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KIMLEY‐HORN AND ASSOCIATES, INC.  <br />NOTES TO THE FINANCIAL STATEMENTS  <br />  <br />DECEMBER 31, 2016 AND 2015  <br />(SEE INDEPENDENT ACCOUNTANT’S REVIEW REPORT)  <br />  <br />  <br />13 <br />Note 7—Lease commitments  <br />  <br />The Company leases office space under operating lease agreements. <br /> <br />As of December 31, 2016, the minimum future rentals payable under the non-cancelable portions of operating <br />leases were as follows: <br /> <br />Years Ending December 31, <br />2017 19,136,769$ <br />2018 18,486,295 <br />2019 17,381,786 <br />2020 14,717,448 <br />2021 10,881,285 <br /> Thereafter 44,762,072 <br />125,365,655$ <br /> Total rent expense under these lease agreements recognized on a straight-line basis over the term of the lease <br />including any periods of free rent was $21,818,174 and $17,744,696 for 2016 and 2015, respectively. <br /> <br />During 2014, the Company sold a building to an unrelated entity for $8,500,000. Concurrent with the sale, the <br />Company leased back the building for 15 years at a monthly rate of $54,667 plus annual escalations of 1%. The <br />monthly rates in 2016 and 2015 were $55,765 and $55,213, respectively. Accordingly, the gain on sale of <br />$1,863,835 has been deferred and is being recognized over the 15-year lease term. <br /> <br />Note 8—Employee retirement plans  <br />  <br />The Company has an employee Retirement Savings and Pension Plan, which includes a 401(k) employee deferral <br />and a Company match. The plan also allows for a profit-sharing benefit, which is determined annually by the Board <br />of Directors. <br /> <br />The Company has a defined contribution Retirement Annuity Plan whose purpose is to provide a retirement benefit <br />for individuals whose compensation exceeds the salary cap imposed by the Internal Revenue Service when <br />computing retirement benefits. <br />