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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-35416
 usslogo2q15a36.jpg
U.S. Silica Holdings, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware 26-3718801
(State or other jurisdiction of
Incorporation or Organization)		 (I.R.S. Employer
Identification No.)
24275 Katy Freeway, Suite 600
Katy, Texas 77494
(Address of Principal Executive Offices) (Zip Code)
(281) 258-2170
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value SLCA  New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ  Accelerated filer ¨
Non-accelerated filer ¨  Smaller reporting company 
☐
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐  No  þ
As of October 27, 2023, 77,154,412 shares of common stock, par value $0.01 per share, of the registrant were outstanding.



U.S. SILICA HOLDINGS, INC.
FORM 10-Q
For the Quarter Ended September 30, 2023
TABLE OF CONTENTS
 
  Page
PART IFinancial Information (Unaudited):
PART IIOther Information:


PART I-FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
U.S. SILICA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except share information)
UnauditedAudited
September 30,
2023		December 31,
2022
ASSETS
Current Assets:
Cash and cash equivalents$222,435 $280,845 
Accounts receivable, net183,434 208,631 
Inventories, net162,636 147,626 
Prepaid expenses and other current assets26,375 20,182 
Total current assets594,880 657,284 
Property, plant and mine development, net1,131,970 1,178,834 
Lease right-of-use assets43,342 42,374 
Goodwill185,649 185,649 
Intangible assets, net133,750 140,809 
Other assets11,383 9,630 
Total assets$2,100,974 $2,214,580 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses$161,797 $216,239 
Current portion of operating lease liabilities19,490 19,773 
Current portion of long-term debt19,763 19,535 
Current portion of deferred revenue5,479 16,275 
Income tax payable2,458 128 
Total current liabilities208,987 271,950 
Long-term debt, net847,849 1,037,458 
Deferred revenue13,100 14,477 
Liability for pension and other post-retirement benefits24,627 30,911 
Deferred income taxes, net94,000 64,636 
Operating lease liabilities58,922 64,478 
Other long-term liabilities 28,467 25,976 
Total liabilities1,275,952 1,509,886 
Commitments and Contingencies (Note N)
Stockholders’ Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized; zero issued and outstanding at September 30, 2023 and December 31, 2022
— — 
Common stock, $0.01 par value, 500,000,000 shares authorized; 87,877,234 issued and 77,133,239 outstanding at September 30, 2023; 85,631,109 issued and 75,738,512 outstanding at December 31, 2022
877 854 
Additional paid-in capital1,245,551 1,234,834 
Retained deficit(233,268)(351,084)
Treasury stock, at cost, 10,743,995 and 9,892,597 shares at September 30, 2023 and December 31, 2022, respectively
(196,406)(186,196)
Accumulated other comprehensive income (loss)1,578 (1,723)
Total U.S. Silica Holdings, Inc. stockholders’ equity818,332 696,685 
Non-controlling interest6,690 8,009 
Total stockholders' equity825,022 704,694 
Total liabilities and stockholders’ equity$2,100,974 $2,214,580 
The accompanying notes are an integral part of these financial statements.
2

U.S. SILICA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; dollars in thousands, except per share amounts)
 Three Months Ended 
 September 30,		Nine Months Ended September 30,
 2023202220232022
Sales:
Product$294,256 $309,831 $965,439 $833,390 
Service72,705 108,982 250,546 278,823 
Total sales366,961 418,813 1,215,985 1,112,213 
Cost of sales (excluding depreciation, depletion and amortization):
Product192,988 217,424 628,308 590,776 
Service47,969 74,096 165,555 196,509 
Total cost of sales (excluding depreciation, depletion and amortization)240,957 291,520 793,863 787,285 
Operating expenses:
Selling, general and administrative29,287 33,933 87,144 108,860 
Depreciation, depletion and amortization35,822 34,500 104,754 106,964 
Total operating expenses65,109 68,433 191,898 215,824 
Operating income60,895 58,860 230,224 109,104 
Other (expense) income:
Interest expense(26,039)(20,174)(76,087)(54,777)
Other income, net, including interest income4,016 3,576 4,161 7,206 
Total other expense(22,023)(16,598)(71,926)(47,571)
Income before income taxes38,872 42,262 158,298 61,533 
Income tax expense(12,064)(10,259)(40,774)(15,209)
Net income$26,808 $32,003 $117,524 $46,324 
Less: Net loss attributable to non-controlling interest(101)(68)(292)(262)
Net income attributable to U.S. Silica Holdings, Inc. $26,909 $32,071 $117,816 $46,586 
Earnings per share attributable to U.S. Silica Holdings, Inc.:
Basic$0.35 $0.42 $1.53 $0.62 
Diluted$0.34 $0.41 $1.50 $0.60 
Weighted average shares outstanding:
Basic77,125 75,587 76,913 75,446 
Diluted78,700 77,770 78,423 77,580 
Dividends declared per share$— $— $— $— 
The accompanying notes are an integral part of these financial statements.
3

U.S. SILICA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited; dollars in thousands)
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2023202220232022
Net income$26,808 $32,003 $117,524 $46,324 
Other comprehensive income (loss):
Unrealized gain on derivatives (net of tax of $68 and $0 for the three months ended September 30, 2023 and 2022, respectively, and $372 and $0 for the nine months ended September 30, 2023 and 2022, respectively).
213 — 1,168 — 
Foreign currency translation adjustment (net of tax of $(130) and $(89) for the three months ended September 30, 2023 and 2022, respectively, and $(43) and $(437) for the nine months ended September 30, 2023 and 2022, respectively).
(410)(272)(137)(1,364)
Pension and other post-retirement benefits liability adjustment (net of tax of $292 and $(721) for the three months ended September 30, 2023 and 2022, respectively, and $723 and $(574) for the nine months ended September 30, 2023 and 2022, respectively).
918 (2,263)2,270 (1,801)
Comprehensive income$27,529 $29,468 $120,825 $43,159 
Less: Comprehensive loss attributable to non-controlling interest(101)(68)(292)(262)
Comprehensive income attributable to U.S. Silica Holdings, Inc.$27,630 $29,536 $121,117 $43,421 
The accompanying notes are an integral part of these financial statements.
4

U.S. SILICA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited; dollars in thousands)
Common
Stock		Treasury
Stock		Additional
Paid-In
Capital		Retained
Deficit		Accumulated
Other
Comprehensive Income (Loss)		Total U.S. Silica Holdings Inc., Stockholders’
Equity		Non-controlling InterestTotal
Stockholders’
Equity
Balance at June 30, 2023$877 $(196,162)$1,241,828 $(260,177)$857 $787,223 $7,117 $794,340 
Net income— — — 26,909 — 26,909 (101)26,808 
Unrealized gain on derivatives— — — — 213 213 — 213 
Foreign currency translation adjustment— — — — (410)(410)— (410)
Pension and post-retirement liability— — — — 918 918 — 918 
Distributions to non-controlling interest— — — — — — (326)(326)
Common stock-based compensation plans activity:
Equity-based compensation— — 3,723 — — 3,723 — 3,723 
Tax payments related to shares withheld for vested restricted stock and stock units— (244)— — — (244)— (244)
Balance at September 30, 2023$877 $(196,406)$1,245,551 $(233,268)$1,578 $818,332 $6,690 $825,022 
Balance at June 30, 2022$852 $(186,826)$1,226,484 $(414,745)$(281)$625,484 $8,950 $634,434 
Net income— — — 32,071 — 32,071 (68)32,003 
Foreign currency translation adjustment— — — — (272)(272)— (272)
Pension and post-retirement liability— — — — (2,263)(2,263)— (2,263)
Distributions to non-controlling interest— — — — — — (383)(383)
Common stock-based compensation plans activity:
Equity-based compensation— — 4,743 — — 4,743 — 4,743 
Proceeds from options exercised— 1,356 (933)— — 423 — 423 
Tax payments related to shares withheld for vested restricted stock and stock units1 (187)(1)— — (187)— (187)
Balance at September 30, 2022$853 $(185,657)$1,230,293 $(382,674)$(2,816)$659,999 $8,499 $668,498 

The accompanying notes are an integral part of these financial statements.



5

Common
Stock		Treasury
Stock		Additional
Paid-In
Capital		Retained
Deficit		Accumulated
Other
Comprehensive
(Loss) Income		Total U.S. Silica Holdings Inc., Stockholders’
Equity		Non-controlling InterestTotal
Stockholders’
Equity
Balance at December 31, 2022$854 $(186,196)$1,234,834 $(351,084)$(1,723)$696,685 $8,009 $704,694 
Net income— — — 117,816 — 117,816 (292)117,524 
Unrealized gain on derivatives— — — — 1,168 1,168 — 1,168 
Foreign currency translation adjustment— — — — (137)(137)— (137)
Pension and post-retirement liability— — — — 2,270 2,270 — 2,270 
Distributions to non-controlling interest— — — — — — (1,027)(1,027)
Common stock-based compensation plans activity:
Equity-based compensation— — 10,740 — — 10,740 — 10,740 
Tax payments related to shares withheld for vested restricted stock and stock units23 (10,210)(23)— — (10,210)— (10,210)
Balance at September 30, 2023$877 $(196,406)$1,245,551 $(233,268)$1,578 $818,332 $6,690 $825,022 
Balance at December 31, 2021$845 $(186,294)$1,218,575 $(429,260)$349 $604,215 $9,868 $614,083 
Net income— — — 46,586 — 46,586 (262)46,324 
Foreign currency translation adjustment— — — — (1,364)(1,364)— (1,364)
Pension and post-retirement liability— — — — (1,801)(1,801)— (1,801)
Distributions to non-controlling interest— — — — — — (1,107)(1,107)
Common stock-based compensation plans activity:
Equity-based compensation— — 13,821 — — 13,821 — 13,821 
Proceeds from options exercised— 3,051 (2,095)— — 956 — 956 
Tax payments related to shares withheld for vested restricted stock and stock units8 (2,414)(8)— — (2,414)— (2,414)
Balance at September 30, 2022$853 $(185,657)$1,230,293 $(382,674)$(2,816)$659,999 $8,499 $668,498 

