LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11. This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

General

As of December 31, 2020 and 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used in operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting standards.

Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used in operations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.

Entergy incurred the following total lease costs for the years ended December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Operating lease cost	$67,471	$63,566
Finance lease cost:
Amortization of right-of-use assets	$12,180	$16,048
Interest on lease liabilities	$2,884	$3,667

Of the lease costs disclosed above, Entergy had $759 thousand and $43 thousand in short-term leases costs for the years ended December 31, 2020 and 2019, respectively.

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$14,344	$13,944	$6,584	$1,443	$4,870
Finance lease cost:
Amortization of right-of-use assets	$2,693	$4,097	$1,627	$712	$1,340
Interest on lease liabilities	$408	$597	$254	$120	$196

Of the lease costs disclosed above, Entergy Arkansas had $43 thousand and Entergy Louisiana had $719 thousand in short-term lease costs for the year ended December 31, 2020.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$13,213	$11,975	$6,927	$1,406	$4,259
Finance lease cost:
Amortization of right-of-use assets	$3,643	$5,940	$2,097	$1,042	$1,568
Interest on lease liabilities	$594	$895	$353	$168	$241

Of the lease costs disclosed above, Entergy Louisiana had $43 thousand in short-term lease costs for the year ended December 31, 2019.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2020 and 2019 are $230 million and $234 million related to operating leases, respectively, and $60 million and $61 million related to finance leases, respectively.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020 and 2019 are the following amounts:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2020
Operating leases	$55,840	$43,189	$16,538	$5,222	$14,738
Finance leases	$12,447	$16,425	$7,452	$3,428	$5,719

2019
Operating leases	$52,317	$36,034	$16,900	$3,878	$14,020
Finance leases	$11,216	$17,209	$6,869	$3,291	$5,273

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Current liabilities:
Operating leases	$59,004	$52,678
Finance leases	$11,921	$11,413
Non-current liabilities:
Operating leases	$170,980	$181,339
Finance leases	$52,803	$53,396

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,942	$11,934	$5,738	$1,406	$4,277
Finance leases	$2,660	$3,821	$1,644	$686	$1,327
Non-current liabilities:
Operating leases	$43,914	$31,260	$10,867	$3,819	$10,469
Finance leases	$9,788	$12,603	$5,808	$2,741	$4,392

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,443	$10,331	$5,633	$1,134	$3,698
Finance leases	$2,442	$3,919	$1,487	$647	$1,222
Non-current liabilities:
Operating leases	$40,880	$25,743	$11,232	$2,746	$10,364
Finance leases	$8,768	$13,376	$5,382	$2,644	$4,009

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of Entergy at December 31, 2020 and 2019:


	2020		2019
Weighted average remaining lease terms:
Operating leases	4.82		5.14
Finance leases	6.34		6.69
Weighted average discount rate:
Operating leases	3.58	%	3.86	%
Finance leases	4.42	%	4.60	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2020:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.74		4.72		5.30		5.78		4.30
Finance leases	5.60		5.20		5.44		5.69		5.39
Weighted average discount rate:
Operating leases	3.34	%	3.11	%	3.43	%	3.09	%	3.07	%
Finance leases	3.18	%	3.33	%	3.22	%	3.35	%	3.22	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2019:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.84		4.33		5.04		5.62		4.54
Finance leases	5.43		5.24		5.32		5.93		5.12
Weighted average discount rate:
Operating leases	3.67	%	3.65	%	3.75	%	3.88	%	3.73	%
Finance leases	3.68	%	3.65	%	3.67	%	3.74	%	3.82	%

Maturity of the lease liabilities for Entergy as of December 31, 2020 are as follows:


Year	Operating Leases	Finance Leases
	(In Thousands)

2021	$65,693	$14,436
2022	57,497	13,175
2023	46,540	12,114
2024	38,525	10,013
2025	20,269	8,225
Years thereafter	20,999	16,436
Minimum lease payments	249,523	74,399
Less: amount representing interest	19,539	9,675
Present value of net minimum lease payments	$229,984	$64,724

Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2020 are as follows:

Operating Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$13,527	$13,076	$6,183	$1,533	$4,650
2022	11,547	10,581	4,890	1,256	3,705
2023	9,868	8,624	2,788	1,028	3,299
2024	8,524	6,466	1,749	773	2,313
2025	6,993	3,693	872	406	1,037
Years thereafter	10,737	3,717	1,927	694	657
Minimum lease payments	61,196	46,157	18,409	5,690	15,661
Less: amount representing interest	5,340	2,963	1,804	465	915
Present value of net minimum lease payments	$55,856	$43,194	$16,605	$5,225	$14,746

Finance Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$3,013	$4,305	$1,857	$790	$1,490
2022	2,712	3,856	1,665	729	1,258
2023	2,441	3,437	1,483	684	1,119
2024	1,978	2,493	1,156	561	882
2025	1,498	1,783	885	456	677
Years thereafter	1,843	1,893	1,027	523	759
Minimum lease payments	13,485	17,767	8,073	3,743	6,185
Less: amount representing interest	1,037	1,343	621	316	467
Present value of net minimum lease payments	$12,448	$16,424	$7,452	$3,427	$5,718

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

Following are the relevant lease disclosures from Note 10 to the financial statements in the Form 10-K for the year ended December 31, 2018.

