LEASES:

6 Months Ended

Jun. 30, 2020

LEASES:

LEASES:

NOTE 7 — LEASES:

The Company has operating leases for power generating facilities, vehicles and properties. Leases with an initial term of 12 months or less, underlying asset value of $10,000 or less and total nominal contract value of $100,000 or less are not recorded on the balance sheet; the Company recognizes lease expenses for these leases on a straight-line basis over the lease term. Some of the Company’s leases include both lease and non-lease components, which are accounted for separately. The Company’s leases have remaining lease terms of two years to 13 years, and do not include options to extend the leases. The Company’s lease agreements do not contain options to purchase the leased assets or to terminate the leases before the expiration date. In addition, the Company’s lease contracts have no material residual value guarantees or material restrictive covenants. As none of the Company’s leases stipulates an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The weighted average remaining lease term for the Company’s leases is 9 years, and the weighted average discount rate for these leases is 3.64%.

The operating lease expense recognized in the six months ended June 30, 2020 and 2019 was classified as follows (in millions):

Classification	2020		2019
Cost of sales (exclusive of depreciation, amortization and depletion)	$	57.5	$	57.6
Selling, general and administrative		0.1		0.1
Exploration		0.1		0.1
Total lease expense	$	57.7	$	57.8

(*) amount is lower than $0.1 million

The Company’s short-term lease costs for the six months ended June 30, 2020 were $0.1 million.

Maturities of lease liabilities were as follows:

	Lease liabilities
Year	(in millions)
2020	$	57.7
2021		115.4
2022		112.6
2023		111.4
2024		103.6
After 2024		826.3
Total lease payments	$	1,327.0
Less: interest on lease liabilities		(315.8)
Present value of lease payments	$	1,011.2