The accompanying notes are an integral part of these financial statements.
6

U.S. SILICA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; dollars in thousands)
 Nine Months Ended 
 September 30,
 20232022
Operating activities:
Net income$117,524 $46,324 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization104,754 106,964 
Debt issuance amortization2,478 3,696 
Original issue discount amortization2,338 749 
Deferred income taxes28,312 9,789 
Deferred revenue(12,173)(9,461)
Gain on disposal of property, plant and equipment(1,154)(557)
Equity-based compensation10,740 13,821 
Allowance for credit losses, net of recoveries(27)378 
Other21,984 5,067 
Changes in operating assets and liabilities:
Accounts receivable25,223 (35,309)
Inventories(14,912)(26,918)
Prepaid expenses and other current assets3,513 1,801 
Income taxes2,330 460 
Accounts payable and accrued expenses(52,620)72,678 
Operating lease liabilities(19,131)(17,643)
Liability for pension and other post-retirement benefits(6,284)1,854 
Other noncurrent assets and liabilities(3,187)(4,233)
Net cash provided by operating activities209,708 169,460 
Investing activities:
Capital expenditures(47,626)(28,691)
Capitalized intellectual property costs(234)(343)
Proceeds from sale of property, plant and equipment2,635 2,171 
Net cash used in investing activities(45,225)(26,863)
Financing activities:
Dividends paid(23)(163)
Proceeds from options exercised— 956 
Tax payments related to shares withheld for vested restricted stock and stock units(10,210)(2,414)
Payments on short-term debt(5,628)(4,424)
Payments on long-term debt(163,749)(106,738)
Financing fees paid(41,648)— 
Distributions to non-controlling interest(1,027)(1,107)
Principal payments on finance lease obligations(608)(999)
Net cash used in financing activities(222,893)(114,889)
Net (decrease) increase in cash and cash equivalents(58,410)27,708 
Cash and cash equivalents, beginning of period280,845 239,425 
Cash and cash equivalents, end of period$222,435 $267,133 



7

U.S. SILICA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; dollars in thousands)
 Nine Months Ended 
 September 30,
 20232022
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest$71,553 $49,913 
Taxes, net of refunds$10,489 $(16,512)
Non-cash items:
Accrued capital expenditures$1,761 $3,724 
The accompanying notes are an integral part of these financial statements.

8

U.S. SILICA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited; dollars in thousands, except per share amounts)

NOTE A—ORGANIZATION AND BASIS OF PRESENTATION
Organization
U.S. Silica Holdings, Inc. (“Holdings,” and together with its subsidiaries “we,” “us” or the “Company”) is a global performance materials company and a leading producer of commercial silica used in the oil and gas industry and in a wide range of industrial applications. In addition, through our subsidiary EP Minerals, LLC ("EPM"), we are an industry leader in the production of industrial minerals, including diatomaceous earth, clay (calcium bentonite and calcium montmorillonite) and perlite. During our 123-year history, we have developed core competencies in mining, processing, logistics and materials science that enable us to produce and cost-effectively deliver products to customers across our end markets. Our operations are organized into two reportable segments based on end markets served: (1) Oil & Gas Proppants and (2) Industrial & Specialty Products. See Note T - Segment Reporting for more information on our reportable segments.
Basis of Presentation and Consolidation
The accompanying unaudited Condensed Consolidated Financial Statements as of and for the three and nine months ended September 30, 2023 included in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). They do not contain certain information included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022; therefore, the unaudited Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Operating results for the nine-month period ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023. In the opinion of management, all adjustments necessary for a fair presentation have been included. Such adjustments are of a normal, recurring nature.
The unaudited Condensed Consolidated Financial Statements include the accounts of Holdings and its direct and indirect wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Throughout this report we refer to (i) our unaudited Condensed Consolidated Balance Sheets as our “Balance Sheets,” (ii) our unaudited Condensed Consolidated Statements of Operations as our “Income Statements,” and (iii) our unaudited Condensed Consolidated Statements of Cash Flows as our “Cash Flows.”
NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates and Assumptions
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The areas requiring the use of management estimates and assumptions relate to the purchase price allocation for businesses acquired; mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production amortization calculations; environmental, reclamation and closure obligations; estimates of recoverable minerals; estimates of allowance for credit losses; estimates of fair value for certain reporting units and asset impairments (including impairments of goodwill, intangible assets and other long-lived assets); write-downs of inventory to net realizable value; equity-based compensation expense; post-employment, post-retirement and other employee benefit liabilities; valuation allowances for deferred tax assets; contingent considerations; reserves for contingencies and litigation and the fair value and accounting treatment of financial instruments. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.
9

New Accounting Pronouncements Recently Adopted
In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting followed by ASU 2021-01, Reference Rate Reform (Topic 848): Scope, issued in January 2021 to provide clarifying guidance regarding the scope of Topic 848. ASU 2020-04 was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. Generally, the guidance is to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. In April 2022, the FASB proposed to extend the effective date through December 31, 2024 and affirmed this decision in December 2022. Upon execution of the Fourth Amended and Restated Credit Agreement, we have transitioned from LIBOR. See Note I - Debt for discussion of the Fourth Amended and Restated Credit Agreement.
New Accounting Pronouncements Not Yet Adopted
None.

NOTE C—EARNINGS PER SHARE
Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is computed similarly to basic earnings per common share except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.
Diluted net earnings per share assumes the conversion of contingently convertible securities and stock options under the treasury stock method, if dilutive. Contingently convertible securities and stock options are excluded from the calculation of fully diluted earnings per share if they are anti-dilutive, including when we incur a loss from continuing operations. 
The following table shows the computation of basic and diluted earnings per share:
In thousands, except per share amounts
Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2023202220232022
Numerator:
Net income attributable to U.S. Silica Holdings, Inc.$26,909 $32,071 $117,816 $46,586 
Denominator:
Weighted average shares outstanding77,125 75,587 76,913 75,446 
Diluted effect of stock awards1,575 2,183 1,510 2,134 
Weighted average shares outstanding assuming dilution78,700 77,770 78,423 77,580 
Earnings per share attributable to U.S. Silica Holdings, Inc.:
Basic earnings per share$0.35 $0.42 $1.53 $0.62 
Diluted earnings per share$0.34 $0.41 $1.50 $0.60 
10

Potentially dilutive shares are excluded from the calculation of diluted weighted average shares outstanding and diluted earnings per share if we are in a net loss position. Certain stock options, restricted stock awards and performance share units were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. Such potentially dilutive shares and stock awards excluded from the calculation of diluted earnings per common share were as follows:
In thousandsThree Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2023202220232022
Potentially dilutive shares excluded — — — — 
Stock options excluded413 521 413 509 
Restricted stock and performance share unit awards excluded7 7 49 24 
NOTE D—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income (loss) consists of fair value adjustments associated with cash flow hedges, accumulated adjustments for net experience losses and prior service costs related to employee benefit plans and foreign currency translation adjustments, net of tax. The following table presents the changes in accumulated other comprehensive income (loss) by component (in thousands):
 For the Nine Months Ended September 30, 2023
 Unrealized (loss) gain on natural gas swapsForeign currency translation adjustmentsPension and other post-retirement benefits liabilityTotal
Beginning Balance$(2,342)$(1,262)$1,881 $(1,723)
Other comprehensive income (loss) before reclassifications1,168 (137)3,861 4,892 
Amounts reclassified from accumulated other comprehensive income— — (1,591)(1,591)
Ending Balance$(1,174)$(1,399)$4,151 $1,578 
Any amounts reclassified from accumulated other comprehensive income (loss) related to pension and other post-retirement benefits are included in the computation of net periodic benefit costs at their pre-tax amounts.
NOTE E—ACCOUNTS RECEIVABLE
Accounts receivable are recorded when billed or accrued and represent claims against third parties that will be settled in cash. The carrying value of our accounts receivable, net of the allowance for credit losses, represents their estimated net realizable value. Accounts receivable (in thousands) consisted of the following:
September 30,
2023		December 31,
2022
Trade receivables$187,110 $209,683 
Less: Allowance for credit losses(5,604)(5,691)
Net trade receivables181,506 203,992 
Other receivables1,928 4,639 
Total accounts receivable$183,434 $208,631 

We classify our trade receivables into the following portfolio segments: Oil & Gas Proppants and Industrial & Specialty Products, which also aligns with our reporting segments. We estimate the allowance for credit losses based on historical collection trends, the age of outstanding receivables, risks attributable to specific customers, such as credit history, bankruptcy or other going concern issues, and current economic and industry conditions. If events or circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past due balances are written off when we have exhausted our internal and external collection efforts and have been unsuccessful in collecting the amount due.
11

The following table reflects the change of the allowance for credit losses (in thousands):
Oil & Gas ProppantsIndustrial & Specialty ProductsTotal
Beginning balance, December 31, 2022$4,028 $1,663 $5,691 
Allowance for credit losses— (27)(27)
Write-offs— (60)(60)
Ending balance, September 30, 2023$4,028 $1,576 $5,604 
Our ten largest customers accounted for 47% and 45% of total sales for the three and nine months ended September 30, 2023, respectively, and 42% and 40% for the three and nine months ended September 30, 2022, respectively. No customers accounted for 10% or more of our total sales for the three and nine months ended September 30, 2023 or 2022. At September 30, 2023 and December 31, 2022, none of our customers' accounts receivable represented 10% or more of our total trade accounts receivable.
NOTE F—INVENTORIES
Inventories (in thousands) consisted of the following:
September 30, 2023December 31, 2022
Supplies$65,746 $54,805 
Raw materials and work in process58,020 47,042 
Finished goods38,870 45,779 
Total inventories$162,636 $147,626 


NOTE G—PROPERTY, PLANT AND MINE DEVELOPMENT
Property, plant and mine development (in thousands) consisted of the following:
September 30,
2023		December 31,
2022
Mining property and mine development$792,123 $789,601 
Asset retirement cost10,567 8,869 
Land53,053 53,128 
Land improvements87,593 76,456 
Buildings76,188 73,151 
Machinery and equipment1,240,640 1,217,933 
Furniture and fixtures3,029 3,922 
Construction-in-progress56,370 55,696 
2,319,563 2,278,756 
Accumulated depreciation, depletion, amortization and impairment charges(1,187,593)(1,099,922)
Total property, plant and mine development, net$1,131,970 $1,178,834 
Depreciation, depletion, and amortization expense related to property, plant and mine development was $32.7 million and $31.6 million for the three months ended September 30, 2023 and 2022, respectively, and $95.5 million and $98.2 million for the nine months ended September 30, 2023 and 2022, respectively.


12

NOTE H—GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill (in thousands) by business segment consisted of the following:
 Oil & Gas Proppants SegmentIndustrial & Specialty Products SegmentTotal
Balance at December 31, 2022$— $185,649 $185,649 
Impairment loss— — — 
Balance at September 30, 2023$— $185,649 $185,649 

Goodwill and trade names are evaluated for impairment annually as of October 31, or more frequently when indicators of impairment exist. We evaluated events and circumstances since the date of our last qualitative assessment, including macroeconomic conditions, industry and market conditions, and our overall financial performance. There were no triggering events during the first nine months of 2023, therefore, no impairment charges were recorded related to goodwill or trade names for the nine months ended September 30, 2023.
The changes in the carrying amount of intangible assets (in thousands) consisted of the following:
 September 30, 2023December 31, 2022
 Gross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet
Technology and intellectual property$71,870 $(33,666)$38,204 $71,651 $(29,990)$41,661 
Customer relationships66,999 (36,393)30,606 66,999 (32,791)34,208 
 Total definite-lived intangible assets:$138,869 $(70,059)$68,810 $138,650 $(62,781)$75,869 
Trade names64,240 — 64,240 64,240 — 64,240 
Other700 — 700 700 — 700 
Total intangible assets:$203,809 $(70,059)$133,750 $203,590 $(62,781)$140,809 

Estimated useful life of technology and intellectual property is 15 years. Estimated useful life of customer relationships is a range of 13 - 20 years.

