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Accrued Liabilities
 6 Months Ended
Mar. 31, 2017
Accrued Liabilities  
Accrued Liabilities

Note 14.  Accrued liabilities





 

 

 

 

 



 

 

 

 

 



March 31,

 

September 30,



2017

 

2016

Salaries and other member benefits

$

 37,947 

 

$

 87,197 

Warranties

 

 15,041 

 

 

 15,993 

Interest payable

 

 9,091 

 

 

 9,071 

Current portion of acquired performance obligations and unfavorable contracts (1)

 

 2,393 

 

 

 2,910 

Accrued retirement benefits

 

 2,503 

 

 

 2,505 

Current portion of loss reserve on contractual lease commitments

 

 1,840 

 

 

 1,840 

Current portion of deferred income from JV formation (Note 4)

 

 6,352 

 

 

 6,552 

Deferred revenues

 

 5,385 

 

 

 5,779 

Taxes, other than income

 

 13,890 

 

 

 14,580 

Other 

 

 11,536 

 

 

 10,200 



$

 105,978 

 

$

 156,627 



(1)

In connection with Woodward’s acquisition of GE Aviation Systems LLC’s (the “Seller”) thrust reverser actuation systems business located in Duarte, California (the “Duarte Acquisition”) in fiscal year 2013, Woodward assumed current and long-term performance obligations for contractual commitments that are expected to result in future economic losses.  In addition, Woodward assumed current and long-term performance obligations for services to be provided to the Seller and others, partially offset by current and long-term assets related to contractual payments due from the Seller.  The current portion of both obligations is included in Accrued liabilities.



Warranties

Provisions of Woodward’s sales agreements include product warranties customary to these types of agreements.  Accruals are established for specifically identified warranty issues that are probable to result in future costs.  Warranty costs are accrued on a non-specific basis whenever past experience indicates a normal and predictable pattern exists.  Changes in accrued product warranties were as follows:









 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three-Months Ended March 31,

 

Six-Months Ended March 31,



 

2017

 

 

2016

 

 

2017

 

 

2016

Warranties, beginning of period

$

 15,528 

 

$

 13,370 

 

$

 15,993 

 

$

 13,741 

Expense, net of recoveries

 

 2,139 

 

 

 3,175 

 

 

 4,062 

 

 

 6,411 

Reductions for settling warranties

 

 (2,750)

 

 

 (1,274)

 

 

 (4,782)

 

 

 (4,743)

Foreign currency exchange rate changes 

 

 124 

 

 

 282 

 

 

 (232)

 

 

 144 

Warranties, end of period

$

 15,041 

 

$

 15,553 

 

$

 15,041 

 

$

 15,553 



Loss reserve on contractual lease commitments

In connection with the construction of a new production facility in Niles, Illinois, Woodward vacated a leased facility in Skokie, Illinois.  During the first quarter of fiscal year 2016 Woodward fully vacated the Skokie facility and therefore recorded a charge of $8,165 to recognize a loss reserve against the estimated remaining contractual lease commitments, less anticipated sublease income.

The summary for the activity in the loss reserve during the three and six-months ended March 31, 2017 and March 31, 2016 is as follows:







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three-Months Ended March 31,

 

Six-Months Ended March 31,



 

2017

 

 

2016

 

 

2017

 

 

2016

Loss reserve on contractual lease commitments, beginning of period

$

 8,840 

 

$

 10,629 

 

$

 9,242 

 

$

 2,464 

Additions

 

 -

 

 

 -

 

 

 -

 

 

 8,165 

Payments

 

 (445)

 

 

 (857)

 

 

 (847)

 

 

 (857)

Loss reserve on contractual lease commitments, end of period

$

 8,395 

 

$

 9,772 

 

$

 8,395 

 

$

 9,772 



Other liabilities included $6,555 of accrued loss reserve on contractual lease commitments that are not expected to be settled or paid within twelve months as of March 31, 2017.