We lease certain of our real estate, machinery, equipment, and vehicles under non-cancelable operating lease agreements.

We recognize expenses under our operating lease assets and liabilities at the commencement date based on the present value of lease payments over the lease term. Our leases do not provide an implicit interest rate. We use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Our lease agreements do not require material variable lease payments, residual value guarantees, or restrictive covenants. For operating leases, we recognize expense on a straight-line basis over the lease term. We record tenant improvement allowances as an offsetting adjustment included in our calculation of the respective right-of-use asset.

Many of our leases include renewal options that enable us to extend the lease term. The execution of those renewal options is at our sole discretion and are reflected in the lease term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

The amounts of assets and liabilities related to our operating and financing leases as of July 31, 2021 were as follows (in thousands):


	Balance Sheet Caption	July 31, 2021
Operating Leases
Right-of-use assets		$	7,154
Accumulated amortization			(2,631	)
Right-of-use assets, net	Other assets	$	4,523

Current liabilities	Accrued expenses and deferred revenue	$	1,349
Non-current liabilities	Other non-current liabilities		3,344
Total operating lease liabilities		$	4,693
Finance Leases
Right-of-use assets		$	40,986
Accumulated depreciation			(4,757	)
Right-of-use assets, net	Property, plant, and equipment, net	$	36,229

Current liabilities	Accrued expenses and deferred revenue	$	1,101
Non-current liabilities	Finance lease payable, net of current portion		38,509
Total finance lease liabilities		$	39,610

For the three months ended July 31, 2021, we recorded $371,000 of operating lease costs, of which $33,000 related to short-term leases that were not recorded as right-of-use assets. We recorded $525,000 of financing lease amortization and $497,000 of financing lease interest expense for the three months ended July 31, 2021. As of July 31, 2021, our weighted average lease term and weighted average discount rate for our operating leases was 3.9 years and 4.5%, respectively. As of July 31, 2021, our weighted average lease term and weighted average discount rate for our financing leases were 17.2 years and 5.0%, respectively, and consisted primarily of our national logistics facility located in Columbia, Missouri. The depreciable lives of right-of-use assets are limited by the lease term and are amortized on a straight-line basis over the life of the lease.

With the completion of the Separation, we entered into a sublease whereby AOUT subleases from us 59.0% of our national logistics facility under the same terms as the master lease. For the three months ended July 31, 2021, we recorded $501,000 of income related to this sublease agreement, which is recorded in other income in our condensed consolidated statements of income.

The following table represents future expected undiscounted cashflows, based on the sublease agreement to AOUT, to be received on an annual basis for the next five years and thereafter, as of July 31, 2021 (in thousands):


Fiscal	Amount
2022	$	1,401
2023		1,897
2024		1,930
2025		1,964
2026		1,998
Thereafter		26,514
Total future sublease receipts		35,704
Less amounts representing interest		(13,024	)
Present value of sublease receipts	$	22,680

Future lease payments for all our operating and finance leases for succeeding fiscal years is as follows (in thousands):


	Operating			Financing			Total
2022	$	1,179		$	2,295		$	3,474
2023		1,584			3,071			4,655
2024		1,576			3,125			4,701
2025		334			3,180			3,514
2026		311			3,235			3,546
Thereafter		404			45,548			45,952
Total future lease payments		5,388			60,454			65,842
Less amounts representing interest		(695	)		(20,844	)		(21,539	)
Present value of lease payments		4,693			39,610			44,303
Less current maturities of lease liabilities		(1,349	)		(1,101	)		(2,450	)
Long-term maturities of lease liabilities	$	3,344		$	38,509		$	41,853

For the three months ended July 31, 2021, the cash paid for amounts included in the measurement of the liabilities and the operating cash flows was $1.1 million.