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Revenue Recognition | 6 Months Ended
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Jun. 30, 2023
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | NOTE 6. REVENUE RECOGNITION The Company’s accounting for revenues is governed by two accounting standards. The majority of the Company’s revenues are considered lease or lease related and are accounted for in accordance with Accounting Standards Codification (ASC) 842, Leases. Revenues determined to be non-lease related are accounted for in accordance with ASC 606, Revenue from Contracts with Customers. The Company accounts for revenues when approval and commitment from both parties have been obtained, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company typically recognizes non-lease related revenues at a point in time because the customer does not simultaneously consume the benefits of the Company’s promised goods and services, or performance obligations, and obtains control when delivery and installation are complete. For contracts that have multiple performance obligations, the transaction price is allocated to each performance obligation in the contract based on the Company’s best estimate of the standalone selling prices of each distinct performance obligation in the contract. The standalone selling price is typically determined based upon the expected cost plus an estimated margin of each performance obligation. Revenue from contracts that satisfies the criteria for over time recognition is recognized as work is performed by using the ratio of costs incurred to estimated total contract costs for each contract. The majority of revenue for these contracts is derived from long-term projects which typically span multiple quarters. The timing of revenue recognition, billings, and cash collections results in billed contract receivables and contract assets on the Company's consolidated balance sheet. In the Company’s contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Billings can occur subsequent to revenue recognition, resulting in contract assets, or in advance, resulting in contract liabilities. These contract assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. The contract liabilities included in Deferred income on the Company’s consolidated balance sheet totaled $49.0 million and $27.4 million at June 30, 2023 and December 31, 2022. Sales revenues totaling $6.6 million and $11.0 million were recognized during the three and six months ended June 30, 2023, respectively, which were included in the contract liability balance at December 31, 2022. For certain modular building sales, the customer retains a small portion of the contract price until full completion of the contract, or revenue is recognizable prior to customer billing, which results in revenue earned in excess of billings. These unbilled contract assets are included in Accounts receivable on the Company’s consolidated balance sheet and totaled $5.7 million and $0.6 million at June 30, 2023 and December 31, 2022, respectively. The Company generally rents and sells to customers on 30 day payment terms. The Company does not typically offer variable payment terms or accept non-monetary consideration. Amounts billed and due from the Company’s customers are classified as Accounts receivable on the Company’s consolidated balance sheet. For certain sales of modular buildings, progress payments from the customer are received during the manufacturing of new equipment, or the preparation of used equipment. The advance payments are not considered a significant financing component because the payments are used to meet working capital needs during the contract and to protect the Company from the customer failing to adequately complete their obligations under the contract. Lease Revenues Rental revenues from operating leases are recognized on a straight-line basis over the term of the lease for all operating segments. Rental billings for periods extending beyond period end are recorded as deferred income and are recognized in the period earned. Rental related services revenues are primarily associated with relocatable modular buildings. For modular building leases, rental related services revenues for modifications, delivery, installation, dismantle and return delivery are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer. These revenues are recognized on a straight-line basis over the term of the lease. Certain leases are accounted for as finance leases. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment. As of the six months ended June 30, 2023, the Company’s future minimum lease payments to be received under non-cancelable finance leases was $4.4 million. Of the total investment in sales-type leases, non-current future minimum lease payments are expected to be $1.1 million in 2024, $0.7 million in 2025, and $0.2 million in 2026. The Company’s assessment of current expected losses on these receivables was not material and no credit loss expense was provided as of the six months ended June 30, 2023. Other revenues include interest income on finance leases and rental income on facility leases. In the three and six months ended June 30, 2023, the Company’s lease revenues were $140.8 million and $277.4 million, respectively, consisting of $139.7 million and $275.8 million of operating lease revenues, respectively, and $1.1 million and $1.6 million of finance lease revenues, respectively. The Company has entered into finance leases to finance certain equipment sales to customers. The lease agreements have a bargain purchase option at the end of the lease term. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a straight-line basis, which results in a constant rate of return on the unrecovered lease investment. The Company’s finance lease revenues for the three and six months ended June 30, 2023 include $1.0 million and $1.4 million of sales revenues, respectively, and $0.1 million and $0.2 million of interest income, respectively. Non-Lease Revenues Non-lease revenues are recognized in the period when control of the performance obligation is transferred, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. For portable storage containers and electronic test equipment, rental related services revenues for delivery and return delivery are considered non-lease revenues. Sales revenues are typically recognized at a point in time, which occurs upon the completion of delivery, installation and acceptance of the equipment by the customer. Accounting for non-lease revenues requires judgment in determining the point in time the customer gains control of the equipment and the appropriate accounting period to recognize revenue. Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses. The following table disaggregates the Company’s revenues by lease (within the scope of ASC 842) and non-lease revenues (within the scope of ASC 606) and the underlying service provided for the three and six months ended June 30, 2023 and 2022:
(in thousands) |  | Mobile Modular |  |  | TRS- RenTelco |  |  | Enviroplex |  |  | Adler Tanks (Discontinued) |  |  | Consolidated |
Three Months Ended June 30, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leasing |  | $ | 110,419 |  |  | $ | 30,337 |  |  | $ | — |  |  | $ | — |  |  | $ | 140,756 |
Non-lease: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental related services |  |  | 13,908 |  |  |  | 563 |  |  |  | — |  |  |  | — |  |  |  | 14,471 |
Sales |  |  | 39,356 |  |  |  | 6,581 |  |  |  | 923 |  |  |  | — |  |  |  | 46,860 |
Other |  |  | 579 |  |  |  | 364 |  |  |  | — |  |  |  | — |  |  |  | 943 |
Total non-lease |  |  | 53,843 |  |  |  | 7,508 |  |  |  | 923 |  |  |  | — |  |  |  | 62,274 |
Total revenues |  | $ | 164,262 |  |  | $ | 37,845 |  |  | $ | 923 |  |  | $ | — |  |  | $ | 203,030 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leasing |  | $ | 79,671 |  |  | $ | 30,909 |  |  | $ | — |  |  | $ | 16,244 |  |  | $ | 126,824 |
Non-lease: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental related services |  |  | 6,883 |  |  |  | 683 |  |  |  | — |  |  |  | 6,636 |  |  |  | 14,202 |
Sales |  |  | 24,816 |  |  |  | 5,462 |  |  |  | 4,650 |  |  |  | 601 |  |  |  | 35,529 |
Other |  |  | 7 |  |  |  | 287 |  |  |  | — |  |  |  | 182 |  |  |  | 476 |
Total non-lease |  |  | 31,706 |  |  |  | 6,432 |  |  |  | 4,650 |  |  |  | 7,419 |  |  |  | 50,207 |
Total revenues |  | $ | 111,377 |  |  | $ | 37,341 |  |  | $ | 4,650 |  |  | $ | 23,663 |  |  | $ | 177,031 |
Six Months Ended June 30, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leasing |  | $ | 210,078 |  |  | $ | 60,677 |  |  | $ | — |  |  | $ | 6,612 |  |  | $ | 277,367 |
Non-lease: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental related services |  |  | 22,882 |  |  |  | 1,289 |  |  |  | — |  |  |  | 2,557 |  |  |  | 26,728 |
Sales |  |  | 56,961 |  |  |  | 11,204 |  |  |  | 1,864 |  |  |  | 269 |  |  |  | 70,298 |
Other |  |  | 998 |  |  |  | 795 |  |  |  | — |  |  |  | — |  |  |  | 1,793 |
Total non-lease |  |  | 80,841 |  |  |  | 13,288 |  |  |  | 1,864 |  |  |  | 2,826 |  |  |  | 98,819 |
Total revenues |  | $ | 290,919 |  |  | $ | 73,965 |  |  | $ | 1,864 |  |  | $ | 9,438 |  |  | $ | 376,186 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leasing |  | $ | 154,265 |  |  | $ | 60,319 |  |  | $ | — |  |  | $ | 30,723 |  |  | $ | 245,307 |
Non-lease: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental related services |  |  | 12,533 |  |  |  | 1,235 |  |  |  | — |  |  |  | 11,821 |  |  |  | 25,589 |
Sales |  |  | 35,191 |  |  |  | 8,741 |  |  |  | 5,567 |  |  |  | 1,258 |  |  |  | 50,757 |
Other |  |  | 33 |  |  |  | 537 |  |  |  | — |  |  |  | 181 |  |  |  | 751 |
Total non-lease |  |  | 47,757 |  |  |  | 10,513 |  |  |  | 5,567 |  |  |  | 13,260 |  |  |  | 77,097 |
Total revenues |  | $ | 202,022 |  |  | $ | 70,832 |  |  | $ | 5,567 |  |  | $ | 43,983 |  |  | $ | 322,404 |
Customer returns of rental equipment prior to the end of the rental contract term are typically billed a cancellation fee, which is recorded as rental revenue in the period billed. Sales of new relocatable modular buildings, portable storage containers, electronic test equipment and related accessories and liquid and solid containment tanks and boxes not manufactured by the Company are typically covered by warranties provided by the manufacturer of the products sold. The Company typically provides limited 90-day warranties for certain sales of used rental equipment and one-year warranties on equipment manufactured by Enviroplex. Although the Company’s policy is to provide reserves for warranties when required for specific circumstances, warranty costs have not been significant to date. The Company’s incremental cost of obtaining lease contracts, which consists of salesperson commissions, are deferred and amortized over the initial lease term for modular leases. Incremental costs for obtaining a contract for all other operating segments are expensed in the period incurred because the lease term is typically less than 12 months.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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