| Leases Leases | 3 Months Ended |
| Mar. 31, 2019 |
| 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 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 March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this 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. Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which 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; however, due to the nature of the agreements and Entergy’s continuing relationship with the lessor, 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 three months ended March 31, 2019: (In Thousands) Operating lease cost $15,720 Financing lease cost: Amortization of right-of-use assets $2,912 Interest on lease liabilities $753 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 financing lease costs which are included in financing activities. The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating lease cost $3,295 $3,026 $1,753 $357 $1,085 Financing lease cost: Amortization of right-of-use assets $629 $1,025 $348 $176 $306 Interest on lease liabilities $105 $152 $59 $30 $46 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 financing 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 March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases. Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating leases $52,916 $36,066 $18,926 $4,961 $9,991 Financing leases $11,317 $16,978 $6,358 $2,974 $5,076 The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019: (In Thousands) Current liabilities: Operating leases $53,121 Financing leases $11,590 Non-current liabilities: Operating leases $173,456 Financing leases $53,065 The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Current liabilities: Operating leases $11,321 $10,958 $6,461 $1,748 $3,071 Financing leases $2,465 $4,052 $1,382 $678 $1,281 Non-current liabilities: Operating leases $41,597 $25,144 $12,565 $3,218 $7,007 Financing leases $8,851 $13,039 $4,975 $2,296 $3,708 The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019: Weighted average remaining lease terms: Operating leases 5.51 Financing leases 7.06 Weighted average discount rate: Operating leases 3.75 % Financing leases 4.64 % The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas Weighted average remaining lease terms: Operating leases 6.38 4.32 5.09 5.64 4.15 Financing leases 5.64 5.29 5.39 5.81 5.09 Weighted average discount rate: Operating leases 3.29 % 3.54 % 3.67 % 3.55 % 3.80 % Financing leases 3.71 % 3.56 % 3.70 % 3.97 % 3.72 % Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows: Year Operating Leases Financing Leases (In Thousands) Remainder for 2019 $44,143 $10,375 2020 52,905 12,489 2021 43,482 10,941 2022 34,768 9,743 2023 27,974 8,680 Years thereafter 45,259 26,744 Minimum lease payments 248,531 78,972 Less: amount representing interest 21,954 14,318 Present value of net minimum lease payments $226,577 $64,654 Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows: Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $9,285 $8,316 $5,231 $1,036 $2,631 2020 11,085 9,795 5,845 1,216 2,961 2021 9,137 8,009 3,886 945 2,186 2022 6,763 5,137 2,505 622 1,196 2023 5,600 3,262 1,228 460 839 Years thereafter 15,713 3,346 2,313 999 1,104 Minimum lease payments 57,583 37,865 21,008 5,278 10,917 Less: amount representing interest 4,664 1,764 1,982 312 839 Present value of net minimum lease payments $52,919 $36,101 $19,026 $4,966 $10,078 Financing Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $2,071 $3,302 $1,159 $592 $1,010 2020 2,464 3,843 1,431 616 1,165 2021 2,067 3,189 1,266 505 973 2022 1,778 2,749 1,073 454 766 2023 1,551 2,301 867 407 633 Years thereafter 2,476 5,414 1,154 748 796 Minimum lease payments 12,407 20,798 6,950 3,322 5,343 Less: amount representing interest 1,091 3,707 592 349 354 Present value of net minimum lease payments $11,316 $17,091 $6,358 $2,973 $4,989 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. In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K. General As of December 31, 2018 , Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year Operating Leases Capital Leases (In Thousands) 2019 $94,043 $2,887 2020 82,191 2,887 2021 75,147 2,887 2022 60,808 2,887 2023 47,391 2,887 Years thereafter 88,004 16,117 Minimum lease payments 447,584 30,552 Less: Amount representing interest — 8,555 Present value of net minimum lease payments $447,584 $21,997 Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018 , $53.1 million in 2017 , and $44.4 million in 2016 . As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf lease obligation, all of which are discussed elsewhere): Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) 2019 $20,421 $25,970 $9,344 $2,493 $5,744 2020 13,918 21,681 8,763 2,349 4,431 2021 11,931 19,514 7,186 1,901 3,625 2022 9,458 15,756 5,675 1,314 2,218 2023 7,782 12,092 2,946 1,043 1,561 Years thereafter 23,297 22,003 4,417 2,323 2,726 Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305 Rental Expenses Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy (In Millions) 2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.9 2017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.2 2016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6 In addition to the above 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 , $4 million in 2017 , and $3.4 million in 2016 for Entergy Arkansas and $0.4 million in 2018 , $0.3 million in 2017 , and $0.3 million in 2016 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018 , $1.6 million in 2017 , and $1.6 million in 2016 . On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02. Power Purchase Agreements As of December 31, 2018 , Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows: Year Entergy Texas (a) Entergy (In Thousands) 2019 $31,159 $31,159 2020 31,876 31,876 2021 32,609 32,609 2022 10,180 10,180 Minimum lease payments $105,824 $105,824 (a) Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases 50% of the capacity and energy from the power purchase agreement from Entergy Texas. Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018, $34.1 million in 2017, and $26.1 million in 2016. Sales and Leaseback Transactions Waterford 3 Lease Obligation In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million . The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report the sale-leaseback as a financing transaction in its financial statements. In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased. The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid. In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction through the end of the lease term in July 2017. Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $62.7 million . Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests, Entergy Louisiana reduced the balance of the liability to $60 million , and recorded the $2.7 million difference as a credit to interest expense. The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016. As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum lease payment (reflecting an interest rate of 8.09% ) of $57.5 million , including $2.3 million in interest, due January 2017 that was recorded as long-term debt. In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana. Grand Gulf Lease Obligations In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million . The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy. System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017. As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019 $17,188 2020 17,188 2021 17,188 2022 17,188 2023 17,188 Years thereafter 223,437 Total 309,377 Less: Amount representing interest 275,025 Present value of net minimum lease payments $34,352 |
