Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2018 | Feb. 05, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | WOODWARD, INC. | |
Entity Central Index Key | 108,312 | |
Current Fiscal Year End Date | --09-30 | |
Trading Symbol | wwd | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 62,082,576 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Consolidated Statements of Earnings | ||
Net sales | $ 652,811 | $ 470,148 |
Costs and expenses: | ||
Cost of goods sold | 492,174 | 347,627 |
Selling, general and administrative expenses | 51,927 | 46,459 |
Research and development costs | 38,867 | 34,786 |
Interest expense | 11,878 | 8,872 |
Interest income | (371) | (363) |
Other expense (income), net (Note 17) | (3,179) | (4,720) |
Total costs and expenses | 591,296 | 432,661 |
Earnings before income taxes | 61,515 | 37,487 |
Income tax expense | 12,395 | 19,227 |
Net earnings | $ 49,120 | $ 18,260 |
Earnings per share (Note 4): | ||
Basic earnings per share | $ 0.79 | $ 0.30 |
Diluted earnings per share | $ 0.77 | $ 0.29 |
Weighted Average Common Shares Outstanding (Note 4): | ||
Basic | 61,818 | 61,246 |
Diluted | 64,059 | 63,709 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Comprehensive earnings | ||
Net earnings | $ 49,120 | $ 18,260 |
Other comprehensive earnings: | ||
Foreign currency translation adjustments | (1,734) | 5,103 |
Net gain (loss) on foreign currency transactions designated as hedges of net investments in foreign subsidiaries (Note 8) | 649 | (743) |
Taxes on changes in foreign currency translation adjustments | 383 | 187 |
Foreign currency translation and transactions adjustments, net of tax | (702) | 4,547 |
Unrealized gain (loss) on fair value adjustment of derivative instruments (Note 8) | 18,563 | |
Reclassification of net realized (gains) losses on derivatives to earnings (Note 8) | (7,826) | (18) |
Taxes on changes in derivative transactions | (208) | 7 |
Derivative adjustments, net of tax | 10,529 | (11) |
Curtailment of postretirement benefit plan arising during the period | 59 | |
Amortization of pension and other postretirement plan: | ||
Net prior service cost | 176 | 137 |
Net loss | 239 | 246 |
Foreign currency exchange rate changes on pension and other postretirement benefit plan liabilities | 303 | (99) |
Taxes on changes in pension and other postretirement benefit plan liability adjustments, net of foreign currency exchange rate changes | (209) | (132) |
Pension and other postretirement benefit plan adjustments, net of tax | 509 | 211 |
Total comprehensive earnings | $ 59,456 | $ 23,007 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | |
Current assets: | |||
Cash and cash equivalents, including restricted cash of $0 and $3,635, respectively | $ 71,634 | $ 83,594 | |
Accounts receivable, less allowance for uncollectible amounts of $3,995 and $3,938, respectively | 489,529 | 432,003 | [1] |
Inventories | 524,500 | 549,596 | [1],[2] |
Income taxes receivable | 3,769 | 6,397 | |
Other current assets | 37,004 | 43,207 | |
Total current assets | 1,126,436 | 1,114,797 | |
Property, plant and equipment, net | 1,060,556 | 1,060,005 | |
Goodwill | 809,480 | 813,250 | |
Intangible assets, net | 673,286 | 700,883 | [3] |
Deferred income tax assets | 15,172 | 16,570 | [4] |
Other assets | 175,606 | 85,144 | [1],[5] |
Total assets | 3,860,536 | 3,790,649 | |
Current liabilities: | |||
Short-term borrowings | 160,000 | 153,635 | |
Accounts payable | 224,890 | 226,285 | |
Income taxes payable | 19,899 | 16,745 | [4] |
Accrued liabilities | 171,137 | 194,513 | [2],[5] |
Total current liabilities | 575,926 | 591,178 | |
Long-term debt, less current portion | 1,024,872 | 1,092,397 | |
Deferred income tax liabilities | 168,409 | 170,915 | [4] |
Other liabilities | 460,462 | 398,055 | [5] |
Total liabilities | 2,229,669 | 2,252,545 | |
Commitments and contingencies (Note 21) | |||
Stockholders' equity: | |||
Preferred stock, par value $0.003 per share, 10,000 shares authorized, no shares issued | |||
Common stock, par value $0.001455 per share, 150,000 shares authorized, 72,960 shares issued | 106 | 106 | |
Additional paid-in capital | 195,894 | 185,705 | |
Accumulated other comprehensive losses | (64,648) | (74,942) | |
Deferred compensation | 9,015 | 8,431 | |
Retained earnings | 2,034,877 | 1,966,643 | |
Stockholders' equity excluding treasury stock | 2,175,244 | 2,085,943 | |
Treasury stock at cost, 11,096 shares and 11,203 shares, respectively | (535,362) | (539,408) | |
Treasury stock held for deferred compensation, at cost, 209 shares and 202 shares, respectively | (9,015) | (8,431) | |
Total stockholders' equity | 1,630,867 | 1,538,104 | |
Total liabilities and stockholders' equity | $ 3,860,536 | $ 3,790,649 | |
[1] | The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward's businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in "Accounts receivable" and noncurrent unbilled receivables in "Other assets." The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. | ||
[2] | The value of noncash consideration in the form of exchanged products and other customer provided inventory is reflected in unbilled receivables included in "Accounts receivable," "Other assets," and "Inventories," and in contract liabilities, which are included in "Accrued liabilities." | ||
[3] | The net book value of the backlog and customer relationships and contracts intangible assets was adjusted concurrent with the change in the timing of the associated revenue, resulting in a reduction in the net book value of these assets as of the date of adoption. | ||
[4] | The value of tax assets and tax liabilities was impacted by the change in timing of the recognition of assets and liabilities within tax jurisdictions. | ||
[5] | Woodward recorded customer funding of product engineering and development identified as material rights as current and noncurrent deferred revenue contract liabilities included in "Accrued liabilities" and "Other liabilities." The related customer funded product engineering and development costs were capitalized as costs to fulfill a contract, to the extent of the contractually committed customer funded payments, and are recorded as "Other assets." |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Current assets: | ||
Restricted cash | $ 0 | $ 3,635 |
Allowance, accounts receivable | $ 3,995 | $ 3,938 |
Stockholders' equity: | ||
Preferred stock, par value | $ 0.003 | $ 0.003 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001455 | $ 0.001455 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 72,960,000 | 72,960,000 |
Treasury stock, shares | 11,096,000 | 11,203,000 |
Treasury stock held for deferred compensation, shares | 209,000 | 202,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Consolidated Statements of Cash Flows | ||
Net cash provided by (used in) operating activities | $ 84,712 | $ (2,533) |
Cash flows from investing activities: | ||
Payments for purchase of property, plant, and equipment | (31,346) | (28,450) |
Proceeds from sale of assets | 249 | 132 |
Proceeds from sales of short-term investments | 27 | |
Payments for purchases of short-term investments | (947) | (791) |
Net cash used in investing activities | (32,017) | (29,109) |
Cash flows from financing activities: | ||
Cash dividends paid | (8,808) | (7,656) |
Proceeds from sales of treasury stock | 3,384 | 1,389 |
Borrowings on revolving lines of credit and short-term borrowings | 542,847 | 458,950 |
Payments on revolving lines of credit and short-term borrowings | (501,218) | (425,250) |
Payments of long-term debt and capital lease obligations | (100,132) | (106) |
Net cash (used in) provided by financing activities | (63,927) | 27,327 |
Effect of exchange rate changes on cash and cash equivalents | (728) | 2,542 |
Net change in cash and cash equivalents | (11,960) | (1,773) |
Cash and cash equivalents at beginning of year | 83,594 | 87,552 |
Cash and cash equivalents, including restricted cash, at end of period | $ 71,634 | $ 85,779 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Total Accumulated Other Comprehensive (Loss) Earnings [Member] | Foreign Currency Translation Adjustments [Member] | Unrealized Derivative Gains (Losses) [Member] | Minimum Retirement Benefit Liability Adjustments [Member] | Deferred Compensation [Member] | Retained Earnings [Member] | Treasury Stock at Cost [Member] | Treasury Stock Held for Deferred Compensaton [Member] | Total |
Balances at Sep. 30, 2017 | $ 106 | $ 163,836 | $ (53,186) | $ (27,280) | $ 135 | $ (26,041) | $ 7,135 | $ 1,820,268 | $ (559,641) | $ (7,135) | $ 1,371,383 | |
Balance, Common Stock, shares at Sep. 30, 2017 | 72,960,000 | |||||||||||
Balance, Treasury Stock, shares at Sep. 30, 2017 | (11,739,000) | |||||||||||
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2017 | (186,000) | |||||||||||
Net earnings | 18,260 | 18,260 | ||||||||||
Other comprehensive earnings (loss), net of tax | 4,747 | 4,547 | (11) | 211 | 4,747 | |||||||
Cash dividends paid | (7,656) | (7,656) | ||||||||||
Sales of treasury stock | 214 | $ 1,175 | 1,389 | |||||||||
Sales of treasury stock, shares | 33,000 | |||||||||||
Stock-based compensation | 12,423 | 12,423 | ||||||||||
Purchases and transfers of stock by/to deferred compensation plan | 1,041 | $ (1,041) | ||||||||||
Purchases and transfer of stock by/to deferred compensation plan, shares | (14,000) | |||||||||||
Distribution of stock from deferred compensation plan | (3) | $ 3 | ||||||||||
Balances at Dec. 31, 2017 | $ 106 | 176,473 | (48,439) | (22,733) | 124 | (25,830) | 8,173 | 1,830,872 | $ (558,466) | $ (8,173) | 1,400,546 | |
Balance, Preferred Stock, shares at Dec. 31, 2017 | 0 | |||||||||||
Balance, Common Stock, shares at Dec. 31, 2017 | 72,960,000 | |||||||||||
Balance, Treasury Stock, shares at Dec. 31, 2017 | (11,706,000) | |||||||||||
Balance, Treasury stock held for deferred compensation, Shares at Dec. 31, 2017 | (200,000) | |||||||||||
Balances at Sep. 30, 2018 | $ 106 | 185,705 | (74,942) | (39,794) | (20,942) | (14,206) | 8,431 | 1,966,643 | $ (539,408) | $ (8,431) | $ 1,538,104 | |
Balance, Preferred Stock, shares at Sep. 30, 2018 | 0 | |||||||||||
Balance, Common Stock, shares at Sep. 30, 2018 | 72,960,000 | 72,960,000 | ||||||||||
Balance, Treasury Stock, shares at Sep. 30, 2018 | (11,203,000) | (11,203,000) | ||||||||||
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2018 | (202,000) | (202,000) | ||||||||||
Net earnings | 49,120 | $ 49,120 | ||||||||||
Other comprehensive earnings (loss), net of tax | 10,336 | (702) | 10,529 | 509 | 10,336 | |||||||
Cash dividends paid | (8,808) | (8,808) | ||||||||||
Sales of treasury stock | (662) | $ 4,046 | 3,384 | |||||||||
Sales of treasury stock, shares | 107,000 | |||||||||||
Stock-based compensation | 10,851 | 10,851 | ||||||||||
Purchases and transfers of stock by/to deferred compensation plan | 591 | $ (591) | ||||||||||
Purchases and transfer of stock by/to deferred compensation plan, shares | (8,000) | |||||||||||
Distribution of stock from deferred compensation plan | (7) | $ 7 | ||||||||||
Distribution of stock from deferred compensation plan, shares | 1,000 | |||||||||||
Balances at Dec. 31, 2018 | $ 106 | $ 195,894 | (64,648) | (40,538) | $ (10,413) | $ (13,697) | $ 9,015 | 2,034,877 | $ (535,362) | $ (9,015) | $ 1,630,867 | |
Balance, Preferred Stock, shares at Dec. 31, 2018 | 0 | 0 | ||||||||||
Balance, Common Stock, shares at Dec. 31, 2018 | 72,960,000 | 72,960,000 | ||||||||||
Balance, Treasury Stock, shares at Dec. 31, 2018 | (11,096,000) | (11,096,000) | ||||||||||
Balance, Treasury stock held for deferred compensation, Shares at Dec. 31, 2018 | (209,000) | (209,000) | ||||||||||
Cumulative effect from adoption | ASC 606 [Member] | $ (42) | $ (42) | 28,927 | $ 28,885 | ||||||||
Cumulative effect from adoption | Accounting Standards Update 2016-16 [Member] | $ (1,005) | $ (1,005) |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Consolidated Statements of Stockholders' Equity | ||
Cash dividends per share | $ 0.1425 | $ 0.1250 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation | |
Basis of Presentation | Note 1. Basis of presentation The Condensed Consolidated Financial Statements of Woodward, Inc. (“Woodward” or the “Company”) as of December 31, 2018 and for the three-months ended December 31, 2018 and December 31, 2017, included herein, have not been audited by an independent registered public accounting firm. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that, in the opinion of management, are necessary to present fairly Woodward’s financial position as of December 31, 2018, and the statements of earnings, comprehensive earnings, cash flows, and changes in stockholders’ equity for the periods presented herein. The results of operations for the three-months ended December 31, 2018 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year. Dollar and share amounts contained in these Condensed Consolidated Financial Statements are in thousands, except per share amounts. The Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in Woodward’s most recent Annual Report on Form 10-K filed with the SEC and other financial information filed with the SEC. Management is required to use estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported revenues and expenses recognized during the reporting period, and certain financial statement disclosures, in the preparation of the Condensed Consolidated Financial Statements included herein. Significant estimates in these Condensed Consolidated Financial Statements include allowances for uncollectible amounts, net realizable value of inventories, variable consideration including customer rebates earned and payable and early payment discounts, warranty reserves, useful lives of property and identifiable intangible assets, the evaluation of impairments of property, the provision for income tax and related valuation reserves, the valuation of assets and liabilities acquired in business combinations, the valuation of derivative instruments, assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans, the valuation of stock compensation instruments granted to employees , board members and any other eligible recipients , estimates of total lifetime sales used in the recognition of revenue of deferred material rights and balance sheet classification of the related contract liability, estimates of total sales contract costs when recognizing revenue under the cost-to-cost method and contingencies. Actual results could vary from Woodward’s estimates. In the September 30, 2018 Balance Sheet, “Accounts receivable” has increased by $183 and “Other current assets” has decreased by $183 , reflecting the reclassification of current unbilled receivables to “Accounts receivable” in order to conform to the current year presentation. |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Dec. 31, 2018 | |
New Accounting Standards | |
New Accounting Standards | Note 2. New accounting standards From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the ASC are communicated through issuance of an Accounting Standards Update (“ASU”). In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans - General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plan.” ASU 2018-14 amends ASC 715 to add, remove, and modify disclosure requirements related to defined benefit pension and other postretirement plans. The ASU’s changes to disclosures aim to improve the effectiveness of ASC 715’s disclosure requirements under the FASB’s disclosure framework project. ASU 2018-14 is effective for public entities for fiscal years beginning after December 15, 2020 (fiscal year 2022 for Woodward). ASU 2018-14 does not impact the interim disclosure requirements of ASC 715. The amendments in ASU 2018-14 should be applied on a retrospective basis to all periods presented. Early adoption is permitted. Woodward expects to adopt the new and modified disclosures requirements of this new guidance in fiscal year 2022. In February 2018, the FASB issued ASU 2018-02, “Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the enactment of tax reform under H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (also known as “The Tax Cuts and Jobs Act”), and provides guidance on the disclosure requirements regarding the stranded tax effects. The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018 (fiscal year 2020 for Woodward), and interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2018-02 may be applied retrospectively in the period of adoption to all periods in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized or may be applied as of the beginning of the period of adoption. Woodward is currently assessing the impact of the adoption of the new guidance and has not yet elected the method of adoption it will apply. Woodward expects to adopt the new guidance under ASU 2018-02 in fiscal year 2020. Upon adoption, if Woodward elects to reclassify under ASU 2018-02, a portion of accumulated other comprehensive earnings would be reclassified to retained earnings. In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU 2017-07 requires that the service cost component of net periodic benefit costs from defined benefit and other postretirement benefit plans be included in the same statement of earnings captions as other compensation costs arising from services rendered by the covered employees during the period. The other components of net benefit cost are presented in the statement of earnings separately from service costs. ASU 2017-07 is effective for fiscal years beginning after December 31, 2017 (fiscal year 2019 for Woodward). Following adoption, only service costs will be eligible for capitalization into manufactured inventories, which should reduce diversity in practice. The amendments of ASU 2017-07 must be applied retrospectively for the presentation of the service cost component and the other components of net periodic benefit costs from defined benefit and other postretirement benefit plans in the statement of earnings and prospectively, on and after the effective date, for the capitalization of the service cost component into manufactured inventories. Woodward adopted the new guidance effective October 1, 2018 and concluded it had no impact on net earnings. As a result of the adoption of ASU 2017-07, only the service component of net periodic benefit costs from defined benefit and other postretirement benefit plans are included in cost of goods sold and selling, general and administrative expenses. All other net periodic benefit costs, other than interest cost, are included on other expense (income), net. The interest cost component of net periodic benefit costs is included in interest expense as Woodward believes it is more similar to the elements within interest expense than other expense (income), net, which combines several elements that are heterogeneous (see Note 17, Other (income) expense, net .), thus improving consistency for users of the financial statements. The following table shows the impact of retrospectively applying this guidance to the Condensed Consolidated Statement of Earnings for the three-months ended December 31, 2017. Three-Months Ended December 31, 2017 As previously reported Adjustment As recast Net sales $ 470,148 $ - $ 470,148 Costs and expenses: Cost of goods sold 346,784 843 347,627 Selling, general, and administrative expenses 46,276 183 46,459 Research and development costs 34,786 - 34,786 Interest expense 6,750 2,122 8,872 Interest income (363) - (363) Other expense (income), net (1,572) (3,148) (4,720) Total costs and expenses 432,661 - 432,661 Earnings before income taxes 37,487 - 37,487 Income tax expense 19,227 - 19,227 Net earnings $ 18,260 $ - $ 18,260 In October 2016, the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory.” ASU 2016-16 eliminates the current U.S. GAAP exception deferring the tax effects of intercompany asset transfers (other than inventory) until the transferred asset is sold to a third party or otherwise recovered through use. After adoption of ASU 2016-16, Woodward will recognize the tax consequences of intercompany asset transfers in the buyer’s and seller’s tax jurisdictions when the transfer occurs, even though the pre-tax effects of these transactions are eliminated in consolidation. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017 (fiscal year 2019 for Woodward), including interim periods within the year of adoption. Woodward adopted the new guidance on October 1, 2018. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. The cumulative impact of the adoption of ASU 2016-16 of $1,005 was recognized at the date of adoption as a decrease to both retained earnings and other current assets at the Condensed Consolidated Balance Sheet. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 (fiscal year 2021 for Woodward), including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018 (fiscal year 2020 for Woodward), including interim periods within those fiscal years. Woodward expects to adopt the new guidance in fiscal year 2021. Woodward does not expect the application of the CECL impairment model to have a significant impact on Woodward’s allowance for uncollectible amounts for accounts receivable and notes receivable from municipalities. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The purpose of ASU 2016-02 is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In addition, ASU 2016-02 modifies the definition of a lease to clarify that an arrangement contains a lease when such arrangement conveys the right to control the use of an identified asset. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (fiscal year 2020 for Woodward), including interim periods within the year of adoption. Originally under ASU 2016-02, an organization was required upon adoption to recognize and measure leases beginning in the earliest period presented using a modified retrospective approach and restate the financial statements for all periods presented. In July 2018, the FASB issued ASU 2018-11, which amends ASU 2016-02 to provide organizations with an additional (and optional) transition method whereby it may elect to recognize and measure leases by applying the cumulative impact of adopting ASU 2016-02 to the opening retained earnings balance in the period of adoption, thereby removing the requirement that the financial statements of prior periods be restated. Although early adoption is permitted, Woodward expects to adopt the new guidance in fiscal year 2020. Woodward expects that it will elect to not restate fiscal years 2018 and 2019 and will recognize the cumulative impact of adopting the standard in Woodward’s opening retained earnings for fiscal year 2020. Woodward is currently assessing the impact this guidance may have on its Condensed Consolidated Financial Statements, including which of its existing lease arrangements will be impacted by the new guidance and whether other arrangements not currently classified as leases may become subject to the guidance of ASU 2016-02, and the possible impacts to embedded leases within existing service arrangements not classified as leases under the previous guidance . Rent expense for all operating leases in fiscal year 2018, none of which was recognized on the balance sheet, was $8,348 . As of September 30, 2018, future minimum rental payments required under operating leases, none of which were recognized on the balance sheet, were $26,020 . Woodward expects to recognize a higher level of lease commitments after the new guidance is adopted. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” and has subsequently issued several supplemental and/or clarifying ASUs (collectively “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. ASC 606 outlines a five-step model, under which Woodward will recognize revenue as performance obligations within a customer contract are satisfied. ASC 606 is intended to provide more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Woodward adopted ASC 606 on October 1, 2018 using the modified retrospective transition method with the cumulative effect of initial adoption recognized at the date of initial application. See Note 3, Revenue , for disclosures and financial statement impacts related to implementation and adoption of ASC 606. |
Revenue
Revenue | 3 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Revenue | Note 3. Revenue Adoption of ASC 606 Woodward adopted ASC 606 on October 1, 2018 and elected the modified retrospective transition method. The results for periods prior to fiscal year 2019 were not adjusted for the new standard and the cumulative effect of the change in accounting of $28,927 was recognized as a net increase to retained earnings at the date of adoption. Woodward has elected to apply the modified retrospective method only to contracts that were not completed as of October 1, 2018. As a practical expedient under ASC 606, Woodward elected to reflect the aggregate effect of all modifications that occurred before the beginning of fiscal year 2019 to contracts for which Woodward had not recognized all revenue as of October 1, 2018 as part of the adjustment to retained earnings at the date of adoption. Revenue Recognition Policy Revenue is recognized on contracts with Woodward’s customers for arrangements in which quantities and pricing are fixed and/or determinable and are generally based on customer purchase orders, often within the framework of a long-term supply arrangement with the customer. Woodward has determined that it is the principal in its sales transactions, as Woodward is primarily responsible for fulfilling the promised performance obligations , has discretion to establish the selling price , and generally assumes the inventory risk. A performance obligation is a promise in a contract with a customer to transfer a distinct product or service to the customer. Woodward recognizes revenue for performance obligations within a customer contract when control of the associated product or service is transferred to the customer. Some of Woodward’s contracts with customers contain a single performance obligation, while other contracts contain multiple performance obligations. Each product within a contract generally represents a separate performance obligation as Woodward does not provide significant installation and integration services, the products do not customize each other, and the products can function independently of each other. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the customer obtains control of the associated product or service. When there are multiple performance obligations within a contract, Woodward generally uses the observable standalone sales price for each distinct product or service within the contract to allocate the transaction price to the distinct products or services. In instances when a standalone sales price for each product or service is not observable within the contract, Woodward allocates the transaction price to each performance obligation using an estimate of the standalone selling price for each product or service, which is generally based on incurred costs plus a reasonable margin, for each distinct product or service in the contract. When determining the transaction price of each contract, Woodward considers contractual consideration payable by the customer and variable consideration that may affect the total transaction price. Variable consideration, consisting of early payment discounts, rebates and other sources of price variability, are included in the estimated transaction price based on both customer-specific information as well as historical experience. Woodward’s contracts with customers generally do not include a financing component. Woodward regularly reviews its estimates of variable consideration on the transaction price and recognizes changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract. In the three-months ended December 31, 2018, Woodward did no t recognize a significant amount of revenue due to changes in transaction price from performance obligations that were satisfied, or partially satisfied, in prior periods. Customers sometimes trade in used products in exchange for new or refurbished products. In addition, Woodward’s customers sometimes provide inventory to Woodward which will be integrated into final products sold to those customers. Woodward obtains control of these exchanged products and customer provided inventory, and therefore , both are forms of noncash consideration. Noncash consideration paid by customers on overall sales transactions is additive to the transaction price. Woodward’s net sales and cost of goods sold include the value of such noncash consideration for the same amount, with no resulting impact to earnings before income taxes. Upon receipt of such inventory, Woodward recognizes an inventory asset and a contract liability. For the three-months ended December 31, 2018, Woodward recognized revenue of $17,057 related to noncash consideration received from customers, of which $16,706 was recognized in the Aerospace segment and $351 was recognized in the Industrial segment. Sales of Products Woodward primarily generates revenue through the manufacture and sale of engineered aerospace and industrial products, including revenue derived from maintenance, repair and overhaul (“MRO”) performance obligations performed on products originally manufactured by Woodward and subsequently returned by original equipment manufacturer (“OEM”) or other end-user customers. The majority of Woodward’s costs incurred to satisfy MRO performance obligations are related to replacing and/or refurbishing component parts of the returned products to restore the units back to a condition generally comparable to that of the unit upon its initial sale to an OEM customer. Therefore, Woodward considers almost all of its revenue to be derived from product sales, including those related to MRO. Revenue from manufactured and MRO products represented 87% and 11% , respectively, of Woodward’s net sales for the three-months ended December 31, 2018. Many Woodward products include emb edded software or firmware that is critical to the performance of the product as designed. As the embedded software or firmware is essential to the functioning of the products sold it does not represent a distinct performance obligation separate from the related tangible product in which the software or firmware is embedded. Woodward does not generally sell or license software or firmware on a standalone basis. Software or firmware upgrades, if any, are generally paid for by the customer and treated as separate performance obligations. The products Woodward sells generally are not subject to risk of return, refund or other similar obligations. Woodward’s sales include product warranty arrangements with customers which are generally assurance-type warranties, rather than service-type warranties. Accordingly, Woodward accounts for warranty related promises to its customers as a guarantee for which a warranty liability is recorded when the related product or service is sold, rather than as a distinct performance obligation accounted for separately from the sale of the underlying product or service. Warranty liabilities are accrued for based on specifically identified warranty issues that are probable to result in future costs, or on a non-specific basis whenever past experience indicates that a normal and predictable pattern exists. Revenue from shipping and handling activities charged to customers are included in net