7. Leases

We are the lessee under various operating leases for certain sales offices, call centers, office space, equipment and vehicles. Some leases include one or more options to renew, with renewal terms that can be extended for one year or more, and the exercise of such renewal options is either at our discretion or the discretion of the lessor, as determined by the respective lease. Certain of our lease agreements include rental payments based on a percentage of sales generated at the location, and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain residual value guarantees or restrictive covenants which we believe to be material.

We recognize operating lease assets and operating lease liabilities associated with lease agreements with an initial term of greater than 12 months, while lease agreements with an initial term of 12 months or less are not recorded in our consolidated balance sheet. We generally do not include lease payments associated with renewal options that are exercisable at our discretion in the measurement of our operating lease assets and liabilities as we are not reasonably certain that such option will be exercised. The table below sets forth information regarding our lease agreements with an initial term of greater than 12 months (dollars in thousands):


	As of
	March 31,
	2019
Operating Lease Asset	$	24,031
Operating Lease Liability		25,263
Weighted Average Lease Term (in years) (1)		4.3
Weighted Average Discount Rate (2)		5.30	%

(1)

Our weighted average lease term excludes one real estate lease that expires in May 2056.

(2)

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future lease payments. To estimate incremental borrowing rates, we consider various factors, including the rates applicable to our recently issued debt and credit facilities and prevailing financial market conditions. We use the incremental borrowing rate on January 1, 2019 for operating leases that commenced prior to that date.

We generally recognize lease costs associated with our operating leases on a straight-line basis over the lease term, while variable lease payments that do not depend on an index or rate are recognized as variable lease costs in the period in which the obligation for those payments is incurred. The table below sets forth information regarding our lease costs which are reflected in selling, general and administrative expenses in our consolidated statement of income and comprehensive income for the three months ended March 31, 2019:


	For the Three Months Ended
	March 31,
	2019
Fixed rental costs	$	2,122
Short-term lease cost		1,170
Variable lease cost		599
Total operating lease costs	$	3,891

The table below sets forth information regarding the maturity of our operating lease liabilities (in thousands):


As of March 31,	Operating Leases
2019	$	6,496
2020		5,050
2021		4,646
2022		4,365
2023		2,675
After 2023		12,416
Total lease payments	$	35,648
Less: Interest		10,385
Present value of operating lease liabilities		25,263

Upon the adoption of the new lease accounting standard on January 1, 2019 (as described in Note 2 above), we recognized an operating lease liability of $26.5 million and an operating lease asset of $25.6 million. The difference between the operating lease liability and operating lease asset primarily reflects the reclassification of accrued and prepaid straight-line rent from accrued liabilities and prepaid expenses to the operating lease assets in our consolidated balance sheet. Included in our consolidated statement of cash flows under operating activities was $1.7 million of cash paid for lease expenses for the three months ended March 31, 2019. During the three months ended March 31, 2019, we did not enter into any new leases with a term greater than 12 months.