Total 2018 rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $47.8 million for Entergy.

Total 2018 rental expenses for leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $6.2 million for Entergy Arkansas, $20.2 million for Entergy Louisiana, $4.6 million for Entergy Mississippi, $2.5 million for Entergy New Orleans, $3.1 million for Entergy Texas, and $1.9 million for System Energy.

In addition to rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018 for Entergy Arkansas and $0.4 million in 2018 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018.

Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018.

Leases

LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11. This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

General

As of December 31, 2020 and 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used in operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting standards.

Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used in operations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.

Entergy incurred the following total lease costs for the years ended December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Operating lease cost	$67,471	$63,566
Finance lease cost:
Amortization of right-of-use assets	$12,180	$16,048
Interest on lease liabilities	$2,884	$3,667

Of the lease costs disclosed above, Entergy had $759 thousand and $43 thousand in short-term leases costs for the years ended December 31, 2020 and 2019, respectively.

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$14,344	$13,944	$6,584	$1,443	$4,870
Finance lease cost:
Amortization of right-of-use assets	$2,693	$4,097	$1,627	$712	$1,340
Interest on lease liabilities	$408	$597	$254	$120	$196

Of the lease costs disclosed above, Entergy Arkansas had $43 thousand and Entergy Louisiana had $719 thousand in short-term lease costs for the year ended December 31, 2020.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$13,213	$11,975	$6,927	$1,406	$4,259
Finance lease cost:
Amortization of right-of-use assets	$3,643	$5,940	$2,097	$1,042	$1,568
Interest on lease liabilities	$594	$895	$353	$168	$241

Of the lease costs disclosed above, Entergy Louisiana had $43 thousand in short-term lease costs for the year ended December 31, 2019.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2020 and 2019 are $230 million and $234 million related to operating leases, respectively, and $60 million and $61 million related to finance leases, respectively.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020 and 2019 are the following amounts:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2020
Operating leases	$55,840	$43,189	$16,538	$5,222	$14,738
Finance leases	$12,447	$16,425	$7,452	$3,428	$5,719

2019
Operating leases	$52,317	$36,034	$16,900	$3,878	$14,020
Finance leases	$11,216	$17,209	$6,869	$3,291	$5,273

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Current liabilities:
Operating leases	$59,004	$52,678
Finance leases	$11,921	$11,413
Non-current liabilities:
Operating leases	$170,980	$181,339
Finance leases	$52,803	$53,396

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,942	$11,934	$5,738	$1,406	$4,277
Finance leases	$2,660	$3,821	$1,644	$686	$1,327
Non-current liabilities:
Operating leases	$43,914	$31,260	$10,867	$3,819	$10,469
Finance leases	$9,788	$12,603	$5,808	$2,741	$4,392

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,443	$10,331	$5,633	$1,134	$3,698
Finance leases	$2,442	$3,919	$1,487	$647	$1,222
Non-current liabilities:
Operating leases	$40,880	$25,743	$11,232	$2,746	$10,364
Finance leases	$8,768	$13,376	$5,382	$2,644	$4,009

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of Entergy at December 31, 2020 and 2019:


	2020		2019
Weighted average remaining lease terms:
Operating leases	4.82		5.14
Finance leases	6.34		6.69
Weighted average discount rate:
Operating leases	3.58	%	3.86	%
Finance leases	4.42	%	4.60	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2020:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.74		4.72		5.30		5.78		4.30
Finance leases	5.60		5.20		5.44		5.69		5.39
Weighted average discount rate:
Operating leases	3.34	%	3.11	%	3.43	%	3.09	%	3.07	%
Finance leases	3.18	%	3.33	%	3.22	%	3.35	%	3.22	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2019:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.84		4.33		5.04		5.62		4.54
Finance leases	5.43		5.24		5.32		5.93		5.12
Weighted average discount rate:
Operating leases	3.67	%	3.65	%	3.75	%	3.88	%	3.73	%
Finance leases	3.68	%	3.65	%	3.67	%	3.74	%	3.82	%

Maturity of the lease liabilities for Entergy as of December 31, 2020 are as follows:


Year	Operating Leases	Finance Leases
	(In Thousands)

2021	$65,693	$14,436
2022	57,497	13,175
2023	46,540	12,114
2024	38,525	10,013
2025	20,269	8,225
Years thereafter	20,999	16,436
Minimum lease payments	249,523	74,399
Less: amount representing interest	19,539	9,675
Present value of net minimum lease payments	$229,984	$64,724

Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2020 are as follows:

Operating Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$13,527	$13,076	$6,183	$1,533	$4,650
2022	11,547	10,581	4,890	1,256	3,705
2023	9,868	8,624	2,788	1,028	3,299
2024	8,524	6,466	1,749	773	2,313
2025	6,993	3,693	872	406	1,037
Years thereafter	10,737	3,717	1,927	694	657
Minimum lease payments	61,196	46,157	18,409	5,690	15,661
Less: amount representing interest	5,340	2,963	1,804	465	915
Present value of net minimum lease payments	$55,856	$43,194	$16,605	$5,225	$14,746

