Net Investment in Direct Financing Lease

12 Months Ended

Dec. 31, 2018

Net Investment in Direct Financing Lease [Abstract]

NET INVESTMENT IN DIRECT FINANCING LEASE

20. NET INVESTMENT IN DIRECT FINANCING LEASE

Emera’s net investment in direct financing lease primarily relates to Brunswick Pipeline. The agreement meets the definition of a direct financing capital lease for accounting purposes. The net investment in direct financing lease consists of the sum of the minimum lease payments and residual value net of estimated executory costs and unearned income. The unearned income is recognized in income over the life of the lease using a constant rate of interest equal to the internal rate of return on the lease. Net investment in direct financing lease consists of the following:

As at	December 31		December 31
millions of Canadian dollars		2018		2017
Total minimum lease payments to be received	$	1,066	$	1,126
Less: amounts representing estimated executory costs		(201)		(211)
Minimum lease payments receivable	$	865	$	915
Estimated residual value of leased property (unguaranteed)		183		183
Less: unearned finance lease income		(564)		(609)
Net investment in direct financing lease	$	484	$	489
Principal due within one year (included in Receivables and other current assets)		9		8
Net investment in direct financing lease – long-term	$	475	$	481

Future minimum lease payments to be received for the next five years:

For the	Year ended December 31
millions of Canadian dollars	2019		2020		2021		2022		2023
Minimum lease payments to be received	$	65	$	65	$	65	$	65	$	64
Less: amounts representing estimated executory costs		(12)		(12)		(12)		(12)		(12)
Minimum lease payments receivable	$	53	$	53	$	53	$	53	$	52