Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Leases

The Company has operating and finance leases for mining and non-mining equipment, office space and certain other facilities under various non-cancellable agreements. Historically, the majority of the Company’s leases have been accounted for as operating leases. Refer to Note 1. “Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, for the Company’s policies regarding “Leases.”

The Company and certain of its subsidiaries have guaranteed other subsidiaries’ performance under various lease obligations. Certain lease agreements are subject to the restrictive covenants of the Company’s credit facilities and include cross-acceleration provisions, under which the lessor could require remedies including, but not limited to, immediate recovery of the present value of any remaining lease payments. Accordingly, as previously described in Note 1. “Basis of Presentation,” certain lease liabilities are classified as current in the accompanying condensed consolidated balance sheet as of September 30, 2020 due to the Company’s probable default under its Credit Agreement as of December 31, 2020, absent successful mitigating actions.

The Company typically agrees to indemnify lessors for the value of the property or equipment leased, should the property be damaged or lost during the course of the Company’s operations. The Company expects that losses with respect to leased property, if any, may be covered by insurance (subject to deductibles). Aside from indemnification of the lessor for the value of the property leased, the Company’s maximum potential obligations under its leases are equal to the respective future minimum lease payments, and the Company assumes that no amounts could be recovered from third parties.

The components of lease expense during the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(Dollars in millions)
Operating lease cost:
Operating lease cost	$	6.3	$	9.9	$	23.3	$	33.9
Short-term lease cost	10.2		15.8		31.7		34.7
Variable lease cost	1.1		2.0		3.7		16.6
Sublease income	—		(1.0)		—		(1.9)
Total operating lease cost	$	17.6	$	26.7	$	58.7	$	83.3
Finance lease cost:
Amortization of right-of-use assets	$	0.8	$	3.4	$	5.2	$	12.0
Interest on lease liabilities	0.2		0.3		0.5		1.2
Total finance lease cost	$	1.0	$	3.7	$	5.7	$	13.2

Supplemental balance sheet information related to leases at September 30, 2020 and December 31, 2019 was as follows:

	September 30, 2020			December 31, 2019
	(Dollars in millions)
Operating leases:
Operating lease right-of-use assets	$	44.9		$	82.4
Accounts payable and accrued expenses	$	54.4		$	29.6
Operating lease liabilities, less current portion	7.1			52.8
Total operating lease liabilities	$	61.5		$	82.4
Finance leases:
Property, plant, equipment and mine development	$	24.6		$	89.6
Accumulated depreciation	(20.7)			(45.9)
Property, plant, equipment and mine development, net	$	3.9		$	43.7
Current portion of long-term debt	$	8.0		$	14.3
Long-term debt, less current portion	—			0.9
Total finance lease liabilities	$	8.0		$	15.2
Weighted average remaining lease term (years)
Operating leases	3.5
Finance leases	16.3
Weighted average discount rate
Operating leases	7.4		%
Finance leases	6.2		%

Supplemental cash flow information related to leases during the three and nine months ended September 30, 2020 and 2019 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	6.8	$	8.4	$	26.4	$	41.8
Operating cash flows for finance leases	0.1		0.3		0.5		1.2
Financing cash flows for finance leases	0.2		5.6		8.1		24.0
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	0.2		3.4		2.3		9.7
Finance leases	0.5		0.3		1.5		0.4

The Company's leases have remaining lease terms ranging from less than one year to 21.3 years, some of which include options to extend the terms deemed reasonably certain of exercise. While certain amounts below are classified as current, the contractual maturities of lease liabilities were as follows:

Period Ending December 31,	Operating Leases		Finance Leases
	(Dollars in millions)
2020	$	9.0	$	0.4
2021	23.3		1.4
2022	14.0		1.2
2023	12.1		0.7
2024	4.8		0.7
2025 and thereafter	7.2		8.2
Total lease payments	70.4		12.6
Less imputed interest	(8.9)		(4.6)
Total lease liabilities	$	61.5	$	8.0

Leases

Leases

The Company has operating and finance leases for mining and non-mining equipment, office space and certain other facilities under various non-cancellable agreements. Historically, the majority of the Company’s leases have been accounted for as operating leases. Refer to Note 1. “Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, for the Company’s policies regarding “Leases.”

