Asset Retirement Obligations

9 Months Ended

Sep. 30, 2015

Asset Retirement Obligation Disclosure

10. Asset Retirement Obligations

Changes in the carrying amount of our asset retirement obligations were as follows (in thousands):

	2015		2014
Balance at January 1,	$	217,312	$	247,329
Reduction in asset retirement obligation attributable to sale of
Decker Mine interest		—		(72,175)
Accretion expense		9,960		12,066
Revisions to estimated future reclamation cash flows		(57,631)		(9,852)
Payments		(780)		(788)
Balance at September 30,		168,861		176,580
Less: current portion		(1,071)		(1,118)
Asset retirement obligation, net of current portion	$	167,790	$	175,462

Revisions to estimated future reclamation cash flows reflect our regular updates to our estimated costs of closure activities throughout the lives of the respective mines and reflect changes in estimates of closure volumes, disturbed acreages, the timing of the reclamation activities, and third-party unit costs as of September 30, 2015 and 2014. The land acquired during the three months ended September 30, 2015 near our Cordero Rojo Mine has been included in the revisions to estimated future reclamation cash flows as the mine life for Cordero Rojo Mine is now expected to be approximately four years longer. Also included were modifications to the Cordero Rojo Mine reclamation plan that resulted in significantly less soil movement to achieve the required post mining topography. Both of these factors have combined to reduce the discounted value of our future liability by $35.2 million. Reductions to asset retirement obligations resulting from such revisions generally result in a corresponding reduction to the related asset retirement cost in Property, plant and equipment, net. However, these factors caused a decrease to the asset retirement obligation that exceeded the carrying amount of the related asset retirement cost of $18.4 million. The resulting non-cash credit reduced Depreciation and depletion expense on the condensed consolidated statements of operations by $16.8 million for the three and nine months ended September 30, 2015.