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Revenue Recognition
 3 Months Ended
Nov. 30, 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.

 

The contract balances are as follows:

 

(in millions)

 

Balance sheet classification

 

November 30,
2023

 

 

August 31,
2023

 

 

$
change

 

Contract assets

 

Accounts Receivable

 

$

1.1

 

 

$

0.1

 

 

$

1.0

 

Contract assets

 

Inventories

 

$

9.3

 

 

$

7.0

 

 

$

2.3

 

Contract liabilities (1)

 

Deferred revenue

 

$

39.1

 

 

$

43.3

 

 

$

(4.2

)

 

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

 

For the three months ended November 30, 2023, the Company recognized $6.5 million of revenue that was included in Contract liabilities as of August 31, 2023.

 

Performance obligations

As of November 30, 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)

 

November 30,
2023

 

Revenue type:

 

 

 

Manufacturing – Railcar sales

 

$

2,779.0

 

Manufacturing – Sustainable conversions

 

$

40.0

 

Management services

 

$

128.4

 

Other

 

$

10.5

 

Based on current production and delivery schedules and existing contracts, approximately $1.6 billion of Railcar sales are expected to be recognized in the remaining nine months of 2024 while the remaining amount is expected to be recognized through 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 2024.

 

Management services includes management and maintenance services of which approximately 54% are expected to be performed through 2028 and the remaining amount through 2037.