sales when invoiced to the customer and the related costs are included in cost of goods sold. As a practical expedient under ASC 606, Woodward has elected to account for the costs of shipping and handling activities as a cost to fulfill a contract and not a promised product or service. Shi pping and handling costs relating to the sale of products recognized at a point in time are recognized as incurred. Shi pping and handling costs relating to the sale of products or services recognized over time are accrued and recognized during the earnings process. Material Rights and Costs to Fulfill a Contract Customers sometimes pay consideration to Woodward for product engineering and development activities that do not result in the immediate transfer of distinct products or services to the customer. There is an implicit assumption that without the customer making such advance payments to Woodward, Woodward’s future sales of products or services to the customer would be at a higher selling price; therefore, such payments create a “material right” to the customer that effectively gives the customer an option to acquire future products or services, at a discount, that are dependent upon the product engineering and development. Material rights are recorded as contract liabilities and will be recognized when control of the related products or services are transferred to the customer. Woodward capitalizes costs of product engineering and development identified as material rights up to the amount of customer funding as costs to fulfill a contract because the costs incurred up to the amount of the customer funding commitment are recoverable. Due to the uncertainty of the product success and/or demand, fulfillment costs in excess of the customer funding are expensed as incurred. Woodward recognizes the deferred material rights as revenue based on a percentage of actual sales to total estimated lifetime sales of the related developed products as the customers exercise their option to acquire additional products or services at a discount. Woodward amortizes the capitalized costs to fulfill a contract as cost of goods sold proportionally to the recognition of the associated deferred material rights. Estimated total lifetime sales are reviewed at least annually and more frequently when circumstances warrant a modification to the previous estimate. For the three-months ended December 31, 2018 Woodward recognized an increase in revenue of $620 and cost of goods sold of $182 related to changes in estimated total lifetime sales. As of December 31, 2018, other assets included $92,091 of capitalized costs to fulfill contracts with customers. Other than amounts related to changes in estimate, during the three-months ended December 31, 2018, Woodward amortized no capitalized costs to fulfill contracts with customers to cost of goods sold. In 2016, Woodward contributed certain contractual rights and intellectual property to a joint venture with the General Electric Company (“GE”). In exchange for a 50% ownership interest in the joint venture and future rights to purchase products from the joint venture at favorable pricing, GE agreed to pay total consideration of $323,410 to Woodward. Under previous accounting guidance, Woodward concluded that the formation of the joint venture was not the culmination of an earnings event and deferred recognition of the consideration paid until earned in the future. Under ASC 606, Woodward also concluded that the formation of the joint venture was not a culmination of an earnings event and has further concluded that the consideration paid or receivable from GE represents a material right. Accordingly, under both ASC 606 and the previous standard, Woodward concluded it was appropriate to defer the consideration received as a liability and recognized it as an increase to net sales in proportion to revenue realized on sales of applicable fuel systems within the scope of the joint venture. Recognition to net sales in a particular period is determined as a percentage of total revenue expected to be realized by Woodward over the estimated remaining lives of the underlying commercial aircraft engine programs assigned to the joint venture. As of the adoption of ASC 606, Woodward has classified this as a contract liability with both a current and noncurrent portion. For further discussion of Woodward’s joint venture, see Note 6, Joint venture . Woodward does not record incremental costs of obtaining a contract , as Woodward does not pay sales commissions or incur other incremental costs related to contracts with Woodward’s customers for arrangements in which quantities and pricing are fixed and/or determinable . Point in time and over time revenue recognition Approximately one- half of Woodward’s customer contracts are recognized at the point in time when control of the products transfers to the customer, generally upon shipment of products, consistent with Woodward’s historical revenue recognition model. The remaining portion of Woodward’s revenues from sales of products and services to customers are recognized over time, rather than at a point in time, due primarily to the terms of certain customer contracts and/or the type of performance obligation being satisfied , as described below. The following table reflects the amount of revenue recognized as point in time or over time for the three-months ended December 31, 2018: Three-Months Ended December 31, 2018 Aerospace Industrial Consolidated Point in time $ 164,014 $ 172,162 $ 336,176 Over time 228,873 87,762 316,635 Total net sales $ 392,887 $ 259,924 $ 652,811 Point in time Control of the products generally transfers to the customer at a point in time, as the customer does not control the products as they are produced. Woodward exercises judgment and considers the timing of right of payment, transfer of the risk and rewards, transfers of title, transfer of physical possession, and customer acceptance when determining when control of the product transfers to the customer, generally upon shipment of products, consistent with Woodward’s historical revenue recognition model. Over time Performance obligations are satisfied and revenue is recognized over time if : (i) the customer receives the benefits as Woodward performs work, if the customer controls the asset as it is being enhanced, or if the product being produced for the customer has no alternative use to Woodward ; and (ii) Woodward has an enforceable right to payment with a profit. For products being produced for the customer that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and where the products are substantially the same and have the same pattern of transfer to the customer, revenue is recognized as a series of distinct products. As Woodward satisfies MRO performance obligations, revenue is recognized over time , as the customer, rather than Woodward, controls the asset being enhanced. When services are provided, revenue from those services is recognized over time because control is transferred continuously to customers as Woodward performs the work. As a practical expedient, revenue for services that are short-term in nature are recognized using an output method as the customer is invoiced , as the invoiced amount corresponds directly to Woodward’s performance to date on the arrangement. For services that are not short-term in nature, MRO, and sales of products that have no alternative use to Woodward and an enforceable right to payment with a profit, Woodward uses an actual cost input measure to determine the extent of progress towards completion of the performance obligation. For these revenue streams, revenue is recognized over time as work is performed based on the relationship between actual costs incurred to-date for each contract and the total estimated costs for such contract at completion of the performance obligation (the cost-to-cost method). Woodward has concluded that this measure of progress best depicts the transfer of assets to the customer, because incurred costs are integral to Woodward’s completion of the performance obligation under the specific customer contract and correlate directly to the transfer of control to the customer. Contract costs include labor, material and overhead. Contract cost estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. As a significant change in one or more of these estimates could affect the profitability of its contracts, Woodward reviews and updates its estimates regularly upon receipt of new contracts with customers. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs will be revised. Such revisions to costs and revenue are recognized in the period in which the revisions are determined as a cumulative catch-up adjustment. The impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, Woodward recognizes provisions for estimated losses on uncompleted contracts in the period in which such losses are determined. For the three-months ended December 31, 2018, adjustments to revenue related to changes in estimates were immaterial. Occasionally Woodward sells maintenance or service arrangements, extended warranties, or other stand ready services. Woodward recognizes revenue from such arrangements as a series of performance obligations over the time period in which the services are available to the customer. Contract assets Customer receivables include amounts billed and currently due from customers as well as unbilled amounts (contract assets) and are included in “Accounts receivable” in Woodward’s Condensed Consolidated Balance Sheets. Amounts are billed in accordance with contractual terms, which are generally tied to shipment of the products to the customer, or as work progresses in accordance with contractual terms. Billed accounts receivable are typically due within 60 days. Consistent with common business practice in China, Woodward’s Chinese subsidiaries accept bankers’ acceptan ce notes from Chinese customers in settlement of certain customer billed accounts receivable. Bankers’ acceptance notes are financial instruments issued by Chinese financial institutions as part of financing arrangements between the financial institution and a customer of the financial institution. Bankers’ acceptance notes represent a commitment by the issuing financial institution to pay a certain amount of money at a specified future maturity date to the legal owner of the bankers’ acceptance note as of the maturity date. The maturity date of bankers’ acceptance notes varies, but it is Woodward’s policy to only accept bankers’ acceptance notes with maturity dates no more than 180 days from the date of Woodward’s receipt of such draft. Woodward has elected to adopt the practical expedient to not adjust the promised amounts of consideration for the effects of a significant financing component at contract inception as the financing component associated with accepting bankers’ acceptance notes has a duration of less than one year. Woodward’s contracts with customers generally have no other financing components. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when contract provisions require revenue to be recognized over time rather than at a point in time. Unbilled amounts primarily relate to performance obligations satisfied over time when the cost-to-cost method is utilized and the revenue recognized exceeds the amount billed to the customer as there is not yet a right to payment in accordance with contractual terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Accounts receivable consisted of the following: December 31, 2018 September 30, 2018 Billed receivables Trade accounts receivable $ 332,792 $ 403,590 Other (Chinese financial institutions) 40,542 23,191 Less: Allowance for uncollectible amounts (3,995) (3,938) Net billed receivables 369,339 422,843 Current unbilled receivables (contract assets), net 120,190 9,160 Total accounts receivable, net $ 489,529 $ 432,003 As of the October 1, 2018 adoption of ASC 606, Woodward recognized unbilled receivables of $104,907 . The remaining change in unbilled receivables was primarily driven by revenue recognized in excess of billings in Woodward’s Aerospace segment. In addition, as of December 31, 2018 “Other assets” at the Condensed Consolidated Balance Sheets includes $444 of unbilled receivables not expected to be invoiced and collected within a period of twelve months. As of September 30, 2018, there were no unbilled receivables not expected to be invoiced and collected within a period of twelve months. Customer billed receivables are recorded at face amounts , less an allowance for doubtful accounts. In establishing the amount of the allowance related to the credit risk of accounts receivable, customer-specific information is considered related to delinquent accounts, past loss experience, bankruptcy filings, deterioration in the customer’s operating results or financial position, and current economic conditions. Bad debt losses are deducted from the allowance, and the related accounts receivable balances are written off when the receivables are deemed uncollectible. Recoveries of accounts receivable previously written off are recognized when received. In the three-months ended December 31, 2018, receivables written off were immaterial. An allowance associated with anticipated other adjustments to the selling price or cash discounts is also established and is included in the allowance for uncollectible amounts. Changes to this allowance are recorded as increases or decreases to net sales as adjustments to the transaction price related to variable consideration. In establishing this amount, both customer -specific information and historical experience are considered. Unbilled receivables are stated net of adjustments for credit risk and the anticipated impacts of variable consideration on the transaction price, as applicable. Billed and unbilled accounts receivable from the U.S. Government were less than 10% of total billed and unbilled accounts receivable at December 31, 2018. Contract liabilities Advance payments and billings in excess of revenue recognized represent contract liabilities and are recorded as deferred revenues when customers remit contractual cash payments in advance of Woodward satisfying performance obligations under contractual arrangements, including those with performance obligations satisfied over time. Woodward generally receives advance payments from customers related to maintenance or service arrangements, extended warranties, or other stand ready services, which it recognizes over the performance period. Contract liabilities are derecognized when revenue is recognized and the performance obligation is satisfied. Advance payments and billings in excess of revenue recognized are included in deferred revenue, which is classified as current or noncurrent based on the timing of when Woodward expects to recognize revenue. The current portion is included in “Accrued liabilities” and the noncurrent portion is included in “Other liabilities” at Woodward’s Condensed Consolidated Balance Sheets. Contract liabilities consisted of the following: December 31, 2018 September 30, 2018 Current Noncurrent Current Noncurrent Deferred revenue from material rights from GE joint venture formation $ 6,988 $ 232,897 $ 7,087 $ 235,300 Deferred revenue advance invoicing and/or prepayments from customers 2,866 - 2,572 - Liability related to customer supplied inventory 17,283 - - - Deferred revenue from material rights related to engineering and development funding 1,053 86,333 - - Net contract liabilities $ 28,190 $ 319,230 $ 9,659 $ 235,300 As of the October 1, 2018 adoption of ASC 606, Woodward recognized current liabilities for the noncash consideration provided to Woodward in the form of customer supplied inventory of $13,141 and current and noncurrent liabilities for deferred revenue from material rights related to engineering and development funding of $664 and $79,347 , respectively. All other changes in contract liability balances were due to normal operating activities. Woodward recognized revenue of $9,760 in the three-months ended December 31, 2018 from contract liabilities balances recorded as of October 1, 2018. 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, 2018 was $1,630,741, the majority of which relate to Woodward’s Aerospace segment. Woodward expects to recognize almost all of these remaining performance obligations within two years after December 31, 2018 . Remaining performance obligations related to material rights that have not yet been recognized in revenue as of December 31, 2018 was $410,355 , of which $6,585 is expected to be recognized in the remainder of fiscal year 2019 , $9,800 is expected to be recognized in 2020 , 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 . Financial statement impact of the adoption of ASC 606 The following schedule quantifies the impact of adopting ASC 606 on the Condensed Consolidated Balance Sheet as of October 1, 2018. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of ASC 606: September 30, 2018 as reported Effect of ASC 606 October 1, 2018 as adjusted ASSETS Current assets: Cash and cash equivalents $ 83,594 $ - $ 83,594 Accounts receivable, net (1)(2) 432,003 104,907 536,910 Inventories (1)(2) 549,596 (55,002) 494,594 Income taxes receivable (5) 6,397 (959) 5,438 Other current assets 43,207 (154) 43,053 Total current assets 1,114,797 48,792 1,163,589 Property, plant and equipment, net 1,060,005 - 1,060,005 Goodwill 813,250 - 813,250 Intangible assets, net (4) 700,883 (2,519) 698,364 Deferred income tax assets (5) 16,570 (975) 15,595 Other assets (1)(2)(3) 85,144 85,865 171,009 Total assets $ 3,790,649 $ 131,163 $ 3,921,812 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ 153,635 $ - $ 153,635 Accounts payable 226,285 - 226,285 Income taxes payable (5) 16,745 4,141 20,886 Accrued liabilities (2)(3) 194,513 15,672 210,185 Total current liabilities 591,178 19,813 610,991 Long-term debt, less current portion 1,092,397 - 1,092,397 Deferred income tax liabilities (5) 170,915 3,833 174,748 Other liabilities (3) 398,055 78,631 476,686 Total liabilities 2,252,545 102,277 2,354,822 Stockholders’ equity: Preferred stock - - - Common stock 106 - 106 Additional paid-in capital 185,705 - 185,705 Accumulated other comprehensive losses (74,942) (41) (74,983) Deferred compensation 8,431 - 8,431 Retained earnings 1,966,643 28,927 1,995,570 2,085,943 28,886 2,114,829 Treasury stock at cost (539,408) - (539,408) Treasury stock held for deferred compensation (8,431) - (8,431) Total stockholders’ equity 1,538,104 28,886 1,566,990 Tot al liabilities and stockholders’ equity $ 3,790,649 $ 131,163 $ 3,921,812 (1) The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward’s businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in “Accounts receivable” and noncurrent unbilled receivables in “Other assets.” The change in the tim ing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs , which are reflected as a reduction to inventory. (2) The value of noncash consideration in the form of exchanged products and other customer provided inventory is reflected in unbilled receivables included in “Accounts receivable,” “Other assets,” and “Inventories,” and in contract liabilities, which are included in “Accrued liabilities.” (3) Woodward recorded customer funding of product engineering and development identified as material rights as current and noncurrent deferred revenue contract liabilities included in “Accrued liabilities” and “Other liabilities.” The related customer funded product engineering and development costs were capitalized as costs to fulfill a contract, to the extent of the contractually committed customer funded payments, and are recorded as “Other assets.” (4) The net book value of the backlog and customer relationships and contracts intangible assets was adjusted concurrent with the change in the timing of the associated revenue, resulting in a reduction in the net book value of these assets as of the date of adoption. (5) The value of tax assets and tax liabilities was impacted by the change in timing of the recognition of assets and liabilities within tax jurisdictions. The following schedule quantifies the impact of adopting ASC 606 on the Condensed Consolidated Statement of Earnings for the three-months ended December 31, 2018. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of ASC 606. Three-Months Ended December 31, 2018, under previous standard Effect of ASC 606 Three-Months Ended December 31, 2018, as reported Net sales $ 632,641 $ 20,170 $ 652,811 Costs and expenses: Cost of goods sold 468,690 23,484 492,174 Selling, general, and administrative expenses 52,026 (99) 51,927 Research and development costs 38,714 153 38,867 Interest expense 11,878 - 11,878 Interest income (371) - (371) Other expense (income), net (3,179) - (3,179) Total costs and expenses 567,758 23,538 591,296 Earnings before income taxes 64,883 (3,368) 61,515 Income tax expense 13,083 (688) 12,395 Net earnings $ 51,800 $ (2,680) $ 49,120 Earnings per share Basic earnings per share $ 0.84 $ (0.04) $ 0.79 Diluted earnings per share $ 0.81 $ (0.04) $ 0.77 Weighted Average Common Shares Outstanding (Note 4): Basic 61,818 61,818 Diluted 64,059 64,059 The adoption of ASC 606 resulted in an increase to net sales and cost of goods sold primarily due to the recognition of noncash consideration in the form of customer supplied inventory and the accelerated recognition of revenue and associated cost of goods sold for over time contracts, which would have been recognized at a point in time under the previous standard. The increases were offset by decreases in revenue and cost of goods sold related to the deferral of amounts due from customers recognized as material rights and over time contracts recognized as of the date of adoption, both of which would otherwise have been recognized as revenue during the period under the previous standard. The following schedule quantifies the impact of adopting ASC 606 on the Condensed Consolidated Balance Sheet as of December 31, 2018. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of ASC 606. December 31, 2018, under previous standard Effect of ASC 606 December 31, 2018, as reported ASSETS Current assets: Cash and cash equivalents $ 71,634 $ - $ 71,634 Accounts receivable, net 374,493 115,036 489,529 Inventories 589,207 (64,707) 524,500 Income taxes receivable 4,677 (908) 3,769 Other current assets 37,181 (177) 37,004 Total current assets 1,077,192 49,244 1,126,436 Property, plant and equipment, net 1,060,556 - 1,060,556 Goodwill 809,480 - 809,480 Intangible assets, net 675,653 (2,367) 673,286 Deferred income tax assets 16,161 (989) 15,172 Other assets 82,806 92,800 175,606 Total assets $ 3,721,848 $ 138,688 $ 3,860,536 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 160,000 $ - $ 160,000 Accounts payable 224 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share | |
Earnings Per Share | Note 4. Earnings per share Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share reflects the weighted-average number of shares outstanding after consideration of the dilutive effect of stock options and restricted stock. The following is a reconciliation of net earnings to basic earnings per share and diluted earnings per share: Three-Months Ended December 31, 2018 2017 Numerator: Net earnings $ 49,120 $ 18,260 Denominator: Basic shares outstanding 61,818 61,246 Dilutive effect of stock options and restricted stock 2,241 2,463 Diluted shares outstanding 64,059 63,709 Income per common share: Basic earnings per share $ 0.79 $ 0.30 Diluted earnings per share $ 0.77 $ 0.29 The following stock option grants were outstanding during the three-months ended December 31, 2018 and 2017, but were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. Three-Months Ended December 31, 2018 2017 Options 1,426 754 Weighted-average option price $ 79.22 $ 78.75 The weighted-average shares of common stock outstanding for basic and diluted earnings per share included the weighted-average treasury stock shares held for deferred compensation obligations of the following: Three-Months Ended December 31, 2018 2017 Weighted-average treasury stock shares held for deferred compensation obligations 206 193 |
Business Acquisition
Business Acquisition | 3 Months Ended |
Dec. 31, 2018 | |
Business Acquisition | |
Business Acquisition | Note 5. Business acquisition In fiscal year 2018, the Company, and its wholly-owned subsidiary, Woodward Aken GmbH (collectively, the “Purchasers”), entered into a Share Purchase Agreement (the “L’Orange Agreement”) with MTU Friedrichshafen GmbH (“MTU”) and MTU America Inc. (together with MTU, the “Sellers”), both of which were subsidiaries of Rolls-Royce PLC (“Rolls-Royce”). Pursuant to the L’Orange Agreement, the Purchasers agreed to acquire all of the outstanding shares of stock of L’Orange GmbH, together with its wholly-owned subsidiaries in China and Germany, as well as all of the outstanding equity interests of its affiliate, Fluid Mechanics LLC, and their related operations (collectively, “L’Orange”), for total consideration (including cash consideration and the assumption of certain liabilities) of €700,000 , or approximately $811,000 based on the foreign currency exchange rate as of the date Woodward executed cross currency swaps in connection with the financing of the transaction as described in Note 8, Derivative instruments and hedging activities . The total consideration to be paid is subject to customary post-closing adjustments. The transactions contemplated by the L’Orange Agreement were completed on June 1, 2018 (the “Closing”) and L’Orange became a subsidiary of the Company. Following the Closing, L’Orange was renamed “ Woodward L’Orange ” . Woodward L’Orange is a supplier of fuel injection systems for industrial diesel, heavy fuel oil and dual-fuel engines. Woodward L’Orange supplies fuel injection technology for engines that power a wide range of industrial applications including marine power and propulsion systems, special-application off road vehicles, locomotives, oil and gas processing, and power generation. Woodward L’Orange serves many large specialist diesel engine manufacturers, including Rolls-Royce Power Systems’ subsidiaries, MTU and Bergen Engines, and other low to high speed engine builders. Woodward L’Orange has been integrated into the Company’s Industrial segment. In connection with the Closing, MTU and a subsidiary of Rolls-Royce, and Woodward L’Orange, entered into a long-term supply agreement, dated June 1, 2018 (the “LTSA”). Pursuant to the terms of the LTSA, Woodward L’Orange will continue to supply to MTU and its affiliates within Rolls-Royce certain liquid fuel injection systems, injectors, pumps and other associated parts and components for industrial diesel, heavy fuel oil and dual-fuel engines in a manner consistent with the supply of such products prior to the transaction. The LTSA has an initial term that extends through December 31, 2032. During the term of the LTSA, MTU will continue to purchase certain of these products exclusively from Woodward L’Orange, subject to certain limitations specified therein, at pricing negotiated at arms-length. ASC Topic 805, “Business Combinations” (“ASC 805”), provides a framework to account for acquisition transactions under U.S. GAAP. The preliminary purchase price of L’Orange, prepared consistent with the required ASC 805 framework, is allocated as follows: Cash paid to Sellers $ 780,401 Less acquired cash and restricted cash (9,286) Total purchase price $ 771,115 The cash consideration was financed through the use of cash on hand, the issuance of an aggregate principal amount of $400,000 of senior unsecured notes in a series of private placement transactions and $167,420 borrowed under Woodward’s existing revolving credit agreement (see Note 14, Credit Facilities, short-term borrowings and long-term debt ). In connection with these borrowings, the Company entered into cross currency swap transactions, which effectively lowered the interest rate on each tranche of the senior unsecured notes and the borrowings under the existing revolving credit agreement (see Note 8, Derivative instruments and hedging activities ). The allocation of the purchase price to the assets acquired and liabilities assumed was accounted for under the purchase method of accounting in accordance with ASC 805. Assets acquired and liabilities assumed in the transaction were recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred. Woodward’s preliminary allocation was based on an evaluation of the appropriate fair values and represents management’s best estimate based on available data. Due to the timing of the transaction, Woodward is in the process of finalizing valuations of current assets, property, plant and equipment (including estimated useful lives), goodwill, intangible assets (including estimated useful lives), and all current and noncurrent liabilities other than the valuation of the pension obligation, the valuation of which is complete. Additionally, Woodward is finalizing the projected combined future tax rate to be applied to the valuation of assets, which could impact the valuation of goodwill and intangible assets. The final determination of the fair value of assets and liabilities will be completed within the one year measurement period as allowed by ASC 805. The following table, which is preliminary and subject to change, summarizes the estimated fair values of the assets acquired and liabilities assumed at the Closing. Any potential adjustments will be made retroactively and could be material to the preliminary values presented below. Accounts receivable $ 26,538 Inventories (1) 72,392 Other current assets 1,385 Property, plant, and equipment 89,772 Goodwill 257,447 Intangible assets 573,427 Total assets acquired 1,020,961 Other current liabilities 41,997 Deferred income tax liabilities 166,927 Other noncurrent liabilities 40,922 Total liabilities assumed 249,846 Net assets acquired $ 771,115 (1) Inventories include a $16,324 adjustment to state work in progress and finished goods inventories at their fair value as of the acquisition date. The entire inventory fair value adjustment was recognized as a noncash increase to cost of goods sold ratably over the estimated inventory turnover period during the year ending September 30, 2018 . In connection with the acquisition of L’Orange, Woodward assumed the defined benefit pension obligations of the L’Orange defined benefit pension plans (the “Woodward L’Orange Pension Plans”). Woodward’s assumption of the liability associated with the Woodward L’Orange Pension Plans was part of the total consideration paid by Woodward to acquire L’Orange and thus reduced Woodward’s cash payment for the transaction. As of June 1, 2018, the total liability recognized by the Company associated with the Woodward L’Orange Pension Plans was $39,257 , of which $1,143 was considered current. As summary of the intangible assets acquired, weighted-average useful lives, and amortization methods follows: Estimated Amounts Weighted-Average Useful Life Amortization Method Intangible assets with finite lives: Customer relationships and contracts $ 388,705 22 years Straight-line Process technology 74,260 22 years Straight-line Backlog 42,932 1 year Accelerated Other 232 3 years Straight-line Intangible asset with indefinite life: Trade name 67,298 Indefinite Not amortized Total $ 573,427 For the three-months ended December 31, 2018, Woodward recorded amortization expense associated with the acquired intangibles of $11,693 . Future amortization expense associated with the acquired intangibles as of December 31, 2018 is expected to be: Year Ending September 30: 2019 (remaining) $ 21,543 2020 19,627 2021 22,586 2022 22,535 2023 22,535 Thereafter 356,994 $ 465,820 The preliminary purchase price allocation resulted in the recognition of $257,447 of goodwill. Only the portion of goodwill which relates to the U.S. operations of Woodward L’Orange is expected to be deductible for tax purposes. The Company has included all of the goodwill in its Industrial segment. The goodwill represents the estimated value of potential expansion with new customers, the opportunity to further develop sales opportunities with new customers, other synergies including supply chain savings expected to be achieved through the integration of Woodward L’Orange with Woodward’s Industrial segment, and intangible assets that do not qualify for separate recognition, such as value of the assembled Woodward L’Orange workforce that is not included within the estimated value of the acquired backlog and customer relationship intangible assets. Pro forma results for Woodward giving effect to the L’Orange acquisition The following unaudited pro forma financial information presents the combined results of operations of Woodward and Woodward L’Orange as if the acquisition had been completed as of the beginning of the prior fiscal year, or October 1, 2016. The unaudited pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisition and related borrowings had taken place on October 1, 2016, nor are they indicative of future results. The unaudited pro forma financial information for the three-months ended December 31, 2018 includes Woodward’s results, including the post-acquisition results of Woodward L’Orange, since June 1, 2018, and the pre-acquisition results of L’Orange for that period. The unaudited pro forma financial information for the three-months ended December 31, 2017 combines Woodward’s results with the pre-acquisition results of L’Orange for that period. Prior to the L’Orange acquisition by Woodward, L’Orange was a wholly owned subsidiary of Rolls-Royce, and as such was not a standalone entity for financial reporting purposes. Accordingly, the historical operating results of L’Orange may not be indicative of the results that might have been achieved, historically or in the future, if L’Orange had been a standalone entity. The unaudited pro forma results for the three-months ended December 31, 2018 and December 31, 2017 follow: Three-Months Ended Three-Months Ended December 31, 2018 December 31, 2017 As reported Pro forma As reported Pro forma Net sales $ 652,811 $ 652,811 $ 470,148 $ 565,993 Net earnings 49,120 53,739 18,260 20,999 Earnings per share: Basic earnings per share $ 0.79 $ 0.87 $ 0.30 $ 0.34 Diluted earnings per share 0.77 0.84 0.29 0.33 The unaudited pro forma results for all periods presented include adjustments made to account for certain costs and transactions that would have been incurred had the acquisition been completed as of October 1, 2016, including amortization charges for acquired intangible assets, eliminations of intercompany transactions, adjustments for acquisition transaction costs, adjustments for depreciation expense for property, plant, and equipment, and adjustments to interest expense. These adjustments are net of any applicable tax impact and were included to arrive at the pro forma results above. The operating results of Woodward L’Orange have been included in Woodward’s operating results for the periods subsequent to the completion of the acquisition on June 1, 2018. Woodward L’Orange contributed net sales of $87,680 for the three-months ended December 31, 2018 and net income before income taxes of $10,602 for the three-months ended December 31, 2018 . Woodward incurred acquisition financing related costs of $3,799 for three-months ended December 31, 2018, which are included in “Interest expense” in the Condensed Consolidated Statements of Earnings. |
