Note 9. Property, plant, and equipment



	September 30,		September 30,
	2016		2015
Land and land improvements	$	87,696	$	79,311
Buildings and building improvements		527,704		372,160
Leasehold improvements		15,213		16,907
Machinery and production equipment		484,315		365,040
Computer equipment and software		117,984		118,154
Office furniture and equipment		29,344		20,939
Other		18,969		18,325
Construction in progress		88,909		252,763
		1,370,134		1,243,599
Less accumulated depreciation		(493,784)		(487,499)
Property, plant and equipment, net	$	876,350	$	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.

During the quarter ended September 30, 2014, Woodward recorded an impairment charge of $3,138, which is included in cost of goods sold in the Consolidated Statement of Earnings, related to the write down to fair value of certain assets held for sale. During the quarter ended March 31, 2015, Woodward completed the sale of these assets.

At September 30, 2016, included in “Office furniture and equipment” and “Other” is $1,653 of gross assets acquired on capital leases, and accumulated depreciation included $322 of amortization associated with the capital lease assets.

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 $26,741 at September 30, 2016 and $47,629 at September 30, 2015 associated with new equipment purchases for the second campus, including capitalized interest of $341 at September 30, 2016 and $499 at September 30, 2015.

During 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 $160,000 of assets were placed in service during the nine-months ended September 30, 2016, and were recorded to “Buildings and building improvements.” Included in “Construction in progress” are $247 at September 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 $0 at September 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, the new campus at its corporate headquarters in Fort Collins, Colorado (both discussed above), and the 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 were used in fiscal year 2016 and will be used going forward and result in a downward adjustment of depreciation on existing assets of approximately $12,000 for fiscal year 2016.

For the fiscal years ended September 30, 2016, 2015, and 2014, Woodward had depreciation expense as follows:



	Year Ended September 30,
	2016		2015		2014
Depreciation expense	$	41,550	$	45,994	$	43,773

For the fiscal years ended September 30, 2016, 2015, and 2014, Woodward capitalized interest that would have otherwise been included in interest expense of the following:



	Year Ended September 30,
	2016		2015		2014
Capitalized interest	$	5,455	$	8,995	$	7,282