10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2011

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 0-8408

WOODWARD, INC.

(Exact name of registrant as specified in its charter)

Delaware	36-1984010
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1000 East Drake Road, Fort Collins, Colorado	80525
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (970) 482-5811

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Name of each exchange on which registered:
Common stock, par value $.001455 per share	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

Aggregate market value of registrant’s common stock held by non-affiliates of the registrant, based upon the closing price of a share of the registrant’s common stock on March 31, 2011 as reported on The NASDAQ Global Select Market on that date: $1,909,499,390. For purposes of this calculation, shares of common stock held by (i) persons holding more than 5% of the outstanding shares of stock, (ii) officers and directors of the registrant, and (iii) the Woodward Governor Company Profit Sharing Trust, Woodward Governor Company Deferred Shares Trust, or the Woodward Charitable Trust, as of March 31, 2011, are excluded in that such persons may be deemed to be affiliates. This determination is not necessarily conclusive of affiliate status.

Number of shares of the registrant’s common stock outstanding as of November 11, 2011: 68,902,457.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our proxy statement for the Annual Meeting of Stockholders to be held January 25, 2012, are incorporated by reference into Parts II and III of this Form 10-K, to the extent indicated.

TABLE OF CONTENTS

	Page
PART I
Forward Looking Statements		3
Item 1. Business		4
Item 1A. Risk Factors		12
Item 1B. Unresolved Staff Comments		22
Item 2. Properties		22
Item 3. Legal Proceedings		22
Item 4. (Removed and Reserved)		23
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		24
Item 6. Selected Financial Data		26
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		46
Item 8. Financial Statements and Supplementary Data		48
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		98
Item 9A. Controls and Procedures		98
PART III
Item 10. Directors, Executive Officers and Corporate Governance		101
Item 11. Executive Compensation		101
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		101
Item 13. Certain Relationships and Related Transactions, and Director Independence		101
Item 14. Principal Accountant Fees and Services		101
PART IV
Item 15. Exhibits and Financial Statement Schedules		102
Signatures		106
Ex-10.10
EX-18.1
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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PART I

Forward Looking Statements

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are statements that are deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of management. Words such as “anticipate,” “believe,” “estimate,” “seek,” “goal,” “expect,” “forecasts,” “intend,” “continue,” “outlook,” “plan,” “project,” “target,” “strive,” “can,” “could,” “may,” “should,” “will,” “would,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characteristics of future events or circumstances are forward-looking statements. Forward-looking statements may include, among others, statements relating to:

• future sales, earnings, cash flow, uses of cash, and other measures of financial performance;

• description of our plans and expectations for future operations;

• the effect of economic downturns or growth in particular regions;

• the effect of changes in the level of activity in particular industries or markets;

• the availability and cost of materials, components, services, and supplies;

• the scope, nature, or impact of acquisition activity and integration into our businesses;

• the development, production, and support of advanced technologies and new products and services;

• new business opportunities;

• restructuring costs and savings;

• our plans, objectives, expectations and intentions with respect to recent acquisitions and expected business opportunities that may be available to us;

• the outcome of contingencies;

• future repurchases of common stock;

• future levels of indebtedness and capital spending; and

• pension plan assumptions and future contributions.

Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including:

• a decline in business with, or financial distress of, our significant customers;

• the instability in the financial markets and prolonged unfavorable economic and other industry conditions;

• our ability to obtain financing, on acceptable terms or at all, to implement our business plans, complete acquisitions, or otherwise take advantage of business opportunities or respond to business pressures;

• the long sales cycle, customer evaluation process, and implementation period of some of our products and services;

• our ability to implement, and realize the intended effects of, our restructuring efforts;

• our ability to successfully manage competitive factors, including prices, promotional incentives, industry consolidation, and commodity and other input cost increases;

• our ability to manage our expenses and product mix while responding to sales increases or decreases;

• the ability of our subcontractors to perform contractual obligations and our suppliers to provide us with materials of sufficient quality or quantity required to meet our production needs at favorable prices or at all;

• the success of, or expenses associated with, our product development activities;

• our ability to integrate acquisitions and manage costs related thereto;

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• our debt obligations, our debt service requirements, and our ability to operate our business, pursue business strategies and incur additional debt in light of covenants contained in our outstanding debt agreements;

• risks related to our U. S. Government contracting activities;

• future impairment charges resulting from changes in the estimates of fair value of reporting units or of long-lived assets;

• future subsidiary results or changes in domestic or international tax statutes;

• environmental liabilities related to manufacturing activities;

• our continued access to a stable workforce and favorable labor relations with our employees;

• the geographical location of a portion of our Aerospace business is in California, which historically has been susceptible to natural disasters;

• our ability to successfully manage regulatory, tax, and legal matters (including product liability, patent, and intellectual property matters);

• liabilities resulting from legal and regulatory proceedings, inquiries, or investigations by private or U.S. Government persons or entities;

• risks from operating internationally, including the impact on reported earnings from fluctuations in foreign currency exchange rates, and changes in the legal and regulatory environments of countries in which we operate;

• fair value of defined benefit plan assets and assumptions used in determining our retirement pension and other postretirement benefit obligations and related expenses including, among others, discount rates and investment return on pension assets; and

• certain provisions of our charter documents and Delaware law that could discourage or prevent others from acquiring our company.

These factors are representative of the risks, uncertainties, and assumptions that could cause actual outcomes and results to differ materially from what is expressed or forecast in our forward-looking statements. Other factors are discussed under “Risk Factors” in our Securities and Exchange Commission (“SEC”) filings and are incorporated herein by reference.

Therefore, actual results could differ materially and adversely from those expressed in any forward-looking statements. For additional information regarding factors that may affect our actual financial condition and results of operations, see the information under the caption “Risk Factors” in Item 1A in this Annual Report on Form 10-K for the fiscal year ending September 30, 2011 (this “Form 10-K”). We undertake no obligation to revise or update any forward-looking statements for any reason.

Unless we have indicated otherwise or the context otherwise requires, references in this Form 10-K to “Woodward,” “the Company,” “we,” “us,” and “our” refer to Woodward, Inc. and its consolidated subsidiaries.

Amounts presented in this Form 10-K are in thousands except per share amounts.

Item 1. Business

General

We are an independent designer, manufacturer, and service provider of energy control and optimization solutions. We design, produce and service reliable, efficient, low-emission, and high-performance energy control products for diverse applications in challenging environments. We have significant production and assembly facilities in the United States, Europe and Asia, and promote our products and services through our worldwide locations.

Our strategic focus is providing energy control solutions for the aerospace and energy markets. The precise and efficient control of energy, including fluid and electrical energy, combustion, and motion, is a growing requirement in the markets we serve. Our customers look to us to optimize the efficiency, emissions and operation of power equipment in both commercial and military operations. Our core technologies leverage well across our markets and customer applications, enabling us to develop and integrate cost-effective and state-of-the-art fuel, combustion, fluid, actuation and electronic systems. We focus primarily on original equipment manufacturers (“OEMs”) and equipment packagers, partnering with them to bring superior component and system solutions to their demanding applications. We also provide aftermarket repair, replacement and other service support for our installed products.

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Our components and integrated systems optimize performance of commercial aircraft, military aircraft, ground vehicles and other equipment, gas and steam turbines, wind turbines, including converters and power grid related equipment, industrial diesel, gas and alternative fuel reciprocating engines, and electrical power systems. Our innovative fluid energy, combustion control, electrical energy, and motion control systems help our customers offer more cost-effective, cleaner, and more reliable equipment. Our customers include leading OEMs and the end users of their products.

During the third quarter of fiscal year 2011, Woodward acquired all of the outstanding stock of Integral Drive Systems AG and its European companies, including their respective holding companies (“IDS”) and the assets of IDS’ business in China (together the “IDS Acquisition”). IDS is a developer and manufacturer of innovative power electronic systems predominantly in utility scale wind turbines and photovoltaic power plants. Additionally, IDS offers key products in power distribution and marine propulsion systems. IDS’ products are used in offshore oil and gas platforms, energy storage and distribution systems and a variety of industrial applications, in addition to wind turbines and photovoltaic plants. Woodward believes the IDS Acquisition expands its presence in wind converter offerings and reduces its time to market with expansion of solar energy, energy storage and marine drives. IDS is being integrated into Woodward’s Energy segment.

We were established in 1870, incorporated in 1902, and are headquartered in Fort Collins, Colorado. The mailing address of our world headquarters is 1000 East Drake Road, Fort Collins, Colorado 80525. Our telephone number at that location is (970) 482-5811, and our website is www.woodward.com.

Markets and Principal Lines of Business

We serve two primary markets — aerospace and energy.

Within the aerospace market, we provide systems, components and solutions for both commercial and military applications. Our key focus areas within this market are:

• Propulsion system control solutions for turbine powered aircraft; and

• Actuation systems and motion control solutions.

Within the energy market, our key focus areas are:

• Control solutions for equipment that produce electricity using conventional or renewable energy sources;

• Solutions for the control of power quality, distribution and storage on the electrical grid; and

• Control solutions for power equipment used in the extraction, distribution, and conversion of renewable and fossil fuels in marine, locomotive, and industrial equipment applications.

Our customers demand technological solutions to meet their needs for performance, efficiency and reliability. Our systems and products are designed to improve fuel efficiency and operating performance, and reduce emissions and costs of operation.

As of September 30, 2011, we reorganized our reportable segments to better align with our markets. We now have two reportable segments — Aerospace and Energy. Both of our reportable segments are comprised of multiple business groups, which focus on particular applications within the aerospace and energy markets. Our Aerospace segment combines the aircraft propulsion portion of the former Turbine Systems business group, which we now refer to as the Aircraft Turbine Systems business group, with our Airframe Systems business group. Our Energy segment combines the industrial turbine portion of the former Turbine Systems business group, which we now refer to as the Industrial Turbomachinery Systems business group, with our Engine Systems and Electrical Power Systems business groups.

All information in this Annual Report on Form 10-K, including comparative financial information, has been retrospectively revised to reflect the realignment of our reportable segments. We use segment information internally to manage our business, including the assessment of business segment performance and decisions for the allocation of resources between segments.

Additional information about our operations in fiscal year 2011 and outlook for the future, including certain segment information, is included in “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additional information about our business segments and certain geographical information is included in Note 21, Segment information and Note 22, Supplemental quarterly financial data (Unaudited), to the Consolidated Financial Statements in “Item 8 — Financial Statements and Supplementary Data.”

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Products, Services and Applications

Aerospace

Our Aerospace segment designs, produces and services systems and products for the management of fuel, air, combustion and motion. These products include pumps, valves, fuel nozzles, metering units, cockpit controls, actuators, motors, and sensors. These products are used on commercial, business and military aircraft, as well as weapons and defense systems. We also have significant content on a wide variety of commercial aircraft, rotorcraft and business jet platforms, including the Airbus A320, Boeing 787, Bell 429 and the Gulfstream G650. We also have significant content on military applications, such as the Blackhawk helicopter, F-35 fighter jet, M1A1 Abrams Tank and guided tactical weapons, such as the Direct Attack Guided Rocket (“DAGR”).

Revenues from the Aerospace segment are generated primarily by sales to OEMs and tier-one prime contractors, and through aftermarket sales of components as provisioning spares or replacements. We also provide aftermarket repair, overhaul and other services to commercial airlines, turbine OEM repair facilities, military depots, third party repair shops, and end users.

Energy

Our Energy segment designs, produces and services systems and products for the management of fuel, air, fluids, gases, electricity and motion. These products include power converters, actuators, valves, pumps, injectors, solenoids, ignition systems, governors, electronics and devices that measure, communicate and protect low and medium voltage electrical distribution systems. Our products are used on industrial gas turbines, aeroderivative turbines, reciprocating engines, electrical grids, wind turbines and compressors. The equipment on which our products are found is used to extract and distribute fossil fuels, generate, distribute or store electricity, and to convert fuel to work in marine, locomotive and industrial equipment applications.

Revenues from the Energy segment are generated primarily by sales to OEMs and tier-one prime contractors, through aftermarket sales or replacements, and by providing other related services to our OEM customers and, in some cases, directly to end users or distributors.

Sales Order Backlog

Our backlog of unshipped sales orders as of October 31, 2011 and 2010 by segment was as follows:

			% Expected to be
	October 31,		filled by September 30,			October 31,
	2011		2012			2010
Aerospace	$	492,263		81	%	$	493,419
Energy		266,827		88			244,276
	$	759,090		84	%	$	737,695

Our current estimate of the sales order backlog is based on unshipped sales orders that are open in our order entry systems. Unshipped orders are not necessarily an indicator of future sales levels because of variations in lead times and customer production demand pull systems.

Seasonality

We do not believe that our sales, in total or in either business segment, are subject to significant seasonal variation. However, our sales have generally been lower in the first quarter of our fiscal year as compared to the immediately preceding quarter due to fewer working days resulting from the observance of various holidays and scheduled plant shutdowns for annual maintenance.

Customers

For the fiscal year ending September 30, 2011, approximately 34% of our consolidated net sales were made to our five largest customers. Sales to our five largest customers represented approximately 39% and 38% of our consolidated net sales for the fiscal years ending September 30, 2010 and September 30, 2009, respectively.

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Sales to our largest customer, General Electric, accounted for approximately 14%, 15%, and 17% of consolidated net sales in each of the fiscal years ending September 30, 2011, 2010 and 2009, respectively. Our accounts receivable from General Electric represented approximately 11% of total accounts receivable as of September 30, 2011 and 14% as of September 30, 2010. We believe General Electric and our other significant customers are creditworthy and will be able to satisfy their credit obligations to us.

The customers who account for approximately 10% or more of sales to each of our business segments for the fiscal year ending September 30, 2011 follow:

	Customer
Aerospace	United Technologies; Boeing; General Electric
Energy	General Electric; Caterpillar

Government Contracts and Regulation

Portions of our business, particularly in our Aerospace segment, are heavily regulated. We contract with numerous U.S. Government agencies and entities, including all of the branches of the U.S. military, the National Aeronautics and Space Administration (“NASA”), and the Departments of Defense, Homeland Security, and Transportation. We contract with similar government authorities outside the United States with respect to our international efforts.

The U.S. Government, and other governments, may terminate any of our government contracts (and, in general, subcontracts) at their convenience, as well as for default based on specified performance measurements. If any of our government contracts were to be terminated for convenience, we generally would be entitled to receive payment for work completed and allowable termination or cancellation costs. If any of our government contracts were to be terminated for our default, the U.S. Government generally would pay only for the work accepted, and could require us to pay the difference between the original contract price and the cost to re-procure the contract items, net of the work accepted from the original contract. The U.S. Government could also hold us liable for damages resulting from the default.

We must comply with, and are affected by, laws and regulations relating to the formation, administration and performance of U.S. Government contracts. These laws and regulations, among other things:

• require accurate, complete and current disclosure and certification of cost and pricing data in connection with certain contracts;

• impose specific and unique cost accounting practices that may differ from accounting principles generally accepted in the United States (“U.S. GAAP”), and therefore require reconciliation;

• impose regulations that define allowable and unallowable costs and otherwise govern our right to reimbursement under certain cost-based U.S. Government contracts;

• impose manufacturing, specifications and other quality standards that may be more restrictive than for non-government business activities; and

• restrict the use and dissemination of information classified for national security purposes and with respect to both the U.S. Government’s and the governments of foreign countries’ regulations pertaining to the export of certain products and technical data.

Sales made directly to U.S. Government agencies and entities, or indirectly through third party manufacturers utilizing Woodward parts and subassemblies, collectively represent 19% of our sales for fiscal year 2011, 23% of our sales for fiscal year 2010 and 20% of our sales for fiscal year 2009. The level of U.S. spending for defense, alternative energy, and other programs is subject to periodic congressional appropriation actions, and is subject to change at any time, including the mix of programs to which such funding is allocated.

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U.S. government related sales from our business segments for fiscal year 2011 and fiscal year 2010 follows:

	Direct U.S.			Indirect U.S.
	Government			Government			Commercial
	Sales			Sales			Sales			Total
Fiscal year ending September 30, 2011
Aerospace	$	67,116		$	252,462		$	523,454		$	843,032
Energy		3,448			7,530			857,692			868,670
Total net external sales	$	70,564		$	259,992		$	1,381,146		$	1,711,702
Percentage of total net sales		4	%		15	%		81	%		100	%
Fiscal year ending September 30, 2010
Aerospace	$	62,287		$	257,715		$	449,377		$	769,379
Energy		3,355			5,294			679,002			687,651
Total net external sales	$	65,642		$	263,009		$	1,128,379		$	1,457,030
Percentage of total net sales		5	%		18	%		77	%		100	%

Manufacturing

We operate manufacturing and assembly plants in the United States, Europe and Asia. Our products consist of mechanical, electronic and electromagnetic systems and components.

Aluminum, iron and steel are primary raw materials used to produce our mechanical components. Other commodities, such as gold, copper and nickel, are also used in the manufacture of our products, although in much smaller quantities. We purchase various goods, including component parts and services used in production, logistics and product development processes from third parties. Generally there are numerous sources for the raw materials and components used in our products, which we believe are sufficiently available to meet current requirements.

We maintain global strategic sourcing models to meet our global facilities’ production needs while building long-term supplier relationships and efficiently managing our overall supply costs. We expect our suppliers to maintain adequate levels of quality raw materials and component parts, and to deliver such parts on a timely basis to support production of our various products. We use a variety of agreements with suppliers intended to protect our intellectual property and processes and to monitor and mitigate risks of disruption in our supply base that could cause a business disruption to our production schedules or to our customers. The risks monitored include supplier financial viability, business continuity, quality, delivery and protection of our intellectual property and processes.

Our customers expect us to maintain adequate levels of certain finished goods and certain component parts to support our warranty commitments and sales to our aftermarket customers, and to deliver such parts on a timely basis to support our customers’ standard and customary needs. We carry certain finished goods and component parts in inventory to meet these rapid delivery requirements of our customers.

Research and Development

We conduct research and development activities primarily with our own independent research and development funds, and also in some cases through customer funding. Our research and development costs include basic research, applied research, development, systems and other concept formulation studies. We also conduct research and development activities aimed at improving our manufacturing processes.

Company-sponsored independent research and development costs are charged to expenses when incurred. Costs related to specific customer development programs are sometimes inventoried and charged to costs depending on the specifics of the contractual arrangements. Under certain arrangements in which a customer shares in product development costs, our portion of the unreimbursed costs is expensed as incurred. Across all our segments, total research and development costs totaled $115,633 in fiscal year 2011, $82,560 in fiscal year 2010, and $78,536 in fiscal year 2009. Research and development costs were 6.8% of consolidated net sales in fiscal year 2011 compared to 5.7% in fiscal year 2010 and 5.5% in fiscal year 2009. See “Research and development costs” in Note 1, Operations and summary of significant accounting policies, to the Consolidated Financial Statements in “Item 8 — Financial Statements and Supplementary Data.”

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Aerospace is focused on developing components and systems that we believe will be instrumental in helping our customers achieve their objectives of lower fuel consumption, lighter weight, more efficient performance, reduced emissions, and improved operating economics. Our development efforts support technology for a wide range of:

• aerospace turbine applications, including commercial, business and military engines of various thrust classes;

• electromechanical and hydraulic actuation systems for cockpit-to-flight surface control of fixed wing aircraft and rotorcraft applications, as well as weapon systems applications; and

• motion control components for integration into comprehensive actuation systems.

The aerospace industry is moving toward more electronic (“fly-by-wire”), lighter weight aircraft, while demanding increased reliability and redundancy. In response, we are developing an expanded family of intelligent cockpit control products (including throttle and rudder controls) with both conventional and fly-by-wire technology as well as motor driven actuation systems.

We collaborate closely with our customers in the early stages as they develop their new product concepts. We believe this collaboration allows us to develop technology that is aligned with our customers’ needs and therefore, increases the likelihood that our systems and components will be selected for inclusion in the platforms developed by our customers. We believe our close collaboration with our customers during preliminary design stages allows us to provide products that deliver the component and system performance necessary for a successful launch of our customers’ product.

Some technology development programs begin years before an expected entry to service, such as those for the next-generation commercial aircraft engines. Other development programs result in nearer-term product launches associated with new OEM offerings, product upgrades, or product replacements on existing programs.

Energy is focused on developing more efficient, cleaner technologies, including integrated control systems and system components that we believe will allow our OEM customers to cost-effectively meet mandated emissions regulations and fuel efficiency demands, allow for usage of a wider range of fuel sources, support global infrastructure requirements, and safely distribute and store power on the electrical grid. Our development efforts support technology for a wide range of:

• power converters for multi-megawatt (where megawatt is referred to as “MW”) class wind turbines in the power range of 1MW to 6MW, both for on-shore and off-shore-applications;

• distributed generator system (“Genset”) controls;

• controls for switchgear;

• new generation of protection and control relays for medium-voltage applications;

• modernization of the self powered protection relay lines;

• industrial gas and steam turbines;

• industrial compressors;

• engines and turbines driving pumps, generators and compressors; and

• engines and turbines used for propulsion of locomotive, marine and industrial equipment.

Our clean technology development efforts include controls for diesel, natural gas and alternative fuel engines, and full-scale converters. Major development projects, including diesel common rail systems, air and gaseous fuel systems, and automated diesel particulate regeneration systems are targeted for future global emissions regulations for the year 2015 and beyond.

We believe that our technologies make marine and industrial power generation and distribution, and alternative fueled bus, truck and ship engines operate cleaner, more efficiently, and more reliably.

Competitive Environment

Our products and product support services are sold worldwide into a variety of competitive markets. In all markets, we compete on the basis of differentiated technology and design, product performance and conformity with customer specifications, customer service and support, including on-time delivery and customer partnering, product quality, price, reputation and local presence. Each of our segments operates in a uniquely competitive environment.

We believe that new competitors face significant barriers to entry into many of our markets, including various government mandated certification requirements to compete in the aerospace markets in which we participate.

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Aerospace industry requires suppliers to comply with significant product certification requirements, which forms a basis for competition as well as a barrier to entry. Technological innovation and design, product performance and conformity with customer specifications, and product quality are of significant importance in the aerospace and defense industry. Our customers include airframe and aircraft engine OEM manufacturers and suppliers to these manufacturers. We supply these customers with technologically innovative components and system solutions. We align our technology roadmaps with our customers, and focus on responding to needs for reduced cost and weight, emission control and reliability improvements. We believe we have developed efficient manufacturing and assembly processes. Our products achieve high levels of field reliability, which we believe offers an advantage in life-cycle cost. We compete with numerous companies around the world that specialize in fuel and air management, combustion, and electronic control products. In addition, many of our OEM customers are capable of developing and manufacturing these same products internally. The principal points of competition within this market are product performance and conformity with customer specifications as well as product quality and reliability, on-time delivery, pricing, and joint development capabilities with our customers.

Our competitors in Aerospace include divisions of Goodrich, Hamilton Sundstrand, Honeywell, Moog and Parker Hannifin. We address competition in aftermarket service through responsiveness to our customers needs providing short turnaround times and geographical presence.

Several competitors are also customers for our products, such as Hamilton Sundstrand, Parker Hannifin, and Honeywell. Some of our customers are affiliated with our competitors through ownership or joint venture agreements. We compete in part by establishing relationships with our customers’ engineering organizations, and by offering innovative solutions to their market problems.

Energy operates in the global markets for industrial turbine engines, industrial reciprocating engine combustion and management systems, including emissions control, fuel and air management, combustion, electronic control products, power generation and distribution (through a global network of sales and support services), and converter technology for on-shore and off-shore wind turbines ranging in capacity from 1MW to 6MW.

We compete with numerous companies who specialize in various engine management products, and our OEM customers are often capable of developing and manufacturing some of these same products internally. Many of our OEM customers are large global OEMs that require suppliers to be able to support them around the world and meet increasingly higher requirements in terms of quality, delivery, reliability and cost improvements.

Competitors include Heinzmann GmbH & Co., Robert Bosch AG, L’Orange GmbH, Hoerbiger, GE Multilin, ABB, Siemens, Schweitzer Electric, Areva and Ingeteam. OEM customers with internal capabilities for similar products include General Electric, Caterpillar, Wartsila and Cummins.

We believe we are a market leader in providing our customers advanced technology and superior product performance at a competitive price. We focus on close relationships with our OEM customers’ engineering teams. Competitive success is based on the development of innovative components and systems that are aligned with the OEMs’ technology roadmaps to achieve future emission, efficiency, and fuel flexibility targets.

The global market for renewable wind energy technology is immature and changing rapidly. Delays in wind turbine installation caused by continued tight global credit availability and uncertainty, with respect to incentives and overall economic environment, have led to over-capacity with manufacturers within the wind turbine industry. Market consolidation has begun to occur and price has become an important factor within the wind turbine converter market.

Employees

As of October 31, 2011, we employed approximately 6,200 full-time employees of which approximately 1,700 were located outside of the U.S. We consider the relationships with our employees to be positive.

Approximately 13% of our total full-time workforce was union employees as of October 31, 2011, all of whom work for our Aerospace segment. The collective bargaining agreements with our union employees are generally renewed through contract renegotiation near the contract expiration dates. The MPC Employees Representative Union contract, which covers 434 employees as of October 31, 2011, expires September 30, 2013. The Local Lodge 727-N International Association of Machinists and Aerospace Workers agreement, which covers 400 employees as of October 31, 2011, expires April 20, 2014. We believe our relationships with our employees and the representative unions are good.

All of our employees in the U.S. were at-will employees as of October 31, 2011. Generally, our employees are not subject to any type of employment contract or agreement. Prior to the acquisition of MPC Products Corporation (“MPC Products”), and Techni-Core, Inc. (“Techni-Core and, together with MPC Products, “MPC”), certain MPC employees who are not executive officers of Woodward had pre-existing employment agreements with MPC. These agreements expired in October 2011. In addition, our executive officers and our other corporate officers each have change-in-control agreements.

Outside of the U.S., we enter into employment contracts and agreements in those countries in which such relationships are mandatory or customary. The provisions of these agreements correspond in each case with the required or customary terms in the subject jurisdiction.

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Patents, Intellectual Property, and Licensing

We own numerous patents and have licenses for the use of patents owned by others, which relate to our products and their manufacture. In addition to owning a large portfolio of intellectual property, we also license intellectual property to and from third parties. For example, the U.S. Government has certain rights in our patents that are developed in performance of certain government contracts, and it may use or authorize others to use the inventions covered by such patents for government purposes as allowed by law. Unpatented process technology, including research, development and engineering technical skills and know-how, as well as unpatented production software and other intellectual property rights, are important to our overall business and to the operations of each of our business segments. While our intellectual property rights taken together are important, we do not believe our business or either of our business segments would be materially affected by the expiration of any particular intellectual property rights or termination of any particular intellectual property patent license agreements.

As of September 30, 2011, our Consolidated Balance Sheet includes $268,897 of net intangible assets. This value represents the carrying values; net of amortization, of certain assets acquired in various business acquisitions and does not purport to represent the fair value of our intellectual property as of September 30, 2011.

U.S. GAAP requires that research and development costs be expensed as incurred; therefore, as we develop new intellectual property in the normal course of business, the costs of developing such assets are expensed as incurred, with no corresponding intangible asset recorded.

Environmental Matters and Climate Change

The Company is regulated by federal, state and international environmental laws governing our use, transport and disposal of substances and control of emissions. Compliance with these existing laws has not had a material impact on our capital expenditures, earnings or global competitive position.

We are engaged in remedial activities, generally in coordination with other companies, pursuant to federal and state laws. When it is reasonably probable we will pay remedial costs at a site, and those costs can be reasonably estimated, we accrue a liability for such future costs with a related charge against our earnings. In formulating that estimate and recognizing those costs, we do not consider amounts expected to be recovered from insurance companies or others, until such recovery is assured. Our accrued liability for environmental remediation costs is not significant and is included in the line item “Accrued liabilities” in the Consolidated Balance Sheets in “Item 8 — Financial Statements and Supplementary Data.”

We generally cannot reasonably estimate costs at sites in the very early stages of remediation. Currently, we have one site in the later stages of remediation, and there is no more than a remote chance that a material amount of costs for remedial activities at any individual site, or at all sites in the aggregate, will be required.

Our manufacturing facilities generally do not produce significant volumes or quantities of byproducts, including greenhouse gases, that would be considered hazardous waste or otherwise harmful to the environment. We do not expect legislation currently pending or expected in the next several years to have a significant negative impact on our operations in any of our segments.

Domestic and foreign legislative initiatives on emissions control, renewable energy, and climate change tend to favorably impact the sale of our energy control products. For example, our Energy segment produces inverters for wind turbines and energy control products that help our customers maximize engine efficiency and minimize wasteful emissions, including greenhouse gases.

Executive Officers of the Registrant

Information about our executive officers is provided below. There are no family relationships between any of the executive officers listed below.

Thomas A. Gendron, Age 50. Chairman of the Board since January 2008; Chief Executive Officer, President, and Director since July 2005; Chief Operating Officer and President September 2002 through June 2005; Vice President and General Manager of Industrial Controls June 2001 through September 2002; Vice President of Industrial Controls April 2000 through May 2001; Director of Global Marketing and Industrial Controls’ Business Development February 1999 through March 2000.

Robert F. Weber, Jr., Age 57. Vice Chairman, Chief Financial Officer and Treasurer since September 2011, and Chief Financial Officer and Treasurer since August 2005. Prior to August 2005, Mr. Weber was employed at Motorola, Inc. for 17 years, where he held various positions, including Corporate Vice President and General Manager — EMEA Auto. Prior to this role, Mr. Weber served in a variety of financial positions at both a corporate and operating unit level with Motorola.

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Martin V. Glass, Age 56. President, Airframe Systems since April 2011; President, Turbine Systems October 2009 through April 2011; Group Vice President, Turbine Systems September 2007 through September 2009; Vice President of the Aircraft Engine Systems Customer Business Segment December 2002 through August 2007; Director of Sales, Marketing, and Engineering February 2000 through December 2002.

Gerhard Lauffer, Age 50. President, Electrical Power Systems since October 2009; Group Vice President, Electrical Power Systems September 2007 through September 2009; Vice President and General Manager Electronic Controls March 2002 through August 2007; Managing Director Leonhard-Reglerbau GmbH 1991 through March 2002 when it was acquired by Woodward.

Sagar Patel, Age 45. President, Aircraft Turbine Systems since June 2011. Prior to this role, Mr. Patel was employed at General Electric for 18 years, most recently serving as President, Mechanical Systems, GE Aviation, from March 2009 through June 2010. He served as President, Aerostructures, GE Aviation from July 2008 through July 2009 and as President and General Manager, MRS Systems, Inc., BE Aircraft Engines, from October 2005 through June 2008.

Chad R. Preiss, Age 46. President, Engine Systems since October 2009; Group Vice President, Engine Systems October 2008 through September 2009; Vice President, Sales, Service, and Marketing, Engine Systems December 2007 through September 2008; and Vice President, Industrial Controls September 2004 through December 2007. Prior to this role, Mr. Preiss served in a variety of engineering and marketing/sales management roles, including Director of Business Development, since joining Woodward in 1988.

James D. Rudolph, Age 50. President, Industrial Turbomachinery since April 2011; Corporate Vice President, Global Sourcing October 2009 through April 2011; Vice President, Global Sourcing April 2009 through October 2009; Director of Global Sourcing April 2005 through April 2009; Director of Engineering for Industrial Controls March 2000 through April 2005. Prior to March 2000, Mr. Rudolph served in a variety of engineering, operations and sales roles since joining the company in 1984.

A. Christopher Fawzy, Age 42. Corporate Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer since October 2009; Vice President, General Counsel, and Corporate Secretary June 2007 through September 2009. Mr. Fawzy became the Company’s Chief Compliance Officer in August 2009. Prior to joining Woodward, Mr. Fawzy was employed by Mentor Corporation, a global medical device company. He joined Mentor in 2001 and served as Corporate Counsel, then General Counsel in 2003, and was appointed Vice President, General Counsel and Secretary in 2004.

Information available on Woodward’s Website

Through a link on the Investor Information section of our website, www.woodward.com, we make available the following filings as soon as reasonably practicable after they are electronically filed or furnished to the SEC: our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

Stockholders may obtain, without charge, a single copy of Woodward’s 2011 Annual Report on Form 10-K upon written request to the Corporate Secretary, Woodward, Inc., 1000 East Drake Road, Fort Collins, Colorado 80525.

Item 1A. Risk Factors

Investment in our securities involves risk. An investor or potential investor should consider the risks summarized in this section when making investment decisions regarding our securities.

Important factors that could individually, or together with one or more other factors, affect our business, results of operations, financial condition, and/or cash flows include, but are not limited to, the following:

Company Risks

A decline in business with, or financial distress of, our significant customers could decrease our consolidated net sales or impair our ability to collect amounts due and payable and have a material adverse effect on our business, financial condition, results of operations and cash flows.

We have fewer customers than many companies with similar sales volumes. For the fiscal year ending September 30, 2011, approximately 34% of our consolidated net sales were made to our five largest customers. Sales to these same five largest customers represented approximately 39% of our consolidated net sales for the fiscal year ending September 30, 2010. Sales to General Electric accounted for approximately 14%, 15%, and 17% of consolidated net sales in each of the fiscal years ending September 30, 2011, 2010, and 2009, respectively, and accounts receivable from General Electric represented approximately 11% and 14% of accounts receivable at September 30, 2011 and 2010, respectively. Sales to our next largest customer accounted for approximately 6%, 8%, and 7% of consolidated net sales in each of the fiscal years ending September 30, 2011, 2010, and 2009, respectively. If any of our significant customers were to change suppliers, in-source production, institute significant restructuring or cost-cutting measures, or experience financial distress, including that which is a result of the prolonged unfavorable economic conditions and continued instability in the financial markets, these significant customers may substantially reduce or otherwise be unable to pay for purchases from us. Accordingly, our consolidated net sales could decrease significantly or we may experience difficulty collecting or be unable to collect amounts due and payable, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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The continued instability in the financial markets, sovereign credit rating downgrades and uncertainty surrounding European sovereign and other debt defaults, and prolonged unfavorable economic conditions could have a material adverse effect on the ability of our customers to perform their obligations to us and on their demand for our products and services.

There has been widespread concern over the continued instability in the financial markets and their influence on the global economy. As a result of the extreme volatility in the credit and capital markets, sovereign credit rating downgrades and uncertainty surrounding European sovereign and other debt defaults, and other prolonged economic challenges currently affecting the global economy, our current or potential customers may experience cash flow problems and, as a result, may modify, delay or cancel plans to purchase our products. Additionally, if customers are not successful in generating sufficient revenue or are precluded from securing necessary financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to us. Any inability of current or potential customers to pay us for our products may adversely affect our earnings and cash flows.

In addition, the general economic environment significantly affects demand for our products and services. During periods of slowing economic activity, such as the prolonged unfavorable economic conditions we have recently experienced, a global slowdown in spending on infrastructure development may occur in the markets in which we operate, and customers may reduce their purchases of our products and services. In addition, unfavorable economic conditions regarding the use of business jets have reduced demand for systems and components for new business jet aircraft in some markets. Any reduction in aircraft order flow or withdrawal from service of business jet and commercial aircraft could further reduce demand for some of our products and services.

There can be no assurance that the prolonged unfavorable economic and market conditions in the United States and internationally will not have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We may not be able to obtain financing, on acceptable terms or at all, to implement our business plans, complete acquisitions, or otherwise take advantage of business opportunities or respond to competitive pressures.

Global financial markets and economic conditions have been, and continue to be, disrupted and volatile. The credit and debt and equity capital markets have been distressed. These issues, along with significant write-offs in the financial services sector, the re-pricing of credit risk, sovereign credit rating downgrades and uncertainty surrounding European sovereign and other debt defaults, and the prolonged economic challenges, have made, and will likely continue to make, it difficult to obtain financing. In addition, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets has generally increased as many lenders and institutional investors have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at maturity either at all or on terms similar to existing debt, and reduced and, in some cases, ceased to provide financing to borrowers. Due to these factors, we cannot be certain that financing, to the extent needed, will be available on acceptable terms or at all. If financing is not available when needed, or is available only on unacceptable terms, we may be unable to implement our business plans, complete acquisitions, or otherwise take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

The long sales cycle, customer evaluation process and implementation period of our products and services may increase the costs of obtaining orders and reduce the predictability of sales cycles and our inventory requirements.

Our products and services are technologically complex. Prospective customers generally must commit significant resources to test and evaluate our products and to install and integrate them into larger systems. Orders expected in one quarter may shift to another quarter or be cancelled with little advance notice as a result of customers’ budgetary constraints, internal acceptance reviews and other factors affecting the timing of customers’ purchase decisions. In addition, customers often require a significant number of product presentations and demonstrations before reaching a sufficient level of confidence in the product’s performance and compatibility with the approvals that typically accompany capital expenditure approval processes. The difficulty in forecasting demand increases the challenge in anticipating sales cycles and our inventory requirements, which may cause us to over-produce finished goods and could result in inventory write-offs, or could cause us to under-produce finished goods. Any such over-production or under-production could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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We have engaged in restructuring activities and may need to implement further restructurings in the future, and there can be no assurance that our restructuring efforts will have the intended effects.

From time to time, we have responded to changes in our industry and the markets we serve by restructuring our operations. Our restructuring activities have included workforce management and other restructuring charges related to our recently acquired businesses, including, among others, changes associated with integrating similar operations, managing our workforce, vacating or consolidating certain facilities and cancelling certain contracts. Restructuring activities can create unanticipated consequences, and we cannot be sure that any or all of these restructuring efforts will be successful. There can be no assurance that the reductions in sites, workforce management and other cost-cutting measures will have the effect currently expected by our management or that they will not harm our future business operations and prospects. A variety of risks could cause us not to realize the expected cost savings, including, among others, the following:

• higher than expected severance costs related to staff reductions;

• higher than expected retention costs for employees that will be retained;

• higher than expected stand-alone overhead expenses;

• delays in the anticipated timing of activities related to our cost-saving plan; and

• other unexpected costs associated with operating the business.

We also cannot be certain that we will not be required to implement further restructuring activities or make additions, reductions or other changes to our management or workforce based on other cost reduction measures or changes in the industry and markets in which we compete. If we are unable to structure our operations in the light of our recently acquired businesses and evolving market conditions, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Suppliers may be unable to provide us with materials of sufficient quality or quantity required to meet our production needs at favorable prices or at all.

We are dependent upon suppliers for parts and raw materials used in the manufacture of components that we sell to our customers, and our raw material costs are subject to commodity market fluctuations. We may experience an increase in costs for parts or raw materials that we source from our suppliers, or we may experience a shortage of parts or raw materials for various reasons, such as the loss of a significant supplier, high overall demand creating shortages in parts and supplies we use, financial distress, work stoppages, natural disasters, fluctuations in commodity prices, or production difficulties that may affect one or more of our suppliers. In particular, global economic uncertainty may affect our key suppliers in terms of their operating cash flow and access to financing. This may in turn affect their ability to perform their obligations to us. Our customers rely on us to provide on-time delivery and have certain rights if our delivery standards are not maintained. A significant increase in our supply costs, including for raw materials that are subject to commodity price fluctuations, or a protracted interruption of supplies for any reason, could result in the delay of one or more of our customer contracts or could damage our reputation and relationships with customers. Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our profitability may suffer if we are unable to manage our expenses or if we experience change in product mix as a result of sales increases or decreases.

Some of our expenses are relatively fixed in relation to changes in sales volume and are difficult to adjust in the short term. Expenses such as depreciation or amortization, which are the result of past capital expenditures or business acquisitions, or expenses driven by business activity other than sales level, such as manufacturing overhead, may be difficult to reduce in a timely manner in response to a reduction in sales. Due to the nature of our sales cycle, in periods of sales increases it may be difficult to rapidly increase our production of finished goods, particularly if such sales increases are unanticipated. An increase in the production of our finished goods requires increases in both the purchases of raw materials and components and in the size of our workforce. If a sudden, unanticipated need for raw materials, components and labor should arise in order to meet unexpected sales demand, we could experience difficulties in sourcing raw materials, components and labor at a favorable cost or to meet our production needs. These factors could result in delays in fulfilling customer sales contracts, damage to our reputation and relationships with our customers, an inability to meet the demands of the market which could prevent us from taking advantage of business opportunities or responding to competitive pressures, and an increase in variable and fixed costs leading to a decrease in net earnings or even net losses. In addition, we sell products that have varying profit margins, and increases or decreases in sales of our various products may change the mix of products that we sell during any period. Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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Subcontractors may fail to perform contractual obligations.

We frequently subcontract portions of work due under contracts with our customers and are dependent on the continued availability and satisfactory performance by these subcontractors. Nonperformance or underperformance by subcontractors could materially impact our ability to perform obligations to our customers. A subcontractor’s failure to perform could result in a customer terminating our contract for default, expose us to liability, substantially impair our ability to compete for future contracts and orders, and limit our ability to enforce fully all of our rights under these agreements, including any rights to indemnification. Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our product development activities may not be successful or may be more costly than currently anticipated.

Our business involves a significant level of product development activities, generally in connection with our customers’ development activities. Industry standards, customer expectations, or other products may emerge that could render one or more of our products or services less desirable or obsolete. Maintaining our market position requires continued investment in research and development. During an economic downturn or a subsequent recovery, we may need to maintain our investment in research and development, which may limit our ability to reduce these expenses in proportion to a sales shortfall. If these activities are not as successful as currently anticipated, or if they are more costly than currently anticipated, future sales and/or earnings could be lower than expected, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Activities necessary to integrate acquisitions may result in costs in excess of current expectations or be less successful than anticipated.

We recently completed the acquisition of IDS and completed three acquisitions in fiscal year 2009, and we may acquire other businesses in the future. The success of these transactions will depend on, among other things, our ability to integrate assets and personnel acquired in these transactions and to apply our internal controls process to these acquired businesses. The integration of these acquisitions may require significant attention from our management, and the diversion of management’s attention and resources could have a material adverse effect on our ability to manage our business. Furthermore, we may not realize the degree or timing of benefits we anticipated when we first enter into these transactions. If actual integration costs are higher than amounts assumed, if we are unable to integrate the assets and personnel acquired in an acquisition as anticipated, or if we are unable to fully benefit from anticipated synergies, our business, financial condition, results of operations, and cash flows could be materially adversely affected.

Our debt obligations and the restrictive covenants in the agreements governing our debt could limit our ability to operate our business or pursue our business strategies, and could adversely affect our business, financial condition, results of operations, and cash flows.

As of September 30, 2011, our total long-term debt, was $425,249. We did not have any short-term borrowings outstanding as of September 30, 2011. Our debt obligations could require us to dedicate a portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow for other purposes, including business development efforts and mergers and acquisitions. We are contractually obligated under the agreements governing our long-term debt to make principal payments of $18,371 in fiscal year 2012, $7,500 in fiscal year 2013, $149,375 in fiscal year 2014, $0 in fiscal year 2015, and $250,000 in fiscal year 2016 and thereafter. Our debt obligations could make us more vulnerable to general adverse economic and industry conditions and could limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, thereby placing us at a disadvantage to our competitors that have less indebtedness.

Our existing term loan facility, revolving credit facility and note purchase agreements impose financial covenants on us and our subsidiaries that require us to maintain certain leverage ratios and minimum levels of consolidated net worth. Certain of these agreements require us to repay outstanding borrowings with portions of the proceeds we receive from certain sales of property or assets and specified future debt offerings.

These financial covenants place certain restrictions on our business that may affect our ability to execute our business strategy successfully or take other actions that we believe would be in the best interests of our Company. These restrictions include limitations or restrictions, among other things, on our ability and the ability of our subsidiaries to:

• incur additional indebtedness;

• pay dividends or make distributions on our capital stock or certain other restricted payments or investments;

• purchase or redeem stock;

• issue stock of our subsidiaries;

• make domestic and foreign investments and extend credit;

• engage in transactions with affiliates;

• transfer and sell assets;

• effect a consolidation or merger or sell, transfer, lease, or otherwise dispose of all or substantially all of our assets; and

• create liens on our assets to secure debt.

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These agreements contain certain customary events of default, including certain cross-default provisions related to other outstanding debt arrangements. Any breach of the covenants under these agreements or other event of default could cause a default under these agreements and/or a cross-default under our other debt arrangements, which could restrict our ability to borrow under our revolving credit facility. If there were an event of default under certain provisions of our debt arrangements that was not cured or waived, the holders of the defaulted debt may be able to cause all amounts outstanding with respect to the debt instrument to be due and payable immediately. Our assets and cash flow may not be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default. If we are unable to repay, refinance, or restructure our indebtedness as required, or amend the covenants contained in these agreements, the lenders or note holders may be entitled to obtain a lien or institute foreclosure proceedings against our assets. Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our business may be affected by government contracting risks.

Sales made directly to U.S. Government agencies and entities were 4% of total net sales during fiscal year 2011, 5% during fiscal year 2010, and 5% during fiscal year 2009, primarily in the aerospace market. Sales made directly to U.S. Government agencies and entities, or indirectly through third party manufacturers utilizing Woodward parts and subassemblies, accounted for approximately 19% of total sales in fiscal year 2011, 23% in fiscal year 2010, and 20% in fiscal year 2009. Our contracts with the U.S. Government are subject to the following unique risks, some of which are beyond our control, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

• The level of U.S. defense spending is subject to periodic congressional appropriation actions, which is subject to change at any time. The mix of programs to which such funding is allocated is also uncertain, and we can provide no assurance that an increase in defense spending will be allocated to programs that would benefit our business. If the amount of spending were to decrease, or there were a shift from certain aerospace and defense programs to other programs, our sales could decrease.

• Our U.S. Government contracts and the U.S. Government contracts of our customers are subject to modification, curtailment or termination by the government, either for the convenience of the government or for default as a result of our failure to perform under the applicable contract. If any of our contracts are terminated by the U.S. Government, our backlog would be reduced, in accordance with contract terms, by the expected value of the remaining work under such contracts. In addition, we are not the prime contractor on most of our contracts for supply to the U.S. Government, and the U.S. Government could terminate a prime contract under which we are a subcontractor, irrespective of the quality of our products and services as a subcontractor.

• We must comply with procurement laws and regulations relating to the formation, administration and performance of our U.S. Government contracts. The U.S. Government may change procurement laws and regulations from time to time. A violation of U.S. Government procurement laws or regulations, a change in U.S. Government procurement laws and regulations, or a termination arising out of our default could expose us to liability, disbarment, or suspension and could have an adverse effect on our ability to compete for future contracts and orders.

Changes in the estimates of fair value of reporting units or of long-lived assets may result in future impairment charges, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Over time, the fair values of long-lived assets change. At September 30, 2011, we had $462,282 of goodwill, representing 26% of our total assets. We test goodwill for impairment on the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Future goodwill impairment charges may occur if estimates of fair values decrease, which would reduce future earnings. We also test property, plant, and equipment and other intangibles for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Future asset impairment charges may occur if asset utilization declines, if customer demand decreases, or for a number of other reasons, which would reduce future earnings. Any such impairment charges could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We completed our annual goodwill impairment test during the quarter ended September 30, 2011. The results of Woodward’s fiscal year 2011 annual goodwill impairment test performed as of July 31, 2011 indicated the estimated fair value of each reporting unit was in excess of its carrying value, and accordingly, no impairment existed. At July 31, 2011 the goodwill impairment test for Woodward’s Airframe Systems reporting unit, which has a significant concentration of business in the commercial, business jet and regional jet markets that have lagged in the economic recovery, indicated the narrowest excess of fair market value as compared to carrying value. Each of Woodward’s remaining reporting units had resulting fair values significantly in excess of their carrying values. Increasing the discount rate by 20%, decreasing the growth rate by 20%, or decreasing forecasted cash flow by 20%, as it relates to the Airframe Systems reporting unit, would not have resulted in an impairment charge.

As part of our ongoing monitoring efforts, we will continue to consider the global economic environment and its potential impact on our businesses, as well as other factors, in assessing goodwill recoverability.

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Future subsidiary results or changes in domestic or international tax statutes may change the amount of valuation allowances provided for deferred income tax assets.

During fiscal year 2011, 49% of our external net sales were made outside the United States. We establish valuation allowances to reflect the estimated amount of deferred tax assets that might not be realized. The underlying analysis is performed for individual tax jurisdictions, generally at a subsidiary level. Future subsidiary results, actual or forecasted, as well as changes to the relevant tax statutes, could change the outcome of our analysis and change the amount of valuation allowances provided for deferred income tax assets, which could have a material adverse effect on our financial condition, results of operations, and cash flows.

Manufacturing activities may result in future environmental costs or liabilities.

We use hazardous materials and/or regulated materials in our manufacturing operations. We also own and operate and may acquire facilities that were formerly owned and operated by others that used such materials. The risk that a significant release of regulated materials has occurred in the past or will occur in the future cannot be completely eliminated or prevented. As a result, we are subject to a substantial number of costly regulations. In particular, we are required to comply with increasingly stringent requirements of federal, state, and local environmental, occupational health and safety laws and regulations in the United States, the European Union, and other territories, including those governing emissions to air, discharges to water, noise and odor emissions, the generation, handling, storage, transportation, treatment and disposal of waste materials, and the cleanup of contaminated properties and human health and safety. Compliance with these laws and regulations results in ongoing costs. We cannot be certain that we have been, or will at all times be, in complete compliance with all environmental requirements, or that we will not incur additional material costs or liabilities in connection with these requirements. As a result, we may incur material costs or liabilities or be required to undertake future environmental remediation activities that could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our performance depends on continued access to a stable workforce and on favorable labor relations with our employees.

Certain of our operations in the United States and internationally involve different employee/employer relationships and the existence of works’ councils. In addition, a portion of our workforce is unionized and is expected to remain unionized for the foreseeable future. Competition for technical personnel in the industry in which we compete is intense. Our future success depends in part on our continued ability to hire, train, assimilate, and retain qualified personnel. There is no assurance that we will continue to be successful in recruiting qualified employees in the future. Any significant increases in labor costs, deterioration of employee relations, including any conflicts with works’ councils or unions, or slowdowns or work stoppages at any of our locations, whether due to employee turnover, changes in availability of qualified technical personnel, or otherwise, could have a material adverse effect on our business, our relationships with customers, and our financial condition, results of operations, and cash flows.

A natural disaster could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Certain of our Aerospace segment operations are located in California. Historically, California has been susceptible to natural disasters, such as earthquakes, floods and wildfires. These natural disasters could harm the California operations of our Aerospace segment through interference with communications, including the interruption or loss of its computer systems and the destruction of our facilities or our operational, financial and management information systems, which could prevent or impede us from processing and controlling the flow of business. Accordingly, any such natural disaster could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our intellectual property rights may not be sufficient to protect all our products or technologies.

Our success depends in part on our ability to obtain patents or rights to patents, protect trade secrets and know-how, and prevent others from infringing on our patents, trademarks, and other intellectual property rights. Some of our intellectual property is not covered by any patent or patent application and includes trade secrets and other know-how that is not patentable or for which we have elected not to obtain a patent, including intellectual property relating to our manufacturing processes and engineering designs. We will be able to protect our intellectual property from unauthorized use by third parties only to the extent that it is covered by valid and enforceable patents, trademarks, or licenses. Patent protection generally involves complex legal and factual questions and, therefore, enforceability of patent rights cannot be predicted with certainty; thus, any patents that we own or license from others may not provide us with adequate protection against competitors. Moreover, the laws of certain foreign countries do not recognize intellectual property rights or protect them to the same extent as do the laws of the United States. Additionally, our commercial success depends significantly on our ability to operate without infringing upon the patent and other proprietary rights of others. Our current or future technologies may, regardless of our intent, infringe upon the patents or violate other proprietary rights of third parties. In the event of such infringement or violation, we may face expensive litigation or indemnification obligations and may be prevented from selling existing products and pursuing product development or commercialization. If we are unable to sufficiently protect our patent and other proprietary rights or if we infringe on the patent or proprietary rights of others, our business, financial condition, results of operations, and cash flows could be materially adversely affected.

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Product liability claims, product recalls or other liabilities associated with the products and services we provide may force us to pay substantial damage awards and other expenses that could exceed our accruals and insurance coverage.

The manufacture and sale of our products and the services we provide expose us to risk of product liability and other tort claims. Both currently and in the past, we have had product liability claims relating to our products, and we will likely be subject to additional product liability claims in the future for both past and current products, some of which may have a material adverse effect on our business, financial condition, results of operations and cash flows. We also provide certain services to our customers and are subject to claims with respect to the services provided. In providing such services, we may rely on subcontractors to perform all or a portion of the contracted services. It is possible that we could be liable to our customers for work performed by a subcontractor. While we believe that we have appropriate insurance coverage available to us related to any such claims, our insurance may not cover all liabilities or be available in the future at a cost acceptable to us. If a product liability or other claim or series of claims, including class action claims, is brought against us for liabilities that are not covered by insurance or for which indemnification or other recovery is not available, such claim could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Amounts accrued for contingencies may be inadequate to cover the amount of loss when the matters are ultimately resolved.

In addition to intellectual property and product liability matters, we are currently involved or may become involved in claims, pending or threatened litigation or other legal proceedings, investigations or regulatory proceedings regarding employment or other regulatory, legal, or contractual matters arising in the ordinary course of business. There is no certainty that the results of these matters will be favorable to the Company. We accrue for known individual matters that we believe are likely to result in a loss when ultimately resolved using estimates of the most likely amount of loss. There may be additional losses that have not been accrued, or liabilities may exceed our estimates, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Legal and regulatory proceedings, inquiries or investigations of our business practices by the U.S. Government are unpredictable and an adverse decision in any such matter, or an adverse decision resulting in a loss that exceeds our best estimates, could have a material adverse impact on our business, financial condition, results of operations, and cash flows.

We are sometimes subject to government inquiries, audits and investigations of our business due to our business relationships with the U.S. Government and the heavily regulated industries in which we do business. Any such inquiry or investigation could potentially result in an adverse ruling against the Company, which could have a material adverse impact on our business, financial condition, results of operations, and cash flows. In October 2009, MPC Products, one of our acquired subsidiaries, entered into a three-year administrative agreement with the U.S. Department of Defense (“DOD”) in connection with certain of its government contract pricing practices prior to June 2005. The administrative agreement requires, among other things, that Woodward and its affiliates, including MPC Products, implement certain enhancements to existing ethics and compliance programs, which have been completed, and make periodic reports to the DOD. If Woodward and MPC Products fail to maintain these enhancements to their ethics and compliance programs or fail to otherwise adhere to the terms of the administrative agreement, the DOD could suspend or debar Woodward or MPC Products from doing business with U.S. Government agencies and entities.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws and regulations.

The U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws and regulations in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. government officials for the purpose of obtaining or retaining business or securing an improper business advantage. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world and sell to industries that have experienced corruption to some degree. If we are found to be liable for FCPA or other similar anti-bribery law or regulatory violations, whether due to our or others’ actions or inadvertence, we could be subject to civil and criminal penalties or other sanctions that could have a material adverse impact on our business, financial condition, results of operations and cash flows.

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Changes in the legal and regulatory environments of the countries in which we operate may affect future sales and expenses.

We operate in a number of countries and are affected by a variety of laws and regulations governing various matters, including foreign investment, employment, import, export, business acquisitions, environmental and taxation matters, land use rights, property, and other matters. Our ability to operate in these countries may be materially adversely affected by unexpected changes in such laws and regulations which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We must also comply with restrictions on exports imposed under the U.S. Export Control Laws and Sanctions Programs. These laws and regulations change from time to time and may restrict foreign sales.

Operations and suppliers may be subject to physical and other risks that could disrupt production.

Our operations include principal facilities in the United States, China, Germany, and Poland. In addition, we operate sales and service facilities in Brazil, Bulgaria, India, Japan, the Netherlands, Peru, the Republic of Korea, Russia, Switzerland and the United Kingdom. We also have suppliers for materials and parts inside and outside the United States. Our operations and sources of supply could be disrupted by a natural disaster, war, political unrest, terrorist activity, public health concerns, or other unforeseen events, which could cause significant delays in the shipment of products and the provision of services and could cause the loss of sales and customers. Accordingly, disruption of our operations or the operations of a significant supplier could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We have significant investments outside the United States and significant sales and purchases in foreign denominated currencies, creating exposure to foreign currency exchange rate fluctuations.

We have significant investments outside the United States. Further, we have sales and purchases of raw materials and finished goods in foreign denominated currencies. Accordingly, we have exposure to fluctuations in foreign currency exchange rates relative to the U.S. dollar. These exposures may change over time as our business and business practices evolve, and they could have a material adverse effect on our financial results and cash flows. An increase in the value of the U.S. dollar could increase the real cost to our customers of our products in those markets outside the United States where we sell in U.S. dollars, and a weakened U.S. dollar could increase the cost of local operating expenses and procurement of raw materials to the extent that we must purchase components in foreign currencies. Foreign currency exchange rate risk is reduced through several means, including the maintenance of local production facilities in the markets served, invoicing of customers in the same currency as the source of the products, prompt settlement of inter-company balances utilizing a global netting system, and limited use of foreign currency denominated debt. Despite these measures, continued instability in the worldwide financial markets, sovereign credit rating downgrades and uncertainty surrounding European sovereign and other debt defaults, could impact our ability to manage effectively our foreign currency exchange rate fluctuation risk, which could have a material adverse effect on our international operations or on our business, financial condition, results of operations, and cash flows.

Our net postretirement benefit obligation liabilities may grow, and the fair value of our pension plan assets may decrease, which could require us to make additional and/or unexpected cash contributions to our pension plans, increase the amount of postretirement benefit expenses, affect our liquidity or affect our ability to comply with the terms of our outstanding debt arrangements.

Accounting for retirement pension and postretirement benefit obligations and related expense requires the use of assumptions, including a weighted-average discount rate, an expected long-term rate of return on assets, and a net healthcare cost trend rate, among others. Benefit obligations and benefit costs are sensitive to changes in these assumptions. As a result, assumption changes could result in increases in our obligation amounts and expenses. If interest rates decline, the present value of our postretirement benefit plan liabilities may increase faster than the value of plan assets, resulting in significantly higher unfunded positions in some of our pension plans. As of September 30, 2011, we had $138,347 in invested pension plan assets. Investment losses may result in decreases to our pension plan assets.

Funding estimates are based on certain assumptions, including discount rates, interest rates, mortality, fair value of assets and expected return on plan assets and are subject to changes in government regulations in the countries in which our employees work. Volatility in the financial markets may impact future discount and interest rate assumptions. Also, new accounting standards on fair value measurement may impact the calculation of future funding levels. We periodically review our assumptions, and any such revision can significantly change the present value of future benefits, and in turn, the funded status of our pension plans and the resulting periodic pension expense. Changes in our pension benefit obligations and the related net periodic costs or credits may occur as a result of variances of actual results from our assumptions, and we may be required to make additional cash contributions in the future beyond those which have been estimated.

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In addition, our existing term loan facility, revolving credit facility, and note purchase agreements contain continuing covenants and events of default regarding our pension plans, including provisions regarding the unfunded liabilities related to those pension plans. See the discussion above concerning “Our debt obligations and the restrictive covenants in the agreements governing our debt could limit our ability to operate our business or pursue our business strategies, and could adversely affect our business, financial condition, results of operations, and cash flows.”

To the extent that the present values of benefits incurred for pension obligations are greater than values of the assets supporting those obligations or if we are required to make additional or unexpected contributions to our pension plans for any reason, our ability to comply with the terms of our outstanding debt arrangements, and our business, financial condition, results of operations, and cash flows may be adversely affected.

Industry Risks

Competitors may develop breakthrough technologies that are adopted by our customers.

The markets in which we operate experience rapidly changing technologies and frequent introductions of new products and services. The technological expertise we have developed and maintained could become less valuable if a competitor were to develop a breakthrough technology that would allow it to match or exceed the performance of existing technologies at a lower cost. If we are unable to develop competitive technologies, future sales or earnings could be lower than expected, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Industry consolidation trends could reduce our sales opportunities, decrease sales prices, and drive down demand for our product.

There has been consolidation and there may be further consolidation in the aerospace, power, and process industries. The consolidation in these industries has resulted in customers with vertically integrated operations, including increased in-sourcing capabilities, which may result in economies of scale for those companies. If our customers continue to seek to control more aspects of vertically integrated projects, cost pressures resulting in further integration or industry consolidation could reduce our sales opportunities, decrease sales prices, and drive down demand for our products, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We operate in a highly competitive industry.

We face intense competition from a number of established competitors in the United States and abroad, some of which are larger in size or are divisions of large diversified companies with substantially greater financial resources. Companies compete on the basis of providing products that meet the needs of customers, as well as on the basis of price, quality, and customer service. Changes in competitive conditions, including the availability of new products and services, the introduction of new channels of distribution, and changes in OEM and aftermarket pricing, could adversely affect future sales, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Unforeseen events may occur that significantly reduce commercial aviation.

A significant portion of our business is related to commercial aviation. The recent global economic downturn and uncertainty in the marketplace led to a general reduction in demand for air transportation services, leading some airlines to withdraw aircraft from service, which negatively impacted sales of our aerospace components and services. These economic conditions similarly impacted our sales of systems and components for new business jet aircraft. Although the operating environment currently faced by commercial airlines has shown signs of improvement, uncertainty continues to exist. The commercial airline industry tends to be cyclical and capital spending by airlines and aircraft manufacturers may be influenced by a variety of factors, including current and future traffic levels, aircraft fuel pricing, labor issues, competition, the retirement of older aircraft, regulatory changes, terrorism and related safety concerns, general economic conditions, worldwide airline profits and backlog levels. In the event these or other economic indicators stagnate or worsen, market demand for our components and systems could be negatively affected by renewed reductions in demand for air transportation services or commercial airlines’ financial difficulties, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Increasing emission standards that drive certain product sales may be eased or delayed.

We sell components and systems that have been designed to meet strict emission standards, including standards that have not yet been implemented but are intended to be implemented soon. If these emission standards are eased, our future sales could be lower as potential customers select alternative products or delay adoption of our products, which would have a material adverse affect on our business, financial condition, results of operations, and cash flows.

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Natural gas prices may increase significantly and disproportionately to other sources of fuels used for power generation.