Amortization expense was $2.4 million and $7.3 million for the three and nine months ended September 30, 2023, respectively, and $2.4 million and $7.3 million for the three and nine months ended September 30, 2022, respectively.

The estimated amortization expense related to definite-lived intangible assets (in thousands) for the five succeeding years is as follows:
2023 (remaining three months)$2,429 
2024$9,714 
2025$9,712 
2026$9,712 
2027$9,712 
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NOTE I—DEBT
Debt (in thousands) consisted of the following:
September 30,
2023		December 31,
2022
Senior secured credit facility:
Revolver expiring March 23, 2028 (10.17% at September 30, 2023 and 8.44% at December 31, 2022)
$— $— 
Term Loan—final maturity March 23, 2030 (10.17% at September 30, 2023 and 8.44% at December 31, 2022)
895,313 1,059,062 
Less: Unamortized original issue discount(25,902)(2,035)
Less: Unamortized debt issuance cost(14,384)(8,922)
Insurance financing notes payable9,705 5,628 
Finance leases (See Note P - Leases)2,880 3,260 
Total debt867,612 1,056,993 
Less: current portion(19,763)(19,535)
Total long-term portion of debt$847,849 $1,037,458 
Senior Secured Credit Facility
On March 23, 2023, we entered into the Fourth Amended and Restated Credit Agreement (the "Credit Agreement"), by entering into a new $1.1 billion senior secured credit facility, consisting of a $950 million Term Loan (the "Term Loan") and a $150 million revolving credit facility (the "Revolver") (collectively the "Credit Facility") that may also be used for swingline loans or letters of credit, and we may elect to increase the term loan or the revolving credit facility in accordance with the terms of the Credit Agreement. Borrowings under the Credit Agreement will bear interest at variable rates as determined at our election, based on the Term Secured Overnight Financing Rate ("SOFR") or a base rate, in each case, plus an applicable margin. In addition, under the Credit Agreement, we are required to pay a per annum commitment fee to revolving lenders and fees for letters of credit. The Credit Agreement is secured by substantially all of our assets and our domestic subsidiaries' assets and a pledge of the equity interests in such entities. The Term Loan matures on March 23, 2030, and the Revolver expires March 23, 2028. We capitalized $45.9 million in debt issuance costs and original issue discount as a result of the Credit Agreement. Additionally, as a result of the exit of certain lending parties, a portion of debt issuance and original discount costs were written off which resulted in additional expense of approximately $4.3 million. This was recorded as a loss on the extinguishment of debt, which was recorded in Other (expense) income, net, including interest income in the Condensed Consolidated Statements of Operations.
The Credit Facility contains covenants that, among other things, limit our ability, and certain of our subsidiaries' abilities, to create, incur or assume indebtedness and liens, to make acquisitions or investments, to sell assets and to pay dividends. The Credit Agreement also requires us to maintain a consolidated leverage ratio of no more than 4.00:1.00 as of the last day of any fiscal quarter whenever usage of the Revolver (other than certain undrawn letters of credit) exceeds 2.85:1.00, or 35%, of the Revolver commitment. These covenants are subject to a number of important exceptions and qualifications. The Credit Agreement includes events of default and other affirmative and negative covenants that are usual for facilities and transactions of this type. As of September 30, 2023 and December 31, 2022, we were in compliance with all covenants in accordance with our senior secured Credit Facility.
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Term Loan
At September 30, 2023, contractual maturities of our Term Loan (in thousands) are as follows:
2023 (remaining three months)$2,250 
20249,000 
20259,000 
20269,000 
20279,000 
Thereafter857,063 
Total$895,313 
Prior to the execution of the Fourth Amended and Restated Credit Agreement, we repurchased outstanding debt under the Term Loan in the amount of $109 million. A proportionate share of debt issuance and original discount costs were written off in conjunction with this repurchase which resulted in additional expense of approximately $1.0 million. As a result, we recorded a loss on extinguishment of debt in the amount of $1.0 million. The loss on extinguishment was recorded in Other (expense) income, net, including interest income in the Condensed Consolidated Statements of Operations.
During the second quarter of 2023, we made a voluntary prepayment on the Term Loan of $25 million. A proportionate share of debt issuance and original discount costs were written off in conjunction with the prepayment of this debt which resulted in additional expense of $1.1 million. This expense was recorded in Other (expense) income, net, including interest income in the Condensed Consolidated Statements of Operations.
During the third quarter of 2023, we made a voluntary prepayment on the Term Loan of $25 million. A proportionate share of debt issuance and original discount costs were written off in conjunction with the prepayment of this debt which resulted in additional expense of $1.1 million. This expense was recorded in Other (expense) income, net, including interest income in the Condensed Consolidated Statements of Operations.
Revolving Line-of-Credit
We have a $150.0 million Revolver with zero drawn and $20.8 million allocated for letters of credit as of September 30, 2023, leaving $129.2 million available under the Revolver. Based on our consolidated leverage ratio of 1.91:1.00 as of September 30, 2023, we have access to the full availability of the Revolver.