| Entergy Arkansas [Member] | |
| 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 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 March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this 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. Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which 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; however, due to the nature of the agreements and Entergy’s continuing relationship with the lessor, 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 three months ended March 31, 2019: (In Thousands) Operating lease cost $15,720 Financing lease cost: Amortization of right-of-use assets $2,912 Interest on lease liabilities $753 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 financing lease costs which are included in financing activities. The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating lease cost $3,295 $3,026 $1,753 $357 $1,085 Financing lease cost: Amortization of right-of-use assets $629 $1,025 $348 $176 $306 Interest on lease liabilities $105 $152 $59 $30 $46 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 financing 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 March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases. Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating leases $52,916 $36,066 $18,926 $4,961 $9,991 Financing leases $11,317 $16,978 $6,358 $2,974 $5,076 The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019: (In Thousands) Current liabilities: Operating leases $53,121 Financing leases $11,590 Non-current liabilities: Operating leases $173,456 Financing leases $53,065 The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Current liabilities: Operating leases $11,321 $10,958 $6,461 $1,748 $3,071 Financing leases $2,465 $4,052 $1,382 $678 $1,281 Non-current liabilities: Operating leases $41,597 $25,144 $12,565 $3,218 $7,007 Financing leases $8,851 $13,039 $4,975 $2,296 $3,708 The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019: Weighted average remaining lease terms: Operating leases 5.51 Financing leases 7.06 Weighted average discount rate: Operating leases 3.75 % Financing leases 4.64 % The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas Weighted average remaining lease terms: Operating leases 6.38 4.32 5.09 5.64 4.15 Financing leases 5.64 5.29 5.39 5.81 5.09 Weighted average discount rate: Operating leases 3.29 % 3.54 % 3.67 % 3.55 % 3.80 % Financing leases 3.71 % 3.56 % 3.70 % 3.97 % 3.72 % Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows: Year Operating Leases Financing Leases (In Thousands) Remainder for 2019 $44,143 $10,375 2020 52,905 12,489 2021 43,482 10,941 2022 34,768 9,743 2023 27,974 8,680 Years thereafter 45,259 26,744 Minimum lease payments 248,531 78,972 Less: amount representing interest 21,954 14,318 Present value of net minimum lease payments $226,577 $64,654 Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows: Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $9,285 $8,316 $5,231 $1,036 $2,631 2020 11,085 9,795 5,845 1,216 2,961 2021 9,137 8,009 3,886 945 2,186 2022 6,763 5,137 2,505 622 1,196 2023 5,600 3,262 1,228 460 839 Years thereafter 15,713 3,346 2,313 999 1,104 Minimum lease payments 57,583 37,865 21,008 5,278 10,917 Less: amount representing interest 4,664 1,764 1,982 312 839 Present value of net minimum lease payments $52,919 $36,101 $19,026 $4,966 $10,078 Financing Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $2,071 $3,302 $1,159 $592 $1,010 2020 2,464 3,843 1,431 616 1,165 2021 2,067 3,189 1,266 505 973 2022 1,778 2,749 1,073 454 766 2023 1,551 2,301 867 407 633 Years thereafter 2,476 5,414 1,154 748 796 Minimum lease payments 12,407 20,798 6,950 3,322 5,343 Less: amount representing interest 1,091 3,707 592 349 354 Present value of net minimum lease payments $11,316 $17,091 $6,358 $2,973 $4,989 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. In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K. General As of December 31, 2018 , Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year Operating Leases Capital Leases (In Thousands) 2019 $94,043 $2,887 2020 82,191 2,887 2021 75,147 2,887 2022 60,808 2,887 2023 47,391 2,887 Years thereafter 88,004 16,117 Minimum lease payments 447,584 30,552 Less: Amount representing interest — 8,555 Present value of net minimum lease payments $447,584 $21,997 Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018 , $53.1 million in 2017 , and $44.4 million in 2016 . As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf lease obligation, all of which are discussed elsewhere): Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) 2019 $20,421 $25,970 $9,344 $2,493 $5,744 2020 13,918 21,681 8,763 2,349 4,431 2021 11,931 19,514 7,186 1,901 3,625 2022 9,458 15,756 5,675 1,314 2,218 2023 7,782 12,092 2,946 1,043 1,561 Years thereafter 23,297 22,003 4,417 2,323 2,726 Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305 Rental Expenses Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy (In Millions) 2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.9 2017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.2 2016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6 In addition to the above 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 , $4 million in 2017 , and $3.4 million in 2016 for Entergy Arkansas and $0.4 million in 2018 , $0.3 million in 2017 , and $0.3 million in 2016 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018 , $1.6 million in 2017 , and $1.6 million in 2016 . On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02. Power Purchase Agreements As of December 31, 2018 , Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows: Year Entergy Texas (a) Entergy (In Thousands) 2019 $31,159 $31,159 2020 31,876 31,876 2021 32,609 32,609 2022 10,180 10,180 Minimum lease payments $105,824 $105,824 (a) Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases 50% of the capacity and energy from the power purchase agreement from Entergy Texas. Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018, $34.1 million in 2017, and $26.1 million in 2016. Sales and Leaseback Transactions Waterford 3 Lease Obligation In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million . The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report the sale-leaseback as a financing transaction in its financial statements. In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased. The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid. In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction through the end of the lease term in July 2017. Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $62.7 million . Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests, Entergy Louisiana reduced the balance of the liability to $60 million , and recorded the $2.7 million difference as a credit to interest expense. The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016. As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum lease payment (reflecting an interest rate of 8.09% ) of $57.5 million , including $2.3 million in interest, due January 2017 that was recorded as long-term debt. In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana. Grand Gulf Lease Obligations In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million . The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy. System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017. As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019 $17,188 2020 17,188 2021 17,188 2022 17,188 2023 17,188 Years thereafter 223,437 Total 309,377 Less: Amount representing interest 275,025 Present value of net minimum lease payments $34,352 |
| Entergy Louisiana [Member] | |
| 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 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 March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this 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. Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which 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; however, due to the nature of the agreements and Entergy’s continuing relationship with the lessor, 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 three months ended March 31, 2019: (In Thousands) Operating lease cost $15,720 Financing lease cost: Amortization of right-of-use assets $2,912 Interest on lease liabilities $753 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 financing lease costs which are included in financing activities. The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating lease cost $3,295 $3,026 $1,753 $357 $1,085 Financing lease cost: Amortization of right-of-use assets $629 $1,025 $348 $176 $306 Interest on lease liabilities $105 $152 $59 $30 $46 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 financing 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 March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases. Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating leases $52,916 $36,066 $18,926 $4,961 $9,991 Financing leases $11,317 $16,978 $6,358 $2,974 $5,076 The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019: (In Thousands) Current liabilities: Operating leases $53,121 Financing leases $11,590 Non-current liabilities: Operating leases $173,456 Financing leases $53,065 The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Current liabilities: Operating leases $11,321 $10,958 $6,461 $1,748 $3,071 Financing leases $2,465 $4,052 $1,382 $678 $1,281 Non-current liabilities: Operating leases $41,597 $25,144 $12,565 $3,218 $7,007 Financing leases $8,851 $13,039 $4,975 $2,296 $3,708 The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019: Weighted average remaining lease terms: Operating leases 5.51 Financing leases 7.06 Weighted average discount rate: Operating leases 3.75 % Financing leases 4.64 % The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas Weighted average remaining lease terms: Operating leases 6.38 4.32 5.09 5.64 4.15 Financing leases 5.64 5.29 5.39 5.81 5.09 Weighted average discount rate: Operating leases 3.29 % 3.54 % 3.67 % 3.55 % 3.80 % Financing leases 3.71 % 3.56 % 3.70 % 3.97 % 3.72 % Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows: Year Operating Leases Financing Leases (In Thousands) Remainder for 2019 $44,143 $10,375 2020 52,905 12,489 2021 43,482 10,941 2022 34,768 9,743 2023 27,974 8,680 Years thereafter 45,259 26,744 Minimum lease payments 248,531 78,972 Less: amount representing interest 21,954 14,318 Present value of net minimum lease payments $226,577 $64,654 Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows: Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $9,285 $8,316 $5,231 $1,036 $2,631 2020 11,085 9,795 5,845 1,216 2,961 2021 9,137 8,009 3,886 945 2,186 2022 6,763 5,137 2,505 622 1,196 2023 5,600 3,262 1,228 460 839 Years thereafter 15,713 3,346 2,313 999 1,104 Minimum lease payments 57,583 37,865 21,008 5,278 10,917 Less: amount representing interest 4,664 1,764 1,982 312 839 Present value of net minimum lease payments $52,919 $36,101 $19,026 $4,966 $10,078 Financing Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $2,071 $3,302 $1,159 $592 $1,010 2020 2,464 3,843 1,431 616 1,165 2021 2,067 3,189 1,266 505 973 2022 1,778 2,749 1,073 454 766 2023 1,551 2,301 867 407 633 Years thereafter 2,476 5,414 1,154 748 796 Minimum lease payments 12,407 20,798 6,950 3,322 5,343 Less: amount representing interest 1,091 3,707 592 349 354 Present value of net minimum lease payments $11,316 $17,091 $6,358 $2,973 $4,989 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. In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K. General As of December 31, 2018 , Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year Operating Leases Capital Leases (In Thousands) 2019 $94,043 $2,887 2020 82,191 2,887 2021 75,147 2,887 2022 60,808 2,887 2023 47,391 2,887 Years thereafter 88,004 16,117 Minimum lease payments 447,584 30,552 Less: Amount representing interest — 8,555 Present value of net minimum lease payments $447,584 $21,997 Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018 , $53.1 million in 2017 , and $44.4 million in 2016 . As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf lease obligation, all of which are discussed elsewhere): Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) 2019 $20,421 $25,970 $9,344 $2,493 $5,744 2020 13,918 21,681 8,763 2,349 4,431 2021 11,931 19,514 7,186 1,901 3,625 2022 9,458 15,756 5,675 1,314 2,218 2023 7,782 12,092 2,946 1,043 1,561 Years