Commercial producers of electricity use many of our components and systems, most predominately in their power plants that use natural gas as their fuel source. Commercial producers of electricity are often in a position to manage the use of different power plant facilities and make decisions based on operating costs. Compared to other sources of fuels used for power generation, natural gas prices have increased slower than fuel oil, but about the same as coal. This increase in natural gas prices and any future increases could decrease the use of our components and systems, which could have a material adverse affect on our business, financial condition, results of operations, and cash flows.

Investment Risks

The historic market price of our common stock may not be indicative of future market prices.

The market price of our common stock changes over time. Stock markets in general have experienced extreme price and volume volatility particularly over the past few years. The trading price of our common stock ranged from a high of $39.52 per share to a low of $24.39 per share during the twelve months ending September 30, 2011. The following factors, among others, could cause the price of our common stock in the public market to fluctuate significantly:

• general economic conditions, particularly in the aerospace, power generation and process and transportation industries;

• variations in our quarterly results of operation;

• a change in sentiment in the market regarding our operations or business prospects;

• the addition or departure of key personnel; and

• announcements by us or our competitors of new business, acquisitions or joint ventures.

Fluctuations in our stock price often occur without regard to specific operating performance. The price of our common stock could fluctuate based upon the above factors or other factors, including those that have little to do with our company, and these fluctuations could be material.

The typical trading volume of our common stock may affect an investor’s ability to sell significant stock holdings in the future without negatively affecting stock price.

As of September 30, 2011, we had 72,960 shares of common stock issued, of which 4,070 shares were held as treasury shares. In addition, 4,228 shares were reserved for issuance upon exercise of outstanding stock option awards. While the level of trading activity will vary each day, the typical trading level represents only a small percentage of total shares of stock outstanding. As a result, a stockholder who sells a significant number of shares of stock in a short period of time could negatively affect our share price.

Certain anti-takeover provisions of our charter documents and under Delaware law could discourage or prevent others from acquiring our company.

While the Company believes that these provisions are in the best interest of its stockholders, our certificate of incorporation and bylaws do contain provisions that:

• provide for a classified board;

• provide that directors may be removed only for cause by holders of at least two-thirds of the outstanding shares of common stock;

• authorize our board of directors to fill vacant directorships or to increase the size of our board of directors;

• permit us to issue, without stockholder approval, up to 10,000 shares of preferred stock, in one or more series and, with respect to each series, to fix the designation, powers, preferences and rights of the shares of the series;

• require special meetings of stockholders to be called by holders of at least two-thirds of the outstanding shares of common stock;

• prohibit stockholders from acting by written consent;

• require advance notice for stockholder proposals and nominations for election to the board of directors to be acted upon at meetings of stockholders; and

• require the affirmative vote of two-thirds of the outstanding shares of our common stock for amendments to our certificate of incorporation and certain business combinations, including mergers, consolidations, sales of all or substantially all of our assets or dissolution.

In addition, Section 203 of the Delaware General Corporation Law limits business combinations with owners of more than 15% of our stock that have not been approved by the board of directors. These provisions and other similar provisions make it more difficult for a third party to acquire us without negotiation. Our board of directors could choose not to negotiate a potential acquisition that it did not believe to be in our strategic interest. Accordingly, the potential acquirer could be discouraged from offering to acquire us or prevented from successfully completing a hostile acquisition by the anti-takeover measures.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal plants are as follows:

United States

Fort Collins, Colorado — Corporate headquarters and Energy segment manufacturing and engineering

Greenville, South Carolina (leased) — Energy segment manufacturing and Aerospace and Energy segments engineering

Loveland, Colorado — Energy segment manufacturing and engineering

Pacoima, California (leased) — Aerospace segment manufacturing and engineering

Rockford, Illinois — Aerospace segment manufacturing and engineering

Santa Clarita, California — Aerospace segment manufacturing and engineering

Skokie, Illinois (leased) — Aerospace segment manufacturing and Aerospace and Energy segments engineering

Zeeland, Michigan — Aerospace segment manufacturing and engineering

Other Countries

Aken, Germany (leased) — Energy segment manufacturing and engineering

Kempen, Germany — Energy segment manufacturing and engineering

Krakow, Poland — Energy segment manufacturing and engineering

Stuttgart, Germany (leased) — Energy segment manufacturing and engineering

Tianjin, Peoples’ Republic of China (leased) — Energy segment assembly

Sofia, Bulgaria — Energy segment manufacturing and engineering

Zurich, Switzerland — Energy segment engineering

In addition to the principal plants listed above, we own or lease other facilities used primarily for sales and service activities in Brazil, China, India, Japan, the Netherlands, Peru, the Republic of Korea, Russia, and the United Kingdom.

Our principal plants are suitable and adequate for the manufacturing and other activities performed at those plants, and we believe our utilization levels are generally high. However, with continuing advancements in manufacturing technology and operational improvements, we believe we can continue to increase production without significant capital expenditures for expansion, retooling, or acquisition of additional plants.

During fiscal year 2010, Woodward began construction of a new 48,000 square foot system test facility in Rockford, Illinois. The facility, which will house numerous environmental system test cells and a vibration lab, will support, among other development projects, aerospace development efforts of next generation fuel systems for aircraft turbines. The test facility is expected to be completed and placed into service in early fiscal year 2012.

Item 3. Legal Proceedings

Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, workman’s compensation claims, regulatory, legal or contractual disputes, product warranty claims and alleged violations of various environmental laws. We have accrued for individual matters that we believe are likely to result in a loss when ultimately resolved using estimates of the most likely amount of loss.

While the outcome of pending claims, legal proceedings, investigations and regulatory proceedings cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings and investigations will not have a material adverse effect on our business, financial condition, results of operations, or cash flows.

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Item 4. (Removed and Reserved)

This section intentionally left blank.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is listed on The NASDAQ Global Select Market and is traded under the symbol “WWD.” At November 11, 2011, there were approximately 68,902,457 holders of record.

The following table sets forth the high and low sales prices of our common stock and dividends paid for the periods indicated.

	Fiscal Year Ending September 30,
	2011						2010
					Cash						Cash
	High		Low		Dividends		High		Low		Dividends
First quarter	$	39.52	$	30.01	$	0.06	$	26.82	$	22.49	$	0.06
Second quarter		39.31		30.46		0.07		32.47		24.59		0.06
Third quarter		37.57		30.93		0.07		35.21		25.52		0.06
Fourth quarter		37.20		24.39		0.07		33.18		24.44		0.06

The information required by this item relating to securities authorized for issuance under equity plans is included under the caption “Executive Compensation — Equity Compensation Plan Information” in our Proxy Statement for the 2011 Annual Meeting of Stockholders to be held January 25, 2012 and is incorporated herein by reference.

Performance Graph

The following graph compares the cumulative 5-year total return to stockholders on our common stock relative to the cumulative total returns of the S&P Midcap 400 index and the S&P Industrial Machinery index. The graph shows total stockholder return assuming an investment of $100 (with reinvestment of all dividends) was made on September 30, 2006 in our common stock and in each of the two indexes and tracks relative performance through September 30, 2011.

	9/06		9/07		9/08		9/09		9/10		9/11
Woodward, Inc.		100.00		187.76		213.44		148.49		200.20		170.58
S&P Midcap 400		100.00		118.76		98.95		95.87		112.92		111.47
S&P Industrial Machinery		100.00		132.90		98.09		96.62		123.65		108.58

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The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Recent Sales of Unregistered Securities

Sales of common stock issued from treasury during the fourth quarter of fiscal 2011 consisted of the following:

	Total Shares		Consideration
	Sold (2)		Received
July 1, 2011 through July 31, 2011 (1)		398	$	14
August 1, 2011 through August 31, 2011		—		—
September 1, 2011 through September 30, 2011		—		—

(1)	On July 28, 2011, one of our directors received 398 shares of common stock from treasury in lieu of cash payment of Board of Director retainer fees. The securities were issued by Woodward in reliance upon the exemption contained in Section 4(2) of the Securities Act of 1933.
(2)	Actual number of shares (not in thousands).

Use of Proceeds

Not applicable.

Issuer Purchases of Equity Securities

					Total
					Number of		Maximum Number
					Shares		(or Approximate
					Purchased		Dollar Value) of
	Total				as Part of		Shares that may
	Number of		Weighted		Publicly		yet be Purchased
	Shares		Average		Announced		under the Plans or
	Purchased		Price Paid		Plans or		Programs at Period
	(4)		Per Share		Programs (1)		End (1)
July 1, 2011 through July 31, 2011		—	$	—		—	$	190,162
August 1, 2011 through August 31, 2011		—		—		—		190,162
September 1, 2011 through September 30, 2011 (2) (3)		59,538		29.58		—		190,162

(1)	In July 2010, our Board of Directors authorized a stock repurchase program of up to $200,000 of our outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period that will end in July 2013.
(2)	Includes 58,744 shares previously held by an optionee for at least six months and delivered to the Company in September 2011 at an average price of $29.61 per share to pay exercise price and tax obligations related to such stock options. Excludes shares withheld by the Company in connection with the net exercise of stock options.
(3)	The Woodward Governor Company Executive Benefit Plan, which is a separate legal entity, aquired 794 shares of common stock on the open market related to the reinvestment of dividends for shares of treasury stock held for deferred compensation in September 2011.
(4)	Actual number of shares (not in thousands).

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Item 6. Selected Financial Data

The following selected financial data should be read in conjunction with the Consolidated Financial Statements and related notes which appear in “Item 8 — Financial Statements and Supplementary Data” of this Annual Report.

	Year Ending September 30,
	2011		2010		2009		2008		2007
	(In thousands except per share amounts)
Net sales (1)	$	1,711,702	$	1,457,030	$	1,430,125	$	1,258,204	$	1,042,337
Net Earnings:
Net earnings attributable to Woodward (1)(2)(3)(4)(5)		132,235		110,844		94,352		121,880		98,157
Net earnings attributable to noncontrolling interests		—		318		64		675		692
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward (6)		1.92		1.62		1.39		1.80		1.43
Diluted earnings per share attributable to Woodward (6)		1.89		1.59		1.37		1.75		1.39
Cash dividends per share		0.27		0.24		0.24		0.24		0.22
Income taxes (3)(4)		55,332		43,713		28,060		60,030		33,831
Interest expense		25,399		29,385		33,629		3,834		4,527
Interest income		534		509		1,131		2,120		3,604
Depreciation expense		40,400		40,502		37,828		28,620		25,428
Amortization expense		34,993		35,114		26,120		6,830		7,496
Capital expenditures		48,255		28,104		28,947		37,516		31,984
Weighted-average shares outstanding:
Basic shares outstanding		68,797		68,472		67,891		67,564		68,489
Diluted shares outstanding		70,140		69,864		69,103		69,560		70,487

	At September 30,
	2011		2010		2009		2008		2007
	(Dollars in thousands)
Working capital	$	536,936	$	456,577	$	434,166	$	369,211	$	275,611
Total assets		1,781,434		1,663,233		1,696,422		927,017		829,767
Long-term debt, less current portion		406,875		425,250		526,771		33,337		45,150
Total debt		425,249		465,842		572,340		48,928		66,586
Total liabilities		862,337		860,039		984,907		294,601		828,554
Stockholders’ equity		919,097		803,194		711,515		632,416		547,213
Full-time worker members		6,199		5,433		5,721		4,476		4,248

Notes:
1.	On April 14, 2011, Woodward acquired Integral Drive Systems AG and its European companies, including their respective holding companies (“IDS”), and the assets of IDS’ business in China. On October 3, 2008, Woodward acquired MPC Products and Techni-Core. On April 3, 2009, Woodward acquired HR Textron Inc. from Textron Inc., its parent company, and the United Kingdome assets and certain liabilities related to HR Textron Inc.’s business (collectively “HRT”), including its Fuel & Pneumatics (“F&P”) product line. The F&P product line was sold on August 10, 2009.
2.	In March 2009, Woodward recorded restructuring and other charges totaling $15,159 before taxes related to restructuring our businesses to adjust to the current economic environment.
3.	Net earnings for fiscal year 2007 included two tax adjustments, a favorable resolution of issues with tax authorities resulting in a reduction of net tax expense of $13,300 and a reduction in deferred tax assets resulting in a tax expense of $3,000 due to a decrease in the German statutory income tax rate. These adjustments increased net earnings by $10,300, or $0.15 per basic share and $0.15 per diluted share.
4.	Woodward recognized $6,416 of benefit related to favorable resolutions of prior year tax matters and the completion of certain internal revaluation assessments in the third quarter of fiscal year 2010. In the third quarter of fiscal year 2009, Woodward recognized $4,992 of benefit related to favorable resolutions of prior year tax matters. These special benefits increased net earnings by $0.09 per basic and diluted shares and $0.07 per basic and diluted shares in fiscal years 2010 and 2009, respectively.
5.	Woodward recognized $12,500 of pre-tax charges through cost of goods sold during the third quarter of fiscal year 2009 related to the purchase accounting basis step-up of inventory acquired as part of the HRT acquisition. This was a non-cash charge which decreased earnings, net of tax, by $8,000 or $0.12 per basic and diluted share.
6.	Per share amounts have been updated from amounts reported prior to February 1, 2008 to reflect the effect of a two-for-one stock split.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

We are an independent designer, manufacturer, and service provider of energy control and optimization solutions. We design, produce and service reliable, efficient, low-emission, and high-performance energy control products for diverse applications in challenging environments. We have significant production and assembly facilities in the United States, Europe and Asia, and promote our products and services through our worldwide locations.

Our strategic focus is providing control solutions for the aerospace and energy markets. The precise and efficient control of energy, including fluid and electrical energy, combustion, and motion, is a growing requirement in the markets we serve. Our customers look to us to optimize the efficiency, emissions and operation of power equipment in both commercial and military operations. Our core technologies leverage well across our markets and customer applications, enabling us to develop and integrate cost-effective and state-of-the-art fuel, combustion, fluid, actuation and electronic systems. We focus primarily on OEMs and equipment packagers, partnering with them to bring superior component and system solutions to their demanding applications. We also provide aftermarket repair, replacement and other service support for our installed products.

Our components and integrated systems optimize performance of commercial aircraft, military aircraft, ground vehicles and other equipment, gas and steam turbines, wind turbines, including converters and power grid related equipment, industrial diesel, gas and alternative fuel reciprocating engines, and electrical power systems. Our innovative fluid energy, combustion control, electrical energy, and motion control systems help our customers offer more cost-effective, cleaner, and more reliable equipment. Our customers include leading OEMs and the end users of their products.

As of September 30, 2011, we reorganized our reportable segments to better align with our markets. We now have two reportable segments — Aerospace and Energy. Both of our reportable segments are comprised of multiple business groups, which focus on particular applications within the aerospace and energy markets. Our Aerospace segment combines the aircraft propulsion portion of the former Turbine Systems business group, which we now refer to as the Aircraft Turbine Systems business group, with our Airframe Systems business group. Our Energy segment combines the industrial turbine portion of the former Turbine Systems business group, which we now refer to as the Industrial Turbomachinery Systems business group, with our Engine Systems and Electrical Power Systems business groups. Our aerospace products are primarily used to provide energy and motion control in both commercial and military fixed wing and rotary aircraft and in various other defense platforms, including guided weapon systems and combat vehicles.

Management’s discussion and analysis should be read together with the Consolidated Financial Statements and Notes included in this report. Dollar and number of share amounts contained in this discussion and elsewhere in this Annual Report on Form 10-K are in thousands, except per share amounts.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 1, Operations and summary of significant accounting policies, to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The estimates and assumptions described below are those that we consider to be most critical to an understanding of our financial statements because they involve significant judgments and uncertainties. All of these estimates reflect our best judgment about current, and for some estimates future, economic and market conditions and their effects based on information available as of the date of these financial statements. As estimates are updated or actual amounts are known, our critical accounting estimates are revised, and operating results may be affected by the revised estimates. Actual results may differ from these estimates under different assumptions or conditions.

Our management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed our disclosures in this Management’s Discussion and Analysis.

Revenue recognition

Woodward recognizes revenue upon shipment or delivery of tangible products for sale. Delivery is upon completion of manufacturing, customer acceptance, and the transfer of the risks and rewards of ownership. In countries whose laws provide for retention of some form of title by sellers, enabling recovery of goods in the event of customer default on payment, product delivery is considered to have occurred when the customer has assumed the risks and rewards of ownership of the products. Occasionally, Woodward transfers title of product to customers, but retains substantive performance obligations such as completion of product testing, customer acceptance or in some instances regulatory acceptance. In these instances, revenue is deferred until the performance obligations are satisfied. Judgment is sometimes required to identify the point in time at which the customer has assumed the risks and rewards of ownership.

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Woodward provides certain development services to customers under fully funded and partially funded long and short-term development contracts. Revenue for such contracts is recognized using the percentage-of-completion, milestone or completed contract methods. Funded development contracts may be fixed price or cost-reimbursable contracts. Anticipated losses on fully funded contracts, if any, are recognized in the period in which the losses become probable and estimable. Revenue recognition under the percentage-of-completion method requires accurate estimation of total costs to complete the development project, which requires judgment and is subject to revision. Revenue recognition under the milestone method requires identification of meaningful milestones with economic substance consistent with the revenue recognition criteria.

Purchase accounting

Woodward consummated one acquisition during fiscal year 2011 for a total cost of $47,161, which included the acquisition of $8,463 in marketable securities, and three acquisitions during fiscal year 2009 for a total cost of $768,423. In addition, we sold the F&P product line, which was acquired as part of the 2009 acquisitions, for net proceeds of approximately $48,000. Significant assumptions and estimates, including projections of future cash flows, affect the carrying value of acquired assets and assumed liabilities, including inventories and other tangible and intangible assets. Changes in the carrying amounts of acquired assets and assumed liabilities may change the carrying value of goodwill, which is not amortized for accounting purposes. Changes in the carrying amount of acquired assets and assumed liabilities may also impact future costs and may subject the Company to risk of future impairment of the recorded fair values of assets acquired, including goodwill.

Inventory

Inventories are valued at the lower of cost or market, with cost being determined using methods that approximate a first-in, first-out basis.

Customer-specific information and contractual terms are considered when evaluating lower of cost or market considerations. The carrying value of inventory as of September 30, 2011 was $381,555. If economic conditions, customer product mix or other factors significantly reduce future customer demand for our products from forecast levels, then future adjustments to the carrying value of inventory may become necessary. We attempt to maintain inventory quantities at levels considered necessary to fill expected orders in a reasonable time frame, which we believe mitigates our exposure to future inventory carrying cost adjustments.

Postretirement benefits

The Company provides various benefits to certain employees through defined benefit plans and other postretirement benefit plans. For financial reporting purposes, net periodic benefits expense and related obligations are calculated using a number of significant actuarial assumptions, including anticipated discount rates, rates of compensation increases, long-term return on defined benefit plan investments, and anticipated healthcare cost increases. Based on these actuarial assumptions, at September 30, 2011 our recorded liabilities include $25,349 for underfunded defined benefit pension plans and $32,923 for unfunded other postretirement benefit plans. Changes in net periodic expense or the amounts of recorded liabilities may occur in the future due to changes in these assumptions.

Estimates of the value of postretirement benefit obligations, and related net periodic benefits expense, are dependent on actuarial assumptions including future interest rates, compensation rates, healthcare cost trends, and returns on defined benefit plan investments. Variances from our fiscal year end estimates for these variables could materially affect our recognized postretirement benefit obligation liabilities. On a near-term basis, such changes are unlikely to have a material impact on reported earnings, since such adjustments are recorded to other comprehensive income and recognized into expense over a number of years. Significant changes in estimates could, however, materially affect the carrying amounts of benefit obligation liabilities, including accumulated benefit obligations, which could affect compliance with the provisions of our debt arrangements and future borrowing capacity.

Reviews for impairment of goodwill

At September 30, 2011, we had $462,282 of goodwill, representing 26% of our total assets. Goodwill is tested for impairment on the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment tests consist of comparing the fair value of reporting units, determined using discounted cash flows, with its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, we compare the implied fair value of goodwill with its carrying amount. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value. There was no impairment charge recorded in fiscal years 2011, 2010 or 2009.

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In the fourth quarter of fiscal year 2011, the Company prospectively changed its goodwill testing date from March 31 to July 31 to better align its impairment testing procedures with the completion of its annual financial and strategic planning process as discussed in Note 10, Goodwill, to the Consolidated Financial Statements. As a result, during fiscal year 2011, Woodward tested its goodwill for impairment as of March 31, 2011 and July 31, 2011 and concluded that there was no impairment of the carrying value of the goodwill. The change in accounting principle related to changing the annual goodwill impairment testing date did not accelerate, delay, avoid, or cause an impairment charge.

As of March 31 and July 31, 2011, Woodward determined its Turbine Systems, Airframe Systems and Engine Systems operating segments represented individual reporting units. Woodward determined that its Electrical Power Systems operating segment included three components that represented reporting units as of March 31, 2011 and four components that represented reporting units as of July 31, 2011 due to the acquisition of IDS.

The fair value of each of Woodward’s reporting units was determined using a discounted cash flow method. This method represents a Level 3 input and incorporates various estimates and assumptions, the most significant being projected revenue growth rates, operating earnings margins, and forecasted cash flows based on the discount rate and terminal growth rate. Management projects revenue growth rates, operating earnings margins and cash flows based on each reporting unit’s current operational results, expected performance and operational strategies over a five or ten-year period. These projections are adjusted to reflect current economic conditions and demand for certain products, and require considerable management judgment.

Forecasted cash flows for the July 31, 2011 impairment testing were discounted using weighted average cost of capital assumptions from 10.0% to 10.2%. The terminal values of the forecasted cash flows were calculated using the Gordon Growth Model and assumed an annual compound growth rate after five or ten years of 4.3%. Forecasted cash flows for the March 31, 2011 impairment testing were discounted using weighted average cost of capital assumption of 11.3% and an annual compound growth rate after five years of 4.4%. These inputs, which are unobservable in the market, represent management’s estimate of what market participants would use in determining the present value of the Company’s forecasted cash flows. Changes in these estimates and assumptions can have a significant impact on the fair value of forecasted cash flows. Woodward evaluated the reasonableness of the reporting units resulting fair values utilizing a market multiple method.

The results of Woodward’s annual goodwill impairment test performed as of July 31, 2011, indicated the estimated fair value of each reporting unit was substantially in excess of its carrying value, and accordingly, no impairment existed. Increasing the discount rate by 20%, decreasing the growth rate by 20%, or decreasing forecasted cash flow by 20%, would not have resulted in an impairment charge at July 31, 2011. See Note 21, Segment information, in the Consolidated Financial Statements.

As part of the Company’s ongoing monitoring efforts, Woodward will continue to consider the global economic environment and its potential impact on Woodward’s business in assessing goodwill recoverability. There can be no assurance that Woodward’s estimates and assumptions regarding forecasted cash flows of certain reporting units, the period or strength of the current economic recovery, or the other inputs used in forecasting the present value of forecasted cash flows will prove to be accurate projections of future performance.

Income taxes

We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes.

During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. The reserves are established when we believe that certain positions are likely to be challenged and may not be fully sustained on review by tax authorities. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or refinement of an estimate. Although we believe our reserves are reasonable, no assurance can be given that the final outcome of these matters will be consistent with what is reflected in our historical income tax provisions and accruals. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. As of September 30, 2011, unrecognized gross tax benefits for which recognition has been deferred was $16,931.

Significant judgment is also required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. As of September 30, 2011, our valuation allowance was $3,201.

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Our effective tax rates differ from the U.S. statutory rate primarily due to the tax impact of foreign operations, adjustments of valuation allowances, research tax credits, state taxes, and tax audit settlements.

Our provision for income taxes is subject to volatility and could be affected by earnings that are different than anticipated in countries which have lower or higher tax rates; by changes in the valuation of our deferred tax assets and liabilities; by transfer pricing adjustments; by tax effects of share-based compensation; and/or changes in tax laws, regulations, and accounting principles, including accounting for uncertain tax positions, or interpretations thereof. In addition, we are subject to examination of our income tax returns by the U.S. Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these examinations will not have a significant effect on our operating results, financial condition, and cash flows.

BUSINESS ENVIRONMENT AND TRENDS

We serve the aerospace and energy markets.

Aerospace Markets

Our aerospace products are primarily used to provide energy and motion control in both commercial and military fixed wing and rotary aircraft and in various other defense platforms, including guided weapon systems and combat vehicles.

Commercial and Civil Aircraft - In the commercial aerospace markets, global air traffic continued to improve in fiscal year 2011. Commercial aircraft production has increased as aircraft operators continue to take delivery of more fuel efficient aircraft and retire older, less efficient aircraft. This trend toward more fuel efficient aircraft favors our product offerings because we generally have more content on the new generation of aircraft. While relatively long development cycles mean the impacts are several years delayed, we have recently been awarded content on the Boeing 737 MAX, 787 and 747-8, Airbus A320neo, Bombardier CSeries, COMAC 919, Bell 429 and a variety of business jet platforms. We continue to explore opportunities on new engine and aircraft programs that are under consideration or have been recently announced.

Defense — In the defense markets, overall spending decreased modestly in 2011. Our involvement with a wide variety of military programs in fixed wing aircraft, rotorcraft and weapons systems has provided relative stability for our defense markets sales. Key programs that have been stable or growing include the F/A-18 E/F, the F-35 (Joint Strike Fighter), and the Black Hawk and Apache helicopter programs. In fiscal year 2011, we were awarded motion control system content for the fueling boom on the KC-46 tanker program. Military aftermarket, tied to the support of ongoing U.S. war efforts, has been steady throughout this cycle.

We continue to explore opportunities on next generation smart weapon systems, including enhanced guided bomb and guided rocket programs, turret controls and remote weapon stations. Weapon programs for which we have significant sales include the JDAM guided tactical weapon system and the M1A1 Abrams tank turret control system.

Energy Markets

Our energy products are used in global power generation and distribution, and to control energy in industrial, mobile and marine equipment.

Industrial Turbines and Compressors — In fiscal year 2011, the industrial turbine market began to recover from the economic downturn that began in fiscal year 2009. In addition to increased production rates by our OEM customers, we gained content on a newer generation of turbines that deliver improved fuel efficiency and lower emissions. In addition, we increased market share by successfully adding customers for our product offerings. We anticipate that long-term power needs in developed and developing regions, as well as backup power for renewable resource generators such as wind turbines, should cause industrial turbine demand to continue to improve. The aftermarket segment of the industry has been favorably impacted by service needs related to turbine installations early in the preceding decade.

As power generation demand continues to improve, turbines are expected to provide a compelling solution due to their inherent low emissions and fast permitting and construction times, along with the abundant availability of reasonably priced natural gas. Further, gas turbines are expected to serve a critical market need in supporting renewable assets in providing fast start and load acceptance during times when renewable sources fluctuate. OEM turbine manufacturers appear to be investing in new technologies focused on emissions, part load operation, start times, and fuel flexibility.

In the oil and gas process industry, demand for industrial gas, steam turbines and compressors is expected to grow, primarily due to increased demand for oil and natural gas products. Exploration, production, distribution and processing of oil and gas products utilize both gas and steam turbines, as well as compressors. Increased construction of floating production storage and offloading, and gas to liquids facilities is expected to drive demand in aeroderivative, steam turbine and compressor applications.

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Reciprocating Engines — The economic recovery we began to see in fiscal year 2010 continued strongly in fiscal year 2011, primarily due to increased demand for mining and other industrial equipment while demand for power generation and marine engines began to improve. Demand for small gas and diesel engines, including engines used in alternative fuel vehicles and industrial equipment, continued to recover throughout fiscal year 2011 as equipment manufacturers increased their production schedules. We believe orders for construction, agricultural, and material handling equipment, particularly in Asia, are driving demand for small diesel engines, and interest in using non-petroleum (alternative) fuels particularly in Korea, China and India is driving demand for small gas engines.

Demand for large gas and diesel engines stabilized in fiscal year 2010, and we began to recover in these markets in fiscal year 2011. We believe that broad commodity demand is driving continued investments in engine-powered mining, oil and natural gas production equipment. Demand for large engine marine applications stabilized and showed some improvement in fiscal year 2011.

Longer term, government issued emissions requirements across many regions and engine applications is driving demand for higher-technology control systems, as is customer demand for improved engine efficiencies. Energy policies in some countries encourage the use of natural gas and other alternative fuels over carbon-rich petroleum fuels, thereby increasing demand for our alternative fuel clean engine control technologies.

Wind Energy - The wind energy industry remains challenged as a result of concerns regarding government support, competitive pricing, and capacity and availability in the credit markets. In the longer term, we anticipate improvement in the market as demand for low emission power sources increases and technology advancements allow renewable energy to be more competitive with conventional sources. In fiscal year 2011, we increased market share with existing wind customers and added new wind customers. Also in fiscal year 2011, we added solar capabilities through our IDS Acquisition.

Electrical Power Generation and Distribution - The electrical power generation and distribution markets began to recover in fiscal year 2011 as credit markets and global energy demand improved despite a continued tight global credit market and uncertainty over government stimulus packages.

We are seeing improving demand for our power sensing and control equipment in line with the global recovery in these markets. The global economic recovery, especially in developing economies, is beginning to drive increased global power demand. After a strong fiscal year 2010, we experienced a modest decline in the level of our project engineering services.

RESULTS OF OPERATIONS

Non-U.S. GAAP Financial Measures

EBIT, EBITDA and free cash flow

Earnings before interest and taxes (“EBIT”), earnings before interest, taxes, depreciation and amortization (“EBITDA”) and free cash flow are financial measures not prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management uses EBIT to evaluate Woodward’s performance without financing and tax related considerations, as these elements may not fluctuate with operating results. Management uses EBITDA in evaluating Woodward’s operating performance, making business decisions, including developing budgets, managing expenditures and forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. Management uses free cash flow, which is defined as net cash flows provided by operating activities less capital expenditures, in reviewing the financial performance of Woodward’s various business groups and evaluating cash levels. Securities analysts, investors, and others frequently use EBIT, EBITDA and free cash flow in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets that are subject to amortization. The use of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. As EBIT and EBITDA exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded. Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Our calculations of EBIT, EBITDA and free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures.

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EBIT and EBITDA for the fiscal years ending September 30, 2011, September 30, 2010 and September 30, 2009 were as follows:

	Year Ending September 30,
	2011			2010			2009
Net earnings	$	132,235		$	111,162		$	94,416
Income taxes		55,332			43,713			28,060
Interest expense		25,399			29,385			33,629
Interest income		(534	)		(509	)		(1,131	)
EBIT		212,432			183,751			154,974
Amortization of intangible assets		34,993			35,114			26,120
Depreciation expense		40,400			40,502			37,828
EBITDA	$	287,825		$	259,367		$	218,922

Free cash flow for the fiscal years ending September 30, 2011, September 30, 2010 and September 30, 2009 was as follows:

	Year Ending September 30,
	2011			2010			2009
Net cash provided by operating activities	$	114,623		$	184,572		$	219,227
Capital expenditures		(48,255	)		(28,104	)		(28,947	)
Free cash flow	$	66,368		$	156,468		$	190,280

Special Items and Adjusted EBIT

2010 net earnings included the following benefit related to special items:

	Year Ending
	September 30, 2010
			Per Share
Favorable resolutions of prior year tax matters and completion of certain internal revaluation assessments	$	6,416	$	0.09

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2009 net earnings included the following charges and benefits related to special items:

	Year Ending
	September 30, 2009
				Per Share
Purchase accounting — inventory basis step-up charge	$	(12,500	)
Less: income tax benefit		4,500
Net after income tax beneift	$	(8,000	)	$	(0.12	)
Workforce management and other charges	$	(16,605	)
Less: income tax benefit		5,762
Net after income tax benefit	$	(10,843	)	$	(0.16	)
Favorable resolution of prior year tax issues	$	4,992		$	0.07
Total special (charges) benefits	$	(13,851	)	$	(0.21	)

EBIT adjusted for the special items above (“Adjusted EBIT”) is as follows:

	Year Ending September 30,
	2011			2010			2009
Net earnings	$	132,235		$	111,162		$	94,416
Income taxes		55,332			43,713			28,060
Interest expense		25,399			29,385			33,629
Interest income		(534	)		(509	)		(1,131	)
EBIT		212,432			183,751			154,974
Purchase accounting — inventory basis step-up charge		—			—			12,500
Workforce management and other charges		—			—			16,605
Adjusted EBIT	$	212,432		$	183,751		$	184,079

EBIT and Adjusted EBIT are financial measures not prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management uses EBIT to evaluate Woodward’s performance without financing and tax related considerations, as these elements may not fluctuate with operating results. Securities analysts, investors, and others frequently use EBIT in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets that are subject to amortization. Management uses Adjusted EBIT to evaluate Woodward’s performance after eliminating certain special items that are of sufficient magnitude to make comparisons between years difficult. The use of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. As EBIT and Adjusted EBIT exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded. Our calculations of EBIT and Adjusted EBIT may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures.

RESULTS OF OPERATIONS

Operational Highlights

Net sales for fiscal year 2011 increased 17.5% to $1,711,702 from $1,457,030 for fiscal year 2010.

Net earnings attributable to Woodward for fiscal year 2011 were $132,235, or $1.89 per diluted share, an increase of 19.3% from $110,844, or $1.59 per diluted share, in fiscal year 2010. Net earnings for fiscal year 2010 included the benefit of $6,416, or $0.09 per share, related to the favorable resolutions of prior year tax matters and completion of internal revaluation assessments.

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Liquidity Highlights

Net cash provided by operating activities for fiscal year 2011 were $114,623 compared to $184,572 for fiscal year 2010, reflecting the increase in working capital utilization primarily associated with increased inventory levels necessary to support future sales growth.

Free cash flow for fiscal year 2011 was $66,368 compared to $156,468 for fiscal year 2010.

EBITDA increased by $28,458 to $287,825 for fiscal year 2011 from $259,367 for fiscal year 2010.

At September 30, 2011, we held $74,539 in cash and cash equivalents, and had total outstanding debt of $425,249. At September 30, 2011, under our $225,000 revolving credit facility, we had additional borrowing availability of $220,118, net of outstanding letters of credit, and had additional borrowing availability of $22,811 under various foreign credit facilities.

The following table sets forth selected consolidated statement of earnings data as a percentage of net sales for each period indicated:

	Year Ending September 30,
	2011						2010						2009
				% of						% of						% of
				Net						Net						Net
				Sales						Sales						Sales
Net sales	$	1,711,702			100.0	%	$	1,457,030			100.0	%	$	1,430,125			100.0	%
Cost of goods sold		1,198,153			70.0			1,021,516			70.1			1,029,095			72.0
Selling, general, and administrative expenses		148,903			8.7			135,880			9.3			128,682			9.0
Research and development costs		115,633			6.8			82,560			5.7			78,536			5.5
Amortization of intangible assets		34,993			2.0			35,114			2.4			26,120			1.8
Restructuring and other charges		—			—			—			—			15,159			1.1
Interest expense		25,399			1.5			29,385			2.0			33,629			2.4
Interest income		(534	)		(0.0	)		(509	)		(0.0	)		(1,131	)		(0.1	)
Other (income) expense, net		1,588			0.1			(1,791	)		(0.1	)		(2,441	)		(0.2	)
Consolidated costs and expenses		1,524,135			89.0			1,302,155			89.4			1,307,649			91.4
Earnings before income taxes		187,567			11.0			154,875			10.6			122,476			8.6
Income tax expense		55,332			3.2			43,713			3.0			28,060			2.0
Net earnings		132,235			7.7			111,162			7.6			94,416			6.6
Net earnings attributable to noncontrolling interest, net		—			—			(318	)		(0.0	)		(64	)		(0.0	)
Net earnings attributable to Woodward	$	132,235			7.7	%	$	110,844			7.6	%	$	94,352			6.6	%

2011 RESULTS OF OPERATIONS

2011 Sales Compared to 2010

Consolidated net external sales increased 17.5% from $1,457,030 in fiscal year 2010 to $1,711,702 in fiscal year 2011 primarily due to volume increases in nearly all of the markets we serve.

Details of the changes in consolidated net external sales are as follows:

Consolidated net external sales at September 30, 2010	$	1,457,030
Aerospace volume changes		70,869
Aerospace customer funded development		(9,990	)
Energy volume changes		165,242
Price changes and sales mix		10,553
Effects of changes in foreign currency		17,998
Consolidated net external sales at September 30, 2011	$	1,711,702

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The increase in net external sales in fiscal year 2011 was attributable to sales volume increases across both of our segments. Customer funded development decreased slightly in the Aerospace segment. Net external sales for fiscal year 2011 were also impacted by favorable price changes and foreign currency exchange rates.

Sales for fiscal year 2011 continued the growth trend we began to experience in the second half of fiscal year 2010. In addition, the global supply chain has begun to recover some from capacity constraints introduced as the global economy struggled in the past several years. We remain focused on meeting customer demand on a timely basis, managing our inventory levels, and coordinating with vendors.

Price changes: Increases in selling prices across several products were partially offset by decreases in selling prices for some wind related products. Selling price changes are in response to prevailing market conditions.

Foreign currency exchange rates: Our worldwide sales activities are primarily denominated in U.S. dollars (“USD”), European Monetary Units (the “Euro”), Great Britain pounds (“GBP”), Japanese yen (“JPY”), Chinese yuan (“CNY”) and Swiss Francs (“CHF”). As the USD, Euro, GBP, JPY, CNY, and CHF fluctuate against each other and other currencies, we are exposed to gains or losses on sales transactions. If the CNY, which the Chinese government has not historically allowed to fluctuate significantly against USD, is allowed to fluctuate against USD in the future, we would be exposed to gains or losses on sales transactions denominated in CNY.

During the fiscal year ended September 30, 2011, our net sales were positively impacted by approximately $17,998 due to changes in foreign currency exchange rates, compared to the same period of fiscal year 2010.

2011 Costs and Expenses Compared to 2010

Variable compensation expense, which is tied to relative financial and operating performance, can vary significantly from fiscal year-to-year. During fiscal year 2011, variable compensation expense increased $25,962 as compared to fiscal year 2010 and has impacted cost of goods sold, selling general and administrative, and research and development expenses.

Cost of goods sold increased by $176,637 to $1,198,153, or 70.0% of net sales, for fiscal year 2011 from $1,021,516, or 70.1% of net sales, for fiscal year 2010. Correspondingly, gross margins (as measured by net sales less cost of goods sold, divided by net sales) remained relatively flat at 30.0% for fiscal year 2011 as compared to 29.9% for the same period of the prior fiscal year.

Selling, general, and administrative expenses increased by $13,023, or 9.6%, to $148,903 for fiscal year 2011 as compared to $135,880 for fiscal year 2010 primarily as a result of increased variable compensation. Selling, general and administrative expenses decreased as a percentage of net sales to 8.7% for fiscal year 2011 as compared to 9.3% for fiscal year 2010. Included in selling, general and administrative expense for fiscal year 2011 is approximately $2,396, related to the acquisition of IDS.

Research and development costs increased by $33,073, or 40.1%, to $115,633 for fiscal year 2011 as compared to $82,560 for the same period of fiscal year 2010. Research and development costs increased as a percentage of net sales to 6.8% for fiscal year 2011 as compared to 5.7% for fiscal year 2010. Our research and development activities extend across nearly our entire customer base. The increase in research and development costs is primarily due to our investment in new product platforms that have been awarded and development of next generation technology. Research and development costs in fiscal year 2011 were also impacted by increased variable compensation.

Amortization of intangible assets decreased slightly to $34,993 for fiscal year 2011 compared to $35,114 for fiscal year 2010. As a percentage of net sales, amortization of intangible assets decreased to 2.0% for fiscal year 2011 as compared to 2.4% for the prior year.

Interest expense decreased to $25,399, or 1.5% of net sales, for fiscal year 2011 compared to $29,385, or 2.0% of net sales, for the prior fiscal year. The decrease in interest expense is due to related debt reductions.

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Income taxes were provided at an effective rate on earnings before income taxes of 29.5% for fiscal year 2011 compared to 28.2% for fiscal year 2010. The change in the effective tax rate (as a percentage of earnings before income taxes) was attributable to the following:

Effective tax rate at September 30, 2010	28.2	%
Retroactive extension of research credit recorded in fiscal 2011	(2.1	)
Research credit in fiscal 2011 as compared to fiscal 2010	(2.2	)
Adjustment of prior period tax issues recorded in the period ending September 30, 2011	(0.3	)
Adjustment of prior period tax issues recorded in the period ending September 30, 2010	5.9
Domestic production activities deduction	(1.2	)
Foreign tax rate differences	1.1
Other changes, net	0.1
Effective tax rate at September 30, 2011	29.5	%

During the year ending September 30, 2010, the Internal Revenue Service concluded an examination of our U.S. Federal income tax returns for fiscal years 2007 and 2008. During the year ending September 30, 2010, we completed certain internal revaluation assessments and certain statues of limitations expired. As a result, we reduced our liability for unrecognized tax benefits by a net favorable amount of $6,416 for the period ended June 30, 2010.

On December 17, 2010, legislation was enacted that retroactively extended the U.S. research tax credit, which had expired as of December 31, 2009. As a result of this extension, fiscal year 2011 includes the effect of recognizing a tax benefit of $3,088 related to recognition of the retroactive impact to the prior year. The credit is scheduled to expire again on December 31, 2011. This expiration will result in a higher effective tax rate in fiscal year 2012 unless legislation is enacted to extend the credit.

In January 2011, the State of Illinois increased its corporate income tax rate from 7.3% to 9.5% effective January 1, 2011. This tax rate increase has not had a material impact on Woodward’s Consolidated Financial Statements and is not expected to have a material impact in the future.

The total amount of the gross liability for worldwide unrecognized tax benefits reported in other liabilities in the Consolidated Balance Sheet was $16,931 at September 30, 2011, and $10,586 at September 30, 2010. At September 30, 2011, the amount of unrecognized tax benefits that would impact Woodward’s effective tax rate, if recognized, was $14,078. At this time, we estimate it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $600 in the next twelve months due primarily to the expiration of certain statutes of limitations. We recognize interest and penalties related to unrecognized tax benefits in tax expense. Woodward had accrued interest and penalties of $1,989 as of September 30, 2011 and $1,431 as of September 30, 2010.

Woodward’s tax returns are audited by U.S., state, and foreign tax authorities, and these audits are at various stages of completion at any given time. Fiscal years remaining open to examination in significant foreign jurisdictions include 2003 and forward. Woodward has been subject to U.S. Federal income tax examinations for fiscal years through 2008. Woodward is subject to U.S. state income tax examinations for fiscal years 2007 and forward.

SEGMENT RESULTS

The following table presents sales by segment:

	Year Ending September 30,
	2011				2010				2009
External net sales:
Aerospace	$	843,032	49	%	$	769,379	53	%	$	704,771	49	%
Energy		868,670	51			687,651	47			725,354	51
Consolidated net sales	$	1,711,702	100	%	$	1,457,030	100	%	$	1,430,125	100	%

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The following table presents earnings by segment:

	Year Ending September 30,
	2011			2010			2009
Aerospace	$	129,502		$	112,171		$	104,550
Energy		113,872			94,014			96,938
Total segment earnings		243,374			206,185			201,488
Nonsegment expenses		(30,942	)		(22,434	)		(46,514	)
Interest expense, net		(24,865	)		(28,876	)		(32,498	)
Consolidated earnings before income taxes		187,567			154,875			122,476
Income tax expense		55,332			43,713			28,060
Consolidated net earnings	$	132,235		$	111,162		$	94,416

The following table presents earnings by segment as a percent of segment net sales:

	Year Ending September 30,
	2011			2010			2009
Aerospace		15.4	%		14.6	%		14.8	%
Energy		13.1			13.7			13.4

2011 Segment Results Compared to 2010

Aerospace

Aerospace segment net sales increased $73,653, or 9.5%, to $843,032 for fiscal year 2011 from $769,379 for fiscal year 2010. Sales during fiscal year 2011 were higher in nearly all markets we serve. Sales for the aerospace aftermarket continued to benefit from increased passenger and cargo air traffic, and the introduction of new aircraft platforms on which Aerospace products are used.

We believe the fleet dynamics of commercial aircraft platforms on which we have content, such as the Airbus A320, the Boeing 777, the Embraer and the Bombardier 70- to 90-seat regional jets, allowed our aftermarket business to be somewhat less negatively impacted by the effects of the recent economic down-cycle than some of our competitors and have supported sales growth as a result of the more recent rebound in air traffic. Commercial OEM aircraft deliveries of narrow-body and wide-body aircraft have increased based on improved airline demand and new product introduction. The increase in sales continues to reflect recovering demand for business and regional jets and rotorcraft, partially offset by a slight decline in military sales and reduced levels of customer funded development revenue.

Aerospace segment earnings increased $17,331, or 15.5%, for the fiscal year 2011 compared to fiscal year 2010 due to the following:

Earnings at September 30, 2010	$	112,171
Sales volume changes		26,485
Selling price and mix		17,542
Customer funded development		(9,990	)
Investments in engineering and research and development		(5,328	)
Changes in variable compensation		(12,307	)
Workman’s compensation		(2,983	)
Effects of changes in foreign currency rates		336
Other, net		3,576
Earnings at September 30, 2011	$	129,502

The increase in Aerospace segment earnings in fiscal year 2011 compared to fiscal year 2010 were primarily the result of sales volume increases, a more favorable price and sales mix due to increased levels of aftermarket sales, partially offset by increased variable compensation and costs associated with new product development, including a reduction in customer funded development. The sales mix during fiscal year 2011 continued to include a higher proportion of aftermarket sales than in fiscal year 2010 as a result of increased air traffic. Earnings as a percentage of sales increased to 15.4% in fiscal year 2011 compared to 14.6% for fiscal year 2010.

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Energy

Energy segment net sales increased $181,019, or 26.3% to $868,670 for fiscal year 2011 from $687,651 for fiscal year 2010. Sales for fiscal year 2011 increased in all of our markets and includes $13,545 in net sales associated with the IDS Acquisition. Sales were particularly strong in the large and small engine markets utilizing diesel, gas, including natural gas, and other special fuel sources, which serve primarily construction, agricultural, and on-highway natural gas vehicles.

In addition, we continued to see growth in our industrial steam turbine market, as well as increased deliveries of wind turbine power converters. Although wind turbine converter sales increased in fiscal year 2011 as compared to fiscal year 2010, wind converter demand continues to be impacted by tight lender requirements for project financing and uncertainty regarding government stimulus programs due to a lack of clear policy direction in the U.S. and elsewhere.

Energy segment earnings increased by $19,858, or 21.1%, for fiscal year 2011 as compared to fiscal year 2010 due to the following:

Earnings at September 30, 2010	$	94,014
Sales volume changes		60,412
Selling price and mix		(7,089	)
Investments in engineering and research and development		(13,906	)
Changes in variable compensation		(11,415	)
Increase in global expansion efforts		(3,625	)
Increased costs to support sales growth		(3,222	)
Freight and duty costs		(1,512	)
Effects of changes in foreign currency rates		3,923
Other, net		(3,708	)
Earnings at September 30, 2011	$	113,872

The increase in the Energy segment earnings for fiscal year 2011 as compared to the prior fiscal year was driven primarily by increased volume, offset partially by increases in research and development, variable compensation and unfavorable selling price and product mix.

Non-segment expenses

Non-segment expenses for fiscal year 2011 increased to $30,942, or 1.8% of net sales, compared to $22,434, or 1.5% of net sales, for fiscal year 2010. The increase in non-segment expenses for fiscal year 2011 is primarily due to increased variable compensation and costs associated with the acquisition of IDS.

2010 RESULTS OF OPERATIONS

2010 Sales Compared to 2009

Consolidated net external sales increased 1.9% from $1,430,125 in fiscal year 2009 to $1,457,030 in fiscal year 2010 primarily due to the inclusion of a full fiscal year of HRT sales in fiscal year 2010 compared to only six months of HRT sales in fiscal year 2009, partially offset by sales volume declines in all of our markets.

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Details of the changes in consolidated net external sales are as follows:

Consolidated net external sales at September 30, 2009	$	1,430,125
HRT external sales from October 2009 to March 2010		117,329
F&P product line external sales from April 2009 to September 2009		(9,620	)
Aerospace volume changes		(48,675	)
Energy volume changes		(44,207	)
Price changes and sales mix		6,894
Effects of changes in foreign currency		5,184
Consolidated net external sales at September 30, 2010	$	1,457,030

Fiscal year 2010 sales included $117,329 of HRT external net sales for the six months from October 2009 to March 2010 that were not present in fiscal year 2009. Fiscal year 2009 sales included $9,620 of F&P product line sales, which was acquired as part of the HRT acquisition in April 2009 and then sold in September 2009, that were not present in fiscal year 2010.

Sales for 2010 began stabilizing in the second half of the year and returned to sequential growth overall. Some volatility is anticipated going forward due to continued uncertainty and some continued softness in certain market segments. Fluctuations in customer order volumes for certain products, coupled with our vendors’ reduction of their production capacities as global demand has fallen, and continued tight credit constraints impacting our suppliers have complicated our management of the overall global supply chain. Meeting customer demand on a timely basis, managing our inventory levels, and coordinating with vendors are key tactical initiatives as we manage our business during the emerging economic recovery.

Price changes and sales mix: Selling price increases across several products were in response to prevailing market conditions, partially offset by price decreases and changes in sales mix by customer.

Foreign currency exchange rates: Our worldwide sales activities are primarily denominated in U.S. dollars (“USD”), European Monetary Units (the “Euro”), Great Britain pounds (“GBP”), Japanese yen (“JPY”) and Chinese Yuan (“CNY”). As the USD, Euro, GBP, and JPY fluctuate against each other and other currencies, we are exposed to gains or losses on sales transactions. If CNY, which the Chinese government has not allowed to fluctuate significantly against USD in 2009 or 2010, is allowed to fluctuate against USD in the future, we would be exposed to gains or losses on sales transactions denominated in CNY.

During fiscal year 2010, our net sales were positively impacted by approximately $5,184 due to changes in foreign currency exchange rates, compared to fiscal year 2009.

2010 Costs and Expenses Compared to 2009

Recent economic events have caused variable compensation expense, which is tied to relative financial performance, to vary significantly from fiscal year-to-year. Increases in variable compensation expense of $6,695 in fiscal year 2010 as compared to fiscal year 2009 impacted cost of goods sold, selling general and administrative, and research and development expenses.

Cost of goods sold decreased by $7,579 to $1,021,516 or 70.1% of net sales, in fiscal year 2010, from $1,029,095 or 72.0% of net sales in fiscal year 2009. Excluding the $15,400 charge for the step-up in basis of inventory related to the HRT and MPC acquisitions in fiscal year 2009, cost of goods sold increased by $7,821 during fiscal year 2010.

Correspondingly, gross margins, measured as net sales less cost of goods sold divided by net sales, were 29.9% for fiscal year 2010 compared to 28.0% for the fiscal year 2009. The increase in gross margins was largely a result from our focus on cost reductions and the impact of purchase accounting inventory step-up adjustments recorded in fiscal year 2009 of $12,500 related to HRT and $2,900 related to MPC. Excluding the $15,400 inventory step-up adjustments, gross margins in fiscal year 2009 were 29.1% compared to 29.9% in fiscal year 2010.

Selling, general and administrative (“SG&A”) expenses increased by $7,198 or 5.6% to $135,880 for fiscal year 2010 from $128,682 for fiscal year 2009. Selling, general, and administrative expenses increased as a percent of sales to 9.3% in fiscal year 2010 from 9.0% in fiscal year 2009. The increase was primarily the result of additional expenses associated with the recently acquired HRT business and higher levels of variable compensation, partially offset by the impact of cost reduction efforts taken during fiscal year 2009.

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Research and development costs increased by $4,024 or 5.1% to $82,560 for fiscal year 2010 from $78,536 for fiscal year 2009. The 5.1% increase was primarily due to increases in spending within our Aerospace segment due to the acquisition of HRT on April 3, 2009, which resulted in higher spending during fiscal year 2010. Research and development costs in fiscal year 2010 were also impacted by increased variable compensation compared to fiscal year 2009.

As a percentage of sales, research and development expenses increased to 5.7% in fiscal year 2010 from 5.5% in fiscal year 2009. Our research and development activities extend across almost all our customer base, and our level of spending is consistent with our strategy of continuing to invest in future platforms and technologies.

Amortization of intangible assets increased by $8,994 to $35,114 for fiscal year 2010 as compared to $26,120 for fiscal year 2009. The increase in amortization reflects the effect of $128,400 in purchased intangibles in connection with the HRT acquisition in April 2009. Amortization of intangible assets as a percent of sales was 2.4% for the fiscal year ending September 30, 2010, as compared to 1.8% for the fiscal year ended 2009.

Restructuring and other charges of $15,159 were recognized in fiscal year 2009. No restructuring costs were recognized in fiscal year 2010. The 2009 charges resulted from a number of initiatives we implemented to maintain our margins through cost reduction and efficiency improvements. The program savings were primarily related to indirect expenses, selling, general, and administrative expenses, material productivity and facility rationalization.

Interest expense decreased by $4,244 to $29,385 for the fiscal year 2010 as compared to $33,629 for fiscal year 2009. Interest expense as a percent of sales was 2.0% for the fiscal year ending September 30, 2010, as compared to 2.4% for the fiscal year ended 2009. Interest expense decreased for the fiscal year ending September 30, 2010 because of interest savings related to debt reductions.

Since the issuance of $400,000 of long-term debt in October 2008, which was used primarily to finance the acquisitions of MPC and MotoTron, and $220,000 of long-term debt issued in April 2009, which was used primarily to finance the acquisition of HRT, we have made unscheduled prepayments of $167,000 on our outstanding long-term debt. After the acquisition of HRT on April 3, 2009, we reduced our total debt, including short-term borrowings, by $291,017, from $756,859 as of September 30, 2009 to $465,842 as of September 30, 2010.

Income taxes were provided at an effective rate on earnings before income taxes of 28.2% in fiscal year 2010 compared to 22.9% in fiscal year 2009. For a reconciliation of our effective tax rate to the U.S. statutory tax rate see Note 17, Income taxes, to the Consolidated Financial Statements in “Item 8 — Financial Statements and Supplementary Data.” The change in the effective tax rate (as a percentage of earnings before income taxes) was attributable to the following:

Effective tax rate at September 30, 2009	22.9	%
Retroactive extension of research credit recorded in fiscal 2009	1.7
Research credit in fiscal 2010 as compared to fiscal 2009	2.6
Adjustment of tax issues recorded in the period ended September 30, 2009	6.6
Adjustment of tax issues recorded in the period ended September 30, 2010	(5.9	)
State income taxes, net of federal tax benefit	0.9
Foreign tax rate differences	0.7
Other changes, net	(1.3	)
Effective tax rate at September 30, 2010	28.2	%

The total amount of the gross liability for worldwide unrecognized tax benefits reported in other liabilities in the Consolidated Balance Sheet was $10,586 at September 30, 2010, and $19,783 at September 30, 2009. At September 30, 2010, the amount of unrecognized tax benefits that would impact Woodward’s effective tax rate, if recognized, was $8,720. At this time, we estimate that it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $1,304 in the next twelve months due primarily to the expiration of certain statutes of limitations. We recognize interest and penalties related to unrecognized tax benefits in tax expense. Woodward had accrued interest and penalties of $1,431 as of September 30, 2010 and $3,804 as of September 30, 2009.

Woodward’s tax returns are audited by U.S., state, and foreign tax authorities, and these audits are at various stages of completion at any given time. Fiscal years remaining open to examination in significant foreign jurisdictions include 2003 and forward. Woodward has been subject to U.S. Federal income tax examinations for fiscal years through 2008; however, certain subsidiaries have open tax years back to 2007, which pre-dates the inclusion of these subsidiaries in the Woodward consolidated return filing group. Woodward is subject to U.S. state income tax examinations for fiscal years 2005 and forward.

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The U.S. research tax credit expired as of December 31, 2009. The U.S. Congress is considering legislation to provide a one-year, retroactive extension; however, as of September 30, 2010, the expired tax credit has not been reinstated. Accounting guidance requires us to use the tax law in effect at the balance sheet date. Accordingly, the calculation of our 2010 income tax provision does not reflect any assumed benefit from the research tax credit for the year ended September 30, 2010. In the event the research tax credit is enacted in some form in future periods, we will account for that change in the tax law at that time.

The Patient Protection and Affordable Care Act, which was signed into law on March 23, 2010, had no impact on our income tax expense in 2010.

2010 Segment Results Compared to 2009

Aerospace

Aerospace segment net sales were $769,379 for fiscal year 2010 compared to $704,771 for fiscal year 2009. Fiscal year 2010 sales included $117,329 of HRT external net sales for the six months from October 2009 to March 2010 that were not present in fiscal year 2009. Fiscal year 2009 sales included $9,620 of F&P product line sales, which was acquired as part of the HRT acquisition in April 2009 and then sold in September 2009, that were not present in fiscal year 2010. Excluding the effect of these sales, Aerospace segment net sales declined $43,102.

From a broad market perspective, the fiscal year-over-year sales decline from 2009 to 2010 was driven by lower sales in the commercial aircraft markets, including aftermarket spares and repair services. The Aerospace segment experienced declines in each of the first three quarters of fiscal year 2010, compared to the same periods in fiscal year 2009. Sales in the defense markets were slightly higher in 2010 than in 2009.

While we believe our experience is largely consistent with underlying economic market trends, we also believe the fleet dynamics of commercial aircraft platforms on which we have content, such as the Airbus A320, the Boeing 777 and the Embraer and the Bombardier 70- to 90-seat Regional Jets, have allowed us to be somewhat less negatively impacted by the effects of the recent economic down-cycle than some of our competitors in the aftermarket segment. Commercial OEM aircraft deliveries of narrow-body and wide-body as well as military aircraft sales have remained relatively stable, although order patterns have fluctuated, such that our overall sales volume has remained less affected, despite larger fluctuations from quarter to quarter. Sales in the aerospace turbine markets were higher in the fourth quarter of fiscal year 2010 compared to both the third quarter of fiscal year 2010 and the fourth quarter of fiscal year 2009. In addition, increased air traffic use favorably affected our aftermarket sales levels. Business jet markets, primarily the large cabin and long-range markets for which our aircraft turbine products are well represented, continued to recover in fiscal year 2010, as evidenced by higher deliveries of product for business jet engines in the second half of fiscal year 2010 compared to the same period of fiscal year 2009. Aerospace net sales were also impacted by reduced demand on various military applications, particularly fixed wing and electro-optical targeting programs, which are markets in which we have a significant presence. Aftermarket sales experienced slight declines, primarily due to passenger and cargo carriers removing planes from service.

Aerospace segment earnings increased $7,621 or 7.3% for fiscal year 2010, as compared to fiscal year 2009 due to the following:

Earnings at September 30, 2009	$	104,550
Purchase accounting inventory basis step-up charge in 2009		12,500
HRT earnings from October 2009 to March 2010		14,397
F&P product line earnings from April 2009 to August 2009		(3,897	)
Sales volume changes		(27,978	)
Selling price and mix		7,680
Depreciation & intangible amortization		(4,342	)
Investments in business development opportunities		(3,896	)
Savings related to workforce management		21,205
Changes in variable compensation		(4,334	)
Effects of changes in foreign currency		(192	)
Other, net		(3,522	)
Earnings at September 30, 2010	$	112,171

Aerospace segment earnings increased in fiscal year 2010 compared to fiscal year 2009, primarily as a result of more favorable sales mix, selling price changes, and workforce management savings, offset by decreases in sales volume and higher levels of variable compensation. Earnings as a percentage of sales decreased to 14.6% in the fiscal year ending September 30, 2010 compared to 14.8% for the same period of fiscal year 2009.

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HRT was acquired on April 3, 2009. The F&P product line, which was acquired as part of the HRT acquisition was sold in September 2009. Therefore, HRT’s results are included in Aerospace segment results for the six months ended September 30, 2009 and for the twelve months ending September 30, 2010. Likewise, the F&P business results from April to August of 2009 are only included in Aerospace segment earnings for the fiscal year ending September 30, 2009. The HRT acquisition contributed $14,397 to the Aerospace segment earnings for the fiscal year ending September 30, 2010. The F&P product line contributed $3,897 to the fiscal year ending September 30, 2009. Segment earnings for the fiscal year ending September 30, 2009 also included a $12,500 charge related to a purchase accounting step-up in basis of HRT inventory.

Fiscal year 2010 earnings were also impacted by significant sales volume declines, increased investments in business development opportunities, higher levels of variable compensation and higher levels of intangible amortization compared to fiscal year 2009. Because of the 2009 acquisitions of MPC and HRT, and the related adjustments made in purchase accounting to assign values to various intangible assets, the Aerospace segment absorbs more amortization expense than our Energy segment. Non-cash intangible amortization expense for the Aerospace segment was $29,810 for the fiscal year ending September 30, 2010 and $20,792 for the fiscal year ending September 30, 2009.

Energy

Energy segment net sales were $687,651 for fiscal year 2010, compared to $725,354 for fiscal year 2009. As a result of the recent economic down-cycle, we experienced declines in all of our energy markets except small gas and diesel engine applications that support the construction, agricultural, and alternative-fuel vehicle markets.

The continuing impact of the global recession has temporarily resulted in excess supplies of electricity in certain markets, which has contributed to reduced sales volumes of industrial gas and steam turbines as well as controls used in large engine applications that serve the power generation, marine and process markets. In addition, uncertainty caused by the delay in issuance of new emissions policies and standards in the U.S. continues to dampen customer demand for industrial turbines.

Wind turbine converter sales also decreased and were partially offset by increases in non-wind related power generation and distribution equipment compared to fiscal year 2009. Wind converter sales declined in the fiscal year ending September 30, 2010, as compared to the same period of fiscal year 2009 as demand continued to be impacted by tight lender requirements for project financing, and uncertainty regarding government stimulus programs due to a lack of clear policy direction in the U.S. and elsewhere. While sales were down for fiscal year 2010 as compared to fiscal year 2009, sales were higher in the fourth quarter of fiscal year 2010 compared to both the third quarter of fiscal year 2010 and the fourth quarter of fiscal year 2009.

Certain developing economies are in early stages of economic recovery, and as a result, are beginning to drive increased power demand in their regions. Increased global natural gas supply, combined with lower natural gas prices, supported an increasing demand for industrial gas turbines used in power generation and process applications. Increased power demand use also favorably affected our aftermarket sales levels.

