Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

LEASES

The Company leases certain office space under non-cancelable operating leases, with initial terms typically ranging from one to fifteen years, along with options that permit renewals for additional periods. The Company also leases certain equipment under non-cancelable operating leases, with initial terms typically ranging from one to five years. Minimum rent is expensed on a straight-line basis over the term of the lease.

The following table presents operating lease right-of-use assets and lease liabilities.

(Dollars in Millions)	2021		2020
Operating Lease Right-of-Use Assets	$	64.4	$	68.6
Operating Lease Liabilities	84.8		89.6

NOTE 20. LEASES (Continued)

Lease expenses are primarily included in insurance expenses in the Consolidated Statements of Income. Additional information regarding the Company’s operating leases is presented below.

(Dollars in Millions)	2021		2020
Lease Cost:
Amortization of Right-of-Use Assets - Finance Leases	$	0.2	$	0.3
Operating Lease Cost	22.3		20.9
Variable Lease Cost	0.2		—
Short-Term Lease Cost (1)	5.0		4.6
Total Lease Expense	$	27.7	$	25.8
Less: Sub-Lease Income	0.3		—
Total Lease Cost	$	27.4	$	25.8

(1) - Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheet.

Other Information on Operating Leases

Supplemental cash flow information related to the Company’s operating and finance leases for the year ended December 31, 2021 and 2020 is as follows:

(Dollars in Millions)	2021		2020
Operating Cash Flows from Operating Lease (Fixed Payments)	$	23.6	$	15.8
Operating Cash Flows from Operating Lease (Liability Reduction)	20.6		17.5
Financing Cash Flows from Finance Leases	0.2		0.3
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities	15.5		11.0

Significant judgments and assumptions for determining lease asset and liability at December 31, 2021 and 2020 are presented below.

	2021		2020
Weighted-average Remaining Lease Term - Finance Leases	1.0 year		0.7 years
Weighted-average Remaining Lease Term - Operating Leases	5.8 years		6.7 years
Weighted-average Discount Rate - Finance Leases	0.6	%	4.0	%
Weighted-average Discount Rate - Operating Leases	3.4	%	4.0	%

Most of the Company’s leases do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of its lease payments.

Future minimum lease payments under operating leases at December 31, 2021 are presented below. There are no significant future minimum lease payments under finance leases.

(Dollars in Millions)
2022	$	23.8
2023	21.1
2024	15.2
2025	9.9
2026	4.2
2027 and Thereafter	20.5
Total Future Payments	$	94.7
Less Imputed Interest	9.9
Present Value of Minimum Lease Payments	$	84.8

Leases

LEASES

The Company leases certain office space under non-cancelable operating leases, with initial terms typically ranging from one to fifteen years, along with options that permit renewals for additional periods. The Company also leases certain equipment under non-cancelable operating leases, with initial terms typically ranging from one to five years. Minimum rent is expensed on a straight-line basis over the term of the lease.

The following table presents operating lease right-of-use assets and lease liabilities.

(Dollars in Millions)	2021		2020
Operating Lease Right-of-Use Assets	$	64.4	$	68.6
Operating Lease Liabilities	84.8		89.6

NOTE 20. LEASES (Continued)

Lease expenses are primarily included in insurance expenses in the Consolidated Statements of Income. Additional information regarding the Company’s operating leases is presented below.

(Dollars in Millions)	2021		2020
Lease Cost:
Amortization of Right-of-Use Assets - Finance Leases	$	0.2	$	0.3
Operating Lease Cost	22.3		20.9
Variable Lease Cost	0.2		—
Short-Term Lease Cost (1)	5.0		4.6
Total Lease Expense	$	27.7	$	25.8
Less: Sub-Lease Income	0.3		—
Total Lease Cost	$	27.4	$	25.8

(1) - Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheet.

Other Information on Operating Leases

Supplemental cash flow information related to the Company’s operating and finance leases for the year ended December 31, 2021 and 2020 is as follows:

(Dollars in Millions)	2021		2020
Operating Cash Flows from Operating Lease (Fixed Payments)	$	23.6	$	15.8
Operating Cash Flows from Operating Lease (Liability Reduction)	20.6		17.5
Financing Cash Flows from Finance Leases	0.2		0.3
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities	15.5		11.0

Significant judgments and assumptions for determining lease asset and liability at December 31, 2021 and 2020 are presented below.

	2021		2020
Weighted-average Remaining Lease Term - Finance Leases	1.0 year		0.7 years
Weighted-average Remaining Lease Term - Operating Leases	5.8 years		6.7 years
Weighted-average Discount Rate - Finance Leases	0.6	%	4.0	%
Weighted-average Discount Rate - Operating Leases	3.4	%	4.0	%

Most of the Company’s leases do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of its lease payments.

Future minimum lease payments under operating leases at December 31, 2021 are presented below. There are no significant future minimum lease payments under finance leases.

(Dollars in Millions)
2022	$	23.8
2023	21.1
2024	15.2
2025	9.9
2026	4.2
2027 and Thereafter	20.5
Total Future Payments	$	94.7
Less Imputed Interest	9.9
Present Value of Minimum Lease Payments	$	84.8