Leases (Tables)

Nov. 18, 2019

Leases [Abstract]

Lease Assets and Liabilities Recorded in Consolidated Balance Sheets

At June 30, 2019, the Companies had the following lease assets and liabilities recorded in the Consolidated Balance Sheets:

	June 30, 2019
(millions)
Dominion Energy
Lease assets:
Operating lease assets	$	468
Finance lease assets(1)		87
Total lease assets	$	555
Lease liabilities:
Operating lease liabilities(2)	$	59
Finance lease liabilities(3)		15
Total lease liabilities - current		74
Operating lease liabilities		404
Finance lease liabilities(4)		72
Total lease liabilities - noncurrent		476
Total lease liabilities	$	550
Virginia Power
Operating lease assets	$	191
Finance lease assets(1)		11
Total lease assets	$	202
Lease liabilities:
Operating lease liabilities(2)	$	31
Finance lease liabilities(3)		2
Total lease liabilities - current		33
Operating lease liabilities		158
Finance lease liabilities(4)		8
Total lease liabilities - noncurrent		166
Total lease liabilities	$	199
Dominion Energy Gas
Operating lease assets	$	39
Finance lease assets(1)		3
Total lease assets(5)	$	42
Lease liabilities:
Operating lease liabilities(2)	$	6
Finance lease liabilities(3)		—
Total lease liabilities - current		6
Operating lease liabilities		32
Finance lease liabilities(4)		3
Total lease liabilities - noncurrent		35
Total lease liabilities(5)	$	41

(1) Included in property, plant and equipment in the Companies’ Consolidated Balance Sheets, net of $32 million, $2 million and $1 million of accumulated amortization at Dominion Energy, Virginia Power and Dominion Energy Gas, respectively, at June 30, 2019.

(2) Included in other current liabilities in the Companies’ Consolidated Balance Sheets.

(3) Included in securities due within one year in the Companies’ Consolidated Balance Sheets.

(4) Included in long-term debt in the Companies’ Consolidated Balance Sheets.

(5) Excludes $24 million of lease assets recorded in assets of discontinued operations and $25 million of lease liabilities recorded in liabilities of discontinued operations.

Summary of Total Lease Cost

For the three and six months ended June 30, 2019, total lease cost associated with the Companies’ lessee leasing arrangements consisted of the following:

	Three Months Ended           June 30, 2019		Six Months Ended           June 30, 2019
(millions)
Dominion Energy
Finance lease cost:
Amortization	$	4	$	7
Interest		1		2
Operating lease cost		19		44
Short-term lease cost		7		13
Variable lease cost		1		3
Total lease cost	$	32	$	69
Virginia Power
Operating lease cost	$	11	$	21
Short-term lease cost		2		4
Variable lease cost		—		1
Total lease cost	$	13	$	26
Dominion Energy Gas
Operating lease cost	$	1	$	3
Short-term lease cost		2		3
Total lease cost	$	3	$	6

Cash Paid for Amounts Included in Measurement of Lease Liabilities

For the six months ended June 30, 2019, cash paid for amounts included in the measurement of lease liabilities consisted of the following amounts, included in the Companies’ Consolidated Statements of Cash Flows:

	Six Months Ended                     June 30, 2019
(millions)
Dominion Energy
Operating cash flows for finance leases	$	2
Operating cash flows for operating leases		61
Financing cash flows for finance leases		6
Virginia Power
Operating cash flows for operating leases		26
Dominion Energy Gas
Operating cash flows for operating leases		6

Weighted Average Remaining Lease Term and Weighted Discounted Rate for Finance and Operating Leases

At June 30, 2019, the weighted average remaining lease term and weighted discount rate for the Companies’ finance and operating leases were as follows:

	June 30, 2019
Dominion Energy
Weighted average remaining lease term - finance leases		7 years
Weighted average remaining lease term - operating leases		21 years
Weighted average discount rate - finance leases		4.68%
Weighted average discount rate - operating leases		4.61%
Virginia Power
Weighted average remaining lease term - finance leases		6 years
Weighted average remaining lease term - operating leases		17 years
Weighted average discount rate - finance leases		4.93%
Weighted average discount rate - operating leases		4.51%
Dominion Energy Gas
Weighted average remaining lease term - finance leases		6 years
Weighted average remaining lease term - operating leases		9 years
Weighted average discount rate - finance leases		4.85%
Weighted average discount rate - operating leases		4.43%

Scheduled Maturities of Lease Liabilities

The Companies’ lease liabilities have the following scheduled maturities:

Maturity of Lease Liabilities	Dominion Energy						Virginia Power						Dominion Energy Gas(1)
(millions)	Operating			Finance			Operating			Finance			Operating			Finance
2019	$	35		$	10		$	17		$	1		$	8		$	1
2020		67			18			33			2			13			1
2021		59			16			29			2			11			1
2022		49			14			23			2			9			1
2023		39			11			18			2			6			1
After 2023		531			35			160			3			25			2
Total undiscounted lease payments		780			104			280			12			72			7
Present value adjustment		(317	)		(17	)		(91	)		(2	)		(13	)		(1	)
Present value of lease liabilities	$	463		$	87		$	189		$	10		$	59		$	6

(1) Includes amounts reflected in discontinued operations.