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Leases
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Leases LEASES
As described in Note 1, Duke Energy adopted the revised accounting guidance for Leases effective January 1, 2019, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. Adoption of the new standard resulted in the recording of ROU assets and operating lease liabilities as follows:
 
As of January 1, 2019
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

ROU assets
$
1,750

 
$
153

 
$
863

 
$
407

 
$
456

 
$
23

 
$
61

 
$
26

Operating lease liabilities – current
205

 
28

 
96

 
35

 
61

 
1

 
4

 
4

Operating lease liabilities – noncurrent
1,504

 
127

 
766

 
371

 
395

 
22

 
58

 
25


As part of its operations, Duke Energy leases certain aircraft, space on communication towers, industrial equipment, fleet vehicles, fuel transportation (barges and railcars), land and office space under various terms and expiration dates. Additionally, Duke Energy Carolinas, Duke Energy Progress and Duke Energy Indiana have finance leases related to firm natural gas pipeline transportation capacity. Duke Energy Progress and Duke Energy Florida have entered into certain PPAs, which are classified as finance and operating leases.
Duke Energy has certain lease agreements, which include variable lease payments that are based on the usage of an asset. These variable lease payments are not included in the measurement of the ROU assets or operating lease liabilities on the Condensed Consolidated Financial Statements.
Certain Duke Energy lease agreements include options for renewal and early termination. The intent to renew a lease varies depending on the lease type and asset. Renewal options that are reasonably certain to be exercised are included in the lease measurements. The decision to terminate a lease early is dependent on various economic factors. No termination options have been included in any of the lease measurements.
Duke Energy operates various renewable energy projects and sells the generated output to utilities, electric cooperatives, municipalities and commercial and industrial customers through long-term PPAs. In certain situations, these PPAs and the associated renewable energy projects qualify as operating leases. Rental income from these leases is accounted for as Nonregulated electric and other revenues in the Condensed Consolidated Statements of Operations. There are no minimum lease payments as all payments are contingent based on actual electricity generated by the renewable energy projects. Contingent lease payments were $72 million and $136 million for the three and six months ended June 30, 2019, respectively. As of June 30, 2019, renewable energy projects owned by Duke Energy and accounted for as operating leases had a cost basis of $3,344 million and accumulated depreciation of $661 million. These assets are principally classified as nonregulated electric generation and transmission assets.
The following table presents the components of lease expense.
 
Three Months Ended June 30, 2019
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Operating lease expense(a)
$
73

 
$
11

 
$
40

 
$
17

 
$
23

 
$
3

 
$
5

 
$
2

Short-term lease expense(a)
6

 
2

 
4

 
2

 
2

 
1

 

 

Variable lease expense(a)
10

 
4

 
5

 
2

 
3

 

 

 

Finance lease expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of leased assets(b)
29

 
1

 
5

 
1

 
4

 
1

 

 

Interest on lease liabilities(c)
20

 
3

 
13

 
10

 
3

 

 
1

 

Total finance lease expense
49

 
4

 
18

 
11

 
7

 
1

 
1

 

Total lease expense
$
138

 
$
21

 
$
67

 
$
32

 
$
35

 
$
5

 
$
6

 
$
2

 
Six Months Ended June 30, 2019
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Operating lease expense(a)
$
145

 
$
23

 
$
82

 
$
36

 
$
46

 
$
6

 
$
10

 
$
3

Short-term lease expense(a)
13

 
4

 
7

 
3

 
4

 
1

 
1

 

Variable lease expense(a)
21

 
12

 
7

 
3

 
4

 

 

 

Finance lease expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of leased assets(b)
56

 
2

 
8

 
2

 
6

 
1

 

 

Interest on lease liabilities(c)
37

 
7

 
19

 
14

 
5

 

 
1

 

Total finance lease expense
93

 
9

 
27

 
16

 
11

 
1

 
1

 

Total lease expense
$
272

 
$
48

 
$
123

 
$
58

 
$
65

 
$
8

 
$
12

 
$
3

(a)
Included in Operations, maintenance and other or, for barges and railcars, Fuel used in electric generation and purchased power on the Condensed Consolidated Statements of Operations.
(b)
Included in Depreciation and amortization on the Condensed Consolidated Statements of Operations.
(c)
Included in Interest Expense on the Condensed Consolidated Statements of Operations.
The following table presents rental expense for operating leases, as reported under the old lease standard. These amounts are included in Operation, maintenance and other and Fuel used in electric generation and purchased power on the Condensed Consolidated Statements of Operations.
(in millions)
Year Ended December 31, 2018
Duke Energy
$
268

Duke Energy Carolinas
49

Progress Energy
143

Duke Energy Progress
75

Duke Energy Florida
68

Duke Energy Ohio
13

Duke Energy Indiana
21

Piedmont
11


The following table presents operating lease maturities and a reconciliation of the undiscounted cash flows to operating lease liabilities.
 
