ERIE INDEMNITY COERIE

ERIE INDEMNITY CO Leases Disclosure

10-KFiled Feb 25, 20211 min read
Leases
The following table summarizes our lease assets and liabilities as of December 31:
(in thousands)20202019
Operating lease assets$14,381 $22,401 
Operating lease liabilities - current$10,713 $11,289 
Operating lease liabilities - long-term3,643 10,665 
Total operating lease liabilities$14,356 $21,954 


We currently have leases for real estate, technology equipment, copiers, and vehicles. Our largest operating lease asset at December 31, 2020 of $6.3 million is for office space leased from the Exchange, including the home office. Under this lease, rent is based on rental rates of like property and all operating expenses are the responsibility of the tenant (Indemnity). The lease agreement expires December 31, 2021. See Note 15, "Related Party".

Operating lease costs for the years ended December 31, 2020 and 2019 totaled $13.1 million and $14.0 million, respectively. Of this amount, the Exchange and its subsidiaries reimbursed us $5.3 million and $6.0 million for the years ended December 31, 2020 and 2019, respectively, which represents the allocated share of lease costs supporting administrative services activities.

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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