During fiscal year 2010, segment net sales were positively impacted by approximately $5,200 due to changes in foreign currency exchange rates, compared to fiscal year 2009.

Energy segment earnings decreased $2,924 or 3.0% for fiscal year 2010 as compared to fiscal year 2009, due to the following:

Earnings at September 30, 2009	$	96,938
Sales volume changes		(20,038	)
Selling price and mix		6,633
Savings related to workforce management		12,299
Costs associated with global expansion		(2,457	)
Decreased infrastructure and overhead related expenses		2,481
Changes in variable compensation		(5,607	)
Effects of changes in foreign currency		1,846
Other, net		1,919
Earnings at September 30, 2010	$	94,014

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The decrease in earnings in the fiscal year ending September 30, 2010 compared to the same period of fiscal year 2009 was driven mainly by the decrease in sales volumes, which was primarily due to reduced market demand. Also contributing were increased variable compensation and costs associated with expanding our global footprint to better accommodate customer demands. These negative effects were partially offset by savings realized because of workforce management actions taken during fiscal year 2009 in response to declining sales and favorable selling price and sales mix.

Non-segment expenses

Non-segment expenses for fiscal year 2010 decreased to $22,434, or 1.5% of sales compared to $46,514 and 3.3% of sales for fiscal year 2009.

In fiscal year 2009, we recorded $16,605 in special charges associated with properly sizing our business for the economic environment related to the global recession. Without these special charges, non-segment expenses for the fiscal year ending September 30, 2009 were $29,909, or 2.1% of net sales.

Excluding the impact of the $16,605 in special charges, non-segment expenses declined in fiscal year 2010 compared to fiscal year 2009, resulting primarily from cost reduction efforts.

LIQUIDITY AND CAPITAL RESOURCES

We believe liquidity and cash generation are important to our strategy of self-funding our ongoing operating needs. Historically, we have been able to satisfy our working capital needs, including capital expenditures, product development and other liquidity requirements associated with our operations, with cash flow provided by operating activities. We expect that cash generated from our operating activities will be sufficient to fund our continuing operating needs.

Our aggregate cash and cash equivalents were $74,539 and $105,579 and our working capital was $536,936 and $456,577 at September 30, 2011 and September 30, 2010, respectively. Of the $74,539 of cash and cash equivalents held at September 30, 2011, $61,885 is held in foreign subsidiaries. We are not presently aware of any restrictions on the repatriation of these funds, although a portion is considered permanently invested in these foreign subsidiaries. If these funds were needed to fund our operations or satisfy obligations in the U.S., they could be repatriated and their repatriation into the U.S. may cause us to incur additional U.S. income taxes on foreign withholding taxes. Any additional taxes could be offset, in part or in whole, by foreign tax credits. The amount of such taxes and application of tax credits would be dependent on the income tax laws and other circumstances at the time these amounts are repatriated.

In the event we are unable to generate sufficient cash flows from operating activities, we have a revolving credit facility comprised of unsecured financing arrangements with a syndicate of U.S. banks totaling $225,000. Under the revolving credit facility, we have an option to increase our available borrowings by $125,000 to $350,000, subject to the lenders’ participation. In addition, we have various foreign lines of credit, some of which are tied to net amounts on deposit at certain foreign financial institutions: these are generally reviewed annually for renewal. Historically, we have used borrowings under these foreign lines of credit to finance certain local operations on a periodic basis.

At September 30, 2011, we had no borrowings outstanding under our revolving credit facility or our foreign short-term lines of credit. The maximum daily balance during the period occurred in connection with the IDS Acquisition. Short-term borrowing activity during the fiscal year ending September 30, 2011 follows:

Maximum daily balance during the period	$	69,000
Average daily balance during the period		32,762
Weighted average interest rate on average daily balance		0.97	%

At September 30, 2011, we had total outstanding debt of $425,249 with additional borrowing availability of $220,118 under our $225,000 revolving credit facility, net of outstanding letters of credit, and additional borrowing availability of $22,811 under various foreign credit facilities.

We were in compliance with all covenants under our revolving credit facility and long-term debt agreements during the fiscal year ending September 30, 2011.

In addition to utilizing our cash resources to fund the working capital needs of our business, we evaluate additional strategic uses of our funds, including the repurchase of our stock, payment of dividends, and consideration of strategic acquisitions and other potential uses of cash.

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We believe we have adequate access to several sources of contractually committed borrowings and other available credit facilities. However, we could be adversely affected if the banks supplying our short-term borrowing requirements refuse to honor their contractual commitments, cease lending, or declare bankruptcy. While we believe the lending institutions participating in our credit arrangements are financially capable, recent events in the global credit markets, including the failure, takeover or rescue by various government entities of major financial institutions, have created uncertainty with respect to credit availability.

Our ability to service our long-term debt, to remain in compliance with the various restrictions and covenants contained in our debt agreements and to fund working capital, capital expenditures and product development efforts will depend on our ability to generate cash from operating activities which in turn is subject to, among other things, future operating performance as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control.

Cash Flows

	Year Ending September 30,
	2011			2010			2009
Net cash provided by operating activities	$	114,623		$	184,572		$	219,227
Net cash used in investing activities		(87,140	)		(52,132	)		(714,130	)
Net cash used in financing activities		(55,979	)		(128,985	)		487,365
Effect of exchange rate changes on cash and cash equivalents		(2,544	)		1,261			(1,432	)
Net change in cash and cash equivalents		(31,040	)		4,716			(8,970	)
Cash and cash equivalents at beginning of period		105,579			100,863			109,833
Cash and cash equivalents at end of period	$	74,539		$	105,579		$	100,863

2011 Cash Flows Compared to 2010

Net cash flows provided by operating activities for fiscal year 2011 was $114,623 compared to $184,572 in fiscal year 2010. The decrease operating cash flows during fiscal year 2011 is attributable to the utilization of working capital primarily associated with increased investment in inventory levels and accounts receivable. The increase in inventory is due to anticipated deliveries scheduled for coming quarters as well as the effect carrying higher levels of certain parts and raw materials as a result of some sourcing inefficiencies.

Net cash flows used in investing activities for fiscal year 2011 was $87,140 compared to $52,132 in fiscal year 2010. The increase of $35,008 compared to the same period of the last fiscal year is due primarily to the IDS Acquisition completed in the third quarter of fiscal 2011 utilizing net cash of $38,944. Cash paid for capital expenditures was $48,255 during fiscal year 2011, compared to $28,104 for fiscal year 2010. The increase in fiscal year 2011 investment in capital equipment reflects an increase of $15,254 related to the construction of a new aircraft turbine test facility in Rockford, IL. Cash flows used in investing activities for fiscal year 2010 included a $25,000 settlement with the DOJ associated with a liability assumed in the acquisition of MPC. The purchase price we paid in connection with the acquisition of MPC was reduced by a corresponding amount and the payment was recognized as cash used for business acquisition.

Net cash flows used in financing activities for fiscal year 2011 was $55,979 as compared to $128,985 in net cash flows used for fiscal year 2010. During fiscal year 2011, we had net reduction in short-term borrowings of $18,171, repaid $18,430 in scheduled long-term debt reductions, and paid stockholder dividends of $18,581. In addition, during this same period, we utilized $6,837 to repurchase 208 shares of our common stock in the open market.

During fiscal year 2010, we repaid $128,420 of outstanding long-term debt, including unscheduled prepayments of $98,000, paid stockholder dividends of $17,085, and purchased the remaining 26% non-controlling interest in Woodward Governor India Limited, a Woodward consolidated subsidiary (“Woodward India”), for $8,120. As a result of this transaction, Woodward owns 100% of Woodward India. In addition, during the fiscal year 2010, we utilized $4,513 to repurchase 163 shares of our common stock in the open market.

2010 Cash Flows Compared to 2009

Net cash flows provided by operating activities decreased by $34,655 compared to the fiscal year ending September 30, 2009. The decrease was driven mainly by higher accounts receivable at the end of fiscal year 2010 caused by higher sales levels in the fourth fiscal quarter of fiscal year 2010 compared to the same period in fiscal year 2009.

Also, during fiscal year 2010, we made a $10,000 elective contribution to our postretirement pension plans, consistent with our history of maintaining funding levels for our employee pension plans significantly above regulatory required levels.

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Net cash flows used in investing activities decreased by $661,998 compared to the fiscal year ending September 30, 2009. During fiscal year 2009, we completed two acquisitions which used $749,820 of cash. Also, in fiscal year 2009 we received proceeds of $48,000 related to the sale of the F&P product line.

During the year ending September 30, 2010 we paid $25,000 to the DOJ to settle a liability assumed in the MPC acquisition. The purchase price we paid in connection with the acquisition of MPC was reduced by $25,000 at the time of the acquisition to account for this contingent liability, and therefore the $25,000 payment is classified as cash used for business acquisitions.

Cash paid for capital expenditures was $28,104 during the fiscal year ending September 30, 2010, compared to $28,947 during the same period fiscal year 2009.

Net cash flows used in financing activities increased by $616,350, to a use of $128,985 in fiscal year 2010 compared to proceeds of $487,365 in fiscal year 2009. During fiscal year 2009, we issued $620,000 of long-term debt, which was used primarily to finance business acquisitions. During the fiscal year ending September 30, 2010, we repaid $128,420 of outstanding current and long-term debt, including unscheduled debt prepayments of $98,000. As a result of the decreases in outstanding current and long-term debt during the fiscal year ending September 30, 2010, our debt to total capitalization ratio, defined as total debt divided by total debt plus total equity, decreased to 36.7% as of September 30, 2010 compared to 44.6% as of September 30, 2009.

Also during the fiscal year ending September 30, 2010, we used $4,513 to repurchase 163 shares of our common stock on the open market at an average price of $27.71 per share as part of our previously announced stock repurchase plans. No shares of stock were repurchased during fiscal year 2009.

In April 2010, Woodward purchased the remaining 26% non-controlling interest in Woodward India for $8,120. As a result of this transaction, Woodward now owns 100% of Woodward India.

Off-Balance Sheet Arrangements and Contractual Obligations

Contractual Obligations

A summary of our consolidated contractual obligations and commitments as of September 30, 2011 is as follows:

	Year Ending September 30,
	2012		2013		2014		2015		2016		Thereafter
	(in thousands)
Long-term debt principal	$	18,371	$	7,500	$	149,375	$	—	$	107,000	$	143,000
Interest on debt obligations		24,485		23,950		17,347		17,345		12,196		21,668
Operating leases		7,219		5,583		4,706		3,620		2,814		7,508
Purchase obligations		242,735		9,383		376		5		—		—
Other		1,343		30		30		30		—		16,931
Total	$	294,153	$	46,446	$	171,834	$	21,000	$	122,010	$	189,107

Purchase obligations include amounts committed under legally enforceable contracts or purchase orders for goods and services with defined terms as to price, quantity, delivery, and termination liability.

Interest obligations on floating rate debt instruments are calculated for future periods using interest rates in effect as of September 30, 2011. See Note 13, Long-term debt, to the Consolidated Financial Statements in “Item 8 — Financial Statements and Supplementary Data” for further details on our long-term debt.

The $16,931 included in other obligations in the Thereafter category represents our best reasonable estimate for uncertain tax positions at this time and may change in future periods, as the timing of the payments and whether such payments will actually be required cannot be reasonably estimated.

The above table does not reflect the following items:

• Contributions to our retirement pension benefit plans which we estimate will total approximately $3,960 in 2012. As of September 30, 2011 our pension plans were underfunded by $25,349 based on projected benefit obligations. Statutory pension contributions in future fiscal years will vary as a result of a number of factors, including actual plan asset returns and interest rates.

45

• Contributions to our other postretirement benefit plans which we estimate will total $4,493 in 2012. Other postretirement contributions are made on a “pay-as-you-go” basis as payments are made to healthcare providers, and such contributions will vary as a result of changes in the future cost of postretirement healthcare benefits provided for covered retirees. As of September 30, 2011, our other postretirement benefit plans were underfunded by $32,923 based on projected benefit obligations.

• Business commitments made to certain customers to perform under long-term product development projects, some of which may result in near-term financial losses. Such losses, if any, are recognized when they become likely to occur.

Guarantees and letters of credit totaling approximately $7,612 were outstanding as of September 30, 2011, some of which were secured by cash and cash equivalents at financial institutions or by Woodward line of credit facilities.

In the event of a change in control of Woodward, as defined in change-in-control agreements with our current corporate officers, we may be required to pay termination benefits to such officers.

In connection with the sale of the F&P product line during fiscal year 2009, we assigned to a subsidiary of the purchaser our rights and responsibilities related to certain contracts with the U.S. Government. We provided to the U.S. Government a customary guarantee of the obligations of the purchaser’s subsidiary under the contracts. The purchaser has agreed to indemnify us for any liability incurred with respect to the guarantee.

New Accounting Standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our Consolidated Financial Statements upon adoption.

To understand the impact of recently issued guidance, whether adopted or to be adopted, please review the information provided in our Note 2, New accounting standards, in the notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we have exposures to interest rate risk from our long-term and short-term debt, and our postretirement benefit plans, and foreign currency exchange rate risk related to our foreign operations and foreign currency transactions.

Interest Rate Risk

Derivative instruments utilized by us are viewed as risk management tools, involve little complexity, and are not used for trading or speculative purposes. To manage interest rate risk related to the $400,000 of long-term debt issued in October 2008, we used a treasury lock which locked in interest rates on the then future debt. The treasury lock agreement was designated as a cash flow hedge against interest rate risk on a portion of the debt issued in October 2008. Similarly, we used a LIBOR lock agreement with a notional amount of $50,000 which hedged the risk of variability in cash flows over a seven-year period related to future interest payments of a portion of the anticipated long-term debt issued in April of 2009 in connection with the acquisition of HRT.

A portion of our long and short-term debt is sensitive to changes in interest rates. As of September 30, 2011, our term loan of $64,375 and advances on our revolving credit facility of $0 include interest rates that fluctuate with market rates. A hypothetical 1% increase in the assumed effective interest rates that apply to the variable rate loan outstanding on September 30, 2011 and the average borrowings on our revolving credit facility in fiscal year 2011 would cause our annual interest expense to increase approximately $924. A hypothetical 0.23% decrease in interest rates that apply to our variable loan outstanding on September 30, 2011 and the average borrowings on our revolving credit facility, which would effectively reduce the variable component of the applicable interest rates to 0%, would decrease our annual interest expense by approximately $217.

The discount rate and future return on plan asset assumptions used to calculate the funding status of our retirement benefit plans are also sensitive to changes in interest rates. The discount rate assumption used to value the defined benefit pension plans as of September 30, 2011 was 5.6% in the U.S., 5.1% in the United Kingdom, 1.5% in Japan and 2.5% in Switzerland. The discount rate assumption used to value the other postretirement benefit plans was 5.5%.

46

The following information illustrates the sensitivity of the net periodic benefit cost and the projected accumulated benefit obligation to a change in the discount rate assumed. Amounts relating to foreign plans are translated at the spot rate on September 30, 2011. It should be noted that economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in assumptions are not necessarily linear due to factors such as the 10% corridor applied to the larger of the postretirement benefit obligation or the fair market value of plan assets when determining amortization of actuarial net gains or losses.

		Increase/(Decrease) In
					2012			Post Retirement
		2012 Net			Projected			Benefit
		Periodic			Service and			Obligation as of
Assumption	Change	Benefit Cost			Interest Costs			Sept. 30, 2011
Defined benefit pension benefits:
Change in discount rate	1% increase	$	(1,327	)	$	(443	)	$	(21,575	)
	1% decrease		2,358			403			26,480
Other postretirement benefits:
Change in discount rate	1% increase		(116	)		140			(2,584	)
	1% decrease		(10	)		(172	)		2,998

Foreign Currency Exchange Rate Risk

We are impacted by changes in foreign currency exchange rates through sales and purchasing transactions when we sell product in currencies different from the currency in which product and manufacturing costs were incurred. The functional currencies of our worldwide facilities primarily include the USD, the Euro, and the GBP. Our purchasing and sales activities are primarily denominated in the USD, the Euro, and the GBP. We may be impacted by changes in the relative buying power of our customers, which may impact sales volumes either positively or negatively. As these currencies fluctuate against each other, and other currencies, we are exposed to foreign currency exchange rate risk on sales, purchasing transactions, and labor.

From time to time, we will enter into a foreign currency exchange rate contract to hedge against changes in foreign currency exchange rates on liabilities expected to be settled at a future date. Market risk arises from the potential adverse effects on the value of derivative instruments that result from a change in foreign currency exchange rates. We minimize this market risk by establishing and monitoring parameters that limit the types of, and degree to which we enter into, derivative instruments. We enter into derivative instruments for risk management purposes only. We do not enter into or issue derivatives for trading or speculative purposes.

Our reported financial results of operations, including the reported value of our assets and liabilities, are also impacted by changes in foreign currency exchange rates. The assets and liabilities of substantially all of our subsidiaries outside the U.S. are translated at period end rates of exchange for each reporting period. Earnings and cash flow statements are translated at weighted-average rates of exchange. Although these translation changes have no immediate cash impact, the translation changes may impact future borrowing capacity, debt covenants, and overall value of our net assets.

Currency exchange rates vary daily and often one currency strengthens against the USD while another currency weakens. Because of the complex interrelationship of the worldwide supply chains and distribution channels, it is difficult to quantify the impact of a particular change in exchange rates. We estimate that a 10% decrease in the purchasing power of the USD against all other currencies for one full fiscal year would increase both net sales and pretax earnings by approximately 3%. We estimate that a 10% increase in the purchasing power of the USD against all other currencies for one full fiscal year would decrease sales by approximately 3% and decrease pre-tax earnings by approximately 11%.

47

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Woodward, Inc.
Fort Collins, Colorado

We have audited the accompanying consolidated balance sheets of Woodward, Inc. and subsidiaries (the “Company”) as of September 30, 2011 and 2010, and the related consolidated statements of earnings, comprehensive earnings, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2011. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Woodward, Inc. and subsidiaries as of September 30, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for the non-controlling interest in a subsidiary on October 1, 2009 in accordance with Financial Accounting Standard Board codification standard ASC 810, Consolidation.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of September 30, 2011, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 16, 2011 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Denver, Colorado
November 16, 2011

48

WOODWARD, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except per share amounts)

	Year Ending September 30,
	2011			2010			2009
Net sales	$	1,711,702		$	1,457,030		$	1,430,125
Costs and expenses:
Cost of goods sold		1,198,153			1,021,516			1,029,095
Selling, general and administrative expenses		148,903			135,880			128,682
Research and development costs		115,633			82,560			78,536
Amortization of intangible assets		34,993			35,114			26,120
Restructuring and other charges		—			—			15,159
Interest expense		25,399			29,385			33,629
Interest income		(534	)		(509	)		(1,131	)
Other (income) expense, net		1,588			(1,791	)		(2,441	)
Total costs and expenses		1,524,135			1,302,155			1,307,649
Earnings before income taxes		187,567			154,875			122,476
Income tax expense		55,332			43,713			28,060
Net earnings		132,235			111,162			94,416
Earnings attributable to noncontrolling interests, net of taxes		—			(318	)		(64	)
Net earnings attributable to Woodward	$	132,235		$	110,844		$	94,352
Earnings per share (Note 3):
Basic earnings per share attributable to Woodward	$	1.92		$	1.62		$	1.39
Diluted earnings per share attributable to Woodward	$	1.89		$	1.59		$	1.37
Weighted Average Common Shares Outstanding (Note 3):
Basic		68,797			68,472			67,891
Diluted		70,140			69,864			69,103
Cash dividends per share paid to Woodward common stockholders	$	0.27		$	0.24		$	0.24

See accompanying Notes to Consolidated Financial Statements.

49

WOODWARD, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(in thousands, except per share amounts)

	Year Ending September 30,
	2011			2010			2009
Comprehensive earnings attributable to Woodward:
Net earnings attributable to Woodward	$	132,235		$	110,844		$	94,352
Other comprehensive earnings:
Foreign currency translation adjustments		(2,653	)		(8,718	)		6,098
Tax changes on foreign currency translation adjustments		1,604			2,406			(343	)
		(1,049	)		(6,312	)		5,755
Reclassification of realized losses on derivatives to earnings		229			282			237
Realized loss on cash flow hedge		—			—			(1,308	)
Tax changes on derivative transactions		(86	)		(108	)		407
		143			174			(664	)
Minimum retirement benefit liability adjustments:
Prior service (cost) benefit arising during the period		—			(3,963	)		1,427
Net (loss) gain arising during the period		(3,088	)		7,873			(25,311	)
Loss due to settlement arising during the period		—			345			246
Amortizaiton of:
Prior service benefit		(805	)		(1,517	)		(3,499	)
Net loss		1,339			1,525			574
Transition obligation asset		—			86			84
Foreign currency exchange rate changes		(376	)		60			(311	)
Tax changes on minimum retirement benefit liability adjustments		1,120			(2,058	)		11,343
		(1,810	)		2,351			(15,447	)
Comprehensive earnings attributable to Woodward		129,519			107,057			83,996
Comprehensive earnings attributable to noncontrolling interest:
Net earnings attributable to noncontrolling interests		—			318			64
Foreign currency translation adjustments		—			163			(87	)
Tax changes on foreign currency translation adjustments		—			(58	)		32
Comprehensive earnings attributable to noncontrolling interests		—			423			9
Total comprehensive earnings	$	129,519		$	107,480		$	84,005

See accompanying Notes to Consolidated Financial Statements.

50

WOODWARD, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	At September 30,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	74,539		$	105,579
Accounts receivable, less allowance for losses of $2,322 and $2,228, respectively		297,614			248,513
Inventories		381,555			295,034
Income taxes receivable		2,456			18,170
Deferred income tax assets		38,270			33,689
Other current assets		23,359			18,157
Total current assets		817,793			719,142
Property, plant and equipment, net		206,725			193,524
Goodwill		462,282			438,594
Intangible assets, net		268,897			292,149
Deferred income tax assets		10,466			8,623
Other assets		15,271			11,201
Total assets	$	1,781,434		$	1,663,233
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	$	—		$	22,099
Current portion of long-term debt		18,374			18,493
Accounts payable		123,453			107,468
Income taxes payable		5,440			5,453
Deferred income tax liability		74			—
Accrued liabilities		133,516			109,052
Total current liabilities		280,857			262,565
Long-term debt, less current portion		406,875			425,250
Deferred income tax liabilities		85,911			88,249
Other liabilities		88,694			83,975
Total liabilities		862,337			860,039
Commitments and contingencies (Note 20)
Stockholders’ equity:
Preferred stock, par value $0.003 per share, 10,000 shares authorized, no shares issued		—			—
Common stock, par value $0.001455 per share, 150,000 shares authorized, 72,960 shares issued		106			106
Additional paid-in capital		81,453			73,915
Accumulated other comprehensive earnings		3,626			6,342
Deferred compensation		4,581			4,888
Retained earnings		949,573			835,919
		1,039,339			921,170
Treasury stock at cost, 4,070 shares and 4,223 shares, respectively		(115,661	)		(113,088	)
Treasury stock held for deferred compensation, at cost, 315 shares and 356 shares, respectively		(4,581	)		(4,888	)
Total stockholders’ equity		919,097			803,194
Total liabilities and stockholders’ equity	$	1,781,434		$	1,663,233

See accompanying Notes to Condensed Consolidated Financial Statements.

51

WOODWARD, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ending September 30,
	2011			2010			2009
Cash flows from operating activities:
Net earnings	$	132,235		$	111,162		$	94,416
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		75,393			75,616			63,948
Net loss (gain) on sales of assets		644			(131	)		(188	)
Stock-based compensation		6,590			6,686			5,499
Excess tax benefits from stock-based compensation		(3,558	)		(5,115	)		(2,695	)
Deferred income taxes		(10,321	)		16,358			17,233
Loss on derivatives reclassified from accumulated comprehensive earnings into earnings		229			282			237
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable		(49,393	)		(40,688	)		37,760
Inventories		(76,643	)		5,896			52,586
Accounts payable and accrued liabilities		27,679			34,426			(44,834	)
Current income taxes		19,064			998			(4,034	)
Retirement benefit obligations		(8,322	)		(13,672	)		(3,343	)
Other		1,026			(7,246	)		2,642
Net cash provided by operating activities		114,623			184,572			219,227
Cash flows from investing activities:
Payments for purchase of property, plant, and equipment		(48,255	)		(28,104	)		(28,947	)
Proceeds from sale of assets		59			312			16,637
Business acquisition, net of cash and marketable securities acquired		(38,698	)		(25,000	)		(749,820	)
Business acquisition, marketable securities acquired		(8,463	)		—			—
Proceeds from sale of marketable securities		8,217			—			—
Proceeds from disposal of Fuel & Pneumatics product line		—			660			48,000
Net cash used in investing activities		(87,140	)		(52,132	)		(714,130	)
Cash flows from financing activities:
Cash dividends paid		(18,581	)		(17,085	)		(16,864	)
Proceeds from sales of treasury stock		2,482			1,999			4,631
Payments for repurchases of common stock		(6,837	)		(4,513	)		(866	)
Excess tax benefits from stock compensation		3,558			5,115			2,695
Purchase of noncontrolling interest		—			(8,120	)		—
Net proceeds from issuance of debt		—			—			620,000
Borrowings on revolving lines of credit and short-term borrowings		164,557			106,019			145,702
Payments on revolving lines of credit and short-term borrowings		(182,728	)		(83,980	)		(149,731	)
Payments of long-term debt		(18,430	)		(128,420	)		(92,392	)
Payments of long-term debt assumed in MPC acquisition		—			—			(18,610	)
Payments for cash flow hedge		—			—			(1,308	)
Debt financing costs		—			—			(5,892	)
Net cash (used in) provided by financing activities		(55,979	)		(128,985	)		487,365
Effect of exchange rate changes on cash and cash equivalents		(2,544	)		1,261			(1,432	)
Net change in cash and cash equivalents		(31,040	)		4,716			(8,970	)
Cash and cash equivalents at beginning of period		105,579			100,863			109,833
Cash and cash equivalents at end of period	$	74,539		$	105,579		$	100,863

See accompanying Notes to Condensed Consolidated Financial Statements.

52

WOODWARD, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except per share amounts)

	Number of shares										Stockholders’ equity
																Accumulated other comprehensive earnings
																									Total
								Treasury								Foreign						Minimum			accumulated												Treasury			Noncontrolling
								stock held for					Additional			currency			Unrealized			retirement			other									Treasury			stock held for			interest in			Total
	Preferred		Common		Treasury			deferred			Common		paid-in			translation			derivative			benefit liability			comprehensive			Deferred			Retained			stock at			deferred			consolidated			stockholders’
	stock		stock		stock			compensation			stock		capital			adjustments			losses			adjustments			earnings			compensaton			earnings			cost			compensation			subsidiary			equity
Balances as of October 1, 2008		—		72,960		(5,261	)		(404	)	$	106	$	68,520		$	23,709		$	(137	)	$	(3,087	)	$	20,485		$	5,283		$	663,442		$	(122,759	)	$	(5,283	)	$	2,622		$	632,416
Net earnings		—		—		—			—			—		—			—			—			—			—			—			94,352			—			—			64			94,416
Cash dividends paid		—		—		—			—			—		—			—			—			—			—			—			(16,289	)		—			—			(575	)		(16,864	)
Purchases of treasury stock		—		—		(42	)		—			—		—			—			—			—			—			—			—			(866	)		—			—			(866	)
Sale of treasury stock		—		—		647			—			—		(3,821	)		—			—			—			—			—			—			7,778			—			—			3,957
Tax benefit attributable to exercise of stock options		—		—		—			—			—		2,695			—			—			—			—			—			—			—			—			—			2,695
Stock-based compensation		—		—		—			—			—		5,499			—			—			—			—			—			—			—			—			—			5,499
Purchase of stock by deferred compensation plan		—		—		35			(38	)		—		304			—			—			—			—			96			—			369			(96	)		—			673
Distribution of stock from deferred compensation plan		—		—		—			53			—		—			—			—			—			—			(475	)		—			—			475			—			—
Foreign currency translation adjustments		—		—		—			—			—		—			6,098			—			—			6,098			—			—			—			—			(87	)		6,011
Reclassification of unrecognized derivative losses to earnings		—		—		—			—			—		—			—			237			—			237			—			—			—			—			—			237
Realized loss on cash flow hedge		—		—		—			—			—		—			—			(1,308	)		—			(1,308	)		—			—			—			—			—			(1,308	)
Minimum retirement benefits liability adjustments		—		—		—			—			—		—			—			—			(26,790	)		(26,790	)		—			—			—			—			—			(26,790	)
Taxes on changes in accumulated other comprehensive earnings		—		—		—			—			—		—			(343	)		407			11,343			11,407			—			—			—			—			32			11,439
Balances as of September 30, 2009		—		72,960		(4,621	)		(389	)		106		73,197			29,464			(801	)		(18,534	)		10,129			4,904			741,505			(115,478	)		(4,904	)		2,056			711,515
Net earnings		—		—		—			—			—		—			—			—			—			—			—			110,844			—			—			318			111,162
Cash dividends paid		—		—		—			—			—		—			—			—			—			—			—			(16,430	)		—			—			(655	)		(17,085	)
Purchases of treasury stock		—		—		(307	)		—			—		—			—			—			—			—			—			—			(8,703	)		—			—			(8,703	)
Sale of treasury stock		—		—		702			—			—		(4,929	)		—			—			—			—			—			—			11,049			—			—			6,120
Purchase of noncontrolling interest		—		—		—			—			—		(6,180	)		(116	)		—			—			(116	)		—			—			—			—			(1,824	)		(8,120	)
Tax benefit attributable to exercise of stock options		—		—		—			—			—		5,115			—			—			—			—			—			—			—			—			—			5,115
Stock-based compensation		—		—		—			—			—		6,686			—			—			—			—			—			—			—			—			—			6,686
Purchase of stock by deferred compensation plan		—		—		3			(3	)		—		26			—			—			—			—			169			—			44			(169	)		—			70
Distribution of stock from deferred compensation plan		—		—		—			36			—		—			—			—			—			—			(185	)		—			—			185			—			—
Foreign currency translation adjustments		—		—		—			—			—		—			(8,602	)		—			—			(8,602	)		—			—			—			—			163			(8,439	)
Reclassification of unrecognized derivative losses to earnings		—		—		—			—			—		—			—			282			—			282			—			—			—			—			—			282
Minimum retirement benefits liability adjustments		—		—		—			—			—		—			—			—			4,409			4,409			—			—			—			—			—			4,409
Taxes on changes in accumulated other comprehensive earnings		—		—		—			—			—		—			2,406			(108	)		(2,058	)		240			—			—			—			—			(58	)		182
Balances as of September 30, 2010		—		72,960		(4,223	)		(356	)		106		73,915			23,152			(627	)		(16,183	)		6,342			4,888			835,919			(113,088	)		(4,888	)		—			803,194
Net earnings		—		—		—			—			—		—			—			—			—			—			—			132,235			—			—			—			132,235
Cash dividends paid		—		—		—			—			—		—			—			—			—			—			—			(18,581	)		—			—			—			(18,581	)
Purchases of treasury stock		—		—		(301	)		—			—		—			—			—			—			—			—			—			(9,700	)		—			—			(9,700	)
Sale of treasury stock		—		—		452			—			—		(2,643	)		—			—			—			—			—			—			7,127			—			—			4,484
Tax benefit attributable to exercise of stock options		—		—		—			—			—		3,558			—			—			—			—			—			—			—			—			—			3,558
Stock-based compensation		—		—		—			—			—		6,590			—			—			—			—			—			—			—			—			—			6,590
Purchase of stock by deferred compensation plan		—		—		2			(5	)		—		33			—			—			—			—			149			—			—			(149	)		—			33
Distribution of stock from deferred compensation plan		—		—		—			46			—		—			—			—			—			—			(456	)		—			—			456			—			—
Foreign currency translation adjustments		—		—		—			—			—		—			(2,653	)		—			—			(2,653	)		—			—			—			—			—			(2,653	)
Reclassification of unrecognized derivative losses to earnings		—		—		—			—			—		—			—			229			—			229			—			—			—			—			—			229
Minimum retirement benefits liability adjustments		—		—		—			—			—		—			—			—			(2,930	)		(2,930	)		—			—			—			—			—			(2,930	)
Taxes on changes in accumulated other comprehensive earnings		—		—		—			—			—		—			1,604			(86	)		1,120			2,638			—			—			—			—			—			2,638
Balances as of September 30, 2011		—		72,960		(4,070	)		(315	)	$	106	$	81,453		$	22,103		$	(484	)	$	(17,993	)	$	3,626		$	4,581		$	949,573		$	(115,661	)	$	(4,581	)	$	—		$	919,097

See accompanying Notes to Condensed Consolidated Financial Statements.

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Note 1. Operations and summary of significant accounting policies

Basis of presentation

The Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Woodward, Inc. and its subsidiaries (collectively “Woodward” or “the Company”). Dollar amounts contained in these Consolidated Financial Statements are in thousands, except per share amounts.

Nature of operations

Woodward is an independent designer, manufacturer, and service provider of energy control and optimization solutions. Woodward designs, produces and services reliable, efficient, low-emission, and high-performance energy control products for diverse applications in challenging environments. Woodward has significant production and assembly facilities in the United States, Europe and Asia, and promotes its products and services through its worldwide locations.

Woodward’s strategic focus is providing energy control solutions for the aerospace and energy markets. The precise and efficient control of energy, including fluid and electrical energy, combustion, and motion, is a growing requirement in the markets it serves. Woodward’s customers look to it to optimize the efficiency, emissions and operation of power equipment in both commercial and military operations. Woodward’s core technologies leverage well across its markets and customer applications, enabling it to develop and integrate cost-effective and state-of-the-art fuel, combustion, fluid, actuation and electronic systems. Woodward focuses primarily on original equipment manufacturers (“OEMs”) and equipment packagers, partnering with them to bring superior component and system solutions to their demanding applications. Woodward also provides aftermarket repair, replacement and other service support for its installed products.

Woodward’s components and integrated systems optimize performance of commercial aircraft, military aircraft, ground vehicles and other equipment, gas and steam turbines, wind turbines, including converters and power grid related equipment, industrial diesel, gas and alternative fuel reciprocating engines, and electrical power systems. Woodward’s innovative fluid energy, combustion control, electrical energy, and motion control systems help its customers offer more cost-effective, cleaner, and more reliable equipment. Woodward’s customers include leading OEMs and the end users of their products.

Woodward serves two significant markets — the aerospace market and the energy market. In order to better serve these markets, Woodward completed a realignment of its reportable segments in September 2011 and now reports its financial results through two reportable segments — Aerospace and Energy. The Aerospace segment combines the aircraft propulsion portion of the former Turbine Systems business group, now referred to as the Aircraft Turbine Systems business group, with the Airframe Systems business group. The Energy segment combines the industrial turbine portion of the former Turbine Systems business group, now referred to as the Industrial Turbomachinery Systems business group, with the Engine Systems and Electrical Power Systems business groups.

Woodward uses reportable segment information internally to manage its business, including the assessment of business segment performance and making decisions on the allocation of resources between segments.

Prior period information has been revised to be consistent with the Company’s current reportable segment structure, which is based upon how it managed its business as of September 30, 2011.

Summary of significant accounting policies

Principles of consolidation: These Consolidated Financial Statements are prepared in accordance with U.S. GAAP and include the accounts of Woodward and its wholly and majority-owned subsidiaries. Transactions within and between these companies are eliminated.

Use of estimates: The preparation of the Consolidated Financial Statements requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, at the date of the financial statements and the reported revenues and expenses recognized during the reporting period, and certain financial statement disclosures. Significant estimates include allowances for doubtful accounts, net realizable value of inventories, percent complete on long-term contracts, cost of sales incentives, useful lives of property and identifiable intangible assets, the evaluation of impairments of property, identifiable intangible assets and goodwill, the provision for income tax and related valuation reserves, the valuation of assets and liabilities acquired in business combinations, assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans, the valuation of stock compensation instruments granted to employees, and contingencies. Actual results could vary materially from Woodward’s estimates.

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Foreign currency exchange rates: The assets and liabilities of substantially all subsidiaries outside the U.S. are translated at fiscal year-end rates of exchange, and earnings and cash flow statements are translated at weighted-average rates of exchange. Translation adjustments are accumulated with other comprehensive earnings as a separate component of stockholders’ equity and are presented net of tax effects in the Consolidated Statements of Stockholders’ Equity. The effects of changes in foreign currency exchange rates on loans between consolidated subsidiaries, that are considered permanent in nature, are also accumulated with other comprehensive earnings, net of tax.

The Company is exposed to market risks related to fluctuations in foreign currency exchange rates because some sales transactions, and certain of the assets and liabilities of its domestic and foreign subsidiaries, are denominated in foreign currencies. Selling, general, and administrative expenses include net foreign currency transaction gains of $575 in 2011, $425 in 2010, and $251 in 2009.

Revenue recognition: Woodward recognizes revenue upon shipment or delivery of tangible products for sale. Delivery is upon completion of manufacturing, customer acceptance, and the transfer of the risks and rewards of ownership. In countries whose laws provide for retention of some form of title by sellers, enabling recovery of goods in the event of customer default on payment, product delivery is considered to have occurred when the customer has assumed the risks and rewards of ownership of the products.

Occasionally, Woodward transfers title of product to customers, but retains substantive performance obligations such as completion of product testing, customer acceptance or in some instances regulatory acceptance. Revenue is deferred until the performance obligations are satisfied.

Woodward provides certain development services to customers under fully funded, partially funded and unfunded long and short-term development contracts. Revenue for such contracts is recognized using the percentage-of-completion, milestone or completed contract methods. Funded development contracts may be fixed price or cost-reimbursable contracts. Anticipated losses on fully funded contracts, if any, are recognized in the period in which the losses become probable and estimable.

Certain Woodward products include incidental software or firmware essential to the performance of the product as designed which are treated as units of accounting associated with the related tangible product with which the software is included. Woodward does not sell software on a standalone basis, although software upgrades, if any, are generally paid for by the customer.

Customer payments: Woodward occasionally agrees to make payments to certain customers in order to participate in anticipated sales activity. Payments made to customers are accounted for as a reduction of revenue unless they are made in exchange for identifiable goods or services with fair values that can be reasonably estimated. Reductions in revenue associated with these customer payments are recognized immediately to the extent that the payments cannot be attributed to anticipated future sales, and are recognized in future periods to the extent that the payments relate to anticipated future sales. Such determinations are based on the facts and circumstances underlying each payment.

Stock-based compensation: Compensation cost relating to stock-based payment awards made to employees and directors is recognized in the financial statements using a fair value method. Non-qualified stock option awards and restricted stock awards are issued under Woodward’s stock-based compensation plans. Woodward measures for the cost of such awards, measured at the grant date, based on the estimated fair value of the award.

Forfeitures are estimated at the time of each grant in order to estimate the portion of the award that will ultimately vest. The estimate is based on Woodward’s historical rates of forfeitures and is updated periodically. The portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods, which is generally the vesting period of the awards.

Research and development costs: Expenditures related to new product development activities in excess of fully and partially funded development contract amounts, if applicable, are expensed when incurred and are separately reported in the Consolidated Statements of Earnings.

Restructuring and other charges: Restructuring charges related to workforce management were recognized as expense in March 2009. Non-cash charges for impairment of a vacated facility were recognized as expense in fiscal year 2009. Restructuring charges related to 2009 business acquisitions, including items such as costs associated with integrating similar operations, workforce management, vacating certain facilities, and the cancellation of certain contracts, were recognized as a liability as of the acquisition date. Adjustments to the initial estimate determined within the allocation period, which is generally not more than one year, are treated as an adjustment to the liabilities recorded in the acquisitions. Adjustments to the initial estimate determined after the allocation period are included in the determination of net earnings in the period in which the adjustment is identified.

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Under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, the acquirer in a business combination can generally only recognize liabilities for plans to exit an activity, involuntarily terminate employees, or relocate employees of an acquiree, if the acquiree, as of the acquisition date, has a current plan in place and certain criteria are satisfied. This differs from the accounting requirements under FASB Statement 141, “Business Combinations” in which the acquirer could recognize liabilities as of the acquisition date for plans to exit an activity, involuntarily terminate employees, or relocate employees of an acquiree, if the criteria were met in Emerging Issues Task Force (“EITF”) Issue No. 95-3, “Recognition of Liabilities in Connection With a Purchase Business Combination.”

A summary of the activity in accrued restructuring charges during the fiscal years ending September 30, 2011 and 2010 can be found at Note 14, Accrued Liabilities.

Income taxes: Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of Woodward’s assets, liabilities, and certain unrecognized gains and losses recorded in accumulated other comprehensive earnings. Woodward provides for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the U.S., except for those earnings that it considers to be permanently reinvested.

Cash equivalents: Highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents.

Cash and cash equivalents are maintained with multiple financial institutions. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. Woodward holds cash and cash equivalents at financial institutions in excess of amounts covered by the Federal Depository Insurance Corporation (the “FDIC”) and sometimes invests excess cash in money market funds not insured by the FDIC.

Accounts receivable: Almost all Woodward’s sales are made on credit and result in accounts receivable, which are recorded at the amount invoiced. In the normal course of business, not all accounts receivable are collected and, therefore, an allowance for losses of accounts receivable is provided equal to the amount that Woodward believes ultimately will not be collected. Customer-specific information is considered related to delinquent accounts, past loss experience, and current economic conditions in establishing the amount of its allowance. Accounts receivable losses are deducted from the allowance and the related accounts receivable balances are written off when the receivables are deemed uncollectible. Recoveries of accounts receivable previously written off are recognized when received.

In coordination with its customers and when terms are considered favorable to Woodward, Woodward sometimes transfers ownership to collect amounts due to Woodward for outstanding accounts receivable to third parties in exchange for cash. If such transfer of ownership is with recourse, then a short-term liability is recorded and is reflected in Woodward’s Cash Flow Statement as a financing source. The settlement of the transferred obligation is reflected in Woodward’s Cash Flow Statement as both cash flow from operations due to the collection of accounts receivable and cash used in financing as the prior recourse obligation is extinguished.

Inventories: Inventories are valued at the lower of cost or market, with cost generally being determined using methods that approximate a first-in, first-out basis.

Component parts include items that can be sold separately as finished goods or included in the manufacture of other products.

Customer deposits are recorded against inventory when the right of offset exists. All other customer deposits are recorded in accrued liabilities.

Property, plant, and equipment: Property, plant, and equipment are recorded at cost and are depreciated over the estimated useful lives of the assets. Assets are generally depreciated using the straight-line method. Certain buildings and improvements are depreciated using the declining-balance method. Assets are tested for recoverability whenever events or circumstances indicate the carrying value may not be recoverable.

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Estimated lives over which fixed assets are generally depreciated at September 30, 2011 were as follows:

Buildings and improvements	2-40 years
Leasehold improvements	1-40 years
Machinery and production equipment	2-15 years
Computer equipment and software	3-10 years
Other	2-20 years

Purchase accounting: Business combinations are accounted for using the purchase method of accounting. Under the purchase method, assets and liabilities, including intangible assets, are recorded at their fair values as of the acquisition date. Acquisition costs in excess of amounts assigned to assets acquired and liabilities assumed are recorded as goodwill.

Goodwill: Woodward tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment tests consist of comparing the implied fair value of reporting units with its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its implied fair value, Woodward compares the implied fair value of goodwill with the recorded carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value. As discussed in Note 10, Goodwill, Woodward changed the annual testing date for its goodwill impairment test from March 31 to July 31. As a result, during 2011, Woodward performed goodwill impairment tests as of March 31, 2011 and July 31, 2011. In addition, as of September 30, 2011, as part of its segment realignment, Woodward created two new reporting units, Aircraft Turbine Systems and Industrial Turbomachinery Systems that were previously included in the Turbine Systems reporting unit. See Note 21, Segment information for a discussion of the segment realignment that occurred.

Other intangibles: Other intangibles are recognized apart from goodwill whenever an acquired intangible asset arises from contractual or other legal rights, or whenever it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented, or exchanged, either individually or in combination with a related contract, asset, or liability. All of Woodward’s intangibles have an estimated useful life and are being amortized using patterns that reflect the periods over which the economic benefits of the assets are expected to be realized. Impairment losses are recognized if the carrying amount of an intangible is both not recoverable and exceeds its fair value.

Estimated lives over which intangible assets are amortized at September 30, 2011 were as follows:

Customer relationships	9-30 years
Intellectual property	10-17 years
Process technology	8-30 years
Other	1-15 years

Impairment of long-lived assets: Woodward reviews the carrying value of its long-lived assets or asset groups to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value. There was no impairment charge recorded in fiscal year 2011, fiscal year 2010, or fiscal year 2009.

Investment in marketable equity securities: Woodward holds marketable equity securities related to its deferred compensation program. Based on Woodward’s intentions regarding these instruments, marketable equity securities are classified as trading securities. The trading securities are reported at fair value, with realized gains and losses recognized in earnings. The trading securities are included in “Other current assets.” The associated obligation to provide benefits is included in “Other liabilities.”

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Investments in unconsolidated subsidiaries: Investments in and operating results of entities in which Woodward does not have a controlling financial interest or the ability to exercise significant influence over the operations are included in the financial statements using the cost method of accounting. Investments and operating results of entities in which Woodward does not have a controlling interest but does have the ability to exercise significant influence over operations are included in the financial statements using the equity method of accounting.

Noncontrolling interests: On October 1, 2009, the Company adopted new guidance which requires, among other things, noncontrolling financial interests be accounted for as a separate component of equity and that all transactions between the Company and the noncontrolling interest be accounted for as equity transactions.

In April 2010, the Company purchased the remaining 26% noncontrolling interest in Woodward Governor India Limited, a Woodward consolidated subsidiary, for $8,120. As a result of this transaction, Woodward now owns 100% of Woodward Governor India Limited and there are no other noncontrolling interests in Woodward’s consolidated subsidiaries.

The following is a summary of the effects of Woodward’s purchase of the remaining 26% noncontrolling interest in Woodward Governor India Limited on Woodward’s stockholders’ equity:

	Year Ending September 30,
	2011		2010			2009
Net earnings attributable to Woodward	$	132,235	$	110,844		$	94,352
Decrease in Woodward’s additional paid-in capital related to purchase of noncontrolling interest		—		(6,180	)		—
Change from net earnings attributable to Woodward and transfers to noncontrolling interest	$	132,235	$	104,664		$	94,352

Deferred compensation: The Company maintains a deferred compensation plan or “rabbi trust” as part of its overall compensation package for certain employees.

Deferred compensation obligations will be settled either by delivery of a fixed number of shares of Woodward’s common stock (in accordance with certain eligible members’ irrevocable elections) or in cash. Woodward has contributed shares of its common stock into a trust established for the future settlement of deferred compensation obligations that are payable in shares of Woodward’s common stock. Common stock held by the trust is reflected in the Consolidated Balance Sheet as “Treasury stock held for deferred compensation” and the related deferred compensation obligation is reflected as a separate component of equity in amounts equal to the fair value of the common stock at the dates of contribution. These accounts are not adjusted for subsequent changes in the fair value of the common stock. Deferred compensation obligations that will be settled in cash are accounted for on an accrual basis in accordance with the terms of the underlying contract and are reflected in the Consolidated Balance Sheet as “Other liabilities.”

Derivatives: The Company is exposed to various market risks that arise from transactions entered into in the normal course of business. The Company has historically utilized derivative instruments, such as treasury lock agreements to lock in fixed rates on future debt issuances, which qualify as cash flow or fair value hedges to mitigate the risk of variability in cash flows related to future interest payments attributable to changes in the designated benchmark rate. The Company records all such interest rate hedge instruments on the balance sheet at fair value. Cash flows related to the instrument designated as a qualifying hedge are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. Accordingly, cash flows relating to the settlement of interest rate derivatives hedging the forecasted future interest payments on debt have been reflected upon settlement as a component of financing cash flows. The resulting gain or loss from such settlement is deferred to other comprehensive income and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged and is therefore reflected as a component of operating cash flows in periods subsequent to settlement. The periodic settlement of interest rate derivatives hedging outstanding variable rate debt is recorded as an adjustment to interest expense and is therefore reflected as a component of operating cash flows.

From time to time, Woodward will enter into foreign currency exchange rate contracts to hedge against changes in foreign currency exchange rates on liabilities expected to be settled at a future date. Woodward has historically not designated these transactions as accounting hedges. The fair value of foreign currency exchange rate contracts held at the end of the period are recognized in the balance sheet and the unrealized gains or losses are recorded to “Other (income) expense, net” in the Statement of Earnings. Upon settlement of foreign currency exchange rate contracts, any unrealized gains or losses previously recognized are reversed and the realized gain or loss is recorded to “Other (income) expense, net” in the Statement of Earnings. Further information on foreign currency exchange rate contracts can be found at Note 6, Derivative instruments and hedging activities.

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Postretirement benefits: The Company provides various benefits to certain current and former employees through defined benefit pension and postretirement plans. For financial reporting purposes, net periodic benefits expense and related obligations are calculated using a number of significant actuarial assumptions. Changes in net periodic expense and funding status may occur in the future due to changes in these assumptions. The funded status of defined pension and postretirement plans recognized in the statement of financial position is measured as the difference between the fair market value of the plan assets and the benefit obligation. For a defined benefit pension plan, the benefit obligation is the projected benefit obligation; for any other defined benefit postretirement plan, such as a retiree health care plan, the benefit obligation is the accumulated benefit obligation. Any over-funded status is recognized as an asset and any underfunded status is recognized as a liability.

Projected benefit obligation is the actuarial present value as of the measurement date of all benefits attributed by the plan benefit formula to employee service rendered before the measurement date using assumptions as to future compensation levels if the plan benefit formula is based on those future compensation levels. Accumulated benefit obligation is the actuarial present value of benefits (whether vested or unvested) attributed by the plan benefit formula to employee service rendered before the measurement date and based on employee service and compensation, if applicable, prior to that date. Accumulated benefit obligation differs from projected benefit obligation in that it includes no assumption about future compensation levels.

Note 2. New accounting standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, Woodward believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Consolidated Financial Statements upon adoption.

In October 2009, the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue Arrangements” and ASU 2009-14, “Certain Revenue Arrangements That Include Software Elements.” ASU 2009-13 and ASU 2009-14 are required to be adopted concurrently in fiscal years beginning on or after June 15, 2010 (fiscal year 2011 for Woodward).

ASU 2009-13 changes the requirements for establishing separate units of accounting in a multiple element arrangement and requires the allocation of arrangement consideration to each deliverable based on the relative selling price. The selling price for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE nor TPE is available.

ASU 2009-14 excludes software that is contained on a tangible product from the scope of software revenue guidance if the software is essential to the tangible product’s functionality.

ASU 2009-13 and ASU 2009-14 were adopted by Woodward on October 1, 2010. The adoption did not impact the identification of or the accounting for separate units of accounting, including the pattern and timing of revenue recognition, and is not expected to have a significant impact on Woodward’s financial position, results of operations or cash flows in future periods. Woodward does not generally sell its products and services through arrangements that include multiple-deliverable arrangements, and the Company had no significant multiple-deliverable arrangements as of September 30, 2011.

In April 2010, the FASB issued ASU 2010-17, “Milestone Method of Revenue Recognition.” ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions, and requires certain disclosures regarding the use of the milestone method.

ASU 2010-17 was adopted by Woodward on October 1, 2010. The adoption did not impact the pattern or timing of revenue recognition and is not expected to have a significant impact on Woodward’s financial position, results of operations or cash flows in future periods. For certain development services provided to customers pursuant to funded long and short-term development contracts, Woodward recognizes revenue based on completion of substantive milestones determined based on the individual facts and circumstances of each arrangement. Total revenues recognized by Woodward based upon completion of substantive milestones as proscribed by ASU 2010-17 was $3,181 for the year ending September 30, 2011.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income.” ASU 2011-05 amends ASC Topic 220, Comprehensive Income, to require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements, and it eliminates the option to present components of other comprehensive income as a part of the statement of changes in stockholders’ equity. In addition, ASU 2011-05 requires an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. These amendments are to be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (fiscal 2013 for Woodward), early adoption is permitted. Woodward adopted ASU 2011-05 in the fourth quarter of fiscal year 2011. The adoption had no impact on Woodward’s Consolidated Financial Statements.

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In September 2011, the FASB issued ASU 2011-08, “Testing Goodwill for Impairment.” ASU 2011-08 allows companies to perform a “qualitative” assessment to determine whether or not the current two-step quantitative testing method, in which Woodward compares the fair value of reporting units to its carrying amount including goodwill, must be followed. If a qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, then the quantitative impairment test is not required. A company may choose to use the qualitative assessment on none, some, or all if its reporting units or to bypass the qualitative assessment and proceed directly to the two-step quantitative testing method. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011; however, early adoption is allowed. Woodward does not anticipate that the adoption of ASU 2011-08 will have a material impact on Woodward’s Consolidated Financial Statements.

Note 3. Earnings per share

Basic earnings per share attributable to Woodward is computed by dividing net earnings available to common stockholders by the weighted average number of shares of common stock outstanding for the period.

Diluted earnings per share attributable to Woodward reflects the weighted-average number of shares outstanding after consideration of the dilutive effect of stock options.

The following is a reconciliation of net earnings attributable to Woodward to basic earnings per share attributable to Woodward and diluted earnings per share attributable to Woodward:

	Year Ending September 30,
	2011		2010		2009
Numerator:
Net earnings attributable to Woodward	$	132,235	$	110,844	$	94,352
Denominator:
Basic shares outstanding		68,797		68,472		67,891
Dilutive effect of employee stock options		1,343		1,392		1,212
Diluted shares outstanding		70,140		69,864		69,103
Income per common share:
Basic earnings per share attributable to Woodward	$	1.92	$	1.62	$	1.39
Diluted earnings per share attributable to Woodward	$	1.89	$	1.59	$	1.37

The following stock option grants were outstanding during the fiscal years ending September 30, 2011, 2010 and 2009, but were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive:

	Year Ended September 30,
	2011		2010		2009
Options		684		1,106		739
Weighted-average option price	$	32.04	$	26.94	$	27.30

The weighted-average shares of common stock outstanding for basic and diluted earnings per share included the weighted-average treasury stock shares held for deferred compensation obligations of the following:

	Year Ending September 30,
	2011		2010		2009
Weighted-average treasury stock shares held for deferred compensation obligation		335		371		409

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Note 4. Business acquisitions and dispositions

Woodward has recorded the acquisitions described below using the purchase method of accounting and, accordingly, has included the results of operations of the acquired businesses in its consolidated results as of the date of each acquisition. In accordance with authoritative accounting guidance for business combinations, the respective purchase prices for these acquisitions are allocated to the tangible assets, liabilities, and intangible assets acquired based on their estimated fair values. The excess purchase price over the respective fair values of assets is recorded as goodwill. Goodwill is not amortized under U.S. GAAP but is tested for impairment at least annually (See Note 10, Goodwill).

IDS Acquisition

During the third quarter of fiscal year 2011, Woodward acquired all of the outstanding stock of Integral Drive Systems AG and its European companies, including their respective holding companies (“IDS”), and the assets of IDS’ business in China (together the “IDS Acquisition”) for an aggregate purchase price of approximately $48,412. The purchase price remains subject to certain customary post-closing adjustments. The estimated purchase price is included in “Cash flows from investing activities” in the Consolidated Statement of Cash Flows.

IDS is a developer and manufacturer of innovative power electronic systems predominantly in utility scale wind turbines and photovoltaic power plants. Additionally, IDS offers key products in power distribution and marine propulsion systems. In addition to wind turbines and photovoltaic plants, its products are used in offshore oil and gas platforms, energy storage and distribution systems, and a variety of industrial applications. IDS is being integrated into Woodward’s Energy segment.

The Company believes the IDS Acquisition expands its presence in wind converter offerings and reduces its time to market with expansion of solar energy, energy storage, and marine drives. Goodwill recorded in connection with the IDS Acquisition, which is not deductible for income tax purposes, represents the estimated value of such future opportunities, the value of potential expansion with new customers and the opportunity to further develop sales opportunities with new and acquired IDS customers, and anticipated synergies expected to be achieved through the integration of IDS into Woodward’s Energy segment.

Woodward has completed finalizing the valuations of current assets, property, plant and equipment (including estimated useful lives), intangible assets (including estimated useful lives), other current liabilities, postretirement benefits obligations, deferred tax liabilities, and other noncurrent liabilities.

As of September 30, 2011, $8,149 paid in connection with the IDS purchase was deposited into escrow accounts to secure Woodward’s ability to recover any amounts owed to Woodward by the seller as a result of customary indemnities related to representations and warranties made by the seller. Funds held in escrow will only be released to the seller as specified in the related purchase agreements. If Woodward were to receive funds from the escrow account in the future, the purchase price of IDS might be adjusted. The final purchase price is subject to normal closing balance sheet net asset adjustments typical in such transactions.

The preliminary purchase price of the IDS Acquisition is as follows:

Cash paid to seller	$	48,412
Less cash acquired		(1,251	)
Total estimated purchase price		47,161
Less marketable securities acquired		(8,463	)
Estimated price paid for business assets	$	38,698

The allocation of the purchase price for the IDS Acquisition was accounted for under the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed in the transaction were recorded at their acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred. The Company’s allocation was based on an evaluation of the appropriate fair values and represents management’s best estimate based on available data.

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The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the IDS Acquisition:

Current assets	$	14,627
Investments in marketable securities		8,463
Property, plant, and equipment		1,954
Goodwill		24,188
Intangible assets		11,882
Total assets acquired		61,114
Other current liabilities		5,505
Warranty accrual		2,250
Postretirement benefits		434
Deferred tax liabilities		2,472
Other tax — noncurrent		3,292
Total liabilities assumed		13,953
Net assets acquired	$	47,161

There were no changes to the values of assets acquired and liabilities assumed during the six-months ending September 30, 2011. The fair value of warranty liabilities assumed represents the estimated costs to provide service for contractual warranty obligations on products sold by IDS prior to April 15, 2011. The fair value of “Other tax — noncurrent” represents the estimated value of gross unrecognized tax benefits assumed.

In connection with the IDS Acquisition, Woodward acquired various marketable securities, which are not classified as cash equivalents under U.S. GAAP. These marketable securities were sold during the fiscal quarter ended June 30, 2011 and reinvested into cash and cash equivalents consistent with Woodward’s internal investment and risk management policies. Losses on the sale of marketable securities were included in “Other (income) expense, net” in the Consolidated Statements of Earnings.

Also, in connection with the IDS Acquisition, Woodward assumed the net postretirement benefit obligations of several Swiss statutory retirement plans which are considered to be defined benefit plans under U.S. GAAP.

A summary of the intangible assets acquired, weighted average useful lives and amortization methods follows:

			Weighted
			Average Useful	Amortization
	Amount		Life	Method
Customer relationships	$	3,452	9 years	Straight-line
Process technology		7,752	8.5 years	Straight-line
Other		678	2.5 years	Straight-line
Total	$	11,882	8 years

The operating results of the IDS Acquisition are included in Woodward’s Consolidated Statements of Earnings and Comprehensive Earnings as of April 15, 2011. Pro forma financial disclosures have not been presented as the IDS Acquisition was not material to Woodward’s financial position or results of operations. The Company incurred transaction costs of $2,396 for the year ending September 30, 2011, which are included in “Selling, general and administrative expenses” in the Consolidated Statements of Earnings.

MPC Acquisition

On October 1, 2008, Woodward acquired all of the outstanding stock of Techni-Core, Inc. (“Techni-Core”) and all of the outstanding stock of MPC Products Corporation (“MPC Products” and, together with Techni-Core, “MPC”) not owned by Techni-Core for approximately $370,437. The purchase price, less approximately $18,610 of assumed outstanding debt, is included in “Cash flows from investing activities” in the Consolidated Statement of Cash Flows. The goodwill resulting from the MPC acquisition totaling $174,893 is not tax deductible. The purchase price allocation period has closed for MPC.

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MPC is an industry leader in the manufacture of high-performance electromechanical motion control systems, primarily for aerospace applications. MPC’s main product lines include high performance electric motors and sensors, analog and digital control electronics, rotary and linear actuation systems, and flight deck and fly-by-wire systems for commercial and military aerospace programs. Through an improved focus on aerospace energy control solutions, MPC complements Woodward’s energy and motion control technologies enhancing Woodward’s system offerings. MPC formed the basis of Woodward’s Airframe Systems business group, which is included in its Aerospace segment.

At the time of the acquisition of MPC, MPC Products was subject to an investigation by the U.S. Department of Justice (the “DOJ”) regarding certain of its pre-2005 government contract pricing practices and related administrative actions by the U.S. Department of Defense (the “DOD”). In October 2009, MPC reached an agreement with the DOJ to resolve the criminal and civil claims, whereby MPC paid $25,000 in compensation and fines. Payments associated with this pre-acquisition contingency were incremental to the estimated MPC purchase price. The purchase price paid by Woodward in connection with the MPC acquisition was reduced by $25,000 at closing to reflect this contingency.

The results of MPC’s operations are included in Woodward’s Consolidated Statements of Earnings and Comprehensive Earnings beginning October 1, 2008.

MotoTron Acquisition

On October 6, 2008, Woodward acquired MotoTron Corporation (“MotoTron”) and the intellectual property assets owned by its parent company, Brunswick Corporation, which were used in connection with the MotoTron business for approximately $17,237. The purchase price is included in “Cash flows from investing activities” in the Consolidated Statement of Cash Flows. The goodwill resulting from the MotoTron acquisition totaling $6,396 is not tax deductible. The purchase price allocation period has closed for MotoTron.

MotoTron specializes in software tools and processes used to rapidly develop control systems for marine, power generation, industrial, and other engine equipment applications. MotoTron has been fully integrated into Woodward’s Engine Systems business group, which is included in its Energy segment.

MotoTron has been an important supplier and partner to Woodward since 2002 and has helped Woodward to better position itself in electronic control technologies for the alternative-fueled bus and mobile equipment markets. The acquisition of MotoTron further strengthened Woodward’s ability to serve the transportation and power generation markets.

