Leases

6 Months Ended

Jun. 30, 2021

ProAssurance is involved in a number of operating leases that are primarily for office facilities. Office facility leases have remaining lease terms ranging from one year to ten years; some of which include options to extend the leases for up to fifteen 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. As a result of ProAssurance's acquisition of NORCAL, the Company recorded $4.4 million of additional operating lease ROU assets and $5.3 million of additional operating lease liabilities during the second quarter of 2021. See Note 2 for more information.

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 and six months ended June 30, 2021 and 2020.


(In thousands)	Location in the Condensed Consolidated Statements of Income and Comprehensive Income	Three Months Ended June 30				Six Months Ended June 30
		2021		2020		2021		2020
Operating lease expense (1)	Operating expense	$	1,214	$	891	$	2,152	$	2,516
Sublease income (2)	Other income	(70)		(38)		(124)		(76)
Net lease expense		$	1,144	$	853	$	2,028	$	2,440

(1) Includes short-term lease costs and variable lease costs, if applicable. For the three and six months ended June 30, 2021 and 2020, 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 and $1.2 million during the three and six months ended June 30, 2021 and 2020, respectively, which is included in other income. See “Item 2. Properties” in ProAssurance's December 31, 2020 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 Sheets as of June 30, 2021 and December 31, 2020.


($ in thousands)	June 30, 2021			December 31, 2020
Operating lease ROU assets	$	21,670		$	19,013
Operating lease liabilities	$	23,499		$	20,116
Weighted-average remaining lease term	7.07 years			8.31 years
Weighted-average discount rate	2.82		%	2.97		%

The following table provides supplemental lease information for the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020.


	Six Months Ended June 30
(In thousands)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,533	$	2,042

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 June 30, 2021.


(In thousands)
2021	$	3,074
2022	5,070
2023	4,078
2024	2,500
2025	1,969
Thereafter	8,875
Total future minimum lease payments	25,566
Less: Imputed interest	2,067
Total operating lease liabilities	$	23,499