Leases

12 Months Ended

Dec. 31, 2020

Leases

Leases

23. Leases

The Company has operating and finance leases for mining equipment, office equipment and office space with remaining lease terms ranging from less than one year to approximately seven years. Some of these leases include both lease and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient to combine these components for all leases. As most of the leases do not provide an implicit rate, the Company calculated the Right-of-use (“ROU”) assets and lease liabilities using its’ secured incremental borrowing rate at the lease commencement date.

Information related to leases was as follows:

		Year Ended December 31,
		2020		2019
	(In thousands)
Operating lease information:
Operating lease cost	$	3,620		$	3,921
Operating cash flows from operating leases		3,610			3,842
Weighted average remaining lease term in years		5.99			5.92
Weighted average discount rate		5.5	%		5.5	%
Financing lease information:
Financing lease cost	$	1,179		$	—
Operating cash flows from financing leases		909			—
Weighted average remaining lease term in years		4.25			—
Weighted average discount rate		6.4	%		—	%

Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows:

	Operating		Finance
Year	Leases		Leases
	(In thousands)
2021	$	3,367	$	1,210
2022		3,317		1,210
2023		3,285		1,210
2024		3,200		1,210
2025		3,185		2,112
Thereafter		4,614		—
Total minimum lease payments	$	20,968	$	6,952
Less imputed interest		(3,236)		(1,078)
Total lease liabilities	$	17,732	$	5,874
As reflected on balance sheet:
Accrued expenses and other current liabilities	$	2,454	$	860
Other noncurrent liabilities		15,278		5,014
Total lease liability	$	17,732	$	5,874

At December 31, 2020, the Company had a $17.1 million ROU operating lease asset and a $5.5 million finance lease asset recorded within “Other noncurrent assets” on the Consolidated Balance Sheet.

Rental expense, including amounts related to these operating leases and other shorter-term arrangements, amounted to $8.6 million in 2020, $12.0 million in 2019 and $12.4 million in 2018.

Royalties are paid to lessors either as a fixed price per ton or as a percentage of the gross selling price of the mined coal. Royalties under the majority of the Company’s significant leases are paid on the percentage of gross selling price basis. Royalty expense, including production royalties, was $103.7 million in 2020, $149.5 million in 2019, and $166.1 million in 2018.

As of December 31, 2020, certain of the Company’s lease obligations were secured by outstanding surety bonds totaling $31.7 million.