We conduct substantially all operations from leased facilities, with the exception of the corporate headquarters in Dallas and the Dallas warehouse, distribution and retail complex, which are owned facilities. The other warehouse facility and all other retail store locations are under operating leases that will expire over the next 1 to 11 years. Many of our leases include options to renew at our discretion. We include the lease renewal option periods in the calculation of our operating lease assets and liabilities when it is reasonably certain that we will renew the lease. We also lease certain equipment under finance leases that expire generally within 60 months.

As discussed in Note 1, we adopted ASC 842 effective July 1, 2019 using the modified retrospective adoption method, which resulted in an adjustment to opening retained earnings of $0.6 million as of July 1, 2019 to recognize impairment of the opening right-of-use asset balance for two stores for which assets had been previously impaired under ASC 360, “Property, Plant, and Equipment.”

We utilized the simplified transition option available in ASC 842, which allowed the continued application of the legacy guidance in ASC 840, including disclosure requirements, in the comparative periods presented in the year of adoption.

We determine whether an agreement contains a lease at inception based on our right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset. Lease liabilities represent the present value of future lease payments and the right-of-use (ROU) assets represent our right to use the underlying assets for the respective lease terms.

The operating lease liability is measured as the present value of the unpaid lease payments and the ROU asset is derived from the calculation of the operating lease liability. As our leases do not generally provide an implicit rate, we use our incremental borrowing rate as the discount rate to calculate the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate that would be required to borrow over a similar term, on a collateralized basis in a similar economic environment.

Rent escalations occurring during the term of the leases are included in the calculation of the future minimum lease payments and the rent expense related to these leases is recognized on a straight-line basis over the lease term. In addition to minimum lease payments, certain leases require payment of a proportionate share of real estate taxes and certain building operating expenses allocated on a percentage of sales in excess of a specified base. These variable lease costs are not included in the measurement of the ROU asset or lease liability due to unpredictability of the payment amount and are recorded as lease expense in the period incurred. The ROU asset is adjusted to account for previously recorded lease-related expenses such as deferred rent and other lease liabilities.

Our lease agreements do not contain residual value guarantees or significant restrictions or covenants other than those customary in such arrangements.

	Year Ended June 30, 2020
Operating lease cost	$	94,318
Variable lease cost		24,014
Finance lease cost:
Amortization of right-of-use assets		286
Interest on lease liabilities		29
Total lease cost	$	118,647

The table below presents additional information related to the Company’s leases as of June 30, 2020:

	As of June 30, 2020
Weighted average remaining lease term (in years)
Operating leases		5.9
Finance leases		2.6
Weighted average discount rate
Operating leases		5.8	%
Finance leases		3.9	%

Other information related to leases, including supplemental disclosures of cash flow information, is as follows (in thousands):

	Year Ended June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	90,983
Operating cash flows from finance leases		23
Financing cash flows from finance leases		224
Right-of-use assets obtained in exchange for operating lease liabilities		28,957

Maturities of lease liabilities were as follows as of June 30, 2020 (in thousands):

	Operating Leases		Finance Leases		Total
Fiscal year:
2021	$	89,598	$	383	$	89,981
2022		78,074		236		78,310
2023		68,032		94		68,126
2024		58,480		10		58,490
2025		50,217		—		50,217
Thereafter		89,140		—		89,140
Total lease payments	$	433,541	$	723	$	434,264
Less: Interest		67,632		34		67,666
Total lease liabilities	$	365,909	$	689	$	366,598
Less: Current lease liabilities		71,097		363		71,460
Non-current lease liabilities	$	294,812	$	326	$	295,138

Current and non-current finance lease liabilities recorded in “Accrued liabilities” and “Other liabilities – non-current”, respectively, on our consolidated balance sheet. As of June 30, 2020, there were no operating lease payments for legally binding minimum lease payments for leases signed by not yet commenced.

Rent expense for real estate leases for the fiscal years ended June 30, 2020, 2019, and 2018 was $118.3 million, $121.5 million, and $118.3 million, respectively. Total lease cost in fiscal 2020 was $118.6 million, including finance lease costs. Rent expense includes minimum base rent as well as contractually required payments for maintenance, insurance and taxes on our leased store locations and distribution centers. Total lease costs of $118.6 million for fiscal 2020 excludes $51.6 million of impairment recorded for operating lease right-of-use assets and $25.1 million recorded for accelerated recognition of rent expense due to planned abandonments due to our permanent store and Phoenix distribution center closing plans. Additionally, circumstances indicated the carrying amount of assets for stores with no closure plans may not be recoverable. Accordingly, we measured for impairment using Level 3 fair value measurement inputs as described above in Note 1.