In fiscal year 2016, Woodward and General Electric Company (“GE”), acting through its GE Aviation business unit, 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:

	September 30, 2021		September 30, 2020
Accrued liabilities	$	4,771	$	4,066
Other liabilities		234,237		234,240

Amortization of the deferred revenue (material right) recognized as an increase to sales was $4,191 for the fiscal year ended September 30, 2021, $5,493 for the fiscal year ended September 30, 2020, and $7,652 for the fiscal year ended September 30, 2019.

Woodward and GE jointly manage the JV and any significant decisions and/or actions of the JV require the mutual consent of both parties. Neither Woodward nor GE has a controlling financial interest in the JV, but both Woodward and GE do have the ability to significantly influence the operating and financial decisions of the JV. Therefore, Woodward is accounting for its 50% ownership interest in the JV using the equity method of accounting. The JV is a related party to Woodward. In addition, GE will continue to pay contingent consideration to Woodward consisting of fifteen annual payments of $4,894 each, which began on January 4, 2017, subject to certain claw-back conditions. Woodward received its third and fourth annual payments of $4,894 during the three-months ended March 31, 2020 and March 31, 2021, respectively, which were recorded as deferred income and included in Net cash provided by operating activities on the Consolidated Statements of Cash Flows. Neither Woodward nor GE contributed any tangible assets to the JV.

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

	For the Year Ended September 30,
	2021		2020		2019
Other income	$	11,366	$	15,580	$	12,932

Cash distributions to Woodward from the JV, recognized in Net cash provided by operating activities on the Consolidated Statements of Cash Flows, from the JV include:

	For the Year Ended September 30,
	2021		2020		2019
Cash distributions	$	13,500	$	14,000	$	15,000

	For the Year Ended September 30,
	2021		2020		2019
Net sales¹	$	35,957	$	48,222	$	60,955

(1)

Net sales include a reduction of $21,101 for the fiscal year ended September 30, 2021, $23,904 for the fiscal year ended September 30, 2020, and $34,236 for the fiscal year ended September 30, 2019 related to royalties owed to the JV by Woodward on sales by Woodward directly to third party aftermarket customers.

The 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:

	September 30, 2021		September 30, 2020
Accounts receivable	$	3,639	$	3,062
Accounts payable		2,823		1,502
Other assets		6,988		9,123

Woodward records in “Other liabilities” amounts invoiced to the JV for support of the JV’s engineering and development projects as an increase to contract liabilities, and records in “Other assets” related incurred expenditures as costs to fulfill a contract. Woodward’s contract liabilities classified as “Other liabilities” included amounts invoiced to the JV as of September 30, 2021 of $73,657 compared to $70,618 as of fiscal year ended September 30, 2020. Woodward’s costs to fulfill a contract included in “Other assets” related to JV activities were $73,657 as of September 30, 2021 and $70,618 as of fiscal year ended September 30, 2020. In the fiscal year ended September 30, 2021, Woodward recognized a $2,072 reduction in the contract liability in “Other liabilities” and a $2,072 reduction in costs to fulfill a contract in “Other assets” related to the recognition of revenue and cost of goods sold that was included in the contract liability and contract asset, respectively, at the beginning of the fiscal year. In the fiscal year ended September 30, 2020, Woodward recognized a $6,609 reduction in the contract liability in “Other liabilities” and a $6,261 reduction in costs to fulfill a contract in “Other assets” related to the termination of a JV engineering and development project previously recognized as a material right. No reductions in costs to fulfill a contract or contract liabilities were recorded during the fiscal year ended September 30, 2021 as a result of the termination of joint venture engineering and development projects.