Joint Venture
Joint Venture | 3 Months Ended |
Dec. 31, 2018 | |
Joint Venture | |
Joint Venture | Note 6. Joint venture On January 4, 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. As part of the JV formation, Woodward contributed to the JV certain contractual rights and intellectual property applicable to the existing GE commercial aircraft engine programs within the scope of the JV. Woodward had no initial cost basis in the JV because Woodward had no cost basis in the contractual rights and intellectual property contributed to the JV. GE purchased from Woodward a 50% ownership interest in the JV for a $250,000 cash payment to Woodward. In addition, GE will pay contingent consideration to Woodward consisting of fifteen annual payments of $4,894 per year, which began on January 4, 2017, subject to certain claw-back conditions. Woodward records annual payments received as deferred income and includes them in Net cash provided by operating activities on the Condensed Consolidated Statement of Cash Flows . Neither Woodward nor GE contributed any tangible assets to the JV. Under previous accounting guidance, Woodward concluded that the formation of the JV was not the culmination of an earnings event and deferred recognition of the consideration paid until earned in the future. Under ASC 606, Woodward also concluded the formation of the JV was not a culmination of an earnings event and has further concluded that the consideration paid or receivable from GE represents a material right. Accordingly, under both ASC 606 and the previous standard, Woodward concluded it was appropriate to defer the consideration received as a liability and recognized it as an increase to net sales in proportion to revenue realized on sales of applicable fuel systems within the scope of the JV. Recognition to net sales in a particular period is determined as a percentage of total revenue expected to be realized by Woodward over the estimated remaining lives of the underlying commercial aircraft engine programs assigned to the JV. Unamortized deferred revenue from material rights in connection with the JV formation included accrued liabilities of $6,988 as of December 31, 2018 and $7,087 as of September 30, 2018, and other liabilities of $232,897 as of December 31, 2018 and $235,300 as of September 30, 2018. Amortization of the deferred income (material right) recognized as an increase to sales was $1,777 for the three-months ended December 31, 2018 and $1,053 for the three-months ended December 31, 2017. 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. Other income includes income of $1,465 for the three-months ended December 31, 2018 and income of $596 for the three-months ended December 31, 2017 related to Woodward’s equity interest in the earnings of the JV. During the three-months ended December 31, 2018, Woodward received a $4,500 cash distribution from the JV , which is included in Net cash provided by operating activities on the Condensed Consolidated Statement of Cash Flows. Woodward received no cash distributions from the JV during the three-months ended December 31, 2017. Woodward’s net investment in the JV, which is included in other assets, was $6,576 as of December 31, 2018 and $9,611 as of September 30, 2018. Woodward’s net sales include $12,833 for the three-months ended December 31, 2018 of sales to the JV, compared to $12,975 for the three-months ended December 31, 2017. Woodward recorded a reduction to sales of $9,182 for the three-months ended December 31, 2018 related to royalties paid to the JV by Woodward on sales by Woodward directly to third party aftermarket customers, compared to $5,408 for the three-months ended December 31, 2017. The Condensed Consolidated Balance Sheets include “Accounts receivable” of $6,916 at December 31, 2018, and $10,499 at September 30, 2018, related to amounts the JV owed Woodward, and include “Accounts payable” of $3,063 at December 31, 2018, and $2,944 at September 30, 2018, related to amounts Woodward owed the JV. Upon the October 1, 2018 adoption of ASC 606, Woodward recorded $57,529 of revenue recognized in prior periods for the JV’s engineering and development projects as an increase to contract liabilities in “Other liabilities” and $57,529 of costs recognized in prior periods as costs to fulfill a contract in “Other assets.” During the quarter ended December 31, 2018, Woodward recognized an additional $4,428 of contract liabilities in “Other liabilities” and $4,428 of additional costs to fulfill a contract in “Other assets.” |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Dec. 31, 2018 | |
Financial Instruments and Fair Value Measurments | |
Financial Instruments and Fair Value Measurements | Note 7. Financial instruments and fair value measurements Financial assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are categorized based upon a fair value hierarchy established by U.S. GAAP, which prioritizes the inputs used to measure fair value into the following levels: Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date. Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data. Level 3: Inputs that reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and are significant to the valuation of the instruments. The table below presents information about Woodward’s financial assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques Woodward utilized to determine such fair value. At December 31, 2018 At September 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets: Cash $ 63,723 $ - $ - $ 63,723 $ 59,838 $ - $ - $ 59,838 Investments in reverse repurchase agreements 161 - - 161 4,582 - - 4,582 Investments in term deposits with foreign banks 7,750 - - 7,750 19,174 - - 19,174 Equity securities 19,059 - - 19,059 19,730 - - 19,730 Total financial assets $ 90,693 $ - $ - $ 90,693 $ 103,324 $ - $ - $ 103,324 Financial liabilities: Cross currency interest rate swaps $ - $ 4,437 $ - $ 4,437 $ - $ 23,000 $ - $ 23,000 Total financial liabilities $ - $ 4,437 $ - $ 4,437 $ - $ - $ - $ 23,000 Investments in reverse repurchase agreements: Woodward sometimes invests excess cash in reverse repurchase agreements. Under the terms of Woodward’s reverse repurchase agreements, Woodward purchases an interest in a pool of securities and is granted a security interest in those securities by the counterparty to the reverse repurchase agreement. At an agreed upon date, generally the next business day, the counterparty repurchases Woodward’s interest in the pool of securities at a price equal to what Woodward paid to the counterparty plus a rate of return determined daily per the terms of the reverse repurchase agreement. Woodward believes that the investments in these reverse repurchase agreements are with creditworthy financial institutions and that the funds invested are highly liquid. The investments in reverse repurchase agreements are reported at fair value, with realized gains from interest income recognized in earnings, and are included in “Cash and cash equivalents” in the Condensed Consolidated Balance Sheets. Since the investments are generally overnight, the carrying value is considered to be equal to the fair value as the amount is deemed to be a cash deposit with no risk of change in value as of the end of each fiscal quarter. Investments in term deposits with foreign banks: Woodward’s foreign subsidiaries sometimes invest excess cash in various highly liquid financial instruments that Woodward believes are with creditworthy financial institutions. Such investments are reported in “Cash and cash equivalents” at fair value, with realized gains from interest income recognized in earnings. The carrying value of Woodward’s investments in term deposits with foreign banks are considered equal to the fair value given the highly liquid nature of the investments. As of September 30, 2018, $3,635 of the term deposits with foreign banks were restricted in use as they were pledged collateral for short-term borrowings. The restriction lapsed during the first quarter of fiscal year 2019 when the related short-term borrowings were paid. Equity securities: Woodward holds marketable equity securities, through investments in various mutual funds, related to its deferred compensation program. Based on Woodward’s intentions regarding these instruments, marketable equity securities are classified as trading securities. The trading securities are reported at fair value, with realized gains and losses recognized in “Other expense (income), net” on the Condensed Consolidated Statements of Earnings. The trading securities are included in “Other assets” in the Condensed Consolidated Balance Sheets. The fair values of Woodward’s trading securities are based on the quoted market prices for the net asset value of the various mutual funds. Cross currency interest rate swaps: Woodward holds cross currency interest rate swaps, which are accounted for at fair value. The swaps are included in “Other liabilities” in the Condensed Consolidated Balance Sheets. The fair values of Woodward’s cross currency interest rate swaps are determined using a market approach that is based on observable inputs other than quoted market prices, including contract terms, interest rates, currency rates, and other market factors. Trade accounts receivable, accounts payable, and short-term borrowings are not remeasured to fair value, as the carrying cost of each approximates its respective fair value. The estimated fair values and carrying costs of other financial instruments that are not required to be remeasured at fair value in the Condensed Consolidated Balance Sheets were as follows: At December 31, 2018 At September 30, 2018 Fair Value Hierarchy Level Estimated Fair Value Carrying Cost Estimated Fair Value Carrying Cost Assets: Notes receivable from municipalities 2 $ 13,473 $ 13,143 $ 13,458 $ 13,462 Investments in short-term time deposits 2 10,163 10,168 8,883 8,874 Liabilities: Long-term debt 2 $ (1,017,257) $ (1,027,659) $ (1,094,987) $ (1,095,292) In connection with certain economic incentives related to Woodward’s development of a second campus in the greater-Rockford, Illinois area for its Aerospace segment and Woodward’s development of a new campus at its corporate headquarters in Fort Collins, Colorado, Woodward received long-term notes from municipalities within the states of Illinois and Colorado. The fair value of the long-term notes was estimated based on a model that discounted future principal and interest payments received at an interest rate available to the Company at the end of the period for similarly rated municipal notes of similar maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy. The interest rates used to estimate the fair value of the long-term notes were 2.7% at December 31, 2018 and 3.1% at September 30, 2018. From time to time, certain of Woodward’s foreign subsidiaries will invest excess cash in short-term time deposits with a fixed maturity date of longer than three months but less than one year from the date of the deposit. Woodward believes that the investments are with creditworthy financial institutions. The fair value of the investments in short-term time deposits was estimated based on a model that discounted future principal and interest payments to be received at an interest rate available to the foreign subsidiary entering into the investment for similar short-term time deposits of similar maturity. This was determined to be a level 2 input as defined by the U.S. GAAP fair value hierarchy. The interest rates used to estimate the fair value of the short-term time deposits was 6.4% at December 31, 2018 and 6.3% at September 30, 2018. The fair value of long-term debt was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy. The weighted-average interest rates used to estimate the fair value of long-term debt were 3.8% at December 31, 2018 and 3.5% at September 30, 2018. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | Note 8. Derivative instruments and hedging activities Woodward has exposures related to global market risks, including the effect of changes in interest rates, foreign currency exchange rates, changes in certain commodity prices and fluctuations in various producer indices. From time to time, Woodward enters into derivative instruments for risk management purposes only, including derivatives designated as accounting hedges and/or those utilized as economic hedges. Woodward uses interest rate related derivative instruments to manage its exposure to fluctuations of interest rates. Woodward does not enter into or issue derivatives for trading or speculative purposes. By using derivative and/or hedging instruments to manage its risk exposure, Woodward is subject, from time to time, to credit risk and market risk on those derivative instruments. Credit risk arises from the potential failure of the counterparty to perform under the terms of the derivative and/or hedging instrument. When the fair value of a derivative contract is positive, the counterparty owes Woodward, which creates credit risk for Woodward. Woodward mitigates this credit risk by entering into transactions with only counterparties that are believed to be creditworthy. Market risk arises from the potential adverse effects on the value of derivative and/or hedging instruments that result from a change in interest rates, commodity prices, or foreign currency exchange rates. Woodward minimizes this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. Derivative instruments not designated or qualifying as hedging instruments In May 2018, Woodward entered into cross currency interest rate swap agreements that synthetically convert $167,420 of floating-rate debt under Woodward’s existing revolving credit agreement to Euro denominated floating-rate debt in conjunction with the L’Orange acquisition (the “Floating-Rate Cross Currency Swap”). Also in May 2018, Woodward entered into cross currency interest rate swap agreements that synthetically convert an aggregate principal amount of $400,000 of fixed-rate debt associated with the 2018 Note Purchase Agreement (as defined at Note 14, Credit facilities short-term borrowings and long-term debt ) to Euro denominated fixed-rate debt (the “Fixed-Rate Cross Currency Swaps”). The cross currency interest rate swaps, which effectively reduce the interest rate on the underlying fixed and floating-rate debt under the 2018 Notes (as defined at Note 14, Credit facilities short-term borrowings and long-term debt ) and Woodward’s existing revolving credit agreement, respectively, is recorded as a reduction to “Interest expense” in Woodward’s Condensed Consolidated Statements of Earnings. Derivatives instruments in fair value hedging relationships Concurrent with the entry into the Floating-Rate Cross Currency Swap, a corresponding Euro denominated intercompany loan receivable with identical terms and notional amount as the underlying Euro denominated floating-rate debt, with a reciprocal cross currency interest rate swap, was entered into by Woodward Barbados Financing SRL (“Barbados”), a wholly owned subsidiary of Woodward, and is designated as a fair value hedge under the criteria prescribed in ASC Topic 815, Derivatives and Hedging (“ASC 815”). The objective of the derivative instrument is to hedge against the foreign currency exchange risk attributable to the spot remeasurement of the Euro denominated intercompany loan. Only the change in the fair value related to the cross currency basis spread, or excluded component, of the derivative instrument is recognized in accumulated other comprehensive (losses) earnings (“OCI”). The remaining change in the fair value of the derivative instrument is recognized in foreign currency transaction gain or loss included in “Selling, general and administrative costs” in Woodward’s Condensed Consolidated Statements of Earnings. The change in the fair value of the derivative instrument in foreign currency transaction gain or loss offsets the change in the spot remeasurement of the intercompany Euro denominated loan. Hedge effectiveness is assessed based on the fair value changes of the derivative instrument, after excluding any fair value changes related to the cross currency basis spread. The initial cost of the cross currency basis spread is recorded in earnings each period through the swap accrual process. There is no credit-risk-related contingent features associated with the floating-rate cross currency interest rate swap. Derivative instruments in cash flow hedging relationships In conjunction with the entry into the Fixed-Rate Cross Currency Swaps, five corresponding intercompany loans receivable, with identical terms and amounts of each tranche of the underlying aggregate principal amount of $400,000 of fixed-rate debt, and reciprocal cross currency interest rate swaps were entered into by Barbados, which are designated as cash flow hedges under the criteria prescribed in ASC 815. The objective of these derivative instruments is to hedge the risk of variability in cash flows attributable to the foreign currency exchange risk of cash flows for future principal and interest payments associated with the Euro denominated intercompany loans over a fifteen year period. Changes in the fair values of the derivative instruments are recognized in accumulated OCI and reclassified to foreign currency transaction gain or loss included in “Selling, general and administrative costs” in Woodward’s Condensed Consolidated Statements of Earnings. Reclassifications out of accumulated OCI of the change in fair value occur each reporting period based upon changes in the spot rate remeasurement of the Euro denominated intercompany loans, including associated interest. Hedge effectiveness is assessed based on the fair value changes of the derivative instruments and deemed to be highly effective in offsetting exposure to variability in foreign exchange rates. There are no credit-risk-related contingent features associated with these fixed-rate cross currency interest rate swaps. In June 2013, in connection with Woodward’s expected refinancing of current maturities on its then existing long-term debt, Woodward entered into a treasury lock agreement with a notional amount of $25,000 that qualified as a cash flow hedge under ASC 815. The objective of this derivative instrument was to hedge the risk of variability in cash flows attributable to changes in the designated benchmark interest rate over a seven-year period related to the future principal and interest payments on a portion of anticipated future debt issuances. The treasury lock agreement was terminated in August 2013 and the resulting gain of $507 was recorded as a reduction to accumulated OCI, net of tax, and is being recognized as a decrease to interest expense over a seven-year period. Woodward expects to reclassify $72 of net unrecognized gains on terminated derivative instruments from accumulated OCI to earnings during the next twelve months. Derivatives instruments in net investment hedging relationships On September 23, 2016 , Woodward and Woodward International Holding B.V., a wholly owned subsidiary of Woodward organized under the laws of The Netherlands (the “BV Subsidiary”), each entered into a note purchase agreement (the “2016 Note Purchase Agreement”) relating to the sale by Woodward and the BV Subsidiary of an aggregate principal amount of €160,000 of senior unsecured notes in a series of private placement transactions. Woodward issued €40,000 aggregate principal amount of Woodward’s Series M Senior Notes due September 23, 2026 (the “Series M Notes”). Woodward designated the Series M Notes as a hedge of a foreign currency exposure of Woodward’s net investment in its Euro denominated functional currency subsidiaries. On the Series M Notes, a foreign exchange gain of $649 for the three-months ended December 31, 2018 and a foreign exchange loss of $743 for the three-months ended December 31, 2017 are included in foreign currency translation adjustments within total comprehensive (losses) earnings. Impact of derivative instruments designated as qualifying hedging instruments The following table discloses the impact of derivative instruments designated as qualifying hedging instruments on Woodward’s Condensed Consolidated Statements of Earnings: Three-Months Ended December 31, 2018 Derivatives in: Location Amount of (Income) Expense Recognized in Earnings on Derivative Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings Cross currency interest rate swap agreement designated as fair value hedges Selling, general and administrative expenses $ (2,389) $ (2,505) $ (2,252) Cross currency interest rate swap agreements designated as cash flow hedges Selling, general and administrative expenses (5,556) (16,058) (5,556) Treasury lock agreement designated as cash flow hedge Interest expense (18) - (18) $ (7,963) $ (18,563) $ (7,826) Three-Months Ended December 31, 2017 Derivatives in: Location Amount of (Income) Expense Recognized in Earnings on Derivative Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings Cross currency interest rate swap agreement designated as fair value hedges Selling, general and administrative expenses $ - $ - $ - Cross currency interest rate swap agreements designated as cash flow hedges Selling, general and administrative expenses - - - Treasury lock agreement designated as cash flow hedge Interest expense (18) - (18) $ (18) $ - $ (18) The remaining unrecognized gains and losses in Woodward’s Condensed Consolidated Balance Sheets associated with derivative instruments that were previously entered into by Woodward, which are classified in accumulated OCI were net losses of $10,578 as of December 31, 2018 and net losses of $21,315 as of September 30, 2018. |
Supplemental Statement of Cash
Supplemental Statement of Cash Flows Information | 3 Months Ended |
Dec. 31, 2018 | |
Supplemental Statement of Cash Flows Information | |
Supplemental Statement of Cash Flows Information | Note 9. Supplemental statement of cash flows information Three-Months Ended December 31, 2018 2017 Interest paid, net of amounts capitalized $ 16,754 $ 11,302 Income taxes paid 15,858 7,695 Income tax refunds received 444 1,772 Non-cash activities: Purchases of property, plant and equipment on account 4,580 10,631 Impact of the adoption of ASC 606 (Note 3) 28,886 - |
Inventories
Inventories | 3 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Inventories | Note 10. Inventories December 31, September 30, 2018 2018 Raw materials $ 98,641 $ 80,999 Work in progress 124,773 118,010 Component parts (1) 307,938 298,820 Finished goods 57,854 51,767 Customer supplied inventory (Note 3) 17,283 - On-hand inventory for which control has transferred to the customer (Note 3) (81,989) - $ 524,500 $ 549,596 (1) Component parts include items that can be sold separately as finished goods or included in the manufacture of other products. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 3 Months Ended |
Dec. 31, 2018 | |
Property, Plant, and Equipment | |
Property, Plant and Equipment | Note 11. Property, plant, and equipment December 31, September 30, 2018 2018 Land and land improvements $ 93,958 $ 94,146 Buildings and building improvements 566,562 565,065 Leasehold improvements 17,897 17,954 Machinery and production equipment 677,086 668,986 Computer equipment and software 125,272 124,788 Office furniture and equipment 32,210 31,533 Other 19,396 19,366 Construction in progress 109,325 103,036 1,641,706 1,624,874 Less accumulated depreciation (581,150) (564,869) Property, plant, and equipment, net $ 1,060,556 $ 1,060,005 In the second quarter of fiscal year 2018, the Company announced its decision to relocate its Duarte, California operations to the Company’s newly renovated Drake Campus in Fort Collins, Colorado. The Company has identified assets held for sale with a carrying value of $8,097 at December 31, 2018 and $8,306 at September 30, 2018, the majority of which are included in “Land and land improvements” and “Buildings and buildings improvements” which relate to the land, building and building improvements, and other assets at the Duarte facility. The assets held for sale are included in the Company’s Aerospace segment. The carrying value of the remaining assets at the Duarte facility was approximately $11,980 as of December 31, 2018, of which the Company has identified approximately $325 that is planned to be disposed of as a result of the relocation. The Company assessed whether the decision to relocate from its Duarte facility could indicate a potential impairment of the assets at the Duarte facility and concluded that the assets were not impaired as of December 31, 2018. Included in “Office furniture and equipment” and “Other” is $1,650 at December 31, 2018 and September 30, 2018, of gross assets acquired on capital leases, and accumulated depreciation included $1,261 at December 31, 2018 and $1,158 at September 30, 2018 of amortization associated with the capital lease assets. In fiscal year 2015, Woodward completed and placed into service a manufacturing and office building on a second campus in the greater-Rockford, Illinois area and has occupied the new facility for its Aerospace segment. This campus is intended to support Woodward’s expected growth in its Aerospace segment as a result of Woodward being awarded a substantial number of new system platforms, particularly on narrow-body aircraft. Included in “Construction in progress” are costs of $30,585 at December 31, 2018 and $32,248 at September 30, 2018 associated with new equipment purchases for the greater-Rockford, Illinois campus and costs of $7,555 at December 31, 2018 and $3,967 at September 30, 2018 associated with new equipment purchases and the renovation of the Drake Campus. For the three-months ended December 31, 2018 and 2017, Woodward had depreciation expense as follows: Three-Months Ended December 31, 2018 2017 Depreciation expense $ 21,169 $ 14,827 For the three-months ended December 31, 2018 and 2017, Woodward capitalized interest that would have otherwise been included in interest expense of the following: Three-Months Ended December 31, 2018 2017 Capitalized interest $ 227 $ 601 |
Goodwill
Goodwill | 3 Months Ended |
Dec. 31, 2018 | |
Goodwill [Abstract] | |
Goodwill | Note 12. Goodwill September 30, 2018 Effects of Foreign Currency Translation December 31, 2018 Aerospace $ 455,423 $ - $ 455,423 Industrial 357,827 (3,770) 354,057 Consolidated $ 813,250 $ (3,770) $ 809,480 On June 1, 2018, Woodward completed the acquisition of L’Orange (see Note 5, Business acquisition ), which resulted in the recognition of $257,447 in goodwill in the Company’s Industrial segment. Woodward tests goodwill for impairment during the fourth quarter of each fiscal year, or at any time there is an indication goodwill is more-likely-than-not impaired, commonly referred to as triggering events. There have been no such triggering events during any of the periods presented , and Woodward’s fourth quarter of fiscal year 2018 impairment test resulted in no impairment. |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net | |
