Equipment on operating leases is reported net of accumulated depreciation of $143.5 million, $123.0 million and $93.4 million as of August 31, 2026, 2025, and 2024, respectively. Depreciation expense was $39.8 million, $36.4 million and $36.0 million for the years ended August 31, 2026, 2025, and 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 seven years. Operating lease rental revenues included in the Company’s Consolidated Statements of Income for the years ended August 31, 2026, 2025, and 2024 were $146.1 million, $139.2 million and $121.1 million respectively, which included $20.8 million, $22.3 million, and $19.9 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, 2026, will mature as follows:


(In millions)
2027	$	113.8
2028		93.3
2029		68.1
2030		47.1
2031		32.8
Thereafter		43.7
	$	398.8

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, 2026, 2025, and 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 72 years, with some including options to extend up to 9 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)	2026		2025		2024
Operating lease expense	$	20.1	$	19.8	$	17.3
Short-term lease expense		3.8		6.1		7.9
Total	$	23.9	$	25.9	$	25.2

Aggregate minimum future amounts payable under operating leases having initial or remaining non-cancelable terms as of August 31, 2026 will mature as follows:


(In millions)
2027	$	17.0
2028		15.9
2029		14.2
2030		11.0
2031		7.4
Thereafter		26.2
Total lease payments	$	91.7
Less: Imputed interest		(14.7	)
Total lease obligations	$	77.0

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


	As of August 31,
(In millions)	2026			2025
Weighted average remaining lease term	10.2 years			10.6 years
Weighted average discount rate		4.8	%		4.5	%

Supplemental cash flow information related to leases was as follows:


	For the Year Ended August 31,
(In millions)	2026		2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	20.1	$	18.4	$	17.1
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	11.6	$	33.6	$	8.6