The disclosed split
NFI’s November 5 report covers the 13 weeks to September 27. Its backlog was valued at about US$12.5 billion, with 7,164 equivalent units in firm orders and 7,343 in options. Options account for 50.6% of those units. An articulated bus counts as two equivalent units. The unit split does not show the dollar share of options. Backlog value is a company-defined measure without a standard IFRS definition.
The factual basis appears at the start. We then examine incentives, risks and possible actions. Examples do not describe these companies’ undisclosed contract provisions.
A purchasing option preserves a decision
Our reading begins with the customer’s position. A buyer may want access to further vehicles while preserving the ability to decide later. The commercial value of that flexibility depends on the exercise deadline, price conditions and availability promised by the contract. Those terms are not disclosed in this split.
For the supplier, two different planning questions follow. How much production is supported by firm orders? What preparation would make an option deliverable if exercised? Treating every option as certain could tie up stock or capacity prematurely. Ignoring options could leave insufficient time to prepare when the buyer decides.
The missing bridge is timing
A planning review should connect option deadlines to procurement lead times and the cost of keeping capacity available. It should also distinguish an option being exercised from a vehicle being delivered and paid for. Those are separate events with different implications for cash.
The published percentage cannot forecast revenue by itself. To build a forecast, we would need conversion assumptions, expected prices and delivery schedules. The number does tell a reader where to investigate. More than half of the equivalent units depend on a further customer choice.