Note 14. Accrued liabilities



	At September 30,
	2018		2017
Salaries and other member benefits	$	88,643	$	91,285
Warranties		20,130		13,597
Interest payable		18,611		9,626
Current portion of acquired performance obligations and unfavorable contracts (1)		1,627		1,627
Accrued retirement benefits		3,571		2,413
Current portion of loss reserve on contractual lease commitments		1,245		1,343
Current portion of deferred income from JV formation (Note 5)		7,087		6,451
Deferred revenues		2,572		4,625
Restructuring charges		16,522		-
Taxes, other than income		21,128		14,401
Other		13,377		9,704
	$	194,513	$	155,072

(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:



	Twelve-Months Ended September 30,
	2018		2017		2016
Warranties, beginning of period	$	13,597	$	15,993	$	13,741
Increases due to acquisition of L'Orange		6,045		-		-
Expense, net of recoveries		5,158		9,135		9,902
Reductions for settling warranties		(4,413)		(11,692)		(7,802)
Foreign currency exchange rate changes		(257)		161		152
Warranties, end of period	$	20,130	$	13,597	$	15,993

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. During the third quarter of fiscal year 2017, Woodward entered into an additional sublease agreement with a third party related to a portion of the vacated Skokie facility. Woodward recorded a reduction in the loss reserve associated with the vacated Skokie facility of $2,322 related to the anticipated sublease income it will receive.

The summary for the activity in the loss reserve during the fiscal years ended September 30, 2018, 2017, and 2016 is as follows:



	Twelve-Months Ended September 30,
	2018		2017			2016
Loss reserve on contractual lease commitments, beginning of period	$	5,270	$	9,242	$	2,464
Additions		-		-		8,165
Payments		(1,339)		(1,650)		(1,387)
Non-cash adjustments		-		(2,322)		-
Loss reserve on contractual lease commitments, end of period	$	3,931	$	5,270	$	9,242

Other liabilities included $2,686 of accrued loss reserve on contractual lease commitments that are not expected to be settled or paid within twelve months as of September 30, 2018.

Restructuring charges

In fiscal year 2018, the Company recorded restructuring charges totaling $17,013, the majority of which relate to the Company’s decision to relocate its Duarte, California operations to the Company’s newly renovated Drake Campus in Fort Collins, Colorado. The Duarte facility, which manufactures thrust reverser actuation systems, is part of the Company’s Aerospace segment. The remaining restructuring charges recognized during the year ended September 30, 2018 consist of workforce management costs related to aligning the Company’s industrial turbomachinery business, which is part of the Company’s Industrial segment, with current market conditions. All of the restructuring charges recorded during the year ended September 30, 2018 were recorded as nonsegment expenses and are expected to be paid within one year of the balance sheet date.

The summary of activity in accrued restructuring charges during the fiscal year ended September 30, 2018 is as follows:


				Period Activity
	Balances as of October 1, 2017			Charges (gains)	Cash receipts (payments)		Non-cash activity		Balances as of September 30, 2018
Workforce management costs associated with:
Duarte plant relocation	$	-	$	12,504	$	-	$	-	$	12,504
Industrial turbomachinery business realignment		-		4,509		(491)		-		4,018
Total	$	-	$	17,013	$	(491)	$	-	$	16,522

In addition to the restructuring charges recognized in fiscal year 2018, the Company anticipates incurring additional costs associated with the relocation from Duarte to the Drake Campus such as expenses associated with equipment relocation, employee training, accelerated depreciation, and increased labor expenses over the coming year. The Company anticipates these additional expenses will vary by quarter, but are expected to be approximately $12,000 in total. Although the Company plans to sell the Duarte facility’s land, building and building improvements, it is currently still occupying the Duarte facility and has recorded these as assets held for sale as of September 30, 2018 (see Note 10, Property, plant and equipment).