Equipment on operating leases is reported net of accumulated depreciation of $123.0 million, $93.4 million and $68.0 million as of August 31, 2025, 2024, and 2023, respectively. Depreciation expense was $36.4 million, $36.0 million and $26.0 million for the years ended August 31, 2025, 2024, and 2023 respectively. In addition, certain railcar equipment leased-in by the Company on operating leases is subleased to customers under non-cancelable operating leases with lease terms ranging from one to seven years. Operating lease rental revenues included in the Company’s Consolidated Statements of Income for the years ended August 31, 2025, 2024, and 2023 was $139.2 million, $121.1 million and $91.9 million respectively, which included $22.3 million, $19.9 million, and $19.3 million respectively, of revenue as a result of daily, monthly or car hire utilization arrangements.

Aggregate minimum future amounts receivable under all non-cancelable operating leases and subleases as of August 31, 2025, will mature as follows:


(In millions)
2026	$	117.5
2027		104.2
2028		85.2
2029		66.1
2030		48.5
Thereafter		91.1
	$	512.6

The Company leases railcars, real estate, and certain equipment under operating and, to a lesser extent, finance lease arrangements. As of and for the years ended August 31, 2025, 2024, and 2023, finance leases were not a material component of the Company's lease portfolio. The Company’s real estate and equipment leases have remaining lease

terms ranging from less than one year to 73 years, with some including options to extend up to 10 years. The Company recognizes a lease liability and corresponding ROU asset based on the present value of lease payments. To determine the present value of lease payments, as most of its leases do not provide a readily determinable implicit rate, the Company’s incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when estimating its incremental borrowing rate.

The components of operating lease costs were as follows:


	For the Year Ended August 31,
(In millions)	2025		2024		2023
Operating lease expense	$	19.8	$	17.3	$	13.6
Short-term lease expense		6.1		7.9		9.3
Total	$	25.9	$	25.2	$	22.9

Aggregate minimum future amounts payable under operating leases having initial or remaining non-cancelable terms as of August 31, 2025 will mature as follows:


(In millions)
2026	$	18.8
2027		15.6
2028		14.6
2029		12.6
2030		9.3
Thereafter		29.9
Total lease payments	$	100.8
Less: Imputed interest		(15.9	)
Total lease obligations	$	84.9

The table below presents additional information related to the Company’s operating leases:


	As of August 31,
(In millions)	2025			2024
Weighted average remaining lease term	10.6 years			10.8 years
Weighted average discount rate		4.5	%		2.8	%

Supplemental cash flow information related to leases were as follows:


	For the Year Ended August 31,
(In millions)	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	18.4	$	17.1	$	14.2
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	33.6	$	8.6	$	27.5