XML 34 R23.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Income Taxes | 3 Months Ended
--- | ---
Dec. 31, 2015
Income Taxes |
Income Taxes | Note 16. Income taxes U.S. GAAP requires that the interim period 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 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 occurs.
The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income of Woodward in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. 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. 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,
|  | 2015 |  | 2014
Earnings before income taxes |  | $ | 27,956 |  | $ | 57,072
Income tax expense |  |  | 2,345 |  |  | 13,288
Effective tax rate |  |  | 8.4% |  |  | 23.3%
On December 18, 2015, the Protecting Americans from Tax Hikes (PATH) Act of 2015 was passed which among other items permanently reinstated the U.S. research and experimentation credit and also extended bonus depreciation with a phase-out ending on December 31, 2019. This law change had two significant impacts in the current quarter as described below. The decrease in the year-over-year effective tax rate for the three-months ended December 31, 2015 is primarily attributable to the impact of the U.S. research and experimentation credit (“R&E Credit”) reinstatement and net favorable resolutions of foreign tax matters. The retroactive portion of the R&E Credit related to the nine-months ended September 30, 2015 was $5,197 and was included in the results of the first quarter of fiscal year 2016. The prior fiscal year’s first quarter included a similar retroactive R&E Credit of $5,063 but had a smaller impact on the effective tax rate due to higher earnings before income taxes in the prior quarter compared to the current quarter. As a result of the bonus depreciation extension, Woodward increased both its current tax receivable and its deferred tax liability by approximately $9,800 in the first quarter of fiscal year 2016 for additional bonus depreciation related to fiscal year 2015. Gross unrecognized tax benefits were $21,626 as of December 31, 2015, and $21,469 as of September 30, 2015. Included in the balance of unrecognized tax benefits were $10,419 as of December 31, 2015 and $10,494 as of September 30, 2015, of tax benefits that, if recognized, would affect the effective tax rate. At this time, Woodward estimates that it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $3,385 in the next twelve months due to the completion of reviews by tax authorities and the settlement of other tax positions. Woodward accrues for potential interest and penalties related to unrecognized tax benefits in tax expense. Woodward had accrued gross interest and penalties of $811 as of December 31, 2015 and $859 as of September 30, 2015. 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. F iscal years remaining open to examination in significant foreign jurisdictions include 2008 and forward. Woodward has concluded U.S. federal income tax examinations through fiscal year 2012. Woodward is generally subject to U.S. state income tax examinations for fiscal years 2012 and forward.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration