Leased Properties

9 Months Ended

Sep. 30, 2019

The Company primarily leases real estate for certain retail stores, distribution centers, office space and land. The Company also leases equipment (primarily vehicles).

Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term from one to 20 years. The exercise of lease renewal options is at the Company's discretion. The Company evaluates renewal options at lease inception and on an ongoing basis, and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.

The table below presents the locations of the operating lease assets and liabilities on the condensed consolidated balance sheets as of September 30, 2019:



	Balance Sheet Line Item	September 30, 2019
Operating lease assets	Operating lease assets	$	1,048,462

Operating lease liabilities:
Current operating lease liabilities	Other current liabilities	$	274,687
Noncurrent operating lease liabilities	Operating lease liabilities	797,166
Total operating lease liabilities		$	1,071,853

The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term.

The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of September 30, 2019 are:



Weighted average remaining lease term (in years)	5.58
Weighted average discount rate	3.21	%

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the condensed consolidated balance sheets as of September 30, 2019:



October 1, 2019 through December 31, 2019	$	77,339
2020	296,219
2021	230,421
2022	173,932
2023	122,529
Thereafter	276,067
Total undiscounted future minimum lease payments	1,176,507
Less: Difference between undiscounted lease payments and discounted operating lease liabilities	104,654
Total operating lease liabilities	$	1,071,853

Operating lease payments include $53,104 related to options to extend lease terms that are reasonably certain of being exercised.

Operating lease costs were $86,704 and $244,090 for the three and nine months ended September 30, 2019, respectively. Operating lease costs are included within selling, administrative and other expenses on the condensed consolidated statements of income and comprehensive income. Short-term lease costs, variable lease costs and sublease income were not material for the periods presented.

Cash paid for amounts included in the measurement of operating lease liabilities were $234,860 for the nine months ended September 30, 2019, and this amount is included in operating activities in the condensed consolidated statements of cash flows. Operating lease assets obtained in exchange for new operating lease liabilities were $277,900 for the nine months ended September 30, 2019.