SAFETY INSURANCE GROUP INC Leases Disclosure
9. Leases
The Company has various non-cancelable, long-term operating leases, the largest of which are for office space including the corporate headquarters, agency locations, VIP claims centers and law offices. Other operating leases consist of auto leases and various office equipment. The Company has no finance leases. Our leases have remaining lease terms of one year to three years, some of which include options to extend the leases for up to five years.
Certain lease agreements contain renewal options and, in addition to the minimum annual rentals, generally provide for payment of a share of the real estate taxes and operating expenses in excess of a base amount. Rental expense for our office space, law offices and VIP claims centers was $4,580, $4,832 and $4,294 for the years ended December 31, 2025, 2024, and 2023, respectively. All leases expire prior to 2029. The Company expects that in the normal course of business, leases that expire will be renewed.
In calculating lease liabilities the Company uses its incremental borrowing rate as of the application date based on original lease terms. The components of lease expense were as follows:
Year Ended December 31, | ||||||||||
| 2025 | 2024 | 2023 | |||||||
Operating lease cost | $ | 3,602 | $ | 4,001 | $ | 4,115 | ||||
Other information related to leases was as follows:
Year Ended December 31, | ||||||
| 2025 | 2024 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows from operating leases | $ | 4,218 | $ | 4,611 | ||
Weighted average remaining lease term | ||||||
Operating leases | 2.95 Years | 3.93 Years | ||||
Weighted average discount rate | ||||||
Operating leases | 2.47% | 2.48% | ||||
Maturities of lease liabilities were as follows:
| Operating Leases | ||
2026 | $ | 4,210 | |
2027 | 3,995 | ||
2028 | 3,924 | ||
Total lease payments | 12,129 | ||
Less imputed interest | (268) | ||
Total | $ | 11,861 | |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
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.