Finance Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$3,013	$4,305	$1,857	$790	$1,490
2022	2,712	3,856	1,665	729	1,258
2023	2,441	3,437	1,483	684	1,119
2024	1,978	2,493	1,156	561	882
2025	1,498	1,783	885	456	677
Years thereafter	1,843	1,893	1,027	523	759
Minimum lease payments	13,485	17,767	8,073	3,743	6,185
Less: amount representing interest	1,037	1,343	621	316	467
Present value of net minimum lease payments	$12,448	$16,424	$7,452	$3,427	$5,718

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

Following are the relevant lease disclosures from Note 10 to the financial statements in the Form 10-K for the year ended December 31, 2018.

Total 2018 rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $47.8 million for Entergy.

Total 2018 rental expenses for leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $6.2 million for Entergy Arkansas, $20.2 million for Entergy Louisiana, $4.6 million for Entergy Mississippi, $2.5 million for Entergy New Orleans, $3.1 million for Entergy Texas, and $1.9 million for System Energy.

In addition to rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018 for Entergy Arkansas and $0.4 million in 2018 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018.

Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018.

Leases

LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11. This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

General

As of December 31, 2020 and 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used in operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting standards.

Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used in operations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.

Entergy incurred the following total lease costs for the years ended December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Operating lease cost	$67,471	$63,566
Finance lease cost:
Amortization of right-of-use assets	$12,180	$16,048
Interest on lease liabilities	$2,884	$3,667

Of the lease costs disclosed above, Entergy had $759 thousand and $43 thousand in short-term leases costs for the years ended December 31, 2020 and 2019, respectively.

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$14,344	$13,944	$6,584	$1,443	$4,870
Finance lease cost:
Amortization of right-of-use assets	$2,693	$4,097	$1,627	$712	$1,340
Interest on lease liabilities	$408	$597	$254	$120	$196

Of the lease costs disclosed above, Entergy Arkansas had $43 thousand and Entergy Louisiana had $719 thousand in short-term lease costs for the year ended December 31, 2020.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$13,213	$11,975	$6,927	$1,406	$4,259
Finance lease cost:
Amortization of right-of-use assets	$3,643	$5,940	$2,097	$1,042	$1,568
Interest on lease liabilities	$594	$895	$353	$168	$241

Of the lease costs disclosed above, Entergy Louisiana had $43 thousand in short-term lease costs for the year ended December 31, 2019.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2020 and 2019 are $230 million and $234 million related to operating leases, respectively, and $60 million and $61 million related to finance leases, respectively.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020 and 2019 are the following amounts:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2020
Operating leases	$55,840	$43,189	$16,538	$5,222	$14,738
Finance leases	$12,447	$16,425	$7,452	$3,428	$5,719

2019
Operating leases	$52,317	$36,034	$16,900	$3,878	$14,020
Finance leases	$11,216	$17,209	$6,869	$3,291	$5,273

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Current liabilities:
Operating leases	$59,004	$52,678
Finance leases	$11,921	$11,413
Non-current liabilities:
Operating leases	$170,980	$181,339
Finance leases	$52,803	$53,396

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,942	$11,934	$5,738	$1,406	$4,277
Finance leases	$2,660	$3,821	$1,644	$686	$1,327
Non-current liabilities:
Operating leases	$43,914	$31,260	$10,867	$3,819	$10,469
Finance leases	$9,788	$12,603	$5,808	$2,741	$4,392

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,443	$10,331	$5,633	$1,134	$3,698
Finance leases	$2,442	$3,919	$1,487	$647	$1,222
Non-current liabilities:
Operating leases	$40,880	$25,743	$11,232	$2,746	$10,364
Finance leases	$8,768	$13,376	$5,382	$2,644	$4,009

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of Entergy at December 31, 2020 and 2019:


	2020		2019
Weighted average remaining lease terms:
Operating leases	4.82		5.14
Finance leases	6.34		6.69
Weighted average discount rate:
Operating leases	3.58	%	3.86	%
Finance leases	4.42	%	4.60	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2020:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.74		4.72		5.30		5.78		4.30
Finance leases	5.60		5.20		5.44		5.69		5.39
Weighted average discount rate:
Operating leases	3.34	%	3.11	%	3.43	%	3.09	%	3.07	%
Finance leases	3.18	%	3.33	%	3.22	%	3.35	%	3.22	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2019:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.84		4.33		5.04		5.62		4.54
Finance leases	5.43		5.24		5.32		5.93		5.12
Weighted average discount rate:
Operating leases	3.67	%	3.65	%	3.75	%	3.88	%	3.73	%
Finance leases	3.68	%	3.65	%	3.67	%	3.74	%	3.82	%

Maturity of the lease liabilities for Entergy as of December 31, 2020 are as follows:


Year	Operating Leases	Finance Leases
	(In Thousands)

