LEASES

6 Months Ended

Jun. 30, 2023

Note 2: Leases

Our portfolio of nonmineral leases is composed of leases for real estate (including office buildings, aggregates sales yards and terminals, and concrete and asphalt sites) and equipment (including railcars and rail track, barges, and office, plant and mobile equipment). Additionally, we entered into an agreement to lease a terminal in California. We expect the lease to commence in late 2023 or early 2024 once all required permits are obtained.

Lease right-of-use (ROU) assets and liabilities and the weighted-average lease terms and discount rates are as follows:



		June 30	December 31	June 30
dollars in millions	Classification on the Balance Sheet	2023	2022	2022
Assets
Operating lease ROU assets		$ 669.5	$ 665.4	$ 780.0
Accumulated amortization		(111.1)	(92.8)	(87.4)
Operating leases, net	Operating lease right-of-use assets, net	558.4	572.6	692.6
Finance lease ROU assets		91.6	93.2	117.0
Accumulated depreciation		(19.9)	(14.9)	(9.9)
Finance leases, net	Property, plant & equipment, net	71.7	78.3	107.1
Total lease assets		$ 630.1	$ 650.9	$ 799.7
Liabilities
Current
Operating	Other current liabilities	$ 47.3	$ 48.1	$ 50.8
Finance	Other current liabilities	20.0	22.3	30.1
Noncurrent
Operating	Noncurrent operating lease liabilities	537.5	548.4	645.1
Finance	Other noncurrent liabilities	26.3	34.8	48.9
Total lease liabilities		$ 631.1	$ 653.6	$ 774.9
Lease Term and Discount Rate
Weighted-average remaining lease term (years)
Operating leases		19.5	19.7	20.3
Finance leases		2.6	3.0	3.2
Weighted-average discount rate
Operating leases		4.0%	3.9%	3.7%
Finance leases		1.9%	1.8%	1.4%

The decreases from June 30, 2022 in total lease assets and liabilities presented above primarily relate to the 2022 sale of concrete operations in New Jersey, New York and Pennsylvania (see Note 16 for additional information). Our lease agreements do not contain material residual value guarantees, restrictive covenants or early termination options.

The components of lease expense are as follows:



	Three Months Ended		Six Months Ended
	June 30		June 30
in millions	2023	2022	2023	2022
Lease Cost
Finance lease cost
Depreciation of right-of-use assets	$ 3.4	$ 4.3	$ 6.8	$ 8.7
Interest on lease liabilities	0.2	0.4	0.5	0.7
Operating lease cost	19.8	20.9	39.1	43.9
Short-term lease cost ¹	12.0	10.2	23.7	20.5
Variable lease cost	5.0	2.4	10.1	4.2
Sublease income	(1.1)	(0.8)	(1.8)	(1.6)
Total lease cost	$ 39.3	$ 37.4	$ 78.4	$ 76.4


¹	Our short-term lease cost includes the cost of leases with an initial term of one year or less (including those with terms of one month or less).

Cash paid for operating leases was $36.6 million and $40.8 million for the six months ended June 30, 2023 and 2022, respectively. Cash paid for finance leases (principal and interest) was $12.1 million and $19.4 million for the six months ended June 30, 2023 and 2022, respectively.