Substantially all of the leases that we enter into are real estate leases. We lease numerous facilities relating to our operations, including showrooms, display lots, marinas, service facilities, slips, offices, equipment and our corporate headquarters. Leases for real property have terms, including renewal options, ranging from one to in excess of twenty-five years. In addition, we lease certain charter boats for our yacht charter business. As of September 30, 2024, the weighted-average remaining lease term for our leases was approximately 21 years. All of our leases are classified as operating leases, which are included as right-of-use ("ROU") assets and operating lease liabilities in the accompanying Consolidated Balance Sheets. For the fiscal years ended September 30, 2022, 2023, and 2024, operating lease expenses recorded in selling, general, and administrative expenses were approximately $23.5 million, $30.4 million, and $33.8 million, of which approximately $0.6 million, $0.7 million, and $0.7 million, related to variable lease expenses, respectively. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We do not have any significant leases that have not yet commenced but that create significant rights and obligations for us. We have elected the practical expedient under ASC Topic 842 to not separate lease and nonlease components.

Our real estate and equipment leases often require that we pay maintenance in addition to rent. Additionally, our real estate leases generally require payment of real estate taxes and insurance. Maintenance, real estate taxes, and insurance payments are generally variable and based on actual costs incurred by the lessor. Therefore, these amounts are not included in the consideration of the contract when determining the ROU asset and lease liability, but are reflected as variable lease expenses.

Substantially all of our lease agreements include fixed rental payments. Certain of our lease agreements include fixed rental payments that are adjusted periodically by a fixed rate or changes in an index. The fixed payments, including the effects of changes in the fixed rate or amount, and renewal options reasonably certain to be exercised, are included in the measurement of the related lease liability. Most of our real estate leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion. If it is reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our right of use assets and lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term, which includes renewal options reasonably certain to be exercised.

For our incremental borrowing rate, we generally use a portfolio approach to determine the discount rate for leases with similar characteristics. We determine discount rates based upon our hypothetical credit rating, taking into consideration our short-term borrowing rates, and then adjusting as necessary for the appropriate lease term. As of September 30, 2024, the weighted-average discount rate used was approximately 6.5%.

As of September 30, 2024, maturities of lease liabilities by fiscal year are summarized as follows:


	(Amounts in thousands)
2025	$	16,134
2026		16,935
2027		15,525
2028		14,918
2029		13,451
Thereafter		258,513
Total lease payments		335,476
Less: interest		(201,189	)
Present value of lease liabilities	$	134,287

The following table sets forth supplemental cash flow information related to leases for the fiscal years ended September 30,


	2022		2023		2024
	(Amounts in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	16,039	$	17,474	$	18,358
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	4,588	$	42,488	$	5,548

The Company reports the amortization of ROU assets and the change in operating lease liabilities on a net basis in accrued expenses and other liabilities in the accompanying Consolidated Statements of Cash Flows.

The Company enters into certain agreements as a lessor under which it rents buildings to third parties. Initial terms of our real estate leases are generally three to five years, exclusive of options to renew, which are generally exercisable at our sole discretion for one term of five years. These leases meet all of the criteria of an operating lease and are accordingly recognized straight line over the lease term.

The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying consolidated statements of operations:


	2023		2024
	(Amounts in thousands)
Operating leases:
Operating lease income	$	9,780	$	10,065
Variable lease income		526		1,008
Total rental income	$	10,306	$	11,073

As of September 30, 2024, future minimum payments to be received during the next five years and thereafter are as follows:


	(Amounts in thousands)
2025	$	7,696
2026		6,073
2027		4,082
2028		2,261
2029		828
Thereafter		—
Total lease payments	$	20,940