Intangible Assets, Net | Note 13. Intangible assets, net December 31, 2018 September 30, 2018 Gross Carrying Value Accumulated Amortization Net Carrying Amount Gross Carrying Value Accumulated Amortization Net Carrying Amount Intangible assets with finite lives: Customer relationships and contracts: Aerospace $ 281,683 $ (170,538) $ 111,145 $ 281,683 $ (166,719) $ 114,964 Industrial 424,543 (36,504) 388,039 429,880 (35,856) 394,024 Total $ 706,226 $ (207,042) $ 499,184 $ 711,563 $ (202,575) $ 508,988 Intellectual property: Aerospace $ - $ - $ - $ - $ - $ - Industrial 19,380 (18,612) 768 19,448 (18,587) 861 Total $ 19,380 $ (18,612) $ 768 $ 19,448 $ (18,587) $ 861 Process technology: Aerospace $ 76,371 $ (56,135) $ 20,236 $ 76,372 $ (54,874) $ 21,498 Industrial 96,110 (21,551) 74,559 97,154 (20,373) 76,781 Total $ 172,481 $ (77,686) $ 94,795 $ 173,526 $ (75,247) $ 98,279 Backlog: Aerospace $ - $ - $ - $ - $ - $ - Industrial 42,363 (30,651) 11,712 42,955 (18,006) 24,949 Total $ 42,363 $ (30,651) $ 11,712 $ 42,955 $ (18,006) $ 24,949 Other intangibles: Aerospace $ - $ - $ - $ - $ - $ - Industrial 1,608 (1,183) 425 1,629 (1,158) 471 Total $ 1,608 $ (1,183) $ 425 $ 1,629 $ (1,158) $ 471 Intangible asset with indefinite life: Tradename: Aerospace $ - $ - $ - $ - $ - $ - Industrial 66,402 - 66,402 67,335 - 67,335 Total $ 66,402 $ - $ 66,402 $ 67,335 $ - $ 67,335 Total intangibles: Aerospace $ 358,054 $ (226,673) $ 131,381 $ 358,055 $ (221,593) $ 136,462 Industrial 650,406 (108,501) 541,905 658,401 (93,980) 564,421 Consolidated Total $ 1,008,460 $ (335,174) $ 673,286 $ 1,016,456 $ (315,573) $ 700,883 For the three-months ended December 31, 2018 and 2017, Woodward recorded amortization expense associated with intangibles of the following: Three-Months Ended December 31, 2018 2017 Amortization expense $ 17,472 $ 6,243 Future amortization expense associated with intangibles is expected to be: Year Ending September 30: 2019 (remaining) $ 38,893 2020 40,660 2021 41,760 2022 39,554 2023 38,496 Thereafter 407,521 $ 606,884 |
Credit Facilities, Short-term B
Credit Facilities, Short-term Borrowings and Long-term Debt | 3 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure | |
Credit Facilities, Short-term Borrowings and Long-term Debt | Note 14. Credit facilities, short-term borrowings and long-term debt Revolving credit facility Woodward maintains a $1,000,000 revolving credit facility established under a revolving credit agreement among Woodward, a syndicate of lenders and Wells Fargo Bank, National Association, as administrative agent (the “Revolving Credit Agreement”). The Revolving Credit Agreement provides for the option to increase available borrowings up to $1,200,000 , subject to lenders’ participation. Borrowings under the Revolving Credit Agreement can be made by Woodward and certain of its foreign subsidiaries in U.S dollars or in foreign currencies other than the U.S. dollar and generally bear interest at LIBOR plus 0.85% to 1.65% . The Revolving Credit Agreement matures in April 2020 . Under the Revolving Credit Agreement, there were $311,481 in principal amount of borrowings outstanding as of December 31, 2018, at an effective interest rate of 3.69% , and $266,541 in principal amount of borrowings outstanding as of September 30, 2018, at an effective interest rate of 3.48% . As of December 31, 2018 , $160,000 of the borrowings under the Revolving Credit Agreement were classified as short-term borrowings , and as of September 30, 2018, $150,000 of the borrowings under the Revolving Credit Agreement were classified as short-term borrowings based on Woodward’s intent and ability to pay this amount in the next twelve months. Short-term borrowings Woodward has other foreign lines of credit and foreign overdraft facilities at various financial institutions, which are generally reviewed annually for renewal and are subject to the usual terms and conditions applied by the financial institutions. Pursuant to the terms of the related facility agreements, Woodward’s foreign performance guarantee facilities are limited in use to providing performance guarantees to third parties. There were no borrowings outstanding on Woodward’s foreign lines of credit and foreign overdraft facilities as of both December 31, 2018 and September 30, 2018. Woodward had other short-term borrowings of $3,635 as of September 30, 2018, which were repaid during the three-months ended December 31, 2018. Long-term debt December 31, September 30, 2018 2018 Long-term portion of revolving credit facility - Floating rate (LIBOR plus 0.85% - 1.65% ), due April 2020 ; unsecured $ 151,481 $ 116,541 Series D notes – 6.39%, due October 2018; unsecured - 100,000 Series F notes – 8.24%, due April 2019; unsecured 43,000 43,000 Series G notes – 3.42%, due November 2020; unsecured 50,000 50,000 Series H notes – 4.03%, due November 2023; unsecured 25,000 25,000 Series I notes – 4.18%, due November 2025; unsecured 25,000 25,000 Series J notes – Floating rate (LIBOR plus 1.25%), due November 2020; unsecured 50,000 50,000 Series K notes – 4.03%, due November 2023; unsecured 50,000 50,000 Series L notes – 4.18%, due November 2025; unsecured 50,000 50,000 Series M notes – 1.12% due September 2026; unsecured 45,795 46,437 Series N notes – 1.31% due September 2028; unsecured 88,154 89,393 Series O notes – 1.57% due September 2031; unsecured 49,229 49,921 Series P notes – 4.27% due May 2025; unsecured 85,000 85,000 Series Q notes – 4.35% due May 2027; unsecured 85,000 85,000 Series R notes – 4.41% due May 2029; unsecured 75,000 75,000 Series S notes – 4.46% due May 2030; unsecured 75,000 75,000 Series T notes – 4.61% due May 2033; unsecured 80,000 80,000 Unamortized debt issuance costs (2,787) (2,895) Total long-term debt 1,024,872 1,092,397 Less: Current portion of long-term debt - - Long-term debt, less current portion $ 1,024,872 $ 1,092,397 The Notes In October 2008 , Woodward entered into a note purchase agreement relating to the Series D Notes, due in October 2018. On October 1, 2018, Woodward paid the entire principal balance of $100,000 on the Series D Notes using proceeds from borrowings under its revolving credit facility. In April 2009 , Woodward entered into a note purchase agreement relating to the Series F Notes. The Series F Notes mature and are payable in April 2019. As of December 31, 2018, the entire amount of debt under the Series F Notes has been classified as long-term based on Woodward’s intent and ability to refinance this debt prior to maturity using cash proceeds from its revolving credit facility which, in turn, is expected to be repaid beyond the next twelve months. On October 1, 2013 , Woodward entered into a note purchase agreement relating to the sale by Woodward of an aggregate principal amount of $250,000 of its senior unsecured notes in a series of private placement transactions. Woodward issued the Series G, H and I Notes (the “First Closing Notes”) on October 1, 2013 . Woodward issued the Series J, K and L Notes (the “Second Closing Notes” and together with the Series D Notes, the Series F Notes and the First Closing Notes, collectively the “USD Notes”) on November 15, 2013 . On September 23, 2016 , Woodward and the BV Subsidiary each entered into note purchase agreements (the “2016 Note Purchase Agreements”) relating to the sale by Woodward and the BV Subsidiary of an aggregate principal amount of €160,000 of senior unsecured notes in a series of private placement transactions. Woodward issued €40,000 Series M Notes. The BV Subsidiary issued (a) €77,000 aggregate principal amount of the BV Subsidiary’s Series N Senior Notes (the “Series N Notes”) and (b) €43,000 aggregate principal amount of the BV Subsidiary’s Series O Senior Notes (the “Series O Notes” and together with the Series M Notes and the Series N Notes, the “2016 Notes”). On May 31, 2018 , Woodward entered into a note purchase agreement (the “2018 Note Purchase Agreement”) relating to the sale by Woodward of an aggregate principal amount of $400,000 of senior unsecured notes comprised of (a) $85,000 aggregate principal amount of its Series P Senior Notes due May 30, 2025 and bearing interest at a rate of 4.27% per annum (the “Series P Notes”), (b) $85,000 aggregate principal amount of its Series Q Senior Notes due May 30, 2027 and bearing interest at a rate of 4.35% per annum (the “Series Q Notes”), (c) $75,000 aggregate principal amount of its Series R Senior Notes due May 30, 2029 and bearing interest at a rate of 4.41% per annum (the “Series R Notes”), (d) $75,000 aggregate principal amount of its Series S Senior Notes due May 30, 2030 and bearing interest at a rate of 4.46% per annum (the “Series S Notes”), and (e) $80,000 aggregate principal amount of its Series T Senior Notes due May 30, 2033 and bearing interest at a rate of 4.61% per annum (the “Series T Notes”, and together with the Series P Notes, the Series Q Notes, the Series R Notes, and the Series S Notes, the “2018 Notes,” and, together with the USD Notes and 2016 Notes, the “Notes”), in a series of private placement transactions. In connection with the issuance of the 2018 Notes, the Company entered into cross currency swap transactions in respect of each tranche of the 2018 Notes, which effectively reduced the interest rates on the Series P Notes to 1.82% per annum, the Series Q Notes to 2.15% per annum, the Series R Notes to 2.42% per annum, the Series S Notes to 2.55% per annum and the Series T Notes to 2.90% per annum (see Note 8, Derivative instruments and hedging activities ). Interest on the First Closing Notes, and the Series K and L Notes is payable semi-annually on April 1 and October 1 of each year until all principal is paid. Interest on the Series F Notes is payable semi-annually on April 15 and October 15 of each year until all principal is paid. Interest on the 2016 Notes is payable semi-annually on March 23 and September 23 of each year, until all principal is paid. Interest on the Series J Notes is payable quarterly on January 1, April 1, July 1 and October 1 of each year until all principal is paid. As of December 31, 2018, the Series J Notes bore interest at an effective rate of 3.89% . Commencing on November 30, 2018, interest on the 2018 Notes is payable semi-annually on May 30 and November 30 of each year until all principal is paid. Debt Issuance Costs Unamortized debt issuance costs associated with the Notes of $2,787 as of December 31, 2018 and $2,895 as of September 30, 2018 were recorded as a reduction in “Long-term debt, less current portion” in the Condensed Consolidated Balance Sheets. Unamortized debt issuance costs of $1,166 associated with the Revolving Credit Agreement as of December 31, 2018 and $1,385 as of September 30, 2018 were recorded as “Other assets” in the Condensed Consolidated Balance Sheets. Amortization of debt issuance costs is included in operating activities in the Condensed Consolidated Statements of Cash Flows. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities | |
Accrued Liabilities | Note 15. Accrued liabilities December 31, September 30, 2018 2018 Salaries and other member benefits $ 61,187 $ 88,643 Warranties 20,156 20,130 Interest payable 7,014 18,611 Current portion of acquired contractual obligations and unfavorable contracts (1) 1,160 1,627 Accrued retirement benefits 3,571 3,571 Current portion of loss reserve on contractual lease commitments 1,245 1,245 Restructuring charges 15,843 16,522 Taxes, other than income 17,290 21,128 Net current contract liabilities (2) 28,190 9,659 Other 15,481 13,377 $ 171,137 $ 194,513 (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 obligations for contractual commitments that are expected to result in future economic losses. In addition, Woodward assumed current and long-term contractual 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 . (2) See Note 3, Revenue for more information on net current contract 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: Three-Months Ended December 31, 2018 2017 Warranties, beginning of period $ 20,130 $ 13,597 Impact from adoption of ASC 606 (Note 3) 594 - Expense, net of recoveries 2,072 (2,030) Reductions for settlement of previous warranty liabilities (2,537) 1,377 Foreign currency exchange rate changes (103) 73 Warranties, end of period $ 20,156 $ 13,017 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 and recognized a loss reserve against the estimated remaining contractual lease commitments, less anticipated sublease income. Changes in the loss reserve were as follows. Three-Months Ended December 31, 2018 2017 Loss reserve on contractual lease commitments, beginning of period $ 3,931 $ 5,270 Payments, net of sublease income (117) (553) Loss reserve on contractual lease commitments, end of period $ 3,814 $ 4,717 Other liabilities included $2,569 and $2,686 of accrued loss reserve on contractual lease commitments as of December 31, 2018 and September 30, 2018, respectively, which are not expected to be settled or paid within twelve months of the respective balance sheet date. Restructuring charges In the second quarter of 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 three-months ended December 31, 2018 is as follows: Period Activity Balances as of October 1, 2018 Charges (gains) Cash receipts (payments) Non-cash activity Balances as of December 31, 2018 Workforce management costs associated with: Duarte plant relocation $ 12,504 $ - $ - $ - $ 12,504 Industrial turbomachinery business realignment 4,018 - (679) - 3,339 Total $ 16,522 $ - $ (679) $ - $ 15,843 |
Other Liabilities
Other Liabilities | 3 Months Ended |
Dec. 31, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities | Note 16. Other liabilities December 31, September 30, 2018 2018 Net accrued retirement benefits, less amounts recognized within accrued liabilities $ 89,503 $ 90,722 Total unrecognized tax benefits 9,015 8,582 Noncurrent income taxes payable 12,494 12,494 Acquired unfavorable contracts (1) - 54 Deferred economic incentives (2) 12,662 13,038 Loss reserve on contractual lease commitments (3) 2,569 2,686 Cross currency swap derivative liability (4) 4,437 23,000 Net noncurrent contract liabilities (5) 319,230 235,300 Other 10,552 12,179 $ 460,462 $ 398,055 (1) In connection with the Duarte Acquisition in fiscal year 2013, Woodward assumed current and long-term obligations for contractual commitments that are expected to result in future economic losses. The long-term portion of the acquired unfavorable contracts is included in Other liabilities. (2) Woodward receives certain economic incentives from various state and local authorities related to capital expansion projects. Such amounts are initially recorded as deferred credits and are being recognized as a reduction to pre-tax expense over the economic lives of the related capital expansion projects. (3) See Note 15, Accrued liabilities for more information on the loss reserve on contractual lease commitments . (4) See Note 7, Financial instruments and fair value measurements for more information on the cross currency swap derivative liability. (5) See Note 3, Revenue , for more information on net noncurrent contract liabilities. |
Other Expense (Income), Net
Other Expense (Income), Net | 3 Months Ended |
Dec. 31, 2018 | |
Other Expense (Income), Net [Abstract] | |
Other Expense (Income), Net | Note 17. Other expense (income), net Three-Months Ended December 31, 2018 2017 Equity interest in the earnings of the JV (Note 6) $ (1,465) $ (596) Net (gain) loss on sales of assets 79 (58) Rent income (67) (54) Net (gain) loss on investments in deferred compensation program 1,729 (654) Other components of net periodic pension and other postretirement benefit, excluding service cost and interest expense (3,243) (3,148) Other (212) (210) $ (3,179) $ (4,720) |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 18. Income taxes U.S. GAAP requires the interim tax provision be determined as follows: · At the end of each quarter, Woodward estimates the tax that will be provided for the current fiscal year stated as a percentage of estimated “ordinary income.” The term ordinary income refers to earnings from continuing operations before income taxes, excluding significant unusual or infrequently occurring items. The estimated annual effective rate is applied to the year-to-date ordinary income at the end of each quarter to compute the estimated year-to-date tax applicable to ordinary income. The tax expense or benefit related to ordinary income in each quarter is equal to the difference between the most recent year-to-date and the prior quarter year-to-date computations. · The tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur. The impact of changes in tax laws or rates on deferred tax amounts, the effects of changes in judgment about beginning of the year valuation allowances, and changes in tax reserves resulting from the finalization of tax audits or reviews are examples of significant unusual or infrequently occurring items that are recognized as discrete items in the interim period in which the event s occur . The determination of the annual effective tax rate is based upon a number of significant estimates and judgments. In addition, as a global commercial enterprise, Woodward’s tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, changes in the estimate of the amount of undistributed foreign earnings that Woodward considers indefinitely reinvested, and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions. On December 22, 2017, the United States (“U.S.”) enacted significant changes to the U.S. tax law following the passage and signing of the Tax Act. The Tax Act included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21% , a one-time repatriation tax on deferred foreign income (“Transition Tax”), deductions, credits and business-related exclusions. Also on December 22, 2017, the SEC issued SAB 118. SAB 118 expresses views of the SEC regarding ASC 740 in the reporting period that includes the enactment date of the Tax Act. Subsequent to the issuance of SAB 118, in March 2018, the FASB issued ASU 2018-05, which formally amended ASC 740 for the guidance previously provided by SAB 118. The SEC staff issuing SAB 118 (the “Staff”) recognized that a registrant’s review of certain income tax effects of the Tax Act may be incomplete at the time financial statements are issued for the reporting period that includes the enactment date, including interim periods therein. The Staff’s view of the enactment of the Tax Act has been developed considering the principles of ASC 805 which addresses the accounting for certain items in a business combination for which the accounting is incomplete upon issuance of the financial statements that include the reporting period in which the business combination occurs. Specifically, the Staff provides that the accounting guidance in ASC Topic 805 may be analogized to the accounting for impacts of the Tax Act. If a company does not have the necessary information available, prepared or analyzed for certain income tax effects of the Tax Act, SAB 118 allows a company to report provisional numbers and adjust those amounts during the measurement period not to extend beyond one year. Enactment of the Tax Act during December 2017 resulted in a provisional discrete net charge to Woodward’s income tax expense in the amount of $14,778 , which was recorded in the first quarter of fiscal year 2018. After adjustments to provisional amounts made throughout fiscal year 2018, the net impact of the enactment of the Tax Act was $10,860 . There were no provisional adjustments recorded to income tax expense related to the Tax Act in the three-months ended December 31, 2018. Woodward finalized its assessment of the income tax effects of the Tax Act in the first quarter of fiscal year 2019. Within the calculation of Woodward’s annual effective tax rate , Woodward has used assumptions and estimates that may change as a result of future guidance, interpretation, and rule-making from the Internal Revenue Service, the SEC, and the FASB and/or various other taxing jurisdictions. Changes in corporate tax rates, the net deferred tax assets and/or liabilities relating to Woodward’s U.S. operations, the taxation of foreign earnings, and the deductibility of expenses contained in the Tax Act or other future tax reform legislation could have a material impact on Woodward’s future income tax expense. Additionally, Woodward anti cipates the IRS will issue additional regulations related to the new Tax Act which may have an impact on Woodward’s future income tax expense. The following table sets forth the tax expense and the effective tax rate for Woodward’s earnings before income taxes: Three-Months Ended December 31, 2018 2017 Earnings before income taxes $ 61,515 $ 37,487 Income tax expense 12,395 19,227 Effective tax rate 20.1% 51.3% The decrease in the year-over-year effective tax rate for the three-months ended December 31, 2018 is primarily attributable to the one-time income tax expense resulting from the Tax Act recognized in the prior fiscal year quarter, and the reduction in the U.S. Federal income tax rate provided by the Tax Act. Partially offsetting this decrease are U.S. foreign tax credits from the repatriation of foreign earnings and the resolution of tax matters, both of which favorably impacted the first quarter of fiscal year 2018 but did not repeat in the current quarter. The decrease is further offset by an increase in the U.S. tax on estimated current year foreign earnings in the current quarter compared to the same quarter last year. Finally, the increase in income tax expense a ttributable to the loss of the domestic production activities d eduction in the current quarter was largely offset by a higher favorable adjustment for the net excess income tax benefits from stock-based compensation compared to the prior fiscal year quarter. Gross unrecognized tax benefits were $8,779 as of December 31, 2018, and $8,364 as of September 30, 2018. Included in the balance of unrecognized tax benefits were $3,457 as of December 31, 2018 and $3,288 as of September 30, 2018 of tax benefits that, if recognized, would affect the effective tax rate. At this time, Woodward does not belie ve it is reasonably possible that the liability for unrecognized tax benefits will decrease in the next twelve months. Woodward accrues for potential interest and penalties related to unrecognized tax benefits and all other interest and penalties related to tax payments in tax expense. Woodward had accrued gross interest and penalties of $302 as of December 31, 2018 and $279 as of September 30, 2018. Woodward’s tax returns are subject to audits by U.S. federal, state, and foreign tax authorities, and these audits are at various stages of completion at any given time. Reviews of tax matters by authorities and lapses of the applicable statutes of limitations may result in changes to tax expense. Woodward’s fiscal years remaining open to examination for U.S. Federal income taxes include fiscal years 2017 and thereafter. In fiscal year 2018, Woodward concluded its U.S. federal income tax examinations through fiscal year 2016. Woodward’s fiscal years remaining open to examination for significant U.S. state income tax jurisdictions include fiscal years 2014 and thereafter. Fiscal years remaining open to examination in significant foreign jurisdictions include 2008 and thereafter. |
Retirement Benefits
Retirement Benefits | 3 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits - General | |
Retirement Benefits | Note 19. Retirement benefits Woodward provides various retirement benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on employee location. Defined contribution plans Most of the Company’s U.S. employees are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes matching contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes. Certain non-U.S. employees are also eligible to participate in similar non-U.S. plans. The amount of expense associated with defined contribution plans was as follows: Three-Months Ended December 31, 2018 2017 Company costs $ 8,371 $ 7,879 Defined benefit plans Woodward has defined benefit plans that provide pension benefits for certain retired employees in the United States, the United Kingdom, Japan , and Germany. Woodward also provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits. Postretirement medical benefits are provided to certain current and retired employees and their covered dependents and beneficiaries in the United States and the United Kingdom. Life insurance benefits are provided to certain retirees in the United States under frozen plans, which are no longer available to current employees. A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward’s defined benefit pension and other postretirement benefit plans. On October 26, 2018, the High Court of Justice in the United Kingdom (the “High Court”) issued a ruling (the “Court Ruling”) requiring defined benefit plan sponsors in the United Kingdom to equalize benefits payable to men and women under its United Kingdom defined benefit pension plans by amending those plans to increase the pension benefits payable to participants that accrued such benefits during the period from 1990 to 1997. In the Court Ruling, the High Court also provided details on acceptable alternative methods of amending plans to equalize the pension benefits. Woodward has initially concluded that Court Ruling is applicable to its defined benefit pension plan in the United Kingdom and will make the necessary plan amendments. Based on its initial estimates, Woodward does not believe the Court Ruling represents a significant event requiring a remeasurement of its United Kingdom defined benefit pension plan’s obligation and assets as of December 31, 2018. U.S. GAAP requires that, for obligations outstanding as of September 30, 2018, the funded status reported in interim periods shall be the same asset or liability recognized in the previous year end statement of financial position adjusted for (a) subsequent accruals of net periodic benefit cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) and (b) contributions to a funded plan or benefit payments. The components of the net periodic retirement pension costs recognized are as follows: Three-Months Ended December 31, United States Other Countries Total 2018 2017 2018 2017 2018 2017 Service cost $ 363 $ 411 $ 512 $ 158 $ 875 $ 569 Interest cost 1,596 1,501 480 329 2,076 1,830 Expected return on plan assets (2,996) (2,904) (662) (686) (3,658) (3,590) Amortization of: Net actuarial loss 154 150 71 72 225 222 Prior service cost 177 177 - - 177 177 Net periodic retirement pension (benefit) cost $ (706) $ (665) $ 401 $ (127) $ (305) $ (792) Contributions paid $ - $ - $ 554 $ 312 $ 554 $ 312 The components net periodic retirement pension costs other than the service cost and interest cost components are included in the line item “Other (income) expense, net” in the Condensed Consolidated Statements of Earnings. The interest cost component is include in the line item “Interest expense” in the Condensed Consolidated Statements of Earnings. The components of the net periodic other postretirement benefit costs recognized are as follows: Three-Months Ended December 31, 2018 2017 Service cost $ 1 $ 2 Interest cost 288 292 Amortization of: Net actuarial loss 14 24 Prior service benefit (1) (40) Curtailment gain - (330) Net periodic other postretirement cost $ 302 $ (52) Contributions paid $ 373 $ 226 The components of net periodic other postretirement benefit costs other than the service cost and interest cost components are included in the line item “Other (income) expense, net” in the Condensed Consolidated Statements of Earnings. The interest cost component is include d in the line item “Interest expense” in the Condensed Consolidated Statements of Earnings. The amount of cash contributions made to these plans in any year is dependent upon a number of factors, including minimum funding requirements in the jurisdictions in which Woodward operates and arrangements made with trustees of certain foreign plans. As a result, the actual funding in fiscal year 2019 may differ from the current estimate. Woodward estimates its remaining cash contributions in fiscal year 2019 will be as follows: Retirement pension benefits: United States $ - United Kingdom 518 Japan - Germany 748 Other postretirement benefits 3,242 Multiemployer defined benefit plans Woodward operates multiemployer defined benefit plans for certain employees in both the Netherlands and Japan. The amounts of contributions associated with the multiemployer defined benefit plans were as follows: Three-Months Ended December 31, 2018 2017 Company contributions $ 77 $ 79 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity and Stock-Based Compensation [Abstract] | |