The results of MotoTron’s operations are included in Woodward’s Consolidated Statements of Earnings and Comprehensive Earnings as of October 6, 2008. If the MotoTron acquisition had been completed on October 1, 2008, Woodward’s net sales and net earnings for the fiscal year ending September 30, 2009 would not have been materially different from amounts reported in the Consolidated Statements of Earnings and Comprehensive Earnings.

HRT Acquisition

On April 3, 2009, Woodward acquired all of the outstanding stock of HR Textron Inc. from Textron Inc., its parent company, and the United Kingdom assets and certain liabilities related to HR Textron Inc.’s business (collectively “HRT”) for approximately $380,749. The purchase price is included in “Cash flows from investing activities” in the Consolidated Statement of Cash Flows. The goodwill resulting from the HRT acquisition totaling $142,699 is tax deductible. The purchase price allocation period has closed for HRT.

Woodward made a 338(h)(10) election with the U.S. Internal Revenue Service, which allows the HRT acquisition to be treated as an asset purchase for income tax purposes. Accordingly, any deferred tax assets and liabilities recorded by Textron Inc. at the acquisition date are not available to Woodward.

HRT is an industry leader in advanced technology, engineering development, and manufacturing of mission-critical actuation systems and controls for aircraft, turbine engines, weapons and combat vehicles. It is recognized for hydraulic and electric primary flight control actuation products, including electro-mechanical actuation systems for unmanned combat air vehicles and weapons, such as the Joint Direct Attack Munitions (JDAM) and the AIM-9X Sidewinder; hydraulic and electric flight controls for fixed and rotor wing aircraft; servovalves for global aerospace; turret controls and stabilization systems for the U.S. M1 Abrams Main Battle Tank and other armored vehicles worldwide; and fuel and pneumatics valves for aircraft and helicopters. HRT has been integrated into Woodward’s Airframe Systems business group, which is included in its Aerospace segment.

The results of HRT’s operations are included in Woodward’s Consolidated Statements of Earnings and Comprehensive Earnings as of April 3, 2009.

On August 10, 2009, Woodward HRT sold the Fuel & Pnuematics (“F&P) product line, for $48,000. During 2010, Woodward received an additional $660 related to working capital adjustments typical in such transactions. The working capital adjustment amount is included in “Cash flows from investing activities” in the Consolidated Statement of Cash Flows. The F&P product line provided a variety of off-turbine fuel management and pneumatic actuation components to producers of military and commercial aircraft and helicopters, as well as their suppliers. Woodward’s 2009 results of operations include approximately $9,620 of sales and $3,897 of pre-tax earnings from the F&P product line for the period April 3, 2009 to August 10, 2009. There was no gain or loss on disposal of the F&P product line.

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Pro forma results for Woodward giving effect to the HRT acquisition

The following unaudited pro forma financial information presents the combined results of operations of Woodward and HRT as if the acquisition had occurred as of the beginning of fiscal year 2009. No pro forma adjustments have been made for MPC as it was acquired by Woodward on October 1, 2008 and the results of MPC’s operations are included in Woodward’s Consolidated Statements of Earnings beginning October 1, 2008. No pro forma adjustment have been made for MotoTron as it was acquired on October 6, 2008 and the results of MotoTron’s operations are included in Woodward’s Consolidated Statements of Earnings as of October 6, 2008. If the MotoTron acquisition had been completed on October 1, 2008, Woodward’s net sales and net earnings for the fiscal year ending September 30, 2009 would not have been materially different from the amounts reported in the Consolidated Statements of Earnings for the fiscal year ending September 30, 2009. The pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the HRT acquisition and related borrowings had taken place at the beginning of the fiscal year 2009. The unaudited pro forma financial information for the fiscal year ended September 30, 2009 includes the historical results of Woodward, including the post-acquisition results of HRT since April 3, 2009 and the historical results of HRT for the approximately six months ended April 2, 2009. No pro forma financial information is provided for the fiscal years ending September 30, 2011 and September 30, 2010 as full fiscal years of post-acquisition results of operations of MPC, MotoTron and HRT were included in Woodward’s Consolidated Statements of Earnings.

Prior to the HRT acquisition by Woodward, HRT was a wholly owned subsidiary of Textron Inc. and as such was not a stand-alone entity. Accordingly, the historical operating results of HRT may not be indicative of the results that might have been achieved, historically or in the future, if HRT had been a stand-alone entity. The unaudited pro forma results for all periods presented include amortization charges for acquired intangible assets, eliminations of intercompany transactions, adjustments for stock options and restricted stock issued, adjustments for depreciation expense for property, plant, and equipment, adjustments to interest expense, adjustments for estimated general and administrative costs for HRT’s historical management and administrative structure and functions, disposal of the F&P product line, and related tax effects.

The unaudited pro forma results follow for the fiscal year ending September 30, 2009:

	Year Ending September 30, 2009
	As reported		Pro froma
Net sales	$	1,430,125	$	1,532,181
Net earnings attributable to Woodward		94,352		93,144
Earnings per share:
Basic earnings per share attributable to Woodward	$	1.39	$	1.37
Diluted earnings per share attributable to Woodward		1.37		1.35

Note 5. Financial instruments and fair value measurements

The estimated fair values of Woodward’s financial instruments were as follows:

	At September 30, 2011						At September 30, 2010
		Estimated Fair					Estimated Fair
	Value			Carrying Cost			Value			Carrying Cost
Cash and cash equivalents	$	74,539		$	74,539		$	105,579		$	105,579
Investments in deferred compensation program		5,855			5,855			5,633			5,633
Short-term borrowings		—			—			(22,099	)		(22,099	)
Long-term debt, including current portion		(482,776	)		(425,246	)		(506,120	)		(443,673	)

The fair values of cash and cash equivalents, which include investments in money market funds, are assumed to be equal to their carrying amounts. Cash and cash equivalents have short-term maturities and market interest rates. Woodward’s cash and cash equivalents include funds deposited or invested in the U.S. and overseas that are not insured by the FDIC. Woodward believes that its deposited and invested funds are held by or invested with credit worthy financial institutions or counterparties.

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Investments related to the deferred compensation program used to provide deferred compensation benefits to certain employees are carried at market value.

The fair values of short-term borrowings at variable interest rates are assumed to be equal to their carrying amounts because such borrowings are expected to be repaid or settled for their carrying amounts within a short period of time.

The fair value of long-term debt at fixed interest rates was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity. The weighted-average interest rates used to estimate the fair value of long-term debt at fixed interest rates were as follows:

	At September 30,
	2011			2010
Weighted-average interest rate used to estimate fair value		2.6	%		2.9	%

Financial assets and liabilities recorded at fair value in the Consolidated Balance Sheet are categorized based upon a fair value hierarchy established by U.S. GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3: Inputs reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

The table below presents information about Woodward’s financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques Woodward utilized to determine such fair value. Woodward had no financial liabilities required to be measured at fair value on a recurring basis as of September 30, 2011 or September 30, 2010.

	At September 30, 2011								At September 30, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial assets:
Investments in money market funds	$	10,823	$	—	$	—	$	10,823	$	50,360	$	—	$	—	$	50,360
Equity securities		5,855		—		—		5,855		5,633		—		—		5,633
Foreign exchange forward contract		—		—		—		—		—		579		—		579
Total financial assets	$	16,678	$	—	$	—	$	16,678	$	55,993	$	579	$	—	$	56,572

Investments in money market funds: Woodward sometimes invests excess cash in money market funds not insured by the FDIC. Woodward believes that the investments in money market funds are on deposit with creditworthy financial institutions and that the funds are highly liquid. The investments in money market funds are reported at fair value, with realized gains from interest income realized in earnings and are included in “Cash and cash equivalents.” The fair values of Woodward’s investments in money market funds are based on the quoted market prices for the net asset value of the various money market funds.

Equity securities: Woodward holds marketable equity securities, through investments in various mutual funds, related to its deferred compensation program. Based on Woodward’s intentions regarding these instruments, marketable equity securities are classified as trading securities. The trading securities are reported at fair value, with realized gains and losses recognized in earnings. The trading securities are included in “Other current assets.” The fair values of Woodward’s trading securities are based on the quoted market prices for the net asset value of the various mutual funds.

Forward contracts: As of September 30, 2010, Woodward was a party to a forward contract. The fair value of the derivative instrument was derived from published foreign currency exchange rates as of September 30, 2010. The forward contract was settled in December 2010, resulting in a realized loss of $1,033.

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Note 6. Derivative instruments and hedging activities

Woodward is exposed to global market risks, including the effect of changes in interest rates, foreign currency exchange rates, changes in certain commodity prices and fluctuations in various producer indices. From time to time, Woodward enters into derivative instruments for risk management purposes only, including derivatives designated as accounting hedges and/or those utilized as economic hedges. Woodward uses interest rate related derivative instruments to manage its exposure to fluctuations of interest rates. Woodward not does enter into or issue derivatives for trading or speculative purposes.

By using derivative and/or hedging instruments to manage its risk exposure, Woodward is subject, from time to time, to credit risk and market risk on those derivative instruments. Credit risk arises from the potential failure of the counterparty to perform under the terms of the derivative and/or hedging instrument. When the fair value of a derivative contract is positive, the counterparty owes Woodward, which creates credit risk for Woodward. Woodward minimizes this credit risk by entering into transactions with only high quality counterparties. Market risk arises from the potential adverse effects on the value of derivative and/or hedging instruments that result from a change in interest rates, commodity prices, or foreign currency exchange rates. Woodward minimizes this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

As of September 30, 2010, Woodward was a party to the forward foreign currency exchange rate contract described below. As of September 30, 2011, all previous derivative instruments into which Woodward had entered into were settled or terminated.

Derivatives in fair value hedging relationships

In 2002, Woodward entered into certain interest rate swaps that were designated as fair value hedges of its long-term debt consisting of senior notes due in October 2011. The discontinuance of these interest rate swaps resulted in gains that are recognized as a reduction of interest expense over the term of the associated debt (10 years) using the effective interest method. The unrecognized portion of the gain is presented as an adjustment to long-term debt.

Derivatives in cash flow hedging relationships

In 2001, Woodward entered into treasury lock agreements that were designated as cash flow hedges of its long-term debt. The objective of these derivatives was to hedge the risk of variability in cash flows related to future interest payments of a portion of the anticipated future debt issuances attributable to changes in the designated benchmark interest rate associated with the expected issuance of the senior notes due in October 2011. The discontinuance of these treasury lock agreements resulted in losses that are recognized as an increase of interest expense over the term of the associated debt (10 years) using the effective interest method. The unrecognized portion of the loss is recorded in accumulated other comprehensive earnings.

In September 2008, the Company entered into treasury lock agreements that qualified as cash flow hedges under authoritative guidance for derivatives and hedging. The objective of this derivative instrument was to hedge the risk of variability in cash flows related to future interest payments of a portion of the anticipated future debt issuances attributable to changes in the designated benchmark interest rate associated with the expected issuance of long-term debt to acquire MPC. The discontinuance of these treasury lock agreements resulted in a gain that is being recognized as a reduction of interest expense over a seven-year period on the hedged Series C and D Notes, which were issued on October 1, 2008, using the effective interest method. The unrecognized portion of the gain is recorded in accumulated other comprehensive earnings, net of tax.

In March 2009, Woodward entered into LIBOR lock agreements that qualified as cash flow hedges under authoritative guidance for derivatives and hedging. The objective of this derivative instrument was to hedge the risk of variability in cash flows over a seven-year period related to future interest payments of a portion of anticipated future debt issuances attributable to changes in the designated benchmark interest rate associated with the then expected issuance of long-term debt to acquire HRT. The discontinuance of the LIBOR lock agreements resulted in a loss that is being recognized as an increase of interest expense over a seven-year period on the hedged Series E and F Notes, which were issued on April 3, 2009, using the effective interest method. The unrecognized portion of the loss is recorded in accumulated other comprehensive earnings, net of tax.

Derivatives in foreign currency relationships

In September 2010, Woodward entered into a foreign currency exchange rate contract to purchase €39,000 for approximately $52,549 in early December 2010. An unrealized gain of $579 on this derivative was carried at fair market value in “Other current assets” as of September 30, 2010. In December 2010, a loss of $1,033 was recorded on the settlement of this forward contract and was recorded in “Other (income) expense, net.” In September 2009, Woodward entered into a foreign currency exchange rate contract to purchase €7,900 for approximately $11,662 in early October 2009. An unrealized loss of $173 on this derivative instrument was carried at fair market value in “Accrued liabilities” as of September 30, 2009. In October 2009, a loss of $71 was realized on the settlement of this forward contract was recorded in “Other (income) expense, net.”

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The objective of these derivative instruments, which were not designated as accounting hedges, was to limit the risk of foreign currency exchange rate fluctuations on certain short-term intercompany loan balances.

The following table discloses the remaining unrecognized gains and losses and recognized gains and losses associated with derivative instruments on Woodward’s Consolidated Balance Sheets:

	At September 30,
	2011			2010
Derivatives designated as hedging instruments	Unrecognized Gain (Loss)
Classified in accumulated other comprehensive earnings	$	(781	)	$	(1,011	)
Classified in current and long-term debt		3			70
	$	(778	)	$	(941	)
Derivatives not designated as hedging instruments	Recognized Gain (Loss)
Classified in other current assets	$	—		$	579

The following tables disclose the impact of derivative instruments on Woodward’s Consolidated Statements of Earnings and Comprehensive Earnings:

		Year Ending September 30, 2011
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(67	)	$	—	$	—
Cash flow hedging relationships	Interest expense		229			—		229
Foreign currency relationships	Other (income) expense, net		1,612			—		—
		$	1,774		$	—	$	229

		Year Ending September 30, 2010
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(127	)	$	—	$	—
Cash flow hedging relationships	Interest expense		282			—		282
Foreign currency relationships	Other (income) expense, net		(681	)		—		—
		$	(526	)	$	—	$	282

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		Year Ending September 30, 2009
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(184	)	$	—	$	—
Cash flow hedging relationships	Interest expense		237			1,199		237
Foreign currency relationships	Other (income) expense, net		173			—		—
		$	226		$	1,199	$	237

Based on the carrying value of the unrecognized gains and losses on terminated derivative instruments designated as cash flow hedges as of September 30, 2011, Woodward expects to reclassify $173 of net unrecognized losses on terminated derivative instruments from accumulated other comprehensive income to earnings during the next twelve months.

Note 7. Supplemental statement of cash flows information

	Year Ending September 30,
	2011		2010		2009
Interest paid, net of amounts capitalized	$	26,140	$	28,317	$	20,479
Income taxes paid		50,360		41,533		21,875
Income tax refunds received		9,496		10,867		2,825
Non-cash activities:
Long-term debt assumed in business acquisition		—		—		18,610
Purchases of property, plant and equipment on account		6,333		2,270		3,880
Sales of assets on account		—		—		760
Equity investment funded by transfer of property, plant and equipment		—		—		165
Cashless exercise of stock options		1,982		4,190		—
Settlement of receivable through purchase of treasury shares in connection with the cashless exercise of stock options		881		—		—
Reduction of accounts receivable and short-term borrowing due to the settlement of accounts receivable previously sold with recourse		3,228		—		—
Reduction of accounts payable due to the assignment of accounts receivable with recourse		570		—		—
Reduction to goodwill due to favorable resolution of lease termination recorded in restructuring reserve		103		—		—
Payment of director fees through issuance of treasury stock		52		—		—

MPC Products, one of Woodward’s subsidiaries acquired in fiscal year 2009, was previously subject to an investigation by the DOJ regarding certain of its government contract pricing practices prior to June 2005. In the three-months ending December 31, 2009, MPC settled the criminal and civil claims related to the DOJ’s investigation and paid $25,000 in compensation and fines. The purchase price Woodward paid in connection with the acquisition of MPC was reduced by $25,000 at the time of the acquisition, which represents the amounts discussed above. Payment of this amount during the year ending September 30, 2010 is reflected as an investing activity in the accompanying Consolidated Statement of Cash Flows.

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Note 8. Inventories

	September 30,		September 30,
	2011		2010
Raw materials	$	43,172	$	19,457
Work in progress		108,718		86,438
Component parts and finished goods		229,665		189,139
	$	381,555	$	295,034

Note 9. Property, plant, and equipment

	At September 30,
	2011			2010
Land	$	14,823		$	11,372
Buildings and improvements		177,637			171,257
Leasehold improvements		18,765			17,884
Machinery and production equipment		265,898			270,126
Computer equipment and software		66,149			57,518
Other		25,191			22,854
Construction in progress		44,975			13,125
		613,438			564,136
Less accumulated depreciation		(406,713	)		(370,612	)
Property, plant and equipment, net	$	206,725		$	193,524

	Year Ending September 30,
	2011		2010		2009
Depreciation expense	$	40,400	$	40,502	$	37,828

During fiscal year 2010, Woodward began construction of a new 48,000 square foot system test facility in Rockford, Illinois. The facility, which will house numerous environmental system test cells and a vibration lab, will support, among other development projects, Aerospace segment development efforts of next generation fuel systems for aircraft turbines. The test facility is expected to be completed and placed into service in early fiscal year 2012. Included in construction in progress at September 30, 2011 and September 30, 2010 are $20,090 and $4,836, respectively, of costs associated with the construction of the test facility, including $1,087 and $165, respectively, of capitalized interest.

In addition at September 30, 2011 and September 30, 2010, Woodward recognized as construction in progress, $11,827 and $1,604, respectively, of costs associated with the development of a new Enterprise Resource Planning (“ERP”) system for its Airframe Systems group, including capitalized interest of $432 and $24, respectively.

For the fiscal years ending September 30, 2011, 2010 and 2009, Woodward had capitalized interest that would have otherwise been included in interest expense of the following:

	Year Ending September 30,
	2011		2010		2009
Capitalized interest	$	1,354	$	150	$	31

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Note 10. Goodwill

								Effects of
	September 30,							Currency			September 30,
	2010		Additions		Adjustments			Translation			2011
Aerospace	$	356,680	$	—	$	(103	)	$	(52	)	$	356,525
Energy		81,914		24,188		—			(345	)		105,757
Consolidated	$	438,594	$	24,188	$	(103	)	$	(397	)	$	462,282

								Effects of
	September 30,							Currency			September 30,
	2009		Additions		Adjustments			Translation			2010
Aerospace	$	359,534	$	—	$	(2,722	)	$	(132	)	$	356,680
Energy		83,268		—		—			(1,354	)		81,914
Consolidated	$	442,802	$	—	$	(2,722	)	$	(1,486	)	$	438,594

The above table reflects the segment realignment that occurred during September 2011 for which the above goodwill balances have been retrospectively reclassified to reflect the new reportable segments. See Note 21, Segment information for a discussion of the segment realignment that took place in September 2011. The Company has no historical goodwill impairment losses in periods prior to those presented in the above table.

During the third quarter of fiscal year 2011, Woodward completed the IDS Acquisition (Note 4, Business acquisitions and dispositions), which resulted in the recognition of $24,188 in goodwill. The operations of the IDS Acquisition are being integrated into Woodward’s Energy reportable segment.

During the first quarter of fiscal year 2011, Woodward negotiated a lease settlement that was favorable in comparison to the previously recorded restructuring accrual established in purchase accounting in connection with the fiscal year 2009 acquisition of MPC. The resulting benefit of $103 was recorded as a reduction to goodwill.

Adjustments recorded in fiscal year 2010 represent changes in the estimated values of assets acquired and liabilities assumed in purchase accounting, related to the acquisition of HRT (see Note 4, Business acquisitions and dispositions).

Woodward tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment tests consist of comparing the implied fair value of each identified reporting unit with its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its implied fair value, Woodward compares the implied fair value of goodwill with the recorded carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value. There was no impairment charge recorded in fiscal years 2011, 2010, or 2009.

In the fourth quarter of fiscal year 2011, Woodward changed its goodwill testing date for all of its reporting units from March 31 to July 31. The change in the goodwill impairment test date is preferable as it better aligns the impairment testing procedures with the completion of the annual financial and strategic planning process. As a result, during fiscal year 2011, Woodward tested its goodwill for impairment as of March 31, 2011 and July 31, 2011 and concluded that there was no impairment of the carrying value of the goodwill. This change in accounting principle did not accelerate, delay, avoid, or cause a goodwill impairment charge. Due to significant judgments and estimates that are utilized in a goodwill impairment analysis, Woodward determined it was impracticable to objectively determine projected cash flows and related valuation estimates as of each July 31 for periods prior to July 31, 2011. As such, Woodward has prospectively applied the change in the annual goodwill impairment testing date from July 31, 2011.

As of March 31 and July 31, 2011, Woodward determined its Turbine Systems, Airframe Systems and Engine Systems operating segments represented individual reporting units. Woodward determined its Electrical Power Systems operating segment included three components that represented reporting units as of March 31, 2011 and four components that represented reporting units as of July 31, 2011 due to the acquisition of IDS.

The fair value of each of Woodward’s reporting units was determined using a discounted cash flow method. This method represents a Level 3 input and incorporates various estimates and assumptions, the most significant being projected revenue growth rates, operating earnings margins, and forecasted cash flows based on the discount rate and terminal growth rate. Management projects revenue growth rates, operating earnings margins and cash flows based on each reporting unit’s current operational results, expected performance and operational strategies over a five or ten-year period. These projections are adjusted to reflect current economic conditions and the demand for certain products and require considerable management judgment.

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Forecasted cash flows used in the July 31, 2011 impairment test were discounted using weighted average cost of capital assumptions from 10.0% to 10.2%. The terminal values of the forecasted cash flows were calculated using the Gordon Growth Model and assumed an annual compound growth rate after five or ten years of 4.3%. Forecasted cash flows used in the March 31, 2011 impairment test were discounted using weighted average cost of capital assumptions of 11.3% and an annual compound growth rate after five years of 4.4%. These inputs, which are unobservable in the market, represent management’s best estimate of what market participants would use in determining the present value of the Company’s forecasted cash flows. Changes in these estimates and assumptions can have a significant impact on the fair value of forecasted cash flows. Woodward evaluated the reasonableness of the reporting units resulting fair values utilizing a market multiple method.

The results of Woodward’s goodwill impairment tests performed as of July 31, 2011 indicated the estimated fair value of each reporting unit was substantially in excess of its carrying value, and accordingly, no impairment existed.

As part of the Company’s ongoing monitoring efforts, Woodward will continue to consider the global economic environment and its potential impact on Woodward’s business in assessing goodwill recoverability. There can be no assurance that Woodward’s estimates and assumptions regarding forecasted cash flows of certain reporting units, the period or strength of the current economic recovery, or the other inputs used in forecasting the present value of forecasted cash flows will prove to be accurate projections of future performance.

Note 11. Other intangibles—net

	September 30, 2011							September 30, 2010
	Gross							Gross
	Carrying		Accumulated			Net Carrying		Carrying		Accumulated			Net Carrying
	Value		Amortization			Amount		Value		Amortization			Amount
Customer relationships:
Aerospace	$	205,171	$	(41,652	)	$	163,519	$	205,181	$	(24,898	)	$	180,283
Energy		41,991		(23,696	)		18,295		38,611		(20,908	)		17,703
Total	$	247,162	$	(65,348	)	$	181,814	$	243,792	$	(45,806	)	$	197,986
Intellectual property:
Aerospace	$	—	$	—		$	—	$	—	$	—		$	—
Energy		20,162		(11,918	)		8,244		20,215		(10,555	)		9,660
Total	$	20,162	$	(11,918	)	$	8,244	$	20,215	$	(10,555	)	$	9,660
Process technology:
Aerospace	$	71,691	$	(15,380	)	$	56,311	$	71,696	$	(10,386	)	$	61,310
Energy		23,451		(7,657	)		15,794		15,805		(6,107	)		9,698
Total	$	95,142	$	(23,037	)	$	72,105	$	87,501	$	(16,493	)	$	71,008
Other intangibles:
Aerospace	$	39,635	$	(34,655	)	$	4,980	$	39,638	$	(27,595	)	$	12,043
Energy		2,621		(867	)		1,754		1,970		(518	)		1,452
Total	$	42,256	$	(35,522	)	$	6,734	$	41,608	$	(28,113	)	$	13,495
Total intangibles:
Aerospace	$	316,497	$	(91,687	)	$	224,810	$	316,515	$	(62,879	)	$	253,636
Energy		88,225		(44,138	)		44,087		76,601		(38,088	)		38,513
Consolidated Total	$	404,722	$	(135,825	)	$	268,897	$	393,116	$	(100,967	)	$	292,149

	Year Ending September 30,
	2011		2010		2009
Amortization expense	$	34,993	$	35,114	$	26,120

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Future amortization expense associated with intangibles is expected to be:

Year Ending September 30:
2012	$	32,872
2013		30,521
2014		27,370
2015		24,861
2016		23,060
Thereafter		130,213
	$	268,897

Note 12. Credit facilities and short-term borrowings

As of September 30, 2011, Woodward’s short-term borrowings and availability under its various short-term credit facilities follows:

			Outstanding
	Total		letters of credit			Outstanding		Remaining
	availability		and guarantees			borrowings		availability
Revolving credit facility	$	225,000	$	(4,882	)	$	—	$	220,118
Foreign lines of credit and overdraft facilities		10,526		—			—		10,526
Foreign performance guarantee facilities		9,736		(2,730	)		—		7,006
Foreign pooling arrangement facility		5,279		—			—		5,279
	$	250,541	$	(7,612	)	$	—	$	242,929

Woodward has a $225,000 revolving credit facility related to unsecured financing arrangements with a syndicate of U.S. banks. The revolving credit facility agreement provides for an option to increase available borrowings to $350,000, subject to the lenders’ participation, and has an expiration date of October 2012. The interest rate on borrowings under the revolving credit facility agreement varies with LIBOR, the federal funds rate, or the prime rate. The revolving credit facility agreement contains certain covenants customary with such agreements, which are generally consistent with the covenants applicable to Woodward’s long-term debt agreements, and contains customary events of default including certain cross default provisions related to Woodward’s other outstanding debt arrangements in excess of $15,000, the occurrence of which would permit the lenders to accelerate the amounts due thereunder. Management believes that Woodward was in compliance with all its debt covenants at September 30, 2011.

Woodward also has various foreign lines of credit and foreign overdraft facilities at various financial institutions, which are generally reviewed annually for renewal and are subject to the usual terms and conditions applied by the financial institutions. Pursuant to the terms of the related facility agreements, Woodward’s foreign performance guarantee facilities are limited in use to providing performance guarantees to third parties. Pursuant to the terms of the related facility agreement, Woodward participates in a pooling arrangement whereby Woodward cash on deposit at certain foreign banks may serve as collateral for borrowings by other Woodward subsidiaries up to the total amounts deposited in the pool.

Short-term borrowings of $0 and $22,099 were outstanding as of September 30, 2011 and September 30, 2010, respectively.

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Note 13. Long-term debt

Long-term debt consisted of the following:

	At September 30,
	2011			2010
2008 Term loan — Variable rate of 1.78% at September 30, 2011, matures October 2013; unsecured	$	64,375		$	71,875
Series B notes — 5.63%, due October 2013; unsecured		100,000			100,000
Series C notes — 5.92%, due October 2015; unsecured		50,000			50,000
Series D notes — 6.39%, due October 2018; unsecured		100,000			100,000
Series E notes — 7.81%, due April 2016; unsecured		57,000			57,000
Series F notes — 8.24%, due April 2019; unsecured		43,000			43,000
Senior notes — 6.39%, due October 2011; unsecured		10,714			21,429
Term notes — 5.95%, due June 2012; secured by land and buildings		157			369
Fair value hedge adjustment for unrecognized discontinued hedge gains		3			70
Total long-term debt		425,249			443,743
Less: current portion		(18,374	)		(18,493	)
Long-term debt, less current portion	$	406,875		$	425,250

Under certain circumstances, the interest rate on each series of the Series B, C and D Notes is subject to increase if Woodward’s leverage ratio of consolidated net debt to consolidated earnings before interest, taxes, depreciation and amortization, plus any unusual non-cash charges to the extent deducted in computing net income minus any unusual non-cash gains to the extent added in computing net income (“Debt Covenant EBITDA”) increases beyond a ratio of 3.5:1.0.

Required future principal payments of outstanding long-term debt as of September 30, 2011 are as follows:

Year Ending September 30:
2012	$	18,371
2013		7,500
2014		149,375
2015		—
2016		107,000
Thereafter		143,000
	$	425,246

The current portion of long-term debt includes $3 at September 30, 2011 compared to $67 at September 30, 2010 related to the fair value hedge adjustment for unrecognized discontinued hedge gains on certain interest rate swaps entered into in 2002 in connection with the issuance of the senior notes due in October 2011.

The 2008 term loan, the Series B, C, D, E and F Notes (together, the “Notes”) and the senior notes due October 2011 are held by multiple institutions. The term notes are held by banks in Germany.

Woodward’s obligations under the 2008 term loan, the Notes, and the senior notes due October 2011 are guaranteed by Woodward FST, Inc., MPC Products Corporation and Woodward HRT, Inc., each of which is a wholly owned subsidiary of Woodward.

Certain financial and other covenants under Woodward’s debt agreements contain customary restrictions on the operation of its business. In the event of non-compliance with these covenants, certain additional restrictions might apply, including restrictions on the Company’s ability to pay dividends or make distributions on its capital stock. Management believes that Woodward was in compliance with the covenants under the long-term debt agreements at September 30, 2011.

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2008 Term Loan

In October 2008, Woodward entered into a term loan credit agreement (the “2008 Term Loan Credit Agreement”), by and among Woodward; the institutions from time to time parties thereto as lenders; and JPMorgan Chase Bank, National Association as administrative agent; which provides for an initial $150,000 unsecured term loan facility, and may, from time to time, be expanded by up to $50,000 of additional indebtedness, subject to the Company’s compliance with certain conditions and the lenders’ participation. The 2008 Term Loan Credit Agreement bears interest at LIBOR plus 1.00% to 2.25%, requires quarterly principal payments of $1,875, and can be prepaid, or prepaid and terminated, without penalty.

The 2008 Term Loan Credit Agreement contains customary terms and conditions, including, among others, covenants that place limits on the Company’s ability to incur liens on assets, incur additional debt (including a leverage or coverage based maintenance test), transfer or sell the Company’s assets, merge or consolidate with other persons, make certain investments, make certain restricted payments, and enter into material transactions with affiliates. The 2008 Term Loan Credit Agreement contains financial covenants requiring that (a) the Company’s ratio of consolidated net debt to Debt Covenant EBITDA, not exceed a ratio of 3.5:1.0 and (b) the Company have a minimum consolidated net worth of $400,000, plus 50% of net income for any fiscal year and 50% of the net proceeds of certain issuances of capital stock, in each case on a rolling four quarter basis. The 2008 Term Loan Credit Agreement also contains customary events of default, including certain cross-default provisions related to Woodward’s other outstanding debt arrangements in excess of $15,000, the occurrence of which would permit the lenders to accelerate the amounts due thereunder.

Series B, C, D, E and F Notes

In October 2008, Woodward entered into a note purchase agreement (the “2008 Note Purchase Agreement”) relating to the Series B, C, and D Notes. In April 2009, Woodward entered into a note purchase agreement (the “2009 Note Purchase Agreement” and, together with the 2008 Note Purchase Agreement, the “Note Purchase Agreements”) relating to the Series E and F Notes.

The Notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Holders of the Notes do not have any registration rights.

Woodward’s obligations under the Notes rank equal in right of payment with all of Woodward’s other unsecured unsubordinated debt, including its outstanding debt under the 2008 Term Loan Credit Agreement, revolving credit facility (see Note 12, Credit facilities and short-term borrowings) and note purchase agreement relating to the senior notes due October 2011.

The Note Purchase Agreements contain customary restrictive covenants, including, among other things, covenants that place limits on Woodward’s ability to incur liens on assets, incur additional debt (including a leverage or coverage based maintenance test), transfer or sell Woodward’s assets, merge or consolidate with other persons, and enter into material transactions with affiliates. The Note Purchase Agreements also contain customary events of default, including certain cross-default provisions related to Woodward’s other outstanding debt arrangements in excess of $25,000 with respect to the 2008 Note Purchase Agreement and $30,000 with respect to the 2009 Note Purchase Agreement, the occurrence of which would permit the holders of the respective Notes to accelerate the amounts due.

The 2008 Note Purchase Agreement contains financial covenants requiring that Woodward’s (a) ratio of consolidated net debt to consolidated Debt Covenant EBITDA not exceed a ratio of 4.0:1.0 during any material acquisition period, or a ratio of 3.5:1.0 at any other time on a rolling four quarter basis and (b) consolidated net worth at any time equal or exceed $425,000 plus 50% of consolidated net earnings for each fiscal year beginning with the fiscal year ending September 30, 2008. Additionally, under the 2008 Note Purchase Agreement, Woodward may not permit the aggregate amount of priority debt to at any time exceed 20% of its consolidated net worth at the end of the then most recently ended fiscal quarter. Priority debt generally refers to certain unsecured debt of Woodward’s subsidiaries and all debt of Woodward and its subsidiaries secured by liens other than certain permitted liens.

The 2009 Note Purchase Agreement contains financial covenants requiring that Woodward’s (a) ratio of consolidated net debt to consolidated Debt Covenant EBITDA not exceed a ratio of 3.5:1.0 at any time on a rolling four quarter basis, and (b) consolidated net worth at all times equal or exceed $485,940 plus 50% of consolidated net earnings for each fiscal year beginning with the fiscal year ending September 30, 2009. Additionally, under the 2009 Note Purchase Agreement, Woodward may not permit the aggregate amount of priority debt to at any time exceed 20% of its consolidated net worth at the end of the then most recently ended fiscal quarter. Priority debt generally refers to certain unsecured debt of Woodward’s subsidiaries and all debt of Woodward and its subsidiaries secured by liens other than certain permitted liens.

Woodward is permitted at any time, at its option, to prepay all, or from time to time prepay any part of, the then outstanding principal amount of any series of the Notes at 100% of the principal amount of the series of the Notes to be prepaid (but, in the case of partial prepayment, not less than $1,000), together with interest accrued on such amount to be prepaid to the date of payment, plus any applicable make-whole amount. The make-whole amount is computed by discounting the remaining scheduled payments of interest and principal of the Notes being prepaid at a discount rate equal to the sum of 50 basis points and the yield to maturity of U.S. Treasury securities having a maturity equal to the remaining average life of the Notes being prepaid.

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Debt Issuance Costs

During the fiscal year ending September 30, 2009, Woodward incurred $5,892 of debt issuance costs, which are being amortized using the effective interest method or patterns that approximate the effective interest method, over the term of the debt to which the costs relate. The related amortization is recognized as interest expense. Recognition of interest expense on the debt issuance costs associated with the 2009 term loan, which was paid-off in full and terminated in 2010, were accelerated and the remaining unamortized amount of debt issuance costs associated with the 2009 term loan were recognized in 2010. Amounts recognized as interest expense from the amortization of debt issuance costs were $764 in fiscal year 2011, $1,515 in fiscal year 2010, and $2,031 in fiscal year 2009. Woodward had $2,153 of unamortized debt issuance costs as of September 30, 2011 and $2,917 of unamortized debt issuance costs as of September 30, 2010. Amortization of debt issuance costs is included in operating activities in the Consolidated Statements of Cash Flows.

Note 14. Accrued liabilities

	At September 30,
	2011		2010
Salaries and other member benefits	$	70,965	$	43,598
Current portion of restructuring and other charges		2,489		4,862
Warranties		14,083		10,851
Interest payable		11,611		11,925
Accrued retirement benefits		2,560		2,748
Deferred revenues		8,160		12,376
Taxes, other than income		5,097		4,618
Other		18,551		18,074
	$	133,516	$	109,052

Warranties

Provisions of Woodward’s sales agreements include product warranties customary to these types of agreements. Accruals are established for specifically identified warranty issues that are probable to result in future costs. Warranty costs are accrued on a non-specific basis whenever past experience indicates a normal and predictable pattern exists. Changes in accrued product warranties for the fiscal years ending September 30, 2011 and September 30, 2010 were as follows:

	At September 30,
	2011			2010
Warranties, beginning of period	$	10,851		$	10,005
Increases to accruals related to warranties during the period		5,402			5,555
Increases due to acquisition of IDS		2,250			—
Settlements of amounts accrued		(4,403	)		(4,494	)
Foreign currency exchange rate changes		(17	)		(215	)
Warranties, end of period	$	14,083		$	10,851

Restructuring and other charges

The main components of accrued non-acquisition related restructuring charges include workforce management costs associated with the early retirement and the involuntary separation of employees in connection with a strategic realignment of global workforce capacity. Restructuring charges related to business acquisitions include a number of items such as those associated with integrating similar operations, workforce management, vacating certain facilities, and the cancellation of some contracts.

During the three-months ending December 31, 2010, Woodward negotiated a lease settlement that was favorable in comparison to the previously recorded restructuring accrual established in purchase accounting in connection with the fiscal year 2009 acquisition of MPC. The resulting benefit of $103 was recorded as a non-cash charge to restructuring and a reduction to goodwill previously established at the time of the acquisition of MPC. During the three-months ending December 31, 2010, Woodward also modified its exit plan related to its Pacoima, California location. As a result, the Company intends to occupy and continue operating from the Pacoima location for a longer period than originally anticipated. Accordingly, Woodward has reduced the anticipated exit costs by $1,513 for the Pacoima location.

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During the fiscal year ended September 30, 2010, accrued restructuring charges were increased by $1,834 to reflect updated estimates of anticipated costs in connection with the HRT acquisition. The business acquisition related accrued restructuring charges of $5,446 as of September 30, 2010 relate primarily to the planned closing of the Pacoima, California facility as part of a decision to consolidate HRT’s production facilities.

The summary of the activity in accrued restructuring charges during the fiscal years ending September 30, 2011 and 2010 is as follows:

	At September 30,
	2011			2010
Non-acquisition related restructuring charges:
Accrued restructuring charges, beginning of period	$	667		$	3,196
Payments		(279	)		(2,027	)
Non-cash adjustments		(22	)		(463	)
Foreign currency exchange rates		(1	)		(39	)
Accrued restructuring charges, end of period	$	365		$	667
Business acquisition restructuring charges:
Accrued restructuring charges, beginning of period	$	5,446		$	9,668
Purchase accounting adjustments		—			1,834
Payments		(705	)		(6,330	)
Non-cash adjustments		(2,197	)		274
Accrued restructuring charges, end of period	$	2,544		$	5,446
Total restructuring charges	$	2,909		$	6,113

Other liabilities included the following amounts of accrued restructuring charges not expected to be settled within twelve months:

	At September 30,
	2011		2010
Non-current accrued restructuring charges	$	420	$	1,251

Note 15. Other liabilities

	September 30,		September 30,
	2011		2010
Net accrued retirement benefits, less amounts recognized within accrued liabilities	$	61,994	$	66,288
Uncertain tax positions, net of offsetting benefits, less amounts recognized within accrued liabilities (Note 17)		14,078		8,720
Other		12,622		8,967
	$	88,694	$	83,975

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Note 16. Other (income) expense, net

	Year Ending September 30,
	2011			2010			2009
Net (gain) loss on sale of assets	$	644		$	(131	)	$	(1,093	)
Rent income		(576	)		(515	)		(959	)
Net gain on investments in deferred compensation program		(31	)		(520	)		(291	)
Net (income) expense recognized in earnings on foreign currency derivatives (Note 6)		1,612			(681	)		173
Other		(61	)		56			(271	)
	$	1,588		$	(1,791	)	$	(2,441	)

For additional information regarding “Net (income) expense recognized in earnings on foreign currency derivatives” refer to Note 6, Derivative instruments and hedging activities.

Note 17. Income taxes

Income taxes consisted of the following:

	Year Ending September 30,
	2011			2010			2009
Current:
Federal	$	48,041		$	9,818		$	(8,006	)
State		6,237			5,600			2,042
Foreign		9,743			13,112			18,441
Deferred
Federal		(8,680	)		13,789			16,436
State		(552	)		1,681			848
Foreign		543			(287	)		(1,701	)
	$	55,332		$	43,713		$	28,060

Earnings before income taxes by geographical area consisted of the following:

	Year Ending September 30,
	2011		2010		2009
United States	$	149,744	$	103,771	$	62,766
Other countries		37,823		51,104		59,710
	$	187,567	$	154,875	$	122,476

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Deferred income taxes presented in the Consolidated Balance Sheets are related to the following:

	At September 30,
	2011			2010
Deferred tax assets:
Retirement healthcare and early retirement benefits	$	12,417		$	13,176
Foreign net operating loss carryforwards		4,276			2,245
Inventory		18,194			13,425
Deferred compensation		14,223			12,293
Defined benefit pension		7,681			2,943
Other		21,054			27,581
Valuation allowance		(3,201	)		(96	)
Total deferred tax assets, net of valuation allowance		74,644			71,567
Deferred tax liabilities:
Goodwill and intangibles — net		(103,393	)		(96,267	)
Other		(8,500	)		(21,237	)
Total deferred tax liabilities		(111,893	)		(117,504	)
Net deferred tax liabilities	$	(37,249	)	$	(45,937	)

Woodward has recorded a deferred tax asset of $4,276 as of September 30, 2011, reflecting the benefit of $25,024 in foreign net operating loss carryforwards. Of these carryforwards, $16,789 will expire by 2018 and is currently offset by a 100% valuation allowance; the net may be carried forward indefinitely.

At September 30, 2011, Woodward has not provided for taxes on undistributed foreign earnings of $113,788 that it considers indefinitely reinvested. These earnings could become subject to income taxes if they are remitted as dividends, are loaned to Woodward or any of Woodward’s subsidiaries located in the United States, or if Woodward sells its stock in the foreign subsidiaries. However, the Company believes that foreign tax credits would largely offset any income tax that might otherwise be due.

Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Both positive and negative evidence are considered in forming Woodward’s judgment as to whether a valuation allowance is appropriate, and more weight is given to evidence that can be objectively verified. Valuation allowances are reassessed whenever there are changes in circumstances that may cause a change in judgment.

The reasons for the differences between Woodward’s effective income tax rate and the United States statutory federal income tax rate were as follows:

	Year Ending September 30,
Percent of pretax earnings	2011			2010			2009
Statutory tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		2.3			2.4			1.5
Foreign tax rate differences		(0.3	)		(1.4	)		(2.1	)
Dividends on stock shares allocated to retirement savings plans		(0.3	)		(0.4	)		(0.5	)
Research credit		(2.7	)		(0.5	)		(3.1	)
Retroactive extension of research credit		(2.1	)		—			(1.7	)
Domestic production activities deduction		(2.1	)		(0.9	)		(0.3	)
Adjustment of tax issues for previous periods and audit settlements		(0.2	)		(5.9	)		(6.6	)
Other items, net		(0.1	)		(0.1	)		0.7
Effective tax rate		29.5	%		28.2	%		22.9	%

The changes in estimate of taxes for previous periods are primarily related to the favorable resolution of certain tax matters. There were favorable resolutions of tax matters of $2,148, $4,667 and $6,846 in the fiscal years ending September 30, 2011, September 30, 2010 and September 30, 2009.

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Income taxes for the fiscal year ending September 30, 2011 included an expense reduction of $3,908 related to the retroactive extension of the U.S. research and experimentation tax credit.

During the fiscal year ending September 30, 2010, the Internal Revenue Service concluded an examination of Woodward’s U.S. Federal income tax returns for fiscal years 2007 and 2008. Also during the fiscal year ending September 30, 2010, Woodward completed certain internal revaluation assessments and certain statutes of limitations expired. As a result, Woodward reduced its liability for unrecognized tax benefits during the fiscal year ending September 30, 2010 by a net favorable amount of $6,784.

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:

Balance, September 30, 2008	$	22,576
Tax positions related to the current year		1,431
Tax positions related to prior years		(556	)
Lapse of applicable statute of limitations		(3,668	)
Balance, September 30, 2009		19,783
Tax positions related to the current year		1,734
Tax positions related to prior years		(7,320	)
Lapse of applicable statute of limitations		(3,611	)
Balance, September 30, 2010		10,586
Tax positions related to the current year		4,264
Tax positions related to prior years		3,160
Lapse of applicable statute of limitations		(1,079	)
Balance, September 30, 2011	$	16,931

Worldwide unrecognized tax benefits included $3,517 recorded in connection with the IDS Acquisition.

The amounts of unrecognized tax benefits that would impact Woodward’s effective tax rate if recognized, net of expected offsetting adjustments, were $14,078 at September 30, 2011 and $8,720 at September 30, 2010. At this time, Woodward estimates it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $600 in the next twelve months due to the completion of reviews by tax authorities and the expiration of certain statutes of limitations.

Woodward recognizes interest and penalties related to unrecognized tax benefits in tax expense. Woodward had accrued interest and penalties of the following:

	At September 30,
	2011		2010
Accrued interest and penalties	$	1,989	$	1,431

Woodward’s tax returns are audited by U.S., state, and foreign tax authorities and these audits are at various stages of completion at any given time. Fiscal years remaining open to examination in significant foreign jurisdictions include 2003 and forward. Woodward has been subject to U.S. Federal income tax examinations for fiscal years through 2008. Woodward is subject to U.S. state income tax examinations for fiscal years 2007 and forward.

Note 18. Retirement benefits

Woodward provides various benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on employee location.

Defined contribution plans

Substantially all U.S. employees are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes. Certain foreign employees are also eligible to participate in foreign plans.

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The amount of expense associated with defined contribution plans totaled $16,927 in fiscal year 2011, $16,474 in fiscal year 2010, and $16,869 in fiscal year 2009.

Woodward operates one multiemployer plan for certain employees in the Netherlands. The amount of contributions associated with the multiemployer plan totaled $476 in fiscal year 2011, $495 in fiscal year 2010, and $550 in fiscal year 2009.

Defined benefit plans

Woodward has defined benefit plans which provide pension benefits for certain retired employees in the U.S., the United Kingdom, Japan and Switzerland. Approximately 1,000 current employees may receive future benefits under the plans and approximately 550 retired employees are eligible to receive future benefits or are currently receiving benefits. A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward’s defined benefit pension plans.

In connection with the acquisition of IDS in the third quarter of fiscal year 2011 (see Note 4, Business acquisitions and dispositions), Woodward assumed pension benefit obligations that contributed to increases in recognized expenses for the fiscal year ending September 30, 2011 compared to the fiscal year ending September 30, 2010. In addition, in connection with the acquisition of HRT in the third quarter of fiscal year 2009 (see Note 4, Business acquisitions and dispositions), Woodward assumed pension benefit obligations that contributed to increases in recognized expenses for the fiscal year ending September 30, 2010 compared to the fiscal year ending September 30, 2009.

Excluding the Woodward HRT Plan, the defined benefit plans in the U.S. were frozen in fiscal year 2007 and no additional employees may participate in the U.S. plans and no additional service costs will be incurred.

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The actuarial assumptions used in measuring the net periodic benefit cost and plan obligations of retirement pension benefits were as follows:

	2011			2010			2009
United States:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.55	%		5.85	%		5.50	%
Rate of compensation increase		4.00			4.00			4.00
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		5.85			5.50			6.50
Rate of compensation increase		4.00			4.00			n/a
Long-term rate of return on plan assets		7.90			7.50			7.50
United Kingdom:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.10	%		4.90	%		5.40	%
Rate of compensation increase		4.30			4.30			4.10
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		4.90			5.40			6.90
Rate of compensation increase		4.30			4.10			4.70
Long-term rate of return on plan assets		6.00			6.50			6.50
Japan:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		1.50	%		1.25	%		1.75	%
Rate of compensation increase		2.00			2.00			2.50
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		1.25			1.75			1.90
Rate of compensation increase		2.00			2.50			2.00
Long-term rate of return on plan assets		3.00			3.30			3.11
Switzerland:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		2.50	%		n/a	%		n/a	%
Rate of compensation increase		2.00			n/a			n/a
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		3.00			n/a			n/a
Rate of compensation increase		2.00			n/a			n/a
Long-term rate of return on plan assets		3.00			n/a			n/a

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The discount rate assumption is intended to reflect the rate at which the retirement benefits could be effectively settled based upon the assumed timing of the benefit payments. In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding. In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark. In Japan, Woodward used Standard & Poors AA-rated corporate bond yields (applicable for bonds over 10 years) as the benchmark. In Switzerland, Woodward used high quality swap rates plus a credit spread of 0.36% as high quality swaps are available in Switzerland at various durations and trade at higher volumes than bonds. Woodward’s assumed rates do not differ significantly from any of these benchmarks.

Compensation increase assumptions are based upon historical experience and anticipated future management actions.

In determining the long-term rate of return on plan assets, Woodward assumes that the historical long-term compound growth rates of equity and fixed-income securities will predict the future returns of similar investments in the plan portfolio. Investment management and other fees paid out of the plan assets are factored into the determination of asset return assumptions.

Net periodic benefit costs consist of the following components reflected as expense in Woodward’s Consolidated Statements of Earnings:

	Year Ending September 30,
	United States									Other Countries									Total
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Service cost	$	3,433		$	3,647		$	1,409		$	992		$	784		$	716		$	4,425		$	4,431		$	2,125
Interest cost		5,646			4,890			2,964			2,284			2,261			2,175			7,930			7,151			5,139
Expected return on plan assets		(6,693	)		(4,759	)		(2,627	)		(2,541	)		(2,361	)		(2,178	)		(9,234	)		(7,120	)		(4,805	)
Amortization of:
Transition obligation		—			—			—			—			86			81			—			86			81
Net (gains) losses		312			583			337			900			753			135			1,212			1,336			472
Net prior service (benefit) cost		75			(260	)		(259	)		(9	)		(8	)		(7	)		66			(268	)		(266	)
Settlement costs		—			—			—			—			345			—			—			345			—
Curtailment costs		—			165			—			—			—			237			—			165			237
Net periodic (benefit) cost	$	2,773		$	4,266		$	1,824		$	1,626		$	1,860		$	1,159		$	4,399		$	6,126		$	2,983

Settlements costs were expensed in the fiscal years ending September 30, 2010 and 2009, respectively, as a result of normal attrition among participants in the Company’s defined benefit plan in Japan. Woodward did not have any settlement costs in fiscal year 2011. Curtailment costs were associated with planned or actual workforce reduction actions.

The following tables provide a reconciliation of the changes in the projected benefit obligation and fair value of assets for the defined benefit pension plans:

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	97,786		$	89,551		$	56,657		$	53,450		$	154,443		$	143,001
Obligation assumed in IDS Acquisition		—			—			2,038			—			2,038			—
Service cost		3,433			3,647			992			784			4,425			4,431
Interest cost		5,646			4,890			2,284			2,261			7,930			7,151
Net actuarial (gains) losses		1,686			(2,877	)		(3,498	)		2,902			(1,812	)		25
Contribution by participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Amounts paid by Company for Pension Protection Fund levy		—			—			(67	)		—			(67	)		—
Curtailment loss		—			165			—			—			—			165
Plan amendments		—			3,962			—			—			—			3,962
Foreign currency exchange rate changes		—			—			917			374			917			374
Projected benefit obligation at end of year	$	106,341		$	97,786		$	57,355		$	56,657		$	163,696		$	154,443
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	85,128		$	64,102		$	43,539		$	40,726		$	128,667		$	104,828
Plan assets received in connection with IDS Acquisition		—			—			1,604			—			1,604			—
Actual return on plan assets		482			7,998			708			3,209			1,190			11,207
Contributions by the company		6,580			14,580			4,151			2,793			10,731			17,373
Contributions by plan participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Foreign currency exchange rate changes		—			—			333			(75	)		333			(75	)
Fair value of plan assets at end of year	$	89,980		$	85,128		$	48,367		$	43,539		$	138,347		$	128,667
Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)

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The Company’s defined benefit pension plans in the United Kingdom, Japan and Switzerland represented $39,677, $15,140 and $2,538, respectively, of the total projected benefit obligation at September 30, 2011 and $37,546, $8,947 and $1,874, respectively, of the total fair value of plan assets at September 30, 2011.

Woodward makes periodic cash contributions to its defined pension plans based on applicable regulations in jurisdictions that oversee its various pension plans, if any, and other factors. Contributions in fiscal year 2010 included a $10,000 discretionary contribution to the U.S. plans.

The following tables provide the amounts recognized in the statement of financial position and accumulated comprehensive income for the defined benefit pension plans:

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Amounts recognized in statement of financial position consist of:
Other non-current liabilities	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)
Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	1,517		$	1,593		$	(24	)	$	(30	)	$	1,493		$	1,563
Unrecognized net (gains) losses		16,769			9,183			13,779			15,963			30,548			25,146
Total amounts recognized		18,286			10,776			13,755			15,933			32,041			26,709
Deferred taxes		(6,949	)		(4,095	)		(4,763	)		(5,585	)		(11,712	)		(9,680	)
Amounts recognized in accumulated other comprehensive income	$	11,337		$	6,681		$	8,992		$	10,348		$	20,329		$	17,029

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were as follows:

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Projected benefit obligation	$	(106,341	)	$	(97,786	)	$	(57,355	)	$	(56,657	)	$	(163,696	)	$	(154,443	)
Accumulated benefit obligation		(96,630	)		(86,260	)		(54,304	)		(54,139	)		(150,934	)		(140,399	)
Fair value of plan assets		89,980			85,128			48,367			43,539			138,347			128,667

Other changes in plan assets and benefit obligations recognized in other comprehensive income were as follows:

	Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Net (gain) loss	$	7,897		$	(6,182	)	$	(1,664	)	$	2,233		$	6,233		$	(3,949	)
Prior service (benefit) cost		—			3,963			—			—			—			3,963
Amortization of net gains (losses)		(312	)		(583	)		(899	)		(753	)		(1,211	)		(1,336	)
Amortization of transition obligation asset		—			—			—			(86	)		—			(86	)
Amortization of prior service benefit (cost)		(75	)		260			9			8			(66	)		268
Settlement loss		—			—			—			(345	)		—			(345	)
Foreign currency exchange rate changes		—			—			376			(60	)		376			(60	)
Total recognized in accumulated other comprehensive income	$	7,510		$	(2,542	)	$	(2,178	)	$	997		$	5,332		$	(1,545	)

The amounts expected to be amortized from Accumulated Other Comprehensive Income and reported as a component of net periodic benefit cost during fiscal year 2012 is as follows:

	United		Other
	States		Countries			Total
Prior service (benefit) cost	$	75	$	(9	)	$	66
Net actuarial (gains) losses		524		667			1,191

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Pension benefit payments are made from the assets of the pension plans. Using foreign exchange rates as of September 30, 2011 and expected future service assumptions, it is anticipated that the future benefit payments will be as follows:

	United		Other
Year Ending September 30,	States		Countries		Total
2012	$	3,109	$	2,468	$	5,577
2013		3,581		2,673		6,254
2014		4,154		2,583		6,737
2015		4,732		2,925		7,657
2016		5,250		2,704		7,954
2017 – 2021		36,000		15,771		51,771

Woodward expects its pension plan contributions in fiscal year 2012 will be $600 in the U.S., $1,787 in the United Kingdom, $1,382 in Japan and $191 in Switzerland.

Defined benefit plan assets

The overall investment objective of the pension plan assets is to earn a rate of return over time which, when combined with Company contributions, satisfies the benefit obligations of the pension plans and maintains sufficient liquidity to pay benefits.

As the timing and nature of the plan obligations varies for each Company sponsored pension plan, investment strategies have been individually designed for each pension plan with a common focus on maintaining diversified investment portfolios that provide for long-term growth while minimizing the risk to principal associated with short-term market behavior. The strategy for each of the plans balances the requirements to generate returns, using investments expected to produce higher returns, such as equity securities, with the need to control risk within the pension plans using less volatile investment assets, such as debt securities. A strategy of more equity-oriented allocation is adopted for those plans which have a longer-term investment plan based on the timing of the associated benefit obligations.

A pension oversight committee is assigned by the Company to each pension plan, excluding the pension plans in Switzerland which are statutory plans. Among other responsibilities, each committee is responsible for all asset class allocation decisions. Asset class allocations, which are reviewed by the respective pension committee on at least an annual basis, are designed to meet or exceed certain market benchmarks which align with each plan’s investment objectives. In evaluating the asset allocation choices, consideration is given to the proper long-term level of risk for each plan, particularly with respect to the long-term nature of each plan’s liabilities, the impact of asset allocation on investment results and the corresponding impact on the volatility and magnitude of plan contributions and expense and the impact certain actuarial techniques may have on the plans’ recognition of investment experience. From time to time, the plans may move outside the prescribed asset class allocation in order to meet significant liabilities with respect to one or more individuals approaching retirement.

Risks associated with the plan assets include interest rate fluctuation risk, market fluctuation risk, risk of default by debt issuers, and liquidity risk. To manage these risks, the assets are managed by established, professional investment firms and performance is evaluated regularly against specific benchmarks. Liability management and asset class diversification are central to the Company’s risk management approach and overall investment strategy.

The assets of the U.S. plans are invested in actively managed mutual funds. The assets of the plan in Japan and the plan in the United Kingdom are invested in actively managed pooled investment funds. Each individual mutual fund or pooled investment fund has been selected based on the investment strategy of the related plan, which mirrors a specific asset class within the associated target allocation. The assets of the plans in Switzerland are insured through an insurance contract that guarantees a federally mandated annual rate of return. Pension plan assets at September 30, 2011 and 2010 do not include any direct investment in Woodward’s common stock.

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The asset allocations are monitored and rebalanced regularly by investment managers assigned to the individual pension plans. The actual allocations of pension plan assets and target allocation ranges by asset class, are as follows:

	At September 30,
	2011						2010
	Percentage			Target			Percentage			Target
	of Plan			Allocation			of Plan			Allocation
	Assets			Ranges			Assets			Ranges
United States:
Asset Class
Equity Securities		58.7	%		39.7 - 79.7	%		49.8	%		40.0 - 60.0	%
Debt Securities		41.1	%		30.3 - 50.3	%		50.0	%		40.0 - 60.0	%
Other		0.2	%		0.0	%		0.2	%		0.0	%
		100.0	%					100.0	%
United Kingdom:
Asset Class
Equity Securities		37.7	%		40.0 - 60.0	%		40.7	%		46.0 - 54.0	%
Debt Securities		62.2	%		35.0 - 65.0	%		58.9	%		46.5 - 53.5	%
Other		0.1	%		0.0	%		0.4	%		0.0	%
		100.0	%					100.0	%
Japan:
Asset Class
Equity Securities		39.9	%		36.0 - 44.0	%		55.2	%		50.0 - 58.0	%
Debt Securities		59.2	%		55.0 - 63.0	%		43.1	%		41.0 - 49.0	%
Other		0.9	%		0.0 - 2.0	%		1.7	%		0.0 - 2.0	%
		100.0	%					100.0	%
Switzerland:
Asset Class
Equity Securities		0.0	%		0.0	%		n/a			n/a
Debt Securities		0.0	%		0.0	%		n/a			n/a
Other		100.0	%		100.0	%		n/a			n/a
		100.0	%					n/a

Actual allocations to each asset class vary from target allocations due to periodic market value fluctuations, investment strategy changes, and the timing of benefit payments and contributions.

The variance at September 30, 2010 in the Company’s United Kingdom pension plan between the actual allocation and target allocation ranges is the result of a decision made by the plan trustees to invest a September 2007 £3,000 special contribution from the Company, into an index linked long-term government securities pooled fund. At September 30, 2010, the fair value of the assets held for the United Kingdom pension plan in the index linked long-term government securities pooled fund is approximately $5,707.

The following table presents Woodward’s pension plan assets using the fair value hierarchy as of September 30, 2011. The fair value hierarchy established by U.S. GAAP prioritizes the inputs used to measure fair value into the following levels:

Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable and can be corroborated by observable market data.

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Level 3: Inputs reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

	At September 30, 2011
	Level 1				Level 2				Level 3				Total
	United		Other		United		Other		United		Other
	States		Countries		States		Countries		States		Countries
Asset Category:
Cash and cash equivalents	$	198	$	125	$	—	$	—	$	—	$	—	$	323
Mutual funds:
U.S. corporate bond fund		36,958		—		—		—		—		—		36,958
U.S. equity large cap fund		29,169		—		—		—		—		—		29,169
International equity large cap growth fund		23,655		—		—		—		—		—		23,655
Pooled funds:
Japanese equity securities		—		—		—		1,921		—		—		1,921
International equity securities		—		—		—		1,652		—		—		1,652
Japanese fixed income securities		—		—		—		3,958		—		—		3,958
International fixed income securities		—		—		—		1,336		—		—		1,336
Index linked U.K. equity fund		—		—		—		7,098		—		—		7,098
Index linked international equity fund		—		—		—		7,062		—		—		7,062
Index linked U.K. corporate bonds fund		—		—		—		13,255		—		—		13,255
Index linked U.K. government securities fund		—		—		—		3,646		—		—		3,646
Index linked U.K. long-term government securities fund		—		—		—		6,440		—		—		6,440
Insurance backed assets:
Insurance backed assets		—		—		—		—		—		1,874		1,874
Total assets	$	89,980	$	125	$	—	$	46,368	$	—	$	1,874	$	138,347

Cash and cash equivalents: Cash and cash equivalents held by the Company’s pension plans are held on deposit with creditworthy financial institutions. The fair value of the cash and cash equivalents are based on the quoted market price of the respective currency in which the cash is maintained.

Pension assets invested in mutual funds: The assets of the Company’s U.S. pension plans are invested in various mutual funds which invest in both equity and debt securities. The fair value of the mutual funds is determined based on the quoted market price of each fund.

Pension assets invested in pooled funds: The assets of the Company’s Japan and United Kingdom pension plans are invested in pooled investment funds, which include both equity and debt securities. The assets of the United Kingdom pension plan are invested in index-linked pooled funds which aim to replicate the movements of an underlying market index to which the fund is linked. Fair value of the pooled funds is based on the net asset value of shares held by the plan as reported by the fund sponsors. All pooled funds held by plans outside of the U.S. are considered to be invested in international equity and debt securities. Although the underlying securities may be largely domestic to the plan holding the investment assets, the underlying assets are considered international from the perspective of the Company.

Pension assets invested in insurance backed assets: A reputable Swiss insurer insures the assets of the Company’s Swiss pension plans. The insurance contract guarantees a federally mandated annual rate of return. The value of the plan assets is effectively the value of the insurance contract. The performance of the underlying assets held by the insurance company has no direct impact on the surrender value of the insurance contract. The insurance backed assets are not traded and therefore have no active market.

