Leases

3 Months Ended

Mar. 31, 2021

Operating Leases – The Company leases office space under non-cancelable lease agreements, which expire on various dates through 2035. The lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. 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 operating lease cost for office space of $12,166 and $11,916 for the three months ended March 31, 2021 and 2020, respectively, and variable lease cost of $1,852 and $1,723 for the three months ended March 31, 2021 and 2020, respectively.

In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of $5,550 as of March 31, 2021 and December 31, 2020, which are secured by cash that is included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition.

The Company has entered into various operating leases for the use of office equipment (primarily computers, printers, copiers and other information technology related equipment). Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office equipment of $1,507 and $1,196 for the three months ended March 31, 2021 and 2020, respectively.

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 $10,091 and $9,102 for the three months ended March 31, 2021 and 2020, respectively, related to its operating leases, which was net of cash received from lease incentives of $3,441 and $1,270 for the three months ended March 31, 2021 and 2020, respectively.

Other information as it relates to the Company's operating leases is as follows:


	For the Three Months Ended March 31,
	2021			2020
New Right-of-Use Assets obtained in exchange for new operating lease liabilities	$	1,864		$	81,133


	March 31, 2021			March 31, 2020
Weighted-average remaining lease term - operating leases	11.4 years			11.8 years
Weighted-average discount rate - operating leases	4.06		%	4.26		%

As of March 31, 2021, the maturities of the undiscounted operating lease liabilities for which the Company has commenced use are as follows:


2021 (April 1 through December 31)	$	40,390
2022	52,830
2023	37,584
2024	30,173
2025	32,672
Thereafter	245,611
Total lease payments	439,260
Less: Tenant Improvement Allowances	(10,695)
Less: Imputed Interest	(90,267)
Present value of lease liabilities	338,298
Less: Current lease liabilities	(43,654)
Long-term lease liabilities	$	294,644

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 on 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 by the end of 2023. These spaces will have lease terms of 3 to 13 years once the Company has taken possession. The additional future payments under these arrangements are $195,299 as of March 31, 2021.

The Company has also entered into agreements which provide for an option to take on additional office space at its 1 Stanhope Gate office in London, U.K. Under the terms of the agreement, the landlord has the option to require the Company to take on up to four additional floors, subject to the current tenant abandoning the space. During the three months ended March

31, 2021, the landlord provided notice to the Company that it intends to exercise this option. The Company anticipates that it will take possession of these floors during 2021. The approximate additional annual payments under this lease agreement are £1,325 and the lease term will end on March 24, 2027.