Stockholders' Equity | Note 20. Stockholders’ equity Stock repurchase program In the first quarter of fiscal year 2017, Woodward’s board of directors terminated the Company’s prior stock repurchase program (the “Prior Repurchase Program”) and replaced it with a new program for the repurchase of up to $500,000 of Woodward’s outstanding shares of common stock on the open market or in privately negotiated transactions over a three -year period that will end in November 2019 (the “2017 Authorization”). Woodward repurchased no common stock under the 2017 Authorization in the first quarter of fiscal years 2019 or 2018. Stock-based compensation Provisions governing outstanding stock option awards are included in the 2017 Omnibus Incentive Plan, as amended from time to time (the “2017 Plan”) and the 2006 Omnibus Incentive Plan (the “2006 Plan”) , as applicable . The 2017 Plan was approved by Woodward’s stockholders in January 2017 and is a successor plan to the 2006 Plan. As of September 14, 2016, the effective dat e of the 2017 Plan, Woodward’s board of d irectors delegated authority to administer the 2017 Plan to the compensation committee of the board (the “Committee”), including, but not limited to, the power to determine the recipients of awards and the terms of those awards. Under the 2017 Plan, there were approximately 608 shares of Woodward’s common stock available for future grants as of Decembe r 31, 2018. On January 30, 2019 , Woodward’s stockholders approved an additional 1,400 shares of Woodward’s common stock to be made available for future grants. Stock options Woodward believes that stock options align the interests of its employees and directors with the interests of its stockholders. Stock option awards are granted with an exercise price equal to the market price of Woodward’s stock at the date the grants are awarded, a ten -year term, and generally a four -year vesting schedule at a rate of 25% per year. The fair value of options granted is estimated as of the grant date using the Black-Scholes-Merton option-valuation model using the assumptions in the following table. Woodward calculates the expected term, which represents the average period of time that stock options granted are expected to be outstanding, based upon historical experience of plan participants. Expected volatility is based on historical volatility using daily stock price observations. The estimated dividend yield is based upon Woodward’s historical dividend practice and the market value of its common stock. The risk-free rate is based on the U.S. treasury yield curve, for periods within the contractual life of the stock option, at the time of grant. Three-Months Ended December 31, 2018 2017 Weighted-average exercise price per share 79.79 78.97 Weighted-average grant date market value of Woodward stock 79.79 78.97 Expected term (years) 6.5 - 8.7 6.4 - 8.7 Estimated volatility 25.7% - 31.0% 30.3% - 32.7% Estimated dividend yield 0.7% - 0.8% 0.6% Risk-free interest rate 2.7% - 3.1% 2.1% - 2.3% The following is a summary of the activity for stock option awards during the three-months ended December 31, 2018: Three-Months Ended December 31, 2018 Number of options Weighted-Average Exercise Price per Share Options, beginning balance 5,611 $ 45.42 Options granted 674 79.79 Options exercised (107) 31.48 Options forfeited (5) 70.65 Options, ending balance 6,173 49.40 Changes in non-vested stock options during the three-months ended December 31, 2018 were as follows: Three-Months Ended December 31, 2018 Number of options Weighted-Average Grant Date Fair Value per Share Non-vested options outstanding, beginning balance 1,988 $ 21.64 Options granted 674 24.59 Options vested (795) 19.78 Options forfeited (5) 23.87 Non-vested options outstanding, ending balance 1,862 23.50 Information about stock options that have vested, or are expected to vest, and are exercisable at December 31, 2018 was as follows: Number Weighted- Average Exercise Price Weighted- Average Remaining Life in Years Aggregate Intrinsic Value Options outstanding 6,173 $ 49.40 5.8 $ 160,762 Options vested and exercisable 4,310 40.19 4.6 147,826 Options vested and expected to vest 6,074 48.99 5.8 160,384 Restricted stock In connection with Woodward’s acquisition of L’Orange, restricted stock units were granted to certain employees of L’Orange (at acquisition) and other current Woodward members in key management positions. Each restricted stock unit entitles the holder to one share of the Company’s common stock upon vesting. The restricted stock units were granted with a two -year vesting schedule and vest on the one and two-year anniversaries of the grant date at a rate of 50% per year. The restricted stock units do not participate in dividends during the vesting period. The fair value of restricted stock units granted were estimated using the closing price of Woodward common stock on the grant date. A summary of the activity for restricted stock units for the three-months ended December 31, 2018: Three-Months Ended December 31, 2018 Number Fair Value per Share Beginning balance 10 $ 82.71 Shares granted - n/a Shares vested - n/a Shares forfeited - n/a Ending balance 10 82.71 Stock-based compensation expense Woodward recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Pursuant to form stock option agreements used by the Company, with terms approved by the administrator of the applicable plan, the requisite service period can be less than the four-year vesting period based on grantee’s retirement eligibility. As such, the recognition of stock-based compensation expense associated with some stock option grants can be accelerated to a period of less than four years, including immediate recognition of stock-based compensation expense on the date of grant. At December 31, 2018, there was approximately $14,466 of total unrecognized compensation expense related to non-vested stock-based compensation arrangements, including both stock options and restricted stock awards. The pre-vesting forfeiture rates for purposes of determining stock-based compensation expense recognized were estimated to be 0% for members of Woodward’s board of directors and 9% for all others. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.2 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure | |
Commitments and Contingencies | Note 21. Commitments and contingencies Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations and/or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, worker’s compensation claims, contractual disputes, product warranty claims and alleged violations of various laws and regulations. Woodward accrues for known individual matters using estimates of the most likely amount of loss where it believes that it is probable the matter will result in a loss when ultimately resolved and such loss is reasonably estimable. Legal costs are expensed as incurred and are classified in “Selling, general and administrative expenses” on the Condensed Consolidated Statements of Earnings. Woodward is partially self-insured in the United States for healthcare and worker’s compensation up to predetermined amounts, above which third party insurance applies. Management regularly reviews the probable outcome of related claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities. While the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings and investigations will not have a material effect on Woodward’s liquidity, financial condition, or results of operations. In the event of a change in control of Woodward, as defined in change-in-control agreements with its current corporate officers, Woodward may be required to pay termination benefits to any such officer if such officer’s employment is terminated within two years following the change of control. |
Segment Information
Segment Information | 3 Months Ended |
Dec. 31, 2018 | |
Segment Information | |
Segment Information | Note 22. Segment information Woodward serves the aerospace and industrial markets through its two reportable segments - Aerospace and Industrial. When appropriate, Woodward’s reportable segments are aggregations of Woodward’s operating segments. Woodward uses operating segment information internally to manage its business, including the assessment of operating segment performance and decisions for the allocation of resources between operating segments. Woodward L’Orange has been included in Woodward’s Industrial segment results since the Closing. The accounting policies of the reportable segments are the same as those of the Company. Woodward evaluates segment profit or loss based on internal performance measures for each segment in a given period. In connection with that assessment, Woodward generally excludes matters such as certain charges for restructuring, interest income and expense, certain gains and losses from asset dispositions, or other non-recurring and/or non-operationally related expenses. A summary of consolidated net sales and earnings by segment follows: Three-Months Ended December 31, 2018 2017 Segment external net sales: Aerospace $ 392,887 $ 305,905 Industrial 259,924 164,243 Total consolidated net sales $ 652,811 $ 470,148 Segment earnings: Aerospace $ 72,854 $ 45,241 Industrial 29,169 19,781 Nonsegment expenses (29,001) (19,026) Interest expense, net (11,507) (8,509) Consolidated earnings before income taxes $ 61,515 $ 37,487 Segment assets consist of accounts receivable, inventories, property, plant, and equipment, net, goodwill, and other intangibles, net. A summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures follows: December 31, 2018 September 30, 2018 Segment assets: Aerospace $ 1,810,447 $ 1,805,892 Industrial 1,645,415 1,642,462 Unallocated corporate property, plant and equipment, net 101,419 102,083 Other unallocated assets 303,255 240,212 Consolidated total assets $ 3,860,536 $ 3,790,649 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Dec. 31, 2018 | |
Subsequent Event [Abstract] | |
Subsequent Event | Note 23. Subsequent event On January 30, 2019 , Woodward’s board of d irectors declared a quarterly cash dividend of $0.1625 per share, payable on March 5, 2019 , to stockholders of record as of February 19, 2019 . |
Revenue (Policy)
Revenue (Policy) | 3 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Revenue Recognition Policy | Revenue Recognition Policy Revenue is recognized on contracts with Woodward’s customers for arrangements in which quantities and pricing are fixed and/or determinable and are generally based on customer purchase orders, often within the framework of a long-term supply arrangement with the customer. Woodward has determined that it is the principal in its sales transactions, as Woodward is primarily responsible for fulfilling the promised performance obligations , has discretion to establish the selling price , and generally assumes the inventory risk. A performance obligation is a promise in a contract with a customer to transfer a distinct product or service to the customer. Woodward recognizes revenue for performance obligations within a customer contract when control of the associated product or service is transferred to the customer. Some of Woodward’s contracts with customers contain a single performance obligation, while other contracts contain multiple performance obligations. Each product within a contract generally represents a separate performance obligation as Woodward does not provide significant installation and integration services, the products do not customize each other, and the products can function independently of each other. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the customer obtains control of the associated product or service. When there are multiple performance obligations within a contract, Woodward generally uses the observable standalone sales price for each distinct product or service within the contract to allocate the transaction price to the distinct products or services. In instances when a standalone sales price for each product or service is not observable within the contract, Woodward allocates the transaction price to each performance obligation using an estimate of the standalone selling price for each product or service, which is generally based on incurred costs plus a reasonable margin, for each distinct product or service in the contract. When determining the transaction price of each contract, Woodward considers contractual consideration payable by the customer and variable consideration that may affect the total transaction price. Variable consideration, consisting of early payment discounts, rebates and other sources of price variability, are included in the estimated transaction price based on both customer-specific information as well as historical experience. Woodward’s contracts with customers generally do not include a financing component. Woodward regularly reviews its estimates of variable consideration on the transaction price and recognizes changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract. In the three-months ended December 31, 2018, Woodward did no t recognize a significant amount of revenue due to changes in transaction price from performance obligations that were satisfied, or partially satisfied, in prior periods. Customers sometimes trade in used products in exchange for new or refurbished products. In addition, Woodward’s customers sometimes provide inventory to Woodward which will be integrated into final products sold to those customers. Woodward obtains control of these exchanged products and customer provided inventory, and therefore , both are forms of noncash consideration. Noncash consideration paid by customers on overall sales transactions is additive to the transaction price. Woodward’s net sales and cost of goods sold include the value of such noncash consideration for the same amount, with no resulting impact to earnings before income taxes. Upon receipt of such inventory, Woodward recognizes an inventory asset and a contract liability. |
New Accounting Standards (Table
New Accounting Standards (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
New Accounting Standards | |
Schedule of Impact of Retrospectively Applying New Accounting Standards to Condensed Consolidated Statement of Earnings | Three-Months Ended December 31, 2017 As previously reported Adjustment As recast Net sales $ 470,148 $ - $ 470,148 Costs and expenses: Cost of goods sold 346,784 843 347,627 Selling, general, and administrative expenses 46,276 183 46,459 Research and development costs 34,786 - 34,786 Interest expense 6,750 2,122 8,872 Interest income (363) - (363) Other expense (income), net (1,572) (3,148) (4,720) Total costs and expenses 432,661 - 432,661 Earnings before income taxes 37,487 - 37,487 Income tax expense 19,227 - 19,227 Net earnings $ 18,260 $ - $ 18,260 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Schedule of Revenue Recognition Time | Three-Months Ended December 31, 2018 Aerospace Industrial Consolidated Point in time $ 164,014 $ 172,162 $ 336,176 Over time 228,873 87,762 316,635 Total net sales $ 392,887 $ 259,924 $ 652,811 |
Schedule of Contract Asset and Liability | December 31, 2018 September 30, 2018 Billed receivables Trade accounts receivable $ 332,792 $ 403,590 Other (Chinese financial institutions) 40,542 23,191 Less: Allowance for uncollectible amounts (3,995) (3,938) Net billed receivables 369,339 422,843 Current unbilled receivables (contract assets), net 120,190 9,160 Total accounts receivable, net $ 489,529 $ 432,003 December 31, 2018 September 30, 2018 Current Noncurrent Current Noncurrent Deferred revenue from material rights from GE joint venture formation $ 6,988 $ 232,897 $ 7,087 $ 235,300 Deferred revenue advance invoicing and/or prepayments from customers 2,866 - 2,572 - Liability related to customer supplied inventory 17,283 - - - Deferred revenue from material rights related to engineering and development funding 1,053 86,333 - - Net contract liabilities $ 28,190 $ 319,230 $ 9,659 $ 235,300 |
Schedule of Impact of the Adoption ASC 606 on Financial Statement | The following schedule quantifies the impact of adopting ASC 606 on the Condensed Consolidated Balance Sheet as of October 1, 2018. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of ASC 606: September 30, 2018 as reported Effect of ASC 606 October 1, 2018 as adjusted ASSETS Current assets: Cash and cash equivalents $ 83,594 $ - $ 83,594 Accounts receivable, net (1)(2) 432,003 104,907 536,910 Inventories (1)(2) 549,596 (55,002) 494,594 Income taxes receivable (5) 6,397 (959) 5,438 Other current assets 43,207 (154) 43,053 Total current assets 1,114,797 48,792 1,163,589 Property, plant and equipment, net 1,060,005 - 1,060,005 Goodwill 813,250 - 813,250 Intangible assets, net (4) 700,883 (2,519) 698,364 Deferred income tax assets (5) 16,570 (975) 15,595 Other assets (1)(2)(3) 85,144 85,865 171,009 Total assets $ 3,790,649 $ 131,163 $ 3,921,812 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ 153,635 $ - $ 153,635 Accounts payable 226,285 - 226,285 Income taxes payable (5) 16,745 4,141 20,886 Accrued liabilities (2)(3) 194,513 15,672 210,185 Total current liabilities 591,178 19,813 610,991 Long-term debt, less current portion 1,092,397 - 1,092,397 Deferred income tax liabilities (5) 170,915 3,833 174,748 Other liabilities (3) 398,055 78,631 476,686 Total liabilities 2,252,545 102,277 2,354,822 Stockholders’ equity: Preferred stock - - - Common stock 106 - 106 Additional paid-in capital 185,705 - 185,705 Accumulated other comprehensive losses (74,942) (41) (74,983) Deferred compensation 8,431 - 8,431 Retained earnings 1,966,643 28,927 1,995,570 2,085,943 28,886 2,114,829 Treasury stock at cost (539,408) - (539,408) Treasury stock held for deferred compensation (8,431) - (8,431) Total stockholders’ equity 1,538,104 28,886 1,566,990 Tot al liabilities and stockholders’ equity $ 3,790,649 $ 131,163 $ 3,921,812 (1) The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward’s businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in “Accounts receivable” and noncurrent unbilled receivables in “Other assets.” The change in the tim ing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs , which are reflected as a reduction to inventory. (2) The value of noncash consideration in the form of exchanged products and other customer provided inventory is reflected in unbilled receivables included in “Accounts receivable,” “Other assets,” and “Inventories,” and in contract liabilities, which are included in “Accrued liabilities.” (3) Woodward recorded customer funding of product engineering and development identified as material rights as current and noncurrent deferred revenue contract liabilities included in “Accrued liabilities” and “Other liabilities.” The related customer funded product engineering and development costs were capitalized as costs to fulfill a contract, to the extent of the contractually committed customer funded payments, and are recorded as “Other assets.” (4) The net book value of the backlog and customer relationships and contracts intangible assets was adjusted concurrent with the change in the timing of the associated revenue, resulting in a reduction in the net book value of these assets as of the date of adoption. (5) The value of tax assets and tax liabilities was impacted by the change in timing of the recognition of assets and liabilities within tax jurisdictions. The following schedule quantifies the impact of adopting ASC 606 on the Condensed Consolidated Statement of Earnings for the three-months ended December 31, 2018. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of ASC 606. Three-Months Ended December 31, 2018, under previous standard Effect of ASC 606 Three-Months Ended December 31, 2018, as reported Net sales $ 632,641 $ 20,170 $ 652,811 Costs and expenses: Cost of goods sold 468,690 23,484 492,174 Selling, general, and administrative expenses 52,026 (99) 51,927 Research and development costs 38,714 153 38,867 Interest expense 11,878 - 11,878 Interest income (371) - (371) Other expense (income), net (3,179) - (3,179) Total costs and expenses 567,758 23,538 591,296 Earnings before income taxes 64,883 (3,368) 61,515 Income tax expense 13,083 (688) 12,395 Net earnings $ 51,800 $ (2,680) $ 49,120 Earnings per share Basic earnings per share $ 0.84 $ (0.04) $ 0.79 Diluted earnings per share $ 0.81 $ (0.04) $ 0.77 Weighted Average Common Shares Outstanding (Note 4): Basic 61,818 61,818 Diluted 64,059 64,059 The adoption of ASC 606 resulted in an increase to net sales and cost of goods sold primarily due to the recognition of noncash consideration in the form of customer supplied inventory and the accelerated recognition of revenue and associated cost of goods sold for over time contracts, which would have been recognized at a point in time under the previous standard. The increases were offset by decreases in revenue and cost of goods sold related to the deferral of amounts due from customers recognized as material rights and over time contracts recognized as of the date of adoption, both of which would otherwise have been recognized as revenue during the period under the previous standard. The following schedule quantifies the impact of adopting ASC 606 on the Condensed Consolidated Balance Sheet as of December 31, 2018. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of ASC 606. December 31, 2018, under previous standard Effect of ASC 606 December 31, 2018, as reported ASSETS Current assets: Cash and cash equivalents $ 71,634 $ - $ 71,634 Accounts receivable, net 374,493 115,036 489,529 Inventories 589,207 (64,707) 524,500 Income taxes receivable 4,677 (908) 3,769 Other current assets 37,181 (177) 37,004 Total current assets 1,077,192 49,244 1,126,436 Property, plant and equipment, net 1,060,556 - 1,060,556 Goodwill 809,480 - 809,480 Intangible assets, net 675,653 (2,367) 673,286 Deferred income tax assets 16,161 (989) 15,172 Other assets 82,806 92,800 175,606 Total assets $ 3,721,848 $ 138,688 $ 3,860,536 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 160,000 $ - $ 160,000 Accounts payable 224,890 - 224,890 Income taxes payable 16,393 3,506 19,899 Accrued liabilities 151,471 19,666 171,137 Total current liabilities 552,754 23,172 575,926 Long-term debt, less current portion 1,024,872 - 1,024,872 Deferred income tax liabilities 164,706 3,703 168,409 Other liabilities 374,841 85,621 460,462 Total liabilities 2,117,173 112,496 2,229,669 Stockholders' equity: Preferred stock - - - Common stock 106 - 106 Additional paid-in capital 195,894 - 195,894 Accumulated other comprehensive losses (64,593) (55) (64,648) Deferred compensation 9,015 - 9,015 Retained earnings 2,008,630 26,247 2,034,877 2,149,052 26,192 2,175,244 Treasury stock at cost (535,362) - (535,362) Treasury stock held for deferred compensation (9,015) - (9,015) Total stockholders' equity 1,604,675 26,192 1,630,867 Total liabilities and stockholders' equity $ 3,721,848 $ 138,688 $ 3,860,536 |
Schedule of Disaggregation of Revenue | Revenue by primary market for the Aerospace reportable segment was as follows: Three-Months Ended December 31, 2018 Commercial OEM $ 140,508 Commercial aftermarket 111,348 Defense OEM 101,836 Defense aftermarket 39,195 Total Aerospace segment net sales $ 392,887 Revenue by primary market for the Industrial reportable segment was as follows: Three-Months Ended December 31, 2018 Reciprocating engines $ 196,130 Industrial turbines 49,512 Renewables 14,282 Total Industrial segment net sales $ 259,924 The customers who account for approximately 10% or more of net sales to each of Woodward’s reportable segments for the three-months ended December 31, 2018 follow: Customer Aerospace The Boeing Company, General Electric Company, United Technologies Corporation 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, 2018 Aerospace Industrial Consolidated United States $ 286,745 $ 49,892 $ 336,637 Germany 12,749 63,364 76,113 Europe, excluding Germany 39,612 59,348 98,960 Asia 24,006 79,418 103,424 Other countries 29,775 7,902 37,677 Total net sales $ 392,887 $ 259,924 $ 652,811 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share | |
Reconciliation of Net Earnings to Net Earnings Per Share Basic and Diluted | Three-Months Ended December 31, 2018 2017 Numerator: Net earnings $ 49,120 $ 18,260 Denominator: Basic shares outstanding 61,818 61,246 Dilutive effect of stock options and restricted stock 2,241 2,463 Diluted shares outstanding 64,059 63,709 Income per common share: Basic earnings per share $ 0.79 $ 0.30 Diluted earnings per share $ 0.77 $ 0.29 |
Anti-dilutive Stock Options Excluded from Computation of Earnings Per Share | Three-Months Ended December 31, 2018 2017 Options 1,426 754 Weighted-average option price $ 79.22 $ 78.75 |
Schedule of Treasury Stock Shares Held for Deferred Compensation Included in Basic and Diluted Shares Outstanding | Three-Months Ended December 31, 2018 2017 Weighted-average treasury stock shares held for deferred compensation obligations 206 193 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Business Acquisition [Line Items] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Year Ending September 30: 2019 (remaining) $ 38,893 2020 40,660 2021 41,760 2022 39,554 2023 38,496 Thereafter 407,521 $ 606,884 |
Business Acquisition, Acquiree - L'Orange [Member] | |
Business Acquisition [Line Items] | |
Schedule of the Purchase Price | Cash paid to Sellers $ 780,401 Less acquired cash and restricted cash (9,286) Total purchase price $ 771,115 |
Schedule of Assets Acquired and Liabililties Assumed | Accounts receivable $ 26,538 Inventories (1) 72,392 Other current assets 1,385 Property, plant, and equipment 89,772 Goodwill 257,447 Intangible assets 573,427 Total assets acquired 1,020,961 Other current liabilities 41,997 Deferred income tax liabilities 166,927 Other noncurrent liabilities 40,922 Total liabilities assumed 249,846 Net assets acquired $ 771,115 (1) Inventories include a $16,324 adjustment to state work in progress and finished goods inventories at their fair value as of the acquisition date. The entire inventory fair value adjustment was recognized as a noncash increase to cost of goods sold ratably over the estimated inventory turnover period during the year ending September 30, 2018 . |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired | Estimated Amounts Weighted-Average Useful Life Amortization Method Intangible assets with finite lives: Customer relationships and contracts $ 388,705 22 years Straight-line Process technology 74,260 22 years Straight-line Backlog 42,932 1 year Accelerated Other 232 3 years Straight-line Intangible asset with indefinite life: Trade name 67,298 Indefinite Not amortized Total $ 573,427 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Year Ending September 30: 2019 (remaining) $ 21,543 2020 19,627 2021 22,586 2022 22,535 2023 22,535 Thereafter 356,994 $ 465,820 |
Schedule of Unaudited Pro Forma Results | Three-Months Ended Three-Months Ended December 31, 2018 December 31, 2017 As reported Pro forma As reported Pro forma Net sales $ 652,811 $ 652,811 $ 470,148 $ 565,993 Net earnings 49,120 53,739 18,260 20,999 Earnings per share: Basic earnings per share $ 0.79 $ 0.87 $ 0.30 $ 0.34 Diluted earnings per share 0.77 0.84 0.29 0.33 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Financial Instruments and Fair Value Measurments | |
Financial Assets that are Measured at Fair Value on a Recurring Basis | At December 31, 2018 At September 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets: Cash $ 63,723 $ - $ - $ 63,723 $ 59,838 $ - $ - $ 59,838 Investments in reverse repurchase agreements 161 - - 161 4,582 - - 4,582 Investments in term deposits with foreign banks 7,750 - - 7,750 19,174 - - 19,174 Equity securities 19,059 - - 19,059 19,730 - - 19,730 Total financial assets $ 90,693 $ - $ - $ 90,693 $ 103,324 $ - $ - $ 103,324 Financial liabilities: Cross currency interest rate swaps $ - $ 4,437 $ - $ 4,437 $ - $ 23,000 $ - $ 23,000 Total financial liabilities $ - $ 4,437 $ - $ 4,437 $ - $ - $ - $ 23,000 |
Estimated Fair Values of Financial Instruments | At December 31, 2018 At September 30, 2018 Fair Value Hierarchy Level Estimated Fair Value Carrying Cost Estimated Fair Value Carrying Cost Assets: Notes receivable from municipalities 2 $ 13,473 $ 13,143 $ 13,458 $ 13,462 Investments in short-term time deposits 2 10,163 10,168 8,883 8,874 Liabilities: Long-term debt 2 $ (1,017,257) $ (1,027,659) $ (1,094,987) $ (1,095,292) |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities | |
Impact of Derivative Instruments on Earnings | Three-Months Ended December 31, 2018 Derivatives in: Location Amount of (Income) Expense Recognized in Earnings on Derivative Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings Cross currency interest rate swap agreement designated as fair value hedges Selling, general and administrative expenses $ (2,389) $ (2,505) $ (2,252) Cross currency interest rate swap agreements designated as cash flow hedges Selling, general and administrative expenses (5,556) (16,058) (5,556) Treasury lock agreement designated as cash flow hedge Interest expense (18) - (18) $ (7,963) $ (18,563) $ (7,826) Three-Months Ended December 31, 2017 Derivatives in: Location Amount of (Income) Expense Recognized in Earnings on Derivative Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings Cross currency interest rate swap agreement designated as fair value hedges Selling, general and administrative expenses $ - $ - $ - Cross currency interest rate swap agreements designated as cash flow hedges Selling, general and administrative expenses - - - Treasury lock agreement designated as cash flow hedge Interest expense (18) - (18) $ (18) $ - $ (18) |
Supplemental Statement of Cas_2
Supplemental Statement of Cash Flows Information (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Supplemental Statement of Cash Flows Information | |
Schedule of Supplemental Statement of Cash Flows Information | Three-Months Ended December 31, 2018 2017 Interest paid, net of amounts capitalized $ 16,754 $ 11,302 Income taxes paid 15,858 7,695 Income tax refunds received 444 1,772 Non-cash activities: Purchases of property, plant and equipment on account 4,580 10,631 Impact of the adoption of ASC 606 (Note 3) 28,886 - |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Schedule of Inventories | December 31, September 30, 2018 2018 Raw materials $ 98,641 $ 80,999 Work in progress 124,773 118,010 Component parts (1) 307,938 298,820 Finished goods 57,854 51,767 Customer supplied inventory (Note 3) 17,283 - On-hand inventory for which control has transferred to the customer (Note 3) (81,989) - $ 524,500 $ 549,596 (1) Component parts include items that can be sold separately as finished goods or included in the manufacture of other products. |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Property, Plant, and Equipment | |
Schedule of Property Plant and Equipment, Net | December 31, September 30, 2018 2018 Land and land improvements $ 93,958 $ 94,146 Buildings and building improvements 566,562 565,065 Leasehold improvements 17,897 17,954 Machinery and production equipment 677,086 668,986 Computer equipment and software 125,272 124,788 Office furniture and equipment 32,210 31,533 Other 19,396 19,366 Construction in progress 109,325 103,036 1,641,706 1,624,874 Less accumulated depreciation (581,150) (564,869) Property, plant, and equipment, net $ 1,060,556 $ 1,060,005 |
Schedule of Depreciation Expense | Three-Months Ended December 31, 2018 2017 Depreciation expense $ 21,169 $ 14,827 |
Schedule of Capitalized Interest | Three-Months Ended December 31, 2018 2017 Capitalized interest $ 227 $ 601 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Goodwill [Abstract] | |
Schedule of Goodwill | September 30, 2018 Effects of Foreign Currency Translation December 31, 2018 Aerospace $ 455,423 $ - $ 455,423 Industrial 357,827 (3,770) 354,057 Consolidated $ 813,250 $ (3,770) $ 809,480 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net | |
Schedule of Finite-lived and Indefinite-lived Intangible Assets by Major Class | December 31, 2018 September 30, 2018 Gross Carrying Value Accumulated Amortization Net Carrying Amount Gross Carrying Value Accumulated Amortization Net Carrying Amount Intangible assets with finite lives: Customer relationships and contracts: Aerospace $ 281,683 $ (170,538) $ 111,145 $ 281,683 $ (166,719) $ 114,964 Industrial 424,543 (36,504) 388,039 429,880 (35,856) 394,024 Total $ 706,226 $ (207,042) $ 499,184 $ 711,563 $ (202,575) $ 508,988 Intellectual property: Aerospace $ - $ - $ - $ - $ - $ - Industrial 19,380 (18,612) 768 19,448 (18,587) 861 Total $ 19,380 $ (18,612) $ 768 $ 19,448 $ (18,587) $ 861 Process technology: Aerospace $ 76,371 $ (56,135) $ 20,236 $ 76,372 $ (54,874) $ 21,498 Industrial 96,110 (21,551) 74,559 97,154 (20,373) 76,781 Total $ 172,481 $ (77,686) $ 94,795 $ 173,526 $ (75,247) $ 98,279 Backlog: Aerospace $ - $ - $ - $ - $ - $ - Industrial 42,363 (30,651) 11,712 42,955 (18,006) 24,949 Total $ 42,363 $ (30,651) $ 11,712 $ 42,955 $ (18,006) $ 24,949 Other intangibles: Aerospace $ - $ - $ - $ - $ - $ - Industrial 1,608 (1,183) 425 1,629 (1,158) 471 Total $ 1,608 $ (1,183) $ 425 $ 1,629 $ (1,158) $ 471 Intangible asset with indefinite life: Tradename: Aerospace $ - $ - $ - $ - $ - $ - Industrial 66,402 - 66,402 67,335 - 67,335 Total $ 66,402 $ - $ 66,402 $ 67,335 $ - $ 67,335 Total intangibles: Aerospace $ 358,054 $ (226,673) $ 131,381 $ 358,055 $ (221,593) $ 136,462 Industrial 650,406 (108,501) 541,905 658,401 (93,980) 564,421 Consolidated Total $ 1,008,460 $ (335,174) $ 673,286 $ 1,016,456 $ (315,573) $ 700,883 |
Schedule of Finite-Lived Intangible Assets Amortization Expense | Three-Months Ended December 31, 2018 2017 Amortization expense $ 17,472 $ 6,243 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Year Ending September 30: 2019 (remaining) $ 38,893 2020 40,660 2021 41,760 2022 39,554 2023 38,496 Thereafter 407,521 $ 606,884 |
Credit Facilities, Short-term_2
Credit Facilities, Short-term Borrowings and Long-term Debt (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure | |
