Revenue

3 Months Ended

Dec. 31, 2020

Revenue From Contract With Customer [Abstract]

Revenue

Note 3.  Revenue

Sales of Products

Revenue from manufactured products; maintenance, repair and overhaul (“MRO”); and services represented 87%, 12%, and 1%, respectively, of Woodward’s net sales for the three-months ended December 31, 2020, and for the three-months ended December 31, 2019.

The amount of revenue recognized as point in time or over time follows:

	Three-Months Ended December 31, 2020						Three-Months Ended December 31, 2019
	Aerospace		Industrial		Consolidated		Aerospace		Industrial		Consolidated
Point in time	$	106,967	$	154,195	$	261,162	$	187,515	$	167,942	$	355,457
Over time		214,700		61,757		276,457		286,410		78,488		364,898
Total net sales	$	321,667	$	215,952	$	537,619	$	473,925	$	246,430	$	720,355

Accounts Receivable

Accounts receivable consisted of the following:

	December 31, 2020			September 30, 2020
Billed receivables
Trade accounts receivable	$	265,732		$	307,914
Other (Chinese financial institutions)		46,896			56,640
Total billed receivables		312,628			364,554
Current unbilled receivables (contract assets)		204,592			181,792
Less: Allowance for uncollectible amounts		(7,499	)		(8,359	)
Total accounts receivable, net	$	509,721		$	537,987

As of December 31, 2020, “Other assets” on the Condensed Consolidated Balance Sheets includes $12,053 of unbilled receivables not expected to be invoiced and collected within a period of twelve months, compared to $16,751 as of September 30, 2020.  Unbilled receivables not expected to be invoiced and collected within a period of twelve months are primarily attributable to customer delays for deliveries on firm orders in the Aerospace segment due to the impacts of the COVID-19 pandemic.

Accounts receivable in Woodward’s Condensed Consolidated Financial Statements represent the net amount expected to be collected, and an allowance for uncollectible amounts related to credit losses is established based on expected losses in accordance with FASB ASC Topic 326, “Financial Instruments – Credit Losses”.  Expected losses are estimated by reviewing specific customer accounts, taking into consideration aging, credit risk of the customers, and historical payment history, as well as current and forecasted economic conditions, and other relevant factors.

The allowance for uncollectible amounts and change in expected credit losses for trade accounts receivable and unbilled receivables (contract assets) consisted of the following:

	Three-Months Ended
	December 31, 2020
Balance, beginning	$	8,359
Charged to costs and expenses		88
Deductions		(1,171	)
Other additions1		223
Balance, ending	$	7,499

(1) Includes effects of foreign exchange rate changes during the period.

Contract liabilities  

Contract liabilities consisted of the following:  

	December 31, 2020				September 30, 2020
	Current		Noncurrent		Current		Noncurrent
Deferred revenue from material rights from GE joint venture formation	$	4,242	$	232,882	$	4,066	$	234,240
Deferred revenue from advanced invoicing and/or prepayments from customers		4,182		1,338		3,239		85
Liability related to customer supplied inventory		16,885		—		14,955		—
Deferred revenue from material rights related to engineering and development funding		4,076		136,804		2,360		132,317
Net contract liabilities	$	29,385	$	371,024	$	24,620	$	366,642

Woodward recognized revenue of $6,528 in the three-months ended December 31, 2020 from contract liabilities balances recorded as of October 1, 2020, compared to $3,970 in the three-months ended December 31, 2019 from contract liabilities balances recorded as of October 1, 2019.

Remaining performance obligations

Remaining performance obligations related to the aggregate amount of the total contract transaction price of firm orders for which the performance obligation has not yet been recognized in revenue as of December 31, 2020 was $1,274,218, compared to $1,454,406 as of September 30, 2020, the majority of which relate in both periods relate to Woodward’s Aerospace segment.  Woodward expects to recognize almost all of these remaining performance obligations within two years after December 31, 2020.  

Remaining performance obligations related to material rights that have not yet been recognized in revenue as of December 31, 2020 was $464,296, compared to $465,668 as of September 30, 2020, of which $8,952 is expected to be recognized in the remainder of fiscal year 2021, $10,625 is expected to be recognized in fiscal year 2022, and the balance is expected to be recognized thereafter.  Woodward expects to recognize revenue from performance obligations related to material rights over the life of the underlying programs, which may be as long as forty years.

Disaggregation of Revenue

Woodward designs, produces and services reliable, efficient, low-emission, and high-performance energy control products for diverse applications in markets throughout the world.  Woodward reports financial results for each of its Aerospace and Industrial reportable segments.  Woodward further disaggregates its revenue from contracts with customers by primary market and by geographical area as Woodward believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

Revenue by primary market for the Aerospace reportable segment was as follows:

	Three-Months Ended December 31,
	2020		2019
Commercial OEM	$	76,081	$	158,666
Commercial aftermarket		65,515		125,928
Defense OEM		131,263		140,926
Defense aftermarket		48,808		48,405
Total Aerospace segment net sales	$	321,667	$	473,925

Revenue by primary market for the Industrial reportable segment was as follows:

	Three-Months Ended December 31,
	2020		2019
Reciprocating engines	$	164,922	$	174,653
Industrial turbines		51,030		51,500
Renewables1		—		20,277
Total Industrial segment net sales	$	215,952	$	246,430

(1) Sales in the renewables market were discontinued as of May 1, 2020 following the closing of the divestiture of the renewable power systems business and other related businesses (as described more fully in Note 10, Sale of businesses, and defined therein as the “disposal group”).

The customers who account for approximately 10% or more of net sales of each of Woodward’s reportable segments for the three-months ended December 31, 2020 are as follows:

	Customer
Aerospace	The Boeing Company, General Electric Company, Raytheon Technologies
Industrial	Rolls-Royce PLC, Weichai Westport, General Electric Company

Net sales by geographic area, as determined based on the location of the customer, were as follows:

	Three-Months Ended December 31, 2020						Three-Months Ended December 31, 2019
	Aerospace		Industrial		Consolidated		Aerospace		Industrial		Consolidated
United States	$	257,546	$	43,153	$	300,699	$	363,912	$	51,092	$	415,004
Germany		7,506		29,642		37,148		17,278		51,438		68,716
Europe, excluding Germany		20,940		43,068		64,008		38,987		50,501		89,488
China		8,964		65,983		74,947		10,212		53,876		64,088
Asia, excluding China		4,480		28,635		33,115		6,981		31,912		38,893
Other countries		22,231		5,471		27,702		36,555		7,611		44,166
Total net sales	$	321,667	$	215,952	$	537,619	$	473,925	$	246,430	$	720,355