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LEASES:

12 Months Ended

Dec. 31, 2023

NOTE 9—LEASES:

The Company has operating leases for power generating facilities, vehicles and properties. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some of the Company’s leases include both lease and non-lease components which are accounted for separately. The Company’s leases have remaining lease terms of less than one year to nine years, and do not include options to extend the leases. The Company’s lease agreements do not contain options to purchase the leased assets or to terminate the leases before the expiration date. In addition, the Company’s lease contracts do not have any material residual value guarantees or material restrictive covenants. As none of the Company’s leases provides an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The weighted average remaining lease term for the Company’s leases is seven years, and the weighted average discount rate for these leases is 4.03%.

The operating lease expense recognized in the years ended December 31, 2023, 2022 and 2021 was classified as follows (in millions):


Classification	2023		2022		2021
Cost of sales (exclusive of depreciation, amortization and depletion)	$	115.4	$	115.5	$	108.1
Selling, general and administrative		0.1		0.1		0.1
Exploration		0.1		0.1		0.2
Total lease expense	$	115.6	$	115.7	$	108.4

Maturities of lease liabilities are as follows:


	Lease liabilities
Year	(in millions)
2024	$	112.7
2025		105.6
2026		105.4
2027		105.1
2028		104.7
After 2028		416.4
Total lease payments	$	949.9
Less: interest on lease liabilities		(174.5)
Present value of lease payments	$	775.4