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LEASES (Tables) | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Schedule of lease expense and supplemental cash flow information for leases | The components of lease expense and supplemental cash flow information related to our leases for the three and nine months ended September 30 are as follows:
|  | Three Months Ended September 30 |  | Nine Months Ended September 30
(in millions) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Finance/capital lease expense (1) |  | $ | 2.1 |  |  | $ | 2.0 |  |  | $ | 6.2 |  |  | $ | 5.8 |
Operating lease expense (2) |  | 1.3 |  |  | 1.4 |  |  | 4.1 |  |  | 4.2 |
Short-term lease expense (2) |  | 0.1 |  |  | 0.1 |  |  | 0.2 |  |  | 0.8 |
Total lease expense |  | $ | 3.5 |  |  | $ | 3.5 |  |  | $ | 10.5 |  |  | $ | 10.8 |
Other information |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows for finance/capital leases (3) |  |  |  |  |  | $ | 2.6 |  |  | $ | 5.8 |
Operating cash flows for operating leases |  |  |  |  |  | $ | 4.9 |  |  | $ | 4.9 |
Financing cash flows for finance leases (3) |  |  |  |  |  | $ | 3.6 |  |  | $ | — |
Non-cash activities: |  |  |  |  |  |  |  |
Right of use assets obtained in exchange for finance lease liabilities |  |  |  |  |  | $ | 28.7 |  |  |
Right of use assets obtained in exchange for operating lease liabilities |  |  |  |  |  | $ | 49.0 |  |  |
Weighted-average remaining lease term – finance leases |  |  |  |  |  | 31.5 years |  |  |
Weighted-average remaining lease term – operating leases |  |  |  |  |  | 13.0 years |  |  |
Weighted average discount rate – finance leases (4) |  |  |  |  |  | 6.8 | % |  |
Weighted average discount rate – operating leases (4) |  |  |  |  |  | 4.4 | % |  |
(1) | For the three and nine months ended September 30, 2019, finance lease expense included amortization of right of use assets in the amount of $1.3 million and $3.6 million (included in depreciation and amortization expense), respectively, and interest on lease liabilities of $0.8 million and $2.6 million (included in interest expense), respectively. For each of the three and nine months ended September 30, 2018, total capital lease cost related to the long-term power purchase agreement was included in cost of sales.
(2) | Operating and short-term lease expense were included as a component of operation and maintenance for the three and nine months ended September 30, 2019 and 2018.
(3) | Prior to our adoption of Topic 842 on January 1, 2019, all cash flows related to the finance lease were recorded as a component of operating cash flows.
(4) Because our operating leases do not provide an implicit rate of return, we used the fully collateralized incremental borrowing rates based upon information available for similarly rated companies in determining the present value of lease payments for our operating leases. For our power purchase agreement that meets the definition of a finance lease, the rate implicit in the lease was readily determinable. For our solar land leases that are finance leases, we used the fully collateralized incremental borrowing rates based upon information available for similarly rated companies in determining the present value of lease payments.
Schedule of finance and operating lease right of use asset | The following table summarizes our finance lease right of use assets, which were included in property, plant and equipment on our balance sheets:
(in millions) |  | September 30, 2019 |  | December 31, 2018
Long-term power purchase commitment |  |  |  |
Under finance/capital lease |  | $ | 140.3 |  |  | $ | 140.3 |
Accumulated amortization |  | (125.2 | ) |  | (120.9 | )
Total long-term power purchase commitment |  | $ | 15.1 |  |  | $ | 19.4 |
Two Creeks land leases |  |  |  |
Under finance leases |  | $ | 7.7 |  |  | $ | — |
Accumulated amortization |  | — |  |  | — |
Total Two Creeks land leases |  | $ | 7.7 |  |  | $ | — |
Badger Hollow I land leases |  |  |  |
Under finance leases |  | $ | 21.0 |  |  | $ | — |
Accumulated amortization |  | — |  |  | — |
Total Badger Hollow I land leases |  | $ | 21.0 |  |  | $ | — |
Total finance lease right of use assets/capital lease asset |  | $ | 43.8 |  |  | $ | 19.4 |
Schedule of future minimum lease payments for operating and finance leases | Future minimum lease payments under our operating leases and our finance leases, and the present value of our net minimum lease payments as of September 30, 2019, were as follows:
(in millions) |  | Total Operating Leases |  | Power Purchase Commitment |  | Two Creeks |  | Badger Hollow I |  | Total Finance Leases
Three months ending December 31, 2019 |  | $ | 1.1 |  |  | $ | 2.0 |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 2.2 |
2020 |  | 6.9 |  |  | 8.8 |  |  | 0.2 |  |  | 0.4 |  |  | 9.4 |
2021 |  | 4.9 |  |  | 9.4 |  |  | 0.2 |  |  | 0.7 |  |  | 10.3 |
2022 |  | 4.9 |  |  | 4.2 |  |  | 0.2 |  |  | 0.7 |  |  | 5.1 |
2023 |  | 5.0 |  |  | — |  |  | 0.2 |  |  | 0.7 |  |  | 0.9 |
2024 |  | 4.8 |  |  | — |  |  | 0.2 |  |  | 0.8 |  |  | 1.0 |
Thereafter |  | 30.5 |  |  | — |  |  | 22.8 |  |  | 57.7 |  |  | 80.5 |
Total minimum lease payments |  | 58.1 |  |  | 24.4 |  |  | 23.9 |  |  | 61.1 |  |  | 109.4 |
Less: Interest |  | (14.9 | ) |  | (4.7 | ) |  | (16.2 | ) |  | (40.1 | ) |  | (61.0 | )
Present value of minimum lease payments |  | 43.2 |  |  | 19.7 |  |  | 7.7 |  |  | 21.0 |  |  | 48.4 |
Less: Short-term lease liabilities |  | (4.4 | ) |  | (5.9 | ) |  | — |  |  | — |  |  | (5.9 | )
Long-term lease liabilities |  | $ | 38.8 |  |  | $ | 13.8 |  |  | $ | 7.7 |  |  | $ | 21.0 |  |  | $ | 42.5 |

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- Definition Tabular disclosure of lessee's lease cost. Includes, but is not limited to, interest expense for finance lease, amortization of right-of-use asset for finance lease, operating lease cost, short-term lease cost, variable lease cost and sublease income. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=77888426&loc=SL77918686-209980 + Details
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- Definition Tabular disclosure of undiscounted cash flows for finance and operating lease liabilities. Includes, but is not limited to, reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the statement of financial position. + References No definition available. + Details
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- Definition Tabular disclosure of right of use assets for finance and operating leases. Includes, but is not limited to, the gross carrying amount of the assets and the associated accumulated amortization. + References No definition available. + Details
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