Leases Leases

12 Months Ended

Dec. 31, 2019

LESSEE — Right-of-use assets are long-term by nature. The following table summarizes the amounts recognized on the Consolidated Balance Sheets related to lease asset and liability balances as of the period indicated (in millions):



	Consolidated Balance Sheet Classification	December 31, 2019
Assets
Right-of-use assets — finance leases	Electric generation, distribution assets and other	$	67
Right-of-use assets — operating leases	Other noncurrent assets	248
Total right-of-use assets		$	315
Liabilities
Finance lease liabilities (current)	Non-recourse debt (current liabilities)	$	3
Finance lease liabilities (noncurrent)	Non-recourse debt (noncurrent liabilities)	67
Total finance lease liabilities		70
Operating lease liabilities (current)	Accrued and other liabilities	16
Operating lease liabilities (noncurrent)	Other noncurrent liabilities	261
Total operating lease liabilities		277
Total lease liabilities		$	347

The following table summarizes supplemental balance sheet information related to leases as of the period indicated:



Lease Term and Discount Rate	December 31, 2019
Weighted-average remaining lease term — finance leases	32 years
Weighted-average remaining lease term — operating leases	23 years
Weighted-average discount rate — finance leases	4.99	%
Weighted-average discount rate — operating leases	6.99	%

The following table summarizes the components of lease expense recognized in Cost of Sales on the Consolidated Statements of Operations for the year ended (in millions):



Components of Lease Cost	December 31, 2019
Operating lease cost	$	46
Finance lease cost:
Amortization of right-of-use assets	2
Interest on lease liabilities	2
Short-term lease costs	38
Variable lease cost	1
Total lease cost	$	89

Operating cash outflows from operating leases included in the measurement of lease liabilities were $48 million for the twelve months ended December 31, 2019.

The following table shows the future lease payments under operating and finance leases for continuing operations together with the present value of the net lease payments as of December 31, 2019 for 2020 through 2024 and thereafter (in millions):



	Maturity of Lease Liabilities
	Finance Leases			Operating Leases
2020	$	4		$	29
2021	4			27
2022	4			27
2023	4			26
2024	4			26
Thereafter	119			460
Total	139			595
Less: Imputed interest	(69		)	(318		)
Present value of lease payments	$	70		$	277

Lessor, Operating Leases [Text Block]

LESSOR — Lease revenue included in the Consolidated Statements of Operations was $600 million for the twelve months ended December 31, 2019, of which $130 million was related to variable lease payments. Underlying gross assets and accumulated depreciation of operating leases included in Property, Plant and Equipment on the Consolidated Balance Sheets were $2.9 billion and $707 million, respectively, as of December 31, 2019.

The option to extend or terminate a lease is based on customary early termination provisions in the contract, such as payment defaults, bankruptcy, and lack of performance on energy delivery. The Company has not recognized any early terminations as of December 31, 2019. Certain leases may provide for variable lease payments based on usage or index-based (e.g., the U.S. Consumer Price Index) adjustments to lease payments.

The following table shows the future lease receipts as of December 31, 2019 for 2020 through 2024 and thereafter (in millions):



	Future Cash Receipts for
	Sales-Type Leases			Operating Leases
2020	$	2		$	504
2021	2			474
2022	2			459
2023	2			395
2024	2			396
Thereafter	38			1,463
Total	48			$	3,691
Less: Imputed interest	(26		)
Present value of total lease receipts	$	22

The Company is constructing and operating projects that pair battery energy storage systems ("BESS") with solar energy systems, which allows the project more flexibility on when to provide energy to the grid. The Company will enter into PPAs for the full output of the facility that allow customers the ability to determine when to charge and discharge the BESS. These arrangements include both lease and non-lease elements under ASC 842, with the BESS component constituting a sales-type lease. Upon commencement of the lease, the book value of the leased asset is removed from the balance sheet and a net investment in sales-type lease is recognized based on the present value of fixed payments under the contract and the residual value of the underlying asset. Due to the variable nature of lease payments under these contracts, the Company recorded losses at commencement of sales-type leases of $36 million for the year ended December 31, 2019. These amounts are recognized in Other expense in the Consolidated Statement of Operations. See Note 21—Other Income and Expense for further information.