Effective February 3, 2019, we adopted Accounting Standards Codification Topic No. 842 – Leases. This guidance requires us to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet as operating right-of-use (“ROU”) assets and operating lease liabilities. ROU assets and operating lease liabilities are calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or our incremental borrowing rate (“IBR”). As the rate implicit in the lease is not readily determinable for our leases, we utilized our IBR, which was determined through the development of a synthetic credit rating and was based on the information available at the adoption date. Adoption of the guidance resulted in the initial recognition of operating lease liabilities of $251.7 million as of February 3, 2019. We recorded corresponding operating lease right-of-use assets based on the operating lease liabilities, reduced by net accrued rent, unamortized deferred lease incentives and prepaid rent totaling $25.8 million. Moreover, as of the adoption date, we recorded $2.6 million of lease-related capitalized costs to beginning retained earnings, net of tax, that did not meet the definition of initial direct costs in accordance with the new guidance.

Operating lease liabilities are increased by interest and reduced by payments each period, and ROU assets are amortized over the lease term. Interest on operating lease liabilities and the amortization of ROU assets results in straight-line rent expense over the lease term. We record variable lease expense primarily associated with contingent rent and reduced rent due to co-tenancy violations when incurred.

For new leases, renewals or amendments, we make certain estimates and assumptions regarding property values, market rents, property lives, discount rates and probable terms. These estimates and assumptions can impact: (1) lease classification and the related accounting treatment; (2) rent holidays, escalations or deferred lease incentives, which are taken into consideration when calculating straight-line expense; (3) the term over which leasehold improvements for each store are amortized; and (4) the values and lives of adjustments to initial ROU assets. The amount of depreciation and amortization, interest and rent expense would vary if different estimates and assumptions were used.

We lease all of our retail stores and our single distribution center, which has a current lease term of 15 years, expiring in 2034. We also enter into leases of equipment, copiers and billboards. All of our leases are operating leases. Leases with terms of twelve months or less are immaterial and are expensed as incurred, and we did not have any leases with related parties as of May 4, 2019.

Our leases typically provide for fixed minimum rental payments and certain leases provide for contingent rental payments based upon various specified percentages of sales above minimum levels. In addition to rental payments, we are required to pay certain non-lease components, such as real estate taxes, insurance and common area maintenance, on most of our real estate leases. We account for lease components (e.g., fixed payments including rent) separately from non-lease components. Certain real estate leases also contain escalation clauses for increases in minimum rentals, operating costs and taxes.

Our real estate leases typically include one or more options to renew, with renewal terms that typically extend the lease term for five years or more. The exercise of lease renewal options is at our sole discretion. When determining the lease term, we include option periods that are reasonably certain to be exercised. Many of our leases also contain “co-tenancy” provisions, including the required presence and continued operation of certain anchor tenants in the adjoining retail space. If a co-tenancy provision is triggered, we could have the right to terminate the lease early or to a reduction of rent. In addition to co-tenancy provisions, certain leases contain “go-dark” provisions that allow us to cease operations while continuing to pay rent through the end of the lease term.

During the thirteen weeks ended May 4, 2019, our operating lease cost was $14.0 million, our variable lease cost was $234,000 and expense associated with non-lease components totaled $5.2 million. During the thirteen weeks ended May 4, 2019, cash paid for amounts included in the measurement of operating lease liabilities was $14.8 million and ROU assets obtained in exchange for new (or remeasured for existing) operating lease liabilities were $9.7 million (excluding ROU assets recorded for existing leases at the adoption date). As of May 4, 2019, the weighted-average remaining lease term for operating leases was 6.4 years and the weighted-average discount rate for operating leases was 5.4%.

The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities on the consolidated balance sheet as of May 4, 2019:

(In thousands)	Operating Leases
2019 (excluding the first three fiscal months)	$	45,805
2020		52,872
2021		51,945
2022		44,138
2023		36,587
Thereafter to 2034		75,833
Total undiscounted lease payments		307,180
Less: Imputed interest		57,574
Total operating lease liabilities		249,606
Less: Current portion of operating lease liabilities		47,089
Long-term portion of operating lease liabilities	$	202,517

Our future minimum lease payments for operating leases as of February 2, 2019, in accordance with legacy lease accounting guidance, were as follows:

(In thousands)	Operating Leases
2019	$	60,807
2020		51,937
2021		50,687
2022		41,536
2023		34,035
Thereafter to 2031		56,437
Total	$	295,439