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v3.22.2.2

Income Taxes (Tables) | 12 Months Ended
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Sep. 30, 2022
Income Tax Disclosure [Abstract] |
Components of Income Tax Expense (Benefit) | Income taxes consisted of the following:
|  | Year Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 21,869 |  |  | $ | 15,109 |  |  | $ | 15,976 |
State |  |  | 2,310 |  |  |  | 853 |  |  |  | 1,383 |
Foreign |  |  | 27,577 |  |  |  | 34,354 |  |  |  | 22,588 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (13,216 | ) |  |  | (8,369 | ) |  |  | 10,784 |
State |  |  | (8,623 | ) |  |  | (2,658 | ) |  |  | (547 | )
Foreign |  |  | (1,717 | ) |  |  | (2,139 | ) |  |  | (8,698 | )
|  | $ | 28,200 |  |  | $ | 37,150 |  |  | $ | 41,486 |
Earnings Before Income Taxes by Geographical Area | Earnings before income taxes by geographical area consisted of the following:
|  | Year Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
United States |  | $ | 99,427 |  |  | $ | 136,280 |  |  | $ | 180,753 |
Other countries |  |  | 100,471 |  |  |  | 109,519 |  |  |  | 101,128 |
|  | $ | 199,898 |  |  | $ | 245,799 |  |  | $ | 281,881 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred income taxes presented in the Consolidated Balance Sheets are related to the following:
|  | September 30, 2022 |  |  | September 30, 2021 |
Deferred tax assets: |  |  |  |  |  |  |  |
Defined benefit plans, other postretirement |  | $ | 4,144 |  |  | $ | 5,364 |
Foreign net operating loss carryforwards |  |  | 3,449 |  |  |  | 2,110 |
Inventory |  |  | 57,102 |  |  |  | 51,011 |
Stock-based and other compensation |  |  | 42,428 |  |  |  | 36,343 |
Deferred revenue net of unbilled receivables |  |  | 49,491 |  |  |  | 46,002 |
Other reserves |  |  | 8,017 |  |  |  | 10,619 |
Tax credits and incentives |  |  | 25,623 |  |  |  | 22,756 |
Lease obligations |  |  | 7,150 |  |  |  | 5,818 |
Other |  |  | 3,402 |  |  |  | 7,936 |
Valuation allowance |  |  | (2,537 | ) |  |  | (4,138 | )
Total deferred tax assets, net of valuation allowance |  |  | 198,269 |  |  |  | 183,821 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Goodwill and intangibles - net |  |  | (187,988 | ) |  |  | (210,911 | )
Property, plant and equipment |  |  | (100,215 | ) |  |  | (105,724 | )
Right of use assets |  |  | (7,013 | ) |  |  | (5,497 | )
Defined benefit plans, pension |  |  | (3,969 | ) |  |  | (2,837 | )
Other |  |  | (2,832 | ) |  |  | (2,722 | )
Total deferred tax liabilities |  |  | (302,017 | ) |  |  | (327,691 | )
Net deferred tax liabilities |  | $ | (103,748 | ) |  | $ | (143,870 | )
Reconciliation of U.S. Statutory Tax Rate to Effective Tax Rate | The following is a reconciliation of the U.S. Federal statutory tax 21% in the fiscal years ended September 30, 2022, September 30, 2021 and September 30, 2020 to Woodward’s effective income tax rate:
|  | Year Ending September 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Percent of pretax earnings |  |  |  |  |  |  |  |  |  |  |  |
Statutory tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income taxes, net of federal tax benefit |  |  | (2.5 | ) |  |  | (0.5 | ) |  |  | 0.3 |
Taxes on international activities |  |  | 0.8 |  |  |  | (0.1 | ) |  |  | (2.1 | )
Research credit |  |  | (4.5 | ) |  |  | (3.1 | ) |  |  | (3.6 | )
Net excess income tax benefit from stock-based compensation |  |  | (2.5 | ) |  |  | (4.2 | ) |  |  | (2.8 | )
Adjustments of prior period tax items |  |  | — |  |  |  | 0.4 |  |  |  | 1.0 |
Compensation and benefits |  |  | 0.3 |  |  |  | 0.5 |  |  |  | 0.4 |
Other items, net |  |  | 1.5 |  |  |  | 1.1 |  |  |  | 0.5 |
Effective tax rate |  |  | 14.1 | % |  |  | 15.1 | % |  |  | 14.7 | %
Reconciliation of the Beginning and Ending Amounts of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:
|  | Year Ending September 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Beginning balance |  | $ | 15,199 |  |  | $ | 9,851 |  |  | $ | 10,305 |
Additions to current year tax positions |  |  | 1,783 |  |  |  | 2,289 |  |  |  | 1,890 |
Reductions to prior year tax positions |  |  | (963 | ) |  |  | — |  |  |  | (2,415 | )
Additions to prior year tax positions |  |  | 112 |  |  |  | 3,166 |  |  |  | 71 |
Lapse of applicable statute of limitations |  |  | (4,193 | ) |  |  | (107 | ) |  |  | — |
Ending balance |  | $ | 11,938 |  |  | $ | 15,199 |  |  | $ | 9,851 |

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