Page 44 - 2019 Annual Report

NOTES TO FINANCIAL STATEMENTS (continued)

Note M: Leases
The Company has leases, primarily for equipment, railcars, fleet vehicles, office space, land and information technology
equipment and software. The Company’s leases have remaining lease terms of one year to 53 years, some of which may include
options to extend the leases for up to 30 years, and some of which may include options to terminate the leases within
one year.

Certain of the Company’s lease agreements include payments based upon variable rates, including, but not limited, to hours
used, tonnage processed and factors related to indices. The Company’s lease agreements do not contain any material residual
value guarantees or material restrictive covenants.
The components of lease cost are as follows:

year ended December 31
(in millions) 2019
Operating lease cost $ 80.9
Finance lease cost:
Amortization of right‐of‐use assets 3.4
Interest on lease liabilities 0.5
Variable lease cost 21.1
Short‐term lease cost 33.0
Total lease cost $ 138.9

The Company has royalty agreements that are prescriptively excluded from the scope of ASC 842 and generally require royalty
payments based on tons produced, tons sold or total sales dollars and also contain minimum payments. Royalty expense was
$58.2 million for the year ended December 31, 2019.
The balance sheet classifications of operating and finance leases are as follows:

December 31
(in millions) 2019
Operating Leases:
Operating lease right‐of‐use assets $ 481.9

Current operating lease liabilities $ 52.7
Noncurrent operating lease liabilities 433.9
Total operating lease liabilities $ 486.6

Finance Leases:
Property, plant and equipment $ 18.3
Accumulated depreciation (3.1 )
Property, plant and equipment, net $ 15.2

Other current liabilities $ 2.8
Other noncurrent liabilities 5.9
Total finance lease liabilities $ 8.7

Page 42 ♦ Annual Report Celebrating 25 Years as a Public Company