Operating Leases

6 Months Ended

Jun. 30, 2024

NOTE 17 – Operating Leases

Our operating leases primarily relate to office space and office equipment with remaining lease terms of 1 to 15 years. At June 30, 2024 and December 31, 2023, operating lease right-of-use assets were $821.9 million and $778.2 million, respectively, and lease liabilities were $877.8 million and $825.5 million, respectively.

The table below summarizes our net lease cost for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,
	2024			2023
Operating lease cost	$	27,680		$	26,349
Short-term lease cost		654			385
Variable lease cost		6,752			6,990
Sublease income		(274	)		(273	)
Net lease cost	$	34,812		$	33,451


	Six Months Ended June 30,
	2024			2023
Operating lease cost	$	55,192		$	52,778
Short-term lease cost		1,378			715
Variable lease cost		14,012			13,945
Sublease income		(549	)		(562	)
Net lease cost	$	70,033		$	66,876

Operating lease costs are included in occupancy and equipment rental in the consolidated statements of operations.

The table below summarizes other information related to our operating leases as of and for the six months ended June 30, 2024 (in thousands):


Operating lease cash flows	$	48,396
Right-of-use assets obtained in exchange for new operating lease liabilities	$	77,719
Weighted-average remaining lease term (years)		12.7
Weighted-average discount rate		4.93	%

The weighted average discount rate represents our company’s incremental borrowing rate at the lease inception date.

The table below presents information about operating lease liabilities as of June 30, 2024, (in thousands, except percentages).


Remainder of 2024	$	52,385
2025		104,083
2026		104,910
2027		105,482
2028		103,283
Thereafter		753,116
Total undiscounted lease payments		1,223,259
Imputed interest		(345,410	)
Total operating lease liabilities	$	877,849

Aircraft Engine Operating Leases

As of June 30, 2024, the Company had a total lease portfolio of 25 aircraft engines with a net book value of $137.8 million, which is included in fixed assets, net in the consolidated statements of financial condition. The aircraft engines were purchased by the Company, through its subsidiaries, during 2024. See Note 25 for additional information. During the second quarter of 2024, the Company sold 3 aircraft engines with a net book value of $17.5 million and recognized a gain from the sale of $19.8 million, which is included in principal transactions in the consolidated statement of operations.

As of June 30, 2024, minimum future payments under non-cancelable leases were (in thousands):


Remainder of 2024	$	10,754
2025		13,648
2026		9,701
2027		5,210
2028		2,670
Thereafter		9,335
	$	51,318

Lease income, included in other income in the consolidated statements of operations, was $7.7 million and $9.6 million for the three and six months ended June 30, 2024, respectively.