Schedule of Long-term Debt | December 31, September 30, 2018 2018 Long-term portion of revolving credit facility - Floating rate (LIBOR plus 0.85% - 1.65% ), due April 2020 ; unsecured $ 151,481 $ 116,541 Series D notes – 6.39%, due October 2018; unsecured - 100,000 Series F notes – 8.24%, due April 2019; unsecured 43,000 43,000 Series G notes – 3.42%, due November 2020; unsecured 50,000 50,000 Series H notes – 4.03%, due November 2023; unsecured 25,000 25,000 Series I notes – 4.18%, due November 2025; unsecured 25,000 25,000 Series J notes – Floating rate (LIBOR plus 1.25%), due November 2020; unsecured 50,000 50,000 Series K notes – 4.03%, due November 2023; unsecured 50,000 50,000 Series L notes – 4.18%, due November 2025; unsecured 50,000 50,000 Series M notes – 1.12% due September 2026; unsecured 45,795 46,437 Series N notes – 1.31% due September 2028; unsecured 88,154 89,393 Series O notes – 1.57% due September 2031; unsecured 49,229 49,921 Series P notes – 4.27% due May 2025; unsecured 85,000 85,000 Series Q notes – 4.35% due May 2027; unsecured 85,000 85,000 Series R notes – 4.41% due May 2029; unsecured 75,000 75,000 Series S notes – 4.46% due May 2030; unsecured 75,000 75,000 Series T notes – 4.61% due May 2033; unsecured 80,000 80,000 Unamortized debt issuance costs (2,787) (2,895) Total long-term debt 1,024,872 1,092,397 Less: Current portion of long-term debt - - Long-term debt, less current portion $ 1,024,872 $ 1,092,397 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities [Line Items] | |
Accrued Liabilities | December 31, September 30, 2018 2018 Salaries and other member benefits $ 61,187 $ 88,643 Warranties 20,156 20,130 Interest payable 7,014 18,611 Current portion of acquired contractual obligations and unfavorable contracts (1) 1,160 1,627 Accrued retirement benefits 3,571 3,571 Current portion of loss reserve on contractual lease commitments 1,245 1,245 Restructuring charges 15,843 16,522 Taxes, other than income 17,290 21,128 Net current contract liabilities (2) 28,190 9,659 Other 15,481 13,377 $ 171,137 $ 194,513 (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 obligations for contractual commitments that are expected to result in future economic losses. In addition, Woodward assumed current and long-term contractual 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 . (2) See Note 3, Revenue for more information on net current contract liabilities. |
Changes in Accrued Product Warranties | Three-Months Ended December 31, 2018 2017 Warranties, beginning of period $ 20,130 $ 13,597 Impact from adoption of ASC 606 (Note 3) 594 - Expense, net of recoveries 2,072 (2,030) Reductions for settlement of previous warranty liabilities (2,537) 1,377 Foreign currency exchange rate changes (103) 73 Warranties, end of period $ 20,156 $ 13,017 |
Loss Reserve On Contractual Lease Commitments [Member] | |
Accrued Liabilities [Line Items] | |
Loss Reserve & Restructuring Reserve Activity | Three-Months Ended December 31, 2018 2017 Loss reserve on contractual lease commitments, beginning of period $ 3,931 $ 5,270 Payments, net of sublease income (117) (553) Loss reserve on contractual lease commitments, end of period $ 3,814 $ 4,717 |
Employee Severance [Member] | |
Accrued Liabilities [Line Items] | |
Loss Reserve & Restructuring Reserve Activity | Period Activity Balances as of October 1, 2018 Charges (gains) Cash receipts (payments) Non-cash activity Balances as of December 31, 2018 Workforce management costs associated with: Duarte plant relocation $ 12,504 $ - $ - $ - $ 12,504 Industrial turbomachinery business realignment 4,018 - (679) - 3,339 Total $ 16,522 $ - $ (679) $ - $ 15,843 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | December 31, September 30, 2018 2018 Net accrued retirement benefits, less amounts recognized within accrued liabilities $ 89,503 $ 90,722 Total unrecognized tax benefits 9,015 8,582 Noncurrent income taxes payable 12,494 12,494 Acquired unfavorable contracts (1) - 54 Deferred economic incentives (2) 12,662 13,038 Loss reserve on contractual lease commitments (3) 2,569 2,686 Cross currency swap derivative liability (4) 4,437 23,000 Net noncurrent contract liabilities (5) 319,230 235,300 Other 10,552 12,179 $ 460,462 $ 398,055 (1) In connection with the Duarte Acquisition in fiscal year 2013, Woodward assumed current and long-term obligations for contractual commitments that are expected to result in future economic losses. The long-term portion of the acquired unfavorable contracts is included in Other liabilities. (2) Woodward receives certain economic incentives from various state and local authorities related to capital expansion projects. Such amounts are initially recorded as deferred credits and are being recognized as a reduction to pre-tax expense over the economic lives of the related capital expansion projects. (3) See Note 15, Accrued liabilities for more information on the loss reserve on contractual lease commitments . (4) See Note 7, Financial instruments and fair value measurements for more information on the cross currency swap derivative liability. (5) See Note 3, Revenue , for more information on net noncurrent contract liabilities. |
Other Expense (Income), Net (Ta
Other Expense (Income), Net (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Other Expense (Income), Net [Abstract] | |
Other Expense (Income), Net | Three-Months Ended December 31, 2018 2017 Equity interest in the earnings of the JV (Note 6) $ (1,465) $ (596) Net (gain) loss on sales of assets 79 (58) Rent income (67) (54) Net (gain) loss on investments in deferred compensation program 1,729 (654) Other components of net periodic pension and other postretirement benefit, excluding service cost and interest expense (3,243) (3,148) Other (212) (210) $ (3,179) $ (4,720) |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Tax Expense and Effective Tax Rate | Three-Months Ended December 31, 2018 2017 Earnings before income taxes $ 61,515 $ 37,487 Income tax expense 12,395 19,227 Effective tax rate 20.1% 51.3% |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Amount of Expense Associated with Defined Contribution Plans | Three-Months Ended December 31, 2018 2017 Company costs $ 8,371 $ 7,879 |
Schedule of Estimated Remaining Cash Contributions | Retirement pension benefits: United States $ - United Kingdom 518 Japan - Germany 748 Other postretirement benefits 3,242 |
Schedule of Amounts of Contributions Associated with Multiemployer Defined Benefit Plans | Three-Months Ended December 31, 2018 2017 Company contributions $ 77 $ 79 |
Defined Benefit Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Periodic Benefit Costs | Three-Months Ended December 31, United States Other Countries Total 2018 2017 2018 2017 2018 2017 Service cost $ 363 $ 411 $ 512 $ 158 $ 875 $ 569 Interest cost 1,596 1,501 480 329 2,076 1,830 Expected return on plan assets (2,996) (2,904) (662) (686) (3,658) (3,590) Amortization of: Net actuarial loss 154 150 71 72 225 222 Prior service cost 177 177 - - 177 177 Net periodic retirement pension (benefit) cost $ (706) $ (665) $ 401 $ (127) $ (305) $ (792) Contributions paid $ - $ - $ 554 $ 312 $ 554 $ 312 |
Other Postretirement Benefit Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Periodic Benefit Costs | Three-Months Ended December 31, 2018 2017 Service cost $ 1 $ 2 Interest cost 288 292 Amortization of: Net actuarial loss 14 24 Prior service benefit (1) (40) Curtailment gain - (330) Net periodic other postretirement cost $ 302 $ (52) Contributions paid $ 373 $ 226 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Assumptions Used in Estimate of Fair Value of Stock Option Awards | Three-Months Ended December 31, 2018 2017 Weighted-average exercise price per share 79.79 78.97 Weighted-average grant date market value of Woodward stock 79.79 78.97 Expected term (years) 6.5 - 8.7 6.4 - 8.7 Estimated volatility 25.7% - 31.0% 30.3% - 32.7% Estimated dividend yield 0.7% - 0.8% 0.6% Risk-free interest rate 2.7% - 3.1% 2.1% - 2.3% |
Summary of Activity for Stock Option Awards | Three-Months Ended December 31, 2018 Number of options Weighted-Average Exercise Price per Share Options, beginning balance 5,611 $ 45.42 Options granted 674 79.79 Options exercised (107) 31.48 Options forfeited (5) 70.65 Options, ending balance 6,173 49.40 |
Changes in Non-vested Stock Options | Three-Months Ended December 31, 2018 Number of options Weighted-Average Grant Date Fair Value per Share Non-vested options outstanding, beginning balance 1,988 $ 21.64 Options granted 674 24.59 Options vested (795) 19.78 Options forfeited (5) 23.87 Non-vested options outstanding, ending balance 1,862 23.50 |
Stock Options Vested, or Expected to Vest and Exercisable | Number Weighted- Average Exercise Price Weighted- Average Remaining Life in Years Aggregate Intrinsic Value Options outstanding 6,173 $ 49.40 5.8 $ 160,762 Options vested and exercisable 4,310 40.19 4.6 147,826 Options vested and expected to vest 6,074 48.99 5.8 160,384 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Activity for Restricted Stock Units | Three-Months Ended December 31, 2018 Number Fair Value per Share Beginning balance 10 $ 82.71 Shares granted - n/a Shares vested - n/a Shares forfeited - n/a Ending balance 10 82.71 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Segment Information | |
Summary of Consolidated Net Sales and Earnings by Segment | Three-Months Ended December 31, 2018 2017 Segment external net sales: Aerospace $ 392,887 $ 305,905 Industrial 259,924 164,243 Total consolidated net sales $ 652,811 $ 470,148 Segment earnings: Aerospace $ 72,854 $ 45,241 Industrial 29,169 19,781 Nonsegment expenses (29,001) (19,026) Interest expense, net (11,507) (8,509) Consolidated earnings before income taxes $ 61,515 $ 37,487 |
Summary of Consolidated Total Assets, Depreciation and Amortization, and Capital Expenditures by Segment | December 31, 2018 September 30, 2018 Segment assets: Aerospace $ 1,810,447 $ 1,805,892 Industrial 1,645,415 1,642,462 Unallocated corporate property, plant and equipment, net 101,419 102,083 Other unallocated assets 303,255 240,212 Consolidated total assets $ 3,860,536 $ 3,790,649 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | |
Change in Accounting Estimate [Line Items] | |||
Accounts receivable | $ 489,529 | $ 432,003 | [1] |
Other current assets | $ 37,004 | 43,207 | |
Reclassification [Member] | |||
Change in Accounting Estimate [Line Items] | |||
Accounts receivable | 183 | ||
Other current assets | $ (183) | ||
[1] | The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward's businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in "Accounts receivable" and noncurrent unbilled receivables in "Other assets." The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. |
New Accounting Standards (Narra
New Accounting Standards (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2018 | |
Rent expense for all operating leases | $ 8,348 | |
Future minimum rental payments required under operating leases | $ 26,020 | |
Accounting Standards Update 2016-16 [Member] | ||
Cumulative effect from adoption | $ (1,005) | |
Retained Earnings [Member] | Accounting Standards Update 2016-16 [Member] | ||
Cumulative effect from adoption | $ (1,005) |
New Accounting Standards (Sched
New Accounting Standards (Schedule of Impact of Retrospectively Applying New Accounting Standards to Condensed Consolidated Statement of Earnings) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net sales | $ 652,811 | $ 470,148 |
Costs and expenses: | ||
Cost of goods sold | 492,174 | 347,627 |
Selling, general and administrative expenses | 51,927 | 46,459 |
Research and development costs | 38,867 | 34,786 |
Interest expense | 11,878 | 8,872 |
Interest income | (371) | (363) |
Other expense (income), net | (3,179) | (4,720) |
Total costs and expenses | 591,296 | 432,661 |
Earnings before income taxes | 61,515 | 37,487 |
Income tax expense | 12,395 | 19,227 |
Net earnings | $ 49,120 | 18,260 |
Accounting Standards Update 2017-07 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net sales | 470,148 | |
Costs and expenses: | ||
Cost of goods sold | 347,627 | |
Selling, general and administrative expenses | 46,459 | |
Research and development costs | 34,786 | |
Interest expense | 8,872 | |
Interest income | (363) | |
Other expense (income), net | (4,720) | |
Total costs and expenses | 432,661 | |
Earnings before income taxes | 37,487 | |
Income tax expense | 19,227 | |
Net earnings | 18,260 | |
Accounting Standards Update 2017-07 [Member] | As Previously Reported [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net sales | 470,148 | |
Costs and expenses: | ||
Cost of goods sold | 346,784 | |
Selling, general and administrative expenses | 46,276 | |
Research and development costs | 34,786 | |
Interest expense | 6,750 | |
Interest income | (363) | |
Other expense (income), net | (1,572) | |
Total costs and expenses | 432,661 | |
Earnings before income taxes | 37,487 | |
Income tax expense | 19,227 | |
Net earnings | 18,260 | |
Accounting Standards Update 2017-07 [Member] | Effect Of [Member] | ||
Costs and expenses: | ||
Cost of goods sold | 843 | |
Selling, general and administrative expenses | 183 | |
Interest expense | 2,122 | |
Other expense (income), net | $ (3,148) |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||||
Dec. 31, 2018 | Oct. 01, 2018 | Sep. 30, 2018 | Dec. 31, 2016 | ||||
Revenue related to noncash consideration | $ 17,057 | ||||||
Increase in revenue related to changes in estimated total lifetime sales | 620 | ||||||
Increase in cost of goods sold related to changes in estimated total lifetime sales | 182 | ||||||
Capitalized costs to fulfill contracts | 92,091 | ||||||
Amortized capitalized costs to fulfill contracts | 0 | ||||||
Accounts receivable | 489,529 | $ 432,003 | [1] | ||||
Noncurrent unbilled receivables | 444 | 0 | |||||
Current contract liabilities | [2] | 28,190 | 9,659 | ||||
Revenue from contract liabilities | 9,760 | ||||||
Noncurrent contract liabilities | [3] | 319,230 | $ 235,300 | ||||
Remaining performance obligation amount | $ 1,630,741 | ||||||
Woodward and General Electric Joint Venture [Member] | |||||||
Ownership interest, joint venture | 50.00% | 50.00% | |||||
Total consideration | $ 323,410 | ||||||
Material Rights [Member] | |||||||
Remaining performance obligation amount | $ 410,355 | ||||||
ASC 606 [Member] | |||||||
Cumulative effect from adoption | 28,885 | ||||||
Capitalized costs to fulfill contracts | 4,428 | $ 57,529 | |||||
Accounts receivable | [1] | 536,910 | |||||
Contract liabilities | 4,428 | 57,529 | |||||
ASC 606 [Member] | Retained Earnings [Member] | |||||||
Cumulative effect from adoption | 28,927 | ||||||
Aerospace [Member] | |||||||
Revenue related to noncash consideration | 16,706 | ||||||
Industrial [Member] | |||||||
Revenue related to noncash consideration | $ 351 | ||||||
Net Sales [Member] | Manufactured Products [Member] | |||||||
Percentage of attributable to revenue | 87.00% | ||||||
Net Sales [Member] | MRO Products [Member] | |||||||
Percentage of attributable to revenue | 11.00% | ||||||
Liability Related To Customer Supplied Inventory [Member] | |||||||
Current contract liabilities | $ 17,283 | ||||||
Liability Related To Customer Supplied Inventory [Member] | ASC 606 [Member] | |||||||
Current contract liabilities | 13,141 | ||||||
Deferred Revenue From Material Rights Related To Engineering And Development Funding [Member] | |||||||
Current contract liabilities | 1,053 | ||||||
Noncurrent contract liabilities | 86,333 | ||||||
Deferred Revenue From Material Rights Related To Engineering And Development Funding [Member] | ASC 606 [Member] | |||||||
Current contract liabilities | 664 | ||||||
Noncurrent contract liabilities | 79,347 | ||||||
Effect Of [Member] | ASC 606 [Member] | |||||||
Accounts receivable | $ 115,036 | $ 104,907 | [1] | ||||
[1] | The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward's businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in "Accounts receivable" and noncurrent unbilled receivables in "Other assets." The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. | ||||||
[2] | See Note 3, Revenue for more information on net current contract liabilities. | ||||||
[3] | See Note 3, Revenue, for more information on net noncurrent contract liabilities. |
Revenue (Narrative - Performanc
Revenue (Narrative - Performance Obligations) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Remaining performance obligation amount | $ 1,630,741 |
Material Rights [Member] | |
Remaining performance obligation amount | 410,355 |
Material Rights [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Remaining performance obligation amount | $ 6,585 |
Remaining performance obligation, expected timing of satisfaction, year | 2,019 |
Period of remaining performance obligation, expected timing of satisfaction | 9 months |
Material Rights [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Remaining performance obligation amount | $ 9,800 |
Remaining performance obligation, expected timing of satisfaction, year | 2,020 |
Period of remaining performance obligation, expected timing of satisfaction | 1 year 9 months |
Aerospace [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Period of remaining performance obligation, expected timing of satisfaction | 2 years |
Revenue (Schedule of Revenue Re
Revenue (Schedule of Revenue Recognition Time) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 652,811 | $ 470,148 |
Point In Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 336,176 | |
Over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 316,635 | |
Aerospace [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 392,887 | |
Aerospace [Member] | Point In Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 164,014 | |
Aerospace [Member] | Over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 228,873 | |
Industrial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 259,924 | |
Industrial [Member] | Point In Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 172,162 | |
Industrial [Member] | Over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 87,762 |
Revenue (Schedule of Contract A
Revenue (Schedule of Contract Asset) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | |
Contract With Customer Asset [Line Items] | |||
Less: Allowance for uncollectible amounts | $ (3,995) | $ (3,938) | |
Net billed receivables | 369,339 | 422,843 | |
Current unbilled receivables (contract assets), net | 120,190 | 9,160 | |
Total accounts receivable, net | 489,529 | 432,003 | [1] |
Trade Accounts Receivable [Member] | |||
Contract With Customer Asset [Line Items] | |||
Billed receivables | 332,792 | 403,590 | |
Other [Member] | |||
Contract With Customer Asset [Line Items] | |||
Billed receivables | $ 40,542 | $ 23,191 | |
[1] | The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward's businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in "Accounts receivable" and noncurrent unbilled receivables in "Other assets." The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. |
Revenue (Schedule of Contract L
Revenue (Schedule of Contract Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | |
Contract With Customer Liability [Line Items] | |||
Current contract liabilities | [1] | $ 28,190 | $ 9,659 |
Noncurrent contract liabilities | [2] | 319,230 | 235,300 |
Deferred Revenue From Material Rights From GE Joint Venture Formation [Member] | |||
Contract With Customer Liability [Line Items] | |||
Current contract liabilities | 6,988 | 7,087 | |
Noncurrent contract liabilities | 232,897 | 235,300 | |
Deferred Revenue Advance Invoicing And/Or Prepayments From Customers [Member] | |||
Contract With Customer Liability [Line Items] | |||
Current contract liabilities | 2,866 | $ 2,572 | |
Liability Related To Customer Supplied Inventory [Member] | |||
Contract With Customer Liability [Line Items] | |||
Current contract liabilities | 17,283 | ||
Deferred Revenue From Material Rights Related To Engineering And Development Funding [Member] | |||
Contract With Customer Liability [Line Items] | |||
Current contract liabilities | 1,053 | ||
Noncurrent contract liabilities | $ 86,333 | ||
[1] | See Note 3, Revenue for more information on net current contract liabilities. | ||
[2] | See Note 3, Revenue, for more information on net noncurrent contract liabilities. |
Revenue (Schedule of Impact of
Revenue (Schedule of Impact of the Adoption ASC 606 on Condensed Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 01, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |||
Current assets: | ||||||||
Cash and cash equivalents | $ 71,634 | $ 83,594 | ||||||
Accounts receivable, net | 489,529 | 432,003 | [1] | |||||
Inventories | 524,500 | 549,596 | [1],[2] | |||||
Income taxes receivable | 3,769 | 6,397 | ||||||
Other current assets | 37,004 | 43,207 | ||||||
Total current assets | 1,126,436 | 1,114,797 | ||||||
Property, plant and equipment, net | 1,060,556 | 1,060,005 | ||||||
Goodwill | 809,480 | 813,250 | ||||||
Intangible assets, net | 673,286 | 700,883 | [3] | |||||
Deferred income tax assets | 15,172 | 16,570 | [4] | |||||
Other assets | 175,606 | 85,144 | [1],[5] | |||||
Total assets | 3,860,536 | 3,790,649 | ||||||
Current liabilities: | ||||||||
Short-term borrowings | 160,000 | 153,635 | ||||||
Current portion of long-term debt | ||||||||
Accounts payable | 224,890 | 226,285 | ||||||
Income taxes payable | 19,899 | 16,745 | [4] | |||||
Accrued liabilities | 171,137 | 194,513 | [2],[5] | |||||
Total current liabilities | 575,926 | 591,178 | ||||||
Long-term debt, less current portion | 1,024,872 | 1,092,397 | ||||||
Deferred income tax liabilities | 168,409 | 170,915 | [4] | |||||
Other liabilities | 460,462 | 398,055 | [5] | |||||
Total liabilities | 2,229,669 | 2,252,545 | ||||||
Stockholders' equity: | ||||||||
Preferred stock | ||||||||
Common stock | 106 | 106 | ||||||
Additional paid-in capital | 195,894 | 185,705 | ||||||
Accumulated other comprehensive losses | (64,648) | (74,942) | ||||||
Deferred compensation | 9,015 | 8,431 | ||||||
Retained earnings | 2,034,877 | 1,966,643 | ||||||
Stockholders' equity excluding treasury stock | 2,175,244 | 2,085,943 | ||||||
Treasury stock at cost | (535,362) | (539,408) | ||||||
Treasury stock held for deferred compensation | (9,015) | (8,431) | ||||||
Total stockholders' equity | 1,630,867 | 1,538,104 | $ 1,400,546 | $ 1,371,383 | ||||
Total liabilities and stockholders' equity | 3,860,536 | $ 3,790,649 | ||||||
ASC 606 [Member] | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 83,594 | |||||||
Accounts receivable, net | [1] | 536,910 | ||||||
Inventories | [1],[2] | 494,594 | ||||||
Income taxes receivable | 5,438 | |||||||
Other current assets | 43,053 | |||||||
Total current assets | 1,163,589 | |||||||
Property, plant and equipment, net | 1,060,005 | |||||||
Goodwill | 813,250 | |||||||
Intangible assets, net | [3] | 698,364 | ||||||
Deferred income tax assets | [4] | 15,595 | ||||||
Other assets | [1],[5] | 171,009 | ||||||
Total assets | 3,921,812 | |||||||
Current liabilities: | ||||||||
Short-term borrowings | 153,635 | |||||||
Accounts payable | 226,285 | |||||||
Income taxes payable | [4] | 20,886 | ||||||
Accrued liabilities | [2],[5] | 210,185 | ||||||
Total current liabilities | 610,991 | |||||||
Long-term debt, less current portion | 1,092,397 | |||||||
Deferred income tax liabilities | [4] | 174,748 | ||||||
Other liabilities | [5] | 476,686 | ||||||
Total liabilities | 2,354,822 | |||||||
Stockholders' equity: | ||||||||
Common stock | 106 | |||||||
Additional paid-in capital | 185,705 | |||||||
Accumulated other comprehensive losses | (74,983) | |||||||
Deferred compensation | 8,431 | |||||||
Retained earnings | 1,995,570 | |||||||
Stockholders' equity excluding treasury stock | 2,114,829 | |||||||
Treasury stock at cost | (539,408) | |||||||
Treasury stock held for deferred compensation | (8,431) | |||||||
Total stockholders' equity | 1,566,990 | |||||||
Total liabilities and stockholders' equity | 3,921,812 | |||||||
Effect Of [Member] | ASC 606 [Member] | ||||||||
Current assets: | ||||||||
Accounts receivable, net | 115,036 | 104,907 | [1] | |||||
Inventories | (64,707) | (55,002) | [1],[2] | |||||
Income taxes receivable | (908) | (959) | ||||||
Other current assets | (177) | (154) | ||||||
Total current assets | 49,244 | 48,792 | ||||||
Intangible assets, net | (2,367) | (2,519) | [3] | |||||
Deferred income tax assets | (989) | (975) | [4] | |||||
Other assets | 92,800 | 85,865 | [1],[5] | |||||
Total assets | 138,688 | 131,163 | ||||||
Current liabilities: | ||||||||
Income taxes payable | 3,506 | 4,141 | [4] | |||||
Accrued liabilities | 19,666 | 15,672 | [2],[5] | |||||
Total current liabilities | 23,172 | 19,813 | ||||||
Deferred income tax liabilities | 3,703 | 3,833 | [4] | |||||
Other liabilities | 85,621 | 78,631 | [5] | |||||
Total liabilities | 112,496 | 102,277 | ||||||
Stockholders' equity: | ||||||||
Accumulated other comprehensive losses | (55) | (41) | ||||||
Retained earnings | 26,247 | 28,927 | ||||||
Stockholders' equity excluding treasury stock | 26,192 | 28,886 | ||||||
Total stockholders' equity | 26,192 | 28,886 | ||||||
Total liabilities and stockholders' equity | 138,688 | $ 131,163 | ||||||
Under Previous Standard [Member] | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 71,634 | |||||||
Accounts receivable, net | 374,493 | |||||||
Inventories | 589,207 | |||||||
Income taxes receivable | 4,677 | |||||||
Other current assets | 37,181 | |||||||
Total current assets | 1,077,192 | |||||||
Property, plant and equipment, net | 1,060,556 | |||||||
Goodwill | 809,480 | |||||||
Intangible assets, net | 675,653 | |||||||
Deferred income tax assets | 16,161 | |||||||
Other assets | 82,806 | |||||||
Total assets | 3,721,848 | |||||||
Current liabilities: | ||||||||
Short-term borrowings | 160,000 | |||||||
Accounts payable | 224,890 | |||||||
Income taxes payable | 16,393 | |||||||
Accrued liabilities | 151,471 | |||||||
Total current liabilities | 552,754 | |||||||
Long-term debt, less current portion | 1,024,872 | |||||||
Deferred income tax liabilities | 164,706 | |||||||
Other liabilities | 374,841 | |||||||
Total liabilities | 2,117,173 | |||||||
Stockholders' equity: | ||||||||
Common stock | 106 | |||||||
Additional paid-in capital | 195,894 | |||||||
Accumulated other comprehensive losses | (64,593) | |||||||
Deferred compensation | 9,015 | |||||||
Retained earnings | 2,008,630 | |||||||
Stockholders' equity excluding treasury stock | 2,149,052 | |||||||
Treasury stock at cost | (535,362) | |||||||
Treasury stock held for deferred compensation | (9,015) | |||||||
Total stockholders' equity | 1,604,675 | |||||||
Total liabilities and stockholders' equity | $ 3,721,848 | |||||||
[1] | The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward's businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in "Accounts receivable" and noncurrent unbilled receivables in "Other assets." The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. | |||||||
[2] | The value of noncash consideration in the form of exchanged products and other customer provided inventory is reflected in unbilled receivables included in "Accounts receivable," "Other assets," and "Inventories," and in contract liabilities, which are included in "Accrued liabilities." | |||||||
[3] | The net book value of the backlog and customer relationships and contracts intangible assets was adjusted concurrent with the change in the timing of the associated revenue, resulting in a reduction in the net book value of these assets as of the date of adoption. | |||||||
[4] | The value of tax assets and tax liabilities was impacted by the change in timing of the recognition of assets and liabilities within tax jurisdictions. | |||||||
[5] | Woodward recorded customer funding of product engineering and development identified as material rights as current and noncurrent deferred revenue contract liabilities included in "Accrued liabilities" and "Other liabilities." The related customer funded product engineering and development costs were capitalized as costs to fulfill a contract, to the extent of the contractually committed customer funded payments, and are recorded as "Other assets." |
Revenue (Schedule of Impact o_2
Revenue (Schedule of Impact of the Adoption ASC 606 on Condensed Consolidated Earning) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales | $ 652,811 | $ 470,148 |
Costs and expenses: | ||
Cost of goods sold | 492,174 | 347,627 |
Selling, general and administrative expenses | 51,927 | 46,459 |
Research and development costs | 38,867 | 34,786 |
Interest expense | 11,878 | 8,872 |
Interest income | (371) | (363) |
Other expense (income), net | (3,179) | (4,720) |
Total costs and expenses | 591,296 | 432,661 |
Earnings before income taxes | 61,515 | 37,487 |
Income tax expense | 12,395 | 19,227 |
Net earnings | $ 49,120 | $ 18,260 |
Earnings Per Share | ||
Basic earnings per share | $ 0.79 | $ 0.30 |
Diluted earnings per share | $ 0.77 | $ 0.29 |
Weighted Average Common Shares Outstanding (Note 4): | ||
Basic | 61,818 | 61,246 |
Diluted | 64,059 | 63,709 |
Under Previous Standard [Member] | ||
Net sales | $ 632,641 | |
Costs and expenses: | ||
Cost of goods sold | 468,690 | |
Selling, general and administrative expenses | 52,026 | |
Research and development costs | 38,714 | |
Interest expense | 11,878 | |
Interest income | (371) | |
Other expense (income), net | (3,179) | |
Total costs and expenses | 567,758 | |
Earnings before income taxes | 64,883 | |
Income tax expense | 13,083 | |
Net earnings | $ 51,800 | |
Earnings Per Share | ||
Basic earnings per share | $ 0.84 | |
Diluted earnings per share | $ 0.81 | |
Weighted Average Common Shares Outstanding (Note 4): | ||
Basic | 61,818 | |
Diluted | 64,059 | |
Effect Of [Member] | ASC 606 [Member] | ||
Net sales | $ 20,170 | |
Costs and expenses: | ||
Cost of goods sold | 23,484 | |
Selling, general and administrative expenses | (99) | |
Research and development costs | 153 | |
Total costs and expenses | 23,538 | |
Earnings before income taxes | (3,368) | |
Income tax expense | (688) | |
Net earnings | $ (2,680) | |
Earnings Per Share | ||
Basic earnings per share | $ (0.04) | |
Diluted earnings per share | $ (0.04) |
Revenue (Schedule of Disaggrega
Revenue (Schedule of Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | $ 652,811 | $ 470,148 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 336,637 | |
Germany [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 76,113 | |
Europe, excluding Germany [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 98,960 | |
Asia [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 103,424 | |
Other Countries [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 37,677 | |
Aerospace [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 392,887 | |
Aerospace [Member] | United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 286,745 | |
Aerospace [Member] | Germany [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 12,749 | |
Aerospace [Member] | Europe, excluding Germany [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 39,612 | |
Aerospace [Member] | Asia [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 24,006 | |
Aerospace [Member] | Other Countries [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 29,775 | |
Aerospace [Member] | Commercial OEM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 140,508 | |
Aerospace [Member] | Commercial Aftermarket [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 111,348 | |
Aerospace [Member] | Defense OEM [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 101,836 | |
Aerospace [Member] | Defense Aftermarket [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 39,195 | |
Industrial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 259,924 | |
