Revenue Recognition

12 Months Ended

Aug. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 4 – 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 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 did not permit billing at the reporting date.

The opening and closing balances of the Company’s contract balances are as follows:

(In millions)	Balance sheet classification	August 31, 2023		August 31, 2022		$ change
Contract assets1	Accounts receivable, net	$	0.1	$	13.0	$	(12.9	)
Contract assets	Inventories	$	7.0	$	6.0	$	1.0
Contract liabilities 1 2	Deferred revenue	$	43.3	$	30.5	$	12.8

1 August 31, 2022 balances include contract assets and liabilities associated with Gunderson Marine which was disposed of in May 2023. See Note 5 for further discussion.

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

For the years ended August 31, 2023 and 2022 the Company recognized $13.0 million and $16.4 million of revenue, respectively, that was included in Contract liabilities as of August 31, 2022 and 2021.

Performance obligations

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

(In millions)	August 31, 2023
Revenue type:
Manufacturing – Railcar sales	$	2,741.2
Manufacturing – Sustainable conversions	$	9.2
Services	$	137.0
Other	$	7.6

Based on current production and delivery schedules and existing contracts, approximately $1.9 billion of the Railcar sales amount is expected to be recognized in the next 12 months while the remaining amount is expected to be recognized into 2026. The table above excludes estimated revenue to be recognized at the Company’s Brazilian manufacturing operations, as they are accounted for under the equity method.

Sustainable conversions represent orders to modernize existing railcars and are expected to be recognized in the next 12 months.

Services includes management and maintenance services of which approximately 57% are expected to be performed through 2028 and the remaining amount through 2037.