Other postretirement benefit plans

Woodward provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits. Postretirement medical benefits are provided to certain current and retired employees and their covered dependants and beneficiaries in the U.S. and the United Kingdom. Benefits include the option to elect company provided medical insurance coverage to age 65 and a Medicare supplemental plan after age 65. Life insurance benefits are provided to certain retirees in the U.S. under frozen plans which are no longer available to current employees. A September 30 measurement date is utilized to value plan assets and obligations for Woodward’s other postretirement benefit plans.

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In connection with the acquisition of HRT (see Note 4, Business acquisitions and dispositions), Woodward assumed estimated benefit obligations of approximately $2,251 related to a Textron-sponsored postretirement medical benefit plan for certain former HRT employees. Participation in the assumed plan for retirees over age 65 is frozen. Active HRT employees have the opportunity to remain on the active employee plan and pay the full premium cost upon retirement.

The postretirement medical benefit plans, other than the assumed HRT plan, were frozen in fiscal year 2006 and no additional employees may participate in the plans. Generally, employees who had attained age 55 and had rendered 10 or more years of service before the plans were frozen were eligible for these postretirement medical benefits.

Certain participating retirees are required to contribute to the plans in order to maintain coverage. The plans, including the assumed HRT plan, provide postretirement medical benefits for approximately 1,100 retired employees and their covered dependants and beneficiaries and may provide future benefits to approximately 70 active employees and their covered dependants and beneficiaries, upon retirement, if the employees elect to participate. As the result of a plan amendment in fiscal year 2009, all the postretirement medical plans are fully insured for retirees who have attained age 65.

The actuarial assumptions used in measuring the net periodic benefit cost and plan obligations of postretirement benefits were as follows:

	2011			2010			2009
Weighted-average discount rate used to determine benefit obligation at September 30		5.54	%		5.84	%		5.50	%
Weighted-average discount rate used to determine net periodic benefit cost for years ended September 30		5.84			5.50			6.51

The discount rate assumption is intended to reflect the rate at which the postretirement benefits could be effectively settled based upon the assumed timing of the benefit payments. In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding. In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark. Woodward’s assumed rates do not differ significantly from any of these benchmarks.

Assumed healthcare cost trend rates at September 30, were as follows:

	2011			2010
Health care cost trend rate assumed for next year		8.0	%		8.5	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.0	%		5.0	%
Year that the rate reaches the ultimate trend rate		2018			2018

Healthcare costs have generally trended upward in recent years, sometimes by amounts greater than 5%. Assumed health care cost trend rates have a significant effect on the amounts reported for postretirement medical plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	1% increase		1% decrease
Effect on projected fiscal year 2012 service and interest cost	$	182	$	(159	)
Effect on accumulated postretirement benefit obligation at September 30, 2011		3,107		(2,722	)

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Net periodic benefit costs consist of the following components reflected as expense in Woodward’s Consolidated Statements of Earnings:

	Year Ending September 30,
	2011			2010			2009
Service cost	$	92		$	120		$	169
Interest cost		1,974			2,081			2,330
Amortization of:
Net (gains) losses		128			189			97
Net prior service (benefit) cost		(871	)		(1,249	)		(3,232	)
Net periodic (benefit) cost	$	1,323		$	1,141		$	(636	)

The following table provides a reconciliation of the changes in the accumulated postretirement benefit obligation and fair value of assets for the postretirement benefits for the fiscal years ending September 30:

	Year Ending September 30,
	2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	37,222		$	42,427
Service cost		92			120
Interest cost		1,974			2,081
Premiums paid by plan participants		2,133			2,274
Net actuarial (gains) losses		(3,146	)		(3,932	)
Benefits paid		(5,349	)		(5,738	)
Foreign currency exchange rate changes		(3	)		(10	)
Projected benefit obligation at end of year	$	32,923		$	37,222
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Contributions by the company		3,216			3,464
Premiums paid by plan participants		2,133			2,274
Benefits paid		(5,349	)		(5,738	)
Fair value of plan assets at end of year	$	—		$	—
Funded status at end of year	$	(32,923	)	$	(37,222	)

The Company’s postretirement medical plan in the United Kingdom represents $509 of the total benefit obligation at September 30, 2011. The Company paid $46 in medical benefits to participants of the United Kingdom postretirement medical plan in fiscal year 2011.

During 2009, as part of Woodward’s postretirement medical benefits, Woodward provided a prescription drug benefit in the U.S. that was at least actuarially equivalent to Medicare Part D. As a result, Woodward was entitled to a federal subsidy that was introduced by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. On January 1, 2009, Woodward converted its prescription drug benefit to a fully insured plan that was no longer eligible for additional federal subsidies.

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The following tables provide the amounts recognized in the statement of financial position and accumulated comprehensive income for the postretirement plans:

	Year Ending September 30,
	2011			2010
Amounts recognized in statement of financial position consist of:
Accrued liabilities	$	(2,503	)	$	(2,693	)
Other non-current liabilities		(30,420	)		(34,529	)
Funded status at end of year	$	(32,923	)	$	(37,222	)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	(1,501	)	$	(2,372	)
Unrecognized net (gains) losses		(2,272	)		1,001
Total amounts recognized		(3,773	)		(1,371	)
Deferred taxes		1,437			530
Amounts recognized in accumulated other comprehensive income	$	(2,336	)	$	(841	)

Woodward pays plan benefits from its general funds; therefore, there are no segregated plan assets as of September 30, 2011 or September 30, 2010.

The accumulated benefit obligation was as follows:

	Year Ending
	September 30,
	2011			2010
Accumulated postretirement benefit obligation	$	(32,923	)	$	(37,222	)

Other changes in plan assets and benefit obligations recognized in other comprehensive income were as follows:

	Year Ending
	September 30
	2011			2010
Net (gain) loss	$	(3,145	)	$	(3,924	)
Amortization of net (gains) losses		(128	)		(189	)
Amortization of prior service benefit (cost)		871			1,249
Total recognized in accumulated other comprehensive income	$	(2,402	)	$	(2,864	)

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Using foreign currency exchange rates as of September 30, 2011 and expected future service, it is anticipated that the future Company contributions to pay benefits, excluding participate contributions, will be as follows:

Year Ending September 30,
2012	$	4,493
2013		4,763
2014		4,911
2015		4,834
2016		4,841
2017 – 2021		21,991

Note 19. Stockholders’ equity

Common Stock

Holders of Woodward’s common stock are entitled to receive dividends when and as declared by the Board of Directors and have the right to one vote per share on all matters requiring stockholder approval.

Dividends declared and paid during the 2011, 2010 and 2009 fiscal years were:

	Year Ending September 30,
	2011		2010		2009
Dividends declared and paid	$	18,581	$	17,085	$	16,864
Dividend per share amount		0.27		0.24		0.24

Stock Repurchase Program

In September 2007, the Board of Directors authorized the repurchase of up to $200,000 of Woodward’s outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period ending in September 2010 (the “2007 Authorization”). Under the 2007 Authorization, Woodward has purchased a total of 55 shares with an aggregate purchase price of $1,515 and no shares of its common stock in fiscal year 2010 and fiscal year 2009, respectively.

In July 2010, the Board of Directors terminated the 2007 Authorization and approved a new stock repurchase plan that authorizes the repurchase of up to $200,000 of Woodward’s outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period that will end in July 2013 (the “2010 Authorization”). Woodward purchased a total of 208 shares with an aggregate purchase price of $6,837 and 108 shares with an aggregate purchase price of $2,998 of its common stock under the 2010 Authorization in fiscal year 2011 and fiscal year 2010, respectively.

Stock-based compensation

Non-qualified stock option awards and restricted stock awards are granted to key management members and directors of the Company. The grant date for these awards is used for the measurement date. Vesting would be accelerated in the event of retirement, disability, or death of a participant, or change in control of the Company, as defined. These awards are valued as of the measurement date and are amortized on a straight-line basis over the requisite vesting period for all awards, including awards with graded vesting. Stock for exercised stock options and for restricted stock awards is issued from treasury stock shares.

Provisions governing the outstanding awards are included in the 2006 Omnibus Incentive Plan (the “2006 Plan”) and the 2002 Stock Option Plan (the “2002 Plan”). The 2006 Plan was approved by stockholders and became effective on January 25, 2006. No further grants will be made under the 2002 Plan. The 2006 Plan made 7,410 stock shares available for grants made on or after January 25, 2006, to members and directors of the Company, subject to annual award limits as specified in the 2006 Plan. In October 2008, Woodward granted restricted stock from treasury stock shares to eligible management employees of MPC pursuant to the 2006 Plan. There were 4,550 stock shares available for future grants as of September 30, 2011.

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Stock-based compensation expense recognized was as follows:

	Year Ending September 30,
	2011		2010		2009
Employee stock-based compensation expense	$	6,590	$	6,686	$	5,499

Stock options

Stock option awards are granted with an exercise price equal to the market price of Woodward’s stock at the date of grant, and generally with a four-year graded vesting schedule and term of 10 years.

The fair value of options granted was estimated on the date of grant using the Black-Scholes-Merton option-valuation model using the assumptions in the following table. The estimated dividend yield is based upon Woodward’s historical dividend practice and the market value of it 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 Ending September 30,
	2011	2010	2009
Expected term	5.8 - 8.7 years	6.5 years	7 years
Estimated volatility	48% - 54%	51.0%	43.0%
Estimated dividend yield	1.0% - 1.3%	1.4%	1.4%
Risk-free interest rate	1.8% - 2.6%	3.4%	3.1%
Weighted-average forfeiture rate	0% - 7.8%	7.9%	8.2%

Woodward calculates the expected term based upon historical experience of plan participants and represents the period of time that stock options granted are expected to be outstanding. Expected volatility is based on historical volatility using daily stock price observations. Historical company information is the primary basis for selection of the expected dividend yield. 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.

The weighted average grant date fair value of options granted follows:

	Year Ending September 30,
	2011		2010		2009
Weighted-average grant date fair value of options	$	15.00	$	11.04	$	7.73

The following is a summary of the activity for stock option awards during the fiscal year ending September 30, 2011:

				Weighted-
				Average
	Number			Exercise Price
Balance at September 30, 2010		4,011		$	16.87
Options granted		709			32.10
Options exercised		(451	)		9.75
Options expired unexercised		(2	)		32.73
Options forfeited		(39	)		26.61
Balance at September 30, 2011		4,228			20.12

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Exercise prices of stock options outstanding as of September 30, 2011 range from $6.15 to $35.00.

Changes in nonvested stock options during the fiscal year ending September 30, 2011 were as follows:

				Weighted-
				Average
	Number			Exercise Price
Balance at September 30, 2010		1,256		$	23.37
Options granted		709			32.10
Options vested		(558	)		23.57
Options forfeited		(39	)		26.61
Balance at September 30, 2011		1,368			27.71

At September 30, 2011, there was $9,964 of unrecognized compensation cost related to nonvested stock options, which Woodward expects to recognize over a weighted-average period of approximately 2.5 years.

Information about stock options that have vested, or are expected to vest, and are exercisable at September 30, 2011, were as follows:

					Weighted-
			Weighted-		Average		Aggregate
			Average		Remaining Life		Intrinsic
	Number		Exercise Price		in Years		Value
Options outstanding		4,228	$	20.12		5.5	$	36,390
Options expected to vest		1,302		27.70		8.3		3,065
Options exercisable		2,860		16.44		4.2		33,130

Other information follows:

	Year Ending September 30,
	2011		2010		2009
Total fair value of stock options vested	$	5,587	$	3,786	$	4,344
Total intrinsic value of options exercised		10,145		14,083		8,695
Cash received from exercises of stock options		4,402		6,084		3,922
Excess tax benefit realized from exercise of stock options		3,558		5,115		2,695

Restricted stock

In connection with Woodward’s acquisition of MPC Products, restricted stock awards were granted with a two-year graded vesting schedule. The restricted stock shares participated in dividends during the vesting period. The fair value of restricted stock granted were estimated using the closing price of Woodward common stock on the grant date. No restricted stock was issued prior to fiscal year 2009.

Changes in the restricted stock awards during the fiscal year ending September 30, 2011 were as follows:

				Weighted-
				Average Grant
				Date Fair Value
	Number			per Share
Balance at September 30, 2010		70		$	33.49
Shares granted		—			n/a
Shares vested		(70	)		33.49
Shares forfeited		—			n/a
Balance at September 30, 2011		—			n/a

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Note 20. Commitments and contingencies

Woodward has entered into operating leases for certain facilities and equipment with terms in excess of one year under agreements that expire at various dates. Some leases require the payment of property taxes, insurance, and maintenance costs in addition to rental payments. Future minimum rental payments required under these leases, excluding available option renewals, are as follows:

Year Ending September 30,
2012	$	7,219
2013		5,583
2014		4,706
2015		3,620
2016		2,814
Thereafter		7,508
Total	$	31,450

Rent expense for all operating leases totaled:

	Year Ending September 30,
	2011		2010		2009
Rent expense	$	10,159	$	9,604	$	11,155

Woodward enters into unconditional purchase obligation arrangements (i.e. issuance of purchase orders, obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as “take-or-pay” contracts) in the normal course of business to ensure that adequate levels of sourced product are available to Woodward. Future minimum unconditional purchase obligations are as follows:

Year Ending September 30,
2012	$	242,735
2013		9,383
2014		376
2015		5
2016		—
Thereafter		—
Total	$	252,499

Woodward also has business commitments made to certain customers to perform under long-term product development projects, some of which may result in near-term financial losses. Such losses, if any, are considered to be a period cost and are recognized as incurred.

Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, workman’s compensation claims, contractual disputes, product warranty claims and alleged violations of various laws and regulations. Woodward has accrued for individual matters that it believes are likely to result in a loss when ultimately resolved using estimates of the most likely amount of loss.

Woodward is partially self-insured in the U.S. for healthcare and workman’s compensation up to predetermined amounts, above which third party insurance applies. Management regularly reviews the probable outcome of these claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities.

While the outcome of pending claims, proceedings and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings and investigations will not have a material adverse effect on the Company’s liquidity, financial condition, or results of operations.

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In connection with the sale of the F&P product line during fiscal year 2009, Woodward assigned to a subsidiary of the purchaser its rights and responsibilities related to certain contracts with the U.S. Government. Woodward provided to the U.S. Government a customary guarantee of the purchaser’s subsidiary’s obligations under the contracts. The purchaser and its affiliates have agreed to indemnify Woodward for any liability incurred with respect to the guarantee.

In the event of a change in control of Woodward, as defined in change-in-control agreements with its current corporate officers, Woodward may be required to pay termination benefits to such officers.

Note 21. Segment information

Effective with the Company’s September 30, 2011 financial reporting, Woodward completed a realignment of its reportable segments to correspond with senior management’s global strategic focus on the markets Woodward serves — the aerospace market and the energy market. Woodward serves these markets through its two reportable segments — Aerospace and Energy. All information in this Annual Report on Form 10-K, including comparative financial information, has been retrospectively revised to reflect the realignment of the reportable segments. Woodward uses reportable segment information internally to manage its business, including the assessment of business segment performance and decisions for the allocation of resources between segments.

Woodward’s Aerospace segment combines the aircraft propulsion portion of the former Turbine Systems business group, now referred to as the Aircraft Turbine Systems business group, with the Airframe Systems business group. Woodward’s Energy segment combines the industrial turbine portion of the former Turbine Systems business group, now referred to as the Industrial Turbomachinery Systems business group, with the Engine Systems and Electrical Power Systems business groups.

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, and certain gains and losses from asset dispositions.

A summary of total segment net sales and consolidated earnings before income taxes follows:

	Year Ending September 30,
	2011			2010			2009
Segment external net sales:
Aerospace	$	843,032		$	769,379		$	704,771
Energy		868,670			687,651			725,354
Total consolidated net sales	$	1,711,702		$	1,457,030		$	1,430,125
Segment earnings:
Aerospace	$	129,502		$	112,171		$	104,550
Energy		113,872			94,014			96,938
Total segment earnings		243,374			206,185			201,488
Nonsegment expenses		(30,942	)		(22,434	)		(46,514	)
Interest expense, net		(24,865	)		(28,876	)		(32,498	)
Consolidated earnings before income taxes	$	187,567		$	154,875		$	122,476

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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:

	At or for the year ending September 30,
	2011		2010		2009
Segment assets:
Aerospace	$	1,036,797	$	994,868	$	1,042,956
Energy		569,929		461,900		439,167
Total segment assets		1,606,726		1,456,768		1,482,123
Unallocated corporate property, plant and equipment, net		8,556		6,111		6,857
Other unallocated assets		166,152		200,354		207,442
Consolidated total assets	$	1,781,434	$	1,663,233	$	1,696,422
Segment depreciation and amortization:
Aerospace	$	50,167	$	50,611	$	38,643
Energy		21,691		21,165		22,452
Total segment depreciation and amortization		71,858		71,776		61,095
Unallocated corporate amounts		3,535		3,840		2,853
Consolidated depreciation and amortization	$	75,393	$	75,616	$	63,948
Segment capital expenditures:
Aerospace	$	34,007	$	13,744	$	11,612
Energy		14,168		11,578		15,158
Total segment capital expenditures		48,175		25,322		26,770
Unallocated corporate amounts		80		2,782		2,177
Consolidated capital expenditures	$	48,255	$	28,104	$	28,947

Sales to General Electric were made by all of Woodward’s reportable segments and totaled approximately 14% of net sales in fiscal year 2011, 15% of net sales in fiscal year 2010, and 17% of net sales in fiscal year 2009. Accounts receivable from General Electric totaled approximately 11% and 14% of accounts receivable at September 30, 2011 and 2010, respectively.

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

	Year Ending September 30,
	2011		2010		2009
United States	$	874,791	$	797,826	$	730,545
Europe		473,054		377,094		406,910
Asia		264,493		191,761		188,958
Other countries		99,364		90,349		103,712
Consolidated external net sales	$	1,711,702	$	1,457,030	$	1,430,125

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

	At September 30,
	2011		2010
United States	$	149,295	$	135,826
Germany		28,385		29,340
Other countries		29,045		28,358
Consolidated property, plant and equipment	$	206,725	$	193,524

Note 22. Supplemental quarterly financial data (Unaudited)

Quarterly results for the fiscal years ending September 30, 2011 and September 30, 2010 follow:

	2011 Fiscal Quarters
	First		Second		Third		Fourth
Net sales	$	365,075	$	418,866	$	438,467	$	489,294
Gross margin (1)		103,898		126,346		134,026		149,279
Earnings before income taxes		31,475		46,487		50,855		58,750
Net Earnings:
Net earnings attributable to Woodward (2)		22,399		32,090		36,056		41,690
Net earnings attributable to noncontrolling interests		—		—		—		—
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward		0.33		0.47		0.52		0.61
Diluted earnings per share attributable to Woodward		0.32		0.46		0.51		0.60
Cash dividends per share		0.06		0.07		0.07		0.07

	2010 Fiscal Quarters
	First		Second		Third		Fourth
Net sales	$	339,308	$	349,352	$	356,367	$	412,003
Gross margin (1)		99,756		105,036		106,401		124,321
Earnings before income taxes		31,490		35,818		38,052		49,515
Net Earnings:
Net earnings attributable to Woodward (2)		22,356		24,068		31,745		32,675
Net earnings (losses) attributable to noncontrolling interests		90		108		120		—
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward		0.33		0.35		0.46		0.48
Diluted earnings per share attributable to Wooward		0.32		0.34		0.45		0.47
Cash dividends per share		0.06		0.06		0.06		0.06

Notes:

1.	Gross margin represents net sales less cost of goods sold excluding amortization expense.
2.	Woodward recognized $6,416 of benefit, in the third quarter of fiscal year 2010, related to favorable resolutions of prior year tax matters and the completion of certain internal revaluation assessments.

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Quarterly results by segment for the fiscal years ending September 30, 2011 and September 30, 2010 follow:

	2011 Fiscal Quarters
	First			Second			Third			Fourth
External net sales:
Aerospace	$	181,144		$	204,945		$	215,242		$	241,701
Energy		183,931			213,921			223,225			247,593
Total	$	365,075		$	418,866		$	438,467		$	489,294
Segment earnings:
Aerospace	$	19,914		$	33,241		$	35,402		$	40,945
Energy		24,503			26,941			29,251			33,177
Total	$	44,417		$	60,182		$	64,653		$	74,122
Earnings reconciliation:
Total segment earnings	$	44,417		$	60,182		$	64,653		$	74,122
Nonsegment expenses		(6,564	)		(7,481	)		(7,554	)		(9,343	)
Interest expense, net		(6,378	)		(6,214	)		(6,244	)		(6,029	)
Consolidated earnings before income taxes	$	31,475		$	46,487		$	50,855		$	58,750

	2010 Fiscal Quarters
	First			Second			Third			Fourth
External net sales:
Aerospace	$	180,384		$	185,196		$	191,150		$	212,649
Energy		158,924			164,156			165,217			199,354
Total	$	339,308		$	349,352		$	356,367		$	412,003
Segment earnings:
Aerospace	$	26,204		$	26,678		$	28,564		$	30,725
Energy		18,837			21,659			22,425			31,093
Total	$	45,041		$	48,337		$	50,989		$	61,818
Earnings reconciliation:
Total segment earnings	$	45,041		$	48,337		$	50,989		$	61,818
Nonsegment expenses		(5,410	)		(5,315	)		(6,085	)		(5,624	)
Interest expense, net		(8,141	)		(7,204	)		(6,852	)		(6,679	)
Consolidated earnings before income taxes	$	31,490		$	35,818		$	38,052		$	49,515

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There have been no disagreements or any reportable events requiring disclosure under Item 304(b) of Regulation S-K.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures, which are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Act is accumulated and communicated to management, including our Principal Executive Officer (Thomas A. Gendron, Chief Executive Officer and President) and Principal Financial Officer (Robert F. Weber, Jr., Vice Chairman, Chief Financial Officer and Treasurer), as appropriate, to allow timely decisions regarding required disclosures.

Thomas A. Gendron and Robert F. Weber, Jr., evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-K. Based on their evaluations, they concluded that our disclosure controls and procedures were effective as of September 30, 2011.

Furthermore, there have been no changes in our internal control over financial reporting during the fourth fiscal quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting for the Company. We have evaluated the effectiveness of internal control over financial reporting using the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and, based on that evaluation, have concluded that the Company’s internal control over financial reporting was effective as of September 30, 2011, the end of the Company’s most recent fiscal year.

Deloitte & Touche, LLP, an independent registered public accounting firm, conducted an audit of Woodward’s internal control over financial reporting as of September 30, 2011, as stated in their report included in “Item 9a — Controls and Procedures.”

Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

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There have been no changes in our internal control over financial reporting during the fourth fiscal quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the third quarter of fiscal year 2011, we completed the IDS Acquisition as discussed in Note 4, Business acquisitions and dispositions, in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. We considered the results of our pre-acquisition due diligence activities, the continuation by IDS of its established internal control over financial reporting, and our implementation of additional internal control over financial reporting activities as part of our overall evaluation of disclosure controls and procedures as of September 30, 2011. The objectives of IDS’ established internal control over financial reporting was predominately associated with local statutory financial reporting. We are in the process of completing a more complete review of IDS’ internal control over financial reporting and will be implementing changes to better align its reporting and controls with the rest of Woodward. As a result of the timing of the acquisition and the changes that are anticipated to be made, and in accordance with the general guidance issued by the SEC regarding exclusion of certain acquired businesses, we are excluding IDS from the September 30, 2011 assessment of Woodward’s internal controls over financial reporting. IDS will be included in the September 30, 2012 assessment of Woodward’s internal controls over financial reporting. IDS accounted for approximately 3% of Woodward’s total assets at September 30, 2011. IDS accounted for less than 1% of Woodward’s total net sales for the year ending September 30, 2011.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Woodward, Inc.
Fort Collins, Colorado

We have audited the internal control over financial reporting of Woodward, Inc. and subsidiaries (the “Company”) as of September 30, 2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Integral Drive Systems AG (“IDS”), which was acquired during the third quarter of fiscal year 2011. The financial statements of IDS constitute 3% of total assets and 1% of total net sales of the consolidated financial statement amounts as of and for the year ended September 30, 2011. Accordingly, our audit did not include the internal control over financial reporting at IDS. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2011, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended September 30, 2011 of the Company and our report dated November 16, 2011 expressed an unqualified opinion on those financial statements and financial statement schedule and included an explanatory paragraph regarding the Company’s adoption of new accounting standards.

/s/ DELOITTE & TOUCHE LLP

Denver, Colorado
November 16, 2011

100

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item relating to our directors and nominees, regarding compliance with Section 16(a) of the Securities Act of 1934, and regarding our Audit Committee is included under the captions “Board of Directors,” “Board Meetings and Committees — Audit Committee” (including information with respect to audit committee financial experts), “Stock Ownership of Management,” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement related to the Annual Meeting of Stockholders to be held January 25, 2012 and is incorporated herein by reference.

The information required by this item relating to our executive officers and other corporate officers is included under the caption “Executive Officers of the Registrant” in Item 1 of this report.

We have adopted a code of ethics that applies to all of our employees, including our principal executive officer and our principal financial and accounting officer. This code of ethics is posted on our Website. The Internet address for our Website is www.woodward.com, and the code of ethics may be found from our main Web page by clicking first on “Investors” and then on “Corporate Governance,” and then on “Woodward Codes of Business Conduct and Ethics.”

We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information to our Website, at the address and location specified above.

Item 11. Executive Compensation

Information regarding executive compensation is under the captions “Board Meetings and Committees — Director Compensation,” “Board Meetings and Committees — Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report on Compensation Discussion and Analysis,” and “Executive Compensation” in our Proxy Statement for the Annual Meeting of Stockholders to be held January 25, 2012, and is incorporated herein by reference, except the section captioned “Compensation Committee Report on Compensation Discussion and Analysis” is hereby “furnished” and not “filed” with this annual report on Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information regarding security ownership of certain beneficial owners and management and related stockholder matters is under the tables captioned “Stock Ownership of Management,” “Persons Owning More Than Five Percent of Woodward Stock,” and “Executive Compensation — Equity Compensation Plan Information” in our Proxy Statement for the Annual Meeting of Stockholders to be held January 25, 2012, and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information set forth under “Board Meetings and Committees — Related Person Transaction Policies and Procedures,” “Board of Directors” and “Audit Committee Report to Stockholders” in our Proxy Statement for the Annual Meeting of the Stockholders to be held January 25, 2012 is incorporated herein by reference except the section captioned “Audit Committee Report” is hereby “furnished” and not “filed” with this annual report on Form 10-K.

Item 14. Principal Accountant Fees and Services

Information regarding principal accountant fees and services is under the captions “Audit Committee Report to Stockholders — Audit Committee’s Policy on Pre-Approval of Services Provided by Independent Registered Public Accounting Firm” and “Audit Committee Report to Stockholders — Fees Paid to Independent Registered Public Accounting Firm” in our Proxy Statement for the Annual Meeting of Stockholders to be held January 25, 2012, and is incorporated herein by reference.

101

PART IV

Item 15. Exhibits and Financial Statement Schedules

	Page Number in
	Form 10-K
(a) (1) Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm		48
Consolidated Statements of Earnings for the fiscal years ending September 30, 2011, 2010, and 2009		49
Consolidated Statements of Comprehensive Earnings for the fiscal years ending September 30, 2011, 2010, and 2009		50
Consolidated Balance Sheets at September 30, 2011 and 2010		51
Consolidated Statements of Cash Flows for the fiscal years ending September 30, 2011, 2010, and 2009		52
Consolidated Statements of Stockholders’ Equity for the fiscal years ending September 30, 2011, 2010, and 2009		53
Notes to Consolidated Financial Statements		54
(a) (2) Consolidated Financial Statement Schedules —
Valuation and Qualifying Accounts		107

Financial statements and schedules other than those listed above are omitted for the reason that they are not applicable, are not required, or the information is included in the financial statements or the footnotes.

(a) (3)	Exhibits Filed as Part of This Report:
	2.1	Stock Purchase Agreement, dated August 19, 2008, by and among Woodward Governor Company, MPC Products Corporation, Techni-Core, Inc., The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991 and the individuals and entities named in Schedule I thereto, filed as Exhibit 10.1 to Current Report on Form 8-K filed August 21, 2008 and incorporated herein by reference
	2.2	Amendment No. 1, dated October 1, 2008, to the Stock Purchase Agreement, dated August 19, 2008, by and among Woodward Governor Company, MPC Products Corporation, Techni-Core, Inc., The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991 and the individuals and entities named in Schedule I thereto, filed as Exhibit 10.6 to Current Report on Form 8-K filed October 7, 2008 and incorporated herein by reference
	2.3	Purchase and Sale Agreement, dated February 27, 2009, by and among Textron Inc., Textron Limited, Woodward Governor Company and Woodward (U.K.) Limited, filed as Exhibit 10.1 to Current Report on Form 8-K filed March 4, 2009 and incorporated herein by reference
	2.4	Letter dated June 5, 2009 amending the Purchase and Sale Agreement, dated February 27, 2009, by and among Textron Inc., Textron Limited, Woodward Governor Company and Woodward (U.K.) Limited, filed as Exhibit 2.1 to Quarterly Report on Form 10-Q filed July 24, 2009 and incorporated herein by reference
	3.1	Restated Certificate of Incorporation, as amended October 3, 2007, filed as Exhibit 3(i)(a) to Annual Report on Form 10-K filed November 20, 2008 and incorporated herein by reference
	3.2	Certificate of Amendment of Certificate of Incorporation, dated January 23, 2008, filed as Exhibit 3(i)(b) to Annual Report on Form 10-K filed November 20, 2008 and incorporated herein by reference

102

	3.3	Certificate of Amendment of the Restated Certificate of Incorporation, dated January 26, 2011, filed as Exhibit 3.1 to Current Report on Form 8-K filed January 28, 2011 and incorporated herein by reference
	3.4	Bylaws of Woodward, Inc., as amended and restated on January 26, 2011, filed as Exhibit 3.2 to Current Report on Form 8-K filed January 28, 2011 and incorporated herein by reference
† 10.1		Long-Term Management Incentive Compensation Plan, filed as Exhibit 10(c) to Annual Report on Form 10-K filed December 22, 2000 (File No. 000-08408) and incorporated herein by reference
† 10.2		Summary Description of Management Incentive Plan, filed as Exhibit 10.2 to Annual Report on Form 10-K filed November 18, 2010 and incorporated by reference.
	10.3	Note Purchase Agreement dated October 15, 2001, filed as Exhibit 4 to Quarterly Report on Form 10-Q filed February 8, 2002 (File No. 000-08408) and incorporated herein by reference
† 10.4		2002 Stock Option Plan, effective January 1, 2002, filed as Exhibit 10(iii) to Quarterly Report on Form 10-Q filed May 9, 2002 (File No. 000-08408) and incorporated herein by reference
† 10.5		Form of Outside Director Stock Purchase Agreement with James L. Rulseh, filed as Exhibit 10(j) to Annual Report on Form 10-K filed December 9, 2002 (File No. 000-08408) and incorporated herein by reference
† 10.6		Summary of Non-Employee Director Meeting Fees and Compensation, filed as Exhibit 10.7 to Annual Report on Form 10-K filed November 20, 2008 and incorporated herein by reference
† 10.7		Material Definitive Agreement with Thomas A. Gendron, filed as Exhibit 10.9 to Annual Report on Form 10-K filed November 20, 2009 and incorporated herein by reference
† 10.8		Material Definitive Agreement with Robert F. Weber, Jr., filed as Exhibit 10.10 to Annual Report on Form 10-K filed November 20, 2009 and incorporated herein by reference
† 10.9		2006 Omnibus Incentive Plan, effective January 25, 2006, filed as Exhibit 4.1 to Registration Statement on Form S-8 filed April 28, 2006 (File No. 333-133640) and incorporated herein by reference
*† 10.10		Amendment No. 1 to the Woodward Governor Company 2006 Omnibus Incentive Plan, effective as of January 26, 2011, filed as an exhibit
† 10.11		Material Definitive Agreement with A. Christopher Fawzy, filed as Exhibit 10.12 to Quarterly Report on Form 10-Q filed July 25, 2007 and incorporated herein by reference
† 10.12		Form of Non-Qualified Stock Option Agreement, filed as Exhibit 99.2 to Current Report on Form 8-K filed November 21, 2007 and incorporated herein by reference
	10.13	Second Amended and Restated Credit Agreement, filed as Exhibit 99.1 to Current Report on Form 8-K filed October 31, 2007 and incorporated herein by reference
† 10.14		Summary of Executive Officer Compensation, filed as Exhibit 10.16 to Annual Report on Form 10-K filed November 20, 2008 and incorporated herein by reference
† 10.15		Dennis Benning Post Retirement Relocation Agreement, filed as Exhibit 10.17 to Annual Report on Form 10-K filed November 29, 2007 and incorporated herein by reference
† 10.16		Dennis Benning Promotion Letter dated October 1, 2008, filed as Exhibit 10.18 to Annual Report on Form 10-K filed November 20, 2008 and incorporated herein by reference
† 10.17		Chad Preiss Promotion Letter dated October 1, 2008, filed as Exhibit 10.19 to Annual Report on Form 10-K filed November 20, 2008 and incorporated herein by reference
	10.18	Term Loan Credit Agreement, dated October 1, 2008, by and among Woodward Governor Company, the institutions from time to time parties thereto as lenders and JPMorgan Chase Bank, National Association, as administrative agent, filed as Exhibit 10.1 to Current Report on Form 8-K filed October 7, 2008 and incorporated herein by reference
	10.19	Note Purchase Agreement, dated October 1, 2008, by and among Woodward Governor Company and the purchasers named therein, filed as Exhibit 10.2 to Current Report on Form 8-K filed October 7, 2008 and incorporated herein by reference
	10.20	Amendment No. 1, dated October 1, 2008, to the Note Purchase Agreement, dated as of October 15, 2001 by and among Woodward Governor Company and the purchasers named therein, filed as Exhibit 10.3 to Current Report on Form 8-K filed October 7, 2008 and incorporated herein by reference

103

	10.21	Amendment No. 2 and Consent, dated October 1, 2008, to the Second Amended and Restated Credit Agreement, dated as of October 25, 2007, by and among Woodward Governor Company, certain foreign subsidiary borrowers of Woodward Governor Company from time to time parties thereto, the institutions from time to time parties thereto, as lenders, JPMorgan Chase Bank, National Association, as administrative agent, Wachovia Bank N.A. and Wells Fargo Bank N.A., as syndication agents, and Deutsche Bank Securities Inc., as documentation agent, filed as Exhibit 10.4 to Current Report on Form 8-K filed October 7, 2008 and incorporated herein by reference
	10.22	Amendment No. 3 to Second Amended and Restated Credit Agreement, dated as of March 30, 2009, by and among Woodward Governor Company, the financial institutions party to the credit agreement referenced therein, and JPMorgan Chase Bank, National Association, as administrative agent, filed as Exhibit 10.1 to Quarterly Report on Form 10-Q filed April 23, 2009 and incorporated herein by reference
	10.23	Amendment No. 1 to Term Loan Credit Agreement, dated as of March 30, 2009, by and among Woodward Governor Company, the financial institutions party to credit agreement referenced therein, and JPMorgan Chase Bank, National Association, as administrative agent, filed as Exhibit 10.2 to Quarterly Report on Form 10-Q filed April 23, 2009 and incorporated herein by reference
	10.24	Term Loan Credit Agreement, dated April 3, 2009, by and among Woodward Governor Company, the institutions from time to time parties thereto, as lenders, and JPMorgan Chase Bank, National Association, as administrative agent, filed as Exhibit 10.1 to Current Report on Form 8-K filed April 8, 2009 and incorporated herein by reference
	10.25	Note Purchase Agreement, dated April 3, 2009, by and among Woodward Governor Company and the purchasers named therein, filed as Exhibit 10.2 to Current Report on Form 8-K filed April 8, 2009 and incorporated herein by reference
† 10.26		Form of Change in Control Agreement for the Company’s principal executive officer and principal financial officer, filed as Exhibit 10.1 to Current Report on Form 8-K filed on December 18, 2009 and incorporated herein by reference
† 10.27		Form of Change in Control Agreement for the Company’s named executive officers other than the Company’s principal executive officer and principal financial officer, filed as Exhibit 10.2 to Current Report on Form 8-K filed on December 18, 2009 and incorporated herein by reference
† 10.28		Executive Benefit Plan, as amended and restated, filed as Exhibit 10.27 to Annual Report on Form 10-K filed November 18, 2010 (File No. 000-08408) and incorporated herein by reference
† 10.29		Dennis Benning Confirmation of Assignment Extension Letter dated November 17, 2010, filed as exhibit 10.28 to Annual Report on Form 10-K filed November 18, 2010 (Filed No. 000-08408) and incorporated herein by reference
† 10.30		James D. Rudolph Promotion Letter, dated February 10, 2011, filed as Exhibit 10.1 to Quarterly Report on Form 10-Q filed April 27, 2011 and incorporated herein by reference
† 10.31		Mr. Martin V. Glass employment letter, dated April 27, 2011, filed as Exhibit 10.1 to Quarterly Report on Form 10-Q filed July 26, 2011 and incorporated herein by reference
† 10.32		Sagar Patel employment letter, dated June 17, 2011, filed as Exhibit 10.2 to Quarterly Report on Form 10-Q filed July 26, 2011 and incorporated herein by reference
	14.1	Code of Ethics, filed as Exhibit 14 to Annual Report on Form 10-K filed on December 10, 2003 and incorporated herein by reference
	* 18.1	Preference Letter issued by current Independent Registered Public Accounting Firm, filed as an exhibit
	* 21.1	Subsidiaries, filed as an exhibit
	* 23.1	Consent of current Independent Registered Public Accounting Firm, filed as an exhibit
	* 31.1	Rule 13a-14(a)/15d-14(a) certification of Thomas A. Gendron, filed as an exhibit
	* 31.2	Rule 13a-14(a)/15d-14(a) certification of Robert F. Weber, Jr., filed as an exhibit
	* 32.1	Section 1350 certifications, filed as an exhibit

104

* 101.1 The following materials from Woodward, Inc.’s Annual Report on Form 10-K for the fiscal year ending September 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Earnings, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders’ Equity, (vi) the Notes to Consolidated Financial Statements, and (vii) document and entity information. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.

*	Filed as an exhibit
†	Management contract or compensatory plan or arrangement

105

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WOODWARD, INC.
Date: November 16, 2011	/s/ Thomas A. Gendron
	Thomas A. Gendron
	Chairman of the Board, Chief Executive Officer, and President (Principal Executive Officer)
Date: November 16, 2011	/s/ Robert F. Weber, Jr.
	Robert F. Weber, Jr.
	Vice Chairman, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John D. Cohn	Director	November 16, 2011
John D. Cohn
/s/ Paul Donovan	Director	November 16, 2011
Paul Donovan
/s/ Thomas A. Gendron Thomas A. Gendron	Chairman of the Board and Director	November 16, 2011
/s/ John A. Halbrook	Director	November 16, 2011
John A. Halbrook
/s/ Michael H. Joyce	Director	November 16, 2011
Michael H. Joyce
/s/ Mary L. Petrovich	Director	November 16, 2011
Mary L. Petrovich
/s/ Larry E. Rittenberg	Director	November 16, 2011
Larry E. Rittenberg
/s/ James R. Rulseh	Director	November 16, 2011
James R. Rulseh
/s/ Ronald M. Sega	Director	November 16, 2011
Ronald M. Sega
/s/ Gregg C. Sengstack	Director	November 16, 2011
Gregg C. Sengstack
/s/ Michael T. Yonker	Director	November 16, 2011
Michael T. Yonker

106

WOODWARD, INC. AND SUBSIDIARIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

For the years ending September 30, 2011, 2010, and 2009

(in thousands)

Column A	Column B		Column C				Column D			Column E
			Additions
	Balance at		Charged to		Charged to
	Beginning of		Costs and		Other		Deductions			Balance at
Description	Year		Expenses		Accounts (a)		(b)			End of Year
Allowance for doubtful accounts:
Fiscal year 2011	$	2,228	$	1,028	$	159	$	(1,093	)	$	2,322
Fiscal year 2010		2,660		431		74		(937	)		2,228
Fiscal year 2009		1,648		1,274		1,003		(1,265	)		2,660

Notes:

(a)	Includes recoveries of accounts previously written off.
(b)	Represents accounts written off and foreign currency exchange rate adjustments. Currency translation adjustments resulted in a decrease in the reserve of $69 in fiscal year 2011, a decrease in the reserve of $37 in fiscal year 2010, and an increase in the reserve of $16 in fiscal year 2009.

107

EX-10.10

EXHIBIT 10.10

AMENDMENT NO. 1

TO THE

WOODWARD GOVERNOR COMPANY 2006 OMNIBUS INCENTIVE PLAN

The Woodward Governor Company 2006 Omnibus Incentive Plan, Effective January 25, 2006 (the “Plan”), is hereby amended, effective as of January 26, 2011, as follows:

1. The Plan is hereby amended by substituting references to “Woodward 2006 Omnibus Incentive Plan” for the references to “Woodward Governor Company 2006 Omnibus Incentive Plan” each place such references appear on the Plan’s title page and in the heading immediately preceding Article 1 of the Plan.

2. Section 1.1 of the Plan is hereby amended in its entirety to read as follows:

1.1 Establishment. Woodward, Inc. (f/k/a Woodward Governor Company), a Delaware corporation (hereinafter referred to as the “Company”), established an omnibus incentive plan, as set forth in this document, effective as of January 25, 2006 (the Effective Date”). Before January 26, 2011, this plan was known as the Woodward Governor Company 2006 Omnibus Incentive Plan and on and after January 26, 2011, following the Company’s name change, shall be known as the Woodward 2006 Omnibus Incentive Plan (hereinafter referred to as the “Plan”). The Plan shall remain in effect as provided in Section 1.3 hereof.

This Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Covered Employee Annual Incentive Awards, Cash-Based Awards, and Other Stock-Based Awards.

3. Section 2.11 of the Plan is hereby amended in its entirety to read as follows:

2.11 “Company” means Woodward, Inc. (f/k/a Woodward Governor Company), a Delaware corporation, and any successor thereto as provided in Article 21 herein.

4. Section 2.42 of the Plan is hereby amended in its entirety to read as follows:

2.42 “Plan” means Woodward 2006 Omnibus Incentive Plan.

5. The second paragraph of Section 8.4 of the Plan is hereby amended by substituting therein the phrase “Woodward, Inc.” for the phrase “Woodward Governor Company” and the phrase “Woodward 2006 Omnibus Incentive Plan” for the phrase “Woodward Governor Company 2006 Omnibus Incentive Plan.”

6. Except as set forth herein, the Plan shall remain in full force and effect.

Executed as of the 8^th day of November, 2011.

WOODWARD, INC.
By:	/s/ Robert F. Weber, Jr.
	Robert F. Weber, Jr.
	Vice Chairman, Chief Financial Officer and Treasurer

EX-18.1

Exhibit 18.1

November 16, 2011

Woodward, Inc.
1000 East Drake Road
Fort Collins, CO 80525

Dear Sirs/Madams:

We have audited the consolidated financial statements of Woodward, Inc. and subsidiaries (the “Company”) as of September 30, 2011 and 2010 and for each of the three years in the period ended September 30, 2011 included in your Annual Report on Form 10-K to the Securities and Exchange Commission and have issued our report thereon dated November 16, 2011, which expresses an unqualified opinion and includes an explanatory paragraph regarding a change in method of accounting for the non-controlling interest in a subsidiary on October 1, 2009. Note 10 to such consolidated financial statements contains a description of your adoption, during the year ended September 30, 2011, of your change in the date for the annual goodwill impairment test. In our judgment, such change is to an alternative accounting principle that is preferable under the circumstances.

Yours truly,

/s/ DELOITTE & TOUCHE LLP

Denver, Colorado

EX-21.1

Exhibit 21.1

Woodward, Inc.
Subsidiaries of the Registrant

Entity Name	Jurisdiction of Organization
Baker Electrical Products	Delaware, USA
Techni-Core, Inc	Delaware, USA
MPC Export Corporation	British Virgin Islands
MPC Products Corporation dba Woodward MPC, Inc.	Illinois, USA
Woodward FST, Inc.	Delaware, USA
Woodward Controls, Inc	Delaware, USA
Woodward International, Inc	Delaware, USA
MotoTron Corporation	Delaware, USA
Woodward Governor de Mexico S.A. de C.V.	Mexico City, Mexico
Woodward Governor France S.A.R.L.	Venissieux, France
Woodward Governor Germany GmbH	Aken, Germany
Woodward Governor GmbH	Lucerne, Switzerland
WGC LLC	Delaware, USA
Woodward Germany Verwaltungs GmbH	Frankfurt am Main, Germany
Woodward Germany GmbH & Co. KG	Frankfurt am Main, Germany
Woodward Governor India Limited	New Delhi, India
Woodward Governor Nederland B.V.	Hoofddorp, The Netherlands
Woodward Governor (Japan) Ltd.	Chiba, Japan
Woodward Controls and Solutions (Thailand) Ltd.	Bangkok, Thailand
Woodward Governor Poland Sp.Zo.o	Krakow, Poland
Woodward Regulateur (Quebec), Inc.	Quebec, Canada
Woodward Comercio de Sistemas de Controle e Protecao Electrica Ltda.	Sao Paulo, Brazil
Woodward GmbH	Stuttgart, Germany
Woodward Hong Kong Limited	Hong Kong, China
Woodward (Tianjin) Controls Company Limited	Tianjin, China
Woodward Controls (Suzhou) Co., Ltd.	Suzhou, China
Woodward Kempen GmbH	Kempen, Germany
Woodward Power Solutions GmbH	Kempen, Germany
Woodward SEG Lima S.A.C	Lima, Peru
Woodward (U.K.) Ltd.	Dorset, UK
Woodward HRT, Inc.	Delaware, USA
Woodward Energy Controls Singapore Pte Ltd.	Singapore
Woodward CIS Limited Liability Company	St. Petersburg, Russia
Woodward Motoron Systems LLC (Joint Venture)	Delaware, USA
AESYS, LLC	Texas, USA
Woodward IDS Switzerland AG	Zug, Switzerland
IDS LTD	Sofia, Bulgaria
IDS Solar LTD	Sofia, Bulgaria

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-170761 on Form S-3 and Registration Statement Numbers 333-10409, 333-66422, 333-82302, 333-112521 and 333-133640 on Form S-8 of our reports dated November XX, 2011, relating to the financial statements and financial statement schedule of Woodward, Inc. (which report expresses an unqualified opinion and includes an explanatory paragraph regarding a change in method of accounting for the non-controlling interest in a subsidiary on October 1, 2009), and the effectiveness of Woodward, Inc.’s internal control over financial reporting appearing in the Annual Report on Form 10-K of Woodward, Inc. for the year ended September 30, 2011.

/s/ DELOITTE & TOUCHE LLP

Denver, Colorado
November 16, 2011

EX-31.1

Exhibit 31.1

Woodward, Inc.
Rule 13a-14(a)/15d-14(a) certifications

CERTIFICATION

I, Thomas A. Gendron, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the year ended September 30, 2011, of Woodward, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2011	/s/ Thomas A. Gendron
	Thomas A. Gendron
	Chairman of the Board, Chief Executive Officer, President (Principal Executive Officer)

A signed original of this written statement required by Rule 13a-14(a)/15d-14(a), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Rule 13a-14(a)/15d-14(a), has been provided to Woodward and will be retained by Woodward and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

Exhibit 31.2

Woodward, Inc.
Rule 13a-14(a)/15d-14(a) certifications

CERTIFICATION

I, Robert F. Weber, Jr., certify that:

1.	I have reviewed this Annual Report on Form 10-K for the year ended September 30, 2011, of Woodward, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2011	/s/ Robert F. Weber, Jr.
	Robert F. Weber, Jr.
	Vice Chairman, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

A signed original of this written statement required by Rule 13a-14(a)/15d-14(a), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Rule 13a-14(a)/15d-14(a), has been provided to Woodward and will be retained by Woodward and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

Woodward, Inc.
Section 1350 certifications

We hereby certify, pursuant to 18 U.S.C. Section 1350, that the accompanying Annual Report on Form 10-K for the year ended September 30, 2011, of Woodward, Inc., fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Woodward, Inc.

Date: November 16, 2011	/s/ Thomas A. Gendron
	Thomas A. Gendron
	Chairman of the Board, Chief Executive Officer, and President
Date: November 16, 2011	/s/ Robert F. Weber, Jr.
	Robert F. Weber, Jr.
	Vice Chairman, Chief Financial Officer and Treasurer

A signed original of this written statement required by Rule 13a-14(a)/15d-14(a), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Rule 13a-14(a)/15d-14(a), has been provided to Woodward and will be retained by Woodward and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Stockholders' Equity (Equity Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Purchase of treasury stock	$ 9,700,000	$ 8,703,000	$ 866,000
2010 Authorization [Member]
Authorized repurchase amount	200,000,000
Repurchase period in years	3
Purchase of treasury stock	6,837,000	2,998,000
Purchase of treasury stock, number of shares	208,000	108,000
2007 Authorization [Member]
Authorized repurchase amount	200,000,000
Repurchase period in years	3
Purchase of treasury stock		$ 1,515,000	$ 0
Purchase of treasury stock, number of shares		55,000	0

XML

Other Intangibles - Net (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011
Other Intangibles - Net
2012	$ 32,872
2013	30,521
2014	27,370
2015	24,861
2016	23,060
Thereafter	130,213
Total future amortization expense	$ 268,897

XML

Segment Information (Property, Plant, and Equipment - Net by Geographical Area) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Property, plant and equipment, net	$ 206,725	$ 193,524
United States [Member]
Property, plant and equipment, net	149,295	135,826
Germany [Member]
Property, plant and equipment, net	28,385	29,340
Other Countries [Member]
Property, plant and equipment, net	$ 29,045	$ 28,358

XML

Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2011

Commitments and Contingencies Disclosure

Future Minimum Rental Payments

Year Ending September 30,
2012	$	7,219
2013		5,583
2014		4,706
2015		3,620
2016		2,814
Thereafter		7,508
Total	$	31,450

Rent Expense for All Operating Leases

	Year Ending September 30,
	2011		2010		2009
Rent expense	$	10,159	$	9,604	$	11,155

Future Minimum Unconditional Purchase Obligations

Year Ending September 30,
2012	$	242,735
2013		9,383
2014		376
2015		5
2016		—
Thereafter		—
Total	$	252,499

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Stockholders' Equity (Dividends Declared and Paid) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Equity
Dividends declared and paid									$ 18,581	$ 17,085	$ 16,864
Dividend per share amount	$ 0.07	$ 0.07	$ 0.07	$ 0.06	$ 0.06	$ 0.06	$ 0.06	$ 0.06	$ 0.27	$ 0.24	$ 0.24

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Condensed Consolidated Statements of Comprehensive Earnings (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Comprehensive earnings attributable to Woodward:
Net earnings attributable to Woodward	$ 132,235	$ 110,844	$ 94,352
Other comprehensive earnings:
Foreign currency translation adjustments	(2,653)	(8,718)	6,098
Tax changes on foreign currency translation adjustments	1,604	2,406	(343)
Foreign currency translation adjustments, net of tax	(1,049)	(6,312)	5,755
Reclassification of unrecognized derivative losses to earnings	229	282	237
Realized loss on cash flow hedge	0	0	(1,308)
Tax changes on derivative transactions	(86)	(108)	407
Derivative adjustments, net of tax	143	174	(664)
Minimum retirement benefit liability adjustments:
Prior service (cost) benefit arising during the period	0	(3,963)	1,427
Net gain (loss) arising during the period	(3,088)	7,873	(25,311)
Loss due to settlement arising during the period	0	345	246
Amortization of: Prior service benefit	(805)	(1,517)	(3,499)
Amortization of: Net loss	1,339	1,525	574
Amortization of: Transition obligation asset	0	86	84
Foreign currency exchange rate changes	(376)	60	(311)
Tax changes on minimum retirement benefit liability adjustments	1,120	(2,058)	11,343
Minimum retirement benefit liability adjustments, net of tax	(1,810)	2,351	(15,447)
Comprehensive earnings attributable to Woodward	129,519	107,057	83,996
Comprehensive earnings attributable to noncontrolling interest:
Net earnings attributable to noncontrolling interest	0	318	64
Foreign currency translation adjustments	0	163	(87)
Tax changes on foreign currency translation adjustments	0	(58)	32
Comprehensive earnings attributable to noncontrolling interest	0	423	9
Total comprehensive earnings	$ 129,519	$ 107,480	$ 84,005

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Condensed Consolidated Balance Sheets (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Current assets:
Cash and cash equivalents	$ 74,539	$ 105,579
Accounts receivable, less allowance for losses of $2,322 and $2,228, respectively	297,614	248,513
Inventories	381,555	295,034
Income taxes receivable	2,456	18,170
Deferred income tax assets	38,270	33,689
Other current assets	23,359	18,157
Total current assets	817,793	719,142
Property, plant and equipment, net	206,725	193,524
Goodwill	462,282	438,594
Intangible assets, net	268,897	292,149
Deferred income tax assets	10,466	8,623
Other assets	15,271	11,201
Total assets	1,781,434	1,663,233
Current liabilities:
Short-term borrowings	0	22,099
Current portion of long-term debt	18,374	18,493
Accounts payable	123,453	107,468
Income taxes payable	5,440	5,453
Deferred income tax liabilities	74	0
Accrued liabilities	133,516	109,052
Total current liabilities	280,857	262,565
Long-term debt, less current portion	406,875	425,250
Deferred income tax liabilities	85,911	88,249
Other liabilities	88,694	83,975
Total liabilities	862,337	860,039
Commitments and contingencies (Note 20)
Stockholders' equity:
Preferred stock, par value $0.003 per share, 10,000 shares authorized, no shares issued	0	0
Common stock, par value $0.001455 per share, 150,000 shares authorized, 72,960 shares issued	106	106
Additional paid-in capital	81,453	73,915
Accumulated other comprehensive earnings	3,626	6,342
Deferred compensation	4,581	4,888
Retained earnings	949,573	835,919
Stockholders' equity excluding treasury stock	1,039,339	921,170
Treasury stock at cost, 4,070 shares and 4,223 shares, respectively	(115,661)	(113,088)
Treasury stock held for deferred compensation, at cost, 315 shares and 356 shares, respectively	(4,581)	(4,888)
Total stockholders' equity	919,097	803,194
Total liabilities and stockholders' equity	$ 1,781,434	$ 1,663,233

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Derivative Instruments and Hedging Activities (Narrative) (Details) In Thousands	12 Months Ended			3 Months Ended
	Sep. 30, 2011 USD ($)	Sep. 30, 2002 Derivatives in Fair Value Hedging Relationships [Member]	Sep. 30, 2002 Derivatives in Cash Flow Hedging Relationships [Member]	Dec. 31, 2010 Derivatives in Foreign Currency Relationships [Member] USD ($)	Dec. 31, 2009 Derivatives in Foreign Currency Relationships [Member] USD ($)	Sep. 30, 2010 Derivatives in Foreign Currency Relationships [Member] EUR (€)	Sep. 30, 2010 Derivatives in Foreign Currency Relationships [Member] USD ($)	Sep. 30, 2009 Derivatives in Foreign Currency Relationships [Member] USD ($)	Sep. 30, 2009 Derivatives in Foreign Currency Relationships [Member] EUR (€)
Term of gain or loss recognition in interest expense on terminated derivatives recorded in OCI	twelve months	10 years	10 years
Foreign currency exchange rate contract						€ 39,000	$ 52,549	$ 11,662	€ 7,900
Gain on the fair market value of foreign currency exchange rate contract							579
Loss on the fair market value of foreign currency exchange rate contract								173
Realized loss on settlement of forward contract				1,033	71
Net unrecognized losses on terminated derivative instruments expected to be reclassified to earnings	$ 173

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Schedule II (Tables) (Allowance for Doubtful Accounts [Member])

12 Months Ended

Sep. 30, 2011

Allowance for Doubtful Accounts [Member]

Schedule II

Column A	Column B		Column C				Column D			Column E
			Additions
	Balance at		Charged to		Charged to
	Beginning of		Costs and		Other		Deductions			Balance at
Description	Year		Expenses		Accounts (a)		(b)			End of Year
Allowance for doubtful accounts:
Fiscal year 2011	$	2,228	$	1,028	$	159	$	(1,093	)	$	2,322
Fiscal year 2010		2,660		431		74		(937	)		2,228
Fiscal year 2009		1,648		1,274		1,003		(1,265	)		2,660

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Credit Facilities and Short-term Borrowings (Short-term Borrowings and Availability Under Various Short-term Credit Facilities) (Details) (USD $) In Thousands	Sep. 30, 2011
Total availability	$ 250,541
Outstanding letters of credit and guarantees	(7,612)
Remaining availability	242,929
Foreign Pooling Arrangement Facility [Member]
Total availability	5,279
Remaining availability	5,279
Foreign Performance Guarantee Facilities [Member]
Total availability	9,736
Outstanding letters of credit and guarantees	(2,730)
Remaining availability	7,006
Foreign Lines of Credit And Overdraft Facilities [Member]
Total availability	10,526
Remaining availability	10,526
Revolving Credit Facility [Member]
Total availability	225,000
Outstanding letters of credit and guarantees	(4,882)
Remaining availability	$ 220,118

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Accrued Liabilities (Warranties) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Accrued Liabilities
Warranties, beginning of period	$ 10,851	$ 10,005
Increases to accruals related to warranties during the period	5,402	5,555
Increases due to acquisition of IDS	2,250	0
Settlements of amounts accrued	(4,403)	(4,494)
Foreign currency exchange rate changes	(17)	(215)
Warranties, end of period	$ 14,083	$ 10,851

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Other (Income) Expense, Net

12 Months Ended

Sep. 30, 2011

Other (Income) Expense, Net

Other (Income) Expense, Net

Note 16. Other (income) expense, net

	Year Ending September 30,
	2011			2010			2009
Net (gain) loss on sale of assets	$	644		$	(131	)	$	(1,093	)
Rent income		(576	)		(515	)		(959	)
Net gain on investments in deferred compensation program		(31	)		(520	)		(291	)
Net (income) expense recognized in earnings on foreign currency derivatives (Note 6)		1,612			(681	)		173
Other		(61	)		56			(271	)
	$	1,588		$	(1,791	)	$	(2,441	)

For additional information regarding "Net (income) expense recognized in earnings on foreign currency derivatives" refer to Note 6, Derivative instruments and hedging activities.

