Finance Lease 2024

  
NOTE 8 – Long-Term Debt and Lease ObligationsThis table summarizes the principal amounts of our long-term debt excluding unamortized discounts, none of which are encumbered by rating triggers:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
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| (Dollars in millions) |  |   |  | Book value |  | Principal amount |
|  Interest rate |  |  Year of issue |  |   |  | At December 31, |  | At December 31, |
|  |  |   |  | 2021 |  | 2020 |  | 2021 |  | 2020 |
| 6.900% |  | 1998 |  | Senior debentures, due 2028 |  | $ | 27  |  |  | $ | 27  |  |  | $ | 28  |  |  | $ | 28  |  |
| 6.920% |  | 2005 |  | Senior debentures, due 2028 |  | 391  |  |  | 391  |  |  | 391  |  |  | 391  |  |
| 6.125% |  | 2004 |  | Senior notes, due 2034 |  | 371  |  |  | 370  |  |  | 374  |  |  | 374  |  |
|   |  |   |  | Total |  | $ | 789  |  |  | $ | 788  |  |  | $ | 793  |  |  | $ | 793  |  |
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 The finance lease term for equipment and autos is three to six years while the operating lease term for real estate properties is typically five years. Lease obligations totaled $54 million and $57 million in 2021 and 2020, respectively. Below are the lease obligations we expect to pay through years 2027 and thereafter including $3 million of interest for finance and operating leases:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
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| (Dollars in millions) | Years ended December 31, |  |  |
|   | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 and thereafter |
| Finance lease obligations | $ | 14  |  |  | $ | 12  |  |  | $ | 8  |  |  | $ | 6  |  |  | $ | 3  |  |  | $ | 2  |  |
| Operating lease obligations | 4  |  |  | 2  |  |  | 2  |  |  | 2  |  |  | 1  |  |  | 1  |  |
|    Total lease obligations | $ | 18  |  |  | $ | 14  |  |  | $ | 10  |  |  | $ | 8  |  |  | $ | 4  |  |  | $ | 3  |  |
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The following table provides lease cost and other information:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) |  | Years ended December 31, |
|  |  | 2021 |  | 2020 |  | 2019 |
| Lease cost: |  |  |  |  |  |  |
|    Finance lease cost |  | $ | 15  |  |  | $ | 15  |  |  | $ | 9  |  |
|    Operating lease cost |  | 4  |  |  | 4  |  |  | 4  |  |
| Total lease cost |  | $ | 19  |  |  | $ | 19  |  |  | $ | 13  |  |
|  |  |  |  |  |  |  |
| Other information finance leases: |  |  |  |  |  |  |
|    Finance cash outflows  |  | $ | 15  |  |  | $ | 15  |  |  | $ | 15  |  |
| Weighted average discount rate |  | 2.46  | % |  | 2.62  | % |  | 2.96  | % |
| Weighted average remaining lease term in years |  | 3.45 |  | 3.67 |  | 3.65 |
|  |  |  |  |  |  |  |
| Other information operating leases: |  |  |  |  |  |  |
|    Operating cash outflows  |  | $ | 4  |  |  | $ | 8  |  |  | $ | 8  |  |
| Weighted average discount rate |  | 2.86  | % |  | 3.65  | % |  | 3.69  | % |
| Weighted average remaining lease term in years |  | 4.37 |  | 4.84 |  | 4.71 |
|  |  |  |  |  |  |  |

 Cincinnati Financial Corporation - 2021 10-K - Page 154