2021	$65,693	$14,436
2022	57,497	13,175
2023	46,540	12,114
2024	38,525	10,013
2025	20,269	8,225
Years thereafter	20,999	16,436
Minimum lease payments	249,523	74,399
Less: amount representing interest	19,539	9,675
Present value of net minimum lease payments	$229,984	$64,724

Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2020 are as follows:

Operating Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$13,527	$13,076	$6,183	$1,533	$4,650
2022	11,547	10,581	4,890	1,256	3,705
2023	9,868	8,624	2,788	1,028	3,299
2024	8,524	6,466	1,749	773	2,313
2025	6,993	3,693	872	406	1,037
Years thereafter	10,737	3,717	1,927	694	657
Minimum lease payments	61,196	46,157	18,409	5,690	15,661
Less: amount representing interest	5,340	2,963	1,804	465	915
Present value of net minimum lease payments	$55,856	$43,194	$16,605	$5,225	$14,746

Finance Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$3,013	$4,305	$1,857	$790	$1,490
2022	2,712	3,856	1,665	729	1,258
2023	2,441	3,437	1,483	684	1,119
2024	1,978	2,493	1,156	561	882
2025	1,498	1,783	885	456	677
Years thereafter	1,843	1,893	1,027	523	759
Minimum lease payments	13,485	17,767	8,073	3,743	6,185
Less: amount representing interest	1,037	1,343	621	316	467
Present value of net minimum lease payments	$12,448	$16,424	$7,452	$3,427	$5,718

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

Following are the relevant lease disclosures from Note 10 to the financial statements in the Form 10-K for the year ended December 31, 2018.

Total 2018 rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $47.8 million for Entergy.

Total 2018 rental expenses for leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $6.2 million for Entergy Arkansas, $20.2 million for Entergy Louisiana, $4.6 million for Entergy Mississippi, $2.5 million for Entergy New Orleans, $3.1 million for Entergy Texas, and $1.9 million for System Energy.

In addition to rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018 for Entergy Arkansas and $0.4 million in 2018 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018.

Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018.

Leases

LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11. This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

General

As of December 31, 2020 and 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used in operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting standards.

Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used in operations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.

Entergy incurred the following total lease costs for the years ended December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Operating lease cost	$67,471	$63,566
Finance lease cost:
Amortization of right-of-use assets	$12,180	$16,048
Interest on lease liabilities	$2,884	$3,667

Of the lease costs disclosed above, Entergy had $759 thousand and $43 thousand in short-term leases costs for the years ended December 31, 2020 and 2019, respectively.

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$14,344	$13,944	$6,584	$1,443	$4,870
Finance lease cost:
Amortization of right-of-use assets	$2,693	$4,097	$1,627	$712	$1,340
Interest on lease liabilities	$408	$597	$254	$120	$196

Of the lease costs disclosed above, Entergy Arkansas had $43 thousand and Entergy Louisiana had $719 thousand in short-term lease costs for the year ended December 31, 2020.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$13,213	$11,975	$6,927	$1,406	$4,259
Finance lease cost:
Amortization of right-of-use assets	$3,643	$5,940	$2,097	$1,042	$1,568
Interest on lease liabilities	$594	$895	$353	$168	$241

Of the lease costs disclosed above, Entergy Louisiana had $43 thousand in short-term lease costs for the year ended December 31, 2019.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2020 and 2019 are $230 million and $234 million related to operating leases, respectively, and $60 million and $61 million related to finance leases, respectively.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020 and 2019 are the following amounts:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2020
Operating leases	$55,840	$43,189	$16,538	$5,222	$14,738
Finance leases	$12,447	$16,425	$7,452	$3,428	$5,719

2019
Operating leases	$52,317	$36,034	$16,900	$3,878	$14,020
Finance leases	$11,216	$17,209	$6,869	$3,291	$5,273

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Current liabilities:
Operating leases	$59,004	$52,678
Finance leases	$11,921	$11,413
Non-current liabilities:
Operating leases	$170,980	$181,339
Finance leases	$52,803	$53,396

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,942	$11,934	$5,738	$1,406	$4,277
Finance leases	$2,660	$3,821	$1,644	$686	$1,327
Non-current liabilities:
Operating leases	$43,914	$31,260	$10,867	$3,819	$10,469
Finance leases	$9,788	$12,603	$5,808	$2,741	$4,392

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,443	$10,331	$5,633	$1,134	$3,698
Finance leases	$2,442	$3,919	$1,487	$647	$1,222
Non-current liabilities:
Operating leases	$40,880	$25,743	$11,232	$2,746	$10,364
Finance leases	$8,768	$13,376	$5,382	$2,644	$4,009

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of Entergy at December 31, 2020 and 2019:


