Leases

9 Months Ended

Aug. 31, 2020

We enter into lease and sublease agreements primarily for office space across our geographic locations. Finance lease ROU assets and finance lease liabilities are not material. Information related to operating leases in the Consolidated Statement of Financial Condition at August 31, 2020 is as follows (in thousands, except lease term and discount rate):



Property, equipment and leasehold improvements, net - ROU assets	$	521,278

Weighted average:
Remaining lease term (in years)	10.8 years
Discount rate	2.9		%

The following table presents the maturities of our operating lease liabilities and a reconciliation to the Lease liabilities included in the Consolidated Statement of Financial Condition at August 31, 2020 (in thousands):


	Lease Liabilities

Remainder of 2020	$	22,271
2021	76,932
2022	74,722
2023	65,220
2024	61,994
2025 and thereafter	403,809
Total undiscounted cash flows	704,948
Less: Difference between undiscounted and discounted cash flows	(106,832)
Operating leases amount in the Consolidated Statement of Financial Condition	598,116
Finance leases amount in the Consolidated Statement of Financial Condition	247
Total amount in the Consolidated Statement of Financial Condition	$	598,363

The following table presents our lease costs (in thousands):


	For the Three Months Ended August 31, 2020		For the Nine Months Ended August 31, 2020

Operating lease costs (1)	$	19,425	$	57,994
Variable lease costs (2)	3,485		9,561
Less: Sublease income	(1,973)		(5,669)
Total lease cost, net	$	20,937	$	61,886

(1) Includes short-term leases, which are not material.

(2) Includes property taxes, insurance costs, common area maintenance, utilities, and other costs that are not fixed. The amount also includes rent increases resulting from inflation indices and periodic market rent reviews.

Consolidated Statement of Cash Flows supplemental information is as follows (in thousands):


	For the Nine Months Ended August 31, 2020

Cash outflows - lease liabilities	$	59,155
Non-cash - ROU assets recorded for new and modified leases	$	21,438

Minimum Future Lease Commitments (under Previous GAAP). As lessee, we lease certain premises and equipment under non-cancelable agreements expiring at various dates through 2039 which are operating leases. At November 30, 2019, future minimum annual lease payments under such leases (net of sublease income) were as follows (in thousands):


2020	$	70,886
2021	73,374
2022	71,464
2023	62,552
2024	59,714
Thereafter	393,995
	731,985
Less: sublease income	(21,883)
	$	710,102

Rental expense, net of sublease rental income, was $65.6 million, $55.7 million, and $60.2 million for the twelve months ended November 30, 2019, the eleven months ended November 30, 2018 and the twelve months ended December 31, 2017, respectively.