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Goodwill (Goodwill) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Goodwill, Beginning Balance	$ 438,594	$ 442,802
Additions	24,188	0
Adjustments	(103)	(2,722)
Effects of Currency Translation	(397)	(1,486)
Goodwill, Ending Balance	462,282	438,594
Energy [Member]
Goodwill, Beginning Balance	81,914	83,268
Additions	24,188	0
Adjustments	0	0
Effects of Currency Translation	(345)	(1,354)
Goodwill, Ending Balance	105,757	81,914
Aerospace [Member]
Goodwill, Beginning Balance	356,680	359,534
Additions	0	0
Adjustments	(103)	(2,722)
Effects of Currency Translation	(52)	(132)
Goodwill, Ending Balance	$ 356,525	$ 356,680

XML

Retirement Benefits (Schedule of Expected Benefit Payments) (Details) (USD $) In Thousands	Sep. 30, 2011
Pension Plans, Defined Benefit [Member]
2012	$ 5,577
2013	6,254
2014	6,737
2015	7,657
2016	7,954
2017 - 2021	51,771
United States Pension Plans of US Entity, Defined Benefit [Member]
2012	3,109
2013	3,581
2014	4,154
2015	4,732
2016	5,250
2017 - 2021	36,000
Foreign Pension Plans, Defined Benefit [Member]
2012	2,468
2013	2,673
2014	2,583
2015	2,925
2016	2,704
2017 - 2021	$ 15,771

XML

Supplemental Quarterly Financial Data (Unaudited) (Quarterly Financial Information) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Quarterly Financial Data
Net sales	$ 489,294	$ 438,467	$ 418,866	$ 365,075	$ 412,003	$ 356,367	$ 349,352	$ 339,308	$ 1,711,702	$ 1,457,030	$ 1,430,125
Gross margin	149,279	134,026	126,346	103,898	124,321	106,401	105,036	99,756
Earnings before income taxes	58,750	50,855	46,487	31,475	49,515	38,052	35,818	31,490	187,567	154,875	122,476
Net Earnings:
Net earnings attributable to Woodward	41,690	36,056	32,090	22,399	32,675	31,745	24,068	22,356	132,235	110,844	94,352
Net earnings attributable to noncontrolling interest						$ 120	$ 108	$ 90	$ 0	$ 318	$ 64
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward	$ 0.61	$ 0.52	$ 0.47	$ 0.33	$ 0.48	$ 0.46	$ 0.35	$ 0.33	$ 1.92	$ 1.62	$ 1.39
Diluted earnings per share attributable to Woodward	$ 0.60	$ 0.51	$ 0.46	$ 0.32	$ 0.47	$ 0.45	$ 0.34	$ 0.32	$ 1.89	$ 1.59	$ 1.37
Dividend per share amount	$ 0.07	$ 0.07	$ 0.07	$ 0.06	$ 0.06	$ 0.06	$ 0.06	$ 0.06	$ 0.27	$ 0.24	$ 0.24

XML

Document and Entity Information (USD $)	12 Months Ended
	Sep. 30, 2011	Nov. 11, 2011	Mar. 31, 2011
Document and Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Entity Registrant Name	Woodward, Inc.
Entity Central Index Key	0000108312
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		68,902,457
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 1,909,499,390

XML

Retirement Benefits (Tables)

12 Months Ended

Sep. 30, 2011

Pension Plans, Defined Benefit [Member]

Schedule of Actuarial Assumptions Used

	2011			2010			2009
United States:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.55	%		5.85	%		5.50	%
Rate of compensation increase		4.00			4.00			4.00
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		5.85			5.50			6.50
Rate of compensation increase		4.00			4.00			n/a
Long-term rate of return on plan assets		7.90			7.50			7.50
United Kingdom:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.10	%		4.90	%		5.40	%
Rate of compensation increase		4.30			4.30			4.10
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		4.90			5.40			6.90
Rate of compensation increase		4.30			4.10			4.70
Long-term rate of return on plan assets		6.00			6.50			6.50
Japan:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		1.50	%		1.25	%		1.75	%
Rate of compensation increase		2.00			2.00			2.50
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		1.25			1.75			1.90
Rate of compensation increase		2.00			2.50			2.00
Long-term rate of return on plan assets		3.00			3.30			3.11
Switzerland:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		2.50	%		n/a	%		n/a	%
Rate of compensation increase		2.00			n/a			n/a
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		3.00			n/a			n/a
Rate of compensation increase		2.00			n/a			n/a
Long-term rate of return on plan assets		3.00			n/a			n/a

Schedule of Net Periodic Benefit Costs

	Year Ending September 30,
	United States									Other Countries									Total
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Service cost	$	3,433		$	3,647		$	1,409		$	992		$	784		$	716		$	4,425		$	4,431		$	2,125
Interest cost		5,646			4,890			2,964			2,284			2,261			2,175			7,930			7,151			5,139
Expected return on plan assets		(6,693	)		(4,759	)		(2,627	)		(2,541	)		(2,361	)		(2,178	)		(9,234	)		(7,120	)		(4,805	)
Amortization of:
Transition obligation		—			—			—			—			86			81			—			86			81
Net (gains) losses		312			583			337			900			753			135			1,212			1,336			472
Net prior service (benefit) cost		75			(260	)		(259	)		(9	)		(8	)		(7	)		66			(268	)		(266	)
Settlement costs		—			—			—			—			345			—			—			345			—
Curtailment costs		—			165			—			—			—			237			—			165			237
Net periodic (benefit) cost	$	2,773		$	4,266		$	1,824		$	1,626		$	1,860		$	1,159		$	4,399		$	6,126		$	2,983

Schedule of Changes in Projected Benefit Obligations and Fair Value of Plan Assets

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	97,786		$	89,551		$	56,657		$	53,450		$	154,443		$	143,001
Obligation assumed in IDS Acquisition		—			—			2,038			—			2,038			—
Service cost		3,433			3,647			992			784			4,425			4,431
Interest cost		5,646			4,890			2,284			2,261			7,930			7,151
Net actuarial (gains) losses		1,686			(2,877	)		(3,498	)		2,902			(1,812	)		25
Contribution by participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Amounts paid by Company for Pension Protection Fund levy		—			—			(67	)		—			(67	)		—
Curtailment loss		—			165			—			—			—			165
Plan amendments		—			3,962			—			—			—			3,962
Foreign currency exchange rate changes		—			—			917			374			917			374
Projected benefit obligation at end of year	$	106,341		$	97,786		$	57,355		$	56,657		$	163,696		$	154,443
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	85,128		$	64,102		$	43,539		$	40,726		$	128,667		$	104,828
Plan assets received in connection with IDS Acquisition		—			—			1,604			—			1,604			—
Actual return on plan assets		482			7,998			708			3,209			1,190			11,207
Contributions by the company		6,580			14,580			4,151			2,793			10,731			17,373
Contributions by plan participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Foreign currency exchange rate changes		—			—			333			(75	)		333			(75	)
Fair value of plan assets at end of year	$	89,980		$	85,128		$	48,367		$	43,539		$	138,347		$	128,667
Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)

Schedule of Amounts Recognized in Balance Sheet and Other Comprehensive Income (Loss)

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Amounts recognized in statement of financial position consist of:
Other non-current liabilities	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)
Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	1,517		$	1,593		$	(24	)	$	(30	)	$	1,493		$	1,563
Unrecognized net (gains) losses		16,769			9,183			13,779			15,963			30,548			25,146
Total amounts recognized		18,286			10,776			13,755			15,933			32,041			26,709
Deferred taxes		(6,949	)		(4,095	)		(4,763	)		(5,585	)		(11,712	)		(9,680	)
Amounts recognized in accumulated other comprehensive income	$	11,337		$	6,681		$	8,992		$	10,348		$	20,329		$	17,029

Schedule of Accumulated and Projected Benefit Obligations and Fair Value of Plan Assets

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Projected benefit obligation	$	(106,341	)	$	(97,786	)	$	(57,355	)	$	(56,657	)	$	(163,696	)	$	(154,443	)
Accumulated benefit obligation		(96,630	)		(86,260	)		(54,304	)		(54,139	)		(150,934	)		(140,399	)
Fair value of plan assets		89,980			85,128			48,367			43,539			138,347			128,667

Schedule of Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)

	Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Net (gain) loss	$	7,897		$	(6,182	)	$	(1,664	)	$	2,233		$	6,233		$	(3,949	)
Prior service (benefit) cost		—			3,963			—			—			—			3,963
Amortization of net gains (losses)		(312	)		(583	)		(899	)		(753	)		(1,211	)		(1,336	)
Amortization of transition obligation asset		—			—			—			(86	)		—			(86	)
Amortization of prior service benefit (cost)		(75	)		260			9			8			(66	)		268
Settlement loss		—			—			—			(345	)		—			(345	)
Foreign currency exchange rate changes		—			—			376			(60	)		376			(60	)
Total recognized in accumulated other comprehensive income	$	7,510		$	(2,542	)	$	(2,178	)	$	997		$	5,332		$	(1,545	)

Schedule of Amounts Expected to be Amortized from Accumulated Other Comprehensive Income (Loss) and Reported as a Component of Net Periodic Benefit Cost During the Next Fiscal Year

	United		Other
	States		Countries			Total
Prior service (benefit) cost	$	75	$	(9	)	$	66
Net actuarial (gains) losses		524		667			1,191

Schedule of Expected Benefit Payments

	United		Other
Year Ending September 30,	States		Countries		Total
2012	$	3,109	$	2,468	$	5,577
2013		3,581		2,673		6,254
2014		4,154		2,583		6,737
2015		4,732		2,925		7,657
2016		5,250		2,704		7,954
2017 — 2021		36,000		15,771		51,771

Schedule of Allocation of Plan Assets, Actual and Target Allocations

	At September 30,
	2011						2010
	Percentage			Target			Percentage			Target
	of Plan			Allocation			of Plan			Allocation
	Assets			Ranges			Assets			Ranges
United States:
Asset Class
Equity Securities		58.7	%		39.7- 79.7	%		49.8	%		40.0- 60.0	%
Debt Securities		41.1	%		30.3- 50.3	%		50.0	%		40.0- 60.0	%
Other		0.2	%		0.0	%		0.2	%		0.0	%
		100.0	%					100.0	%
United Kingdom:
Asset Class
Equity Securities		37.7	%		40.0- 60.0	%		40.7	%		46.0- 54.0	%
Debt Securities		62.2	%		35.0- 65.0	%		58.9	%		46.5- 53.5	%
Other		0.1	%		0.0	%		0.4	%		0.0	%
		100.0	%					100.0	%
Japan:
Asset Class
Equity Securities		39.9	%		36.0- 44.0	%		55.2	%		50.0- 58.0	%
Debt Securities		59.2	%		55.0- 63.0	%		43.1	%		41.0- 49.0	%
Other		0.9	%		0.0- 2.0	%		1.7	%		0.0- 2.0	%
		100.0	%					100.0	%
Switzerland:
Asset Class
Equity Securities		0.0	%		0.0	%		n/a			n/a
Debt Securities		0.0	%		0.0	%		n/a			n/a
Other		100.0	%		100.0	%		n/a			n/a
		100.0	%					n/a

Schedule of Allocation of Plan Assets, Fair Value Hieracrchy

	At September 30, 2011
	Level 1				Level 2				Level 3
	United		Other		United		Other		United		Other
	States		Countries		States		Countries		States		Countries		Total
Asset Category:
Cash and cash equivalents	$	198	$	125	$	—	$	—	$	—	$	—	$	323
Mutual funds:
U.S. corporate bond fund		36,958		—		—		—		—		—		36,958
U.S. equity large cap fund		29,169		—		—		—		—		—		29,169
International equity large cap growth fund		23,655		—		—		—		—		—		23,655
Pooled funds:
Japanese equity securities		—		—		—		1,921		—		—		1,921
International equity securities		—		—		—		1,652		—		—		1,652
Japanese fixed income securities		—		—		—		3,958		—		—		3,958
International fixed income securities		—		—		—		1,336		—		—		1,336
Index linked U.K. equity fund		—		—		—		7,098		—		—		7,098
Index linked international equity fund		—		—		—		7,062		—		—		7,062
Index linked U.K. corporate bonds fund		—		—		—		13,255		—		—		13,255
Index linked U.K. government securities fund		—		—		—		3,646		—		—		3,646
Index linked U.K. long-term government securities fund		—		—		—		6,440		—		—		6,440
Insurance backed assets:
Insurance backed assets		—		—		—		—		—		1,874		1,874
Total assets	$	89,980	$	125	$	—	$	46,368	$	—	$	1,874	$	138,347

Other Postretirement Benefit Plans, Defined Benefit [Member]

Schedule of Actuarial Assumptions Used

	2011			2010			2009
Weighted-average discount rate used to determine benefit obligation at September 30		5.54	%		5.84	%		5.50	%
Weighted-average discount rate used to determine net periodic benefit cost for years ended September 30		5.84			5.50			6.51

Schedule of Net Periodic Benefit Costs

	Year Ending September 30,
	2011			2010			2009
Service cost	$	92		$	120		$	169
Interest cost		1,974			2,081			2,330
Amortization of:
Net (gains) losses		128			189			97
Net prior service (benefit) cost		(871	)		(1,249	)		(3,232	)
Net periodic (benefit) cost	$	1,323		$	1,141		$	(636	)

Schedule of Changes in Projected Benefit Obligations and Fair Value of Plan Assets

	Year Ending September 30,
	2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	37,222		$	42,427
Service cost		92			120
Interest cost		1,974			2,081
Premiums paid by plan participants		2,133			2,274
Net actuarial (gains) losses		(3,146	)		(3,932	)
Benefits paid		(5,349	)		(5,738	)
Foreign currency exchange rate changes		(3	)		(10	)
Projected benefit obligation at end of year	$	32,923		$	37,222
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Contributions by the company		3,216			3,464
Premiums paid by plan participants		2,133			2,274
Benefits paid		(5,349	)		(5,738	)
Fair value of plan assets at end of year	$	—		$	—
Funded status at end of year	$	(32,923	)	$	(37,222	)

Schedule of Amounts Recognized in Balance Sheet and Other Comprehensive Income (Loss)

	Year Ending September 30,
	2011			2010
Amounts recognized in statement of financial position consist of:
Accrued liabilities	$	(2,503	)	$	(2,693	)
Other non-current liabilities		(30,420	)		(34,529	)
Funded status at end of year	$	(32,923	)	$	(37,222	)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	(1,501	)	$	(2,372	)
Unrecognized net (gains) losses		(2,272	)		1,001
Total amounts recognized		(3,773	)		(1,371	)
Deferred taxes		1,437			530
Amounts recognized in accumulated other comprehensive income	$	(2,336	)	$	(841	)

Schedule of Accumulated and Projected Benefit Obligations and Fair Value of Plan Assets

	Year Ending
	September 30,
	2011			2010
Accumulated postretirement benefit obligation	$	(32,923	)	$	(37,222	)

Schedule of Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)

	Year Ending
	September 30
	2011			2010
Net (gain) loss	$	(3,145	)	$	(3,924	)
Amortization of net (gains) losses		(128	)		(189	)
Amortization of prior service benefit (cost)		871			1,249
Total recognized in accumulated other comprehensive income	$	(2,402	)	$	(2,864	)

Schedule of Health Care Cost Trend Rates

	2011			2010
Health care cost trend rate assumed for next year		8.0	%		8.5	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.0	%		5.0	%
Year that the rate reaches the ultimate trend rate		2018			2018

Schedule of Health Care Costs Sensitivity

	1% increase		1% decrease
Effect on projected fiscal year 2012 service and interest cost	$	182	$	(159	)
Effect on accumulated postretirement benefit obligation at September 30, 2011		3,107		(2,722	)

Schedule of Future Postretirement Company Contributions

Year Ending September 30,
2012	$	4,493
2013		4,763
2014		4,911
2015		4,834
2016		4,841
2017 — 2021		21,991

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Stockholders' Equity

12 Months Ended

Sep. 30, 2011

Stockholders' Equity and Stock-Based Compensation [Abstract]

Stockholders' Equity

 

Note 19. Stockholders' equity

Common Stock

Holders of Woodward's common stock are entitled to receive dividends when and as declared by the Board of Directors and have the right to one vote per share on all matters requiring stockholder approval.

Dividends declared and paid during the 2011, 2010 and 2009 fiscal years were:

	Year Ending September 30,
	2011		2010		2009
Dividends declared and paid	$	18,581	$	17,085	$	16,864
Dividend per share amount		0.27		0.24		0.24

Stock Repurchase Program

In September 2007, the Board of Directors authorized the repurchase of up to $200,000 of Woodward's outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period ending in September 2010 (the "2007 Authorization"). Under the 2007 Authorization, Woodward has purchased a total of 55 shares with an aggregate purchase price of $1,515 and no shares of its common stock in fiscal year 2010 and fiscal year 2009, respectively.

In July 2010, the Board of Directors terminated the 2007 Authorization and approved a new stock repurchase plan that authorizes the repurchase of up to $200,000 of Woodward's outstanding shares of common stock on the open market or in privately negotiated transactions over a three-year period that will end in July 2013 (the "2010 Authorization"). Woodward purchased a total of 208 shares with an aggregate purchase price of $6,837 and 108 shares with an aggregate purchase price of $2,998 of its common stock under the 2010 Authorization in fiscal year 2011 and fiscal year 2010, respectively.

Stock-based compensation

Non-qualified stock option awards and restricted stock awards are granted to key management members and directors of the Company. The grant date for these awards is used for the measurement date. Vesting would be accelerated in the event of retirement, disability, or death of a participant, or change in control of the Company, as defined. These awards are valued as of the measurement date and are amortized on a straight-line basis over the requisite vesting period for all awards, including awards with graded vesting. Stock for exercised stock options and for restricted stock awards is issued from treasury stock shares.

Provisions governing the outstanding awards are included in the 2006 Omnibus Incentive Plan (the "2006 Plan") and the 2002 Stock Option Plan (the "2002 Plan"). The 2006 Plan was approved by stockholders and became effective on January 25, 2006. No further grants will be made under the 2002 Plan. The 2006 Plan made 7,410 stock shares available for grants made on or after January 25, 2006, to members and directors of the Company, subject to annual award limits as specified in the 2006 Plan. In October 2008, Woodward granted restricted stock from treasury stock shares to eligible management employees of MPC pursuant to the 2006 Plan. There were 4,550 stock shares available for future grants as of September 30, 2011.

Stock-based compensation expense recognized was as follows:

	Year Ending September 30,
	2011		2010		2009
Employee stock-based compensation expense	$	6,590	$	6,686	$	5,499

Stock options

Stock option awards are granted with an exercise price equal to the market price of Woodward's stock at the date of grant, and generally with a four-year graded vesting schedule and term of 10 years.

The fair value of options granted was estimated on the date of grant using the Black-Scholes-Merton option-valuation model using the assumptions in the following table. The estimated dividend yield is based upon Woodward's historical dividend practice and the market value of it 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 Ending September 30,
	2011	2010	2009
Expected term	5.8- 8.7 years	6.5years	7years
Estimated volatility	48% - 54%	51.0%	43.0%
Estimated dividend yield	1.0% - 1.3%	1.4%	1.4%
Risk-free interest rate	1.8% - 2.6%	3.4%	3.1%
Weighted-average forfeiture rate	0% - 7.8%	7.9%	8.2%

Woodward calculates the expected term based upon historical experience of plan participants and represents the period of time that stock options granted are expected to be outstanding. Expected volatility is based on historical volatility using daily stock price observations. Historical company information is the primary basis for selection of the expected dividend yield. 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.

The weighted average grant date fair value of options granted follows:

	Year Ending September 30,
	2011		2010		2009
Weighted-average grant date fair value of options	$	15.00	$	11.04	$	7.73

The following is a summary of the activity for stock option awards during the fiscal year ending September 30, 2011:

				Weighted-
				Average
	Number			Exercise Price
Balance at September 30, 2010		4,011		$	16.87
Options granted		709			32.10
Options exercised		(451	)		9.75
Options expired unexercised		(2	)		32.73
Options forfeited		(39	)		26.61
Balance at September 30, 2011		4,228			20.12

Exercise prices of stock options outstanding as of September 30, 2011 range from $6.15 to $35.00.

Changes in nonvested stock options during the fiscal year ending September 30, 2011 were as follows:

				Weighted-
				Average
	Number			Exercise Price
Balance at September 30, 2010		1,256		$	23.37
Options granted		709			32.10
Options vested		(558	)		23.57
Options forfeited		(39	)		26.61
Balance at September 30, 2011		1,368			27.71

At September 30, 2011, there was $9,964 of unrecognized compensation cost related to nonvested stock options, which Woodward expects to recognize over a weighted-average period of approximately 2.5 years.

Information about stock options that have vested, or are expected to vest, and are exercisable at September 30, 2011, were as follows:

					Weighted-
			Weighted-		Average		Aggregate
			Average		Remaining Life		Intrinsic
	Number		Exercise Price		in Years		Value
Options outstanding		4,228	$	20.12		5.5	$	36,390
Options expected to vest		1,302		27.70		8.3		3,065
Options exercisable		2,860		16.44		4.2		33,130

Other information follows:

	Year Ending September 30,
	2011		2010		2009
Total fair value of stock options vested	$	5,587	$	3,786	$	4,344
Total intrinsic value of options exercised		10,145		14,083		8,695
Cash received from exercises of stock options		4,402		6,084		3,922
Excess tax benefit realized from exercise of stock options		3,558		5,115		2,695

Restricted stock

In connection with Woodward's acquisition of MPC Products, restricted stock awards were granted with a two-year graded vesting schedule. The restricted stock shares participated in dividends during the vesting period. The fair value of restricted stock granted were estimated using the closing price of Woodward common stock on the grant date. No restricted stock was issued prior to 2009.

Changes in the restricted stock awards during the fiscal year ending September 30, 2011 were as follows:

				Weighted-
				Average Grant
				Date Fair Value
	Number			per Share
Balance at September 30, 2010		70		$	33.49
Shares granted		—			n/a
Shares vested		(70	)		33.49
Shares forfeited		—			n/a
Balance at September 30, 2011		—			n/a

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Income Taxes (Tables)

12 Months Ended

Sep. 30, 2011

Income Taxes

Components of Income Tax Expense (Benefit)

	Year Ending September 30,
	2011			2010			2009
Current:
Federal	$	48,041		$	9,818		$	(8,006	)
State		6,237			5,600			2,042
Foreign		9,743			13,112			18,441
Deferred
Federal		(8,680	)		13,789			16,436
State		(552	)		1,681			848
Foreign		543			(287	)		(1,701	)
	$	55,332		$	43,713		$	28,060

Earnings Before Income Taxes by Geographical Area

	Year Ending September 30,
	2011		2010		2009
United States	$	149,744	$	103,771	$	62,766
Other countries		37,823		51,104		59,710
	$	187,567	$	154,875	$	122,476

Composition of Deferred Income Taxes

	At September 30,
	2011			2010
Deferred tax assets:
Retirement healthcare and early retirement benefits	$	12,417		$	13,176
Foreign net operating loss carryforwards		4,276			2,245
Inventory		18,194			13,425
Deferred compensation		14,223			12,293
Defined benefit pension		7,681			2,943
Other		21,054			27,581
Valuation allowance		(3,201	)		(96	)
Total deferred tax assets, net of valuation allowance		74,644			71,567
Deferred tax liabilities:
Goodwill and intangibles — net		(103,393	)		(96,267	)
Other		(8,500	)		(21,237	)
Total deferred tax liabilities		(111,893	)		(117,504	)
Net deferred tax liabilities	$	(37,249	)	$	(45,937	)

Reconciliation of Effective Tax Rate to U.S. Statutory Tax Rate

	Year Ending September 30,
Percent of pretax earnings	2011			2010			2009
Statutory tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		2.3			2.4			1.5
Foreign tax rate differences		(0.3	)		(1.4	)		(2.1	)
Dividends on stock shares allocated to retirement savings plans		(0.3	)		(0.4	)		(0.5	)
Research credit		(2.7	)		(0.5	)		(3.1	)
Retroactive extension of research credit		(2.1	)		—			(1.7	)
Domestic production activities deduction		(2.1	)		(0.9	)		(0.3	)
Adjustment of tax issues for previous periods and audit settlements		(0.2	)		(5.9	)		(6.6	)
Other items, net		(0.1	)		(0.1	)		0.7
Effective tax rate		29.5	%		28.2	%		22.9	%

Reconciliation of the Beginning and Ending Amounts of Gross Unrecognized Tax Benefits

Balance, September 30, 2008	$	22,576
Tax positions related to the current year		1,431
Tax positions related to prior years		(556	)
Lapse of applicable statute of limitations		(3,668	)
Balance, September 30, 2009		19,783
Tax positions related to the current year		1,734
Tax positions related to prior years		(7,320	)
Lapse of applicable statute of limitations		(3,611	)
Balance, September 30, 2010		10,586
Tax positions related to the current year		4,264
Tax positions related to prior years		3,160
Lapse of applicable statute of limitations		(1,079	)
Balance, September 30, 2011	$	16,931

Accrued Interest and Penalties

	At September 30,
	2011		2010
Accrued interest and penalties	$	1,989	$	1,431

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Retirement Benefits (Schedule of Health Care Cost Trend Rates) (Details) (Other Postretirement Benefit Plans, Defined Benefit [Member])	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Other Postretirement Benefit Plans, Defined Benefit [Member]
Health care cost trend rate assumed for next year	8.00%	8.50%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2018	2018

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Commitments and Contingencies (Future Minimum Unconditional Purchase Obligations) (Details) (USD $) In Thousands	Sep. 30, 2011
Commitments and Contingencies Disclosure
2012	$ 242,735
2013	9,383
2014	376
2015	5
2016	0
Thereafter	0
Total	$ 252,499

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Stockholders' Equity (Weighted Average Grant Date Fair Value of Options Granted) (Details) (Stock Options [Member], USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Stock Options [Member]
Weighted-average grant date fair value of options	$ 15.00	$ 11.04	$ 7.73

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Segment Information (Narrative) (Details) (General Electric [Member])	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
General Electric [Member]
Percentage of net sales from major customer	14.00%	15.00%	17.00%
Percentage of accounts receivable from major customer	11.00%	14.00%

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Property, Plant, and Equipment - Net (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011 sqft	Sep. 30, 2010
Size of system test facility, in square feet	48,000
Construction in progress	$ 44,975	$ 13,125
System Test Facility [Member]
Construction in progress	20,090	4,836
Capitalized interest	1,087	165
Enterprise Resource Planning system [Member]
Construction in progress	11,827	1,604
Capitalized interest	$ 432	$ 24

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Financial Instruments and Fair Value Measurements

12 Months Ended

Sep. 30, 2011

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

Note 5. Financial instruments and fair value measurements

The estimated fair values of Woodward's financial instruments were as follows:

	At September 30, 2011						At September 30, 2010
	Estimated Fair						Estimated Fair
	Value			Carrying Cost			Value			Carrying Cost
Cash and cash equivalents	$	74,539		$	74,539		$	105,579		$	105,579
Investments in deferred compensation program		5,855			5,855			5,633			5,633
Short-term borrowings		—			—			(22,099	)		(22,099	)
Long-term debt, including current portion		(482,776	)		(425,246	)		(506,120	)		(443,673	)

The fair values of cash and cash equivalents, which include investments in money market funds, are assumed to be equal to their carrying amounts. Cash and cash equivalents have short-term maturities and market interest rates. Woodward's cash and cash equivalents include funds deposited or invested in the U.S. and overseas that are not insured by the FDIC. Woodward believes that its deposited and invested funds are held by or invested with credit worthy financial institutions or counterparties.

Investments related to the deferred compensation program used to provide deferred compensation benefits to certain employees are carried at market value.

The fair values of short-term borrowings at variable interest rates are assumed to be equal to their carrying amounts because such borrowings are expected to be repaid or settled for their carrying amounts within a short period of time.

The fair value of long-term debt at fixed interest rates was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity. The weighted-average interest rates used to estimate the fair value of long-term debt at fixed interest rates were as follows:

	At September 30,
	2011			2010
Weighted-average interest rate used to estimate fair value		2.6	%		2.9	%

Financial assets and liabilities recorded at fair value in the Consolidated Balance Sheet are categorized based upon a fair value hierarchy established by U.S. GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3: Inputs reflect management's best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

The table below presents information about Woodward's financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques Woodward utilized to determine such fair value. Woodward had no financial liabilities required to be measured at fair value on a recurring basis as of September 30, 2011 or September 30, 2010.

	At September 30, 2011								At September 30, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial assets:
Investments in money market funds	$	10,823	$	—	$	—	$	10,823	$	50,360	$	—	$	—	$	50,360
Equity securities		5,855		—		—		5,855		5,633		—		—		5,633
Foreign exchange forward contract		—		—		—		—		—		579		—		579
Total financial assets	$	16,678	$	—	$	—	$	16,678	$	55,993	$	579	$	—	$	56,572

Investments in money market funds: Woodward sometimes invests excess cash in money market funds not insured by the FDIC. Woodward believes that the investments in money market funds are on deposit with creditworthy financial institutions and that the funds are highly liquid. The investments in money market funds are reported at fair value, with realized gains from interest income realized in earnings and are included in "Cash and cash equivalents." The fair values of Woodward's investments in money market funds are based on the quoted market prices for the net asset value of the various money market funds.

Equity securities: Woodward holds marketable equity securities, through investments in various mutual funds, related to its deferred compensation program. Based on Woodward's intentions regarding these instruments, marketable equity securities are classified as trading securities. The trading securities are reported at fair value, with realized gains and losses recognized in earnings. The trading securities are included in "Other current assets." The fair values of Woodward's trading securities are based on the quoted market prices for the net asset value of the various mutual funds.

Forward contracts: As of September 30, 2010, Woodward was a party to a forward contract. The fair value of the derivative instrument was derived from published foreign currency exchange rates as of September 30, 2010. The forward contract was settled in December 2010, resulting in a realized loss of $1,033.

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Commitments and Contingencies

12 Months Ended

Sep. 30, 2011

Commitments and Contingencies Disclosure

Commitments and Contingencies

Note 20. Commitments and contingencies

Woodward has entered into operating leases for certain facilities and equipment with terms in excess of one year under agreements that expire at various dates. Some leases require the payment of property taxes, insurance, and maintenance costs in addition to rental payments. Future minimum rental payments required under these leases, excluding available option renewals, are as follows:

Year Ending September 30,
2012	$	7,219
2013		5,583
2014		4,706
2015		3,620
2016		2,814
Thereafter		7,508
Total	$	31,450

Rent expense for all operating leases totaled:

	Year Ending September 30,
	2011		2010		2009
Rent expense	$	10,159	$	9,604	$	11,155

Woodward enters into unconditional purchase obligation arrangements (i.e. issuance of purchase orders, obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as "take-or-pay" contracts) in the normal course of business to ensure that adequate levels of sourced product are available to Woodward. Future minimum unconditional purchase obligations are as follows:

Year Ending September 30,
2012	$	242,735
2013		9,383
2014		376
2015		5
2016		—
Thereafter		—
Total	$	252,499

Woodward also has business commitments made to certain customers to perform under long-term product development projects, some of which may result in near-term financial losses. Such losses, if any, are considered to be a period cost and are recognized as incurred.

Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, workman's compensation claims, contractual disputes, product warranty claims and alleged violations of various laws and regulations. Woodward has accrued for individual matters that it believes are likely to result in a loss when ultimately resolved using estimates of the most likely amount of loss.

Woodward is partially self-insured in the U.S. for healthcare and workman's compensation up to predetermined amounts, above which third party insurance applies. Management regularly reviews the probable outcome of these claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities.

While the outcome of pending claims, proceedings and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings and investigations will not have a material adverse effect on the Company's liquidity, financial condition, or results of operations.

In connection with the sale of the F&P product line during fiscal year 2009, Woodward assigned to a subsidiary of the purchaser its rights and responsibilities related to certain contracts with the U.S. Government. Woodward provided to the U.S. Government a customary guarantee of the purchaser's subsidiary's obligations under the contracts. The purchaser and its affiliates have agreed to indemnify Woodward for any liability incurred with respect to the guarantee.

In the event of a change in control of Woodward, as defined in change-in-control agreements with its current corporate officers, Woodward may be required to pay termination benefits to such officers.

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Long-term Debt (Tables)

12 Months Ended

Sep. 30, 2011

Debt Disclosure

Schedule of Long-term Debt

	At September 30,
	2011			2010
2008 Term loan — Variable rate of 1.78% at September 30, 2011, matures October 2013; unsecured	$	64,375		$	71,875
Series B notes — 5.63%, due October 2013; unsecured		100,000			100,000
Series C notes — 5.92%, due October 2015; unsecured		50,000			50,000
Series D notes — 6.39%, due October 2018; unsecured		100,000			100,000
Series E notes — 7.81%, due April 2016; unsecured		57,000			57,000
Series F notes — 8.24%, due April 2019; unsecured		43,000			43,000
Senior notes — 6.39%, due October 2011; unsecured		10,714			21,429
Term notes — 5.95%, due June 2012; secured by land and buildings		157			369
Fair value hedge adjustment for unrecognized discontinued hedge gains		3			70
Total long-term debt		425,249			443,743
Less: current portion		(18,374	)		(18,493	)
Long-term debt, less current portion	$	406,875		$	425,250

Schedule of Future Principal Payments of Long-term Debt

Year Ending September 30:
2012	$	18,371
2013		7,500
2014		149,375
2015		—
2016		107,000
Thereafter		143,000
	$	425,246

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Stockholders' Equity (Stock-based Compensation Expense Recognized) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Stock-Based Compensation
Employee stock-based compensation expense	$ 6,590	$ 6,686	$ 5,499

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Inventories (Tables)

12 Months Ended

Sep. 30, 2011

Inventories

Schedule of Inventories

	September 30,		September 30,
	2011		2010
Raw materials	$	43,172	$	19,457
Work in progress		108,718		86,438
Component parts and finished goods		229,665		189,139
	$	381,555	$	295,034

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Income Taxes (Components of Income Tax Expense (Benefit)) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Current:
Federal	$ 48,041	$ 9,818	$ (8,006)
State	6,237	5,600	2,042
Foreign	9,743	13,112	18,441
Deferred:
Federal	(8,680)	13,789	16,436
State	(552)	1,681	848
Foreign	543	(287)	(1,701)
Income tax expense	$ 55,332	$ 43,713	$ 28,060

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Retirement Benefits

12 Months Ended

Sep. 30, 2011

Retirement Benefits - General

Retirement Benefits

Note 18. Retirement benefits

Woodward provides various benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on employee location.

Defined contribution plans

Substantially all U.S. employees are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes. Certain foreign employees are also eligible to participate in foreign plans.

The amount of expense associated with defined contribution plans totaled $16,927 in fiscal year 2011, $16,474 in fiscal year 2010, and $16,869 in fiscal year 2009.

Woodward operates one multiemployer plan for certain employees in the Netherlands. The amount of contributions associated with the multiemployer plan totaled $476 in fiscal year 2011, $495 in fiscal year 2010, and $550 in fiscal year 2009.

Defined benefit plans

Woodward has defined benefit plans which provide pension benefits for certain retired employees in the U.S., the United Kingdom, Japan and Switzerland. Approximately 1,000 current employees may receive future benefits under the plans and approximately 550 retired employees are eligible to receive future benefits or are currently receiving benefits. A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward's defined benefit pension plans.

In connection with the acquisition of IDS in the third quarter of fiscal year 2011 (see Note 4, Business acquisitions and dispositions), Woodward assumed pension benefit obligations that contributed to increases in recognized expenses for the fiscal year ending September 30, 2011 compared to the fiscal year ending September 30, 2010. In addition, in connection with the acquisition of HRT in the third quarter of fiscal year 2009 (see Note 4, Business acquisitions and dispositions), Woodward assumed pension benefit obligations that contributed to increases in recognized expenses for the fiscal year ending September 30, 2010 compared to the fiscal year ending September 30, 2009.

Excluding the Woodward HRT Plan, the defined benefit plans in the U.S. were frozen in fiscal year 2007 and no additional employees may participate in the U.S. plans and no additional service costs will be incurred.

The actuarial assumptions used in measuring the net periodic benefit cost and plan obligations of retirement pension benefits were as follows:

	2011			2010			2009
United States:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.55	%		5.85	%		5.50	%
Rate of compensation increase		4.00			4.00			4.00
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		5.85			5.50			6.50
Rate of compensation increase		4.00			4.00			n/a
Long-term rate of return on plan assets		7.90			7.50			7.50
United Kingdom:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		5.10	%		4.90	%		5.40	%
Rate of compensation increase		4.30			4.30			4.10
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		4.90			5.40			6.90
Rate of compensation increase		4.30			4.10			4.70
Long-term rate of return on plan assets		6.00			6.50			6.50
Japan:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		1.50	%		1.25	%		1.75	%
Rate of compensation increase		2.00			2.00			2.50
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		1.25			1.75			1.90
Rate of compensation increase		2.00			2.50			2.00
Long-term rate of return on plan assets		3.00			3.30			3.11
Switzerland:
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate		2.50	%		n/a	%		n/a	%
Rate of compensation increase		2.00			n/a			n/a
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate		3.00			n/a			n/a
Rate of compensation increase		2.00			n/a			n/a
Long-term rate of return on plan assets		3.00			n/a			n/a

The discount rate assumption is intended to reflect the rate at which the retirement benefits could be effectively settled based upon the assumed timing of the benefit payments. In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding. In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark. In Japan, Woodward used Standard & Poors AA-rated corporate bond yields (applicable for bonds over 10 years) as the benchmark. In Switzerland, Woodward used high quality swap rates plus a credit spread of 0.36% as high quality swaps are available in Switzerland at various durations and trade at higher volumes than bonds. Woodward's assumed rates do not differ significantly from any of these benchmarks.

Compensation increase assumptions are based upon historical experience and anticipated future management actions.

In determining the long-term rate of return on plan assets, Woodward assumes that the historical long-term compound growth rates of equity and fixed-income securities will predict the future returns of similar investments in the plan portfolio. Investment management and other fees paid out of the plan assets are factored into the determination of asset return assumptions.

Net periodic benefit costs consist of the following components reflected as expense in Woodward's Consolidated Statements of Earnings:

	Year Ending September 30,
	United States									Other Countries									Total
	2011			2010			2009			2011			2010			2009			2011			2010			2009
Service cost	$	3,433		$	3,647		$	1,409		$	992		$	784		$	716		$	4,425		$	4,431		$	2,125
Interest cost		5,646			4,890			2,964			2,284			2,261			2,175			7,930			7,151			5,139
Expected return on plan assets		(6,693	)		(4,759	)		(2,627	)		(2,541	)		(2,361	)		(2,178	)		(9,234	)		(7,120	)		(4,805	)
Amortization of:
Transition obligation		—			—			—			—			86			81			—			86			81
Net (gains) losses		312			583			337			900			753			135			1,212			1,336			472
Net prior service (benefit) cost		75			(260	)		(259	)		(9	)		(8	)		(7	)		66			(268	)		(266	)
Settlement costs		—			—			—			—			345			—			—			345			—
Curtailment costs		—			165			—			—			—			237			—			165			237
Net periodic (benefit) cost	$	2,773		$	4,266		$	1,824		$	1,626		$	1,860		$	1,159		$	4,399		$	6,126		$	2,983

Settlements costs were expensed in the fiscal years ending September 30, 2010 and 2009, respectively, as a result of normal attrition among participants in the Company's defined benefit plan in Japan. Woodward did not have any settlement costs in fiscal year 2011. Curtailment costs were associated with planned or actual workforce reduction actions.

The following tables provide a reconciliation of the changes in the projected benefit obligation and fair value of assets for the defined benefit pension plans:

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	97,786		$	89,551		$	56,657		$	53,450		$	154,443		$	143,001
Obligation assumed in IDS Acquisition		—			—			2,038			—			2,038			—
Service cost		3,433			3,647			992			784			4,425			4,431
Interest cost		5,646			4,890			2,284			2,261			7,930			7,151
Net actuarial (gains) losses		1,686			(2,877	)		(3,498	)		2,902			(1,812	)		25
Contribution by participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Amounts paid by Company for Pension Protection Fund levy		—			—			(67	)		—			(67	)		—
Curtailment loss		—			165			—			—			—			165
Plan amendments		—			3,962			—			—			—			3,962
Foreign currency exchange rate changes		—			—			917			374			917			374
Projected benefit obligation at end of year	$	106,341		$	97,786		$	57,355		$	56,657		$	163,696		$	154,443
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	85,128		$	64,102		$	43,539		$	40,726		$	128,667		$	104,828
Plan assets received in connection with IDS Acquisition		—			—			1,604			—			1,604			—
Actual return on plan assets		482			7,998			708			3,209			1,190			11,207
Contributions by the company		6,580			14,580			4,151			2,793			10,731			17,373
Contributions by plan participants		—			—			122			25			122			25
Benefits paid		(2,210	)		(1,552	)		(2,090	)		(3,139	)		(4,300	)		(4,691	)
Foreign currency exchange rate changes		—			—			333			(75	)		333			(75	)
Fair value of plan assets at end of year	$	89,980		$	85,128		$	48,367		$	43,539		$	138,347		$	128,667
Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)

The Company's defined benefit pension plans in the United Kingdom, Japan and Switzerland represented $39,677, $15,140 and $2,538, respectively, of the total projected benefit obligation at September 30, 2011 and $37,546, $8,947 and $1,874, respectively, of the total fair value of plan assets at September 30, 2011.

Woodward makes periodic cash contributions to its defined pension plans based on applicable regulations in jurisdictions that oversee its various pension plans, if any, and other factors. Contributions in fiscal year 2010 included a $10,000 discretionary contribution to the U.S. plans.

The following tables provide the amounts recognized in the statement of financial position and accumulated comprehensive income for the defined benefit pension plans:

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Amounts recognized in statement of financial position consist of:
Other non-current liabilities	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)
Underfunded status at end of year	$	(16,361	)	$	(12,658	)	$	(8,988	)	$	(13,118	)	$	(25,349	)	$	(25,776	)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	1,517		$	1,593		$	(24	)	$	(30	)	$	1,493		$	1,563
Unrecognized net (gains) losses		16,769			9,183			13,779			15,963			30,548			25,146
Total amounts recognized		18,286			10,776			13,755			15,933			32,041			26,709
Deferred taxes		(6,949	)		(4,095	)		(4,763	)		(5,585	)		(11,712	)		(9,680	)
Amounts recognized in accumulated other comprehensive income	$	11,337		$	6,681		$	8,992		$	10,348		$	20,329		$	17,029

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were as follows:

	At or for the Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Projected benefit obligation	$	(106,341	)	$	(97,786	)	$	(57,355	)	$	(56,657	)	$	(163,696	)	$	(154,443	)
Accumulated benefit obligation		(96,630	)		(86,260	)		(54,304	)		(54,139	)		(150,934	)		(140,399	)
Fair value of plan assets		89,980			85,128			48,367			43,539			138,347			128,667

 

Other changes in plan assets and benefit obligations recognized in other comprehensive income were as follows:

	Year Ending September 30,
	United States						Other Countries						Total
	2011			2010			2011			2010			2011			2010
Net (gain) loss	$	7,897		$	(6,182	)	$	(1,664	)	$	2,233		$	6,233		$	(3,949	)
Prior service (benefit) cost		—			3,963			—			—			—			3,963
Amortization of net gains (losses)		(312	)		(583	)		(899	)		(753	)		(1,211	)		(1,336	)
Amortization of transition obligation asset		—			—			—			(86	)		—			(86	)
Amortization of prior service benefit (cost)		(75	)		260			9			8			(66	)		268
Settlement loss		—			—			—			(345	)		—			(345	)
Foreign currency exchange rate changes		—			—			376			(60	)		376			(60	)
Total recognized in accumulated other comprehensive income	$	7,510		$	(2,542	)	$	(2,178	)	$	997		$	5,332		$	(1,545	)

The amounts expected to be amortized from Accumulated Other Comprehensive Income and reported as a component of net periodic benefit cost during fiscal year 2012 is as follows:

	United		Other
	States		Countries			Total
Prior service (benefit) cost	$	75	$	(9	)	$	66
Net actuarial (gains) losses		524		667			1,191

Pension benefit payments are made from the assets of the pension plans. Using foreign exchange rates as of September 30, 2011 and expected future service assumptions, it is anticipated that the future benefit payments will be as follows:

	United		Other
Year Ending September 30,	States		Countries		Total
2012	$	3,109	$	2,468	$	5,577
2013		3,581		2,673		6,254
2014		4,154		2,583		6,737
2015		4,732		2,925		7,657
2016		5,250		2,704		7,954
2017 — 2021		36,000		15,771		51,771

Woodward expects its pension plan contributions in fiscal year 2012 will be $600 in the U.S., $1,787 in the United Kingdom, $1,382 in Japan and $191 in Switzerland.

Defined benefit plan assets

The overall investment objective of the pension plan assets is to earn a rate of return over time which, when combined with Company contributions, satisfies the benefit obligations of the pension plans and maintains sufficient liquidity to pay benefits.

As the timing and nature of the plan obligations varies for each Company sponsored pension plan, investment strategies have been individually designed for each pension plan with a common focus on maintaining diversified investment portfolios that provide for long-term growth while minimizing the risk to principal associated with short-term market behavior. The strategy for each of the plans balances the requirements to generate returns, using investments expected to produce higher returns, such as equity securities, with the need to control risk within the pension plans using less volatile investment assets, such as debt securities. A strategy of more equity-oriented allocation is adopted for those plans which have a longer-term investment plan based on the timing of the associated benefit obligations.

A pension oversight committee is assigned by the Company to each pension plan, excluding the pension plans in Switzerland which are statutory plans. Among other responsibilities, each committee is responsible for all asset class allocation decisions. Asset class allocations, which are reviewed by the respective pension committee on at least an annual basis, are designed to meet or exceed certain market benchmarks which align with each plan's investment objectives. In evaluating the asset allocation choices, consideration is given to the proper long-term level of risk for each plan, particularly with respect to the long-term nature of each plan's liabilities, the impact of asset allocation on investment results and the corresponding impact on the volatility and magnitude of plan contributions and expense and the impact certain actuarial techniques may have on the plans' recognition of investment experience. From time to time, the plans may move outside the prescribed asset class allocation in order to meet significant liabilities with respect to one or more individuals approaching retirement.

Risks associated with the plan assets include interest rate fluctuation risk, market fluctuation risk, risk of default by debt issuers, and liquidity risk. To manage these risks, the assets are managed by established, professional investment firms and performance is evaluated regularly against specific benchmarks. Liability management and asset class diversification are central to the Company's risk management approach and overall investment strategy.

The assets of the U.S. plans are invested in actively managed mutual funds. The assets of the plan in Japan and the plan in the United Kingdom are invested in actively managed pooled investment funds. Each individual mutual fund or pooled investment fund has been selected based on the investment strategy of the related plan, which mirrors a specific asset class within the associated target allocation. The assets of the plans in Switzerland are insured through an insurance contract that guarantees a federally mandated annual rate of return. Pension plan assets at September 30, 2011 and 2010 do not include any direct investment in Woodward's common stock.

The asset allocations are monitored and rebalanced regularly by investment managers assigned to the individual pension plans. The actual allocations of pension plan assets and target allocation ranges by asset class, are as follows:

	At September 30,
	2011						2010
	Percentage			Target			Percentage			Target
	of Plan			Allocation			of Plan			Allocation
	Assets			Ranges			Assets			Ranges
United States:
Asset Class
Equity Securities		58.7	%		39.7- 79.7	%		49.8	%		40.0- 60.0	%
Debt Securities		41.1	%		30.3- 50.3	%		50.0	%		40.0- 60.0	%
Other		0.2	%		0.0	%		0.2	%		0.0	%
		100.0	%					100.0	%
United Kingdom:
Asset Class
Equity Securities		37.7	%		40.0- 60.0	%		40.7	%		46.0- 54.0	%
Debt Securities		62.2	%		35.0- 65.0	%		58.9	%		46.5- 53.5	%
Other		0.1	%		0.0	%		0.4	%		0.0	%
		100.0	%					100.0	%
Japan:
Asset Class
Equity Securities		39.9	%		36.0- 44.0	%		55.2	%		50.0- 58.0	%
Debt Securities		59.2	%		55.0- 63.0	%		43.1	%		41.0- 49.0	%
Other		0.9	%		0.0- 2.0	%		1.7	%		0.0- 2.0	%
		100.0	%					100.0	%
Switzerland:
Asset Class
Equity Securities		0.0	%		0.0	%		n/a			n/a
Debt Securities		0.0	%		0.0	%		n/a			n/a
Other		100.0	%		100.0	%		n/a			n/a
		100.0	%					n/a

Actual allocations to each asset class vary from target allocations due to periodic market value fluctuations, investment strategy changes, and the timing of benefit payments and contributions.

The variance at September 30, 2010 in the Company's United Kingdom pension plan between the actual allocation and target allocation ranges is the result of a decision made by the plan trustees to invest a September 2007 £3,000 special contribution from the Company, into an index linked long-term government securities pooled fund. At September 30, 2010, the fair value of the assets held for the United Kingdom pension plan in the index linked long-term government securities pooled fund is approximately $5,707.

The following table presents Woodward's pension plan assets using the fair value hierarchy as of September 30, 2011. The fair value hierarchy established by U.S. GAAP prioritizes the inputs used to measure fair value into the following levels:

Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable and can be corroborated by observable market data.

Level 3: Inputs reflect management's best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

	At September 30, 2011
	Level 1				Level 2				Level 3
	United		Other		United		Other		United		Other
	States		Countries		States		Countries		States		Countries		Total
Asset Category:
Cash and cash equivalents	$	198	$	125	$	—	$	—	$	—	$	—	$	323
Mutual funds:
U.S. corporate bond fund		36,958		—		—		—		—		—		36,958
U.S. equity large cap fund		29,169		—		—		—		—		—		29,169
International equity large cap growth fund		23,655		—		—		—		—		—		23,655
Pooled funds:
Japanese equity securities		—		—		—		1,921		—		—		1,921
International equity securities		—		—		—		1,652		—		—		1,652
Japanese fixed income securities		—		—		—		3,958		—		—		3,958
International fixed income securities		—		—		—		1,336		—		—		1,336
Index linked U.K. equity fund		—		—		—		7,098		—		—		7,098
Index linked international equity fund		—		—		—		7,062		—		—		7,062
Index linked U.K. corporate bonds fund		—		—		—		13,255		—		—		13,255
Index linked U.K. government securities fund		—		—		—		3,646		—		—		3,646
Index linked U.K. long-term government securities fund		—		—		—		6,440		—		—		6,440
Insurance backed assets:
Insurance backed assets		—		—		—		—		—		1,874		1,874
Total assets	$	89,980	$	125	$	—	$	46,368	$	—	$	1,874	$	138,347

Cash and cash equivalents: Cash and cash equivalents held by the Company's pension plans are held on deposit with creditworthy financial institutions. The fair value of the cash and cash equivalents are based on the quoted market price of the respective currency in which the cash is maintained.

Pension assets invested in mutual funds: The assets of the Company's U.S. pension plans are invested in various mutual funds which invest in both equity and debt securities. The fair value of the mutual funds is determined based on the quoted market price of each fund.

Pension assets invested in pooled funds: The assets of the Company's Japan and United Kingdom pension plans are invested in pooled investment funds, which include both equity and debt securities. The assets of the United Kingdom pension plan are invested in index-linked pooled funds which aim to replicate the movements of an underlying market index to which the fund is linked. Fair value of the pooled funds is based on the net asset value of shares held by the plan as reported by the fund sponsors. All pooled funds held by plans outside of the U.S. are considered to be invested in international equity and debt securities. Although the underlying securities may be largely domestic to the plan holding the investment assets, the underlying assets are considered international from the perspective of the Company.

Pension assets invested in insurance backed assets: A reputable Swiss insurer insures the assets of the Company's Swiss pension plans. The insurance contract guarantees a federally mandated annual rate of return. The value of the plan assets is effectively the value of the insurance contract. The performance of the underlying assets held by the insurance company has no direct impact on the surrender value of the insurance contract. The insurance backed assets are not traded and therefore have no active market.

Other postretirement benefit plans

Woodward provides other postretirement benefits to its employees including postretirement medical benefits and life insurance benefits. Postretirement medical benefits are provided to certain current and retired employees and their covered dependants and beneficiaries in the U.S. and the United Kingdom. Benefits include the option to elect company provided medical insurance coverage to age 65 and a Medicare supplemental plan after age 65. Life insurance benefits are provided to certain retirees in the U.S. under frozen plans which are no longer available to current employees. A September 30 measurement date is utilized to value plan assets and obligations for Woodward's other postretirement benefit plans.

In connection with the acquisition of HRT (see Note 4, Business acquisitions and dispositions), Woodward assumed estimated benefit obligations of approximately $2,251 related to a Textron-sponsored postretirement medical benefit plan for certain former HRT employees. Participation in the assumed plan for retirees over age 65 is frozen. Active HRT employees have the opportunity to remain on the active employee plan and pay the full premium cost upon retirement.

The postretirement medical benefit plans, other than the assumed HRT plan, were frozen in fiscal year 2006 and no additional employees may participate in the plans. Generally, employees who had attained age 55 and had rendered 10 or more years of service before the plans were frozen were eligible for these postretirement medical benefits.

Certain participating retirees are required to contribute to the plans in order to maintain coverage. The plans, including the assumed HRT plan, provide postretirement medical benefits for approximately 1,100 retired employees and their covered dependants and beneficiaries and may provide future benefits to approximately 70 active employees and their covered dependants and beneficiaries, upon retirement, if the employees elect to participate. As the result of a plan amendment in fiscal year 2009, all the postretirement medical plans are fully insured for retirees who have attained age 65.

The actuarial assumptions used in measuring the net periodic benefit cost and plan obligations of postretirement benefits were as follows:

	2011			2010			2009
Weighted-average discount rate used to determine benefit obligation at September 30		5.54	%		5.84	%		5.50	%
Weighted-average discount rate used to determine net periodic benefit cost for years ended September 30		5.84			5.50			6.51

The discount rate assumption is intended to reflect the rate at which the postretirement benefits could be effectively settled based upon the assumed timing of the benefit payments. In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding. In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark. Woodward's assumed rates do not differ significantly from any of these benchmarks.

Assumed healthcare cost trend rates at September 30, were as follows:

	2011			2010
Health care cost trend rate assumed for next year		8.0	%		8.5	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.0	%		5.0	%
Year that the rate reaches the ultimate trend rate		2018			2018

Healthcare costs have generally trended upward in recent years, sometimes by amounts greater than 5%. Assumed health care cost trend rates have a significant effect on the amounts reported for postretirement medical plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	1% increase		1% decrease
Effect on projected fiscal year 2012 service and interest cost	$	182	$	(159	)
Effect on accumulated postretirement benefit obligation at September 30, 2011		3,107		(2,722	)

Net periodic benefit costs consist of the following components reflected as expense in Woodward's Consolidated Statements of Earnings:

	Year Ending September 30,
	2011			2010			2009
Service cost	$	92		$	120		$	169
Interest cost		1,974			2,081			2,330
Amortization of:
Net (gains) losses		128			189			97
Net prior service (benefit) cost		(871	)		(1,249	)		(3,232	)
Net periodic (benefit) cost	$	1,323		$	1,141		$	(636	)

The following table provides a reconciliation of the changes in the accumulated postretirement benefit obligation and fair value of assets for the postretirement benefits for the fiscal years ending September 30:

	Year Ending September 30,
	2011			2010
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$	37,222		$	42,427
Service cost		92			120
Interest cost		1,974			2,081
Premiums paid by plan participants		2,133			2,274
Net actuarial (gains) losses		(3,146	)		(3,932	)
Benefits paid		(5,349	)		(5,738	)
Foreign currency exchange rate changes		(3	)		(10	)
Projected benefit obligation at end of year	$	32,923		$	37,222
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Contributions by the company		3,216			3,464
Premiums paid by plan participants		2,133			2,274
Benefits paid		(5,349	)		(5,738	)
Fair value of plan assets at end of year	$	—		$	—
Funded status at end of year	$	(32,923	)	$	(37,222	)

The Company's postretirement medical plan in the United Kingdom represents $509 of the total benefit obligation at September 30, 2011. The Company paid $46 in medical benefits to participants of the United Kingdom postretirement medical plan in fiscal year 2011.

During 2009, as part of Woodward's postretirement medical benefits, Woodward provided a prescription drug benefit in the U.S. that was at least actuarially equivalent to Medicare Part D. As a result, Woodward was entitled to a federal subsidy that was introduced by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. On January 1, 2009, Woodward converted its prescription drug benefit to a fully insured plan that was no longer eligible for additional federal subsidies.

The following tables provide the amounts recognized in the statement of financial position and accumulated comprehensive income for the postretirement plans:

	Year Ending September 30,
	2011			2010
Amounts recognized in statement of financial position consist of:
Accrued liabilities	$	(2,503	)	$	(2,693	)
Other non-current liabilities		(30,420	)		(34,529	)
Funded status at end of year	$	(32,923	)	$	(37,222	)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	$	(1,501	)	$	(2,372	)
Unrecognized net (gains) losses		(2,272	)		1,001
Total amounts recognized		(3,773	)		(1,371	)
Deferred taxes		1,437			530
Amounts recognized in accumulated other comprehensive income	$	(2,336	)	$	(841	)

Woodward pays plan benefits from its general funds; therefore, there are no segregated plan assets as of September 30, 2011 or September 30, 2010.

The accumulated benefit obligation was as follows:

	Year Ending
	September 30,
	2011			2010
Accumulated postretirement benefit obligation	$	(32,923	)	$	(37,222	)

Other changes in plan assets and benefit obligations recognized in other comprehensive income were as follows:

	Year Ending
	September 30
	2011			2010
Net (gain) loss	$	(3,145	)	$	(3,924	)
Amortization of net (gains) losses		(128	)		(189	)
Amortization of prior service benefit (cost)		871			1,249
Total recognized in accumulated other comprehensive income	$	(2,402	)	$	(2,864	)

Using foreign currency exchange rates as of September 30, 2011 and expected future service, it is anticipated that the future Company contributions to pay benefits, excluding participate contributions, will be as follows:

Year Ending September 30,
2012	$	4,493
2013		4,763
2014		4,911
2015		4,834
2016		4,841
2017 — 2021		21,991

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Retirement Benefits (Schedule of Amounts Recognized in Balance Sheet and Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Pension Plans, Defined Benefit [Member]
Amounts recognized in statement of financial position consist of:
Other non-current liabilities	$ (25,349)	$ (25,776)
Underfunded status at end of year	(25,349)	(25,776)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	1,493	1,563
Unrecognized net (gains) losses	30,548	25,146
Total amounts recognized	32,041	26,709
Deferred taxes	(11,712)	(9,680)
Amounts recognized in accumulated other comprehensive income	20,329	17,029
United States Pension Plans of US Entity, Defined Benefit [Member]
Amounts recognized in statement of financial position consist of:
Other non-current liabilities	(16,361)	(12,658)
Underfunded status at end of year	(16,361)	(12,658)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	1,517	1,593
Unrecognized net (gains) losses	16,769	9,183
Total amounts recognized	18,286	10,776
Deferred taxes	(6,949)	(4,095)
Amounts recognized in accumulated other comprehensive income	11,337	6,681
Foreign Pension Plans, Defined Benefit [Member]
Amounts recognized in statement of financial position consist of:
Other non-current liabilities	(8,988)	(13,118)
Underfunded status at end of year	(8,988)	(13,118)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	(24)	(30)
Unrecognized net (gains) losses	13,779	15,963
Total amounts recognized	13,755	15,933
Deferred taxes	(4,763)	(5,585)
Amounts recognized in accumulated other comprehensive income	8,992	10,348
Other Postretirement Benefit Plans, Defined Benefit [Member]
Amounts recognized in statement of financial position consist of:
Accrued liabilities	(2,503)	(2,693)
Other non-current liabilities	(30,420)	(34,529)
Underfunded status at end of year	(32,923)	(37,222)
Amounts recognized in accumulated other comprehensive income consist of:
Unrecognized net prior service (benefit) cost	(1,501)	(2,372)
Unrecognized net (gains) losses	(2,272)	1,001
Total amounts recognized	(3,773)	(1,371)
Deferred taxes	1,437	530
Amounts recognized in accumulated other comprehensive income	$ (2,336)	$ (841)

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Goodwill

12 Months Ended

Sep. 30, 2011

Goodwill

Goodwill

Note 10. Goodwill

								Effects of
	September 30,							Currency			September 30,
	2010		Additions		Adjustments			Translation			2011
Aerospace	$	356,680	$	—	$	(103	)	$	(52	)	$	356,525
Energy		81,914		24,188		—			(345	)		105,757
Consolidated	$	438,594	$	24,188	$	(103	)	$	(397	)	$	462,282

								Effects of
	September 30,							Currency			September 30,
	2009		Additions		Adjustments			Translation			2010
Aerospace	$	359,534	$	—	$	(2,722	)	$	(132	)	$	356,680
Energy		83,268		—		—			(1,354	)		81,914
Consolidated	$	442,802	$	—	$	(2,722	)	$	(1,486	)	$	438,594

The above table reflects the segment realignment that occurred during September 2011 for which the above goodwill balances have been retrospectively reclassified to reflect the new reportable segments. See Note 21, Segment information for a discussion of the segment realignment that took place in September 2011. The Company has no historical goodwill impairment losses in periods prior to those presented in the above table.

During the third quarter of fiscal year 2011, Woodward completed the IDS Acquisition (Note 4, Business acquisitions and dispositions), which resulted in the recognition of $24,188 in goodwill. The operations of the IDS Acquisition are being integrated into Woodward's Energy reportable segment.

During the first quarter of fiscal year 2011, Woodward negotiated a lease settlement that was favorable in comparison to the previously recorded restructuring accrual established in purchase accounting in connection with the fiscal year 2009 acquisition of MPC. The resulting benefit of $103 was recorded as a reduction to goodwill.

Adjustments recorded in fiscal year 2010 represent changes in the estimated values of assets acquired and liabilities assumed in purchase accounting, related to the acquisition of HRT (see Note 4, Business acquisitions and dispositions).

Woodward tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment tests consist of comparing the implied fair value of each identified reporting unit with its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its implied fair value, Woodward compares the implied fair value of goodwill with the recorded carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value. There was no impairment charge recorded in fiscal years 2011, 2010, or 2009.

In the fourth quarter of fiscal year 2011, Woodward changed its goodwill testing date for all of its reporting units from March 31 to July 31. The change in the goodwill impairment test date is preferable as it better aligns the impairment testing procedures with the completion of the annual financial and strategic planning process. As a result, during fiscal year 2011, Woodward tested its goodwill for impairment as of March 31, 2011 and July 31, 2011 and concluded that there was no impairment of the carrying value of the goodwill. This change in accounting principle did not accelerate, delay, avoid, or cause a goodwill impairment charge. Due to significant judgments and estimates that are utilized in a goodwill impairment analysis, Woodward determined it was impracticable to objectively determine projected cash flows and related valuation estimates as of each July 31 for periods prior to July 31, 2011. As such, Woodward has prospectively applied the change in the annual goodwill impairment testing date from July 31, 2011.

As of March 31 and July 31, 2011, Woodward determined its Turbine Systems, Airframe Systems and Engine Systems operating segments represented individual reporting units. Woodward determined its Electrical Power Systems operating segment included three components that represented reporting units as of March 31, 2011 and four components that represented reporting units as of July 31, 2011 due to the acquisition of IDS.

The fair value of each of Woodward's reporting units was determined using a discounted cash flow method. This method represents a Level 3 input and incorporates various estimates and assumptions, the most significant being projected revenue growth rates, operating earnings margins, and forecasted cash flows based on the discount rate and terminal growth rate. Management projects revenue growth rates, operating earnings margins and cash flows based on each reporting unit's current operational results, expected performance and operational strategies over a five or ten-year period. These projections are adjusted to reflect current economic conditions and the demand for certain products and require considerable management judgment.

Forecasted cash flows used in the July 31, 2011 impairment test were discounted using weighted average cost of capital assumptions from 10.0% to 10.2%. The terminal values of the forecasted cash flows were calculated using the Gordon Growth Model and assumed an annual compound growth rate after five or ten years of 4.3%. Forecasted cash flows used in the March 31, 2011 impairment test were discounted using weighted average cost of capital assumptions of 11.3% and an annual compound growth rate after five years of 4.4%. These inputs, which are unobservable in the market, represent management's best estimate of what market participants would use in determining the present value of the Company's forecasted cash flows. Changes in these estimates and assumptions can have a significant impact on the fair value of forecasted cash flows. Woodward evaluated the reasonableness of the reporting units resulting fair values utilizing a market multiple method.

The results of Woodward's goodwill impairment tests performed as of July 31, 2011 indicated the estimated fair value of each reporting unit was substantially in excess of its carrying value, and accordingly, no impairment existed.

As part of the Company's ongoing monitoring efforts, Woodward will continue to consider the global economic environment and its potential impact on Woodward's business in assessing goodwill recoverability. There can be no assurance that Woodward's estimates and assumptions regarding forecasted cash flows of certain reporting units, the period or strength of the current economic recovery, or the other inputs used in forecasting the present value of forecasted cash flows will prove to be accurate projections of future performance.

