Leases

12 Months Ended

Dec. 31, 2022

Operating Leases – The Company leases office space under non-cancelable lease agreements, which expire on various dates through 2035. The Company reflects lease expense over the lease terms on a straight-line basis. The lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. 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 Consolidated Statements of Operations includes operating lease cost for office space of $51,913, $49,580 and $48,561 for the years ended December 31, 2022, 2021 and 2020, respectively, and variable lease cost, which principally include costs for real estate taxes, common area maintenance and other operating expenses of $6,563, $6,062 and $7,490 for the years ended December 31, 2022, 2021 and 2020, respectively.

In conjunction with the lease of office space, the Company has entered into letters of credit in the amount of $5,637 and $5,616 as of December 31, 2022 and 2021, respectively, which are secured by cash that is included in Other Assets on the 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 Consolidated Statements of Operations includes operating lease cost for office equipment of $5,316, $5,193 and $4,709 for the years ended December 31, 2022, 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 $57,456, $45,886 and $30,709 for the years ended December 31, 2022, 2021 and 2020, respectively, related to its operating leases, which was net of cash received from lease incentives of $3,412, $9,216 and $14,732 for the years ended December 31, 2022, 2021 and 2020, respectively.

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


	For the Years Ended December 31,
		2022			2021
New Right-of-Use Assets obtained in exchange for new operating lease liabilities		$	20,666		$	34,544

		December 31,
		2022			2021
Weighted-average remaining lease term - operating leases		10.4 years			10.8 years
Weighted-average discount rate - operating leases		3.92		%	3.92		%

As of December 31, 2022, the maturities of the undiscounted operating lease liabilities for which the Company has commenced use are as follows:


2023	$	49,288
2024	42,340
2025	42,537
2026	39,056
2027	26,685
Thereafter	190,856
Total lease payments	390,762
Less: Tenant Improvement Allowances	(3,365)
Less: Imputed Interest	(71,351)
Present value of lease liabilities	316,046
Less: Current lease liabilities	(37,968)
Long-term lease liabilities	$	278,078

In December 2022, the Company entered into a lease agreement to take on 38 rentable square feet in New York, New York. The Company took possession of this space in January 2023. The approximate additional annual expense under this lease agreement, net of certain lease incentives, is $2,300 and the lease term will end on December 31, 2035.

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, including the lease above, the Company entered into leases for office space which have not yet commenced and thus are not yet included on the Company's 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 $262,919 as of December 31, 2022.