Federal Coal Lease Obligations

3 Months Ended

Mar. 31, 2015

Federal Coal Lease Obligations

Federal Coal Lease Obligations

8. Federal Coal Lease Obligations

Federal coal lease obligations consisted of the following (in thousands):

	March 31,		December 31,
	2015		2014
Federal coal lease obligations, current	$	63,970	$	63,970
Federal coal lease obligations, noncurrent		—		—
Total federal coal lease obligations	$	63,970	$	63,970

Our federal coal lease obligations, as reflected in the condensed consolidated balance sheets, consist of discounted obligations payable to the Bureau of Land Management of the U.S. Department of the Interior (the “BLM”) discounted at an imputed interest rate. Imputed interest is included in accrued expenses. We have no further committed LBA payments after 2015.

As of March 31,2015, we have the following federal coal lease payments (dollars in thousands):

					March 31, 2015				December 31, 2014
	Annual		Imputed		Carrying		Fair		Carrying		Fair
Payment Dates	Payment		Interest Rate		Value		Value (1)		Value		Value (1)
July 1, 2015	$	59,545	8.50	%		54,880		59,246		54,880		58,976
September 1, 2015	$	9,862	8.50	%		9,090		9,780		9,090		9,736
					$	63,970	$	69,026	$	63,970	$	68,712

• The fair value of estimates for federal coal lease obligations was determined by discounting the remaining lease payments using the then current estimate of the credit-adjusted, risk-free rate based on our then current credit rating, whichis considered Level 2 in the fair value hierarchy.