thereafter 23,297 22,003 4,417 2,323 2,726 Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305 Rental Expenses Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy (In Millions) 2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.9 2017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.2 2016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6 In addition to the above 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 , $4 million in 2017 , and $3.4 million in 2016 for Entergy Arkansas and $0.4 million in 2018 , $0.3 million in 2017 , and $0.3 million in 2016 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018 , $1.6 million in 2017 , and $1.6 million in 2016 . On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02. Power Purchase Agreements As of December 31, 2018 , Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows: Year Entergy Texas (a) Entergy (In Thousands) 2019 $31,159 $31,159 2020 31,876 31,876 2021 32,609 32,609 2022 10,180 10,180 Minimum lease payments $105,824 $105,824 (a) Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases 50% of the capacity and energy from the power purchase agreement from Entergy Texas. Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018, $34.1 million in 2017, and $26.1 million in 2016. Sales and Leaseback Transactions Waterford 3 Lease Obligation In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million . The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report the sale-leaseback as a financing transaction in its financial statements. In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased. The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid. In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction through the end of the lease term in July 2017. Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $62.7 million . Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests, Entergy Louisiana reduced the balance of the liability to $60 million , and recorded the $2.7 million difference as a credit to interest expense. The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016. As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum lease payment (reflecting an interest rate of 8.09% ) of $57.5 million , including $2.3 million in interest, due January 2017 that was recorded as long-term debt. In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana. Grand Gulf Lease Obligations In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million . The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy. System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017. As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019 $17,188 2020 17,188 2021 17,188 2022 17,188 2023 17,188 Years thereafter 223,437 Total 309,377 Less: Amount representing interest 275,025 Present value of net minimum lease payments $34,352 |
| Entergy Mississippi [Member] | |
| 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 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 March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this 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. Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which 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; however, due to the nature of the agreements and Entergy’s continuing relationship with the lessor, 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 three months ended March 31, 2019: (In Thousands) Operating lease cost $15,720 Financing lease cost: Amortization of right-of-use assets $2,912 Interest on lease liabilities $753 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 financing lease costs which are included in financing activities. The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating lease cost $3,295 $3,026 $1,753 $357 $1,085 Financing lease cost: Amortization of right-of-use assets $629 $1,025 $348 $176 $306 Interest on lease liabilities $105 $152 $59 $30 $46 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 financing 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 March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases. Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating leases $52,916 $36,066 $18,926 $4,961 $9,991 Financing leases $11,317 $16,978 $6,358 $2,974 $5,076 The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019: (In Thousands) Current liabilities: Operating leases $53,121 Financing leases $11,590 Non-current liabilities: Operating leases $173,456 Financing leases $53,065 The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Current liabilities: Operating leases $11,321 $10,958 $6,461 $1,748 $3,071 Financing leases $2,465 $4,052 $1,382 $678 $1,281 Non-current liabilities: Operating leases $41,597 $25,144 $12,565 $3,218 $7,007 Financing leases $8,851 $13,039 $4,975 $2,296 $3,708 The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019: Weighted average remaining lease terms: Operating leases 5.51 Financing leases 7.06 Weighted average discount rate: Operating leases 3.75 % Financing leases 4.64 % The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas Weighted average remaining lease terms: Operating leases 6.38 4.32 5.09 5.64 4.15 Financing leases 5.64 5.29 5.39 5.81 5.09 Weighted average discount rate: Operating leases 3.29 % 3.54 % 3.67 % 3.55 % 3.80 % Financing leases 3.71 % 3.56 % 3.70 % 3.97 % 3.72 % Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows: Year Operating Leases Financing Leases (In Thousands) Remainder for 2019 $44,143 $10,375 2020 52,905 12,489 2021 43,482 10,941 2022 34,768 9,743 2023 27,974 8,680 Years thereafter 45,259 26,744 Minimum lease payments 248,531 78,972 Less: amount representing interest 21,954 14,318 Present value of net minimum lease payments $226,577 $64,654 Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows: Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $9,285 $8,316 $5,231 $1,036 $2,631 2020 11,085 9,795 5,845 1,216 2,961 2021 9,137 8,009 3,886 945 2,186 2022 6,763 5,137 2,505 622 1,196 2023 5,600 3,262 1,228 460 839 Years thereafter 15,713 3,346 2,313 999 1,104 Minimum lease payments 57,583 37,865 21,008 5,278 10,917 Less: amount representing interest 4,664 1,764 1,982 312 839 Present value of net minimum lease payments $52,919 $36,101 $19,026 $4,966 $10,078 Financing Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $2,071 $3,302 $1,159 $592 $1,010 2020 2,464 3,843 1,431 616 1,165 2021 2,067 3,189 1,266 505 973 2022 1,778 2,749 1,073 454 766 2023 1,551 2,301 867 407 633 Years thereafter 2,476 5,414 1,154 748 796 Minimum lease payments 12,407 20,798 6,950 3,322 5,343 Less: amount representing interest 1,091 3,707 592 349 354 Present value of net minimum lease payments $11,316 $17,091 $6,358 $2,973 $4,989 