Insurance Financing Notes Payable

During the third quarter of 2023, we renewed our insurance policies and financed the payments through notes payable with a stated interest rate of 6.6%. These payments will be made in installments throughout a nine-month period and, as such, have been classified as current debt. As of September 30, 2023, the notes payable had a balance of $9.7 million.
15

NOTE J—ASSET RETIREMENT OBLIGATIONS
Mine reclamation or future remediation costs for inactive mines are accrued based on management’s best estimate at the end of each period of the costs expected to be incurred at such site at the expected abandonment date. Such cost estimates include, where applicable, ongoing care, maintenance and monitoring costs. Changes in estimates at inactive mines are reflected in earnings in the period an estimate is revised. Liabilities related to our asset retirement obligations are reflected in other long-term liabilities on our balance sheets. Changes in the asset retirement obligations (in thousands) are as follows:
Nine Months Ended 
 September 30,
20232022
Beginning balance$20,732 $32,049 
Accretion1,555 1,123 
Additions and revisions of estimates1,698 (3,126)
   Payments(5)(62)
Ending balance$23,980 $29,984 
NOTE K—FAIR VALUE ACCOUNTING
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
    Level 1—Quoted prices in active markets for identical assets or liabilities.
    Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
    Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
Cash Equivalents
Due to the short-term maturity, we believe our cash equivalent instruments approximated their reported carrying values, therefore we have classified our cash equivalents as Level 1 of the fair value hierarchy.
Long-Term Debt, Including Current Maturities
The fair values of our long-term debt, including current maturities, approximated their carrying values based on their effective interest rates compared to current market rates, therefore we have classified our long-term debt as Level 1 of the fair value hierarchy.
Derivative Instruments
The estimated fair value of our derivative instruments is recorded at each reporting period and is determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, we have classified these swap agreements as Level 2 of the fair value hierarchy.
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NOTE L—DERIVATIVE INSTRUMENTS
Cash Flow Hedges of Natural Gas Price Risk
Natural gas is the primary fuel source used for drying in the commercial silica production process. In the past, the price of natural gas has been volatile, and we believe this volatility may continue. In order to manage our exposure to natural gas price increases, we entered into natural gas swaps. The derivative instruments are recorded on the balance sheet within other current or long-term assets or liabilities based on maturity dates at their fair values. As of September 30, 2023, the fair value of our natural gas swaps was a liability of $1.5 million, of which $1.3 million was classified within accounts payable and accrued liabilities on our balance sheet and $0.2 million was classified within other long-term obligations on our balance sheet. At December 31, 2022, the fair value of our natural gas swaps was a liability of $3.1 million, of which $2.3 million was classified within accounts payable and accrued liabilities on our balance sheet and $0.8 million was classified within other long-term obligations on our balance sheet.
We designated the natural gas swap agreements as qualified cash flow hedges. Accordingly, the effective portion of the gain or loss on the derivative instrument was reported as a component of other comprehensive income and recognized in earnings in the same period or periods during which the hedged transaction affects earnings.
The following table summarizes the fair values of our derivative instruments (in thousands, except contract/notional amount). See Note K - Fair Value Accounting for more information regarding the estimated fair values of our derivative instruments.
 September 30, 2023December 31, 2022
 Maturity
Date		Contract/Notional
Amount (MMBtu)		Carrying
Amount		Fair
Value		Maturity DateContract/Notional
Amount (MMBtu)		Carrying
Amount		Fair
Value
Natural Gas - W. Texas (WAHA) - Inside FERC20231,200,000 $(365)$(365)20231,200,000 $(1,887)$(1,887)
Natural Gas - W. Texas (WAHA) - Inside FERC2024870,000 $(879)$(879)2024870,000 $(656)$(656)
Natural Gas - W. Texas (WAHA) - Inside FERC2024750,000 $109 $109 N/AN/A$— $— 
Natural Gas - Henry Hub - NYMEX2023300,000 $(145)$(145)2023300,000 $(425)$(425)
Natural Gas - Henry Hub - NYMEX2024120,000 $(194)$(194)2024120,000 $(85)$(85)
Natural Gas - Henry Hub - NYMEX202590,000 $(75)$(75)202590,000 $(35)$(35)
During the nine months ended September 30, 2023, we had no ineffectiveness for the natural gas swap derivatives.
The following table summarizes the effect of derivative instruments (in thousands) on our income statements and our consolidated statements of comprehensive income:
Nine Months Ended 
 September 30,
20232022
Deferred losses from derivatives in OCI, beginning of period$(2,342)$— 
Gain recognized in OCI from derivative instruments1,168 — 
Deferred losses from derivatives in OCI, end of period$(1,174)$— 
NOTE M—EQUITY-BASED COMPENSATION
In July 2011, we adopted the U.S. Silica Holdings, Inc. 2011 Incentive Compensation Plan (the “2011 Plan”), which was amended and restated effective May 2015, amended and restated effective February 1, 2020, amended and restated effective May 13, 2021, amended and restated effective May 12, 2022 and amended and restated effective May 11, 2023. The 2011 Plan provides for grants of stock options, restricted stock, performance share units and other incentive-based awards. We believe our 2011 Plan aligns the interests of our employees and directors with those of our common stockholders. We use a combination of
17

treasury stock and new shares, if necessary, to satisfy option exercises or vesting of restricted awards and performance share units.
Stock Options