	2020		2019
Weighted average remaining lease terms:
Operating leases	4.82		5.14
Finance leases	6.34		6.69
Weighted average discount rate:
Operating leases	3.58	%	3.86	%
Finance leases	4.42	%	4.60	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2020:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.74		4.72		5.30		5.78		4.30
Finance leases	5.60		5.20		5.44		5.69		5.39
Weighted average discount rate:
Operating leases	3.34	%	3.11	%	3.43	%	3.09	%	3.07	%
Finance leases	3.18	%	3.33	%	3.22	%	3.35	%	3.22	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2019:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.84		4.33		5.04		5.62		4.54
Finance leases	5.43		5.24		5.32		5.93		5.12
Weighted average discount rate:
Operating leases	3.67	%	3.65	%	3.75	%	3.88	%	3.73	%
Finance leases	3.68	%	3.65	%	3.67	%	3.74	%	3.82	%

Maturity of the lease liabilities for Entergy as of December 31, 2020 are as follows:


Year	Operating Leases	Finance Leases
	(In Thousands)

2021	$65,693	$14,436
2022	57,497	13,175
2023	46,540	12,114
2024	38,525	10,013
2025	20,269	8,225
Years thereafter	20,999	16,436
Minimum lease payments	249,523	74,399
Less: amount representing interest	19,539	9,675
Present value of net minimum lease payments	$229,984	$64,724

Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2020 are as follows:

Operating Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$13,527	$13,076	$6,183	$1,533	$4,650
2022	11,547	10,581	4,890	1,256	3,705
2023	9,868	8,624	2,788	1,028	3,299
2024	8,524	6,466	1,749	773	2,313
2025	6,993	3,693	872	406	1,037
Years thereafter	10,737	3,717	1,927	694	657
Minimum lease payments	61,196	46,157	18,409	5,690	15,661
Less: amount representing interest	5,340	2,963	1,804	465	915
Present value of net minimum lease payments	$55,856	$43,194	$16,605	$5,225	$14,746

Finance Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$3,013	$4,305	$1,857	$790	$1,490
2022	2,712	3,856	1,665	729	1,258
2023	2,441	3,437	1,483	684	1,119
2024	1,978	2,493	1,156	561	882
2025	1,498	1,783	885	456	677
Years thereafter	1,843	1,893	1,027	523	759
Minimum lease payments	13,485	17,767	8,073	3,743	6,185
Less: amount representing interest	1,037	1,343	621	316	467
Present value of net minimum lease payments	$12,448	$16,424	$7,452	$3,427	$5,718

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

Following are the relevant lease disclosures from Note 10 to the financial statements in the Form 10-K for the year ended December 31, 2018.

Total 2018 rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $47.8 million for Entergy.

Total 2018 rental expenses for leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $6.2 million for Entergy Arkansas, $20.2 million for Entergy Louisiana, $4.6 million for Entergy Mississippi, $2.5 million for Entergy New Orleans, $3.1 million for Entergy Texas, and $1.9 million for System Energy.

In addition to rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018 for Entergy Arkansas and $0.4 million in 2018 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018.

Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018.

Leases

LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11. This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

General

As of December 31, 2020 and 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used in operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting standards.

Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used in operations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.

Entergy incurred the following total lease costs for the years ended December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Operating lease cost	$67,471	$63,566
Finance lease cost:
Amortization of right-of-use assets	$12,180	$16,048
Interest on lease liabilities	$2,884	$3,667

Of the lease costs disclosed above, Entergy had $759 thousand and $43 thousand in short-term leases costs for the years ended December 31, 2020 and 2019, respectively.

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$14,344	$13,944	$6,584	$1,443	$4,870
Finance lease cost:
Amortization of right-of-use assets	$2,693	$4,097	$1,627	$712	$1,340
Interest on lease liabilities	$408	$597	$254	$120	$196

Of the lease costs disclosed above, Entergy Arkansas had $43 thousand and Entergy Louisiana had $719 thousand in short-term lease costs for the year ended December 31, 2020.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$13,213	$11,975	$6,927	$1,406	$4,259
Finance lease cost:
Amortization of right-of-use assets	$3,643	$5,940	$2,097	$1,042	$1,568
Interest on lease liabilities	$594	$895	$353	$168	$241

Of the lease costs disclosed above, Entergy Louisiana had $43 thousand in short-term lease costs for the year ended December 31, 2019.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2020 and 2019 are $230 million and $234 million related to operating leases, respectively, and $60 million and $61 million related to finance leases, respectively.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020 and 2019 are the following amounts:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2020
Operating leases	$55,840	$43,189	$16,538	$5,222	$14,738
Finance leases	$12,447	$16,425	$7,452	$3,428	$5,719

2019
Operating leases	$52,317	$36,034	$16,900	$3,878	$14,020
Finance leases	$11,216	$17,209	$6,869	$3,291	$5,273

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Current liabilities:
Operating leases	$59,004	$52,678
Finance leases	$11,921	$11,413
Non-current liabilities:
Operating leases	$170,980	$181,339
Finance leases	$52,803	$53,396

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,942	$11,934	$5,738	$1,406	$4,277
Finance leases	$2,660	$3,821	$1,644	$686	$1,327
Non-current liabilities:
Operating leases	$43,914	$31,260	$10,867	$3,819	$10,469
Finance leases	$9,788	$12,603	$5,808	$2,741	$4,392

