Equipment on operating leases is reported net of accumulated depreciation of $115.7 million and $93.4 million as of May 31, 2025 and August 31, 2024, respectively. Depreciation expense was $8.9 million and $27.0 million for the three and nine months ended May 31, 2025, respectively, and $8.6 million and $24.8 million for the three and nine months ended May 31, 2024, 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 approximately eleven years. Operating lease rental revenues included in the Company’s Condensed Consolidated Statements of Income for the three and nine months ended May 31, 2025 was $35.5 million and $103.1 million, which included $6.1 million and $16.6 million, respectively, of revenue as a result of daily, monthly or car hire utilization arrangements. Operating lease rental revenues included in the Company’s Condensed Consolidated Statements of Income for the three and nine months ended May 31, 2024 was $30.4 million and $88.5 million, which included $4.5 million and $15.0 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 at May 31, 2025, will mature as follows:


(in millions)
Remaining three months of 2025	$	32.8
2026		111.7
2027		100.2
2028		81.4
2029		62.9
Thereafter		133.6
	$	522.6

The Company leases railcars, real estate, and certain equipment under operating and, to a lesser extent, finance lease arrangements. As of and for the three and nine months ended May 31, 2025 and May 31, 2024, 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 8 years. The Company recognizes a lease liability and corresponding right-of-use (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 each lease commencement date. The Company considers 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:


	Three months ended				Nine months ended
(in millions)	May 31, 2025		May 31, 2024		May 31, 2025		May 31, 2024
Operating lease expense	$	5.2	$	4.1	$	14.5	$	12.9
Short-term lease expense		1.4		2.0		4.5		4.7
Total	$	6.6	$	6.1	$	19.0	$	17.6

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


(in millions)
Remaining three months of 2025	$	4.7
2026		18.8
2027		15.7
2028		14.6
2029		12.6
Thereafter		39.1
Total lease payments	$	105.5
Less: Imputed interest		(16.7	)
Total lease obligations	$	88.8

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


Weighted average remaining lease term (years):
Operating leases	10.5

Weighted average discount rate:
Operating leases	4.5	%

Supplemental cash flow information related to leases were as follows:


(in millions)	Nine months ended May 31, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	13.7
ROU assets obtained in exchange for new operating lease liabilities	$	33.9