Twelve Months Ended June 30,
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

2020
$
279

 
$
33

 
$
129

 
$
51

 
$
78

 
$
2

 
$
6

 
$
5

2021
239

 
28

 
112

 
52

 
60

 
2

 
5

 
5

2022
199

 
19

 
94

 
40

 
54

 
2

 
4

 
5

2023
190

 
18

 
95

 
40

 
55

 
2

 
4

 
5

2024
178

 
15

 
96

 
41

 
55

 
2

 
4

 
5

Thereafter
1,055

 
61

 
513

 
306

 
207

 
22

 
65

 
7

Total operating lease payments
2,140

 
174

 
1,039

 
530

 
509

 
32

 
88

 
32

Less: present value discount
(425
)
 
(30
)
 
(192
)
 
(117
)
 
(75
)
 
(10
)
 
(28
)
 
(3
)
Total operating lease liabilities(a)
$
1,715

 
$
144

 
$
847

 
$
413

 
$
434

 
$
22

 
$
60

 
$
29

(a)
Certain operating lease payments include renewal options that are reasonably certain to be exercised.
The following table presents future minimum lease payments under operating leases, which at inception had a non-cancelable term of more than one year, as reported under the old lease standard.
 
December 31, 2018
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

2019
$
239

 
$
33

 
$
97

 
$
49

 
$
48

 
$
2

 
$
6

 
$
5

2020
219

 
29

 
90

 
46

 
44

 
2

 
5

 
5

2021
186

 
19

 
79

 
37

 
42

 
2

 
4

 
5

2022
170

 
19

 
76

 
34

 
42

 
2

 
4

 
5

2023
160

 
17

 
77

 
35

 
42

 
2

 
5

 
6

Thereafter
1,017

 
68

 
455

 
314

 
141

 
23

 
66

 
11

Total
$
1,991

 
$
185

 
$
874

 
$
515

 
$
359

 
$
33

 
$
90

 
$
37


The following table presents finance lease maturities and a reconciliation of the undiscounted cash flows to finance lease liabilities.
 
Twelve Months Ended June 30,
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Indiana

2020
$
177

 
$
19

 
$
69

 
$
44

 
$
25

 
$
1

2021
183

 
17

 
69

 
44

 
25

 
1

2022
180

 
14

 
69

 
44

 
25

 
1

2023
171

 
14

 
69

 
44

 
25

 
1

2024
172

 
14

 
64

 
44

 
20

 
1

Thereafter
847

 
191

 
560

 
547

 
13

 
28

Total finance lease payments
1,730

 
269

 
900

 
767

 
133

 
33

Less: amounts representing interest
(708
)
 
(162
)
 
(483
)
 
(457
)
 
(26
)
 
(23
)
Total finance lease liabilities
$
1,022

 
$
107

 
$
417

 
$
310

 
$
107

 
$
10


The following table presents future minimum lease payments under finance leases, as reported under the old lease standard.
 
December 31, 2018
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

2019
$
170

 
$
20

 
$
45

 
$
20

 
$
25

 
$
2

 
$
1

2020
174

 
20

 
46

 
21

 
25

 

 
1

2021
177

 
15

 
45

 
20

 
25

 

 
1

2022
165

 
15

 
45

 
21

 
24

 

 
1

2023
165

 
15

 
45

 
21

 
24

 

 
1

Thereafter
577

 
204

 
230

 
209

 
21

 

 
27

Minimum annual payments
1,428

 
289

 
456

 
312

 
144

 
2

 
32

Less: amount representing interest
(487
)
 
(180
)
 
(205
)
 
(175
)
 
(30
)
 

 
(22
)
Total
$
941

 
$
109

 
$
251

 
$
137

 
$
114

 
$
2

 
$
10


The following tables contain additional information related to leases.
 
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Classification
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
Operating lease ROU assets, net
$
1,735

 
$
141

 
$
839

 
$
407

 
$
432

 
$
22

 
$
60

 
$
26

Finance
Net property, plant and equipment
1,013

 
122

 
423

 
309

 
114

 

 
10

 

Total lease assets
 
$
2,748

 
$
263

 
$
1,262

 
$
716

 
$
546

 
$
22

 
$
70

 
$
26

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
Other current liabilities
$
213

 
$
27

 
$
100

 
$
36

 
$
64

 
$
1

 
$
4

 
$
4

Finance
Current maturities of long-term debt
115

 
6

 
23

 
6

 
17

 

 

 

Noncurrent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
Operating lease liabilities
1,502

 
117

 
747

 
377

 
370

 
21

 
56

 
25

Finance
Long-Term Debt
907

 
101

 
394

 
304

 
90

 

 
10

 

Total lease liabilities
 
$
2,737

 
$
251

 
$
1,264

 
$
723

 
$
541

 
$
22

 
$
70

 
$
29


 
Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Cash paid for amounts included in the measurement of lease liabilities(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating cash flows from operating leases
$
136

 
$
15

 
$
60

 
$
23

 
$
37

 
$
1

 
$
3

 
$
5

Operating cash flows from finance leases
37

 
7

 
19

 
14

 
5

 

 
1

 

Financing cash flows from finance leases
56

 
2

 
8

 
2

 
6

 
1

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease assets obtained in exchange for new lease liabilities (non-cash)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating(b)
$
78

 
$
2

 
$
30

 
$
30

 
$

 
$

 
$

 
$
1

Finance
175

 

 
175

 
175

 

 

 

 

(a)
No amounts were classified as investing cash flows from operating leases for the six months ended June 30, 2019.
(b)
Does not include ROU assets recorded as a result of the adoption of the new lease standard.
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
 
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Weighted-average remaining lease term (years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating leases
11

 
9

 
10

 
12

 
9

 
18

 
19

 
6

Finance leases
16

 
19

 
17

 
18

 
12

 

 
27

 

Weighted-average discount rate(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating leases
3.9
%
 
3.7
%
 
3.8
%
 
3.8
%
 
3.7
%
 
4.2
%
 
4.1
%
 
3.6
%
Finance leases
7.9
%
 
12.9
%
 
11.8
%
 
12.4
%
 
8.3
%
 
%
 
11.9
%
 
%
(a)
The discount rate is calculated using the rate implicit in a lease if it is readily determinable. Generally, the rate used by the lessor is not provided to Duke Energy and in these cases the incremental borrowing rate is used. Duke Energy will typically use its fully collateralized incremental borrowing rate as of the commencement date to calculate and record the lease. The incremental borrowing rate is influenced by the lessee’s credit rating and lease term and as such may differ for individual leases, embedded leases or portfolios of leased assets.
Leases LEASES
As described in Note 1, Duke Energy adopted the revised accounting guidance for Leases effective January 1, 2019, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. Adoption of the new standard resulted in the recording of ROU assets and operating lease liabilities as follows:
 
As of January 1, 2019
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

ROU assets
$
1,750

 
$
153

 
$
863

 
$
407

 
$
456

 
$
23

 
$
61

 
$
26

Operating lease liabilities – current
205

 
28

 
96

 
35

 
61

 
1

 
4

 
4

Operating lease liabilities – noncurrent
1,504

 
127

 
766

 
371

 
395

 
22

 
58

 
25


As part of its operations, Duke Energy leases certain aircraft, space on communication towers, industrial equipment, fleet vehicles, fuel transportation (barges and railcars), land and office space under various terms and expiration dates. Additionally, Duke Energy Carolinas, Duke Energy Progress and Duke Energy Indiana have finance leases related to firm natural gas pipeline transportation capacity. Duke Energy Progress and Duke Energy Florida have entered into certain PPAs, which are classified as finance and operating leases.
Duke Energy has certain lease agreements, which include variable lease payments that are based on the usage of an asset. These variable lease payments are not included in the measurement of the ROU assets or operating lease liabilities on the Condensed Consolidated Financial Statements.
Certain Duke Energy lease agreements include options for renewal and early termination. The intent to renew a lease varies depending on the lease type and asset. Renewal options that are reasonably certain to be exercised are included in the lease measurements. The decision to terminate a lease early is dependent on various economic factors. No termination options have been included in any of the lease measurements.
Duke Energy operates various renewable energy projects and sells the generated output to utilities, electric cooperatives, municipalities and commercial and industrial customers through long-term PPAs. In certain situations, these PPAs and the associated renewable energy projects qualify as operating leases. Rental income from these leases is accounted for as Nonregulated electric and other revenues in the Condensed Consolidated Statements of Operations. There are no minimum lease payments as all payments are contingent based on actual electricity generated by the renewable energy projects. Contingent lease payments were $72 million and $136 million for the three and six months ended June 30, 2019, respectively. As of June 30, 2019, renewable energy projects owned by Duke Energy and accounted for as operating leases had a cost basis of $3,344 million and accumulated depreciation of $661 million. These assets are principally classified as nonregulated electric generation and transmission assets.
The following table presents the components of lease expense.
 
