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Stockholders' Equity | 12 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
Stockholders' Equity | Note 21. Stockholders’ equity Common stock and treasury stock Activity in common stock and treasury stock shares are as follows:
|  | Common Stock |  |  | Treasury Stock |  |  | Treasury stock held for deferred compensation |
Balances as of September 30, 2021 |  |  | 72,960 |  |  |  | (9,702 | ) |  |  | (167 | )
Purchase of treasury stock |  |  | — |  |  |  | (4,123 | ) |  |  | — |
Sales of treasury stock |  |  | — |  |  |  | 468 |  |  |  | — |
Common shares issued for benefit plans |  |  | — |  |  |  | 150 |  |  |  | — |
Purchases of stock by deferred compensation |  |  | — |  |  |  | — |  |  |  | (3 | )
Distribution of stock from deferred compensation |  |  | — |  |  |  | — |  |  |  | 31 |
Balances as of September 30, 2022 |  |  | 72,960 |  |  |  | (13,207 | ) |  |  | (139 | )
Balances as of September 30, 2022 |  |  | 72,960 |  |  |  | (13,207 | ) |  |  | (139 | )
Purchase of treasury stock |  |  | — |  |  |  | (1,060 | ) |  |  | — |
Sales of treasury stock |  |  | — |  |  |  | 1,009 |  |  |  | — |
Common shares issued for benefit plans |  |  | — |  |  |  | 188 |  |  |  | — |
Purchases of stock by deferred compensation |  |  | — |  |  |  | — |  |  |  | (2 | )
Distribution of stock from deferred compensation |  |  | — |  |  |  | — |  |  |  | 86 |
Balances as of September 30, 2023 |  |  | 72,960 |  |  |  | (13,070 | ) |  |  | (55 | )
Balances as of September 30, 2023 |  |  | 72,960 |  |  |  | (13,070 | ) |  |  | (55 | )
Purchase of treasury stock |  |  | — |  |  |  | (2,236 | ) |  |  | — |
Sales of treasury stock |  |  | — |  |  |  | 1,360 |  |  |  | — |
Common shares issued for benefit plans |  |  | — |  |  |  | 159 |  |  |  | — |
Purchases of stock by deferred compensation |  |  | — |  |  |  | — |  |  |  | (1 | )
Distribution of stock from deferred compensation |  |  | — |  |  |  | — |  |  |  | 11 |
Balances as of September 30, 2024 |  |  | 72,960 |  |  |  | (13,787 | ) |  |  | (45 | )
Stock repurchase program In November 2019, the Board had authorized a 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 was scheduled to expire in November 2022 (the “2019 Authorization”). During fiscal year 2022, we repurchased 233 shares of our common stock for $26,742 under the 2019 Authorization. In January 2022, the Board terminated the 2019 Authorization and concurrently authorized a program for the repurchase of up to $800,000 of Woodward’s outstanding shares of common stock on the open market or in privately negotiated transactions over a two-year period ending in January 2024 (the “2022 Authorization”). During fiscal year 2023, we repurchased 1,060 shares of our common stock for $126,380 under the 2022 Authorization, as compared to 3,890 shares of our common stock for $446,042 under the 2022 Authorization during fiscal year 2022. In January 2024, the Board terminated the 2022 Authorization, which was nearing expiration, and concurrently authorized a new program for the repurchase of up to $600,000 of Woodward's outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period ending in January 2027 (the "2024 Authorization"). During fiscal year 2024, we repurchased 2,236 shares of our common stock for $390,819 under the 2024 Authorization. Stock-based compensation Provisions governing non-qualified stock option awards, restricted stock units ("RSUs"), and performance restricted stock units ("PSUs") are included in the 2017 Omnibus Incentive Plan, as amended from time to time (the “2017 Plan”) and with respect to outstanding stock options awarded in or prior to fiscal year 2016, the 2006 Omnibus Incentive Plan (the “2006 Plan”). 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 date of the 2017 Plan, the Board delegated authority to administer the 2017 Plan to the Human Capital & Compensation Committee of the Board, including, but not limited to, the power to determine the recipients of awards and the terms of those awards. Stock options 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 have 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.