The following table summarizes the status of, and changes in, our stock option awards during the nine months ended September 30, 2023:
Number of
Shares		Weighted
Average
Exercise Price		Weighted
Average
Remaining Contractual Term in Years
Outstanding at December 31, 2022508,523 $36.22 2.0 years
Granted— $— 
Exercised— $— 
Forfeited (58,160)$36.65 
Expired(37,434)$24.80 
Outstanding at September 30, 2023412,929 $37.20 1.4 years
Exercisable at September 30, 2023412,929 $37.20 1.4 years
There were no grants of stock options during the three and nine months ended September 30, 2023 and 2022.
The following table summarizes stock option exercise activity:
Three months ended September 30,Nine months ended September 30,
2023202220232022
Options exercised (in actual shares)— 40,000 — 90,000 
Intrinsic value of options exercised (in thousands)$— $167 $— $613 
Cash received from options exercised (in thousands)$— $423 $— $956 
Tax benefit realized from options exercised (in thousands)$— $40 $— $148 
As of September 30, 2023 and 2022, there was no unrecognized compensation expense related to these options. We account for forfeitures as they occur.
Restricted Stock and Restricted Stock Unit Awards
The following table summarizes the status of, and changes in, our unvested restricted stock awards during the nine months ended September 30, 2023:
Number of SharesGrant Date Weighted
Average Fair Value
Unvested, December 31, 20221,438,386 $9.37 
Granted737,239 $12.13 
Vested(725,767)$9.03 
Forfeited(121,338)$8.70 
Unvested, September 30, 20231,328,520 $11.15 
We granted 101,634 and 737,239 restricted stock and restricted stock unit awards during the three and nine months ended September 30, 2023, respectively. We granted 11,621 and 642,333 restricted stock and restricted stock units during the three and nine months ended September 30, 2022, respectively. The fair value of the awards was based on the market price of our stock at date of grant.
We recognized $2.0 million and $5.5 million of equity-based compensation expense related to restricted stock and restricted stock units during the three and nine months ended September 30, 2023, respectively. We recognized $1.8 million and
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$5.2 million of equity-based compensation expense related to restricted stock and restricted stock units during the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, there was $10.5 million of unrecognized compensation expense related to these restricted stock and restricted stock units, which is expected to be recognized over a weighted-average period of 1.9 years.
We also granted cash awards during the three months ended March 31, 2020. These awards vested over a period of three years and were settled in cash. As such, these awards were classified as liability instruments. We recognized zero and $0.3 million of expense related to these awards for the three and nine months ended September 30, 2023, respectively. We recognized $0.2 million and $0.6 million of expense related to these awards for the three and nine months ended September 30, 2022, respectively. The liability for these awards was included in accounts payable and other accrued expenses on our balance sheets. These awards were remeasured at fair value each reporting period with resulting changes reflected in our income statements. As of September 30, 2023, there was no unrecognized expense related to these awards.
Performance Share Unit Awards
The following table summarizes the status of, and changes in, our performance share unit awards during the nine months ended September 30, 2023:
Number of SharesGrant Date Weighted
Average Fair Value
Unvested, December 31, 20222,292,751 $9.51 
Granted1,295,904 $9.54 
Vested(1,549,033)$6.60 
Forfeited/Cancelled(109,259)$11.52 
Unvested, September 30, 20231,930,363 $11.75 
We granted zero and 1,295,904 performance share unit awards during the three and nine months ended September 30, 2023, respectively. We granted zero and 920,681 performance share unit awards during the three and nine months ended September 30, 2022, respectively. A portion of these awards was measured against total shareholder return ("TSR"), and a portion was measured against adjusted free cash flow ("ACF") targets. The grant date weighted average fair value of these awards was estimated to be $9.54 and $11.79 for the nine months ended September 30, 2023 and 2022, respectively.
The number of TSR measured units that will vest will depend on the percentage ranking of our TSR compared to the TSR for each of the companies in the peer group over the three year period from January 1, 2023 through December 31, 2025 for the 2023 grant, January 1, 2022 through December 31, 2024 for the 2022 grant, and January 1, 2021 through December 31, 2023 for the 2021 grant. The number of ACF measured units that will vest will be based on ACF achievement versus target. The ACF targets are set annually and are approved by the Board of Directors. The related compensation expense is recognized on a straight-line basis over the vesting period.
The grant date fair value for the TSR awards was estimated using a Monte Carlo simulation model. The Monte Carlo simulation model requires the use of highly subjective assumptions. Our key assumptions in the model included the price and the expected volatility of our common stock and our self-determined peer group companies’ stock, risk-free rate of interest, dividend yields and cross-correlations between our common stock and our self-determined peer group companies' stock.
We recognized $1.7 million and $5.2 million of compensation expense related to performance share unit awards during the three and nine months ended September 30, 2023, respectively. We recognized $2.9 million and $8.6 million of compensation expense related to performance share unit awards during the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, there was $10.1 million of unrecognized compensation expense related to these performance share unit awards, which is expected to be recognized over a weighted-average period of 1.9 years.
We also granted cash awards during the three months ended March 31, 2020. These awards vested over a period of three years and were settled in cash. As such, these awards were classified as liability instruments. We recognized $0.1 million and $0.8 million of expense related to these awards for the nine months ended September 30, 2023 and 2022, respectively. The liability for these awards was included in accounts payable and other accrued expenses on our balance sheets. These awards were remeasured at fair value each reporting period with resulting changes reflected in our income statements. As of September 30, 2023, there was no unrecognized expense related to these awards.
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NOTE N—COMMITMENTS AND CONTINGENCIES
Future Minimum Annual Commitments at September 30, 2023 (in thousands):
Minimum Purchase Commitments
2023 (remaining three months)$1,891 
20247,640 
20256,431 
20263,844 
20272,288 
Thereafter7,484 
Total future purchase commitments$29,578 
Minimum Purchase Commitments
We enter into service agreements with our transload and transportation providers as well as commodity suppliers. Some of these agreements require us to purchase a minimum amount of services over a specific period of time. Any inability to meet these minimum contract requirements requires us to pay a shortfall fee, which is based on the difference between the minimum amount contracted for and the actual amount purchased.
Contingent Liability on Royalty Agreement
On May 17, 2017, we purchased reserves in Crane County, Texas, for $94.4 million cash plus contingent consideration. The contingent consideration is a royalty that is based on the tonnage shipped to third-parties. Because the contingent consideration is dependent on future tonnage sold, the amounts of which are uncertain, it is not currently possible to estimate the fair value of these future payments. The contingent consideration will be capitalized at the time a payment is probable and reasonably estimable, and the related depletion expense will be adjusted prospectively.
Other Commitments and Contingencies
Our operating subsidiary, U.S. Silica Company (“U.S. Silica”), has been named as a defendant in various product liability claims alleging silica exposure causing silicosis. During the nine months ended September 30, 2023, no new claims were brought against U.S. Silica. As of September 30, 2023, there were 39 active silica-related product liability claims pending in which U.S. Silica is a defendant. Although the outcomes of these claims cannot be predicted with certainty, in the opinion of management, it is not reasonably possible that the ultimate resolution of these matters will have a material adverse effect on our financial position or results of operations that exceeds the accrual amounts.
We have recorded estimated liabilities for these claims in other long-term liabilities and an estimate of future recoveries under insurance in other assets on our consolidated balance sheets. For both September 30, 2023 and December 31, 2022, other non-current assets included zero for insurance for third-party product liability claims. As of September 30, 2023 and December 31, 2022 other long-term liabilities included $0.7 million and $0.8 million, respectively, for third-party product liability claims.
Obligations under Guarantees
We have indemnified our insurers against any loss they may incur in the event that holders of surety bonds, issued on our behalf, execute the bonds. As of September 30, 2023, there was $42.8 million in bonds outstanding, of which $38.8 million related to reclamation requirements issued by various governmental authorities. Reclamation bonds remain outstanding until the mining area is reclaimed and the authority issues a formal release. The remaining bonds relate to licenses, permits, and tax collection.
20

