XML 41 R17.htm IDEA: XBRL DOCUMENT
v3.22.2

Leases (Notes) | 6 Months Ended
--- | ---
Jun. 30, 2022
Lessor, Lease, Description [Line Items] |
Lessor, Operating Leases | LEASES LESSOR — The Company has operating leases for certain generation contracts that contain provisions to provide capacity to a customer, which is a stand-ready obligation to deliver energy when required by the customer. Capacity receipts are generally considered lease elements as they cover the majority of available output from a facility. The allocation of contract payments between the lease and non-lease elements is made at the inception of the lease. Lease receipts from such contracts are recognized as lease revenue on a straight-line basis over the lease term, whereas variable lease receipts are recognized when earned. The following table presents lease revenue from operating leases in which the Company is the lessor for the periods indicated (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
Operating Lease Revenue | 2022 |  | 2021 |  | 2022 |  | 2021
Total lease revenue | $ | 140 |  |  | $ | 118 |  |  | $ | 274 |  |  | $ | 261 |
Less: Variable lease revenue | (16) |  |  | (25) |  |  | (23) |  |  | (39) |
Total Non-variable lease revenue | $ | 124 |  |  | $ | 93 |  |  | $ | 251 |  |  | $ | 222 |
The following table presents the underlying gross assets and accumulated depreciation of operating leases included in Property, plant and equipment, net for the periods indicated (in millions):
Property, Plant and Equipment, Net |  | June 30, 2022 |  | December 31, 2021
Gross assets |  | $ | 1,600 |  |  | $ | 2,423 |
Less: Accumulated depreciation |  | (419) |  |  | (765) |
Net assets |  | $ | 1,181 |  |  | $ | 1,658 |
The option to extend or terminate a lease is based on customary early termination provisions in the contract, such as payment defaults, bankruptcy, and lack of performance on energy delivery. The Company has not recognized any early terminations as of June 30, 2022. Certain leases may provide for variable lease payments based on usage or index-based (e.g., the U.S. Consumer Price Index) adjustments to lease payments. The following table shows the future lease receipts as of June 30, 2022 for the remainder of 2022 through 2026 and thereafter (in millions):
| Future Cash Receipts for
| Sales-Type Leases |  | Operating Leases
2022 | $ | 12 |  |  | $ | 215 |
2023 | 24 |  |  | 384 |
2024 | 24 |  |  | 384 |
2025 | 24 |  |  | 385 |
2026 | 24 |  |  | 277 |
Thereafter | 361 |  |  | 747 |
Total | $ | 469 |  |  | $ | 2,392 |
Less: Imputed interest | (268) |  |  |
Present value of total lease receipts | $ | 201 |  |  |
Battery Storage Lease Arrangements — The Company constructs and operates projects consisting only of a stand-alone battery energy storage system (“BESS”) facility, as well as projects that pair a BESS with solar energy systems. These projects allow more flexibility on when to provide energy to the grid. The Company will enter into PPAs for the full output of the facility that allow customers the ability to determine when to charge and discharge the BESS. These arrangements include both lease and non-lease elements under ASC 842, with the BESS component typically constituting a sales-type lease. The Company recognized lease income on sales-type leases through interest income of $13 million and $16 million for the three and six months ended June 30, 2022, respectively; and $4 million and $8 million for the three and six months ended June 30, 2021, respectively. During the second quarter of 2022, the Company recognized a full allowance of $20 million on a sales-type lease receivable at AES Gilbert. See Note 14—Other Income and Expense for further information. Prior to January 1, 2022, due to the variable-based nature of lease payments under certain contracts, the Company recorded a loss at commencement of sales-type leases of $13 million for the six months ended June 30, 2021. These amounts are recognized in Other expense in the Condensed Consolidated Statement of Operations. See Note 14—Other Income and Expense for further information. Effective January 1, 2022, the Company adopted ASU 2021-05 in which lessors classify and account for certain leases with primarily variable-based lease payments as operating leases. The Company adopted this standard on a prospective basis. See Note 1—Financial Statement Presentation for further information.

X
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. + References No definition available. + Details
Name: | us-gaap_LessorLeaseDescriptionLineItems
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 30 -URI https://asc.fasb.org/subtopic&trid=77888252 + Details
Name: | us-gaap_OperatingLeasesOfLessorDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration