Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

Leases

The Company primarily enters into rental agreements for certain mining equipment that are for periods of 12 months or less, some of which include options to extend the leases. Leases that are for periods of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense on these agreements on a straight-line basis over the lease term. Additionally, the Company has certain finance leases for mining equipment that expire over various contractual periods. The leases have remaining lease terms of one to five years. These leases do not include an option to renew. Amortization expense for finance leases is included in depreciation and depletion expense.

Supplemental balance sheet information related to leases was as follows (in thousands):

	March 31, 2020			December 31, 2019
Finance lease right-of-use assets, net(1)	$	39,516		$	40,227
Finance lease liabilities
Current	8,022			10,146
Noncurrent	26,106			25,528
Total finance lease liabilities	$	34,128		$	35,674
Weighted average remaining lease term - finance leases (in months)	42.7			44.7
Weighted average discount rate - finance leases(2)	5.86		%	6.02		%

⁽¹⁾ Finance lease right-of-use assets are recorded net of accumulated amortization of $7.8 million and $4.8 million and are included in property, plant and equipment, net in the Condensed Balance Sheet as of March 31, 2020 and the Balance Sheet as of December 31, 2019, respectively.

⁽²⁾ When an implicit discount rate is not readily available in a lease, the Company uses its incremental borrowing rate based on information available at the commencement date when determining the present value of lease payments.

The components of lease expense were as follows (in thousands):

	For the three months ended March 31,
	2020		2019
Operating lease cost(1):	$	292	$	144
Finance lease cost:
Amortization of leased assets	2,998		1,957
Interest on lease liabilities	546		13
Net lease cost	$	3,836	$	2,114

(1) Includes leases that are for periods of 12 months or less.

Maturities of lease liabilities were as follows (in thousands):

	Finance Leases(1)
2020	$	7,978
2021	13,089
2022	8,558
2023	8,558
2024	842
Thereafter	—
Total	39,025
Less: amount representing interest	(4,897		)
Present value of lease liabilities	$	34,128

(1) Finance lease payments include $4.5 million of future payments required under signed lease agreements that have not yet commenced.

Supplemental cash flow information related to leases was as follows (in thousands):

	For the three months ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	546	$	13
Financing cash flows from finance leases	$	3,833	$	1,957
Non-cash right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	2,286	$	2,086

As of March 31, 2020, the Company had additional commitments for finance leases, primarily for mining equipment, that have not yet commenced of $4.5 million. These finance leases will commence between fiscal year 2020 and 2021 with lease terms of one to two years.

Leases

Leases

The Company primarily enters into rental agreements for certain mining equipment that are for periods of 12 months or less, some of which include options to extend the leases. Leases that are for periods of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense on these agreements on a straight-line basis over the lease term. Additionally, the Company has certain finance leases for mining equipment that expire over various contractual periods. The leases have remaining lease terms of one to five years. These leases do not include an option to renew. Amortization expense for finance leases is included in depreciation and depletion expense.

Supplemental balance sheet information related to leases was as follows (in thousands):

	March 31, 2020			December 31, 2019
Finance lease right-of-use assets, net(1)	$	39,516		$	40,227
Finance lease liabilities
Current	8,022			10,146
Noncurrent	26,106			25,528
Total finance lease liabilities	$	34,128		$	35,674
Weighted average remaining lease term - finance leases (in months)	42.7			44.7
Weighted average discount rate - finance leases(2)	5.86		%	6.02		%

⁽¹⁾ Finance lease right-of-use assets are recorded net of accumulated amortization of $7.8 million and $4.8 million and are included in property, plant and equipment, net in the Condensed Balance Sheet as of March 31, 2020 and the Balance Sheet as of December 31, 2019, respectively.

⁽²⁾ When an implicit discount rate is not readily available in a lease, the Company uses its incremental borrowing rate based on information available at the commencement date when determining the present value of lease payments.

The components of lease expense were as follows (in thousands):

	For the three months ended March 31,
	2020		2019
Operating lease cost(1):	$	292	$	144
Finance lease cost:
Amortization of leased assets	2,998		1,957
Interest on lease liabilities	546		13
Net lease cost	$	3,836	$	2,114

(1) Includes leases that are for periods of 12 months or less.

Maturities of lease liabilities were as follows (in thousands):

	Finance Leases(1)
2020	$	7,978
2021	13,089
2022	8,558
2023	8,558
2024	842
Thereafter	—
Total	39,025
Less: amount representing interest	(4,897		)
Present value of lease liabilities	$	34,128

(1) Finance lease payments include $4.5 million of future payments required under signed lease agreements that have not yet commenced.

Supplemental cash flow information related to leases was as follows (in thousands):

	For the three months ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	546	$	13
Financing cash flows from finance leases	$	3,833	$	1,957
Non-cash right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	2,286	$	2,086

As of March 31, 2020, the Company had additional commitments for finance leases, primarily for mining equipment, that have not yet commenced of $4.5 million. These finance leases will commence between fiscal year 2020 and 2021 with lease terms of one to two years.