Revenue Recognition

6 Months Ended

Feb. 29, 2024

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 new railcars and other management-type services, for which the Company has not yet satisfied the related performance obligations.

The contract balances are as follows:

(in millions)	Balance sheet classification	February 29, 2024		August 31, 2023		$ change
Contract assets	Accounts Receivable	$	0.7	$	0.1	$	0.6
Contract assets	Inventories	$	10.3	$	7.0	$	3.3
Contract liabilities (1)	Deferred revenue	$	77.7	$	43.3	$	34.4

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

For the three and six months ended February 29, 2024, the Company recognized $6.8 million and $13.4 million of revenue that was included in Contract liabilities as of August 31, 2023.

Performance obligations

As of February 29, 2024, 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)	February 29, 2024
Revenue type:
Manufacturing – Railcar sales	$	2,725.8
Manufacturing – Sustainable conversions	$	52.6
Management services	$	133.4
Other	$	13.0

Based on current production and delivery schedules and existing contracts, approximately $1.1 billion of Railcar sales are expected to be recognized in the remainder of 2024 while the remaining amount is expected to be recognized through 2026.

Sustainable conversions represent orders to modernize existing railcars and are expected to be recognized in 2024.

Management services includes management and maintenance service contracts of which approximately 55% are expected to be performed through 2028 and the remaining amount through 2037.