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 ROU 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 August 3, 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 (“CAM”), on most of our real estate leases. Such non-lease components are typically variable in nature and are not included in the measurement of the lease liability, ROU asset or straight-line operating lease expense. 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.

Lease-related costs reported in our condensed consolidated statements of income were as follows:

(In thousands)	Thirteen Weeks Ended August 3, 2019		Twenty-six Weeks Ended August 3, 2019
Operating lease cost	$	13,231	$	27,194
Variable lease cost		180		398
CAM, property taxes and insurance		4,935		10,184
Total	$	18,346	$	37,776

Other information related to leases, including supplemental cash flow information, consists of:

(In thousands)	Twenty-six Weeks Ended August 3, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	30,236
ROU assets obtained in exchange for operating lease liabilities	$	20,924

	As of August 3, 2019
Weighted-average remaining lease term for operating leases (in years)	6.3
Weighted-average discount rate for operating leases		5.4	%

The following table reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years to the operating lease liabilities on the consolidated balance sheet as of August 3, 2019:

(In thousands)	Operating Leases
2019 (excluding the first six fiscal months)	$	30,512
2020		54,089
2021		53,418
2022		46,127
2023		39,000
Thereafter to 2034		80,704
Total undiscounted lease payments		303,850
Less: Imputed interest		57,475
Total operating lease liabilities		246,375
Less: Current portion of operating lease liabilities		46,783
Long-term portion of operating lease liabilities	$	199,592

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