Leases

Federated has material operating leases related to its corporate headquarters in Pittsburgh, Pennsylvania. These leases expire in 2030 and have renewal options for additional periods through 2040. These leases include provisions for leasehold improvement incentives, rent escalation and certain penalties for early termination. In addition, Federated has various other operating lease agreements primarily for additional facilities. These leases are noncancelable and expire on various dates through the year 2027. Most leases include renewal options for additional periods through 2037 and, in certain cases, escalation clauses. The value of the ROU assets and lease liabilities recognized do not include the consideration of any renewal options, as they are not yet reasonably certain to be exercised.

During the three months ended March 31, 2019 and 2018, Federated recorded $4.4 million and $3.3 million, respectively, in operating lease costs to Office and Occupancy on the Consolidated Statements of Income.

The following table reconciles future minimum undiscounted payments to the operating lease liabilities recorded on the Consolidated Balance Sheets as of March 31, 2019:



(in millions)
Remainder of 2019	$	13.5
2020	17.9
2021	17.5
2022	18.2
2023	18.4
2024 and Thereafter	70.2
Total Undiscounted Lease Payments	$	155.7
Present Value Adjustment¹	(25.4		)
Net Operating Lease Liabilities	$	130.3

1 Calculated using the IBR for each lease.

The following table presents other information related to the operating leases recorded on the Consolidated Balance Sheets as of March 31, 2019:



Weighted-average remaining lease term (in years)	9.2
Weighted-average discount rate (IBR)	3.79		%
Cash paid for the amounts included in the measurement of lease liabilities (in millions)	$	4.7