Note 10. Property, plant, and equipment



	June 30,		September 30,
	2016		2015
Land and land improvements	$	87,466	$	79,311
Buildings and building improvements		523,238		372,160
Leasehold improvements		14,018		16,907
Machinery and production equipment		417,435		365,040
Computer equipment and software		112,273		118,154
Office furniture and equipment		25,517		20,939
Other		18,371		18,325
Construction in progress		138,798		252,763
		1,337,116		1,243,599
Less accumulated depreciation		(492,661)		(487,499)
Property, plant and equipment, net	$	844,455	$	756,100

Included in “Land and land improvements” and “Buildings and improvements” are assets held for sale of $681 at September 30, 2015 related to Woodward’s Industrial segment. The sale of these assets was completed on April 15, 2016.

Included in “Office furniture and equipment” and “Other” is $1,626 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 occupied the new facility in anticipation of beginning serial production of new narrow-body product lines beginning in fiscal year 2017 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 $66,695 at June 30, 2016 and $47,629 at September 30, 2015, associated with new equipment purchases for the second campus including capitalized interest of $1,469 at June 30, 2016 and $499 at September 30, 2015.

During the first nine-months of fiscal year 2016, Woodward completed and placed into service a new campus at its corporate headquarters in Fort Collins, Colorado to support the future growth of its Industrial segment by supplementing its existing Colorado manufacturing facilities and corporate headquarters. Woodward began occupying the new campus during its second quarter of fiscal year 2016. Approximately $158,000 of assets were placed in service during the six-months ended June 30, 2016, and were recorded to “Buildings and building improvements.” Included in “Construction in progress” are $4,554 at June 30, 2016 and $151,669 at September 30, 2015, associated with the construction of the new campus and related new equipment purchases, including capitalized interest of $284 at June 30, 2016 and $5,205 at September 30, 2015.

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 (both 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 nine-months ended June 30, 2016 and June 30, 2015, Woodward had depreciation expense as follows:



	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Depreciation expense	$	10,413	$	11,280	$	29,162	$	33,727

For the three and nine-months ended June 30, 2016 and June 30, 2015, Woodward capitalized interest that would have otherwise been included in interest expense of the following:



	Three-Months Ended				Nine-Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Capitalized interest	$	914	$	2,544	$	5,054	$	7,310