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Leases | 6 Months Ended
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Jun. 30, 2019
Leases [Abstract] |
Leases | Note 12 – Leases We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing and warehouse facilities, retail and service locations, equipment, vehicles, and solar energy systems, worldwide. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our leases, where we are the lessee, often include options to extend the lease term for up to 10 years. Some of our leases also include options to terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Certain operating leases provide for annual increases to lease payments based on an index or rate. We estimate the annual increase in lease payments based on the index or rate at the lease commencement date, for both our historical leases and for new leases commencing after January 1, 2019. Differences between the estimated lease payment and actual payment are expensed as incurred. Lease expense for finance lease payments is recognized as amortization expense of the finance lease ROU asset and interest expense on the finance lease liability over the lease term. The balances for the operating and finance leases where we are the lessee are presented as follows (in thousands) within our consolidated balance sheet:
|  | June 30, 2019 |
Operating leases: |  |  |  |
Operating lease right-of-use assets |  | $ | 1,248,277 |
Accrued liabilities and other |  | $ | 220,092 |
Other long-term liabilities |  |  | 1,030,797 |
Total operating lease liabilities |  | $ | 1,250,889 |
Finance leases: |  |  |  |
Solar energy systems, net |  | $ | 31,288 |
Property, plant and equipment, net |  |  | 1,620,995 |
Total finance lease assets |  | $ | 1,652,283 |
Current portion of long-term debt and finance leases |  | $ | 331,257 |
Long-term debt and finance leases, net of current portion |  |  | 1,328,554 |
Total finance lease liabilities |  | $ | 1,659,811 |
The components of lease expense are as follows (in thousands) within our consolidated statements of operations:
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, 2019 |  |  | June 30, 2019 |
Operating lease expense: |  |  |  |  |  |  |  |
Operating lease expense (1) |  | $ | 106,101 |  |  | $ | 207,338 |
Finance lease expense: |  |  |  |  |  |  |  |
Amortization of leased assets |  | $ | 75,060 |  |  | $ | 132,325 |
Interest on lease liabilities |  |  | 26,906 |  |  |  | 50,467 |
Total finance lease expense |  | $ | 101,966 |  |  | $ | 182,792 |
Total lease expense |  | $ | 208,067 |  |  | $ | 390,130 |
(1) | Includes short-term leases and variable lease costs, which are immaterial.
Other information related to leases where we are the lessee is as follows (in thousands):
|  | June 30, 2019 |
Weighted-average remaining lease term: |  |  |  |
Operating leases |  | 6.6 years |
Finance leases |  | 4.4 years |
Weighted-average discount rate: |  |  |  |
Operating leases |  |  | 6.4 | %
Finance leases |  |  | 6.6 | %
Supplemental cash flow information related to leases where we are the lessee is as follows (in thousands):
|  | Six Months Ended |
|  | June 30, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash outflows from operating leases |  | $ | 170,405 |
Operating cash outflows from finance leases (interest payments) |  | $ | 49,067 |
Financing cash outflows from finance leases |  | $ | 142,571 |
Leased assets obtained in exchange for new finance lease liabilities |  | $ | 468,723 |
Leased assets obtained in exchange for new operating lease liabilities |  | $ | 119,267 |
As of June 30, 2019, the maturities of our operating and finance lease liabilities (excluding short-term leases) are as follows (in thousands):
|  | Operating |  |  | Finance |
|  | Leases |  |  | Leases |
Six months ending December 31, 2019 |  | $ | 147,583 |  |  | $ | 237,862 |
2020 |  |  | 279,622 |  |  |  | 372,881 |
2021 |  |  | 247,142 |  |  |  | 654,080 |
2022 |  |  | 198,809 |  |  |  | 559,243 |
2023 |  |  | 166,428 |  |  |  | 10,297 |
Thereafter |  |  | 517,982 |  |  |  | 17,223 |
Total minimum lease payments |  |  | 1,557,566 |  |  |  | 1,851,586 |
Less: Interest |  |  | 306,677 |  |  |  | 191,775 |
Present value of lease obligations |  |  | 1,250,889 |  |  |  | 1,659,811 |
Less: Current portion |  |  | 220,092 |  |  |  | 331,257 |
Long-term portion of lease obligations |  | $ | 1,030,797 |  |  | $ | 1,328,554 |
As of June 30, 2019, we have excluded from the table above an additional operating lease for a facility that has not yet commenced of $55.8 million. This operating lease is expected to commence in the second half of 2019 for an initial lease term of 11.5 years. As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018 and under legacy lease accounting (ASC 840), future minimum lease payments under non-cancellable leases as of December 31, 2018 are as follows (in thousands):
|  | Operating |  |  | Finance |
|  | Leases |  |  | Leases |
2019 |  | $ | 275,654 |  |  | $ | 416,952 |
2020 |  |  | 256,931 |  |  |  | 503,545 |
2021 |  |  | 230,406 |  |  |  | 506,197 |
2022 |  |  | 182,911 |  |  |  | 23,828 |
2023 |  |  | 157,662 |  |  |  | 4,776 |
Thereafter |  |  | 524,590 |  |  |  | 5,938 |
Total minimum lease payments |  | $ | 1,628,154 |  |  |  | 1,461,236 |
Less: Interest |  |  |  |  |  |  | 122,340 |
Present value of lease obligations |  |  |  |  |  |  | 1,338,896 |
Less: Current portion |  |  |  |  |  |  | 345,714 |
Long-term portion of lease obligations |  |  |  |  |  | $ | 993,182 |
Non-cancellable Operating Lease Receivables Under the new lease standard, we are the lessor of certain vehicle arrangements as described in Note 2, Summary of Significant Accounting Policies. As of June 30, 2019, maturities of our operating lease receivables from customers for each of the next five years and thereafter were as follows (in thousands):
Six months ending December 31, 2019 |  | $ | 278,034 |
2020 |  |  | 493,508 |
2021 |  |  | 343,819 |
2022 |  |  | 207,032 |
2023 |  |  | 187,467 |
Thereafter |  |  | 2,460,362 |
Total |  | $ | 3,970,222 |
As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018 and under legacy lease accounting (ASC 840), future minimum lease payments to be received from customers under non-cancellable leases as of December 31, 2018 are as follows (in thousands):
2019 |  | $ | 501,625 |
2020 |  |  | 418,299 |
2021 |  |  | 270,838 |
2022 |  |  | 186,807 |
2023 |  |  | 188,809 |
Thereafter |  |  | 2,469,732 |
Total |  | $ | 4,036,110 |
The above tables do not include vehicle sales to customers or leasing partners with a resale value guarantee as the cash payments were received upfront. For our solar PPA arrangements, customers are charged solely based on actual power produced by the installed solar energy system at a predefined rate per kilowatt-hour of power produced. The future payments from such arrangements are not included in the above table as they are a function of the power generated by the related solar energy systems in the future. Following the adoption of the new lease standard, solar energy system sales and PPAs that commence after January 1, 2019, where we are the lessor and were previously accounted for as leases, will no longer meet the definition of a lease and are therefore not included in the table as of June 30, 2019 (refer to Note 2, Summary of Significant Accounting Policies).

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