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Supplemental Quarterly Financial Data (Unaudited) (Quarterly Financial Information - Segment Reporting) (Details) (USD $) In Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Net sales	$ 489,294	$ 438,467	$ 418,866	$ 365,075	$ 412,003	$ 356,367	$ 349,352	$ 339,308	$ 1,711,702	$ 1,457,030	$ 1,430,125
Interest expense, net	(6,029)	(6,244)	(6,214)	(6,378)	(6,679)	(6,852)	(7,204)	(8,141)	(24,865)	(28,876)	(32,498)
Consolidated earnings before income taxes	58,750	50,855	46,487	31,475	49,515	38,052	35,818	31,490	187,567	154,875	122,476
Total of Reporting Segments [Member]
Segment earnings (loss)	74,122	64,653	60,182	44,417	61,818	50,989	48,337	45,041	243,374	206,185	201,488
Aerospace [Member]
Net sales	241,701	215,242	204,945	181,144	212,649	191,150	185,196	180,384	843,032	769,379	704,771
Segment earnings (loss)	40,945	35,402	33,241	19,914	30,725	28,564	26,678	26,204	129,502	112,171	104,550
Energy [Member]
Net sales	247,593	223,225	213,921	183,931	199,354	165,217	164,156	158,924	868,670	687,651	725,354
Segment earnings (loss)	33,177	29,251	26,941	24,503	31,093	22,425	21,659	18,837	113,872	94,014	96,938
Unallocated Corporate [Member]
Segment earnings (loss)	$ (9,343)	$ (7,554)	$ (7,481)	$ (6,564)	$ (5,624)	$ (6,085)	$ (5,315)	$ (5,410)	$ (30,942)	$ (22,434)	$ (46,514)

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Operations and summary of significant accounting policies

12 Months Ended

Sep. 30, 2011

Basis of Presentation

Operations and Summary of Significant Accounting Policies

Note 1. Operations and summary of significant accounting policies

Basis of presentation

The Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts of Woodward, Inc. and its subsidiaries (collectively "Woodward" or "the Company"). Dollar amounts contained in these Consolidated Financial Statements are in thousands, except per share amounts.

Nature of operations

Woodward is an independent designer, manufacturer, and service provider of energy control and optimization solutions. Woodward designs, produces and services reliable, efficient, low-emission, and high-performance energy control products for diverse applications in challenging environments. Woodward has significant production and assembly facilities in the United States, Europe and Asia, and promotes its products and services through its worldwide locations.

Woodward's strategic focus is providing energy control solutions for the aerospace and energy markets. The precise and efficient control of energy, including fluid and electrical energy, combustion, and motion, is a growing requirement in the markets it serves. Woodward's customers look to it to optimize the efficiency, emissions and operation of power equipment in both commercial and military operations. Woodward's core technologies leverage well across its markets and customer applications, enabling it to develop and integrate cost-effective and state-of-the-art fuel, combustion, fluid, actuation and electronic systems. Woodward focuses primarily on original equipment manufacturers ("OEMs") and equipment packagers, partnering with them to bring superior component and system solutions to their demanding applications. Woodward also provides aftermarket repair, replacement and other service support for its installed products.

Woodward's components and integrated systems optimize performance of commercial aircraft, military aircraft, ground vehicles and other equipment, gas and steam turbines, wind turbines, including converters and power grid related equipment, industrial diesel, gas and alternative fuel reciprocating engines, and electrical power systems. Woodward's innovative fluid energy, combustion control, electrical energy, and motion control systems help its customers offer more cost-effective, cleaner, and more reliable equipment. Woodward's customers include leading OEMs and the end users of their products.

Woodward serves two significant markets — the aerospace market and the energy market. In order to better serve these markets, Woodward completed a realignment of its reportable segments in September 2011 and now reports its financial results through two reportable segments — Aerospace and Energy. The Aerospace segment combines the aircraft propulsion portion of the former Turbine Systems business group, now referred to as the Aircraft Turbine Systems business group, with the Airframe Systems business group. The Energy segment combines the industrial turbine portion of the former Turbine Systems business group, now referred to as the Industrial Turbomachinery Systems business group, with the Engine Systems and Electrical Power Systems business groups.

Woodward uses reportable segment information internally to manage its business, including the assessment of business segment performance and making decisions on the allocation of resources between segments.

Prior period information has been revised to be consistent with the Company's current reportable segment structure, which is based upon how it managed its business as of September 30, 2011.

Summary of significant accounting policies

Principles of consolidation: These Consolidated Financial Statements are prepared in accordance with U.S. GAAP and include the accounts of Woodward and its wholly and majority-owned subsidiaries. Transactions within and between these companies are eliminated.

Use of estimates: The preparation of the Consolidated Financial Statements requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, at the date of the financial statements and the reported revenues and expenses recognized during the reporting period, and certain financial statement disclosures. Significant estimates include allowances for doubtful accounts, net realizable value of inventories, percent complete on long-term contracts, cost of sales incentives, useful lives of property and identifiable intangible assets, the evaluation of impairments of property, identifiable intangible assets and goodwill, the provision for income tax and related valuation reserves, the valuation of assets and liabilities acquired in business combinations, assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans, the valuation of stock compensation instruments granted to employees, and contingencies. Actual results could vary materially from Woodward's estimates.

Foreign currency exchange rates: The assets and liabilities of substantially all subsidiaries outside the U.S. are translated at fiscal year-end rates of exchange, and earnings and cash flow statements are translated at weighted-average rates of exchange. Translation adjustments are accumulated with other comprehensive earnings as a separate component of stockholders' equity and are presented net of tax effects in the Consolidated Statements of Stockholders' Equity. The effects of changes in foreign currency exchange rates on loans between consolidated subsidiaries, that are considered permanent in nature, are also accumulated with other comprehensive earnings, net of tax.

The Company is exposed to market risks related to fluctuations in foreign currency exchange rates because some sales transactions, and certain of the assets and liabilities of its domestic and foreign subsidiaries, are denominated in foreign currencies. Selling, general, and administrative expenses include net foreign currency transaction gains of $575 in 2011, $425 in 2010, and $251 in 2009.

Revenue recognition: Woodward recognizes revenue upon shipment or delivery of tangible products for sale. Delivery is upon completion of manufacturing, customer acceptance, and the transfer of the risks and rewards of ownership. In countries whose laws provide for retention of some form of title by sellers, enabling recovery of goods in the event of customer default on payment, product delivery is considered to have occurred when the customer has assumed the risks and rewards of ownership of the products.

Occasionally, Woodward transfers title of product to customers, but retains substantive performance obligations such as completion of product testing, customer acceptance or in some instances regulatory acceptance. Revenue is deferred until the performance obligations are satisfied.

Woodward provides certain development services to customers under fully funded, partially funded and unfunded long and short-term development contracts. Revenue for such contracts is recognized using the percentage-of-completion, milestone or completed contract methods. Funded development contracts may be fixed price or cost-reimbursable contracts. Anticipated losses on fully funded contracts, if any, are recognized in the period in which the losses become probable and estimable.

Certain Woodward products include incidental software or firmware essential to the performance of the product as designed which are treated as units of accounting associated with the related tangible product with which the software is included. Woodward does not sell software on a standalone basis, although software upgrades, if any, are generally paid for by the customer.

Customer payments: Woodward occasionally agrees to make payments to certain customers in order to participate in anticipated sales activity. Payments made to customers are accounted for as a reduction of revenue unless they are made in exchange for identifiable goods or services with fair values that can be reasonably estimated. Reductions in revenue associated with these customer payments are recognized immediately to the extent that the payments cannot be attributed to anticipated future sales, and are recognized in future periods to the extent that the payments relate to anticipated future sales. Such determinations are based on the facts and circumstances underlying each payment.

Stock-based compensation: Compensation cost relating to stock-based payment awards made to employees and directors is recognized in the financial statements using a fair value method. Non-qualified stock option awards and restricted stock awards are issued under Woodward's stock-based compensation plans. Woodward measures for the cost of such awards, measured at the grant date, based on the estimated fair value of the award.

Forfeitures are estimated at the time of each grant in order to estimate the portion of the award that will ultimately vest. The estimate is based on Woodward's historical rates of forfeitures and is updated periodically. The portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods, which is generally the vesting period of the awards.

Research and development costs: Expenditures related to new product development activities in excess of fully and partially funded development contract amounts, if applicable, are expensed when incurred and are separately reported in the Consolidated Statements of Earnings.

Restructuring and other charges: Restructuring charges related to workforce management were recognized as expense in March 2009. Non-cash charges for impairment of a vacated facility were recognized as expense in fiscal year 2009. Restructuring charges related to 2009 business acquisitions, including items such as costs associated with integrating similar operations, workforce management, vacating certain facilities, and the cancellation of certain contracts, were recognized as a liability as of the acquisition date. Adjustments to the initial estimate determined within the allocation period, which is generally not more than one year, are treated as an adjustment to the liabilities recorded in the acquisitions. Adjustments to the initial estimate determined after the allocation period are included in the determination of net earnings in the period in which the adjustment is identified.

Under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805, Business Combinations, the acquirer in a business combination can generally only recognize liabilities for plans to exit an activity, involuntarily terminate employees, or relocate employees of an acquiree, if the acquiree, as of the acquisition date, has a current plan in place and certain criteria are satisfied. This differs from the accounting requirements under FASB Statement 141, "Business Combinations" in which the acquirer could recognize liabilities as of the acquisition date for plans to exit an activity, involuntarily terminate employees, or relocate employees of an acquiree, if the criteria were met in Emerging Issues Task Force ("EITF") Issue No. 95-3, "Recognition of Liabilities in Connection With a Purchase Business Combination."

A summary of the activity in accrued restructuring charges during the fiscal years ending September 30, 2011 and 2010 can be found at Note 14, Accrued Liabilities.

Income taxes: Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of Woodward's assets, liabilities, and certain unrecognized gains and losses recorded in accumulated other comprehensive earnings. Woodward provides for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the U.S., except for those earnings that it considers to be permanently reinvested.

Cash equivalents: Highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents.

Cash and cash equivalents are maintained with multiple financial institutions. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. Woodward holds cash and cash equivalents at financial institutions in excess of amounts covered by the Federal Depository Insurance Corporation (the "FDIC") and sometimes invests excess cash in money market funds not insured by the FDIC.

Accounts receivable: Almost all Woodward's sales are made on credit and result in accounts receivable, which are recorded at the amount invoiced. In the normal course of business, not all accounts receivable are collected and, therefore, an allowance for losses of accounts receivable is provided equal to the amount that Woodward believes ultimately will not be collected. Customer-specific information is considered related to delinquent accounts, past loss experience, and current economic conditions in establishing the amount of its allowance. Accounts receivable losses are deducted from the allowance and the related accounts receivable balances are written off when the receivables are deemed uncollectible. Recoveries of accounts receivable previously written off are recognized when received.

In coordination with its customers and when terns are considered favorable to Woodward, Woodward somtimes transfers ownership to collect amounts due to Woodward for outstanding accounts receivable to third parties in exchange for cash. If such transfer of ownership is with recourse, then a short-term liability is recorded and is reflected in Woodward's Cash Flow Statement as a financing source. The settlement of the transferred obligation is reflected in Woodward's Cash Flow Statement as both cash from operations due to the collection of accounts receivable and cash used in financing as the prior recourse obligation is extinguished.

Inventories: Inventories are valued at the lower of cost or market, with cost generally being determined using methods that approximate a first-in, first-out basis.

Component parts include items that can be sold separately as finished goods or included in the manufacture of other products.

Customer deposits are recorded against inventory when the right of offset exists. All other customer deposits are recorded in accrued liabilities.

Property, plant, and equipment: Property, plant, and equipment are recorded at cost and are depreciated over the estimated useful lives of the assets. Assets are generally depreciated using the straight-line method. Certain buildings and improvements are depreciated using the declining-balance method. Assets are tested for recoverability whenever events or circumstances indicate the carrying value may not be recoverable.

Estimated lives over which fixed assets are generally depreciated at September 30, 2011 were as follows:

Buildings and improvements	2- 40	years
Leasehold improvements	1- 40	years
Machinery and production equipment	2- 15	years
Computer equipment and software	3- 10	years
Other	2- 20	years

Purchase accounting: Business combinations are accounted for using the purchase method of accounting. Under the purchase method, assets and liabilities, including intangible assets, are recorded at their fair values as of the acquisition date. Acquisition costs in excess of amounts assigned to assets acquired and liabilities assumed are recorded as goodwill.

Goodwill: Woodward tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment tests consist of comparing the implied fair value of reporting units with its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its implied fair value, Woodward compares the implied fair value of goodwill with the recorded carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value. As discussed in Note 10, Goodwill, Woodward changed the annual testing date for its goodwill impairment test from March 31 to July 31. As a result, during 2011, Woodward performed goodwill impairment tests as of March 31, 2011 and July 31, 2011. In addition, as of September 30, 2011, as part of its segment realignment, Woodward created two new reporting units, Aircraft Turbine Systems and Industrial Turbomachinery Systems that were previously included in the Turbine Systems reporting unit. See Note 21, Segment information for a discussion of the segment realignment that occurred.

Other intangibles: Other intangibles are recognized apart from goodwill whenever an acquired intangible asset arises from contractual or other legal rights, or whenever it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented, or exchanged, either individually or in combination with a related contract, asset, or liability. All of Woodard's intangibles have an estimated useful life and are being amortized using patterns that reflect the periods over which the economic benefits of the assets are expected to be realized. Impairment losses are recognized if the carrying amount of an intangible is both not recoverable and exceeds its fair value. 

Estimated lives over which intangible assets are amortized at September 30, 2011 were as follows:

Customer relationships	9- 30	years
Intellectual property	10- 17	years
Process technology	8- 30	years
Other	1- 15	years

Impairment of long-lived assets: Woodward reviews the carrying value of its long-lived assets or asset groups to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value. There was no impairment charge recorded in fiscal year 2011, fiscal year 2010, or fiscal year 2009.

Investment in marketable equity securities: Woodward holds marketable equity securities related to its deferred compensation program. Based on Woodward's intentions regarding these instruments, marketable equity securities are classified as trading securities. The trading securities are reported at fair value, with realized gains and losses recognized in earnings. The trading securities are included in "Other current assets." The associated obligation to provide benefits is included in "Other liabilities."

Investments in unconsolidated subsidiaries: Investments in and operating results of entities in which Woodward does not have a controlling financial interest or the ability to exercise significant influence over the operations are included in the financial statements using the cost method of accounting. Investments and operating results of entities in which Woodward does not have a controlling interest but does have the ability to exercise significant influence over operations are included in the financial statements using the equity method of accounting.

Noncontrolling interests: On October 1, 2009, the Company adopted new guidance which requires, among other things, noncontrolling financial interests be accounted for as a separate component of equity and that all transactions between the Company and the noncontrolling interest be accounted for as equity transactions.

In April 2010, the Company purchased the remaining 26% noncontrolling interest in Woodward Governor India Limited, a Woodward consolidated subsidiary, for $8,120. As a result of this transaction, Woodward now owns 100% of Woodward Governor India Limited and there are no other noncontrolling interests in Woodward's consolidated subsidiaries.

The following is a summary of the effects of Woodward's purchase of the remaining 26% noncontrolling interest in Woodward Governor India Limited on Woodward's stockholders' equity:

	Year Ending September 30,
	2011		2010			2009
Net earnings attributable to Woodward	$	132,235	$	110,844		$	94,352
Decrease in Woodward's additional paid-in capital related to purchase of noncontrolling interest		—		(6,180	)		—
Change from net earnings attributable to Woodward and transfers to noncontrolling interest	$	132,235	$	104,664		$	94,352

Deferred compensation: The Company maintains a deferred compensation plan or "rabbi trust" as part of its overall compensation package for certain employees.

Deferred compensation obligations will be settled either by delivery of a fixed number of shares of Woodward's common stock (in accordance with certain eligible members' irrevocable elections) or in cash. Woodward has contributed shares of its common stock into a trust established for the future settlement of deferred compensation obligations that are payable in shares of Woodward's common stock. Common stock held by the trust is reflected in the Consolidated Balance Sheet as "Treasury stock held for deferred compensation" and the related deferred compensation obligation is reflected as a separate component of equity in amounts equal to the fair value of the common stock at the dates of contribution. These accounts are not adjusted for subsequent changes in the fair value of the common stock. Deferred compensation obligations that will be settled in cash are accounted for on an accrual basis in accordance with the terms of the underlying contract and are reflected in the Consolidated Balance Sheet as "Other liabilities."

Derivatives: The Company is exposed to various market risks that arise from transactions entered into in the normal course of business. The Company has historically utilized derivative instruments, such as treasury lock agreements to lock in fixed rates on future debt issuances, which qualify as cash flow or fair value hedges to mitigate the risk of variability in cash flows related to future interest payments attributable to changes in the designated benchmark rate. The Company records all such interest rate hedge instruments on the balance sheet at fair value. Cash flows related to the instrument designated as a qualifying hedge are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. Accordingly, cash flows relating to the settlement of interest rate derivatives hedging the forecasted future interest payments on debt have been reflected upon settlement as a component of financing cash flows. The resulting gain or loss from such settlement is deferred to other comprehensive income and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged and is therefore reflected as a component of operating cash flows in periods subsequent to settlement. The periodic settlement of interest rate derivatives hedging outstanding variable rate debt is recorded as an adjustment to interest expense and is therefore reflected as a component of operating cash flows.

From time to time, Woodward will enter into foreign currency exchange rate contracts to hedge against changes in foreign currency exchange rates on liabilities expected to be settled at a future date. Woodward has historically not designated these transactions as accounting hedges. The fair value of foreign currency exchange rate contracts held at the end of the period are recognized in the balance sheet and the unrealized gains or losses are recorded to "Other (income) expense, net" in the Statement of Earnings. Upon settlement of foreign currency exchange rate contracts, any unrealized gains or losses previously recognized are reversed and the realized gain or loss is recorded to "Other (income) expense, net" in the Statement of Earnings. Further information on foreign currency exchange rate contracts can be found at Note 6, Derivative instruments and hedging activities.

Postretirement benefits: The Company provides various benefits to certain current and former employees through defined benefit pension and postretirement plans. For financial reporting purposes, net periodic benefits expense and related obligations are calculated using a number of significant actuarial assumptions. Changes in net periodic expense and funding status may occur in the future due to changes in these assumptions. The funded status of defined pension and postretirement plans recognized in the statement of financial position is measured as the difference between the fair market value of the plan assets and the benefit obligation. For a defined benefit pension plan, the benefit obligation is the projected benefit obligation; for any other defined benefit postretirement plan, such as a retiree health care plan, the benefit obligation is the accumulated benefit obligation. Any over-funded status is recognized as an asset and any underfunded status is recognized as a liability.

Projected benefit obligation is the actuarial present value as of the measurement date of all benefits attributed by the plan benefit formula to employee service rendered before the measurement date using assumptions as to future compensation levels if the plan benefit formula is based on those future compensation levels. Accumulated benefit obligation is the actuarial present value of benefits (whether vested or unvested) attributed by the plan benefit formula to employee service rendered before the measurement date and based on employee service and compensation, if applicable, prior to that date. Accumulated benefit obligation differs from projected benefit obligation in that it includes no assumption about future compensation levels.

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Financial Instruments and Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2011

Financial Instruments and Fair Value Measurements

Estimated Fair Values of Financial Instruments

	At September 30, 2011						At September 30, 2010
	Estimated Fair						Estimated Fair
	Value			Carrying Cost			Value			Carrying Cost
Cash and cash equivalents	$	74,539		$	74,539		$	105,579		$	105,579
Investments in deferred compensation program		5,855			5,855			5,633			5,633
Short-term borrowings		—			—			(22,099	)		(22,099	)
Long-term debt, including current portion		(482,776	)		(425,246	)		(506,120	)		(443,673	)

Schedule of Weighted Average Interest Rates Used to Calculate Long-Term Debt Fair Value

	At September 30,
	2011			2010
Weighted-average interest rate used to estimate fair value		2.6	%		2.9	%

Financial Assets that are Measured at Fair Value on a Recurring Basis

	At September 30, 2011								At September 30, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial assets:
Investments in money market funds	$	10,823	$	—	$	—	$	10,823	$	50,360	$	—	$	—	$	50,360
Equity securities		5,855		—		—		5,855		5,633		—		—		5,633
Foreign exchange forward contract		—		—		—		—		—		579		—		579
Total financial assets	$	16,678	$	—	$	—	$	16,678	$	55,993	$	579	$	—	$	56,572

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Supplemental Statements of Cash Flows Information

12 Months Ended

Sep. 30, 2011

Supplemental Statements of Cash Flows Information

Supplemental Statements of Cash Flows Information

Note 7. Supplemental statement of cash flows information

	Year Ending September 30,
	2011		2010		2009
Interest paid, net of amounts capitalized	$	26,140	$	28,317	$	20,479
Income taxes paid		50,360		41,533		21,875
Income tax refunds received		9,496		10,867		2,825
Non-cash activities:
Long-term debt assumed in business acquisition		—		—		18,610
Purchases of property, plant and equipment on account		6,333		2,270		3,880
Sales of assets on account		—		—		760
Equity investment funded by transfer of property, plant and equipment		—		—		165
Cashless exercise of stock options		1,982		4,190		—
Settlement of receivable through purchase of treasury shares in connection with the cashless exercise of stock options		881		—		—
Reduction of accounts receivable and short-term borrowing due to the settlement of accounts receivable previously sold with recourse		3,228		—		—
Reduction of accounts payable due to the assignment of accounts receivable with recourse		570		—		—
Reduction to goodwill due to favorable resolution of lease termination recorded in restructuring reserve		103		—		—
Payment of director fees through issuance of treasury stock		52		—		—

MPC Products, one of Woodward's subsidiaries acquired in fiscal year 2009, was previously subject to an investigation by the DOJ regarding certain of its government contract pricing practices prior to June 2005. In the three-months ending December 31, 2009, MPC settled the criminal and civil claims related to the DOJ's investigation and paid $25,000 in compensation and fines. The purchase price Woodward paid in connection with the acquisition of MPC was reduced by $25,000 at the time of the acquisition, which represents the amounts discussed above. Payment of this amount during the year ending September 30, 2010 is reflected as an investing activity in the accompanying Consolidated Statement of Cash Flows.

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Credit Facilities and short-term borrowings

12 Months Ended

Sep. 30, 2011

Debt Disclosure

Credit Facilities and Short-term Borrowings

 

Note 12. Credit facilities and short-term borrowings

As of September 30, 2011, Woodward's short-term borrowings and availability under its various short-term credit facilities follows:

			Outstanding
	Total		letters of credit			Outstanding		Remaining
	availability		and guarantees			borrowings		availability
Revolving credit facility	$	225,000	$	(4,882	)	$	—	$	220,118
Foreign lines of credit and overdraft facilities		10,526		—			—		10,526
Foreign performance guarantee facilities		9,736		(2,730	)		—		7,006
Foreign pooling arrangement facility		5,279		—			—		5,279
	$	250,541	$	(7,612	)	$	—	$	242,929

Woodward has a $225,000 revolving credit facility related to unsecured financing arrangements with a syndicate of U.S. banks. The revolving credit facility agreement provides for an option to increase available borrowings to $350,000, subject to the lenders' participation, and has an expiration date of October 2012. The interest rate on borrowings under the revolving credit facility agreement varies with LIBOR, the federal funds rate, or the prime rate. The revolving credit facility agreement contains certain covenants customary with such agreements, which are generally consistent with the covenants applicable to Woodward's long-term debt agreements, and contains customary events of default including certain cross default provisions related to Woodward's other outstanding debt arrangements in excess of $15,000, the occurrence of which would permit the lenders to accelerate the amounts due thereunder. Management believes that Woodward was in compliance with all its debt covenants at September 30, 2011.

Woodward also has various foreign lines of credit and foreign overdraft facilities at various financial institutions, which are generally reviewed annually for renewal and are subject to the usual terms and conditions applied by the financial institutions. Pursuant to the terms of the related facility agreements, Woodward's foreign performance guarantee facilities are limited in use to providing performance guarantees to third parties. Pursuant to the terms of the related facility agreement, Woodward participates in a pooling arrangement whereby Woodward cash on deposit at certain foreign banks may serve as collateral for borrowings by other Woodward subsidiaries up to the total amounts deposited in the pool.

Short-term borrowings of $0 and $22,099 were outstanding as of September 30, 2011 and September 30, 2010, respectively

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Derivative Instruments and Hedging Activities (Impact of Derivative Instruments on Earnings) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Amount of (Income) Expense Recognized in Earnings on Derivative	$ 1,774	$ (526)	$ 226
Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative	0	0	1,199
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings	229	282	237
Derivatives in Fair Value Hedging Relationships [Member] | Interest Expense [Member]
Amount of (Income) Expense Recognized in Earnings on Derivative	(67)	(127)	(184)
Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative	0	0	0
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings	0	0	0
Derivatives in Cash Flow Hedging Relationships [Member] | Interest Expense [Member]
Amount of (Income) Expense Recognized in Earnings on Derivative	229	282	237
Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative	0	0	1,199
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings	229	282	237
Derivatives in Foreign Currency Relationships [Member] | Other (Income) Expense [Member]
Amount of (Income) Expense Recognized in Earnings on Derivative	1,612	(681)	173
Amount of (Gain) Loss Recognized in Accumulated OCI on Derivative	0	0	0
Amount of (Gain) Loss Reclassified from Accumulated OCI into Earnings	$ 0	$ 0	$ 0

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Inventories

12 Months Ended

Sep. 30, 2011

Inventories

Inventories

Note 8. Inventories

	September 30,		September 30,
	2011		2010
Raw materials	$	43,172	$	19,457
Work in progress		108,718		86,438
Component parts and finished goods		229,665		189,139
	$	381,555	$	295,034

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Income Taxes (Composition of Deferred Income Taxes) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Deferred tax assets:
Retirement healthcare and early retirement benefits	$ 12,417	$ 13,176
Foreign net operating loss carryforwards	4,276	2,245
Inventory	18,194	13,425
Deferred compensation	14,223	12,293
Defined benefit pension	7,681	2,943
Other	21,054	27,581
Valuation allowance	(3,201)	(96)
Total deferred tax assets, net of valuation allowance	74,644	71,567
Deferred tax liabilities:
Goodwill and intangibles - net	(103,393)	(96,267)
Other	(8,500)	(21,237)
Total deferred tax liabilities	(111,893)	(117,504)
Net deferred tax liabilities	$ (37,249)	$ (45,937)

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Stockholders' Equity (Schedule of Assumptions Used in Estimate of Fair Value of Stock Option Awards) (Details) (Stock Options [Member])	12 Months Ended
	Sep. 30, 2010 years	Sep. 30, 2009 years	Sep. 30, 2011 Minimum [Member] years	Sep. 30, 2011 Maximum [Member] years
Expected term	6.5	7.0	5.8	8.7
Estimated volatility	51.00%	43.00%	48.00%	54.00%
Estimated dividend yield	1.40%	1.40%	1.00%	1.30%
Risk-free interest rate	3.40%	3.10%	1.80%	2.60%
Weighted-average forfeiture rate	7.90%	8.20%	0.00%	7.80%

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Retirement Benefits (Narrative) (Details) In Thousands, unless otherwise specified	12 Months Ended																		12 Months Ended			12 Months Ended			12 Months Ended		12 Months Ended					12 Months Ended
	Sep. 30, 2011 USD ($)	Sep. 30, 2010 USD ($)	Sep. 30, 2009 USD ($)	Sep. 30, 2011 Cash and Cash Equivalents [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: Index linked U.K. government securities fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: Index linked U.K. long-term government securities fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2010 Pooled funds: Index linked U.K. long-term government securities fund [Member] United Kingdom Plan, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Mutual funds: U.S. corporate bond fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: Index linked U.K. corporate bonds fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: Japanese fixed income securities [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: International fixed income securities [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Mutual funds: U.S. equity large cap fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Mutual funds: International equity large cap growth fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: Japanese equity securities [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: International equity securities [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: Index linked U.K. equity fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pooled funds: Index linked international equity fund [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Insurance Backed Assets [Member] Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2010 Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2009 Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 United States Pension Plans of US Entity, Defined Benefit [Member] USD ($)	Sep. 30, 2010 United States Pension Plans of US Entity, Defined Benefit [Member] USD ($)	Sep. 30, 2009 United States Pension Plans of US Entity, Defined Benefit [Member] USD ($)	Sep. 30, 2011 United Kingdom Plan, Defined Benefit [Member] USD ($)	Sep. 30, 2007 United Kingdom Plan, Defined Benefit [Member] GBP (£)	Sep. 30, 2011 Japan Plan, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Switzerland Plan, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Foreign Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2010 Foreign Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2009 Foreign Pension Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 Other Postretirement Benefit Plans, Defined Benefit [Member] USD ($) years	Sep. 30, 2010 Other Postretirement Benefit Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2009 Other Postretirement Benefit Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 United Kingdom, Other Postretirement Benefit Plans, Defined Benefit [Member] USD ($)	Sep. 30, 2011 United States Postretirement Benefit Plans of US Entity, Defined Benefit [Member]
Expense associated with defined contribution plans	$ 16,927	$ 16,474	$ 16,869
Contributions associated with the multiemployer plan	476	495	550
Approximate number of current employees who may receive future benefits																			1,000
Approximate number of retired employees eligible to receive or currently receiving benefits																			550
Discount rate support/source data																						In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding.			In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark.		In Japan, Woodward used Standard & Poors AA-rated corporate bond yields (applicable for bonds over 10 years) as the benchmark.	In Switzerland, Woodward used high quality swap rates plus a credit spread of 0.36% as high quality swaps are available in Switzerland at various durations and trade at higher volumes than bonds.							In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark.	In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding.
Projected benefit obligation																			163,696	154,443	143,001	106,341	97,786	89,551	39,677		15,140	2,538	57,355	56,657	53,450	32,923	37,222	42,427	509
Fair value of plan assets				323	3,646	6,440	5,707	36,958	13,255	3,958	1,336	29,169	23,655	1,921	1,652	7,098	7,062	1,874	138,347	128,667	104,828	89,980	85,128	64,102	37,546		8,947	1,874	48,367	43,539	40,726	0	0	0
Benefits paid																			4,300	4,691		2,210	1,552						2,090	3,139		5,349	5,738		46
Discretionary contribution by the Company																							10,000
Company contributions in fiscal 2012																						600			1,787		1,382	191				4,493
Special Company contribution																										3,000
Option to elect company provided medical insurance coverage up to this age and a Medicare supplemental plan after this age																																65
Obligation assumed in HRT acquisition																			$ 2,038	$ 0		$ 0	$ 0						$ 2,038	$ 0				$ 2,251
Participation in assumed HRT plan is frozen for retirees over this age																																65
Age employees were eligible to participate in plan																																55
Years of service required to be eligible to participate in plan																																10
Approximate number of retired employees and their covered dependents and beneficiaries currently providing postretirement benefits																																1,100
Approximate number of active employees and their covered dependants and beneficiaries who may receive postretirement benefits in the future																																70
As a result of a plan amendment, all postretirement medical benefits are fully insured for retirees who have attained this age																																65

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Accrued Liabilities (Accrued Liabilities) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Accrued Liabilities
Salaries and other member benefits	$ 70,965	$ 43,598
Current portion of restructuring and other charges	2,489	4,862
Warranties	14,083	10,851	10,005
Interest payable	11,611	11,925
Accrued retirement benefits	2,560	2,748
Deferred revenues	8,160	12,376
Taxes, other than income	5,097	4,618
Other	18,551	18,074
Accrued liabilities	$ 133,516	$ 109,052

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Long-term Debt (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Debt financing costs	$ 0	$ 0	$ 5,892
Amortization of debt financing costs recognized as interest expense	764	1,515	2,031
Balance of unamortized debt financing costs	2,153	2,917
Designated as Hedging Instrument [Member] | Current and Long-Term Debt [Member]
Realized Gain (Loss) On Terminated Derivatives, Current Portion	3	67
2008 Note Purchase Agreement [Member]
Leverage Ratio	3.5:1.0
Issuance Date	October 2008
Debt Covenant, Ratio Of Consolidated Net Debt to Debt Covenant EBITDA	3.5:1.0
Debt Covenant, Minimum Consolidated Net Worth Calculation, Base Value	425,000
Debt Covenant, Minimum Consolidated Net Worth Calculation, Percentage of Net Income	50.00%
Debt Covenant, Calculations, Period Of Time	rolling four quarter basis
Cross default provisions related to the Company's other outstanding debt arrangements in excess of this amount, the occurrence of which would permit the lenders to accelerate the amounts due thereunder	25,000
Debt Covenant, Ratio Of Consolidated Net Debt to Debt Covenant EBITDA During Material Acquisition Period, Maximum	4.0:1.0
Debt Covenant, Maximum Percentage of Priority Debt To Consolidated Net Worth	20.00%
2009 Note Purchase Agreement [Member]
Issuance Date	April 2009
Debt Covenant, Ratio Of Consolidated Net Debt to Debt Covenant EBITDA	3.5:1.0
Debt Covenant, Minimum Consolidated Net Worth Calculation, Base Value	485,940
Debt Covenant, Minimum Consolidated Net Worth Calculation, Percentage of Net Income	50.00%
Debt Covenant, Calculations, Period Of Time	rolling four quarter basis
Cross default provisions related to the Company's other outstanding debt arrangements in excess of this amount, the occurrence of which would permit the lenders to accelerate the amounts due thereunder	30,000
Debt Covenant, Maximum Percentage of Priority Debt To Consolidated Net Worth	20.00%
The Notes [Member]
Prepayment, Maximum Percentage of Principal	100.00%
Prepayment, Partial Payment Minimum	1,000
Prepayment, Make-Whole Amount Computation, Discount Rate Basis Points	50
Minimum [Member] | 2008 Term Loan [Member]
Basis Spread On Variable Rate	1.00%
Maximum [Member] | 2008 Term Loan [Member]
Basis Spread On Variable Rate	2.25%
2008 Term Loan [Member]
Issuance Date	October 2008
Face Amount	150,000
Option For Additonal Indebtedness	50,000
Variable Rate Basis	LIBOR
Principal Payment Amount	1,875
Frequency of Periodic Payment	quarterly
Debt Covenant, Ratio Of Consolidated Net Debt to Debt Covenant EBITDA	3.5:1.0
Debt Covenant, Minimum Consolidated Net Worth Calculation, Base Value	400,000
Debt Covenant, Minimum Consolidated Net Worth Calculation, Percentage of Net Income	50.00%
Debt Covenant, Minimum Consolidated Net Worth Calculation, Percentage of Net Proceeds of Issuance of Capital Stock	50.00%
Debt Covenant, Calculations, Period Of Time	rolling four quarter basis
Cross default provisions related to the Company's other outstanding debt arrangements in excess of this amount, the occurrence of which would permit the lenders to accelerate the amounts due thereunder	$ 15,000

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Operatons and summary of significant accounting policies (Table)

12 Months Ended

Sep. 30, 2011

Basis of Presentation

Schedule of Property, Plant and Equipment Useful Lives

Buildings and improvements	2- 40	years
Leasehold improvements	1- 40	years
Machinery and production equipment	2- 15	years
Computer equipment and software	3- 10	years
Other	2- 20	years

Schedule of Finite-Lived Intangible Assets Useful Lives

Customer relationships	9- 30	years
Intellectual property	10- 17	years
Process technology	8- 30	years
Other	1- 15	years

Schedule of Effects of Purchasing Non-controlling Interest on Stockholders' Equity

	Year Ending September 30,
	2011		2010			2009
Net earnings attributable to Woodward	$	132,235	$	110,844		$	94,352
Decrease in Woodward's additional paid-in capital related to purchase of noncontrolling interest		—		(6,180	)		—
Change from net earnings attributable to Woodward and transfers to noncontrolling interest	$	132,235	$	104,664		$	94,352

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Derivative Instruments and Hedging Activities

12 Months Ended

Sep. 30, 2011

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Note 6. Derivative instruments and hedging activities

Woodward is exposed to global market risks, including the effect of changes in interest rates, foreign currency exchange rates, changes in certain commodity prices and fluctuations in various producer indices. From time to time, Woodward enters into derivative instruments for risk management purposes only, including derivatives designated as accounting hedges and/or those utilized as economic hedges. Woodward uses interest rate related derivative instruments to manage its exposure to fluctuations of interest rates. Woodward not does enter into or issue derivatives for trading or speculative purposes.

By using derivative and/or hedging instruments to manage its risk exposure, Woodward is subject, from time to time, to credit risk and market risk on those derivative instruments. Credit risk arises from the potential failure of the counterparty to perform under the terms of the derivative and/or hedging instrument. When the fair value of a derivative contract is positive, the counterparty owes Woodward, which creates credit risk for Woodward. Woodward minimizes this credit risk by entering into transactions with only high quality counterparties. Market risk arises from the potential adverse effects on the value of derivative and/or hedging instruments that result from a change in interest rates, commodity prices, or foreign currency exchange rates. Woodward minimizes this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

As of September 30, 2010, Woodward was a party to the forward foreign currency exchange rate contract described below. As of September 30, 2011, all previous derivative instruments into which Woodward had entered into were settled or terminated.

Derivatives in fair value hedging relationships

In 2002, Woodward entered into certain interest rate swaps that were designated as fair value hedges of its long-term debt consisting of senior notes due in October 2011. The discontinuance of these interest rate swaps resulted in gains that are recognized as a reduction of interest expense over the term of the associated debt (10 years) using the effective interest method. The unrecognized portion of the gain is presented as an adjustment to long-term debt.

Derivatives in cash flow hedging relationships

In 2001, Woodward entered into treasury lock agreements that were designated as cash flow hedges of its long-term debt. The objective of these derivatives was to hedge the risk of variability in cash flows related to future interest payments of a portion of the anticipated future debt issuances attributable to changes in the designated benchmark interest rate associated with the expected issuance of the senior notes due in October 2011. The discontinuance of these treasury lock agreements resulted in losses that are recognized as an increase of interest expense over the term of the associated debt (10 years) using the effective interest method. The unrecognized portion of the loss is recorded in accumulated other comprehensive earnings.

In September 2008, the Company entered into treasury lock agreements that qualified as cash flow hedges under authoritative guidance for derivatives and hedging. The objective of this derivative instrument was to hedge the risk of variability in cash flows related to future interest payments of a portion of the anticipated future debt issuances attributable to changes in the designated benchmark interest rate associated with the expected issuance of long-term debt to acquire MPC. The discontinuance of these treasury lock agreements resulted in a gain that is being recognized as a reduction of interest expense over a seven-year period on the hedged Series C and D Notes, which were issued on October 1, 2008, using the effective interest method. The unrecognized portion of the gain is recorded in accumulated other comprehensive earnings, net of tax.

In March 2009, Woodward entered into LIBOR lock agreements that qualified as cash flow hedges under authoritative guidance for derivatives and hedging. The objective of this derivative instrument was to hedge the risk of variability in cash flows over a seven-year period related to future interest payments of a portion of anticipated future debt issuances attributable to changes in the designated benchmark interest rate associated with the then expected issuance of long-term debt to acquire HRT. The discontinuance of the LIBOR lock agreements resulted in a loss that is being recognized as an increase of interest expense over a seven-year period on the hedged Series E and F Notes, which were issued on April 3, 2009, using the effective interest method. The unrecognized portion of the loss is recorded in accumulated other comprehensive earnings, net of tax.

Derivatives in foreign currency relationships

In September 2010, Woodward entered into a foreign currency exchange rate contract to purchase €39,000 for approximately $52,549 in early December 2010. An unrealized gain of $579 on this derivative was carried at fair market value in "Other current assets" as of September 30, 2010. In December 2010, a loss of $1,033 was recorded on the settlement of this forward contract and was recorded in "Other (income) expense, net." In September 2009, Woodward entered into a foreign currency exchange rate contract to purchase €7,900 for approximately $11,662 in early October 2009. An unrealized loss of $173 on this derivative instrument was carried at fair market value in "Accrued liabilities" as of September 30, 2009. In October 2009, a loss of $71 was realized on the settlement of this forward contract was recorded in "Other (income) expense, net."

The objective of these derivative instruments, which were not designated as accounting hedges, was to limit the risk of foreign currency exchange rate fluctuations on certain short-term intercompany loan balances.

The following table discloses the remaining unrecognized gains and losses and recognized gains and losses associated with derivative instruments on Woodward's Consolidated Balance Sheets:

	At September 30,
	2011			2010
Derivatives designated as hedging instruments	Unrecognized Gain (Loss)
Classified in accumulated other comprehensive earnings	$	(781	)	$	(1,011	)
Classified in current and long-term debt		3			70
	$	(778	)	$	(941	)
Derivatives not designated as hedging instruments	Recognized Gain (Loss)
Classified in other current assets	$	—		$	579

The following tables disclose the impact of derivative instruments on Woodward's Consolidated Statements of Earnings and Comprehensive Earnings:

		Year Ending September 30, 2011
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(67	)	$	—	$	—
Cash flow hedging relationships	Interest expense		229			—		229
Foreign currency relationships	Other (income) expense, net		1,612			—		—
		$	1,774		$	—	$	229
		Year Ending September 30, 2010
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(127	)	$	—	$	—
Cash flow hedging relationships	Interest expense		282			—		282
Foreign currency relationships	Other (income) expense, net		(681	)		—		—
		$	(526	)	$	—	$	282
		Year Ending September 30, 2009
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(184	)	$	—	$	—
Cash flow hedging relationships	Interest expense		237			1,199		237
Foreign currency relationships	Other (income) expense, net		173			—		—
		$	226		$	1,199	$	237

Based on the carrying value of the unrecognized gains and losses on terminated derivative instruments designated as cash flow hedges as of September 30, 2011, Woodward expects to reclassify $173 of net unrecognized losses on terminated derivative instruments from accumulated other comprehensive income to earnings during the next twelve months.

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Supplemental Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Sep. 30, 2011

Sep. 30, 2010

Quarterly Financial Information

	2011 Fiscal Quarters
	First		Second		Third		Fourth
Net sales	$	365,075	$	418,866	$	438,467	$	489,294
Gross margin (1)		103,898		126,346		134,026		149,279
Earnings before income taxes		31,475		46,487		50,855		58,750
Net Earnings:
Net earnings attributable to Woodward (2)		22,399		32,090		36,056		41,690
Net earnings attributable to noncontrolling interests		—		—		—		—
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward		0.33		0.47		0.52		0.61
Diluted earnings per share attributable to Woodward		0.32		0.46		0.51		0.60
Cash dividends per share		0.06		0.07		0.07		0.07

	2010 Fiscal Quarters
	First		Second		Third		Fourth
Net sales	$	339,308	$	349,352	$	356,367	$	412,003
Gross margin (1)		99,756		105,036		106,401		124,321
Earnings before income taxes		31,490		35,818		38,052		49,515
Net Earnings:
Net earnings attributable to Woodward (2)		22,356		24,068		31,745		32,675
Net earnings (losses) attributable to noncontrolling interests		90		108		120		—
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward		0.33		0.35		0.46		0.48
Diluted earnings per share attributable to Wooward		0.32		0.34		0.45		0.47
Cash dividends per share		0.06		0.06		0.06		0.06

Segment Reporting [Member]

Quarterly Financial Information

	2011 Fiscal Quarters
	First			Second			Third			Fourth
External net sales:
Aerospace	$	181,144		$	204,945		$	215,242		$	241,701
Energy		183,931			213,921			223,225			247,593
Total	$	365,075		$	418,866		$	438,467		$	489,294
Segment earnings:
Aerospace	$	19,914		$	33,241		$	35,402		$	40,945
Energy		24,503			26,941			29,251			33,177
Total	$	44,417		$	60,182		$	64,653		$	74,122
Earnings reconciliation:
Total segment earnings	$	44,417		$	60,182		$	64,653		$	74,122
Nonsegment expenses		(6,564	)		(7,481	)		(7,554	)		(9,343	)
Interest expense, net		(6,378	)		(6,214	)		(6,244	)		(6,029	)
Consolidated earnings before income taxes	$	31,475		$	46,487		$	50,855		$	58,750

	2010 Fiscal Quarters
	First			Second			Third			Fourth
External net sales:
Aerospace	$	180,384		$	185,196		$	191,150		$	212,649
Energy		158,924			164,156			165,217			199,354
Total	$	339,308		$	349,352		$	356,367		$	412,003
Segment earnings:
Aerospace	$	26,204		$	26,678		$	28,564		$	30,725
Energy		18,837			21,659			22,425			31,093
Total	$	45,041		$	48,337		$	50,989		$	61,818
Earnings reconciliation:
Total segment earnings	$	45,041		$	48,337		$	50,989		$	61,818
Nonsegment expenses		(5,410	)		(5,315	)		(6,085	)		(5,624	)
Interest expense, net		(8,141	)		(7,204	)		(6,852	)		(6,679	)
Consolidated earnings before income taxes	$	31,490		$	35,818		$	38,052		$	49,515

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Cash flows from operating activities:
Net earnings	$ 132,235	$ 111,162	$ 94,416
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	75,393	75,616	63,948
Net (gain) loss on sales of assets	644	(131)	(188)
Stock-based compensation	6,590	6,686	5,499
Excess tax benefits from stock-based compensation	(3,558)	(5,115)	(2,695)
Deferred income taxes	(10,321)	16,358	17,233
Loss on derivatives reclassified from accumulated comprehensive earnings into earnings	229	282	237
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	(49,393)	(40,688)	37,760
Inventories	(76,643)	5,896	52,586
Accounts payable and accrued liabilities	27,679	34,426	(44,834)
Current income taxes	19,064	998	(4,034)
Retirement benefit obligations	(8,322)	(13,672)	(3,343)
Other	1,026	(7,246)	2,642
Net cash provided by operating activities	114,623	184,572	219,227
Cash flows from investing activities:
Payments for purchase of property, plant and equipment	(48,255)	(28,104)	(28,947)
Proceeds from the sale of assets	59	312	16,637
Business acquisitions, net of cash and marketable securities acquired	(38,698)	(25,000)	(749,820)
Business acquisitions, marketable securities acquired	(8,463)	0	0
Proceeds from sale of marketable securities	8,217	0	0
Proceeds from disposal of Fuel & Pneumatics product line	0	660	48,000
Net cash used in investing activities	(87,140)	(52,132)	(714,130)
Cash flows from financing activities:
Cash dividends paid	(18,581)	(17,085)	(16,864)
Proceeds from sales of treasury stock	2,482	1,999	4,631
Payments for repurchases of common stock	(6,837)	(4,513)	(866)
Excess tax benefits from stock compensation	3,558	5,115	2,695
Purchase of noncontrolling interest	0	(8,120)	0
Net proceeds from issuance of debt	0	0	620,000
Borrowings on revolving lines of credit and short-term borrowings	164,557	106,019	145,702
Payments on revolving lines of credit and short-term borrowings	(182,728)	(83,980)	(149,731)
Payments of long-term debt	(18,430)	(128,420)	(92,392)
Payments of long-term debt assumed in MPC acquisition	0	0	(18,610)
Payments for cash flow hedge	0	0	(1,308)
Debt financing costs	0	0	(5,892)
Net cash provided by (used in) financing activities	(55,979)	(128,985)	487,365
Effect of exchange rate changes on cash and cash equivalents	(2,544)	1,261	(1,432)
Net change in cash and cash equivalents	(31,040)	4,716	(8,970)
Cash and cash equivalents at beginning of period	105,579	100,863	109,833
Cash and cash equivalents at end of period	$ 74,539	$ 105,579	$ 100,863

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Schedule II (Details) (Allowance for Doubtful Accounts [Member], USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Allowance for Doubtful Accounts [Member]
Balance at Beginning of Year	$ 2,228	$ 2,660	$ 1,648
Additions: Charged to Costs and Expenses	1,028	431	1,274
Additions: Charged to Other Accounts	159	74	1,003
Deductions	(1,093)	(937)	(1,265)
Balance at End of Year	2,322	2,228	2,660
Currency translation adjustments	$ (69)	$ (37)	$ 16

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Credit Facilities and Short-term Borrowings (Narrative) (Details) (USD $) In Thousands						12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011 Foreign Pooling Arrangement Facility [Member]	Sep. 30, 2011 Foreign Performance Guarantee Facilities [Member]	Sep. 30, 2011 Foreign Lines of Credit And Overdraft Facilities [Member]	Sep. 30, 2011 Revolving Credit Facility [Member]
Maximum borrowing capacity	$ 250,541		$ 5,279	$ 9,736	$ 10,526	$ 225,000
Option to increase maximum borrowings to this amount						350,000
Line of Credit Facility, Expiration Date						October 2012
Cross default provisions related to the Company's other outstanding debt arrangements in excess of this amount, the occurrence of which would permit the lenders to accelerate the amounts due thereunder						15,000
Short-term borrowings	$ 0	$ 22,099

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Retirement Benefits (Schedule of Allocation of Plan Assets, Actual and Target Allocations) (Details)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
United States Pension Plans of US Entity, Defined Benefit [Member]
Equity Securities, Target Allocation, Minimum	39.70%	40.00%
Equity Securities, Target Allocation, Maximum	79.70%	60.00%
Equity Securities, Percentage of Plan Assets	58.70%	49.80%
Debt Securities, Target Allocation, Minimum	30.30%	40.00%
Debt Securities, Target Allocation, Maximum	50.30%	60.00%
Debt Securities, Percentage of Plan Assets	41.10%	50.00%
Other, Target Allocation, Minimum	0.00%	0.00%
Other, Target Allocation, Maximum	0.00%	0.00%
Other, Percentage of Plan Assets	0.20%	0.20%
United Kingdom Plan, Defined Benefit [Member]
Equity Securities, Target Allocation, Minimum	40.00%	46.00%
Equity Securities, Target Allocation, Maximum	60.00%	54.00%
Equity Securities, Percentage of Plan Assets	37.70%	40.70%
Debt Securities, Target Allocation, Minimum	35.00%	46.50%
Debt Securities, Target Allocation, Maximum	65.00%	53.50%
Debt Securities, Percentage of Plan Assets	62.20%	58.90%
Other, Target Allocation, Minimum	0.00%	0.00%
Other, Target Allocation, Maximum	0.00%	0.00%
Other, Percentage of Plan Assets	0.10%	0.40%
Japan Plan, Defined Benefit [Member]
Equity Securities, Target Allocation, Minimum	36.00%	50.00%
Equity Securities, Target Allocation, Maximum	44.00%	58.00%
Equity Securities, Percentage of Plan Assets	39.90%	55.20%
Debt Securities, Target Allocation, Minimum	55.00%	41.00%
Debt Securities, Target Allocation, Maximum	63.00%	49.00%
Debt Securities, Percentage of Plan Assets	59.20%	43.10%
Other, Target Allocation, Minimum	0.00%	0.00%
Other, Target Allocation, Maximum	2.00%	2.00%
Other, Percentage of Plan Assets	0.90%	1.70%
Switzerland Plan, Defined Benefit [Member]
Equity Securities, Target Allocation, Minimum	0.00%
Equity Securities, Target Allocation, Maximum	0.00%
Equity Securities, Percentage of Plan Assets	0.00%
Debt Securities, Target Allocation, Minimum	0.00%
Debt Securities, Target Allocation, Maximum	0.00%
Debt Securities, Percentage of Plan Assets	0.00%
Other, Target Allocation, Minimum	100.00%
Other, Target Allocation, Maximum	100.00%
Other, Percentage of Plan Assets	100.00%

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Recent Accounting Pronouncements

12 Months Ended

Sep. 30, 2011

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Note 2. New accounting standards

From time to time, the Financial Accounting Standards Board ("FASB") or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification ("ASC") are communicated through issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, Woodward believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Consolidated Financial Statements upon adoption.

In October 2009, the FASB issued ASU 2009-13, "Multiple-Deliverable Revenue Arrangements" and ASU 2009-14, "Certain Revenue Arrangements That Include Software Elements." ASU 2009-13 and ASU 2009-14 are required to be adopted concurrently in fiscal years beginning on or after June 15, 2010 (fiscal year 2011 for Woodward).

ASU 2009-13 changes the requirements for establishing separate units of accounting in a multiple element arrangement and requires the allocation of arrangement consideration to each deliverable based on the relative selling price. The selling price for each deliverable is based on vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or estimated selling price ("ESP") if neither VSOE nor TPE is available.

ASU 2009-14 excludes software that is contained on a tangible product from the scope of software revenue guidance if the software is essential to the tangible product's functionality.

ASU 2009-13 and ASU 2009-14 were adopted by Woodward on October 1, 2010. The adoption did not impact the identification of or the accounting for separate units of accounting, including the pattern and timing of revenue recognition, and is not expected to have a significant impact on Woodward's financial position, results of operations or cash flows in future periods. Woodward does not generally sell its products and services through arrangements that include multiple-deliverable arrangements, and the Company had no significant multiple-deliverable arrangements as of September 30, 2011.

In April 2010, the FASB issued ASU 2010-17, "Milestone Method of Revenue Recognition." ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions, and requires certain disclosures regarding the use of the milestone method.

ASU 2010-17 was adopted by Woodward on October 1, 2010. The adoption did not impact the pattern or timing of revenue recognition and is not expected to have a significant impact on Woodward's financial position, results of operations or cash flows in future periods. For certain development services provided to customers pursuant to funded long and short-term development contracts, Woodward recognizes revenue based on completion of substantive milestones determined based on the individual facts and circumstances of each arrangement. Total revenues recognized by Woodward based upon completion of substantive milestones as proscribed by ASU 2010-17 was $3,181 for the year ending September 30, 2011.

In June 2011, the FASB issued ASU 2011-05, "Comprehensive Income." ASU 2011-05 amends ASC Topic 220, Comprehensive Income, to require that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements, and it eliminates the option to present components of other comprehensive income as a part of the statement of changes in stockholders' equity. In addition, ASU 2011-05 requires an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. These amendments are to be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (fiscal 2013 for Woodward), early adoption is permitted. Woodward adopted ASU 2011-05 in the fourth quarter of fiscal year 2011. The adoption had no impact on Woodward's Consolidated Financial Statements.

In September 2011, the FASB issued ASU 2011-08, "Testing Goodwill for Impairment." ASU 2011-08 allows companies to perform a "qualitative" assessment to determine whether or not the current two-step quantitative testing method, in which Woodward compares the fair value of reporting units to its carrying amount including goodwill, must be followed. If a qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, then the quantitative impairment test is not required. A company may choose to use the qualitative assessment on none, some, or all if its reporting units or to bypass the qualitative assessment and proceed directly to the two-step quantitative testing method. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011; however, early adoption is allowed. Woodward does not anticipate that the adoption of ASU 2011-08 will have a material impact on Woodward's Consolidated Financial Statements.

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Goodwill (Tables)

12 Months Ended

Sep. 30, 2011

Sep. 30, 2010

Goodwill

Schedule of Goodwill

								Effects of
	September 30,							Currency			September 30,
	2010		Additions		Adjustments			Translation			2011
Aerospace	$	356,680	$	—	$	(103	)	$	(52	)	$	356,525
Energy		81,914		24,188		—			(345	)		105,757
Consolidated	$	438,594	$	24,188	$	(103	)	$	(397	)	$	462,282

								Effects of
	September 30,							Currency			September 30,
	2009		Additions		Adjustments			Translation			2010
Aerospace	$	359,534	$	—	$	(2,722	)	$	(132	)	$	356,680
Energy		83,268		—		—			(1,354	)		81,914
Consolidated	$	442,802	$	—	$	(2,722	)	$	(1,486	)	$	438,594

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Operations and summary of significant accounting policies (Policy)

12 Months Ended

Sep. 30, 2011

Principles of consolidation

Principles of consolidation: These Consolidated Financial Statements are prepared in accordance with U.S. GAAP and include the accounts of Woodward and its wholly and majority-owned subsidiaries. Transactions within and between these companies are eliminated.

Use of estimates

Use of estimates: The preparation of the Consolidated Financial Statements requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, at the date of the financial statements and the reported revenues and expenses recognized during the reporting period, and certain financial statement disclosures. Significant estimates include allowances for doubtful accounts, net realizable value of inventories, percent complete on long-term contracts, cost of sales incentives, useful lives of property and identifiable intangible assets, the evaluation of impairments of property, identifiable intangible assets and goodwill, the provision for income tax and related valuation reserves, the valuation of assets and liabilities acquired in business combinations, assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans, the valuation of stock compensation instruments granted to employees, and contingencies. Actual results could vary materially from Woodward's estimates.

Foreign currency exchange rates

Foreign currency exchange rates: The assets and liabilities of substantially all subsidiaries outside the U.S. are translated at fiscal year-end rates of exchange, and earnings and cash flow statements are translated at weighted-average rates of exchange. Translation adjustments are accumulated with other comprehensive earnings as a separate component of stockholders' equity and are presented net of tax effects in the Consolidated Statements of Stockholders' Equity. The effects of changes in foreign currency exchange rates on loans between consolidated subsidiaries, that are considered permanent in nature, are also accumulated with other comprehensive earnings, net of tax.

The Company is exposed to market risks related to fluctuations in foreign currency exchange rates because some sales transactions, and certain of the assets and liabilities of its domestic and foreign subsidiaries, are denominated in foreign currencies. Selling, general, and administrative expenses include net foreign currency transaction gains of $575 in 2011, $425 in 2010, and $251 in 2009.

Revenue recognition

Revenue recognition: Woodward recognizes revenue upon shipment or delivery of tangible products for sale. Delivery is upon completion of manufacturing, customer acceptance, and the transfer of the risks and rewards of ownership. In countries whose laws provide for retention of some form of title by sellers, enabling recovery of goods in the event of customer default on payment, product delivery is considered to have occurred when the customer has assumed the risks and rewards of ownership of the products.

Occasionally, Woodward transfers title of product to customers, but retains substantive performance obligations such as completion of product testing, customer acceptance or in some instances regulatory acceptance. Revenue is deferred until the performance obligations are satisfied.

Woodward provides certain development services to customers under fully funded, partially funded and unfunded long and short-term development contracts. Revenue for such contracts is recognized using the percentage-of-completion, milestone or completed contract methods. Funded development contracts may be fixed price or cost-reimbursable contracts. Anticipated losses on fully funded contracts, if any, are recognized in the period in which the losses become probable and estimable.

Certain Woodward products include incidental software or firmware essential to the performance of the product as designed which are treated as units of accounting associated with the related tangible product with which the software is included. Woodward does not sell software on a standalone basis, although software upgrades, if any, are generally paid for by the customer.

Customer payments

Customer payments: Woodward occasionally agrees to make payments to certain customers in order to participate in anticipated sales activity. Payments made to customers are accounted for as a reduction of revenue unless they are made in exchange for identifiable goods or services with fair values that can be reasonably estimated. Reductions in revenue associated with these customer payments are recognized immediately to the extent that the payments cannot be attributed to anticipated future sales, and are recognized in future periods to the extent that the payments relate to anticipated future sales. Such determinations are based on the facts and circumstances underlying each payment.

Stock-based compensation

Stock-based compensation: Compensation cost relating to stock-based payment awards made to employees and directors is recognized in the financial statements using a fair value method. Non-qualified stock option awards and restricted stock awards are issued under Woodward's stock-based compensation plans. Woodward measures for the cost of such awards, measured at the grant date, based on the estimated fair value of the award.

Forfeitures are estimated at the time of each grant in order to estimate the portion of the award that will ultimately vest. The estimate is based on Woodward's historical rates of forfeitures and is updated periodically. The portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods, which is generally the vesting period of the awards.

Research and development

Research and development costs: Expenditures related to new product development activities in excess of fully and partially funded development contract amounts, if applicable, are expensed when incurred and are separately reported in the Consolidated Statements of Earnings.

Restructuring and other charges

Restructuring and other charges: Restructuring charges related to workforce management were recognized as expense in March 2009. Non-cash charges for impairment of a vacated facility were recognized as expense in fiscal year 2009. Restructuring charges related to 2009 business acquisitions, including items such as costs associated with integrating similar operations, workforce management, vacating certain facilities, and the cancellation of certain contracts, were recognized as a liability as of the acquisition date. Adjustments to the initial estimate determined within the allocation period, which is generally not more than one year, are treated as an adjustment to the liabilities recorded in the acquisitions. Adjustments to the initial estimate determined after the allocation period are included in the determination of net earnings in the period in which the adjustment is identified.

Under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805, Business Combinations, the acquirer in a business combination can generally only recognize liabilities for plans to exit an activity, involuntarily terminate employees, or relocate employees of an acquiree, if the acquiree, as of the acquisition date, has a current plan in place and certain criteria are satisfied. This differs from the accounting requirements under FASB Statement 141, "Business Combinations" in which the acquirer could recognize liabilities as of the acquisition date for plans to exit an activity, involuntarily terminate employees, or relocate employees of an acquiree, if the criteria were met in Emerging Issues Task Force ("EITF") Issue No. 95-3, "Recognition of Liabilities in Connection With a Purchase Business Combination."

Income taxes

Income taxes: Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of Woodward's assets, liabilities, and certain unrecognized gains and losses recorded in accumulated other comprehensive earnings. Woodward provides for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the U.S., except for those earnings that it considers to be permanently reinvested.

Cash equivalents

Cash equivalents: Highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents.

Cash and cash equivalents are maintained with multiple financial institutions. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. Woodward holds cash and cash equivalents at financial institutions in excess of amounts covered by the Federal Depository Insurance Corporation (the "FDIC") and sometimes invests excess cash in money market funds not insured by the FDIC.

Accounts receivable

Accounts receivable: Almost all Woodward's sales are made on credit and result in accounts receivable, which are recorded at the amount invoiced. In the normal course of business, not all accounts receivable are collected and, therefore, an allowance for losses of accounts receivable is provided equal to the amount that Woodward believes ultimately will not be collected. Customer-specific information is considered related to delinquent accounts, past loss experience, and current economic conditions in establishing the amount of its allowance. Accounts receivable losses are deducted from the allowance and the related accounts receivable balances are written off when the receivables are deemed uncollectible. Recoveries of accounts receivable previously written off are recognized when received.

In coordination with its customers and when terns are considered favorable to Woodward, Woodward somtimes transfers ownership to collect amounts due to Woodward for outstanding accounts receivable to third parties in exchange for cash. If such transfer of ownership is with recourse, then a short-term liability is recorded and is reflected in Woodward's Cash Flow Statement as a financing source. The settlement of the transferred obligation is reflected in Woodward's Cash Flow Statement as both cash from operations due to the collection of accounts receivable and cash used in financing as the prior recourse obligation is extinguished.

Inventories

Inventories: Inventories are valued at the lower of cost or market, with cost generally being determined using methods that approximate a first-in, first-out basis.

Component parts include items that can be sold separately as finished goods or included in the manufacture of other products.