NOTE O—PENSION AND POST-RETIREMENT BENEFITS
We maintain a single-employer noncontributory defined benefit pension plan covering certain employees. The plan is frozen to all new employees. The plan provides benefits based on each covered employee’s years of qualifying service. Our funding policy is to contribute amounts within the range of the minimum required and maximum deductible contributions for the plan consistent with a goal of appropriate minimization of the unfunded projected benefit obligations. The pension plan uses a benefit level per year of service for covered hourly employees and a final average pay method for covered salaried employees. The plan uses the projected unit credit cost method to determine the actuarial valuation.
In addition, we provide defined benefit post-retirement health care and life insurance benefits to some employees. Covered employees become eligible for these benefits at retirement after meeting minimum age and service requirements. The projected future cost of providing post-retirement benefits, such as healthcare and life insurance, is recognized as an expense as employees render services. In general, retiree health benefits are paid as covered expenses are incurred. Expenses incurred other than service costs are reported in Other (expense) income in our Condensed Consolidated Statements of Operations.
Net pension benefit cost (in thousands) consisted of the following:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2023202220232022
Service cost$620 $506 $1,766 $1,887 
Interest cost1,578 959 4,075 2,340 
Expected return on plan assets(1,855)(1,573)(4,892)(4,415)
Net amortization and deferral35 686 30 1,687 
Net pension benefit costs$378 $578 $979 $1,499 
Net post-retirement benefit cost (in thousands) consisted of the following:
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2023202220232022
Service cost$(2)$1 $6 $13 
Interest cost89 63 249 135 
Unrecognized prior service cost(516)(516)(1,547)(1,547)
Unrecognized net gain(333)(154)(595)(223)
Net post-retirement benefit income$(762)$(606)$(1,887)$(1,622)
We made a voluntary contribution of $2.0 million to the qualified pension plan for the three and nine months ended September 30, 2023 and no contributions for the three and nine months ended September 30, 2022. Our best estimates of expected required contributions to the pension and post-retirement medical benefit plans for the 2023 fiscal year are zero and $1.0 million, respectively.
We contribute to three multiemployer defined benefit pension plans under the terms of collective-bargaining agreements for union-represented employees. A multiemployer plan is subject to collective bargaining for employees of two or more unrelated companies. These plans allow multiple employers to pool their pension resources and realize efficiencies associated with the daily administration of the plan. Multiemployer plans are generally governed by a board of trustees composed of management and labor representatives and are funded through employer contributions. However, in most cases, management is not directly represented. Our contributions to individual multiemployer pension funds did not exceed 5% of the fund’s total contributions for the three and nine months ended September 30, 2023 and 2022. Additionally, our contributions to multiemployer post-retirement benefit plans were immaterial for all periods presented in the accompanying condensed consolidated financial statements.
We also sponsor a defined contribution plan covering certain employees. We contribute to the plan in two ways. For certain employees not covered by the defined benefit plan, we make a contribution equal to 4% of their salary. For all other eligible employees, we make a contribution up to 6% of eligible earnings. Contributions were $1.9 million and $5.9 million for the three and nine months ended September 30, 2023, respectively, and $1.7 million and $5.2 million for the three and nine months ended September 30, 2022, respectively.
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NOTE P— LEASES
We lease railroad cars, office space, mining property, mining/processing equipment and transportation and other equipment. The majority of our leases have remaining lease terms of approximately one year to 20 years. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We have lease agreements with lease and non-lease components, the latter of which are generally accounted for separately.
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):
LeasesClassificationSeptember 30,
2023		December 31, 2022
Assets
OperatingLease right-of-use assets$40,395 $39,088 
FinanceLease right-of-use assets2,947 3,286 
Total leased assets$43,342 $42,374 
Liabilities
Current
OperatingCurrent portion of operating lease liabilities$19,490 $19,773 
Finance Current portion of long-term debt1,058 1,107 
Non-current
OperatingOperating lease liabilities58,922 64,478 
FinanceLong-term debt, net1,822 2,153 
Total lease liabilities$81,292 $87,511 
Lease Term and Discount Rate
Weighted average remaining lease term:
Operating 6.1 years6.4 years
Finance4.7 years