Joint Venture

6 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Note 6. Joint venture

In fiscal year 2016, Woodward and General Electric Company (“GE”), acting through its GE Aviation business unit at the time, consummated the formation of a strategic joint venture between Woodward and GE (the “JV”) to develop, manufacture, and support fuel systems for specified existing and all future GE commercial aircraft engines that produce thrust in excess of fifty thousand pounds.

Unamortized deferred revenue from material rights in connection with the JV formation included:


	March 31, 2024		September 30, 2023
Accrued liabilities	$	6,364	$	6,147
Other liabilities		235,837		233,997

Amortization of the deferred revenue (material right) recognized as an increase to sales was $1,502 for the three months and $2,837 for the six months ended March 31, 2024, and $1,203 for the three months and $2,034 for the six months ended March 31, 2023.

As part of the JV formation, GE pays contingent consideration to Woodward consisting of fifteen annual payments of $4,894 per year, which began in the second quarter of fiscal year 2017, subject to certain claw-back conditions. Woodward received its annual payments of $4,894 during the three-months ended March 31, 2024 and 2023, which were recorded as deferred income and included in “Net cash provided by operating activities” on the Condensed Consolidated Statements of Cash Flows.

Other income related to Woodward’s equity interest in the earnings of the JV was as follows:


	Three Months Ended March 31,				Six Months Ended March 31,
	2024		2023		2024		2023
Other income	$	8,701	$	8,468	$	18,856	$	13,041

Cash distributions to Woodward from the JV, recognized in “Other, net” in “Net cash provided by operating activities” on the Condensed Consolidated Statements of Cash Flows, were as follows:


	Three Months Ended March 31,				Six Months Ended March 31,
	2024		2023		2024		2023
Cash distributions	$	12,000	$	5,500	$	18,500	$	10,000

Net sales to the JV were as follows:


	Three Months Ended March 31,				Six Months Ended March 31,
	2024		2023		2024		2023
Net sales1	$	22,080	$	7,320	$	42,352	$	13,797

(1)

Net sales included a reduction of $14,992 for the three months and $29,531 for the six months ended March 31, 2024 related to royalties owed to the JV by Woodward on sales by Woodward directly to third party aftermarket customers, compared to a reduction to sales of $12,888 for the three months and $20,458 for the six months ended March 31, 2023.

The Condensed Consolidated Balance Sheets include “Accounts receivable” related to amounts the JV owed Woodward, “Accounts payable” related to amounts Woodward owed the JV, and “Other assets” related to Woodward’s net investment in the JV, as follows:


	March 31, 2024		September 30, 2023
Accounts receivable	$	5,279	$	3,666
Accounts payable		7,324		6,276
Other assets		16,384		16,028