Leases

12 Months Ended

Dec. 31, 2023

Federated Hermes has material operating leases related to its corporate headquarters in Pittsburgh, Pennsylvania. These leases expire in 2030 and have renewal options for additional periods through 2040. These leases include provisions for leasehold improvement incentives, rent escalation and certain penalties for early termination. In addition, Federated Hermes has various other operating lease agreements primarily for facilities. These leases are noncancelable and expire on various dates through the year 2036. Most leases include renewal options for additional rental periods that would end on various dates through 2041 and, in certain cases, escalation clauses. The value of the ROU assets and lease liabilities recognized do not include the consideration of any renewal options, as they are not yet reasonably certain to be exercised.

During the years ended December 31, 2023, 2022, and 2021, Federated Hermes recorded $19.5 million, $19.0 million and $19.0 million, respectively, in operating lease costs to Operating Expenses - Office and Occupancy on the Consolidated Statements of Income.

The following table reconciles future minimum undiscounted payments of the operating lease liabilities recorded on the Consolidated Balance Sheets as of December 31, 2023:


(in millions)
2024	$	20.0
2025	17.8
2026	16.4
2027	15.7
2028	15.6
2029 and Thereafter	44.0
Total Undiscounted Lease Payments	$	129.5
Present Value Adjustment1	(19.4)
Net Operating Lease Liabilities	$	110.1

1 Calculated using the IBR for each lease.

The following information relates to the operating leases recorded on the Consolidated Balance Sheets as of December 31, 2023:


Weighted-average remaining lease term (in years)	7.7
Weighted-average discount rate (IBR)	3.9		%
Cash paid in 2023 for the amounts included in the measurement of lease liabilities (in millions)	$	20.4