We lease our retail, office and manufacturing space under operating leases which, in addition to the minimum lease payments, may require payment of a proportionate share of the real estate taxes and certain building operating expenses. Our retail store leases generally provide for an initial lease term of five to 10 years. Our office and manufacturing leases provide for an initial lease term of up to 15 years. In addition, our mall-based retail store leases may require payment of variable rent based on net sales in excess of certain thresholds. Certain leases may contain options to extend the term of the original lease. The exercise of lease renewal options is at our sole discretion. Lease options are included in the lease term only if exercise is reasonably certain at lease commencement. Our lease agreements do not contain any material residual value guarantees. We also lease vehicles and certain equipment under operating leases with an initial lease term of three to five years.

We determine if an arrangement is a lease at inception. Beginning in 2019 in conjunction with our adoption of ASC Topic 842, Leases, right-of-use (ROU) assets and operating lease liabilities are recognized at the lease commencement date based on the estimated present value of future lease payments over the lease term. Most of our leases do not provide an implicit interest rate nor is it available to us from our lessors. As an alternative, we use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, including publicly available data, in determining the present value of lease payments.

Our operating lease costs include facility, vehicle and equipment lease costs, but exclude variable lease costs. Operating lease costs are recognized on a straight-line basis over the lease term, after consideration of rent escalations and rent holidays. The lease term for purposes of the calculation begins on the earlier of the lease commencement date or the date we take possession of the property. During lease renewal negotiations that extend beyond the original lease term, we estimate straight-line rent expense based on current market conditions. Variable lease costs are recorded when it is probable the cost has been incurred and the amount is reasonably estimable. Future payments for real estate taxes and certain building operating expenses for which we are obligated are not included in operating lease costs. Leases with an initial term of 12 months or less are not recorded on the balance sheet as a ROU asset or operating lease liability. We recognize operating lease costs for these short-term leases, primarily small equipment leases, on a straight-line basis over the lease term. At March 30, 2019, our finance ROU assets and lease liabilities were not significant.

(1)	Includes short-term lease costs which are not significant.

The maturities of operating lease liabilities as of March 30, 2019, are as follows (in thousands):

2019 (excluding the three months ended March 30, 2019)	$	58,730
2020		71,142
2021		63,969
2022		56,501
2023		48,089
2024		37,133
Thereafter		92,942
Total lease payments⁽¹⁾		428,506
Less: Interest		95,863
Present value of operating lease liabilities⁽²⁾	$	332,643

⁽¹⁾	Total lease payments exclude $53 million of legally binding minimum lease payments for leases signed but not yet commenced.

⁽²⁾	Includes the current portion of $54 million for operating lease liabilities.

The aggregate future commitments under operating leases as of December 30, 2018, were expected to be as follows (in thousands):

2019	$	78,337
2020		73,331
2021		66,491
2022		59,515
2023		51,076
Thereafter		149,318
Total lease payments⁽¹⁾		478,068

⁽¹⁾	Total lease payments include $62 million of legally binding minimum lease payments for leases signed but not yet commenced.

March 30,

2019

Weighted-average remaining lease term (years)

6.8

Weighted-average discount rate

7.5

	Three Months Ended
(in thousands)	March 30, 2019
Cash paid for amounts included in present value of operating lease liabilities	$	19,757
Right-of-use assets obtained in exchange for operating lease liabilities⁽¹⁾	$	16,153

⁽¹⁾	See Note 1, Recently Adopted Accounting Guidance, for the impact of our initial adoption of the lease standard.

Three Months

Ended

March 30,

2019

Operating lease costs⁽¹⁾

Variable lease cost