Note 3: Leases

The Company leases retail stores, warehouse facilities, and office space. These assets and properties are generally leased under noncancelable agreements that expire at various dates through 2040 with various renewal options for additional periods. The agreements, which have been classified as operating leases, generally provide for minimum and, in some cases percentage rent, and require us to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for all leases with lease terms greater than 12 months. The amounts recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

As of December 31, 2021, the weighted average remaining lease term is 8.37 years and our weighted average discount rate is 6.44%. Total cash payments for the three months ended December 31, 2021 and 2020 were approximately $2.5 million and $2.2 million, respectively. Additionally, we obtained right-of-use assets in exchange for lease liabilities of approximately $1.0 million upon commencement of operating leases during the three months ended December 31, 2021.

During the three months ended December 31, 2021 and 2020, the Company recorded no gain or loss settlements, nor did it record impairment charges relating to any of its leases.