Leases

3 Months Ended

Mar. 31, 2023

The Company has operating leases for office space and equipment expiring at various dates through 2034. The Company leases its corporate headquarters at 85 Broad Street, New York, New York which houses its executive management team and many administrative functions for the firm as well as its research, trading, investment banking, and asset management divisions and an office in Troy, Michigan, which among other things, houses its payroll and human resources departments. In addition, the Company has 92 retail branch offices in the United States as well as offices in London, England, St. Helier, Isle of Jersey, Geneva, Switzerland, Munich, Germany, Tel Aviv, Israel and Hong Kong, China.

The Company is constantly assessing its needs for office space and, on a rolling basis, has many leases that expire in any given year.

Substantially all of the leases are held by the Company's subsidiary, Viner Finance Inc., which is a consolidated subsidiary and 100% owned by the Company.

Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Most leases include an option to renew and the exercise of lease renewal options is at the Company's sole discretion. The Company did not include the renewal options as part of the right of use assets and liabilities.

The depreciable life of assets and leasehold improvements is limited by the expected lease term. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As of March 31, 2023, the Company had right-of-use operating lease assets of $152.8 million (net of accumulated amortization of $86.9 million) which are comprised of real estate leases of $149.7 million (net of accumulated amortization of $84.6 million) and equipment leases of $3.1 million (net of accumulated amortization of $2.3 million). As of March 31, 2023, the Company had operating lease liabilities of $193.4 million which are comprised of real estate lease liabilities of $190.3 million and equipment lease liabilities of $3.1 million. The Company had no finance leases as of March 31, 2023.

As most of the Company's leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company used the incremental borrowing rate on January 1, 2019 for operating leases that commenced prior to that date. The Company used the incremental borrowing rate as of the lease commencement date for the operating leases that commenced subsequent to January 1, 2019.

The following table presents the weighted average lease term and weighted average discount rate for the Company's operating leases as of March 31, 2023 and December 31, 2022, respectively:


	As of
	March 31, 2023	December 31, 2022

Weighted average remaining lease term (in years)	6.94	6.82
Weighted average discount rate	7.03%	6.66%

The following table presents operating lease costs recognized for the three months ended March 31, 2023 and March 31, 2022, respectively, which are included in occupancy and equipment costs on the condensed consolidated income statements:


(Expressed in thousands)
	For the Three Months Ended March 31,
	2023		2022
Operating lease costs:
Real estate leases - Right-of-use lease asset amortization	$	6,439	$	6,157
Real estate leases - Interest expense	3,209		3,356
Equipment leases - Right-of-use lease asset amortization	422		414
Equipment leases - Interest expense	46		32

The maturities of lease liabilities as of March 31, 2023 and December 31, 2022 are as follows:


(Expressed in thousands)
	As of
	March 31, 2023		December 31, 2022
2023	$	32,656	$	42,343
2024	41,070		38,018
2025	35,007		31,684
2026	32,706		29,671
2027	31,258		28,178
After 2027	73,181		58,146
Total lease payments	$	245,878	$	228,040
Less interest	(52,528)		(45,470)
Present value of lease liabilities	$	193,350	$	182,570

As of March 31, 2023, the Company had $20.3 million of additional real estate operating leases that have not yet commenced ($40.2 million as of December 31, 2022).