Leases

3 Months Ended

Mar. 31, 2020

ProAssurance is involved in a number of operating leases primarily for office facilities. Office facility leases have remaining lease terms ranging from one year to twelve years; some of which include options to extend the leases for up to ten years, and some of which include an option to terminate the lease within one year. ProAssurance subleases certain office facilities to third parties and classifies these leases as operating leases.

The following table provides a summary of the components of net lease expense as well as the reporting location in the Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2020 and 2019.



(In thousands)	Location in the Condensed Consolidated Statements of Income and Comprehensive Income	Three Months Ended March 31
(In thousands)		2020			2019
Operating lease expense ⁽¹⁾	Operating expense	$	1,625		$	774
Sublease income ⁽²⁾	Other income	(38		)	(38		)
Net lease expense		$	1,587		$	736

⁽¹⁾ Includes short-term lease costs and variable lease costs, if applicable. For the three months ended March 31, 2020 and 2019, no short-term lease costs were recognized and variable lease costs were nominal in amount.

⁽²⁾ Sublease income excludes rental income from owned properties of $0.6 million during each of the three months ended March 31, 2020 and 2019 which is included in other income. See “Item 2. Properties” in ProAssurance's December 31, 2019 report on Form 10-K for a listing of currently owned properties.

The following table provides supplemental lease information for operating leases on the Condensed Consolidated Balance Sheet as of March 31, 2020 and December 31, 2019.



($ in thousands)	March 31, 2020			December 31, 2019
Operating lease ROU assets	$	19,722		$	21,074
Operating lease liabilities	$	21,311		$	22,051
Weighted-average remaining lease term	8.67 years			8.74 years
Weighted-average discount rate	3.08		%	3.08		%

The following table provides supplemental lease information for the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019.

The following table is a schedule of remaining future minimum lease payments for operating leases that had an initial or remaining non-cancellable lease term in excess of one year as of March 31, 2020. Operating lease payments exclude $0.5 million of future minimum lease payments for one lease signed but not yet commenced as of March 31, 2020. This lease will commence in the first quarter of 2021 with a lease term of approximately seven years.



(In thousands)
2020	$	3,139
2021	3,951
2022	3,064
2023	2,361
2024	1,773
Thereafter	10,047
Total future minimum lease payments	24,335
Less: Imputed interest	3,024
Total operating lease liabilities	$	21,311

Three Months Ended March 31

(In thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases