Equity Investment in Affiliate

12 Months Ended

Sep. 29, 2018

Equity Method Investments and Joint Ventures [Abstract]

Equity Investment in Affiliate

16. Equity Investment in Affiliate

On October 14, 2009, Blue Bird and Girardin Minibus entered into a venture, Micro Bird Holdings, Inc. (“Micro Bird”), to combine the complementary expertise of the two separate manufacturers. Blue Bird Micro Bird by Girardin Type A buses are produced in Drummondville, Quebec by Micro Bird.

The Company holds a 50% equity interest in Micro Bird Holdings, Inc. ("Micro Bird"), and accounts for Micro Bird under the equity method of accounting as the Company does not have control to direct the activities that most significantly impact Micro Bird’s financial performance based on the shared powers of the venture partners. The carrying amount of the equity method investment is adjusted for the Company’s proportionate share of net earnings or losses and reduced by any dividends received. At September 29, 2018 and September 30, 2017, the Company had an investment of $11.1 million and $11.6 million, respectively. During fiscal years ended 2018, 2017 and 2016, Micro Bird paid dividends to all common stockholders, and the Company received $1.8 million, $4.6 million, and $2.3 million, respectively, net of required withholding taxes. The dividends reduced the carrying value of our investment and are presented as cash inflows in the operating section of our Consolidated Statements of Cash Flows.

In recognizing the Company’s 50% portion of Micro Bird net income, the Company recorded $1.3 million, $3.3 million and $2.9 million in equity in net income of non-consolidated affiliate for the fiscal years ended 2018, 2017 and 2016, respectively.