Industrial [Member] | United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 49,892 | |
Industrial [Member] | Germany [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 63,364 | |
Industrial [Member] | Europe, excluding Germany [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 59,348 | |
Industrial [Member] | Asia [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 79,418 | |
Industrial [Member] | Other Countries [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 7,902 | |
Industrial [Member] | Reciprocating Engines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 196,130 | |
Industrial [Member] | Renewables [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | 14,282 | |
Industrial [Member] | Industrial Turbines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total segment net sales | $ 49,512 |
Earnings Per Share (Reconciliat
Earnings Per Share (Reconciliation of Net Earnings to Net Earnings Per Share Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||
Net earnings | $ 49,120 | $ 18,260 |
Denominator: | ||
Basic shares outstanding | 61,818 | 61,246 |
Dilutive effect of stock options and restricted stock | 2,241 | 2,463 |
Diluted shares outstanding | 64,059 | 63,709 |
Income per common share: | ||
Basic earnings per share | $ 0.79 | $ 0.30 |
Diluted earnings per share | $ 0.77 | $ 0.29 |
Earnings Per Share (Anti-diluti
Earnings Per Share (Anti-dilutive Stock Options Excluded from Computation of Earnings Per Share) (Details) - Stock Options [Member] - $ / shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options | 1,426 | 754 |
Weighted-average option price | $ 79.22 | $ 78.75 |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Treasury Stock Shares Held for Deferred Compensation Included in Basic and Diluted Shares Outstanding) (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share | ||
Weighted-average treasury stock shares held for deferred compensation obligations | 206 | 193 |
Business Acquisition (Narrative
Business Acquisition (Narrative) (Details) € in Thousands, $ in Thousands | Jun. 01, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Sep. 30, 2018USD ($) |
Business Acquisition [Line Items] | ||||||
Borrowings on revolving lines of credit | $ 542,847 | $ 458,950 | ||||
Amortization of Intangible Assets | 17,472 | 6,243 | ||||
Net sales | 652,811 | 470,148 | ||||
Earnings before income taxes | 61,515 | $ 37,487 | ||||
Acquisition financing related costs | $ 3,799 | |||||
Business Acquisition, Acquiree - L'Orange [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Effective Date of Acquisition | Jun. 1, 2018 | |||||
Purchase agreement contract price | € 700,000 | $ 811,000 | ||||
Proceeds from issuance of long-term debt | $ 400,000 | |||||
Borrowings on revolving lines of credit | 167,420 | |||||
Amortization of Intangible Assets | $ 11,693 | |||||
Goodwill, Acquired During Period | $ 257,447 | |||||
Net sales | 87,680 | |||||
Earnings before income taxes | $ 10,602 | |||||
Defined Benefit Pension Plan [Member] | Business Acquisition, Acquiree - L'Orange [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Pension obligation assumed in L'Orange aquisition | $ 39,257 | |||||
Current portion of pension obligation | $ 1,143 |
Business Acquisition (Schedule
Business Acquisition (Schedule of the Purchase Price) (Details) - Business Acquisition, Acquiree - L'Orange [Member] $ in Thousands | 3 Months Ended |
Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Cash paid to seller | $ 780,401 |
Less acquired cash and restricted cash | (9,286) |
Total purchase price | $ 771,115 |
Business Acquisition (Schedul_2
Business Acquisition (Schedule of Assets Acquired and Liabililties Assumed) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 01, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 809,480 | $ 813,250 | |
Fair value adjustment to inventory as of acquisition date | $ 16,324 | ||
Business Acquisition, Acquiree - L'Orange [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 26,538 | ||
Inventories | 72,392 | ||
Other current assets | 1,385 | ||
Property, plant, and equipment | 89,772 | ||
Goodwill | 257,447 | ||
Intangible assets | 573,427 | $ 573,427 | |
Total assets acquired | 1,020,961 | ||
Other current liabilities | 41,997 | ||
Deferred income tax liabilities | 166,927 | ||
Other noncurrent liabilities | 40,922 | ||
Total liabilities assumed | 249,846 | ||
Net assets acquired | $ 771,115 |
Business Acquisition (Schedul_3
Business Acquisition (Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Jun. 01, 2018 | |
Business Acquisition, Acquiree - L'Orange [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 573,427 | $ 573,427 |
Business Acquisition, Acquiree - L'Orange [Member] | Trade Name [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | 67,298 | |
Process Technology [Member] | ||
Business Acquisition [Line Items] | ||
Weighted Average Useful Life | 22 years | |
Process Technology [Member] | Business Acquisition, Acquiree - L'Orange [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | 74,260 | |
Customer Relationships And Contracts [Member] | ||
Business Acquisition [Line Items] | ||
Weighted Average Useful Life | 22 years | |
Customer Relationships And Contracts [Member] | Business Acquisition, Acquiree - L'Orange [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | 388,705 | |
Other Intangible Assets [Member] | ||
Business Acquisition [Line Items] | ||
Weighted Average Useful Life | 3 years | |
Other Intangible Assets [Member] | Business Acquisition, Acquiree - L'Orange [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | 232 | |
Backlog [Member] | ||
Business Acquisition [Line Items] | ||
Weighted Average Useful Life | 1 year | |
Backlog [Member] | Business Acquisition, Acquiree - L'Orange [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 42,932 |
Business Acquisition (Schedul_4
Business Acquisition (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |
2019 (remaining) | $ 38,893 |
2,020 | 40,660 |
2,021 | 41,760 |
2,022 | 39,554 |
2,023 | 38,496 |
Thereafter | 407,521 |
Total Finite-Lived Intangible Assets, Net | 606,884 |
Business Acquisition, Acquiree - L'Orange [Member] | |
Business Acquisition [Line Items] | |
2019 (remaining) | 21,543 |
2,020 | 19,627 |
2,021 | 22,586 |
2,022 | 22,535 |
2,023 | 22,535 |
Thereafter | 356,994 |
Total Finite-Lived Intangible Assets, Net | $ 465,820 |
Business Acquisition (Schedul_5
Business Acquisition (Schedule of Unaudited Pro Forma Results) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Net sales | $ 652,811 | $ 470,148 |
Net earnings | $ 49,120 | $ 18,260 |
Basic earnings per share | $ 0.79 | $ 0.30 |
Diluted earnings per share | $ 0.77 | $ 0.29 |
Business Acquisition, Acquiree - L'Orange [Member] | ||
Business Acquisition [Line Items] | ||
Net sales | $ 87,680 | |
Pro forma | ||
Net sales | 652,811 | $ 565,993 |
Net earnings | $ 53,739 | $ 20,999 |
Basic earnings per share | $ 0.87 | $ 0.34 |
Diluted earnings per share | $ 0.84 | $ 0.33 |
Joint Venture (Narrative) (Deta
Joint Venture (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Oct. 01, 2018 | Sep. 30, 2018 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | |||||
Equity interest in earnings (losses) of joint venture | $ 1,465 | $ 596 | |||
Costs recognized to fulfill a contract | 92,091 | ||||
ASC 606 [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Revenue recognized to contract liabilities | 4,428 | $ 57,529 | |||
Costs recognized to fulfill a contract | $ 4,428 | $ 57,529 | |||
Woodward and General Electric Joint Venture [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Agreement to Form Joint Venture, Execution Date | Jan. 4, 2016 | ||||
Ownership interest, joint venture | 50.00% | 50.00% | |||
Cash received from formation of joint venture | $ 250,000 | ||||
Cash received annually from formation of joint venture | 4,894 | ||||
Current portion of deferred income recorded in connection with joint venture | 6,988 | $ 7,087 | |||
Noncurrent portion of deferred income recorded in connection with joint venture | 232,897 | 235,300 | |||
Equity interest in earnings (losses) of joint venture | 1,465 | 596 | |||
Cash distributions from joint venture | 4,500 | 0 | |||
Net investment in joint venture | 6,576 | 9,611 | |||
Accounts receivable from related party | 6,916 | 10,499 | |||
Accounts payable to related party | 3,063 | $ 2,944 | |||
Woodward and General Electric Joint Venture [Member] | Sales [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Amortization of deferred income recognized as an increase to sales | 1,777 | 1,053 | |||
Sales to related party | 12,833 | 12,975 | |||
Reduction to sales related to royalties paid to joint venture | $ 9,182 | $ 5,408 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Investments in Short-Term Time Deposits [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Interest rate used to estimate fair value | 6.40% | 6.30% |
Long Term Notes Receivable From Municipalities [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Interest rate used to estimate fair value | 2.70% | 3.10% |
Long-Term Debt [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Interest rate used to estimate fair value | 3.80% | 3.50% |
Cash [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 63,723 | $ 59,838 |
Investments in Reverse Repurchase Agreements [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 161 | 4,582 |
Investments in Term Deposits with Foreign Banks [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 7,750 | 19,174 |
Restricted Investments in Term Deposits with Foreign Banks [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 3,635 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements (Financial Assets that are Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 90,693 | $ 103,324 |
Total financial liabilities | 4,437 | 23,000 |
Cross Currency Interest Rate Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Hedging liabilities, cross currency interest rate swaps | 4,437 | 23,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 90,693 | 103,324 |
Total financial liabilities | ||
Fair Value, Inputs, Level 1 [Member] | Cross Currency Interest Rate Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Hedging liabilities, cross currency interest rate swaps | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | ||
Total financial liabilities | 4,437 | |
Fair Value, Inputs, Level 2 [Member] | Cross Currency Interest Rate Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Hedging liabilities, cross currency interest rate swaps | 4,437 | 23,000 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | ||
Total financial liabilities | ||
Fair Value, Inputs, Level 3 [Member] | Cross Currency Interest Rate Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Hedging liabilities, cross currency interest rate swaps | ||
Cash [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 63,723 | 59,838 |
Cash [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 63,723 | 59,838 |
Cash [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Cash [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Investments in Reverse Repurchase Agreements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 161 | 4,582 |
Investments in Reverse Repurchase Agreements [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 161 | 4,582 |
Investments in Reverse Repurchase Agreements [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Investments in Reverse Repurchase Agreements [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Investments in Term Deposits with Foreign Banks [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 7,750 | 19,174 |
Investments in Term Deposits with Foreign Banks [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 7,750 | 19,174 |
Investments in Term Deposits with Foreign Banks [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Investments in Term Deposits with Foreign Banks [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 19,059 | 19,730 |
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 19,059 | 19,730 |
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | ||
Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes receivable from municipalities, Carrying Cost | $ 13,143 | $ 13,462 |
Investments in short-term time deposits, Carrying Cost | 10,168 | 8,874 |
Long-term debt, excluding current portion, Carrying Cost | (1,027,659) | (1,095,292) |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes receivable from municipalities, Estimated Fair Value | 13,473 | 13,458 |
Investments in short-term time deposits, Estimated Fair Value | 10,163 | 8,883 |
Long-term debt, excluding current portion, Estimated Fair Value | $ (1,017,257) | $ (1,094,987) |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Narrative) (Details) | 1 Months Ended | 3 Months Ended | ||||||||
Aug. 31, 2013USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | May 31, 2018USD ($)loan | Sep. 23, 2016EUR (€) | Oct. 01, 2013USD ($) | Jun. 30, 2013USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of Gain (Loss) Recognized in Accumulated OCI on Derivative | $ 18,563,000 | |||||||||
Translation Adjustment for Net Investment Hedge Increase (Decrease), Gross | 649,000 | $ (743,000) | ||||||||
Unrealized gain (loss) on fair value adjustment of derivative instruments (Note 8) | $ 18,563,000 | |||||||||
Term of gain or loss recognition in interest expense on terminated derivatives recorded in OCI | 12 months | |||||||||
Face Amount | € | € 160,000,000 | |||||||||
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member] | EUR Denominated Loan [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Translation Adjustment for Net Investment Hedge Increase (Decrease), Gross | $ 649,000 | $ (743,000) | ||||||||
Total Accumulated Other Comprehensive (Loss) Earnings [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Remaining unrecognzied gains (losses) associated with derivative instruments included in AOCI | $ (10,578,000) | $ 21,315,000 | ||||||||
Fixed-Rate Cross Currency Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Derivative, number of instruments | loan | 5 | |||||||||
Derivative, notional amount | $ 400,000,000 | |||||||||
Fixed-Rate Cross Currency Interest Rate Contract [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Derivative, notional amount | 400,000,000 | |||||||||
Floating-Rate Cross Currency Interest Rate Contract [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Derivative, notional amount | $ 167,420,000 | |||||||||
Treasury Lock [Member] | Designated as Hedging Instrument [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of Gain (Loss) Recognized in Accumulated OCI on Derivative | $ 507,000 | |||||||||
Unrealized gain (loss) on fair value adjustment of derivative instruments (Note 8) | $ 507,000 | |||||||||
Net unrecognized gains on terminated derivative instruments expected to be reclassified to earnings | $ 72,000 | |||||||||
Derivative, notional amount | $ 25,000,000 | |||||||||
2013 Note Purchase Agreement [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Face Amount | $ 250,000,000 | |||||||||
2016 Note Purchase Agreements [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Issuance Date | Sep. 23, 2016 | |||||||||
Series O Notes [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Face Amount | € | € 43,000,000 | |||||||||
Series N Notes [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Face Amount | € | 77,000,000 | |||||||||
Series M Notes [Member] | ||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Face Amount | € | € 40,000,000 | € 40,000,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Impact of Derivative Instruments on Earnings) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Income) Expense Recognized in Earnings on Derivative | $ (7,963) | $ (18) |
Amount of Gain/Loss Recognized in Accumulated OCI on Derivative | (18,563) | |
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings | (7,826) | (18) |
Fixed-Rate Cross Currency Interest Rate Contract [Member] | Selling, General and Administrative Expenses [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Income) Expense Recognized in Earnings on Derivative | (5,556) | |
Amount of Gain/Loss Recognized in Accumulated OCI on Derivative | (16,058) | |
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings | (5,556) | |
Floating-Rate Cross Currency Interest Rate Contract [Member] | Selling, General and Administrative Expenses [Member] | Derivatives in Fair Value Hedging Relationships [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Income) Expense Recognized in Earnings on Derivative | (2,389) | |
Amount of Gain/Loss Recognized in Accumulated OCI on Derivative | (2,505) | |
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings | (2,252) | |
Treasury Lock [Member] | Interest Expense [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Income) Expense Recognized in Earnings on Derivative | (18) | (18) |
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings | $ (18) | $ (18) |
Supplemental Statements of Cash
Supplemental Statements of Cash Flows Information (Schedule of Supplemental Statement of Cash Flows Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Statement of Cash Flows Information | ||
Interest paid, net of amounts capitalized | $ 16,754 | $ 11,302 |
Income taxes paid | 15,858 | 7,695 |
Income tax refunds received | 444 | 1,772 |
Non-cash activities: | ||
Purchases of property, plant and equipment on account | 4,580 | $ 10,631 |
Impact of the adoption of ASC 606 (Note 3) | $ 28,886 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | ||
Inventories | ||||
Raw materials | $ 98,641 | $ 80,999 | ||
Work in progress | 124,773 | 118,010 | ||
Component parts | [1] | 307,938 | 298,820 | |
Finished goods | 57,854 | 51,767 | ||
Customer supplied inventory (Note 3) | 17,283 | |||
On-hand inventory for which control has transferred to the customer (Note 3) | (81,989) | |||
Inventory, net | $ 524,500 | $ 549,596 | [2],[3] | |
[1] | Component parts include items that can be sold separately as finished goods or included in the manufacture of other products. | |||
[2] | The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward's businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in "Accounts receivable" and noncurrent unbilled receivables in "Other assets." The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. | |||
[3] | The value of noncash consideration in the form of exchanged products and other customer provided inventory is reflected in unbilled receivables included in "Accounts receivable," "Other assets," and "Inventories," and in contract liabilities, which are included in "Accrued liabilities." |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Drake Campus Fort Collins Colorado Member | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment held for sale | $ 8,097 | $ 8,306 |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Duarte Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment remaining | 11,980 | |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Duarte Facility [Member] | Employee Relocation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Assets planned to be disposed of as a result of relocation | 325 | |
Second Campus Rockford Illinois [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 30,585 | 32,248 |
Drake Campus Fort Collins Colorado Member | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 7,555 | 3,967 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross assets acquired on capital leases | 1,650 | |
Accumulated depreciation on capital lease assets | $ 1,261 | $ 1,158 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment (Property, Plant, and Equipment, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 1,641,706 | $ 1,624,874 |
Less accumulated depreciation | (581,150) | (564,869) |
Property, plant, and equipment, net | 1,060,556 | 1,060,005 |
Land and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 93,958 | 94,146 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 566,562 | 565,065 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 17,897 | 17,954 |
Machinery and Production Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 677,086 | 668,986 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 125,272 | 124,788 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 32,210 | 31,533 |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 19,396 | 19,366 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 109,325 | $ 103,036 |
Property, Plant, and Equipmen_4
Property, Plant, and Equipment (Schedule of Depreciation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant, and Equipment | ||
Depreciation expense | $ 21,169 | $ 14,827 |
Property, Plant, and Equipmen_5
Property, Plant, and Equipment (Schedule of Capitalized Interest) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant, and Equipment | ||
Capitalized interest | $ 227 | $ 601 |
Goodwill (Narrative) (Details)
Goodwill (Narrative) (Details) - USD ($) $ in Thousands | Jun. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2018 |
Goodwill [Line Items] | |||
Impairment | $ 0 | ||
Business Acquisition, Acquiree - L'Orange [Member] | |||
Goodwill [Line Items] | |||
Goodwill addition | $ 257,447 | ||
Business Acquisition, Acquiree - L'Orange [Member] | Industrial [Member] | |||
Goodwill [Line Items] | |||
Goodwill addition | $ 257,447 |
Goodwill (Schedule of Goodwill)
Goodwill (Schedule of Goodwill) (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2018USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 813,250 |
Effects of Currency Translation | (3,770) |
Goodwill, Ending Balance | 809,480 |
Aerospace [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 455,423 |
Effects of Currency Translation | |
Goodwill, Ending Balance | 455,423 |
Industrial [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 357,827 |
Effects of Currency Translation | (3,770) |
Goodwill, Ending Balance | $ 354,057 |
Intangible Assets, Net (Schedul
Intangible Assets, Net (Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill), Total | $ 1,008,460 | $ 1,016,456 | |
Accumulated Amortization of Finite-Lived Intangible | (335,174) | (315,573) | |
Net Carrying Amount - Finite-Lived Intangible | 606,884 | ||
Intangible Assets, Net (Excluding Goodwill), Total | 673,286 | 700,883 | [1] |
Trade Name [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets | 66,402 | 67,335 | |
Accumulated Amortization of Finite-Lived Intangible | |||
Customer Relationships And Contracts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 706,226 | 711,563 | |
Accumulated Amortization of Finite-Lived Intangible | (207,042) | (202,575) | |
Net Carrying Amount - Finite-Lived Intangible | 499,184 | 508,988 | |
Intellectual Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 19,380 | 19,448 | |
Accumulated Amortization of Finite-Lived Intangible | (18,612) | (18,587) | |
Net Carrying Amount - Finite-Lived Intangible | 768 | 861 | |
Process Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 172,481 | 173,526 | |
Accumulated Amortization of Finite-Lived Intangible | (77,686) | (75,247) | |
Net Carrying Amount - Finite-Lived Intangible | 94,795 | 98,279 | |
Backlog [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 42,363 | 42,955 | |
Accumulated Amortization of Finite-Lived Intangible | (30,651) | (18,006) | |
Net Carrying Amount - Finite-Lived Intangible | 11,712 | 24,949 | |
Other Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 1,608 | 1,629 | |
Accumulated Amortization of Finite-Lived Intangible | (1,183) | (1,158) | |
Net Carrying Amount - Finite-Lived Intangible | 425 | 471 | |
Aerospace [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill), Total | 358,054 | 358,055 | |
Accumulated Amortization of Finite-Lived Intangible | (226,673) | (221,593) | |
Intangible Assets, Net (Excluding Goodwill), Total | 131,381 | 136,462 | |
Aerospace [Member] | Trade Name [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets | |||
Accumulated Amortization of Finite-Lived Intangible | |||
Aerospace [Member] | Customer Relationships And Contracts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 281,683 | 281,683 | |
Accumulated Amortization of Finite-Lived Intangible | (170,538) | (166,719) | |
Net Carrying Amount - Finite-Lived Intangible | 111,145 | 114,964 | |
Aerospace [Member] | Intellectual Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | |||
Accumulated Amortization of Finite-Lived Intangible | |||
Net Carrying Amount - Finite-Lived Intangible | |||
Aerospace [Member] | Process Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 76,371 | 76,372 | |
Accumulated Amortization of Finite-Lived Intangible | (56,135) | (54,874) | |
Net Carrying Amount - Finite-Lived Intangible | 20,236 | 21,498 | |
Aerospace [Member] | Backlog [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | |||
Accumulated Amortization of Finite-Lived Intangible | |||
Net Carrying Amount - Finite-Lived Intangible | |||
Aerospace [Member] | Other Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | |||
Accumulated Amortization of Finite-Lived Intangible | |||
Net Carrying Amount - Finite-Lived Intangible | |||
Industrial [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill), Total | 650,406 | 658,401 | |
Accumulated Amortization of Finite-Lived Intangible | (108,501) | (93,980) | |
Intangible Assets, Net (Excluding Goodwill), Total | 541,905 | 564,421 | |
Industrial [Member] | Trade Name [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets | 66,402 | 67,335 | |
Accumulated Amortization of Finite-Lived Intangible | |||
Industrial [Member] | Customer Relationships And Contracts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 424,543 | 429,880 | |
Accumulated Amortization of Finite-Lived Intangible | (36,504) | (35,856) | |
Net Carrying Amount - Finite-Lived Intangible | 388,039 | 394,024 | |
Industrial [Member] | Intellectual Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 19,380 | 19,448 | |
Accumulated Amortization of Finite-Lived Intangible | (18,612) | (18,587) | |
Net Carrying Amount - Finite-Lived Intangible | 768 | 861 | |
Industrial [Member] | Process Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 96,110 | 97,154 | |
Accumulated Amortization of Finite-Lived Intangible | (21,551) | (20,373) | |
Net Carrying Amount - Finite-Lived Intangible | 74,559 | 76,781 | |
Industrial [Member] | Backlog [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 42,363 | 42,955 | |
Accumulated Amortization of Finite-Lived Intangible | (30,651) | (18,006) | |
Net Carrying Amount - Finite-Lived Intangible | 11,712 | 24,949 | |
Industrial [Member] | Other Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value - Finite-Lived Intangible | 1,608 | 1,629 | |
Accumulated Amortization of Finite-Lived Intangible | (1,183) | (1,158) | |
Net Carrying Amount - Finite-Lived Intangible | $ 425 | $ 471 | |
[1] | The net book value of the backlog and customer relationships and contracts intangible assets was adjusted concurrent with the change in the timing of the associated revenue, resulting in a reduction in the net book value of these assets as of the date of adoption. |
Intangible Assets, Net (Sched_2
Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets, Net | ||
Amortization expense | $ 17,472 | $ 6,243 |
Intangible Assets, Net (Sched_3
Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Intangible Assets, Net | |
2019 (remaining) | $ 38,893 |
2,020 | 40,660 |
2,021 | 41,760 |
2,022 | 39,554 |
2,023 | 38,496 |
Thereafter | 407,521 |
Total Finite-Lived Intangible Assets, Net | $ 606,884 |
Credit Facilities, Short-term_3
Credit Facilities, Short-term Borrowings and Long-term Debt (Narrative) (Details) | Oct. 01, 2018USD ($) | Dec. 31, 2018EUR (€) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | May 31, 2018USD ($) | Sep. 23, 2016EUR (€) | Oct. 01, 2013USD ($) |
Debt Instrument [Line Items] | |||||||
Principal amount | $ 1,092,397,000 | $ 1,024,872,000 | |||||
Face Amount | € | € 160,000,000 | ||||||
Balance of unamortized debt issuance costs | 2,895,000 | 2,787,000 | |||||
Short-term borrowings | 153,635,000 | 160,000,000 | |||||
Minimum [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.85% | ||||||
Maximum [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.65% | ||||||
The Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Balance of unamortized debt issuance costs | 2,895,000 | $ 2,787,000 | |||||
Debt Instrument, Description | In October 2008, Woodward entered into a note purchase agreement relating to the Series D Notes, due in October 2018. On October 1, 2018, Woodward paid the entire principal balance of $100,000 on the Series D Notes using proceeds from borrowings under its revolving credit facility. In April 2009, Woodward entered into a note purchase agreement relating to the Series F Notes. The Series F Notes mature and are payable in April 2019. As of December 31, 2018, the entire amount of debt under the Series F Notes has been classified as long-term based on Woodward's intent and ability to refinance this debt prior to maturity using cash proceeds from its revolving credit facility which, in turn, is expected to be repaid beyond the next twelve months.On October 1, 2013, Woodward entered into a note purchase agreement relating to the sale by Woodward of an aggregate principal amount of $250,000 of its senior unsecured notes in a series of private placement transactions. Woodward issued the Series G, H and I Notes (the "First Closing Notes") on October 1, 2013. Woodward issued the Series J, K and L Notes (the "Second Closing Notes" and together with the Series D Notes, the Series F Notes and the First Closing Notes, collectively the "USD Notes") on November 15, 2013. On September 23, 2016, Woodward and the BV Subsidiary each entered into note purchase agreements (the "2016 Note Purchase Agreements") relating to the sale by Woodward and the BV Subsidiary of an aggregate principal amount of €160,000 of senior unsecured notes in a series of private placement transactions. Woodward issued €40,000 Series M Notes. The BV Subsidiary issued (a) €77,000 aggregate principal amount of the BV Subsidiary's Series N Senior Notes (the "Series N Notes") and (b) €43,000 aggregate principal amount of the BV Subsidiary's Series O Senior Notes (the "Series O Notes" and together with the Series M Notes and the Series N Notes, the "2016 Notes").On May 31, 2018, Woodward entered into a note purchase agreement (the "2018 Note Purchase Agreement") relating to the sale by Woodward of an aggregate principal amount of $400,000 of senior unsecured notes comprised of (a) $85,000 aggregate principal amount of its Series P Senior Notes due May 30, 2025 and bearing interest at a rate of 4.27% per annum (the "Series P Notes"), (b) $85,000 aggregate principal amount of its Series Q Senior Notes due May 30, 2027 and bearing interest at a rate of 4.35% per annum (the "Series Q Notes"), (c) $75,000 aggregate principal amount of its Series R Senior Notes due May 30, 2029 and bearing interest at a rate of 4.41% per annum (the "Series R Notes"), (d) $75,000 aggregate principal amount of its Series S Senior Notes due May 30, 2030 and bearing interest at a rate of 4.46% per annum (the "Series S Notes"), and (e) $80,000 aggregate principal amount of its Series T Senior Notes due May 30, 2033 and bearing interest at a rate of 4.61% per annum (the "Series T Notes", and together with the Series P Notes, the Series Q Notes, the Series R Notes, and the Series S Notes, the "2018 Notes," and, together with the USD Notes and 2016 Notes, the "Notes"), in a series of private placement transactions. In connection with the issuance of the 2018 Notes, the Company entered into cross currency swap transactions in respect of each tranche of the 2018 Notes, which effectively reduced the interest rates on the Series P Notes to 1.82% per annum, the Series Q Notes to 2.15% per annum, the Series R Notes to 2.42% per annum, the Series S Notes to 2.55% per annum and the Series T Notes to 2.90% per annum (see Note 8, Derivative instruments and hedging activities). Interest on the First Closing Notes, and the Series K and L Notes is payable semi-annually on April 1 and October 1 of each year until all principal is paid. Interest on the Series F Notes is payable semi-annually on April 15 and October 15 of each year until all principal is paid. Interest on the 2016 Notes is payable semi-annually on March 23 and September 23 of each year, until all principal is paid. Interest on the Series J Notes is payable quarterly on January 1, April 1, July 1 and October 1 of each year until all principal is paid. As of December 31, 2018, the Series J Notes bore interest at an effective rate of 3.89%. Commencing on November 30, 2018, interest on the 2018 Notes is payable semi-annually on May 30 and November 30 of each year until all principal is paid. | ||||||