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,443	$10,331	$5,633	$1,134	$3,698
Finance leases	$2,442	$3,919	$1,487	$647	$1,222
Non-current liabilities:
Operating leases	$40,880	$25,743	$11,232	$2,746	$10,364
Finance leases	$8,768	$13,376	$5,382	$2,644	$4,009

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of Entergy at December 31, 2020 and 2019:


	2020		2019
Weighted average remaining lease terms:
Operating leases	4.82		5.14
Finance leases	6.34		6.69
Weighted average discount rate:
Operating leases	3.58	%	3.86	%
Finance leases	4.42	%	4.60	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2020:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.74		4.72		5.30		5.78		4.30
Finance leases	5.60		5.20		5.44		5.69		5.39
Weighted average discount rate:
Operating leases	3.34	%	3.11	%	3.43	%	3.09	%	3.07	%
Finance leases	3.18	%	3.33	%	3.22	%	3.35	%	3.22	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2019:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.84		4.33		5.04		5.62		4.54
Finance leases	5.43		5.24		5.32		5.93		5.12
Weighted average discount rate:
Operating leases	3.67	%	3.65	%	3.75	%	3.88	%	3.73	%
Finance leases	3.68	%	3.65	%	3.67	%	3.74	%	3.82	%

Maturity of the lease liabilities for Entergy as of December 31, 2020 are as follows:


Year	Operating Leases	Finance Leases
	(In Thousands)

2021	$65,693	$14,436
2022	57,497	13,175
2023	46,540	12,114
2024	38,525	10,013
2025	20,269	8,225
Years thereafter	20,999	16,436
Minimum lease payments	249,523	74,399
Less: amount representing interest	19,539	9,675
Present value of net minimum lease payments	$229,984	$64,724

Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2020 are as follows:

Operating Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$13,527	$13,076	$6,183	$1,533	$4,650
2022	11,547	10,581	4,890	1,256	3,705
2023	9,868	8,624	2,788	1,028	3,299
2024	8,524	6,466	1,749	773	2,313
2025	6,993	3,693	872	406	1,037
Years thereafter	10,737	3,717	1,927	694	657
Minimum lease payments	61,196	46,157	18,409	5,690	15,661
Less: amount representing interest	5,340	2,963	1,804	465	915
Present value of net minimum lease payments	$55,856	$43,194	$16,605	$5,225	$14,746

Finance Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$3,013	$4,305	$1,857	$790	$1,490
2022	2,712	3,856	1,665	729	1,258
2023	2,441	3,437	1,483	684	1,119
2024	1,978	2,493	1,156	561	882
2025	1,498	1,783	885	456	677
Years thereafter	1,843	1,893	1,027	523	759
Minimum lease payments	13,485	17,767	8,073	3,743	6,185
Less: amount representing interest	1,037	1,343	621	316	467
Present value of net minimum lease payments	$12,448	$16,424	$7,452	$3,427	$5,718

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

Following are the relevant lease disclosures from Note 10 to the financial statements in the Form 10-K for the year ended December 31, 2018.

Total 2018 rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $47.8 million for Entergy.

Total 2018 rental expenses for leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $6.2 million for Entergy Arkansas, $20.2 million for Entergy Louisiana, $4.6 million for Entergy Mississippi, $2.5 million for Entergy New Orleans, $3.1 million for Entergy Texas, and $1.9 million for System Energy.

In addition to rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018 for Entergy Arkansas and $0.4 million in 2018 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018.

Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018.

Leases

LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11. This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

General

As of December 31, 2020 and 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used in operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting standards.

Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used in operations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.

Entergy incurred the following total lease costs for the years ended December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Operating lease cost	$67,471	$63,566
Finance lease cost:
Amortization of right-of-use assets	$12,180	$16,048
Interest on lease liabilities	$2,884	$3,667

Of the lease costs disclosed above, Entergy had $759 thousand and $43 thousand in short-term leases costs for the years ended December 31, 2020 and 2019, respectively.

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$14,344	$13,944	$6,584	$1,443	$4,870
Finance lease cost:
Amortization of right-of-use assets	$2,693	$4,097	$1,627	$712	$1,340
Interest on lease liabilities	$408	$597	$254	$120	$196

Of the lease costs disclosed above, Entergy Arkansas had $43 thousand and Entergy Louisiana had $719 thousand in short-term lease costs for the year ended December 31, 2020.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$13,213	$11,975	$6,927	$1,406	$4,259
Finance lease cost:
Amortization of right-of-use assets	$3,643	$5,940	$2,097	$1,042	$1,568
Interest on lease liabilities	$594	$895	$353	$168	$241

Of the lease costs disclosed above, Entergy Louisiana had $43 thousand in short-term lease costs for the year ended December 31, 2019.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2020 and 2019 are $230 million and $234 million related to operating leases, respectively, and $60 million and $61 million related to finance leases, respectively.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020 and 2019 are the following amounts:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2020
Operating leases	$55,840	$43,189	$16,538	$5,222	$14,738
Finance leases	$12,447	$16,425	$7,452	$3,428	$5,719

