The Company’s operating leases have remaining reasonably certain lease terms of up to 12 years, which typically include options to extend the leases for up to 5 years. The Company’s finance leases have remaining reasonably certain lease terms of up to 4 years.

The adoption of ASC 842 resulted in recording a non-cash transitional adjustment to ROU assets and operating lease liabilities of $262.9 million and $279.7 million, respectively, as of December 31, 2018. The difference between the ROU assets and operating lease liabilities at transition primarily represented existing deferred rent and tenant improvement allowances, which were derecognized, and existing prepaid rent balances. The Company derecognized deferred rent and tenant improvement allowances of $9.2 million and $7.6 million, respectively, in connection with the non-cash transitional adjustment. As a result of adopting ASC 842, the Company also recorded a decrease to retained earnings, which the Company did not consider material, of $0.3 million, net of tax, as of December 31, 2018, reflecting the cumulative effect related to store asset impairment. The adoption of this standard did not materially impact the Company’s consolidated net earnings, shareholders’ equity or cash flows.

As of March 31, 2019, assets recorded under finance leases were $13.2 million and accumulated amortization associated with finance leases was $6.0 million, while ROU assets recorded as operating leases were $268.4 million and accumulated amortization associated with operating leases was $13.8 million. In the first quarter of fiscal 2019, the Company recorded a non-cash increase of $5.8 million to ROU assets and operating lease liabilities resulting from lease reassessments.

Certain of the leases for the Company’s retail store facilities provide for payments based on future sales volumes at the leased location, which are not measurable at the inception of the lease, and others include rental payments adjusted periodically for inflation. The Company expenses such variable amounts in the period incurred, which is the period in which it becomes probable that the specified target that triggers the variable lease payments will be achieved. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In the fourth quarter of fiscal 2016, the Company entered into an assignment agreement for a certain store lease. In consideration for the assignment, the Company received an assignment fee of $4.3 million. The assignment is accounted for as a sublease arrangement and the assignment fee has been deferred into accrued expenses and other long-term liabilities in the accompanying interim unaudited condensed consolidated balance sheets. The remaining balance of this deferred lease revenue as of the end of the first quarter of fiscal 2019 was $1.7 million, and $0.9 million per year will be recognized ratably into revenue over the remaining lease term of approximately two years.

	13 Weeks Ended
	March 31, 2019
	(In thousands)
Lease expense:
Amortization of right-of-use assets	$	680
Interest on lease liabilities		100
Finance lease expense		780
Operating lease expense		19,825
Short-term lease expense		—
Variable lease expense		102
Sublease income		(316	)
Total lease expense	$	20,391

	13 Weeks Ended
	March 31, 2019
	(Dollars In thousands)
Operating cash flows from operating leases	$	24,914
Operating cash flows from finance leases		100
Financing cash flows from finance leases		866
Cash paid for amounts included in the measurement of lease liabilities	$	25,880

Right-of-use assets obtained in exchange for new finance lease liabilities	$	864
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,833
Weighted-average remaining lease term—finance leases	3.4 years
Weighted-average remaining lease term—operating leases	5.3 years
Weighted-average discount rate—finance leases		5.8	%
Weighted-average discount rate—operating leases		6.5	%

In accordance with ASC 842, maturities of finance and operating lease liabilities as of March 31, 2019 were as follows:

Year Ending:	Finance Leases			Operating Leases
	(In thousands)
2019	$	1,892		$	57,032
2020		2,593			77,263
2021		1,669			54,720
2022		1,220			42,420
2023		495			28,962
Thereafter		—			57,434
Undiscounted cash flows	$	7,869		$	317,831
Reconciliation of lease liabilities:
Weighted-average remaining lease term	3.4 years			5.3 years
Weighted-average discount rate		5.8	%		6.5	%
Present values	$	7,169		$	266,199
Lease liabilities - current		2,228			60,708
Lease liabilities - long-term		4,941			205,491
Lease liabilities - total	$	7,169		$	266,199
Difference between undiscounted and discounted cash flows	$	700		$	51,632

In accordance with ASC 840, rent expense for operating leases consisted of the following:

In accordance with ASC 840, future minimum lease payments under non-cancelable leases as of December 30, 2018 were as follows:

Year Ending:	Capital Leases			Operating Leases		Total
	(In thousands)
2019	$	2,668		$	81,876	$	84,544
2020		2,179			70,657		72,836
2021		1,472			54,863		56,335
2022		1,057			42,267		43,324
2023		539			31,241		31,780
Thereafter		—			54,386		54,386
Total minimum lease payments ⁽¹⁾		7,915		$	335,290	$	343,205
Imputed interest		(770	)
Present value of minimum lease payments	$	7,145

^{_________________________}

⁽¹⁾

Minimum lease payments have not been reduced by sublease rentals of $0.3 million due in the future under non-cancelable subleases.