Revenue Recognition

6 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

3) Revenue Recognition

The following disaggregates our revenue by major sources for the three and six months ended March 31, 2024 and March 31, 2023:

	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2024		2023		2024		2023
Petroleum Products:
Home heating oil and propane	$	508,155	$	566,457	$	859,369	$	1,001,980
Other petroleum products		87,143		102,755		184,479		237,161
Total petroleum products		595,298		669,212		1,043,848		1,239,141
Installations and Services:
Equipment installations		26,224		25,208		60,539		57,997
Equipment maintenance service contracts		29,386		28,961		58,302		57,677
Billable call services		15,124		14,236		31,439		30,989
Total installations and services		70,734		68,405		150,280		146,663
Total Sales	$	666,032	$	737,617	$	1,194,128	$	1,385,804

Deferred Contract Costs

We recognize an asset for incremental commission expenses paid to sales personnel in conjunction with obtaining new residential customer product and equipment maintenance service contracts. We defer these costs only when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract. Costs to obtain a contract are amortized and recorded ratably as delivery and branch expenses over the period representing the transfer of goods or services to which the assets relate. Costs to obtain new residential product and equipment maintenance service contracts are amortized as expense over the estimated customer relationship period of approximately five years. Deferred contract costs are classified as current or non-current within “Prepaid expenses and other current assets” and “Deferred charges and other assets, net,” respectively. At March 31, 2024, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.2 million and $5.4 million, respectively. At September 30, 2023, the amount of deferred contract costs included in “Prepaid expenses and other current assets” and “Deferred charges and other assets, net” was $3.3 million and $5.4 million, respectively. For the six months ended March 31, 2024 we recognized expense of $1.8 million and for the six months ended March 31, 2023 we recognized expense of $2.0 million associated with the amortization of deferred contract costs within “Delivery and branch expenses” in the Condensed Consolidated Statement of Operations.

Contract Liability Balances

The Company has contract liabilities for advanced payments received from customers for future oil deliveries (primarily amounts received from customers on “smart pay” budget payment plans in advance of oil deliveries) and obligations to service customers with equipment maintenance service contracts. Contract liabilities are recognized straight-line over the service contract period, generally one year or less. As of March 31, 2024 and September 30, 2023 the Company had contract liabilities of $118.5 million and $170.3 million, respectively. During the six months ended March 31, 2024, the Company recognized $133.2 million of revenue that was included in the September 30, 2023 contract liability balance. During the six months ended March 31, 2023 the Company recognized $117.4 million of revenue that was included in the September 30, 2022 contract liability balance.

Receivables and Allowance for Doubtful Accounts

Accounts receivables from customers are recorded at the invoiced amounts. Finance charges may be applied to trade receivables that are more than 30 days past due, and are recorded as finance charge income.

The allowance for doubtful accounts is the Company’s estimate of the amount of trade receivables that may not be collectible. The allowance is determined at an aggregate level by grouping accounts based on certain account criteria and its receivable aging. The allowance is based on both quantitative and qualitative factors, including historical loss experience, historical collection patterns, overdue status, aging trends, current and future economic conditions. The Company has an established process to periodically review current and past due trade receivable balances to determine the adequacy of the allowance. No single statistic or measurement determines the adequacy of the allowance. The total allowance reflects management’s estimate of losses inherent in its trade receivables at the balance sheet date. Different assumptions or changes in economic conditions could result in material changes to the allowance for doubtful accounts.

Changes in the allowance for credit losses are as follows:

(in thousands)	Credit Loss Allowance
Balance at September 30, 2023	$	8,375
Current period provision		3,672
Write-offs, net and other		(3,151	)
Balance as of March 31, 2024	$	8,896