2019
Operating leases	$52,317	$36,034	$16,900	$3,878	$14,020
Finance leases	$11,216	$17,209	$6,869	$3,291	$5,273

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Current liabilities:
Operating leases	$59,004	$52,678
Finance leases	$11,921	$11,413
Non-current liabilities:
Operating leases	$170,980	$181,339
Finance leases	$52,803	$53,396

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,942	$11,934	$5,738	$1,406	$4,277
Finance leases	$2,660	$3,821	$1,644	$686	$1,327
Non-current liabilities:
Operating leases	$43,914	$31,260	$10,867	$3,819	$10,469
Finance leases	$9,788	$12,603	$5,808	$2,741	$4,392

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,443	$10,331	$5,633	$1,134	$3,698
Finance leases	$2,442	$3,919	$1,487	$647	$1,222
Non-current liabilities:
Operating leases	$40,880	$25,743	$11,232	$2,746	$10,364
Finance leases	$8,768	$13,376	$5,382	$2,644	$4,009

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of Entergy at December 31, 2020 and 2019:


	2020		2019
Weighted average remaining lease terms:
Operating leases	4.82		5.14
Finance leases	6.34		6.69
Weighted average discount rate:
Operating leases	3.58	%	3.86	%
Finance leases	4.42	%	4.60	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2020:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.74		4.72		5.30		5.78		4.30
Finance leases	5.60		5.20		5.44		5.69		5.39
Weighted average discount rate:
Operating leases	3.34	%	3.11	%	3.43	%	3.09	%	3.07	%
Finance leases	3.18	%	3.33	%	3.22	%	3.35	%	3.22	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2019:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.84		4.33		5.04		5.62		4.54
Finance leases	5.43		5.24		5.32		5.93		5.12
Weighted average discount rate:
Operating leases	3.67	%	3.65	%	3.75	%	3.88	%	3.73	%
Finance leases	3.68	%	3.65	%	3.67	%	3.74	%	3.82	%

Maturity of the lease liabilities for Entergy as of December 31, 2020 are as follows:


Year	Operating Leases	Finance Leases
	(In Thousands)

2021	$65,693	$14,436
2022	57,497	13,175
2023	46,540	12,114
2024	38,525	10,013
2025	20,269	8,225
Years thereafter	20,999	16,436
Minimum lease payments	249,523	74,399
Less: amount representing interest	19,539	9,675
Present value of net minimum lease payments	$229,984	$64,724

Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2020 are as follows:

Operating Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$13,527	$13,076	$6,183	$1,533	$4,650
2022	11,547	10,581	4,890	1,256	3,705
2023	9,868	8,624	2,788	1,028	3,299
2024	8,524	6,466	1,749	773	2,313
2025	6,993	3,693	872	406	1,037
Years thereafter	10,737	3,717	1,927	694	657
Minimum lease payments	61,196	46,157	18,409	5,690	15,661
Less: amount representing interest	5,340	2,963	1,804	465	915
Present value of net minimum lease payments	$55,856	$43,194	$16,605	$5,225	$14,746

Finance Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$3,013	$4,305	$1,857	$790	$1,490
2022	2,712	3,856	1,665	729	1,258
2023	2,441	3,437	1,483	684	1,119
2024	1,978	2,493	1,156	561	882
2025	1,498	1,783	885	456	677
Years thereafter	1,843	1,893	1,027	523	759
Minimum lease payments	13,485	17,767	8,073	3,743	6,185
Less: amount representing interest	1,037	1,343	621	316	467
Present value of net minimum lease payments	$12,448	$16,424	$7,452	$3,427	$5,718

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

Following are the relevant lease disclosures from Note 10 to the financial statements in the Form 10-K for the year ended December 31, 2018.

Total 2018 rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $47.8 million for Entergy.

Total 2018 rental expenses for leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $6.2 million for Entergy Arkansas, $20.2 million for Entergy Louisiana, $4.6 million for Entergy Mississippi, $2.5 million for Entergy New Orleans, $3.1 million for Entergy Texas, and $1.9 million for System Energy.

In addition to rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018 for Entergy Arkansas and $0.4 million in 2018 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018.

Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018.

Leases

LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11. This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

General

As of December 31, 2020 and 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used in operations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases under the accounting standards.

Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used in operations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements and Entergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance the leases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be required to pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.

Entergy incurred the following total lease costs for the years ended December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Operating lease cost	$67,471	$63,566
Finance lease cost:
Amortization of right-of-use assets	$12,180	$16,048
Interest on lease liabilities	$2,884	$3,667

Of the lease costs disclosed above, Entergy had $759 thousand and $43 thousand in short-term leases costs for the years ended December 31, 2020 and 2019, respectively.

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$14,344	$13,944	$6,584	$1,443	$4,870
Finance lease cost:
Amortization of right-of-use assets	$2,693	$4,097	$1,627	$712	$1,340
Interest on lease liabilities	$408	$597	$254	$120	$196

Of the lease costs disclosed above, Entergy Arkansas had $43 thousand and Entergy Louisiana had $719 thousand in short-term lease costs for the year ended December 31, 2020.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Operating lease cost	$13,213	$11,975	$6,927	$1,406	$4,259
Finance lease cost:
Amortization of right-of-use assets	$3,643	$5,940	$2,097	$1,042	$1,568
Interest on lease liabilities	$594	$895	$353	$168	$241

Of the lease costs disclosed above, Entergy Louisiana had $43 thousand in short-term lease costs for the year ended December 31, 2019.