The Company and certain of its subsidiaries have guaranteed other subsidiaries’ performance under various lease obligations. Certain lease agreements are subject to the restrictive covenants of the Company’s credit facilities and include cross-acceleration provisions, under which the lessor could require remedies including, but not limited to, immediate recovery of the present value of any remaining lease payments. Accordingly, as previously described in Note 1. “Basis of Presentation,” certain lease liabilities are classified as current in the accompanying condensed consolidated balance sheet as of September 30, 2020 due to the Company’s probable default under its Credit Agreement as of December 31, 2020, absent successful mitigating actions.

The Company typically agrees to indemnify lessors for the value of the property or equipment leased, should the property be damaged or lost during the course of the Company’s operations. The Company expects that losses with respect to leased property, if any, may be covered by insurance (subject to deductibles). Aside from indemnification of the lessor for the value of the property leased, the Company’s maximum potential obligations under its leases are equal to the respective future minimum lease payments, and the Company assumes that no amounts could be recovered from third parties.

The components of lease expense during the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(Dollars in millions)
Operating lease cost:
Operating lease cost	$	6.3	$	9.9	$	23.3	$	33.9
Short-term lease cost	10.2		15.8		31.7		34.7
Variable lease cost	1.1		2.0		3.7		16.6
Sublease income	—		(1.0)		—		(1.9)
Total operating lease cost	$	17.6	$	26.7	$	58.7	$	83.3
Finance lease cost:
Amortization of right-of-use assets	$	0.8	$	3.4	$	5.2	$	12.0
Interest on lease liabilities	0.2		0.3		0.5		1.2
Total finance lease cost	$	1.0	$	3.7	$	5.7	$	13.2

Supplemental balance sheet information related to leases at September 30, 2020 and December 31, 2019 was as follows:

	September 30, 2020			December 31, 2019
	(Dollars in millions)
Operating leases:
Operating lease right-of-use assets	$	44.9		$	82.4
Accounts payable and accrued expenses	$	54.4		$	29.6
Operating lease liabilities, less current portion	7.1			52.8
Total operating lease liabilities	$	61.5		$	82.4
Finance leases:
Property, plant, equipment and mine development	$	24.6		$	89.6
Accumulated depreciation	(20.7)			(45.9)
Property, plant, equipment and mine development, net	$	3.9		$	43.7
Current portion of long-term debt	$	8.0		$	14.3
Long-term debt, less current portion	—			0.9
Total finance lease liabilities	$	8.0		$	15.2
Weighted average remaining lease term (years)
Operating leases	3.5
Finance leases	16.3
Weighted average discount rate
Operating leases	7.4		%
Finance leases	6.2		%

Supplemental cash flow information related to leases during the three and nine months ended September 30, 2020 and 2019 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	6.8	$	8.4	$	26.4	$	41.8
Operating cash flows for finance leases	0.1		0.3		0.5		1.2
Financing cash flows for finance leases	0.2		5.6		8.1		24.0
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	0.2		3.4		2.3		9.7
Finance leases	0.5		0.3		1.5		0.4

The Company's leases have remaining lease terms ranging from less than one year to 21.3 years, some of which include options to extend the terms deemed reasonably certain of exercise. While certain amounts below are classified as current, the contractual maturities of lease liabilities were as follows:

Period Ending December 31,	Operating Leases		Finance Leases
	(Dollars in millions)
2020	$	9.0	$	0.4
2021	23.3		1.4
2022	14.0		1.2
2023	12.1		0.7
2024	4.8		0.7
2025 and thereafter	7.2		8.2
Total lease payments	70.4		12.6
Less imputed interest	(8.9)		(4.6)
Total lease liabilities	$	61.5	$	8.0