Implications Of Operating Leases On Analysis Of U.S. Electric Utilities Jan 08

  • ID: 1787476
  • January 2008
  • Region: United States
  • Standard & Poors
1 of 3


  • Allegheny Energy Inc.
  • CenterPoint Energy Inc.
  • DTE Energy Co.
  • Great Plains Energy Inc.
  • NorthWestern Corp.
  • PEPCO Holdings Inc.
  • MORE

Companies lease for many reasons including cost-effective financing, cash flow objectives, flexibility, risk shifting, tax strategies, and accounting advantages such as off-balance-sheet treatment. Lease accounting distinguishes between capital and operating leases. Accounting for capital leases is similar to debt-financed acquisitions of assets, and operating leases are recorded as rent expense on a pay-as-you-go basis. Since lessors and lessees can structure terms to achieve the desired accounting result, Standard & Poor's Ratings Services views the distinction between capital and operating leases as artificial. Like any other form of financing, operating leases represent claims against future cash flows. Operating-lease adjustment is one of the accounting adjustments that Standard & Poor's uses to analyze the financial results and ratios of electric utilities. The...

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2 of 3

- Allegheny Energy Inc.
- Baltimore Gas & Electric Co.
- Central Vermont Public Service Corp.
- Commonwealth Edison Co.
- Dominion Resources Inc.
- Duke Energy Corp.
- El Paso Electric Co.
- Empire District Electric Co.
- Hawaiian Electric Industries Inc.
- Westar Energy Inc.
- National Grid USA
- NorthWestern Corp.
- Otter Tail Corp.
- PPL Electric Utilities Corp.
- PECO Energy Co.
- Portland General Electric Co.
- Public Service Electric & Gas Co.
- Avista Corp.
- American Electric Power Co. Inc.
- KCP&L Greater Missouri Operations Co.
- Green Mountain Power Corp.
- NV Energy Inc.
- IPALCO Enterprises Inc.
- SCANA Corp.
- TECO Energy Inc.
- Puget Energy Inc.
- NextEra Energy Inc.
- Eversource Energy
- Southern Co.
- Pinnacle West Capital Corp.
- CMS Energy Corp.
- WEC Energy Group Inc.
- Edison International
- Berkshire Hathaway Energy Company
- Duquesne Light Holdings Inc.
- Integrys Energy Group Inc.
- DTE Energy Co.
- CenterPoint Energy Inc.
- OGE Energy Corp.
- Ameren Corp.
- Alliant Energy Corp.
- FirstEnergy Corp.
- Consolidated Edison Inc.
- Iberdrola USA
- Cleco Corp.
- Xcel Energy Inc.
- Progress Energy Inc.
- Great Plains Energy Inc.
- Black Hills Corp.
- Oncor Electric Delivery Co. LLC
- PEPCO Holdings Inc.
- PNM Resources Inc.

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