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. In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K. General As of December 31, 2018 , Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year Operating Leases Capital Leases (In Thousands) 2019 $94,043 $2,887 2020 82,191 2,887 2021 75,147 2,887 2022 60,808 2,887 2023 47,391 2,887 Years thereafter 88,004 16,117 Minimum lease payments 447,584 30,552 Less: Amount representing interest — 8,555 Present value of net minimum lease payments $447,584 $21,997 Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018 , $53.1 million in 2017 , and $44.4 million in 2016 . As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf lease obligation, all of which are discussed elsewhere): Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) 2019 $20,421 $25,970 $9,344 $2,493 $5,744 2020 13,918 21,681 8,763 2,349 4,431 2021 11,931 19,514 7,186 1,901 3,625 2022 9,458 15,756 5,675 1,314 2,218 2023 7,782 12,092 2,946 1,043 1,561 Years thereafter 23,297 22,003 4,417 2,323 2,726 Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305 Rental Expenses Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy (In Millions) 2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.9 2017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.2 2016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6 In addition to the above 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 , $4 million in 2017 , and $3.4 million in 2016 for Entergy Arkansas and $0.4 million in 2018 , $0.3 million in 2017 , and $0.3 million in 2016 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018 , $1.6 million in 2017 , and $1.6 million in 2016 . On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02. Power Purchase Agreements As of December 31, 2018 , Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows: Year Entergy Texas (a) Entergy (In Thousands) 2019 $31,159 $31,159 2020 31,876 31,876 2021 32,609 32,609 2022 10,180 10,180 Minimum lease payments $105,824 $105,824 (a) Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases 50% of the capacity and energy from the power purchase agreement from Entergy Texas. Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018, $34.1 million in 2017, and $26.1 million in 2016. Sales and Leaseback Transactions Waterford 3 Lease Obligation In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million . The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report the sale-leaseback as a financing transaction in its financial statements. In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased. The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid. In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction through the end of the lease term in July 2017. Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $62.7 million . Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests, Entergy Louisiana reduced the balance of the liability to $60 million , and recorded the $2.7 million difference as a credit to interest expense. The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016. As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum lease payment (reflecting an interest rate of 8.09% ) of $57.5 million , including $2.3 million in interest, due January 2017 that was recorded as long-term debt. In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana. Grand Gulf Lease Obligations In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million . The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy. System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017. As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019 $17,188 2020 17,188 2021 17,188 2022 17,188 2023 17,188 Years thereafter 223,437 Total 309,377 Less: Amount representing interest 275,025 Present value of net minimum lease payments $34,352 |
| Entergy New Orleans [Member] | |
| 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 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 March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this 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. Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which 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; however, due to the nature of the agreements and Entergy’s continuing relationship with the lessor, 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 three months ended March 31, 2019: (In Thousands) Operating lease cost $15,720 Financing lease cost: Amortization of right-of-use assets $2,912 Interest on lease liabilities $753 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 financing lease costs which are included in financing activities. The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating lease cost $3,295 $3,026 $1,753 $357 $1,085 Financing lease cost: Amortization of right-of-use assets $629 $1,025 $348 $176 $306 Interest on lease liabilities $105 $152 $59 $30 $46 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 financing 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 March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases. Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating leases $52,916 $36,066 $18,926 $4,961 $9,991 Financing leases $11,317 $16,978 $6,358 $2,974 $5,076 The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019: (In Thousands) Current liabilities: Operating leases $53,121 Financing leases $11,590 Non-current liabilities: Operating leases $173,456 Financing leases $53,065 The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Current liabilities: Operating leases $11,321 $10,958 $6,461 $1,748 $3,071 Financing leases $2,465 $4,052 $1,382 $678 $1,281 Non-current liabilities: Operating leases $41,597 $25,144 $12,565 $3,218 $7,007 Financing leases $8,851 $13,039 $4,975 $2,296 $3,708 The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019: Weighted average remaining lease terms: Operating leases 5.51 Financing leases 7.06 Weighted average discount rate: Operating leases 3.75 % Financing leases 4.64 % The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas Weighted average remaining lease terms: Operating leases 6.38 4.32 5.09 5.64 4.15 Financing leases 5.64 5.29 5.39 5.81 5.09 Weighted average discount rate: Operating leases 3.29 % 3.54 % 3.67 % 3.55 % 3.80 % Financing leases 3.71 % 3.56 % 3.70 % 3.97 % 3.72 % Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows: Year Operating Leases Financing Leases (In Thousands) Remainder for 2019 $44,143 $10,375 2020 52,905 12,489 2021 43,482 10,941 2022 34,768 9,743 2023 27,974 8,680 Years thereafter 45,259 26,744 Minimum lease payments 248,531 78,972 Less: amount representing interest 21,954 14,318 Present value of net minimum lease payments $226,577 $64,654 Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows: Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $9,285 $8,316 $5,231 $1,036 $2,631 2020 11,085 9,795 5,845 1,216 2,961 2021 9,137 8,009 3,886 945 2,186 2022 6,763 5,137 2,505 622 1,196 2023 5,600 3,262 1,228 460 839 Years thereafter 15,713 3,346 2,313 999 1,104 Minimum lease payments 57,583 37,865 21,008 5,278 10,917 Less: amount representing interest 4,664 1,764 1,982 312 839 Present value of net minimum lease payments $52,919 $36,101 $19,026 $4,966 $10,078 Financing Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $2,071 $3,302 $1,159 $592 $1,010 2020 2,464 3,843 1,431 616 1,165 2021 2,067 3,189 1,266 505 973 2022 1,778 2,749 1,073 454 766 2023 1,551 2,301 867 407 633 Years thereafter 2,476 5,414 1,154 748 796 Minimum lease payments 12,407 20,798 6,950 3,322 5,343 Less: amount representing interest 1,091 3,707 592 349 354 Present value of net minimum lease payments $11,316 $17,091 $6,358 $2,973 $4,989 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. In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K. General As of December 31, 2018 , Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year Operating Leases Capital Leases (In Thousands) 2019 $94,043 $2,887 2020 82,191 2,887 2021 75,147 2,887 2022 60,808 2,887 2023 47,391 2,887 Years thereafter 88,004 16,117 Minimum lease payments 447,584 30,552 Less: Amount representing interest — 8,555 Present value of net minimum lease payments $447,584 $21,997 Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018 , $53.1 million in 2017 , and $44.4 million in 2016 . As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf lease obligation, all of which are discussed elsewhere): Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) 2019 $20,421 $25,970 $9,344 $2,493 $5,744 2020 13,918 21,681 8,763 2,349 4,431 2021 11,931 19,514 7,186 1,901 3,625 2022 9,458 15,756 5,675 1,314 2,218 2023 7,782 12,092 2,946 1,043 1,561 Years thereafter 23,297 22,003 4,417 2,323 2,726 Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305 Rental Expenses Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy (In Millions) 2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.9 2017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.2 2016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6 In addition to the above 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 , $4 million in 2017 , and $3.4 million in 2016 for Entergy Arkansas and $0.4 million in 2018 , $0.3 million in 2017 , and $0.3 million in 2016 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018 , $1.6 million in 2017 , and $1.6 million in 2016 . On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02. Power Purchase Agreements As of December 31, 2018 , Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows: Year Entergy Texas (a) Entergy (In Thousands) 2019 $31,159 $31,159 2020 31,876 31,876 2021 32,609 32,609 2022 10,180 10,180 Minimum lease payments $105,824 $105,824 (a) Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases 50% of the capacity and energy from the power purchase agreement from Entergy Texas. Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018, $34.1 million in 2017, and $26.1 million in 2016. Sales and Leaseback Transactions Waterford 3 Lease Obligation In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million . The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report the sale-leaseback as a financing transaction in its financial statements. In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased. The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid. In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction through the end of the lease term in July 2017. Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $62.7 million . Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests, Entergy Louisiana reduced the balance of the liability to $60 million , and recorded the $2.7 million difference as a credit to interest expense. The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016. As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum lease payment (reflecting an interest rate of 8.09% ) of $57.5 million , including $2.3 million in interest, due January 2017 that was recorded as long-term debt. In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana. Grand Gulf Lease Obligations In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million . The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy. System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017. As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019 $17,188 2020 17,188 2021 17,188 2022 17,188 2023 17,188 Years thereafter 223,437 Total 309,377 Less: Amount representing interest 275,025 Present value of net minimum lease payments $34,352 |
| Entergy Texas [Member] | |
| 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 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 March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this 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. Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which 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; however, due to the nature of the agreements and Entergy’s continuing relationship with the lessor, 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 three months ended March 31, 2019: (In Thousands) Operating lease cost $15,720 Financing lease cost: Amortization of right-of-use assets $2,912 Interest on lease liabilities $753 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 financing lease costs which are included in financing activities. The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating lease cost $3,295 $3,026 $1,753 $357 $1,085 Financing lease cost: Amortization of right-of-use assets $629 $1,025 $348 $176 $306 Interest on lease liabilities $105 $152 $59 $30 $46 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 financing 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 March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases. Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating leases $52,916 $36,066 $18,926 $4,961 $9,991 Financing leases $11,317 $16,978 $6,358 $2,974 $5,076 The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019: (In Thousands) Current liabilities: Operating leases $53,121 Financing leases $11,590 Non-current liabilities: Operating leases $173,456 Financing leases $53,065 The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Current liabilities: Operating leases $11,321 $10,958 $6,461 $1,748 $3,071 Financing leases $2,465 $4,052 $1,382 $678 $1,281 Non-current liabilities: Operating leases $41,597 $25,144 $12,565 $3,218 $7,007 Financing leases $8,851 $13,039 $4,975 $2,296 $3,708 The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019: Weighted average remaining lease terms: Operating leases 5.51 Financing leases 7.06 Weighted average discount rate: Operating leases 3.75 % Financing leases 4.64 % The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas Weighted average remaining lease terms: Operating leases 6.38 4.32 5.09 5.64 4.15 Financing leases 5.64 5.29 5.39 5.81 5.09 Weighted average discount rate: Operating leases 3.29 % 3.54 % 3.67 % 3.55 % 3.80 % Financing leases 3.71 % 3.56 % 3.70 % 3.97 % 3.72 % Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows: Year Operating Leases Financing Leases (In Thousands) Remainder for 2019 $44,143 $10,375 2020 52,905 12,489 2021 43,482 10,941 2022 34,768 9,743 2023 27,974 8,680 Years thereafter 45,259 26,744 Minimum lease payments 248,531 78,972 Less: amount representing interest 21,954 14,318 Present value of net minimum lease payments $226,577 $64,654 Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows: Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $9,285 $8,316 $5,231 $1,036 $2,631 2020 11,085 9,795 5,845 1,216 2,961 2021 9,137 8,009 3,886 945 2,186 2022 6,763 5,137 2,505 622 1,196 2023 5,600 3,262 1,228 460 839 Years thereafter 15,713 3,346 2,313 999 1,104 Minimum lease payments 57,583 37,865 21,008 5,278 10,917 Less: amount representing interest 4,664 1,764 1,982 312 839 Present value of net minimum lease payments $52,919 $36,101 $19,026 $4,966 $10,078 Financing Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $2,071 $3,302 $1,159 $592 $1,010 2020 2,464 3,843 1,431 616 1,165 2021 2,067 3,189 1,266 505 973 2022 1,778 2,749 1,073 454 766 2023 1,551 2,301 867 407 633 Years thereafter 2,476 5,414 1,154 748 796 Minimum lease payments 12,407 20,798 6,950 3,322 5,343 Less: amount representing interest 1,091 3,707 592 349 354 Present value of net minimum lease payments $11,316 $17,091 $6,358 $2,973 $4,989 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. In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K. General As of December 31, 2018 , Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year Operating Leases Capital Leases (In Thousands) 2019 $94,043 $2,887 2020 82,191 2,887 2021 75,147 2,887 2022 60,808 2,887 2023 47,391 2,887 Years thereafter 88,004 16,117 Minimum lease payments 447,584 30,552 Less: Amount representing interest — 8,555 Present value of net minimum lease payments $447,584 $21,997 Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018 , $53.1 million in 2017 , and $44.4 million in 2016 . As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf lease obligation, all of which are discussed elsewhere): Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) 2019 $20,421 $25,970 $9,344 $2,493 $5,744 2020 13,918 21,681 8,763 2,349 4,431 2021 11,931 19,514 7,186 1,901 3,625 2022 9,458 15,756 5,675 1,314 2,218 2023 7,782 12,092 2,946 1,043 1,561 Years thereafter 23,297 22,003 4,417 2,323 2,726 Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305 Rental Expenses Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy (In Millions) 2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.9 2017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.2 2016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6 In addition to the above 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 , $4 million in 2017 , and $3.4 million in 2016 for Entergy Arkansas and $0.4 million in 2018 , $0.3 million in 2017 , and $0.3 million in 2016 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018 , $1.6 million in 2017 , and $1.6 million in 2016 . On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02. Power Purchase Agreements As of December 31, 2018 , Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows: Year Entergy Texas (a) Entergy (In Thousands) 2019 $31,159 $31,159 2020 31,876 31,876 2021 32,609 32,609 2022 10,180 10,180 Minimum lease payments $105,824 $105,824 (a) Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases 50% of the capacity and energy from the power purchase agreement from Entergy Texas. Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018, $34.1 million in 2017, and $26.1 million in 2016. Sales and Leaseback Transactions Waterford 3 Lease Obligation In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million . The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report the sale-leaseback as a financing transaction in its financial statements. In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased. The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid. In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction through the end of the lease term in July 2017. Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $62.7 million . Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests, Entergy Louisiana reduced the balance of the liability to $60 million , and recorded the $2.7 million difference as a credit to interest expense. The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016. As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum lease payment (reflecting an interest rate of 8.09% ) of $57.5 million , including $2.3 million in interest, due January 2017 that was recorded as long-term debt. In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana. Grand Gulf Lease Obligations In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million . The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy. System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017. As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019 $17,188 2020 17,188 2021 17,188 2022 17,188 2023 17,188 Years thereafter 223,437 Total 309,377 Less: Amount representing interest 275,025 Present value of net minimum lease payments $34,352 |
| System Energy [Member] | |
| 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 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 March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this 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. Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which 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; however, due to the nature of the agreements and Entergy’s continuing relationship with the lessor, 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 three months ended March 31, 2019: (In Thousands) Operating lease cost $15,720 Financing lease cost: Amortization of right-of-use assets $2,912 Interest on lease liabilities $753 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 financing lease costs which are included in financing activities. The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating lease cost $3,295 $3,026 $1,753 $357 $1,085 Financing lease cost: Amortization of right-of-use assets $629 $1,025 $348 $176 $306 Interest on lease liabilities $105 $152 $59 $30 $46 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 financing 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 March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases. Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Operating leases $52,916 $36,066 $18,926 $4,961 $9,991 Financing leases $11,317 $16,978 $6,358 $2,974 $5,076 The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019: (In Thousands) Current liabilities: Operating leases $53,121 Financing leases $11,590 Non-current liabilities: Operating leases $173,456 Financing leases $53,065 The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Current liabilities: Operating leases $11,321 $10,958 $6,461 $1,748 $3,071 Financing leases $2,465 $4,052 $1,382 $678 $1,281 Non-current liabilities: Operating leases $41,597 $25,144 $12,565 $3,218 $7,007 Financing leases $8,851 $13,039 $4,975 $2,296 $3,708 The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019: Weighted average remaining lease terms: Operating leases 5.51 Financing leases 7.06 Weighted average discount rate: Operating leases 3.75 % Financing leases 4.64 % The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019: Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas Weighted average remaining lease terms: Operating leases 6.38 4.32 5.09 5.64 4.15 Financing leases 5.64 5.29 5.39 5.81 5.09 Weighted average discount rate: Operating leases 3.29 % 3.54 % 3.67 % 3.55 % 3.80 % Financing leases 3.71 % 3.56 % 3.70 % 3.97 % 3.72 % Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows: Year Operating Leases Financing Leases (In Thousands) Remainder for 2019 $44,143 $10,375 2020 52,905 12,489 2021 43,482 10,941 2022 34,768 9,743 2023 27,974 8,680 Years thereafter 45,259 26,744 Minimum lease payments 248,531 78,972 Less: amount representing interest 21,954 14,318 Present value of net minimum lease payments $226,577 $64,654 Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows: Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $9,285 $8,316 $5,231 $1,036 $2,631 2020 11,085 9,795 5,845 1,216 2,961 2021 9,137 8,009 3,886 945 2,186 2022 6,763 5,137 2,505 622 1,196 2023 5,600 3,262 1,228 460 839 Years thereafter 15,713 3,346 2,313 999 1,104 Minimum lease payments 57,583 37,865 21,008 5,278 10,917 Less: amount representing interest 4,664 1,764 1,982 312 839 Present value of net minimum lease payments $52,919 $36,101 $19,026 $4,966 $10,078 Financing Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) Remainder of 2019 $2,071 $3,302 $1,159 $592 $1,010 2020 2,464 3,843 1,431 616 1,165 2021 2,067 3,189 1,266 505 973 2022 1,778 2,749 1,073 454 766 2023 1,551 2,301 867 407 633 Years thereafter 2,476 5,414 1,154 748 796 Minimum lease payments 12,407 20,798 6,950 3,322 5,343 Less: amount representing interest 1,091 3,707 592 349 354 Present value of net minimum lease payments $11,316 $17,091 $6,358 $2,973 $4,989 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. In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K. General As of December 31, 2018 , Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year Operating Leases Capital Leases (In Thousands) 2019 $94,043 $2,887 2020 82,191 2,887 2021 75,147 2,887 2022 60,808 2,887 2023 47,391 2,887 Years thereafter 88,004 16,117 Minimum lease payments 447,584 30,552 Less: Amount representing interest — 8,555 Present value of net minimum lease payments $447,584 $21,997 Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018 , $53.1 million in 2017 , and $44.4 million in 2016 . As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf lease obligation, all of which are discussed elsewhere): Operating Leases Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas (In Thousands) 2019 $20,421 $25,970 $9,344 $2,493 $5,744 2020 13,918 21,681 8,763 2,349 4,431 2021 11,931 19,514 7,186 1,901 3,625 2022 9,458 15,756 5,675 1,314 2,218 2023 7,782 12,092 2,946 1,043 1,561 Years thereafter 23,297 22,003 4,417 2,323 2,726 Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305 Rental Expenses Year Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy (In Millions) 2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.9 2017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.2 2016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6 In addition to the above 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 , $4 million in 2017 , and $3.4 million in 2016 for Entergy Arkansas and $0.4 million in 2018 , $0.3 million in 2017 , and $0.3 million in 2016 for Entergy Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $0.1 million in 2018 , $1.6 million in 2017 , and $1.6 million in 2016 . On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02. Power Purchase Agreements As of December 31, 2018 , Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows: Year Entergy Texas (a) Entergy (In Thousands) 2019 $31,159 $31,159 2020 31,876 31,876 2021 32,609 32,609 2022 10,180 10,180 Minimum lease payments $105,824 $105,824 (a) Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases 50% of the capacity and energy from the power purchase agreement from Entergy Texas. Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018, $34.1 million in 2017, and $26.1 million in 2016. Sales and Leaseback Transactions Waterford 3 Lease Obligation In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million . The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report the sale-leaseback as a financing transaction in its financial statements. In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased. The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid. In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction through the end of the lease term in July 2017. Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $62.7 million . Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests, Entergy Louisiana reduced the balance of the liability to $60 million , and recorded the $2.7 million difference as a credit to interest expense. The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016. As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum lease payment (reflecting an interest rate of 8.09% ) of $57.5 million , including $2.3 million in interest, due January 2017 that was recorded as long-term debt. In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana. Grand Gulf Lease Obligations In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million . The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy. System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017. As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019 $17,188 2020 17,188 2021 17,188 2022 17,188 2023 17,188 Years thereafter 223,437 Total 309,377 Less: Amount representing interest 275,025 Present value of net minimum lease payments $34,352 |
