The Company adopted ASU 2016-02, Leases (Topic 842), beginning with its first quarter ended November 23, 2019 which requires leases to be recognized on the balance sheet. Leases with an original term of 12 months or less are not recognized in the Company’s Condensed Consolidated Balance Sheets, and the lease expense related to these short-term leases is recognized over the lease term. The Company elected the practical expedient to not separate lease components from the non-lease components, which includes fixed common-area maintenance costs at its retail store locations, for all classes of leased assets, except vehicles. The Company’s vehicle leases typically include variable non-lease components, such as maintenance and fuel charges, which contain observable standalone prices. The Company has elected to exclude these variable non-lease components from vehicle lease payments for the purpose of calculating the right-of-use assets and liabilities. These variable lease payments are expensed as incurred.

The Company’s leases primarily relate to its retail stores, distribution centers and vehicles under various non-callable leases. Leases are categorized at their commencement date, which is the date the Company takes possession or control of the underlying asset. Most of the Company’s leases are operating leases; however, certain land and vehicles are leased under finance leases. The leases have varying terms and expire at various dates through 2040. Retail leases typically have initial terms of between one and 20 years, with one to six optional renewal periods of one to five years each. Finance leases for vehicles typically have original terms between one and five years, and finance leases for real estate leases typically have terms of 20 or more years. The exercise of lease renewal options is at the Company’s sole discretion. The Company evaluates renewal options at lease commencement and on an ongoing basis and includes options that are reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. The Company subleases certain properties that are not used in its operations. Sublease income was not significant for the periods presented. Certain lease agreements require variable payments based upon actual costs of common-area maintenance, real estate taxes and insurance. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company’s finance leases for vehicles have a stated borrowing rate which it uses in determining the present value of the lease payments over the lease term. Substantially all the operating leases and finance leases for real estate do not provide a stated borrowing rate. Accordingly, we use the Company’s incremental borrowing rate at commencement or modification date is used in determining the present value of lease payments over the lease term. For operating leases that commenced prior to the date of adoption of the new standard, the Company used the incremental borrowing rate that corresponded to the remaining lease term as of the date of adoption.

Lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheet are as follows:

Accumulated amortization related to finance lease assets was $101.6 million as of May 9, 2020.

Lease costs for finance and operating leases for the twelve and thirty-six weeks ended May 9, 2020 are as follows:

The future rental payments, inclusive of renewal options that have been included in defining the expected lease term, of our operating and finance lease obligations as of May 9, 2020 having initial or remaining lease terms in excess of one year are as follows:


	Finance		Operating
(in thousands)	Leases		Leases		Total

2020	$	15,052	$	79,958	$	95,010
2021		61,531		320,888		382,419
2022		49,532		317,806		367,338
2023		34,827		298,900		333,727
2024		12,837		275,164		288,001
Thereafter		38,271		2,246,943		2,285,214
Total lease payments		212,050		3,539,659		3,751,709
Less: Interest		(27,774)		(821,620)		(849,394)
Present value of lease liabilities	$	184,276	$	2,718,039	$	2,902,315

The following table summarizes the Company’s lease term and discount rate assumptions:


	May 9, 2020
Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised
Finance leases – real estate	30
Finance leases – vehicles	3
Operating leases	15
Weighted-average discount rate:
Finance leases – real estate	3.24	%
Finance leases – vehicles	2.70	%
Operating leases	3.43	%

The following table summarizes the other information related to the Company’s lease liabilities:


	Thirty-Six
	Weeks Ended
(in thousands)	May 9, 2020

Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from operating leases	$	98,356
Leased assets obtained in exchange for new finance lease liabilities		48,236
Leased assets obtained in exchange for new operating lease liabilities		163,066

As of May 9, 2020, the Company has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases are generally for real estate and have undiscounted future payments of approximately $14.2 million and will commence when the Company obtains possession of the underlying leased asset. Commencement dates are expected to be from fiscal 2020 to fiscal 2022.