Leases (Tables)

Nov. 18, 2019

Leases [Abstract]

Lease Assets and Liabilities Recorded in Consolidated Balance Sheets

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

	September 30, 2019
(millions)
Dominion Energy
Lease assets:
Operating lease assets	$	455
Finance lease assets(1)		159
Total lease assets	$	614
Lease liabilities:
Operating lease liabilities(2)	$	58
Finance lease liabilities(3)		30
Total lease liabilities - current		88
Operating lease liabilities		394
Finance lease liabilities(4)		132
Total lease liabilities - noncurrent		526
Total lease liabilities	$	614
Virginia Power
Operating lease assets	$	184
Finance lease assets(1)		15
Total lease assets	$	199
Lease liabilities:
Operating lease liabilities(2)	$	30
Finance lease liabilities(3)		3
Total lease liabilities - current		33
Operating lease liabilities		152
Finance lease liabilities(4)		11
Total lease liabilities - noncurrent		163
Total lease liabilities	$	196
Dominion Energy Gas
Operating lease assets	$	37
Finance lease assets(1)		4
Total lease assets(5)	$	41
Lease liabilities:
Operating lease liabilities(2)	$	6
Finance lease liabilities(3)		1
Total lease liabilities - current		7
Operating lease liabilities		31
Finance lease liabilities(4)		4
Total lease liabilities - noncurrent		35
Total lease liabilities(5)	$	42

(1) Included in property, plant and equipment in the Companies’ Consolidated Balance Sheets, net of $39 million, $3 million and $1 million of accumulated amortization at Dominion Energy, Virginia Power and Dominion Energy Gas, respectively, at September 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 $26 million of lease assets recorded in assets of discontinued operations and $24 million for lease liabilities recorded in liabilities of discontinued operations.

Summary of Total Lease Cost

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

	Three Months Ended     September 30, 2019		Nine Months Ended     September 30, 2019
(millions)
Dominion Energy
Finance lease cost:
Amortization	$	7	$	14
Interest		1		3
Operating lease cost		20		64
Short-term lease cost		7		20
Variable lease cost		1		4
Total lease cost	$	36	$	105
Virginia Power
Operating lease cost	$	10	$	31
Short-term lease cost		3		7
Variable lease cost		1		2
Total lease cost	$	14	$	40
Dominion Energy Gas
Operating lease cost	$	1	$	5
Short-term lease cost		2		5
Total lease cost	$	3	$	10

Cash Paid for Amounts Included in Measurement of Lease Liabilities

For the nine months ended September 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:

	Nine Months Ended             September 30, 2019
(millions)
Dominion Energy
Operating cash flows for finance leases	$	3
Operating cash flows for operating leases		89
Financing cash flows for finance leases		12
Virginia Power
Operating cash flows for operating leases		40
Dominion Energy Gas
Operating cash flows for operating leases		10

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

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

	September 30, 2019
Dominion Energy
Weighted average remaining lease term - finance leases		6 years
Weighted average remaining lease term - operating leases		21 years
Weighted average discount rate - finance leases		4.36%
Weighted average discount rate - operating leases		4.58%
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		4.65%
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		4.55%
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	$	18		$	10		$	8		$	1		$	5		$	1
2020		68			39			33			3			13			2
2021		61			33			29			3			11			2
2022		50			31			23			3			9			2
2023		40			28			18			2			6			2
After 2023		538			49			160			4			25			3
Total undiscounted lease payments		775			190			271			16			69			12
Present value adjustment		(323	)		(28	)		(89	)		(2	)		(13	)		(2	)
Present value of lease liabilities	$	452		$	162		$	182		$	14		$	56		$	10

(1) Includes amounts reflected in discontinued operations.