Revenue Recognition

9 Months Ended

May 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 2 – Revenue Recognition

Contract balances

Contract assets primarily consist of work completed for railcar maintenance but not billed at the reporting date. Contract liabilities primarily consist of customer prepayments for manufacturing and other management-type services, for which the Company has not yet satisfied the related performance obligations. Contract assets in the August 31, 2022 balance also included unbilled receivables on marine vessel construction for which the respective contracts do not yet permit billing at the reporting date.

The contract balances are as follows:

(in millions)	Balance sheet classification	May 31, 2023		August 31, 2022		$ change
Contract assets (1)	Accounts Receivable	$	—	$	13.0	$	(13.0	)
Contract assets	Inventories		7.9		6.0	$	1.9
Contract liabilities (1) (2)	Deferred revenue		54.5		30.5	$	24.0

(1) Balance includes contract assets and liabilities associated with Gunderson Marine which was disposed of in May 2023. See Note 4 for further discussion.

(2) Contract liabilities balance includes deferred revenue within the scope of Revenue from Contracts with Customers (Topic 606).

For the three and nine months ended May 31, 2023, the Company recognized $2.7 million and $12.6 million of revenue, respectively that was included in Contract liabilities as of August 31, 2022.

Performance obligations

As of May 31, 2023, the Company has entered into contracts with customers for which revenue has not yet been recognized. The following table outlines estimated revenue related to performance obligations wholly or partially unsatisfied, that the Company anticipates will be recognized in future periods.

(in millions)	May 31, 2023
Revenue type:
Manufacturing – Railcar sales	$	2,029.9
Manufacturing – Sustainable conversions	$	87.6
Management services	$	139.5
Other	$	10.0

Based on current production and delivery schedules and existing contracts, approximately $1.9 billion of Railcar sales are expected to be recognized in 2023 and 2024.

Sustainable conversions represent orders to modernize existing railcars and are expected to be recognized through 2023.

Management services includes management and maintenance services of which approximately 52% are expected to be performed through 2027 and the remaining amount through 2037.