Note 9. Property, plant, and equipment



	March 31,		September 30,
	2016		2015
Land and land improvements	$	87,632	$	79,311
Buildings and building improvements		499,987		372,160
Leasehold improvements		12,797		16,907
Machinery and production equipment		381,243		365,040
Computer equipment and software		111,287		118,154
Office furniture and equipment		22,268		20,939
Other		18,360		18,325
Construction in progress		185,177		252,763
		1,318,751		1,243,599
Less accumulated depreciation		(492,779)		(487,499)
Property, plant and equipment, net	$	825,972	$	756,100

Included in “Land and land improvements” and “Buildings and improvements” are assets held for sale of $686 at March 31, 2016 and $681 at September 30, 2015 related to Woodward’s Industrial segment. The entire change in value is due to changes in foreign currency exchange rates between September 30, 2015 and March 31, 2016. The sale of these assets was completed on April 15, 2016.

Included in “Office furniture and equipment” and “Other” is $1,239 of gross assets acquired on capital leases.

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 begun occupying the new facility for its Aerospace segment. This campus is intended to support Woodward’s expected growth in its Aerospace segment over the next ten years and beyond, required 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 $72,244 at March 31, 2016 and $47,629 at September 30, 2015, associated with new equipment purchases for the second campus including capitalized interest of $1,369 at March 31, 2016 and $499 at September 30, 2015.

Woodward is also developing a new campus at its corporate headquarters in Fort Collins, Colorado to support the continued growth of its Industrial segment by supplementing its existing Colorado manufacturing facilities and corporate headquarters. Included in “Construction in progress” are $48,606 at March 31, 2016 and $151,669 at September 30, 2015, associated with the construction of the new campus including capitalized interest of $934 at March 31, 2016 and $5,205 at September 30, 2015. Woodward began occupying the new campus during its second quarter of fiscal year 2016. Approximately $135,000 of assets were placed in service during the three-months ended March 31, 2016, and were recorded to “Buildings and building improvements.”

Concurrent with and in relation to Woodward’s significant investment in three new campuses and related equipment in the greater-Rockford, Illinois area, its corporate headquarters in Fort Collins, Colorado (discussed above), and a new campus in Niles, Illinois (that was completed in fiscal year 2015), Woodward initiated a comprehensive review of its depreciation lives as required by U.S. GAAP to evaluate the estimates of the useful lives of Woodward assets. This review resulted in estimates of the useful lives of both existing and new assets generally in excess of those utilized prior to fiscal year 2016. The revised estimates will be used in fiscal year 2016 and going forward and result in a downward adjustment of depreciation on existing assets of approximately $12,000 for fiscal year 2016.

For the three and six-months ended March 31, 2016 and March 31, 2015, Woodward had depreciation expense as follows:



	Three-Months Ended				Six-Months Ended
	March 31,				March 31,
	2016		2015		2016		2015
Depreciation expense	$	8,633	$	11,449	$	18,749	$	22,447

For the three and six-months ended March 31, 2016 and March 31, 2015, Woodward capitalized interest that would have otherwise been included in interest expense of the following:



	Three-Months Ended				Six-Months Ended
	March 31,				March 31,
	2016		2015		2016		2015
Capitalized interest	$	2,267	$	2,801	$	4,140	$	4,766