Leases

6 Months Ended

Jun. 30, 2019

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 in accordance with the Company's accounting policy election described in Note 2. The Company recognizes lease expense on these agreements on a straight-line basis over the lease term. Additionally, the Company has finance leases for certain 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):

	June 30, 2019
Finance lease right-of-use assets, net(1)	$	41,473
Finance lease liabilities
Current	8,659
Noncurrent	31,166
Total finance lease liabilities	$	39,825
Weighted average remaining lease term - finance leases (in months)	52.3
Weighted average discount rate - finance leases(2)	5.85		%

⁽¹⁾ Finance lease right-of-use assets are recorded net of accumulated amortization of $6.4 million as of June 30, 2019.

⁽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 June 30, 2019		For the six months ended June 30, 2019
Operating lease cost(1):	$	63	$	207
Finance lease cost:
Amortization of leased assets	3,421		5,828
Interest on lease liabilities	395		408
Net lease cost	$	3,879	$	6,443

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

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

	Finance Leases(1)
2019	$	6,495
2020	13,043
2021	8,558
2022	8,558
2023	8,558
Thereafter	842
Total	46,054
Less: amount representing interest	(6,229		)
Present value of lease liabilities	$	39,825

(1) Finance lease payments exclude $1.1M 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 June 30, 2019		For the six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	395	$	408
Financing cash flows from finance leases	$	5,697	$	7,654
Non-cash right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	38,216	$	40,302

As of June 30, 2019, the Company had additional commitments for finance leases, primarily for mining equipment, that have not yet commenced of $1.1 million. These finance leases will commence between fiscal year 2019 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 in accordance with the Company's accounting policy election described in Note 2. The Company recognizes lease expense on these agreements on a straight-line basis over the lease term. Additionally, the Company has finance leases for certain 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):

	June 30, 2019
Finance lease right-of-use assets, net(1)	$	41,473
Finance lease liabilities
Current	8,659
Noncurrent	31,166
Total finance lease liabilities	$	39,825
Weighted average remaining lease term - finance leases (in months)	52.3
Weighted average discount rate - finance leases(2)	5.85		%

⁽¹⁾ Finance lease right-of-use assets are recorded net of accumulated amortization of $6.4 million as of June 30, 2019.

⁽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 June 30, 2019		For the six months ended June 30, 2019
Operating lease cost(1):	$	63	$	207
Finance lease cost:
Amortization of leased assets	3,421		5,828
Interest on lease liabilities	395		408
Net lease cost	$	3,879	$	6,443

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

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

	Finance Leases(1)
2019	$	6,495
2020	13,043
2021	8,558
2022	8,558
2023	8,558
Thereafter	842
Total	46,054
Less: amount representing interest	(6,229		)
Present value of lease liabilities	$	39,825

(1) Finance lease payments exclude $1.1M 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 June 30, 2019		For the six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	395	$	408
Financing cash flows from finance leases	$	5,697	$	7,654
Non-cash right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	38,216	$	40,302

As of June 30, 2019, the Company had additional commitments for finance leases, primarily for mining equipment, that have not yet commenced of $1.1 million. These finance leases will commence between fiscal year 2019 and 2021 with lease terms of one to two years.