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included in financing activities.

Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore, there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2020 and 2019 are $230 million and $234 million related to operating leases, respectively, and $60 million and $61 million related to finance leases, respectively.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020 and 2019 are the following amounts:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2020
Operating leases	$55,840	$43,189	$16,538	$5,222	$14,738
Finance leases	$12,447	$16,425	$7,452	$3,428	$5,719

2019
Operating leases	$52,317	$36,034	$16,900	$3,878	$14,020
Finance leases	$11,216	$17,209	$6,869	$3,291	$5,273

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of December 31, 2020 and 2019:


	2020	2019
	(In Thousands)
Current liabilities:
Operating leases	$59,004	$52,678
Finance leases	$11,921	$11,413
Non-current liabilities:
Operating leases	$170,980	$181,339
Finance leases	$52,803	$53,396

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2020:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,942	$11,934	$5,738	$1,406	$4,277
Finance leases	$2,660	$3,821	$1,644	$686	$1,327
Non-current liabilities:
Operating leases	$43,914	$31,260	$10,867	$3,819	$10,469
Finance leases	$9,788	$12,603	$5,808	$2,741	$4,392

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Current liabilities:
Operating leases	$11,443	$10,331	$5,633	$1,134	$3,698
Finance leases	$2,442	$3,919	$1,487	$647	$1,222
Non-current liabilities:
Operating leases	$40,880	$25,743	$11,232	$2,746	$10,364
Finance leases	$8,768	$13,376	$5,382	$2,644	$4,009

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of Entergy at December 31, 2020 and 2019:


	2020		2019
Weighted average remaining lease terms:
Operating leases	4.82		5.14
Finance leases	6.34		6.69
Weighted average discount rate:
Operating leases	3.58	%	3.86	%
Finance leases	4.42	%	4.60	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2020:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.74		4.72		5.30		5.78		4.30
Finance leases	5.60		5.20		5.44		5.69		5.39
Weighted average discount rate:
Operating leases	3.34	%	3.11	%	3.43	%	3.09	%	3.07	%
Finance leases	3.18	%	3.33	%	3.22	%	3.35	%	3.22	%

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and finance leases of the Registrant Subsidiaries at December 31, 2019:


	Entergy Arkansas		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas

Weighted average remaining lease terms:
Operating leases	5.84		4.33		5.04		5.62		4.54
Finance leases	5.43		5.24		5.32		5.93		5.12
Weighted average discount rate:
Operating leases	3.67	%	3.65	%	3.75	%	3.88	%	3.73	%
Finance leases	3.68	%	3.65	%	3.67	%	3.74	%	3.82	%

Maturity of the lease liabilities for Entergy as of December 31, 2020 are as follows:


Year	Operating Leases	Finance Leases
	(In Thousands)

2021	$65,693	$14,436
2022	57,497	13,175
2023	46,540	12,114
2024	38,525	10,013
2025	20,269	8,225
Years thereafter	20,999	16,436
Minimum lease payments	249,523	74,399
Less: amount representing interest	19,539	9,675
Present value of net minimum lease payments	$229,984	$64,724

Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2020 are as follows:

Operating Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$13,527	$13,076	$6,183	$1,533	$4,650
2022	11,547	10,581	4,890	1,256	3,705
2023	9,868	8,624	2,788	1,028	3,299
2024	8,524	6,466	1,749	773	2,313
2025	6,993	3,693	872	406	1,037
Years thereafter	10,737	3,717	1,927	694	657
Minimum lease payments	61,196	46,157	18,409	5,690	15,661
Less: amount representing interest	5,340	2,963	1,804	465	915
Present value of net minimum lease payments	$55,856	$43,194	$16,605	$5,225	$14,746

Finance Leases


Year	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

2021	$3,013	$4,305	$1,857	$790	$1,490
2022	2,712	3,856	1,665	729	1,258
2023	2,441	3,437	1,483	684	1,119
2024	1,978	2,493	1,156	561	882
2025	1,498	1,783	885	456	677
Years thereafter	1,843	1,893	1,027	523	759
Minimum lease payments	13,485	17,767	8,073	3,743	6,185
Less: amount representing interest	1,037	1,343	621	316	467
Present value of net minimum lease payments	$12,448	$16,424	$7,452	$3,427	$5,718

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

Following are the relevant lease disclosures from Note 10 to the financial statements in the Form 10-K for the year ended December 31, 2018.

Total 2018 rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $47.8 million for Entergy.

Total 2018 rental expenses for leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction) amounted to $6.2 million for Entergy Arkansas, $20.2 million for Entergy Louisiana, $4.6 million for Entergy Mississippi, $2.5 million for Entergy New Orleans, $3.1 million for Entergy Texas, and $1.9 million for System Energy.

In addition to rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018 for Entergy Arkansas and $0.4 million in 2018 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018.

Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018.