Three Months Ended June 30, 2019
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Operating lease expense(a)
$
73

 
$
11

 
$
40

 
$
17

 
$
23

 
$
3

 
$
5

 
$
2

Short-term lease expense(a)
6

 
2

 
4

 
2

 
2

 
1

 

 

Variable lease expense(a)
10

 
4

 
5

 
2

 
3

 

 

 

Finance lease expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of leased assets(b)
29

 
1

 
5

 
1

 
4

 
1

 

 

Interest on lease liabilities(c)
20

 
3

 
13

 
10

 
3

 

 
1

 

Total finance lease expense
49

 
4

 
18

 
11

 
7

 
1

 
1

 

Total lease expense
$
138

 
$
21

 
$
67

 
$
32

 
$
35

 
$
5

 
$
6

 
$
2

 
Six Months Ended June 30, 2019
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Operating lease expense(a)
$
145

 
$
23

 
$
82

 
$
36

 
$
46

 
$
6

 
$
10

 
$
3

Short-term lease expense(a)
13

 
4

 
7

 
3

 
4

 
1

 
1

 

Variable lease expense(a)
21

 
12

 
7

 
3

 
4

 

 

 

Finance lease expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of leased assets(b)
56

 
2

 
8

 
2

 
6

 
1

 

 

Interest on lease liabilities(c)
37

 
7

 
19

 
14

 
5

 

 
1

 

Total finance lease expense
93

 
9

 
27

 
16

 
11

 
1

 
1

 

Total lease expense
$
272

 
$
48

 
$
123

 
$
58

 
$
65

 
$
8

 
$
12

 
$
3

(a)
Included in Operations, maintenance and other or, for barges and railcars, Fuel used in electric generation and purchased power on the Condensed Consolidated Statements of Operations.
(b)
Included in Depreciation and amortization on the Condensed Consolidated Statements of Operations.
(c)
Included in Interest Expense on the Condensed Consolidated Statements of Operations.
The following table presents rental expense for operating leases, as reported under the old lease standard. These amounts are included in Operation, maintenance and other and Fuel used in electric generation and purchased power on the Condensed Consolidated Statements of Operations.
(in millions)
Year Ended December 31, 2018
Duke Energy
$
268

Duke Energy Carolinas
49

Progress Energy
143

Duke Energy Progress
75

Duke Energy Florida
68

Duke Energy Ohio
13

Duke Energy Indiana
21

Piedmont
11


The following table presents operating lease maturities and a reconciliation of the undiscounted cash flows to operating lease liabilities.
 
Twelve Months Ended June 30,
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

2020
$
279

 
$
33

 
$
129

 
$
51

 
$
78

 
$
2

 
$
6

 
$
5

2021
239

 
28

 
112

 
52

 
60

 
2

 
5

 
5

2022
199

 
19

 
94

 
40

 
54

 
2

 
4

 
5

2023
190

 
18

 
95

 
40

 
55

 
2

 
4

 
5

2024
178

 
15

 
96

 
41

 
55

 
2

 
4

 
5

Thereafter
1,055

 
61

 
513

 
306

 
207

 
22

 
65

 
7

Total operating lease payments
2,140

 
174

 
1,039

 
530

 
509

 
32

 
88

 
32

Less: present value discount
(425
)
 
(30
)
 
(192
)
 
(117
)
 
(75
)
 
(10
)
 
(28
)
 
(3
)
Total operating lease liabilities(a)
$
1,715

 
$
144

 
$
847

 
$
413

 
$
434

 
$
22

 
$
60

 
$
29

(a)
Certain operating lease payments include renewal options that are reasonably certain to be exercised.
The following table presents future minimum lease payments under operating leases, which at inception had a non-cancelable term of more than one year, as reported under the old lease standard.
 
December 31, 2018
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

2019
$
239

 
$
33

 
$
97

 
$
49

 
$
48

 
$
2

 
$
6

 
$
5

2020
219

 
29

 
90

 
46

 
44

 
2

 
5

 
5

2021
186

 
19

 
79

 
37

 
42

 
2

 
4

 
5

2022
170

 
19

 
76

 
34

 
42

 
2

 
4

 
5

2023
160

 
17

 
77

 
35

 
42

 
2

 
5

 
6

Thereafter
1,017

 
68

 
455

 
314

 
141

 
23

 
66

 
11

Total
$
1,991

 
$
185

 
$
874

 
$
515

 
$
359

 
$
33

 
$
90

 
$
37


The following table presents finance lease maturities and a reconciliation of the undiscounted cash flows to finance lease liabilities.
 
