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Leases

3 Months Ended

Mar. 31, 2022

We lease office space, furniture and office equipment under various operating and financing leases. Our current leases have remaining lease terms of one year to 15 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Since 2010, we have sub-leased over one million square feet of office space.

Leases included in the condensed consolidated statement of financial condition as of March 31, 2022 and December 31, 2021 were as follows:


	Classification	March 31, 2022		December 31, 2021
		(in thousands)
Operating Leases
Operating lease right-of-use assets	Right-of-use assets	$	398,804	$	414,105
Operating lease liabilities	Lease liabilities	466,439		482,781
Finance Leases
Property and equipment, gross	Right-of-use assets	13,284		10,947
Amortization of right-of-use assets	Right-of-use assets	(3,580)		(3,072)
Property and equipment, net		9,704		7,875
Finance lease liabilities	Lease liabilities	9,351		7,954

The components of lease expense included in the condensed consolidated statement of income as of March 31, 2022 and March 31, 2021 were as follows:


		Three Months Ended March 31,
	Classification			2022		2021
			(in thousands)
Operating lease cost	General and administrative			$	24,525	$	24,418
Financing lease cost:
Amortization of right-of-use assets	General and administrative			740		501
Interest on lease liabilities	Interest expense			37		22
Total finance lease cost				777		523
Variable lease cost (1)	General and administrative			10,687		9,546
Sublease income	General and administrative			(8,561)		(9,807)
Net lease cost				$	27,428	$	24,680

(1) Variable lease expense includes operating expenses, real estate taxes and employee parking.

The sub-lease income represents all revenues received from sub-tenants. It is primarily fixed base rental payments combined with variable reimbursements such as operating expenses, real estate taxes and employee parking. We derive most of our sub-tenant income from our New York metro sub-tenant agreements. Sub-tenant income related to base rent is recorded on a straight-line basis.

Maturities of lease liabilities were as follows:


	Operating Leases		Financing Leases		Total
Year ending December 31,	(in thousands)
2022 (excluding the three months ended March 31, 2022)	$	75,061	$	1,940	$	77,001
2023	97,522		2,887		100,409
2024	100,148		2,043		102,191
2025	34,308		1,747		36,055
2026	32,868		1,011		33,879
Thereafter	172,179		—		172,179
Total lease payments	512,086		9,628		521,714
Less interest	(45,647)		(277)
Present value of lease liabilities	$	466,439	$	9,351

We have signed a lease which commences in 2024, relating to approximately 166,000 square feet of space in New York City. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20-year lease term is approximately $393.0 million.


Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases	7.51
Finance leases	3.73
Weighted average discount rate:
Operating leases	2.74	%
Finance leases	1.62	%

Supplemental cash flow information related to leases was as follows:


	Three Months Ended March 31,
	2022	2021
	(in thousands)




Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases	7,719	12,161
Finance leases	2,569	3,283

(1) Represents non-cash activity and, accordingly, is not reflected in the consolidated statements of cash flows.

Leases