|  | Year Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Weighted-average exercise price per share |  | $ | 137.36 |  |  | $ | 84.84 |  |  | $ | 115.3 |
Expected term (years) |  |  |  | 6.6 |  | - |  | 8.7 |  |  |  |  | 6.6 |  | - |  | 8.8 |  |  |  |  | 6.6 |  | - |  | 8.7 |
Estimated volatility |  |  |  | 35.0 | % | - |  | 37.6 | % |  |  |  | 34.7 | % | - |  | 37.6 | % |  |  |  | 33.8 | % | - |  | 36.4 | %
Estimated dividend yield |  |  |  | 0.7 | % | - |  | 0.7 | % |  |  |  | 0.7 | % | - |  | 0.9 | % |  |  |  | 0.6 | % | - |  | 0.8 | %
Risk-free interest rate |  |  |  | 4.2 | % | - |  | 4.4 | % |  |  |  | 3.4 | % | - |  | 4.4 | % |  |  |  | 1.1 | % | - |  | 3.5 | %
The weighted average grant date fair value of options granted follows:
|  | Year Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Weighted-average grant date fair value of options |  | $ | 58.34 |  |  | $ | 34.19 |  |  | $ | 41.78 |
The following is a summary of the activity for stock option awards during the fiscal year ended September 30, 2024:
|  | Number of options |  |  | Weighted- Average Exercise Price Per Share |
Balance at September 30, 2023 |  |  | 4,842 |  |  | $ | 80.48 |
Granted |  |  | 87 |  |  |  | 137.36 |
Exercised |  |  | (1,340 | ) |  |  | 69.23 |
Forfeited |  |  | (11 | ) |  |  | 96.82 |
Balance at September 30, 2024 |  |  | 3,578 |  |  | $ | 86.03 |
Changes in non-vested stock options during the fiscal year ended September 30, 2024 were as follows:
|  | Number of options |  |  | Weighted- Average Grant Date Fair Value Per Share |
Balance at September 30, 2023 |  |  | 1,393 |  |  | $ | 33.96 |
Granted |  |  | 87 |  |  |  | 58.34 |
Vested |  |  | (572 | ) |  |  | 32.36 |
Forfeited |  |  | (10 | ) |  |  | 37.76 |
Balance at September 30, 2024 |  |  | 898 |  |  | $ | 37.30 |
Information about stock options that have vested, or are expected to vest, and are exercisable at September 30, 2024 was as follows:
|  | Number of options |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Life in Years |  |  | Aggregate Intrinsic Value |
Options outstanding |  |  | 3,578 |  |  | $ | 86.03 |  |  |  | 5.3 |  |  | $ | 305,872 |
Options vested and exercisable |  |  | 2,680 |  |  |  | 82.14 |  |  |  | 4.5 |  |  |  | 239,541 |
Options vested and expected to vest |  |  | 3,557 |  |  |  | 85.91 |  |  |  | 5.2 |  |  |  | 304,515 |
Other information follows:
|  | Year Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Total fair value of stock options vested |  | $ | 18,527 |  |  | $ | 24,388 |  |  | $ | 18,945 |
Total intrinsic value of options exercised |  |  | 115,198 |  |  |  | 67,203 |  |  |  | 32,709 |
Cash received from exercises of stock options |  |  | 89,875 |  |  |  | 50,749 |  |  |  | 21,897 |
Excess tax benefit realized from exercise of stock options |  |  | 17,939 |  |  |  | 12,595 |  |  |  | 6,472 |
Restricted stock units The Company generally grants RSUs to eligible employees under its form RSU agreement for employees (the “Standard Form RSU Agreement”). RSUs granted under the Standard Form RSU Agreement prior to November 14, 2023, generally have a four-year vesting schedule at a rate of 25% per year, and RSUs granted after November 14, 2023 have a three-year vesting schedule at a rate of 33.3% per year, in each case generally subject to continued employment. The fair value of RSUs granted are estimated using the closing price of the Company’s stock on the grant date. The Company has also granted RSUs to certain employees under its form attraction and retention RSU agreement (the “Form Attraction and Retention RSU Agreement”), which has from time to time been used for new hires and specific retention purposes. RSUs granted under the Form Attraction and Retention RSU Agreement are generally scheduled to fully vest on the third or fourth anniversary of the respective grant dates, and in each case, subject to continued employment. A summary of the activity for RSUs:
|  | Number of units |  |  | Weighted-Average Grant Date Fair Value |
Balance at September 30, 2023 |  |  | 177 |  |  | $ | 93.46 |
Granted |  |  | 178 |  |  |  | 139.04 |
Vested |  |  | (30 | ) |  |  | 88.97 |
Forfeited |  |  | (7 | ) |  |  | 149.02 |
Balance at September 30, 2024 |  |  | 318 |  |  | $ | 118.19 |
Performance restricted stock units In November 2023, the Company granted PSUs to certain eligible employees under the form PSU agreement that generally will vest subject to a market condition and a service condition through the performance period. The market condition associated with the awards is based on the Company's relative total shareholder return ("TSR") compared to the TSR generated by the other companies that comprise the S&P 400 Midcap Index over a three-year performance period. Performance at target will result in vesting and issuance of the number of PSUs granted, equal to 100% payout. Performance below or above target can result in an issuance of between 0% - 150% of the target number of PSUs granted. Expense is recognized based on the weighted average grant date fair value on a straight line basis over the service period, irrespective as to whether the market condition is achieved. The fair value of the PSUs for the November 2023 grant was determined based upon a Monte Carlo valuation method. The assumptions used in the Monte Carlo method to value the PSUs granted, which includes the grant date fair value outcome from the Monte Carlo method, were as follows:
|  | September 30, 2024 |
Expected volatility |  |  | 30.2 | %
Risk free interest rate |  |  | 4.5 | %
Expected life |  | 3 years |
Grant date fair value |  | $ | 146.47 |
The PSUs granted receive dividend equivalent units; therefore, no discount was applied for Woodward’s dividends. A summary of the activity for PSUs:
|  | Number of units |  |  | Weighted-Average Grant Date Fair Value |
Beginning balance |  |  | — |  |  | $ | — |
Granted |  |  | 66 |  |  |  | 146.47 |
Forfeited |  |  | (4 | ) |  |  | 146.47 |
Ending balance |  |  | 62 |  |  | $ | 146.47 |
Stock-based compensation expense Woodward recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Pursuant to the form 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 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. Stock-based compensation expense recognized was as follows:
|  | Year Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Employee stock-based compensation expense |  | $ | 33,052 |  |  | $ | 23,958 |  |  | $ | 20,109 |
In connection with an executive separation and release agreement entered into by the Company, Woodward recognized an additional $1,682 and $1,265 of stock-based compensation expense, before tax, during fiscal year 2024 and fiscal year 2023, respectively. At September 30, 2024, there was approximately $26,694 of total unrecognized compensation expense related to non-vested stock-based compensation arrangements, including stock options, restricted stock, and performance stock awards. The pre-vesting forfeiture rates for purposes of determining stock-based compensation expense recognized were estimated to be 0.0% for members of Woodward’s Board and 7.4% for all others. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.79 years.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent + Details
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