Leases

Operating Leases – The Company leases office space under non-cancelable lease agreements, which expire on various dates through 2034. The Company reflects lease expense over the lease terms on a straight-line basis. Occupancy lease agreements, in addition to base rentals, generally are subject to escalation provisions based on certain costs incurred by the landlord. The Company does not have any leases with variable lease payments. Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes occupancy rental expense relating to operating leases of $11,036 and $10,117 for the three months ended March 31, 2019 and 2018, respectively.

In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of approximately $5,509 and $5,502, which are secured by cash that is included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition as of March 31, 2019 and December 31, 2018, respectively.

The Company has entered into various operating leases for the use of office equipment (primarily computers, printers, copiers and other IT related equipment). Rental expense for office equipment totaled $923 and $459 for the three months ended March 31, 2019 and 2018, respectively. Rental expense for office equipment is included in Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations.

The Company uses its secured incremental borrowing rate to determine the present value of its right-of-use assets and lease liabilities. The determination of an appropriate incremental borrowing rate requires significant assumptions and judgment. The Company's incremental borrowing rate was calculated based on the Company's recent debt issuances and current market conditions. The Company scales the rates appropriately depending on the life of the leases.

The Company incurred net operating cash outflows of $2,973 for the three months ended March 31, 2019 related to its operating leases, which were net of cash received from lease incentives of $6,198.

Upon adoption of ASC 842 on January 1, 2019, the Company recorded Right-of-Use Assets on its statement of financial condition of $180,935. Other information as it relates to the Company's operating leases is as follows:



	For the Three Months Ended
	March 31, 2019
New Right-of-Use Assets obtained in exchange for new operating lease liabilities	$	14,573


	March 31, 2019
Weighted-average remaining lease term - operating leases	8.9 years
Weighted-average discount rate - operating leases	5.55		%

As of March 31, 2019, the maturities of the undiscounted operating lease liabilities for which the Company has commenced use are as follows:



2019	$	28,781
2020	41,601
2021	41,941
2022	35,054
2023	21,442
Thereafter	165,688
Total minimum lease payments	334,507
Less: Tenant Improvement Allowances	(27,541		)
Less: Imputed Interest	(88,024		)
Present value of lease liabilities	218,942
Less: Current lease liabilities	(32,648		)
Long-term lease liabilities	$	186,294

In conjunction with the lease agreement to expand its headquarters at 55 East 52nd St., New York, New York, and lease agreements at certain other locations, the Company entered into leases for office space which have not yet commenced and thus are not yet included in the Company's Unaudited Condensed Consolidated Statements of Financial Condition as right-of-use assets and lease liabilities. The Company anticipates that it will take possession of these spaces between 2019 and 2023 with lease terms of 7 to 15 years. The additional minimum future payments under these arrangements are $252,300 as of March 31, 2019.

As of December 31, 2018, the approximate aggregate minimum future payments required on the operating leases, net of rent abatement and certain other rent credits, under legacy U.S. GAAP (ASC 840), were as follows:



2019	$	36,537
2020	39,059
2021	39,561
2022	39,585
2023	27,564
Thereafter	403,450
Total	$	585,756