Twelve Months Ended June 30,
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Indiana

2020
$
177

 
$
19

 
$
69

 
$
44

 
$
25

 
$
1

2021
183

 
17

 
69

 
44

 
25

 
1

2022
180

 
14

 
69

 
44

 
25

 
1

2023
171

 
14

 
69

 
44

 
25

 
1

2024
172

 
14

 
64

 
44

 
20

 
1

Thereafter
847

 
191

 
560

 
547

 
13

 
28

Total finance lease payments
1,730

 
269

 
900

 
767

 
133

 
33

Less: amounts representing interest
(708
)
 
(162
)
 
(483
)
 
(457
)
 
(26
)
 
(23
)
Total finance lease liabilities
$
1,022

 
$
107

 
$
417

 
$
310

 
$
107

 
$
10


The following table presents future minimum lease payments under finance leases, as reported under the old lease standard.
 
December 31, 2018
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

2019
$
170

 
$
20

 
$
45

 
$
20

 
$
25

 
$
2

 
$
1

2020
174

 
20

 
46

 
21

 
25

 

 
1

2021
177

 
15

 
45

 
20

 
25

 

 
1

2022
165

 
15

 
45

 
21

 
24

 

 
1

2023
165

 
15

 
45

 
21

 
24

 

 
1

Thereafter
577

 
204

 
230

 
209

 
21

 

 
27

Minimum annual payments
1,428

 
289

 
456

 
312

 
144

 
2

 
32

Less: amount representing interest
(487
)
 
(180
)
 
(205
)
 
(175
)
 
(30
)
 

 
(22
)
Total
$
941

 
$
109

 
$
251

 
$
137

 
$
114

 
$
2

 
$
10


The following tables contain additional information related to leases.
 
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Classification
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
Operating lease ROU assets, net
$
1,735

 
$
141

 
$
839

 
$
407

 
$
432

 
$
22

 
$
60

 
$
26

Finance
Net property, plant and equipment
1,013

 
122

 
423

 
309

 
114

 

 
10

 

Total lease assets
 
$
2,748

 
$
263

 
$
1,262

 
$
716

 
$
546

 
$
22

 
$
70

 
$
26

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
Other current liabilities
$
213

 
$
27

 
$
100

 
$
36

 
$
64

 
$
1

 
$
4

 
$
4

Finance
Current maturities of long-term debt
115

 
6

 
23

 
6

 
17

 

 

 

Noncurrent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
Operating lease liabilities
1,502

 
117

 
747

 
377

 
370

 
21

 
56

 
25

Finance
Long-Term Debt
907

 
101

 
394

 
304

 
90

 

 
10

 

Total lease liabilities
 
$
2,737

 
$
251

 
$
1,264

 
$
723

 
$
541

 
$
22

 
$
70

 
$
29


 
Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Cash paid for amounts included in the measurement of lease liabilities(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating cash flows from operating leases
$
136

 
$
15

 
$
60

 
$
23

 
$
37

 
$
1

 
$
3

 
$
5

Operating cash flows from finance leases
37

 
7

 
19

 
14

 
5

 

 
1

 

Financing cash flows from finance leases
56

 
2

 
8

 
2

 
6

 
1

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease assets obtained in exchange for new lease liabilities (non-cash)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating(b)
$
78

 
$
2

 
$
30

 
$
30

 
$

 
$

 
$

 
$
1

Finance
175

 

 
175

 
175

 

 

 

 

(a)
No amounts were classified as investing cash flows from operating leases for the six months ended June 30, 2019.
(b)
Does not include ROU assets recorded as a result of the adoption of the new lease standard.
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
 
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Weighted-average remaining lease term (years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating leases
11

 
9

 
10

 
12

 
9

 
18

 
19

 
6

Finance leases
16

 
19

 
17

 
18

 
12

 

 
27

 

Weighted-average discount rate(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating leases
3.9
%
 
3.7
%
 
3.8
%
 
3.8
%
 
3.7
%
 
4.2
%
 
4.1
%
 
3.6
%
Finance leases
7.9
%
 
12.9
%
 
11.8
%
 
12.4
%
 
8.3
%
 
%
 
11.9
%
 
%
(a)
The discount rate is calculated using the rate implicit in a lease if it is readily determinable. Generally, the rate used by the lessor is not provided to Duke Energy and in these cases the incremental borrowing rate is used. Duke Energy will typically use its fully collateralized incremental borrowing rate as of the commencement date to calculate and record the lease. The incremental borrowing rate is influenced by the lessee’s credit rating and lease term and as such may differ for individual leases, embedded leases or portfolios of leased assets.