PROASSURANCE CORPPRA

PROASSURANCE CORP Leases Disclosure

10-KFiled Feb 23, 20262 min read
Leases
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 five 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 Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2025, 2024 and 2023.
(In thousands)Location in the Consolidated Statements of Income and Comprehensive IncomeYear Ended December 31
202520242023
Operating lease expense(1)
Operating expense$3,342 $3,636 $4,546 
Sublease income(2)
Other income(266)(288)(396)
Net lease expense$3,076 $3,348 $4,150 
(1) Includes short-term lease costs and variable lease costs, if applicable. For the years ended December 31, 2025 and 2023, we recognized a nominal amount of short-term lease costs and variable lease costs. For the year ended December 31, 2024, 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 $1.8 million for the year ended December 31, 2025 and $2.8 million for each of the years ended December 31, 2024 and 2023, which is included in other income. See “Item 2. Properties” for a listing of currently owned properties.
The following table provides supplemental lease information for operating leases on the Consolidated Balance Sheet as of December 31, 2025 and December 31, 2024.
Year Ended December 31
($ in thousands)20252024
Operating lease ROU assets$13,820 $16,514 
Operating lease liabilities$14,643 $17,390 
Weighted-average remaining lease term5.42 years6.25 years
Weighted-average discount rate4.48 %3.57 %
The following table provides supplemental lease information for the Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023.
Year Ended December 31
(In thousands)202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$3,307 $3,564 $4,573 
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 December 31, 2025.
(In thousands)
2026$3,241 
20273,274 
20282,910 
20292,474 
20301,903 
Thereafter
2,306 
Total future minimum lease payments
16,108 
Less: Imputed interest
1,465 
Total operating lease liabilities
$14,643 

Historical Timeline

Fiscal YearFiled
2025Feb 23, 2026Showing above
2024Feb 24, 2025
2023Feb 27, 2024
2022Feb 27, 2023
2021Feb 22, 2022
2020Feb 26, 2021
2019Feb 20, 2020

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.

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