Segment Information

12 Months Ended

Sep. 30, 2015

Segment Information

Segment Information

Note 20.  Segment information

Woodward serves the aerospace, industrial and energy markets through its two reportable segments - Aerospace and Energy.  Woodward’s reportable segments are aggregations of Woodward’s operating segments.  Woodward uses operating segment information internally to manage its business, including the assessment of operating segment performance and decisions for the allocation of resources between operating segments.

The accounting policies of the reportable segments are the same as those of the Company.  Woodward evaluates segment profit or loss based on internal performance measures for each segment in a given period.  In connection with that assessment, Woodward excludes matters such as charges for restructuring costs, interest income and expense, certain gains and losses from asset dispositions, or other non-recurring and/or non-operationally related expenses. 

A summary of consolidated net sales and earnings by segment follows:

	Year Ended September 30,
	2015		2014		2013
Segment external net sales:
Aerospace	$	1,160,883	$	1,084,025	$	1,061,477
Energy		877,420		917,215		874,499
Total consolidated net sales	$	2,038,303	$	2,001,240	$	1,935,976
Segment earnings:
Aerospace	$	187,747	$	159,200	$	166,122
Energy		126,641		134,278		98,940
Total segment earnings		314,388		293,478		265,062
Nonsegment expenses		(49,362)		(43,701)		(39,061)
Interest expense, net		(24,077)		(22,533)		(26,430)
Consolidated earnings before income taxes	$	240,949	$	227,244	$	199,571

Segment assets consist of accounts receivable, inventories, property, plant, and equipment, net, goodwill, and other intangibles, net.  A summary of consolidated total assets, consolidated depreciation and amortization and consolidated capital expenditures follows:

	Year Ended September 30,
	2015		2014		2013
Segment assets:
Aerospace	$	1,566,421	$	1,440,355	$	1,361,861
Energy		653,848		610,345		599,007
Total segment assets		2,220,269		2,050,700		1,960,868
Unallocated corporate property, plant and equipment, net		85,834		72,992		50,115
Other unallocated assets		233,862		273,510		207,535
Consolidated total assets	$	2,539,965	$	2,397,202	$	2,218,518
Segment depreciation and amortization:
Aerospace	$	46,488	$	46,895	$	49,887
Energy		20,768		22,672		20,890
Total segment depreciation and amortization		67,256		69,567		70,777
Unallocated corporate amounts		7,979		7,786		3,456
Consolidated depreciation and amortization	$	75,235	$	77,353	$	74,233
Segment capital expenditures:
Aerospace	$	150,021	$	134,307	$	74,964
Energy		113,292		55,780		28,137
Total segment capital expenditures		263,313		190,087		103,101
Unallocated corporate amounts		23,299		17,019		38,499
Consolidated capital expenditures	$	286,612	$	207,106	$	141,600

Sales to General Electric were made by all of Woodward’s reportable segments and totaled approximately 18% of net sales in fiscal year 2015, 15% of net sales in fiscal year 2014, and 15% of net sales in fiscal year 2013.  Accounts receivable from General Electric totaled approximately 15%of accounts receivable at September 30, 2015 and 12% of accounts receivable at September 30, 2014.

U.S. Government related sales from Woodward’s reportable segments were as follows:

	Direct U.S. Government Sales		Indirect U.S. Government Sales		Total U.S. Government Related Sales
Fiscal year ended September 30, 2015
Aerospace	$	92,322	$	258,391	$	350,713
Energy		4,836		8,839		13,675
Total net external sales	$	97,158	$	267,230	$	364,388
Percentage of total net sales		5%		13%		18%
Fiscal year ended September 30, 2014
Aerospace	$	76,982	$	254,806	$	331,788
Energy		2,517		5,588		8,105
Total net external sales	$	79,499	$	260,394	$	339,893
Percentage of total net sales		4%		13%		17%
Fiscal year ended September 30, 2013
Aerospace	$	104,410	$	289,197	$	393,607
Energy		3,649		8,106		11,755
Total net external sales	$	108,059	$	297,303	$	405,362
Percentage of total net sales		6%		15%		21%

Accounts receivable from the U.S. Government totaled approximately 3% of accounts receivable at September 30, 2015 and 2% of accounts receivable at September 30, 2014.

The customers who account for approximately 10% or more of sales to each of Woodward’s reporting segments for the fiscal year ended September 30, 2015 follow:

	Customer
Aerospace	General Electric, Boeing, United Technologies
Energy	General Electric

Net sales by geographical area, as determined by the location of the customer invoiced, were as follows:

	Year Ended September 30,
	2015		2014		2013
United States	$	1,054,895	$	1,025,149	$	1,058,912
Europe (1)		569,322		519,721		480,922
Asia		241,875		299,755		287,742
Other countries		172,211		156,615		108,400
Consolidated net sales	$	2,038,303	$	2,001,240	$	1,935,976

(1) As a percentage of consolidated net sales, net sales to customers in Germany accounted for 10% for the year ended September 30, 2015,  9% for the year ended September 30, 2014 and 9% for the year ended September 30, 2013.

Property, plant, and equipment, net by geographical area, as determined by the physical location of the assets, were as follows:

	At September 30,
	2015		2014
United States	$	704,686	$	457,563
Germany		25,634		26,898
Other countries		25,780		28,818
Consolidated property, plant and equipment, net	$	756,100	$	513,279