2013 Note Purchase Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Face Amount | $ 250,000,000 | ||||||
Series J Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 3.89% | 3.89% | |||||
Series D Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Payments of debt | $ 100,000,000 | ||||||
2016 Note Purchase Agreements [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Issuance Date | Sep. 23, 2016 | ||||||
Series M Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Face Amount | € | € 40,000,000 | € 40,000,000 | |||||
Series N Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Face Amount | € | 77,000,000 | ||||||
Series O Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Face Amount | € | € 43,000,000 | ||||||
2018 Note Purchase Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Face Amount | $ 400,000,000 | ||||||
Series P Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Face Amount | 85,000,000 | ||||||
Notes Payable to Banks [Member] | Series J Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 50,000,000 | $ 50,000,000 | |||||
Maturity date | Nov. 15, 2020 | Nov. 15, 2020 | |||||
Notes Payable to Banks [Member] | Series J Notes [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.25% | 1.25% | |||||
Notes Payable to Banks [Member] | Series D Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 100,000,000 | ||||||
Interest rate | 6.39% | 6.39% | 6.39% | ||||
Maturity date | Oct. 1, 2018 | Oct. 1, 2018 | |||||
Notes Payable to Banks [Member] | Series F Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 43,000,000 | $ 43,000,000 | |||||
Interest rate | 8.24% | 8.24% | 8.24% | ||||
Maturity date | Apr. 3, 2019 | Apr. 3, 2019 | |||||
Notes Payable to Banks [Member] | Series M Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 46,437,000 | $ 45,795,000 | |||||
Interest rate | 1.12% | 1.12% | 1.12% | ||||
Maturity date | Sep. 23, 2026 | Sep. 23, 2026 | |||||
Notes Payable to Banks [Member] | Series N Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 89,393,000 | $ 88,154,000 | |||||
Interest rate | 1.31% | 1.31% | 1.31% | ||||
Maturity date | Sep. 23, 2028 | Sep. 23, 2028 | |||||
Notes Payable to Banks [Member] | Series O Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 49,921,000 | $ 49,229,000 | |||||
Interest rate | 1.57% | 1.57% | 1.57% | ||||
Maturity date | Sep. 23, 2031 | Sep. 23, 2031 | |||||
Notes Payable to Banks [Member] | Series P Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 85,000,000 | $ 85,000,000 | |||||
Interest rate | 4.27% | 4.27% | |||||
Maturity date | May 30, 2025 | ||||||
Notes Payable to Banks [Member] | Series Q Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 85,000,000 | $ 85,000,000 | |||||
Interest rate | 4.35% | 4.35% | |||||
Maturity date | May 30, 2027 | ||||||
Notes Payable to Banks [Member] | Series R Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 75,000,000 | $ 75,000,000 | |||||
Interest rate | 4.41% | 4.41% | |||||
Maturity date | May 30, 2029 | ||||||
Notes Payable to Banks [Member] | Series S Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 75,000,000 | $ 75,000,000 | |||||
Interest rate | 4.46% | 4.46% | |||||
Maturity date | May 30, 2030 | ||||||
Notes Payable to Banks [Member] | Series T Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 80,000,000 | $ 80,000,000 | |||||
Interest rate | 4.61% | 4.61% | |||||
Maturity date | May 30, 2033 | ||||||
Other Foreign Short-term Borrowings [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Short-term borrowings | 3,635,000 | ||||||
Foreign Lines of Credit And Overdraft Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Short-term borrowings | 0 | $ 0 | |||||
Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 116,541,000 | $ 151,481,000 | |||||
Maturity date | Apr. 1, 2020 | Apr. 1, 2020 | |||||
Effective interest rate | 3.69% | 3.48% | 3.69% | ||||
Outstanding borrowings | $ 266,541,000 | $ 311,481,000 | |||||
Short-term borrowings | 160,000,000 | ||||||
Debt Instrument, Description | Woodward maintains a $1,000,000 revolving credit facility established under a revolving credit agreement among Woodward, a syndicate of lenders and Wells Fargo Bank, National Association, as administrative agent (the "Revolving Credit Agreement"). The Revolving Credit Agreement provides for the option to increase available borrowings up to $1,200,000, subject to lenders' participation. Borrowings under the Revolving Credit Agreement can be made by Woodward and certain of its foreign subsidiaries in U.S dollars or in foreign currencies other than the U.S. dollar and generally bear interest at LIBOR plus 0.85% to 1.65%. The Revolving Credit Agreement matures in April 2020. | ||||||
Revolving Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate basis | LIBOR | ||||||
Balance of unamortized debt issuance costs, line of credit | 1,385,000 | $ 1,166,000 | |||||
Short-term borrowings | $ 150,000,000 | ||||||
Cross Currency Interest Rate Contract [Member] | Series P Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 1.82% | 1.82% | |||||
Cross Currency Interest Rate Contract [Member] | Series Q Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 2.15% | 2.15% | |||||
Cross Currency Interest Rate Contract [Member] | Series R Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 2.42% | 2.42% | |||||
Cross Currency Interest Rate Contract [Member] | Series S Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 2.55% | 2.55% | |||||
Cross Currency Interest Rate Contract [Member] | Series T Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 2.90% | 2.90% |
Credit Facilities, Short-term_4
Credit Facilities, Short-term Borrowings and Long-term Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 1,024,872 | $ 1,092,397 |
Unamortized debt issuance costs | (2,787) | (2,895) |
Current portion of long-term debt | ||
Long-term debt, excluding current portion | $ 1,024,872 | $ 1,092,397 |
Minimum [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.85% | |
Maximum [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.65% | |
Series D Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.39% | 6.39% |
Maturity date | Oct. 1, 2018 | Oct. 1, 2018 |
Long-term Debt | $ 100,000 | |
Series F Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.24% | 8.24% |
Maturity date | Apr. 3, 2019 | Apr. 3, 2019 |
Long-term Debt | $ 43,000 | $ 43,000 |
Series G Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.42% | 3.42% |
Maturity date | Nov. 15, 2020 | Nov. 15, 2020 |
Long-term Debt | $ 50,000 | $ 50,000 |
Series H Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.03% | 4.03% |
Maturity date | Nov. 15, 2023 | Nov. 15, 2023 |
Long-term Debt | $ 25,000 | $ 25,000 |
Series I Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.18% | 4.18% |
Maturity date | Nov. 15, 2025 | Nov. 15, 2025 |
Long-term Debt | $ 25,000 | $ 25,000 |
Series J Notes [Member] | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 3.89% | |
Variable interest rate | 3.89% | |
Series J Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | Nov. 15, 2020 | Nov. 15, 2020 |
Long-term Debt | $ 50,000 | $ 50,000 |
Series J Notes [Member] | Notes Payable to Banks [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.25% | 1.25% |
Series K Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.03% | 4.03% |
Maturity date | Nov. 15, 2023 | Nov. 15, 2023 |
Long-term Debt | $ 50,000 | $ 50,000 |
Series L Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.18% | 4.18% |
Maturity date | Nov. 15, 2025 | Nov. 15, 2025 |
Long-term Debt | $ 50,000 | $ 50,000 |
Series M Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.12% | 1.12% |
Maturity date | Sep. 23, 2026 | Sep. 23, 2026 |
Long-term Debt | $ 45,795 | $ 46,437 |
Series N Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.31% | 1.31% |
Maturity date | Sep. 23, 2028 | Sep. 23, 2028 |
Long-term Debt | $ 88,154 | $ 89,393 |
Series O Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.57% | 1.57% |
Maturity date | Sep. 23, 2031 | Sep. 23, 2031 |
Long-term Debt | $ 49,229 | $ 49,921 |
Series P Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.27% | |
Maturity date | May 30, 2025 | |
Long-term Debt | $ 85,000 | 85,000 |
Series R Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.41% | |
Maturity date | May 30, 2029 | |
Long-term Debt | $ 75,000 | 75,000 |
Series S Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.46% | |
Maturity date | May 30, 2030 | |
Long-term Debt | $ 75,000 | 75,000 |
Series T Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.61% | |
Maturity date | May 30, 2033 | |
Long-term Debt | $ 80,000 | 80,000 |
Series Q Notes [Member] | Notes Payable to Banks [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.35% | |
Maturity date | May 30, 2027 | |
Long-term Debt | $ 85,000 | $ 85,000 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 3.69% | 3.48% |
Variable interest rate | 3.69% | 3.48% |
Maturity date | Apr. 1, 2020 | Apr. 1, 2020 |
Long-term Debt | $ 151,481 | $ 116,541 |
Revolving Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Variable rate basis | LIBOR |
Accrued Liabilities (Narrative)
Accrued Liabilities (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 17,013 | |||
Loss Reserve On Contractual Lease Commitments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Loss reserve, noncurrent portion | [1] | $ 2,569 | $ 2,686 | |
Duarte Plant Relocation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | ||||
[1] | See Note 15, Accrued liabilities for more information on the loss reserve on contractual lease commitments. |
Accrued Liabilities (Accrued Li
Accrued Liabilities (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | ||
Accrued Liabilities | ||||||
Salaries and other member benefits | $ 61,187 | $ 88,643 | ||||
Warranties | 20,156 | 20,130 | $ 13,017 | $ 13,597 | ||
Interest payable | 7,014 | 18,611 | ||||
Current portion of acquired contractual obligations and unfavorable contracts | [1] | 1,160 | 1,627 | |||
Accrued retirement benefits | 3,571 | 3,571 | ||||
Current portion of loss reserve on contractual lease commitments | 1,245 | 1,245 | ||||
Restructuring charges | 15,843 | 16,522 | ||||
Taxes, other than income | 17,290 | 21,128 | ||||
Net current contract liabilities | [2] | 28,190 | 9,659 | |||
Other | 15,481 | 13,377 | ||||
Accrued liabilities | $ 171,137 | $ 194,513 | [3],[4] | |||
[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 obligations for contractual commitments that are expected to result in future economic losses. In addition, Woodward assumed current and long-term contractual 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. | |||||
[2] | See Note 3, Revenue for more information on net current contract liabilities. | |||||
[3] | The value of noncash consideration in the form of exchanged products and other customer provided inventory is reflected in unbilled receivables included in "Accounts receivable," "Other assets," and "Inventories," and in contract liabilities, which are included in "Accrued liabilities." | |||||
[4] | Woodward recorded customer funding of product engineering and development identified as material rights as current and noncurrent deferred revenue contract liabilities included in "Accrued liabilities" and "Other liabilities." The related customer funded product engineering and development costs were capitalized as costs to fulfill a contract, to the extent of the contractually committed customer funded payments, and are recorded as "Other assets." |
Accrued Liabilities (Changes in
Accrued Liabilities (Changes in Accrued Product Warranties) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accrued Liabilities | ||
Warranties, beginning of period | $ 20,130 | $ 13,597 |
Impact from adoption of ASC 606 (Note 3) | 594 | |
Expense, net of recoveries | 2,072 | (2,030) |
Reductions for settlement of previous warranty liabilities | (2,537) | 1,377 |
Foreign currency exchange rate changes | (103) | 73 |
Warranties, end of period | $ 20,156 | $ 13,017 |
Accrued Liabilities (Changes _2
Accrued Liabilities (Changes in Loss Reserve Activity) (Details) - Loss Reserve On Contractual Lease Commitments [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges, beginning of period | $ 3,931 | $ 5,270 |
Payments, net of sublease income | (117) | (553) |
Restructuring charges, end of period | $ 3,814 | $ 4,717 |
Accrued Liabilities (Changes _3
Accrued Liabilities (Changes in Restructuring Reserve Activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Charges (gains) | $ 17,013 | |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges, beginning of period | $ 16,522 | |
Charges (gains) | ||
Cash receipts (payments) | (679) | |
Non-cash activity | ||
Restructuring charges, end of period | 15,843 | |
Duarte Plant Relocation [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges, beginning of period | 12,504 | |
Charges (gains) | ||
Cash receipts (payments) | ||
Non-cash activity | ||
Restructuring charges, end of period | 12,504 | |
Industrial Turbomachinery Business Realignment [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges, beginning of period | 4,018 | |
Charges (gains) | ||
Cash receipts (payments) | (679) | |
Non-cash activity | ||
Restructuring charges, end of period | $ 3,339 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | ||
Other Liabilities [Line Items] | ||||
Net accrued retirement benefits, less amounts recognized within accrued liabilities | $ 89,503 | $ 90,722 | ||
Total unrecognized tax benefits | 9,015 | 8,582 | ||
Noncurrent income taxes payable | 12,494 | 12,494 | ||
Acquired unfavorable contracts | [1] | 54 | ||
Deferred economic incentives | [2] | 12,662 | 13,038 | |
Net noncurrent contract liabilities | [3] | 319,230 | 235,300 | |
Other | 10,552 | 12,179 | ||
Other liabilities | 460,462 | 398,055 | [4] | |
Loss Reserve On Contractual Lease Commitments [Member] | ||||
Other Liabilities [Line Items] | ||||
Loss reserve, noncurrent portion | [5] | 2,569 | 2,686 | |
Cross Currency Interest Rate Contract [Member] | ||||
Other Liabilities [Line Items] | ||||
Derivative liability | [6] | $ 4,437 | $ 23,000 | |
[1] | In connection with the Duarte Acquisition in fiscal year 2013, Woodward assumed current and long-term obligations for contractual commitments that are expected to result in future economic losses. The long-term portion of the acquired unfavorable contracts is included in Other liabilities. | |||
[2] | Woodward receives certain economic incentives from various state and local authorities related to capital expansion projects. Such amounts are initially recorded as deferred credits and are being recognized as a reduction to pre-tax expense over the economic lives of the related capital expansion projects. | |||
[3] | See Note 3, Revenue, for more information on net noncurrent contract liabilities. | |||
[4] | Woodward recorded customer funding of product engineering and development identified as material rights as current and noncurrent deferred revenue contract liabilities included in "Accrued liabilities" and "Other liabilities." The related customer funded product engineering and development costs were capitalized as costs to fulfill a contract, to the extent of the contractually committed customer funded payments, and are recorded as "Other assets." | |||
[5] | See Note 15, Accrued liabilities for more information on the loss reserve on contractual lease commitments. | |||
[6] | See Note 7, Financial instruments and fair value measurements for more information on the cross currency swap derivative liability. |
Other Expense (Income), Net (De
Other Expense (Income), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Other Expense (Income), Net [Abstract] | ||
Equity interest in the earnings of the JV (Note 6) | $ (1,465) | $ (596) |
Net (gain) loss on sales of assets | 79 | (58) |
Rent income | (67) | (54) |
Net (gain) loss on investments in deferred compensation program | 1,729 | (654) |
Other components of net periodic pension and other postretirement benefit, excluding service cost and interest expense | (3,243) | (3,148) |
Other | (212) | (210) |
Other expense (income), net | $ (3,179) | $ (4,720) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | |
Income Taxes [Line Items] | ||||
Statutory tax rate | 35.00% | 21.00% | ||
Net discrete impacts of the enactment of the Tax Act | $ 0 | $ 14,778 | $ 10,860 | |
Gross unrecognized tax benefits | 8,779 | $ 8,779 | 8,364 | |
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | 3,457 | 3,457 | 3,288 | |
Accrued interest and penalties | $ 302 | $ 302 | $ 279 | |
Domestic Tax Authority [Member] | ||||
Income Taxes [Line Items] | ||||
Years remaining open to tax examination | 2,017 | |||
State and Local Jurisdiction [Member] | ||||
Income Taxes [Line Items] | ||||
Years remaining open to tax examination | 2,014 | |||
Foreign Tax Authority [Member] | ||||
Income Taxes [Line Items] | ||||
Years remaining open to tax examination | 2,008 |
Income Taxes (Tax Expense and E
Income Taxes (Tax Expense and Effective Tax Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | ||
Earnings before income taxes | $ 61,515 | $ 37,487 |
Income tax expense | $ 12,395 | $ 19,227 |
Effective tax rate | 20.10% | 51.30% |
Retirement Benefits (Narrative)
Retirement Benefits (Narrative) (Details) - USD ($) $ in Thousands | Jun. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic retirement (benefit) cost | $ (305) | $ (792) | |
Contributions paid - pensions | 554 | 312 | |
Defined Benefit Pension Plan [Member] | Business Acquisition, Acquiree - L'Orange [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension obligation assumed in L'Orange aquisition | $ 39,257 | ||
Current portion of pension obligation | $ 1,143 | ||
Other Postretirement Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic retirement (benefit) cost | 302 | (52) | |
United States [Member] | Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic retirement (benefit) cost | (706) | (665) | |
Foreign Plan [Member] | Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic retirement (benefit) cost | 401 | (127) | |
Contributions paid - pensions | $ 554 | $ 312 |
Retirement Benefits (Schedule o
Retirement Benefits (Schedule of Amount of Expense Associated with Defined Contribution Plans) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Company costs | $ 8,371 | $ 7,879 |
Retirement Benefits (Schedule_2
Retirement Benefits (Schedule of Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 875 | $ 569 |
Interest cost | 2,076 | 1,830 |
Expected return on plan assets | (3,658) | (3,590) |
Amortization of: Net actuarial loss | 225 | 222 |
Amortization of: Prior service (benefit) cost | 177 | 177 |
Net periodic retirement (benefit) cost | (305) | (792) |
Contributions paid - pensions | 554 | 312 |
Other Postretirement Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 1 | 2 |
Interest cost | 288 | 292 |
Amortization of: Net actuarial loss | 14 | 24 |
Amortization of: Prior service (benefit) cost | (1) | (40) |
Curtailment (gain) loss | (330) | |
Net periodic retirement (benefit) cost | 302 | (52) |
Contributions paid - other postretirement plans | 373 | 226 |
United States [Member] | Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 363 | 411 |
Interest cost | 1,596 | 1,501 |
Expected return on plan assets | (2,996) | (2,904) |
Amortization of: Net actuarial loss | 154 | 150 |
Amortization of: Prior service (benefit) cost | 177 | 177 |
Net periodic retirement (benefit) cost | (706) | (665) |
Foreign Plan [Member] | Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 512 | 158 |
Interest cost | 480 | 329 |
Expected return on plan assets | (662) | (686) |
Amortization of: Net actuarial loss | 71 | 72 |
Net periodic retirement (benefit) cost | 401 | (127) |
Contributions paid - pensions | $ 554 | $ 312 |
Retirement Benefits (Schedule_3
Retirement Benefits (Schedule of Estimated Remaining Cash Contributions) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Other Postretirement Benefit Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated future employer contributions in the currect fiscal year | $ 3,242 |
UNITED KINGDOM | Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated future employer contributions in the currect fiscal year | 518 |
Germany [Member] | Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated future employer contributions in the currect fiscal year | $ 748 |
Retirement Benefits (Schedule_4
Retirement Benefits (Schedule of Amounts of Contributions Associated with Multiemployer Defined Benefit Plans) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Multiemployer Plans [Abstract] | ||
Company contributions | $ 77 | $ 79 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands | Jan. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost related to non-vested stock-based compensation arrangements | $ 14,466 | |||
Forfeiture rate, Board of Directors | 0.00% | |||
Forfeiture rate, non-Board of Directors | 9.00% | |||
Unrecognized compensation cost is expected to be recognized over a weighted-average period | 2 years 2 months 12 days | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested contractual term, in years | 10 years | |||
Vesting period, in years | 4 years | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period, in years | 2 years | |||
Subsequent Event [Member] | 2017 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of additional shares available for future grants | 1,400 | |||
Share-based Compensation Award, Tranche One [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate | 25.00% | |||
Share-based Compensation Award, Tranche One [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate | 50.00% | |||
2017 Authorization [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Repurchase period in years | 3 years | |||
Stock repurchase program authorized amount | $ 500,000 | |||
Shares of common stock repurchased | 0 | 0 | ||
2017 Authorization [Member] | 2017 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for future grants | 608 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Assumptions Used in Estimate of Fair Value of Stock Option Awards) (Details) - Stock Options [Member] - $ / shares | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average exercise price per share | $ 79.79 | $ 78.97 |
Weighted-average grant date market value of Woodward stock | $ 79.79 | $ 78.97 |
Expected term | 6 years 4 months 24 days | |
Estimated dividend yield | 0.60% | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 6 years 6 months | 6 years 4 months 24 days |
Estimated volatility | 25.70% | 30.30% |
Estimated dividend yield | 0.70% | |
Risk-free interest rate | 2.70% | 2.10% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 8 years 8 months 12 days | 8 years 8 months 12 days |
Estimated volatility | 31.00% | 32.70% |
Estimated dividend yield | 0.80% | |
Risk-free interest rate | 3.10% | 2.30% |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Activity for Stock Option Awards) (Details) - Stock Options [Member] shares in Thousands | 3 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options, beginning balance | shares | 5,611 |
Weighted Average Exercise Price Per Share, beginning balance | $ / shares | $ 45.42 |
Options granted, Number of options | shares | 674 |
Options granted, Weighted Average Exercise Price Per Share | $ / shares | $ 79.79 |
Options exercised, Number of options | shares | (107) |
Options exercised, Weighted Average Exercise Price Per Share | $ / shares | $ 31.48 |
Options forfeited, Number of options | shares | (5) |
Options forfeited, Weighted Average Exercise Price Per Share | $ / shares | $ 70.65 |
Number of options, ending balance | shares | 6,173 |
Weighted Average Exercise Price Per Share, ending balance | $ / shares | $ 49.40 |
Stockholders' Equity (Changes i
Stockholders' Equity (Changes in Non-vested Stock Options) (Details) - Stock Options [Member] shares in Thousands | 3 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options, beginning balance | shares | 1,988 |
Weighted-Average Grant Date Fair Value Per Share, beginning balance | $ / shares | $ 21.64 |
Options granted, Number of options | shares | 674 |
Options granted, Weighted-Average Grant Date Fair Value Per Share | $ / shares | $ 24.59 |
Options vested, Number of options | shares | (795) |
Options vested, Weighted-Average Grant Date Fair Value Per Share | $ / shares | $ 19.78 |
Options forfeited, Number of options | shares | (5) |
Options forfeited, Weighted-Average Grant Date Fair Value Per Share | $ / shares | $ 23.87 |
Number of Options, ending balance | shares | 1,862 |
Weighted-Average Grant Date Fair Value Per Share, ending balance | $ / shares | $ 23.50 |
Stockholders' Equity (Stock Opt
Stockholders' Equity (Stock Options Vested, or Expected to Vest and Exercisable) (Details) - Stock Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding, Number of options | 6,173 | 5,611 |
Options outstanding, Weighted-Average Exercise Price | $ 49.40 | $ 45.42 |
Options outstanding, Weighted-Average Remaining Life in Years | 5 years 9 months 18 days | |
Options outstanding, Aggregate Intrinsic Value | $ 160,762 | |
Options vested and exercisable, Number of options | 4,310 | |
Options vested and exercisable, Weighted-Average Exercise Price Per Share | $ 40.19 | |
Options vested and exercisable, Weighted-Average Remaining Life in Years | 4 years 7 months 6 days | |
Options vested and exercisable, Aggregate Intrinsic Value | $ 147,826 | |
Options vested and expected to vest, Number of options | 6,074 | |
Options vested and expected to vest, Weighted-Average Exercise Price Per Share | $ 48.99 | |
Options vested and expected to vest, Weighted-Average Remaining Life in Years | 5 years 9 months 18 days | |
Options vested and expected to vest, Aggregate Intrinsic Value | $ 160,384 |
Stockholders' Equity (Summary_2
Stockholders' Equity (Summary of Activity for Restricted Stock Units) (Details) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 3 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares, beginning balance | 10 |
Weighted-Average Grant Date Fair Value Per Share, beginning balance | $ / shares | $ 82.71 |
Shares granted, Number of Shares | |
Shares vested, Number of Shares | |
Shares forfeited, Number of Shares | |
Number of shares, ending balance | 10 |
Weighted-Average Grant Date Fair Value Per Share, ending balance | $ / shares | $ 82.71 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 3 Months Ended |
Dec. 31, 2018 | |
Officer [Member] | |
Loss Contingencies [Line Items] | |
Period in which payments of termination benefits required for employment terminated following change of control | 2 years |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 3 Months Ended |
Dec. 31, 2018segment | |
Segment Information | |
Number of Reportable Segments | 2 |
Segment Information (Summary of
Segment Information (Summary of Consolidated Net Sales and Earnings by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 652,811 | $ 470,148 |
Interest expense, net | (11,507) | (8,509) |
Consolidated earnings before income taxes | 61,515 | 37,487 |
Aerospace [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 392,887 | |
Industrial [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 259,924 | |
Operating Segments [Member] | Aerospace [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 392,887 | 305,905 |
Segment earnings (loss) | 72,854 | 45,241 |
Operating Segments [Member] | Industrial [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 259,924 | 164,243 |
Segment earnings (loss) | 29,169 | 19,781 |
Unallocated Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment earnings (loss) | $ (29,001) | $ (19,026) |
Segment Information (Summary _2
Segment Information (Summary of Consolidated Total Assets, Depreciation and Amortization, and Capital Expenditures by Segment) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | |||
Assets | $ 3,860,536 | $ 3,790,649 | |
Property, plant and equipment, net | 1,060,556 | 1,060,005 | |
Other assets | 175,606 | 85,144 | [1],[2] |
Unallocated Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Property, plant and equipment, net | 101,419 | 102,083 | |
Other assets | 303,255 | 240,212 | |
Aerospace [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,810,447 | 1,805,892 | |
Industrial [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Assets | $ 1,645,415 | $ 1,642,462 | |
[1] | The adoption of ASC 606 changed the revenue recognition practices for a number of revenue generating activities across Woodward's businesses, although the most significant impacts are concentrated in product being produced for customers that have no alternative use to Woodward and Woodward has an enforceable right to payment with a profit, and MRO. The revenue related to these activities, which previously was accounted for on a point in time basis, is now required to use an over time model because the associated contracts meet one or more of the mandatory criteria established in ASC 606, as described above, and are included as current unbilled receivables in "Accounts receivable" and noncurrent unbilled receivables in "Other assets." The change in the timing of revenue recognized in connection with over time contracts similarly changed the timing of manufacturing cost recognition and certain engineering and development costs, which are reflected as a reduction to inventory. | ||
[2] | Woodward recorded customer funding of product engineering and development identified as material rights as current and noncurrent deferred revenue contract liabilities included in "Accrued liabilities" and "Other liabilities." The related customer funded product engineering and development costs were capitalized as costs to fulfill a contract, to the extent of the contractually committed customer funded payments, and are recorded as "Other assets." |
Subsequent Event (Narrative) (D
Subsequent Event (Narrative) (Details) - $ / shares | 3 Months Ended | |
Dec. 31, 2018 | Jan. 30, 2019 | |
Subsequent Event [Line Items] | ||
Dividend, declared date | Jan. 30, 2019 | |
Dividend, payable date | Mar. 5, 2019 | |
Dividend, record date | Feb. 19, 2019 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Dividend per share | $ 0.1625 |