Customer deposits are recorded against inventory when the right of offset exists. All other customer deposits are recorded in accrued liabilities.

Property, plant and equipment

Property, plant, and equipment: Property, plant, and equipment are recorded at cost and are depreciated over the estimated useful lives of the assets. Assets are generally depreciated using the straight-line method. Certain buildings and improvements are depreciated using the declining-balance method. Assets are tested for recoverability whenever events or circumstances indicate the carrying value may not be recoverable.

Estimated lives over which fixed assets are generally depreciated at September 30, 2011 were as follows:

Buildings and improvements	2- 40	years
Leasehold improvements	1- 40	years
Machinery and production equipment	2- 15	years
Computer equipment and software	3- 10	years
Other	2- 20	years

Purchase accounting

Purchase accounting: Business combinations are accounted for using the purchase method of accounting. Under the purchase method, assets and liabilities, including intangible assets, are recorded at their fair values as of the acquisition date. Acquisition costs in excess of amounts assigned to assets acquired and liabilities assumed are recorded as goodwill.

Goodwill

Goodwill: Woodward tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment tests consist of comparing the implied fair value of reporting units with its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its implied fair value, Woodward compares the implied fair value of goodwill with the recorded carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss would be recognized to reduce the carrying amount to its implied fair value. As discussed in Note 10, Goodwill, Woodward changed the annual testing date for its goodwill impairment test from March 31 to July 31. As a result, during 2011, Woodward performed goodwill impairment tests as of March 31, 2011 and July 31, 2011. In addition, as of September 30, 2011, as part of its segment realignment, Woodward created two new reporting units, Aircraft Turbine Systems and Industrial Turbomachinery Systems that were previously included in the Turbine Systems reporting unit. See Note 21, Segment information for a discussion of the segment realignment that occurred.

Other intangibles

Other intangibles: Other intangibles are recognized apart from goodwill whenever an acquired intangible asset arises from contractual or other legal rights, or whenever it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented, or exchanged, either individually or in combination with a related contract, asset, or liability. All of Woodard's intangibles have an estimated useful life and are being amortized using patterns that reflect the periods over which the economic benefits of the assets are expected to be realized. Impairment losses are recognized if the carrying amount of an intangible is both not recoverable and exceeds its fair value. 

Estimated lives over which intangible assets are amortized at September 30, 2011 were as follows:

Customer relationships	9- 30	years
Intellectual property	10- 17	years
Process technology	8- 30	years
Other	1- 15	years

Impairment of long-lived assets

Impairment of long-lived assets: Woodward reviews the carrying value of its long-lived assets or asset groups to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset groups carrying amount and its estimated fair value. There was no impairment charge recorded in fiscal year 2011, fiscal year 2010, or fiscal year 2009.

Investments in marketable equity securities

Investment in marketable equity securities: Woodward holds marketable equity securities related to its deferred compensation program. Based on Woodward's intentions regarding these instruments, marketable equity securities are classified as trading securities. The trading securities are reported at fair value, with realized gains and losses recognized in earnings. The trading securities are included in "Other current assets." The associated obligation to provide benefits is included in "Other liabilities."

Investments in unconsolidated subsidiaries

Investments in unconsolidated subsidiaries: Investments in and operating results of entities in which Woodward does not have a controlling financial interest or the ability to exercise significant influence over the operations are included in the financial statements using the cost method of accounting. Investments and operating results of entities in which Woodward does not have a controlling interest but does have the ability to exercise significant influence over operations are included in the financial statements using the equity method of accounting.

Non-controlling interests

Noncontrolling interests: On October 1, 2009, the Company adopted new guidance which requires, among other things, noncontrolling financial interests be accounted for as a separate component of equity and that all transactions between the Company and the noncontrolling interest be accounted for as equity transactions.

Derivatives

Derivatives: The Company is exposed to various market risks that arise from transactions entered into in the normal course of business. The Company has historically utilized derivative instruments, such as treasury lock agreements to lock in fixed rates on future debt issuances, which qualify as cash flow or fair value hedges to mitigate the risk of variability in cash flows related to future interest payments attributable to changes in the designated benchmark rate. The Company records all such interest rate hedge instruments on the balance sheet at fair value. Cash flows related to the instrument designated as a qualifying hedge are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. Accordingly, cash flows relating to the settlement of interest rate derivatives hedging the forecasted future interest payments on debt have been reflected upon settlement as a component of financing cash flows. The resulting gain or loss from such settlement is deferred to other comprehensive income and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged and is therefore reflected as a component of operating cash flows in periods subsequent to settlement. The periodic settlement of interest rate derivatives hedging outstanding variable rate debt is recorded as an adjustment to interest expense and is therefore reflected as a component of operating cash flows.

From time to time, Woodward will enter into foreign currency exchange rate contracts to hedge against changes in foreign currency exchange rates on liabilities expected to be settled at a future date. Woodward has historically not designated these transactions as accounting hedges. The fair value of foreign currency exchange rate contracts held at the end of the period are recognized in the balance sheet and the unrealized gains or losses are recorded to "Other (income) expense, net" in the Statement of Earnings. Upon settlement of foreign currency exchange rate contracts, any unrealized gains or losses previously recognized are reversed and the realized gain or loss is recorded to "Other (income) expense, net" in the Statement of Earnings. Further information on foreign currency exchange rate contracts can be found at Note 6, Derivative instruments and hedging activities.

Postretirement benefits

Postretirement benefits: The Company provides various benefits to certain current and former employees through defined benefit pension and postretirement plans. For financial reporting purposes, net periodic benefits expense and related obligations are calculated using a number of significant actuarial assumptions. Changes in net periodic expense and funding status may occur in the future due to changes in these assumptions. The funded status of defined pension and postretirement plans recognized in the statement of financial position is measured as the difference between the fair market value of the plan assets and the benefit obligation. For a defined benefit pension plan, the benefit obligation is the projected benefit obligation; for any other defined benefit postretirement plan, such as a retiree health care plan, the benefit obligation is the accumulated benefit obligation. Any over-funded status is recognized as an asset and any underfunded status is recognized as a liability.

Projected benefit obligation is the actuarial present value as of the measurement date of all benefits attributed by the plan benefit formula to employee service rendered before the measurement date using assumptions as to future compensation levels if the plan benefit formula is based on those future compensation levels. Accumulated benefit obligation is the actuarial present value of benefits (whether vested or unvested) attributed by the plan benefit formula to employee service rendered before the measurement date and based on employee service and compensation, if applicable, prior to that date. Accumulated benefit obligation differs from projected benefit obligation in that it includes no assumption about future compensation levels.

Deferred Compensation, Excluding Share-based Payments and Retirement Benefits [Member]

Deferred compensation

Deferred compensation: The Company maintains a deferred compensation plan or "rabbi trust" as part of its overall compensation package for certain employees.

Deferred compensation obligations will be settled either by delivery of a fixed number of shares of Woodward's common stock (in accordance with certain eligible members' irrevocable elections) or in cash. Woodward has contributed shares of its common stock into a trust established for the future settlement of deferred compensation obligations that are payable in shares of Woodward's common stock. Common stock held by the trust is reflected in the Consolidated Balance Sheet as "Treasury stock held for deferred compensation" and the related deferred compensation obligation is reflected as a separate component of equity in amounts equal to the fair value of the common stock at the dates of contribution. These accounts are not adjusted for subsequent changes in the fair value of the common stock. Deferred compensation obligations that will be settled in cash are accounted for on an accrual basis in accordance with the terms of the underlying contract and are reflected in the Consolidated Balance Sheet as "Other liabilities."

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Income Taxes (Narrative) (Details) (USD $) In Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Deferred Tax Assets, Operating Loss Carryforwards, Foreign		$ 4,276	$ 2,245
Undistributed foreign earnings for which Woodward has not provided for taxes		113,788
Favorable resolutions of tax matters		2,148	4,667	6,846
Income tax expense reduction due to research and experimentation tax credit		3,908
Reduction in liability for unrecognized tax benefits	(6,416)		6,784
Unrecognized Tax Benefits that Would Impact Effective Tax Rate		14,078	8,720
Estimated decrease in liability for unrecognized tax benefits		600
Foreign Country [Member]
Operating loss carryforwards		25,024
Operating loss carryforwards, amount that will expire		16,789
Operating loss carryforwards, expiration date		2018
Business Acquisition, Acquiree - IDS [Member]
Unrecognized Tax Benefits that Would Impact Effective Tax Rate		$ 3,517

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Recent Accounting Pronouncements (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011
Recent Accounting Pronouncements
Total revenues recognized based upon completion of substantive milestones	$ 3,181

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Earnings Per Share (Anti-dilutive Stock Options Excluded from Computation of Earnings Per Share) (Details) (USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Earnings Per Share
Options	684	1,106	739
Weighted-average option price	$ 32.04	$ 26.94	$ 27.30

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Segment Information (Tables)

12 Months Ended

Sep. 30, 2011

Segment Information - WWD

Consolidated Net Sales and Earnings by Segment

	Year Ending September 30,
	2011			2010			2009
Segment external net sales:
Aerospace	$	843,032		$	769,379		$	704,771
Energy		868,670			687,651			725,354
Total consolidated net sales	$	1,711,702		$	1,457,030		$	1,430,125
Segment earnings:
Aerospace	$	129,502		$	112,171		$	104,550
Energy		113,872			94,014			96,938
Total segment earnings		243,374			206,185			201,488
Nonsegment expenses		(30,942	)		(22,434	)		(46,514	)
Interest expense, net		(24,865	)		(28,876	)		(32,498	)
Consolidated earnings before income taxes	$	187,567		$	154,875		$	122,476

Consolidated Total Assets, Depreciation and Amortization, and Capital Expenditures by Segment

	At or for the year ending September 30,
	2011		2010		2009
Segment assets:
Aerospace	$	1,036,797	$	994,868	$	1,042,956
Energy		569,929		461,900		439,167
Total segment assets		1,606,726		1,456,768		1,482,123
Unallocated corporate property, plant and equipment, net		8,556		6,111		6,857
Other unallocated assets		166,152		200,354		207,442
Consolidated total assets	$	1,781,434	$	1,663,233	$	1,696,422
Segment depreciation and amortization:
Aerospace	$	50,167	$	50,611	$	38,643
Energy		21,691		21,165		22,452
Total segment depreciation and amortization		71,858		71,776		61,095
Unallocated corporate amounts		3,535		3,840		2,853
Consolidated depreciation and amortization	$	75,393	$	75,616	$	63,948
Segment capital expenditures:
Aerospace	$	34,007	$	13,744	$	11,612
Energy		14,168		11,578		15,158
Total segment capital expenditures		48,175		25,322		26,770
Unallocated corporate amounts		80		2,782		2,177
Consolidated capital expenditures	$	48,255	$	28,104	$	28,947

External Net Sales by Geographical Area

	Year Ending September 30,
	2011		2010		2009
United States	$	874,791	$	797,826	$	730,545
Europe		473,054		377,094		406,910
Asia		264,493		191,761		188,958
Other countries		99,364		90,349		103,712
Consolidated external net sales	$	1,711,702	$	1,457,030	$	1,430,125

Property, Plant, and Equipment - Net by Geographical Area

	At September 30,
	2011		2010
United States	$	149,295	$	135,826
Germany		28,385		29,340
Other countries		29,045		28,358
Consolidated property, plant and equipment	$	206,725	$	193,524

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Supplemental Quarterly Financial Data (Unaudited) (Narrative) (Details) (USD $) In Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2010	Sep. 30, 2010
Quarterly Financial Data
Unrecognized Tax Benefits, Period Increase (Decrease) Including Amounts Pertaining To Examined Tax Returns	$ (6,416)	$ 6,784

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Business Acquisitions (Schedule of Estimated Purchase Price Allocation) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009 Business Acquisition, Acquiree - MotoTron [Member]	Sep. 30, 2009 Business Acquisition, Acquiree - HRT [Member]	Sep. 30, 2009 Business Acquisition, Acquiree - MPC [Member]	Sep. 30, 2011 Business Acquisition, Acquiree - IDS [Member]
Current assets						$ 14,627
Investments in marketable securities						8,463
Property, plant, and equipment						1,954
Goodwill			6,396	142,699	174,893	24,188
Intangible assets						11,882
Total assets acquired						61,114
Other current liabilities						5,505
Warranty accrual	2,250	0				2,250
Postretirement benefits						434
Deferred tax liabilities						2,472
Other tax - noncurrent						3,292
Total liabilities assumed						13,953
Net assets acquired						$ 47,161

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Earnings Per Share

12 Months Ended

Sep. 30, 2011

Earnings Per Share

Earnings Per Share

Note 3. Earnings per share

Basic earnings per share attributable to Woodward is computed by dividing net earnings available to common stockholders by the weighted average number of shares of common stock outstanding for the period.

Diluted earnings per share attributable to Woodward reflects the weighted-average number of shares outstanding after consideration of the dilutive effect of stock options.

The following is a reconciliation of net earnings attributable to Woodward to basic earnings per share attributable to Woodward and diluted earnings per share attributable to Woodward:

	Year Ending September 30,
	2011		2010		2009
Numerator:
Net earnings attributable to Woodward	$	132,235	$	110,844	$	94,352
Denominator:
Basic shares outstanding		68,797		68,472		67,891
Dilutive effect of employee stock options		1,343		1,392		1,212
Diluted shares outstanding		70,140		69,864		69,103
Income per common share:
Basic earnings per share attributable to Woodward	$	1.92	$	1.62	$	1.39
Diluted earnings per share attributable to Woodward	$	1.89	$	1.59	$	1.37

The following stock option grants were outstanding during the fiscal years ending September 30, 2011, 2010 and 2009, but were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive:

	Year Ended September 30,
	2011		2010		2009
Options		684		1,106		739
Weighted-average option price	$	32.04	$	26.94	$	27.30

The weighted-average shares of common stock outstanding for basic and diluted earnings per share included the weighted-average treasury stock shares held for deferred compensation obligations of the following:

	Year Ending September 30,
	2011		2010		2009
Weighted-average treasury stock shares held for deferred compensation obligation		335		371		409

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Inventories (Schedule of Inventories) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Inventories
Raw materials	$ 43,172	$ 19,457
Work in progress	108,718	86,438
Component parts and finished goods	229,665	189,139
Inventory, net	$ 381,555	$ 295,034

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Credit Facilities and Short-term Borrowings (Tables)

12 Months Ended

Sep. 30, 2011

Debt Disclosure

Short-term Borrowings and Availability Under Various Short-term Credit Facilities

			Outstanding
	Total		letters of credit			Outstanding		Remaining
	availability		and guarantees			borrowings		availability
Revolving credit facility	$	225,000	$	(4,882	)	$	—	$	220,118
Foreign lines of credit and overdraft facilities		10,526		—			—		10,526
Foreign performance guarantee facilities		9,736		(2,730	)		—		7,006
Foreign pooling arrangement facility		5,279		—			—		5,279
	$	250,541	$	(7,612	)	$	—	$	242,929

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Segment Information

12 Months Ended

Sep. 30, 2011

Segment Information - WWD

Segment Information

Note 21. Segment information

Effective with the Company's September 30, 2011 financial reporting, Woodward completed a realignment of its reportable segments to correspond with senior management's global strategic focus on the markets Woodward serves — the aerospace market and the energy market. Woodward serves these markets through its two reportable segments — Aerospace and Energy. All information in this Annual Report on Form 10-K, including comparative financial information, has been retrospectively revised to reflect the realignment of the reportable segments. Woodward uses reportable segment information internally to manage its business, including the assessment of business segment performance and decisions for the allocation of resources between segments.

Woodward's Aerospace segment combines the aircraft propulsion portion of the former Turbine Systems business group, now referred to as the Aircraft Turbine Systems business group, with the Airframe Systems business group. Woodward's Energy segment combines the industrial turbine portion of the former Turbine Systems business group, now referred to as the Industrial Turbomachinery Systems business group, with the Engine Systems and Electrical Power Systems business groups.

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, and certain gains and losses from asset dispositions.

A summary of total segment net sales and consolidated earnings before income taxes follows:

	Year Ending September 30,
	2011			2010			2009
Segment external net sales:
Aerospace	$	843,032		$	769,379		$	704,771
Energy		868,670			687,651			725,354
Total consolidated net sales	$	1,711,702		$	1,457,030		$	1,430,125
Segment earnings:
Aerospace	$	129,502		$	112,171		$	104,550
Energy		113,872			94,014			96,938
Total segment earnings		243,374			206,185			201,488
Nonsegment expenses		(30,942	)		(22,434	)		(46,514	)
Interest expense, net		(24,865	)		(28,876	)		(32,498	)
Consolidated earnings before income taxes	$	187,567		$	154,875		$	122,476

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:

	At or for the year ending September 30,
	2011		2010		2009
Segment assets:
Aerospace	$	1,036,797	$	994,868	$	1,042,956
Energy		569,929		461,900		439,167
Total segment assets		1,606,726		1,456,768		1,482,123
Unallocated corporate property, plant and equipment, net		8,556		6,111		6,857
Other unallocated assets		166,152		200,354		207,442
Consolidated total assets	$	1,781,434	$	1,663,233	$	1,696,422
Segment depreciation and amortization:
Aerospace	$	50,167	$	50,611	$	38,643
Energy		21,691		21,165		22,452
Total segment depreciation and amortization		71,858		71,776		61,095
Unallocated corporate amounts		3,535		3,840		2,853
Consolidated depreciation and amortization	$	75,393	$	75,616	$	63,948
Segment capital expenditures:
Aerospace	$	34,007	$	13,744	$	11,612
Energy		14,168		11,578		15,158
Total segment capital expenditures		48,175		25,322		26,770
Unallocated corporate amounts		80		2,782		2,177
Consolidated capital expenditures	$	48,255	$	28,104	$	28,947

Sales to General Electric were made by all of Woodward's reportable segments and totaled approximately 14% of net sales in fiscal year 2011, 15% of net sales in fiscal year 2010, and 17% of net sales in fiscal year 2009. Accounts receivable from General Electric totaled approximately 11% and 14% of accounts receivable at September 30, 2011 and 2010, respectively.

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

	Year Ending September 30,
	2011		2010		2009
United States	$	874,791	$	797,826	$	730,545
Europe		473,054		377,094		406,910
Asia		264,493		191,761		188,958
Other countries		99,364		90,349		103,712
Consolidated external net sales	$	1,711,702	$	1,457,030	$	1,430,125

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

	At September 30,
	2011		2010
United States	$	149,295	$	135,826
Germany		28,385		29,340
Other countries		29,045		28,358
Consolidated property, plant and equipment	$	206,725	$	193,524

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Retirement Benefits (Schedule of Accumulated and Projected Benefit Obligations and Fair Value of Plan Assets) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Pension Plans, Defined Benefit [Member]
Projected benefit obligation	$ (163,696)	$ (154,443)	$ (143,001)
Accumulated benefit obligation	(150,934)	(140,399)
Fair value of plan assets	138,347	128,667	104,828
United States Pension Plans of US Entity, Defined Benefit [Member]
Projected benefit obligation	(106,341)	(97,786)	(89,551)
Accumulated benefit obligation	(96,630)	(86,260)
Fair value of plan assets	89,980	85,128	64,102
Foreign Pension Plans, Defined Benefit [Member]
Projected benefit obligation	(57,355)	(56,657)	(53,450)
Accumulated benefit obligation	(54,304)	(54,139)
Fair value of plan assets	48,367	43,539	40,726
United Kingdom Plan, Defined Benefit [Member]
Projected benefit obligation	(39,677)
Fair value of plan assets	37,546
Japan Plan, Defined Benefit [Member]
Projected benefit obligation	(15,140)
Fair value of plan assets	8,947
Switzerland Plan, Defined Benefit [Member]
Projected benefit obligation	(2,538)
Fair value of plan assets	1,874
Other Postretirement Benefit Plans, Defined Benefit [Member]
Projected benefit obligation	(32,923)	(37,222)	(42,427)
Accumulated benefit obligation	(32,923)	(37,222)
Fair value of plan assets	$ 0	$ 0	$ 0

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Business Acquisitions (Schedule of Unaudited Pro Forma Results) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Net sales	$ 489,294	$ 438,467	$ 418,866	$ 365,075	$ 412,003	$ 356,367	$ 349,352	$ 339,308	$ 1,711,702	$ 1,457,030	$ 1,430,125
Net earnings attributable to Woodward	41,690	36,056	32,090	22,399	32,675	31,745	24,068	22,356	132,235	110,844	94,352
Basic earnings per share attributable to Woodward	$ 0.61	$ 0.52	$ 0.47	$ 0.33	$ 0.48	$ 0.46	$ 0.35	$ 0.33	$ 1.92	$ 1.62	$ 1.39
Diluted earnings per share attributable to Woodward	$ 0.60	$ 0.51	$ 0.46	$ 0.32	$ 0.47	$ 0.45	$ 0.34	$ 0.32	$ 1.89	$ 1.59	$ 1.37
Fuel and Pneumatics Product Line [Member]
Net sales											9,620
Business Acquisition, Acquiree - HRT [Member]
Pro forma
Net sales											1,532,181
Net earnings attributable to Woodward											$ 93,144
Basic earnings per share attributable to Woodward											$ 1.37
Diluted earnings per share attributable to Woodward											$ 1.35

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Long-term Debt (Schedule of Future Principal Payments of Long-term Debt) (Details) (USD $) In Thousands	Sep. 30, 2011
Debt Disclosure
2012	$ 18,371
2013	7,500
2014	149,375
2015	0
2016	107,000
Thereafter	143,000
Long-term debt balance	$ 425,246

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Retirement Benefits (Schedule of Health Care Costs Sensitivity) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011
Retirement Benefits
Effect on projected fiscal year 2012 service and interest cost, 1% increase	$ 182
Effect on projected fiscal year 2012 service and interest cost, 1% decrease	(159)
Effect on accumulated postretirement benefit obligation, 1% increase	3,107
Effect on accumulated postretirement benefit obligation, 1% decrease	$ (2,722)

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Income Taxes (Reconciliation of the Beginning and Ending Amounts of Gross Unrecognized Tax Benefits) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes
Balance, Gross unrecognized tax benefits	$ 10,586	$ 19,783	$ 22,576
Tax positions related to the current year	4,264	1,734	1,431
Tax positions related to prior years	3,160	(7,320)	(556)
Lapse of applicable statute of limitation	(1,079)	(3,611)	(3,668)
Balance, Gross unrecognized tax benefits	$ 16,931	$ 10,586	$ 19,783

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Property, Plant, and Equipment - Net (Property, Plant, and Equipment - Net) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Property, Plant, and Equipment - Net
Land	$ 14,823	$ 11,372
Buildings and improvements	177,637	171,257
Leasehold improvements	18,765	17,884
Machinery and production equipment	265,898	270,126
Computer equipment and software	66,149	57,518
Other	25,191	22,854
Construction in progress	44,975	13,125
Property, plant and equipment, gross total	613,438	564,136
Less accumulated depreciation	(406,713)	(370,612)
Property, plant and equipment, net, total	206,725	193,524
Depreciation expense	40,400	40,502	37,828
Capitalized interest	$ 1,354	$ 150	$ 31

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Business Acquisitions (Narrative) (Details) (USD $) In Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Assumed outstanding debt	$ 0				$ 0				$ 0	$ 0	$ 18,610
Proceeds from disposal of Fuel & Pneumatics product line									0	660	48,000
Net sales	489,294	438,467	418,866	365,075	412,003	356,367	349,352	339,308	1,711,702	1,457,030	1,430,125
Earnings before income taxes	58,750	50,855	46,487	31,475	49,515	38,052	35,818	31,490	187,567	154,875	122,476
Legal Settlement [Member] | Business Acquisition, Acquiree - MPC [Member]
Payments for Legal Settlements										25,000
Fuel and Pneumatics Product Line [Member]
Net sales											9,620
Earnings before income taxes											3,897
Business Acquisition, Acquiree - MotoTron [Member]
Purchase price											17,237
Goodwill											6,396
Business Acquisition, Acquiree - HRT [Member]
Purchase price											380,749
Goodwill											142,699
Proceeds from disposal of Fuel & Pneumatics product line										660	48,000
Business Acquisition, Acquiree - MPC [Member]
Purchase price					25,000					25,000	370,437
Goodwill											174,893
Assumed outstanding debt											18,610
Business Acquisition, Acquiree - IDS [Member]
Cash paid to seller	48,412								48,412
Amount of the estimated purchase price deposited in escrow	8,149								8,149
Transaction costs									2,396
Goodwill	$ 24,188								$ 24,188

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Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2011

Earnings Per Share

Reconciliation of Net Earnings to Net Earnings Per Share Basic and Diluted

	Year Ending September 30,
	2011		2010		2009
Numerator:
Net earnings attributable to Woodward	$	132,235	$	110,844	$	94,352
Denominator:
Basic shares outstanding		68,797		68,472		67,891
Dilutive effect of employee stock options		1,343		1,392		1,212
Diluted shares outstanding		70,140		69,864		69,103
Income per common share:
Basic earnings per share attributable to Woodward	$	1.92	$	1.62	$	1.39
Diluted earnings per share attributable to Woodward	$	1.89	$	1.59	$	1.37

Anti-dilutive Stock Options Excluded from Computation of Earnings Per Share

	Year Ended September 30,
	2011		2010		2009
Options		684		1,106		739
Weighted-average option price	$	32.04	$	26.94	$	27.30

Schedule of Treasury Stock Shares Held for Deferred Compensation Included in Basic and Diluted Shares Outstanding

	Year Ending September 30,
	2011		2010		2009
Weighted-average treasury stock shares held for deferred compensation obligation		335		371		409

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Commitments and Contingencies (Future Minimum Rental Payments) (Details) (USD $) In Thousands	Sep. 30, 2011
Commitments and Contingencies Disclosure
2012	$ 7,219
2013	5,583
2014	4,706
2015	3,620
2016	2,814
Thereafter	7,508
Total	$ 31,450

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Stockholders' Equity (Stock Options Vested, Or Expected to Vest and Are Exercisable) (Details) (Stock Options [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Sep. 30, 2011 years
Stock Options [Member]
Options outstanding, Number of options	4,228
Options outstanding, Weighted-Average Exercise Price Per Share	$ 20.12
Options outstanding, Weighted-Average Remaining Life in Years	5.5
Options outstanding, Aggregate Intrinsic Value	$ 36,390
Options expected to vest, Number of options	1,302
Options expected to vest, Weighted-Average Exercise Price Per Share	$ 27.70
Options expected to vest, Weighted-Average Remaining Life in Years	8.3
Options expected to vest, Aggregate Intrinsic Value	3,065
Options exercisable, Number of options	2,860
Options exercisable, Weighted-Average Exercise Price Per Share	$ 16.44
Options exercisable, Weighted-Average Remaining Life in Years	4.2
Options exercisable, Aggregate Intrinsic Value	$ 33,130

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Other Intangibles - Net (Tables)

12 Months Ended

Sep. 30, 2011

Other Intangibles - Net

Schedule of Finite-Lived Intangible Assets by Major Class

	September 30, 2011							September 30, 2010
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Value		Amortization			Amount		Value		Amortization			Amount
Customer relationships:
Aerospace	$	205,171	$	(41,652	)	$	163,519	$	205,181	$	(24,898	)	$	180,283
Energy		41,991		(23,696	)		18,295		38,611		(20,908	)		17,703
Total	$	247,162	$	(65,348	)	$	181,814	$	243,792	$	(45,806	)	$	197,986
Intellectual property:
Aerospace	$	—	$	—		$	—	$	—	$	—		$	—
Energy		20,162		(11,918	)		8,244		20,215		(10,555	)		9,660
Total	$	20,162	$	(11,918	)	$	8,244	$	20,215	$	(10,555	)	$	9,660
Process technology:
Aerospace	$	71,691	$	(15,380	)	$	56,311	$	71,696	$	(10,386	)	$	61,310
Energy		23,451		(7,657	)		15,794		15,805		(6,107	)		9,698
Total	$	95,142	$	(23,037	)	$	72,105	$	87,501	$	(16,493	)	$	71,008
Other intangibles:
Aerospace	$	39,635	$	(34,655	)	$	4,980	$	39,638	$	(27,595	)	$	12,043
Energy		2,621		(867	)		1,754		1,970		(518	)		1,452
Total	$	42,256	$	(35,522	)	$	6,734	$	41,608	$	(28,113	)	$	13,495
Total intangibles:
Aerospace	$	316,497	$	(91,687	)	$	224,810	$	316,515	$	(62,879	)	$	253,636
Energy		88,225		(44,138	)		44,087		76,601		(38,088	)		38,513
Consolidated Total	$	404,722	$	(135,825	)	$	268,897	$	393,116	$	(100,967	)	$	292,149

Schedule of Finite-Lived Intangible Assets Amortization Expense

	Year Ending September 30,
	2011		2010		2009
Amortization expense	$	34,993	$	35,114	$	26,120

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Year Ending September 30:
2012	$	32,872
2013		30,521
2014		27,370
2015		24,861
2016		23,060
Thereafter		130,213
	$	268,897

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Schedule II

12 Months Ended

Sep. 30, 2011

Valuation and Qualifying Accounts

Schedule II

 

WOODWARD, INC. AND SUBSIDIARIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

For the years ending September 30, 2011, 2010, and 2009
 
(in thousands)

Column A	Column B		Column C				Column D			Column E
			Additions
	Balance at		Charged to		Charged to
	Beginning of		Costs and		Other		Deductions			Balance at
Description	Year		Expenses		Accounts (a)		(b)			End of Year
Allowance for doubtful accounts:
Fiscal year 2011	$	2,228	$	1,028	$	159	$	(1,093	)	$	2,322
Fiscal year 2010		2,660		431		74		(937	)		2,228
Fiscal year 2009		1,648		1,274		1,003		(1,265	)		2,660

Notes:

(a)	Includes recoveries of accounts previously written off.
(b)	Represents accounts written off and foreign currency exchange rate adjustments. Currency translation adjustments resulted in a decrease in the reserve of $69 in fiscal year 2011, a decrease in the reserve of $37 in fiscal year 2010, and an increase in the reserve of $16 in fiscal year 2009.

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Other Intangibles - Net

12 Months Ended

Sep. 30, 2011

Other Intangibles - Net

Other Intangibles - Net

Note 11. Other intangibles—net

	September 30, 2011							September 30, 2010
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Value		Amortization			Amount		Value		Amortization			Amount
Customer relationships:
Aerospace	$	205,171	$	(41,652	)	$	163,519	$	205,181	$	(24,898	)	$	180,283
Energy		41,991		(23,696	)		18,295		38,611		(20,908	)		17,703
Total	$	247,162	$	(65,348	)	$	181,814	$	243,792	$	(45,806	)	$	197,986
Intellectual property:
Aerospace	$	—	$	—		$	—	$	—	$	—		$	—
Energy		20,162		(11,918	)		8,244		20,215		(10,555	)		9,660
Total	$	20,162	$	(11,918	)	$	8,244	$	20,215	$	(10,555	)	$	9,660
Process technology:
Aerospace	$	71,691	$	(15,380	)	$	56,311	$	71,696	$	(10,386	)	$	61,310
Energy		23,451		(7,657	)		15,794		15,805		(6,107	)		9,698
Total	$	95,142	$	(23,037	)	$	72,105	$	87,501	$	(16,493	)	$	71,008
Other intangibles:
Aerospace	$	39,635	$	(34,655	)	$	4,980	$	39,638	$	(27,595	)	$	12,043
Energy		2,621		(867	)		1,754		1,970		(518	)		1,452
Total	$	42,256	$	(35,522	)	$	6,734	$	41,608	$	(28,113	)	$	13,495
Total intangibles:
Aerospace	$	316,497	$	(91,687	)	$	224,810	$	316,515	$	(62,879	)	$	253,636
Energy		88,225		(44,138	)		44,087		76,601		(38,088	)		38,513
Consolidated Total	$	404,722	$	(135,825	)	$	268,897	$	393,116	$	(100,967	)	$	292,149

	Year Ending September 30,
	2011		2010		2009
Amortization expense	$	34,993	$	35,114	$	26,120

Future amortization expense associated with intangibles is expected to be:

Year Ending September 30:
2012	$	32,872
2013		30,521
2014		27,370
2015		24,861
2016		23,060
Thereafter		130,213
	$	268,897

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Operations and summary of significant accounting policies (Schedule of finite-lived intangible assets useful lives) (Details)	12 Months Ended
	Sep. 30, 2011 years
Customer Relationships [Member]
Finite-Lived Intangible Assets, Useful Life, Minimum	9
Finite-Lived Intangible Assets, Useful Life, Maximum	30
Intellectual Property [Member]
Finite-Lived Intangible Assets, Useful Life, Minimum	10
Finite-Lived Intangible Assets, Useful Life, Maximum	17
Process Technology [Member]
Finite-Lived Intangible Assets, Useful Life, Minimum	8
Finite-Lived Intangible Assets, Useful Life, Maximum	30
Other Intangibles [Member]
Finite-Lived Intangible Assets, Useful Life, Minimum	1
Finite-Lived Intangible Assets, Useful Life, Maximum	15

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Stockholders' Equity (Changes in Nonvested Stock Options) (Details) (Stock Options [Member], USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011
Stock Options [Member]
Number of Options, beginning balance	1,256
Weighted-Average Exercise Price Per Share, beginning balance	$ 23.37
Options granted, Number of options	709
Options granted, Weighted-Average Exercise Price Per Share	$ 32.10
Options vested, Number of options	(558)
Options vested, Weighted-Average Exercise Price Per Share	$ 23.57
Options forfeited, Number of options	(39)
Options forfeited, Weighted-Average Exercise Price Per Share	$ 26.61
Number of Options, ending balance	1,368
Weighted-Average Exercise Price Per Share, ending balance	$ 27.71

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Other Intangibles - Net (Schedule of Finite-Lived Intangible Assets by Major Class) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Gross Carrying Value	$ 404,722	$ 393,116
Accumulated Amortization	(135,825)	(100,967)
Net Carrying Amount	268,897	292,149
Amortization expense	34,993	35,114	26,120
Customer Relationships [Member] | Aerospace [Member]
Gross Carrying Value	205,171	205,181
Accumulated Amortization	(41,652)	(24,898)
Net Carrying Amount	163,519	180,283
Intellectual Property [Member] | Aerospace [Member]
Gross Carrying Value	0	0
Accumulated Amortization	0	0
Net Carrying Amount	0	0
Process Technology [Member] | Aerospace [Member]
Gross Carrying Value	71,691	71,696
Accumulated Amortization	(15,380)	(10,386)
Net Carrying Amount	56,311	61,310
Other Intangibles [Member] | Aerospace [Member]
Gross Carrying Value	39,635	39,638
Accumulated Amortization	(34,655)	(27,595)
Net Carrying Amount	4,980	12,043
Aerospace [Member]
Gross Carrying Value	316,497	316,515
Accumulated Amortization	(91,687)	(62,879)
Net Carrying Amount	224,810	253,636
Customer Relationships [Member] | Energy [Member]
Gross Carrying Value	41,991	38,611
Accumulated Amortization	(23,696)	(20,908)
Net Carrying Amount	18,295	17,703
Intellectual Property [Member] | Energy [Member]
Gross Carrying Value	20,162	20,215
Accumulated Amortization	(11,918)	(10,555)
Net Carrying Amount	8,244	9,660
Process Technology [Member] | Energy [Member]
Gross Carrying Value	23,451	15,805
Accumulated Amortization	(7,657)	(6,107)
Net Carrying Amount	15,794	9,698
Other Intangibles [Member] | Energy [Member]
Gross Carrying Value	2,621	1,970
Accumulated Amortization	(867)	(518)
Net Carrying Amount	1,754	1,452
Energy [Member]
Gross Carrying Value	88,225	76,601
Accumulated Amortization	(44,138)	(38,088)
Net Carrying Amount	44,087	38,513
Customer Relationships [Member]
Gross Carrying Value	247,162	243,792
Accumulated Amortization	(65,348)	(45,806)
Net Carrying Amount	181,814	197,986
Intellectual Property [Member]
Gross Carrying Value	20,162	20,215
Accumulated Amortization	(11,918)	(10,555)
Net Carrying Amount	8,244	9,660
Process Technology [Member]
Gross Carrying Value	95,142	87,501
Accumulated Amortization	(23,037)	(16,493)
Net Carrying Amount	72,105	71,008
Other Intangibles [Member]
Gross Carrying Value	42,256	41,608
Accumulated Amortization	(35,522)	(28,113)
Net Carrying Amount	$ 6,734	$ 13,495

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Supplemental Statements of Cash Flows Information (Narrative) (Details) (Legal Settlement [Member], USD $) In Thousands	3 Months Ended
	Dec. 31, 2009
Legal Settlement [Member]
Business acquisitions, net of cash acquired	$ (25,000)

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Segment Information (Consolidated Total Assets, Depreciation and Amortization, and Capital Expenditures by Segment) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Assets	$ 1,781,434	$ 1,663,233	$ 1,696,422
Property, plant and equipment, net	206,725	193,524
Depreciation and amortization	75,393	75,616	63,948
Capital expenditures	48,255	28,104	28,947
Aerospace [Member]
Assets	1,036,797	994,868	1,042,956
Depreciation and amortization	50,167	50,611	38,643
Capital expenditures	34,007	13,744	11,612
Energy [Member]
Assets	569,929	461,900	439,167
Depreciation and amortization	21,691	21,165	22,452
Capital expenditures	14,168	11,578	15,158
Unallocated Corporate [Member]
Property, plant and equipment, net	8,556	6,111	6,857
Other unallocated assets	166,152	200,354	207,442
Depreciation and amortization	3,535	3,840	2,853
Capital expenditures	80	2,782	2,177
Total of Reporting Segments [Member]
Assets	1,606,726	1,456,768	1,482,123
Depreciation and amortization	71,858	71,776	61,095
Capital expenditures	$ 48,175	$ 25,322	$ 26,770

XML

Stockholders' Equiyt (Other Stock Option Information) (Details) (Stock Options [Member], USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Stock Options [Member]
Total fair value of stock options vested	$ 5,587	$ 3,786	$ 4,344
Total intrinsic value of options exercised	10,145	14,083	8,695
Cash received from exercises of stock options	4,402	6,084	3,922
Excess tax benefit realized from exercise of stock options	$ 3,558	$ 5,115	$ 2,695

XML

Accrued Liabilities (Restructuring and Other Charges) (Details) (USD $) In Thousands	12 Months Ended		3 Months Ended		12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2010 Lease Settlement [Member] Business Acquisitions [Member]	Dec. 31, 2010 Facility Closing [Member] Business Acquisitions [Member]	Sep. 30, 2011 Non-Acquisition [Member]	Sep. 30, 2010 Non-Acquisition [Member]	Sep. 30, 2011 Business Acquisitions [Member]	Sep. 30, 2010 Business Acquisitions [Member]
Accrued restructuring charges, beginning balance	$ 6,113	$ 12,864			$ 667	$ 3,196	$ 5,446	$ 9,668
Payments	(984)	(8,357)			(279)	(2,027)	(705)	(6,330)
Purchase accounting adjustments	0	1,834					0	1,834
Non-cash adjustments	(2,219)	(189)	(103)	(1,513)	(22)	(463)	(2,197)	274
Foreign currency exchange rates	(1)	(39)			(1)	(39)
Accrued restructuring charges, ending balance	2,909	6,113			365	667	2,544	5,446
Non-current accrued restructuring charges	$ 420	$ 1,251

XML

Earnings Per Share (Schedule of Treasury Stock Shares Held for Deferred Compensation Included in Basic and Diluted Shares Outstanding) (Details) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Earnings Per Share
Weighted-average treasury stock shares held for deferred compensation obligation	335	371	409

XML

Segment Information (Consolidated Net Sales and Earnings by Segment) (Details) (USD $) In Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Net sales	$ 489,294	$ 438,467	$ 418,866	$ 365,075	$ 412,003	$ 356,367	$ 349,352	$ 339,308	$ 1,711,702	$ 1,457,030	$ 1,430,125
Interest expense, net	(6,029)	(6,244)	(6,214)	(6,378)	(6,679)	(6,852)	(7,204)	(8,141)	(24,865)	(28,876)	(32,498)
Consolidated earnings before income taxes	58,750	50,855	46,487	31,475	49,515	38,052	35,818	31,490	187,567	154,875	122,476
Total of Reporting Segments [Member]
Segment earnings (loss)	74,122	64,653	60,182	44,417	61,818	50,989	48,337	45,041	243,374	206,185	201,488
Aerospace [Member]
Net sales	241,701	215,242	204,945	181,144	212,649	191,150	185,196	180,384	843,032	769,379	704,771
Segment earnings (loss)	40,945	35,402	33,241	19,914	30,725	28,564	26,678	26,204	129,502	112,171	104,550
Energy [Member]
Net sales	247,593	223,225	213,921	183,931	199,354	165,217	164,156	158,924	868,670	687,651	725,354
Segment earnings (loss)	33,177	29,251	26,941	24,503	31,093	22,425	21,659	18,837	113,872	94,014	96,938
Unallocated Corporate [Member]
Segment earnings (loss)	$ (9,343)	$ (7,554)	$ (7,481)	$ (6,564)	$ (5,624)	$ (6,085)	$ (5,315)	$ (5,410)	$ (30,942)	$ (22,434)	$ (46,514)

XML

Retirement Benefits (Schedule of Net Periodic Benefit Costs) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Pension Plans, Defined Benefit [Member]
Service cost	$ 4,425	$ 4,431	$ 2,125
Interest cost	7,930	7,151	5,139
Expected return on plan assets	(9,234)	(7,120)	(4,805)
Amortization of: Transition obligation	0	86	81
Amortization of: Net (gains) losses	1,212	1,336	472
Amortization of: Net prior service (benefit) cost	66	(268)	(266)
Settlement costs	0	345	0
Curtailment costs	0	165	237
Net periodic (beneift) cost	4,399	6,126	2,983
United States Pension Plans of US Entity, Defined Benefit [Member]
Service cost	3,433	3,647	1,409
Interest cost	5,646	4,890	2,964
Expected return on plan assets	(6,693)	(4,759)	(2,627)
Amortization of: Transition obligation	0	0	0
Amortization of: Net (gains) losses	312	583	337
Amortization of: Net prior service (benefit) cost	75	(260)	(259)
Settlement costs	0	0	0
Curtailment costs	0	165	0
Net periodic (beneift) cost	2,773	4,266	1,824
Foreign Pension Plans, Defined Benefit [Member]
Service cost	992	784	716
Interest cost	2,284	2,261	2,175
Expected return on plan assets	(2,541)	(2,361)	(2,178)
Amortization of: Transition obligation	0	86	81
Amortization of: Net (gains) losses	900	753	135
Amortization of: Net prior service (benefit) cost	(9)	(8)	(7)
Settlement costs	0	345	0
Curtailment costs	0	0	237
Net periodic (beneift) cost	1,626	1,860	1,159
Other Postretirement Benefit Plans, Defined Benefit [Member]
Service cost	92	120	169
Interest cost	1,974	2,081	2,330
Amortization of: Net (gains) losses	128	189	97
Amortization of: Net prior service (benefit) cost	(871)	(1,249)	(3,232)
Net periodic (beneift) cost	$ 1,323	$ 1,141	$ (636)

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Business Acquisitions

12 Months Ended

Sep. 30, 2011

Business Combinations

Business Acquisitions

Note 4. Business acquisitions and dispositions

Woodward has recorded the acquisitions described below using the purchase method of accounting and, accordingly, has included the results of operations of the acquired businesses in its consolidated results as of the date of each acquisition. In accordance with authoritative accounting guidance for business combinations, the respective purchase prices for these acquisitions are allocated to the tangible assets, liabilities, and intangible assets acquired based on their estimated fair values. The excess purchase price over the respective fair values of assets is recorded as goodwill. Goodwill is not amortized under U.S. GAAP but is tested for impairment at least annually (See Note 10, Goodwill).

IDS Acquisition

During the third quarter of fiscal year 2011, Woodward acquired all of the outstanding stock of Integral Drive Systems AG and its European companies, including their respective holding companies ("IDS"), and the assets of IDS' business in China (together the "IDS Acquisition") for an aggregate purchase price of approximately $48,412. The purchase price remains subject to certain customary post-closing adjustments. The estimated purchase price is included in "Cash flows from investing activities" in the Consolidated Statement of Cash Flows.

IDS is a developer and manufacturer of innovative power electronic systems predominantly in utility scale wind turbines and photovoltaic power plants. Additionally, IDS offers key products in power distribution and marine propulsion systems. In addition to wind turbines and photovoltaic plants, its products are used in offshore oil and gas platforms, energy storage and distribution systems, and a variety of industrial applications. IDS is being integrated into Woodward's Energy segment.

The Company believes the IDS Acquisition expands its presence in wind converter offerings and reduces its time to market with expansion of solar energy, energy storage, and marine drives. Goodwill recorded in connection with the IDS Acquisition, which is not deductible for income tax purposes, represents the estimated value of such future opportunities, the value of potential expansion with new customers and the opportunity to further develop sales opportunities with new and acquired IDS customers, and anticipated synergies expected to be achieved through the integration of IDS into Woodward's Energy segment.

Woodward has completed finalizing the valuations of current assets, property, plant and equipment (including estimated useful lives), intangible assets (including estimated useful lives), other current liabilities, postretirement benefits obligations, deferred tax liabilities, and other noncurrent liabilities.

As of September 30, 2011, $8,149 paid in connection with the IDS purchase was deposited into escrow accounts to secure Woodward's ability to recover any amounts owed to Woodward by the seller as a result of customary indemnities related to representations and warranties made by the seller. Funds held in escrow will only be released to the seller as specified in the related purchase agreements. If Woodward were to receive funds from the escrow account in the future, the purchase price of IDS might be adjusted. The final purchase price is subject to normal closing balance sheet net asset adjustments typical in such transactions.

The preliminary purchase price of the IDS Acquisition is as follows:

Cash paid to seller	$	48,412
Less cash acquired		(1,251	)
Total estimated purchase price		47,161
Less marketable securities acquired		(8,463	)
Estimated price paid for business assets	$	38,698

The allocation of the purchase price for the IDS Acquisition was accounted for under the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed in the transaction were recorded at their acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred. The Company's allocation was based on an evaluation of the appropriate fair values and represents management's best estimate based on available data.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the IDS Acquisition:

Current assets	$	14,627
Investments in marketable securities		8,463
Property, plant, and equipment		1,954
Goodwill		24,188
Intangible assets		11,882
Total assets acquired		61,114
Other current liabilities		5,505
Warranty accrual		2,250
Postretirement benefits		434
Deferred tax liabilities		2,472
Other tax — noncurrent		3,292
Total liabilities assumed		13,953
Net assets acquired	$	47,161

There were no changes to the values of assets acquired and liabilities assumed during the six-months ending September 30, 2011. The fair value of warranty liabilities assumed represents the estimated costs to provide service for contractual warranty obligations on products sold by IDS prior to April 15, 2011. The fair value of "Other tax — noncurrent" represents the estimated value of gross unrecognized tax benefits assumed.

In connection with the IDS Acquisition, Woodward acquired various marketable securities, which are not classified as cash equivalents under U.S. GAAP. These marketable securities were sold during the fiscal quarter ended June 30, 2011 and reinvested into cash and cash equivalents consistent with Woodward's internal investment and risk management policies. Losses on the sale of marketable securities were included in "Other (income) expense, net" in the Consolidated Statements of Earnings.

Also, in connection with the IDS Acquisition, Woodward assumed the net postretirement benefit obligations of several Swiss statutory retirement plans which are considered to be defined benefit plans under U.S. GAAP.

A summary of the intangible assets acquired, weighted average useful lives and amortization methods follows:

			Weighted
			Average Useful	Amortization
	Amount		Life	Method
Customer relationships	$	3,452	9years	Straight-line
Process technology		7,752	8.5years	Straight-line
Other		678	2.5years	Straight-line
Total	$	11,882	8years

The operating results of the IDS Acquisition are included in Woodward's Consolidated Statements of Earnings and Comprehensive Earnings as of April 15, 2011. Pro forma financial disclosures have not been presented as the IDS Acquisition was not material to Woodward's financial position or results of operations. The Company incurred transaction costs of $2,396 for the year ending September 30, 2011, which are included in "Selling, general and administrative expenses" in the Consolidated Statements of Earnings.

MPC Acquisition

On October 1, 2008, Woodward acquired all of the outstanding stock of Techni-Core, Inc. ("Techni-Core") and all of the outstanding stock of MPC Products Corporation ("MPC Products" and, together with Techni-Core, "MPC") not owned by Techni-Core for approximately $370,437. The purchase price, less approximately $18,610 of assumed outstanding debt, is included in "Cash flows from investing activities" in the Consolidated Statement of Cash Flows. The goodwill resulting from the MPC acquisition totaling $174,893 is not tax deductible. The purchase price allocation period has closed for MPC.

MPC is an industry leader in the manufacture of high-performance electromechanical motion control systems, primarily for aerospace applications. MPC's main product lines include high performance electric motors and sensors, analog and digital control electronics, rotary and linear actuation systems, and flight deck and fly-by-wire systems for commercial and military aerospace programs. Through an improved focus on aerospace energy control solutions, MPC complements Woodward's energy and motion control technologies enhancing Woodward's system offerings. MPC formed the basis of Woodward's Airframe Systems business group, which is included in its Aerospace segment.

At the time of the acquisition of MPC, MPC Products was subject to an investigation by the U.S. Department of Justice (the "DOJ") regarding certain of its pre-2005 government contract pricing practices and related administrative actions by the U.S. Department of Defense (the "DOD"). In October 2009, MPC reached an agreement with the DOJ to resolve the criminal and civil claims, whereby MPC paid $25,000 in compensation and fines. Payments associated with this pre-acquisition contingency were incremental to the estimated MPC purchase price. The purchase price paid by Woodward in connection with the MPC acquisition was reduced by $25,000 at closing to reflect this contingency.

The results of MPC's operations are included in Woodward's Consolidated Statements of Earnings and Comprehensive Earnings beginning October 1, 2008.

MotoTron Acquisition

On October 6, 2008, Woodward acquired MotoTron Corporation ("MotoTron") and the intellectual property assets owned by its parent company, Brunswick Corporation, which were used in connection with the MotoTron business for approximately $17,237. The purchase price is included in "Cash flows from investing activities" in the Consolidated Statement of Cash Flows. The goodwill resulting from the MotoTron acquisition totaling $6,396 is not tax deductible. The purchase price allocation period has closed for MotoTron.

MotoTron specializes in software tools and processes used to rapidly develop control systems for marine, power generation, industrial, and other engine equipment applications. MotoTron has been fully integrated into Woodward's Engine Systems business group, which is included in its Energy segment.

MotoTron has been an important supplier and partner to Woodward since 2002 and has helped Woodward to better position itself in electronic control technologies for the alternative-fueled bus and mobile equipment markets. The acquisition of MotoTron further strengthened Woodward's ability to serve the transportation and power generation markets.

The results of MotoTron's operations are included in Woodward's Consolidated Statements of Earnings and Comprehensive Earnings as of October 6, 2008. If the MotoTron acquisition had been completed on October 1, 2008, Woodward's net sales and net earnings for the fiscal year ending September 30, 2009 would not have been materially different from amounts reported in the Consolidated Statements of Earnings and Comprehensive Earnings.

HRT Acquisition

On April 3, 2009, Woodward acquired all of the outstanding stock of HR Textron Inc. from Textron Inc., its parent company, and the United Kingdom assets and certain liabilities related to HR Textron Inc.'s business (collectively "HRT") for approximately $380,749. The purchase price is included in "Cash flows from investing activities" in the Consolidated Statement of Cash Flows. The goodwill resulting from the HRT acquisition totaling $142,699 is tax deductible. The purchase price allocation period has closed for HRT.

Woodward made a 338(h)(10) election with the U.S. Internal Revenue Service, which allows the HRT acquisition to be treated as an asset purchase for income tax purposes. Accordingly, any deferred tax assets and liabilities recorded by Textron Inc. at the acquisition date are not available to Woodward.

HRT is an industry leader in advanced technology, engineering development, and manufacturing of mission-critical actuation systems and controls for aircraft, turbine engines, weapons and combat vehicles. It is recognized for hydraulic and electric primary flight control actuation products, including electro-mechanical actuation systems for unmanned combat air vehicles and weapons, such as the Joint Direct Attack Munitions (JDAM) and the AIM-9X Sidewinder; hydraulic and electric flight controls for fixed and rotor wing aircraft; servovalves for global aerospace; turret controls and stabilization systems for the U.S. M1 Abrams Main Battle Tank and other armored vehicles worldwide; and fuel and pneumatics valves for aircraft and helicopters. HRT has been integrated into Woodward's Airframe Systems business group, which is included in its Aerospace segment.

The results of HRT's operations are included in Woodward's Consolidated Statements of Earnings and Comprehensive Earnings as of April 3, 2009.

On August 10, 2009, Woodward HRT sold the Fuel & Pnuematics ("F&P) product line, for $48,000. During 2010, Woodward received an additional $660 related to working capital adjustments typical in such transactions. The working capital adjustment amount is included in "Cash flows from investing activities" in the Consolidated Statement of Cash Flows. The F&P product line provided a variety of off-turbine fuel management and pneumatic actuation components to producers of military and commercial aircraft and helicopters, as well as their suppliers. Woodward's 2009 results of operations include approximately $9,620 of sales and $3,897 of pre-tax earnings from the F&P product line for the period April 3, 2009 to August 10, 2009. There was no gain or loss on disposal of the F&P product line.

Pro forma results for Woodward giving effect to the HRT acquisition

The following unaudited pro forma financial information presents the combined results of operations of Woodward and HRT as if the acquisition had occurred as of the beginning of fiscal year 2009. No pro forma adjustments have been made for MPC as it was acquired by Woodward on October 1, 2008 and the results of MPC's operations are included in Woodward's Consolidated Statements of Earnings beginning October 1, 2008. No pro forma adjustment have been made for MotoTron as it was acquired on October 6, 2008 and the results of MotoTron's operations are included in Woodward's Consolidated Statements of Earnings as of October 6, 2008. If the MotoTron acquisition had been completed on October 1, 2008, Woodward's net sales and net earnings for the fiscal year ending September 30, 2009 would not have been materially different from the amounts reported in the Consolidated Statements of Earnings for the fiscal year ending September 30, 2009. The pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the HRT acquisition and related borrowings had taken place at the beginning of the fiscal year 2009. The unaudited pro forma financial information for the fiscal year ended September 30, 2009 includes the historical results of Woodward, including the post-acquisition results of HRT since April 3, 2009 and the historical results of HRT for the approximately six months ended April 2, 2009. No pro forma financial information is provided for the fiscal years ending September 30, 2011 and September 30, 2010 as full fiscal years of post-acquisition results of operations of MPC, MotoTron and HRT were included in Woodward's Consolidated Statements of Earnings.

Prior to the HRT acquisition by Woodward, HRT was a wholly owned subsidiary of Textron Inc. and as such was not a stand-alone entity. Accordingly, the historical operating results of HRT may not be indicative of the results that might have been achieved, historically or in the future, if HRT had been a stand-alone entity. The unaudited pro forma results for all periods presented include amortization charges for acquired intangible assets, eliminations of intercompany transactions, adjustments for stock options and restricted stock issued, adjustments for depreciation expense for property, plant, and equipment, adjustments to interest expense, adjustments for estimated general and administrative costs for HRT's historical management and administrative structure and functions, disposal of the F&P product line, and related tax effects.

The unaudited pro forma results follow for the fiscal year ending September 30, 2009:

	Year Ending September 30, 2009
	As reported		Pro froma
Net sales	$	1,430,125	$	1,532,181
Net earnings attributable to Woodward		94,352		93,144
Earnings per share:
Basic earnings per share attributable to Woodward	$	1.39	$	1.37
Diluted earnings per share attributable to Woodward		1.37		1.35

XML

Long-term Debt (Schedule of Long-term Debt) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Long-term debt balance	$ 425,246
Total long-term debt	425,249	443,743
Less: current portion	(18,374)	(18,493)
Long-term debt, less current portion	406,875	425,250
Designated as Hedging Instrument [Member] | Accumulated Other Comprehensive Earnings [Member]
Fair value hedge adjustment for unrecognized discontinued hedge gains	(781)	(1,011)
Designated as Hedging Instrument [Member] | Current and Long-Term Debt [Member]
Fair value hedge adjustment for unrecognized discontinued hedge gains	3	70
Designated as Hedging Instrument [Member]
Fair value hedge adjustment for unrecognized discontinued hedge gains	(778)	(941)
2008 Term Loan [Member] | Medium-term Notes [Member]
Long-term debt balance	64,375	71,875
Variable interest rate	1.78%
Maturity date	Oct. 01, 2013
Series B Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	100,000	100,000
Interest rate	5.63%
Maturity date	Oct. 01, 2013
Series C Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	50,000	50,000
Interest rate	5.92%
Maturity date	Oct. 01, 2015
Series D Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	100,000	100,000
Interest rate	6.39%
Maturity date	Oct. 01, 2018
Series E Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	57,000	57,000
Interest rate	7.81%
Maturity date	Apr. 03, 2016
Series F Notes [Member] | Notes Payable to Banks [Member]
Long-term debt balance	43,000	43,000
Interest rate	8.24%
Maturity date	Apr. 03, 2019
Senior Notes, Series A [Member] | Notes Payable to Banks [Member]
Long-term debt balance	10,714	21,429
Interest rate	6.39%
Maturity date	Oct. 15, 2011
Term Notes [Member] | Secured Debt [Member]
Long-term debt balance	$ 157	$ 369
Interest rate	5.95%
Maturity date	Jun. 30, 2012

XML

Accrued Liabilities

12 Months Ended

Sep. 30, 2011

Accrued Liabilities

Accrued Liabilities

Note 14. Accrued liabilities

	At September 30,
	2011		2010
Salaries and other member benefits	$	70,965	$	43,598
Current portion of restructuring and other charges		2,489		4,862
Warranties		14,083		10,851
Interest payable		11,611		11,925
Accrued retirement benefits		2,560		2,748
Deferred revenues		8,160		12,376
Taxes, other than income		5,097		4,618
Other		18,551		18,074
	$	133,516	$	109,052

Warranties

Provisions of Woodward's sales agreements include product warranties customary to these types of agreements. Accruals are established for specifically identified warranty issues that are probable to result in future costs. Warranty costs are accrued on a non-specific basis whenever past experience indicates a normal and predictable pattern exists. Changes in accrued product warranties for the fiscal years ending September 30, 2011 and September 30, 2010 were as follows:

	At September 30,
	2011			2010
Warranties, beginning of period	$	10,851		$	10,005
Increases to accruals related to warranties during the period		5,402			5,555
Increases due to acquisition of IDS		2,250			—
Settlements of amounts accrued		(4,403	)		(4,494	)
Foreign currency exchange rate changes		(17	)		(215	)
Warranties, end of period	$	14,083		$	10,851

Restructuring and other charges

The main components of accrued non-acquisition related restructuring charges include workforce management costs associated with the early retirement and the involuntary separation of employees in connection with a strategic realignment of global workforce capacity. Restructuring charges related to business acquisitions include a number of items such as those associated with integrating similar operations, workforce management, vacating certain facilities, and the cancellation of some contracts.

During the three-months ending December 31, 2010, Woodward negotiated a lease settlement that was favorable in comparison to the previously recorded restructuring accrual established in purchase accounting in connection with the fiscal year 2009 acquisition of MPC. The resulting benefit of $103 was recorded as a non-cash charge to restructuring and a reduction to goodwill previously established at the time of the acquisition of MPC. During the three-months ending December 31, 2010, Woodward also modified its exit plan related to its Pacoima, California location. As a result, the Company intends to occupy and continue operating from the Pacoima location for a longer period than originally anticipated. Accordingly, Woodward has reduced the anticipated exit costs by $1,513 for the Pacoima location.

During the fiscal year ended September 30, 2010, accrued restructuring charges were increased by $1,834 to reflect updated estimates of anticipated costs in connection with the HRT acquisition. The business acquisition related accrued restructuring charges of $5,446 as of September 30, 2010 relate primarily to the planned closing of the Pacoima, California facility as part of a decision to consolidate HRT's production facilities.

The summary of the activity in accrued restructuring charges during the fiscal years ending September 30, 2011 and 2010 is as follows:

	At September 30,
	2011			2010
Non-acquisition related restructuring charges:
Accrued restructuring charges, beginning of period	$	667		$	3,196
Payments		(279	)		(2,027	)
Non-cash adjustments		(22	)		(463	)
Foreign currency exchange rates		(1	)		(39	)
Accrued restructuring charges, end of period	$	365		$	667
Business acquisition restructuring charges:
Accrued restructuring charges, beginning of period	$	5,446		$	9,668
Purchase accounting adjustments		—			1,834
Payments		(705	)		(6,330	)
Non-cash adjustments		(2,197	)		274
Accrued restructuring charges, end of period	$	2,544		$	5,446
Total restructuring charges	$	2,909		$	6,113

Other liabilities included the following amounts of accrued restructuring charges not expected to be settled within twelve months:

	At September 30,
	2011		2010
Non-current accrued restructuring charges	$	420	$	1,251

XML

Business Acquisitions (Schedule of Finite-Lived Intangible Assets Acquired) (Details) (Business Acquisition, Acquiree - IDS [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011 years
Weighted Average Useful Life	8.0
Total	$ 11,882
Customer Relationships [Member]
Amount	3,452
Weighted Average Useful Life	9.0
Process Technology [Member]
Amount	7,752
Weighted Average Useful Life	8.5
Other Intangibles [Member]
Amount	$ 678
Weighted Average Useful Life	2.5

XML

Business Acquisitions (Schedule of Estimated Purchase Price) (Details) (Business Acquisition, Acquiree - IDS [Member], USD $) In Thousands	Sep. 30, 2011
Business Acquisition, Acquiree - IDS [Member]
Cash paid to seller	$ 48,412
Less cash acquired	(1,251)
Total estimated purchase price	47,161
Less marketable securities acquired	(8,463)
Estimated price paid for business assets	$ 38,698

XML

Property, Plant, and Equipment - Net (Tables)

12 Months Ended

Sep. 30, 2011

Property, Plant, and Equipment - Net

Schedule of Property Plant and Equipment-Net

	At September 30,
	2011			2010
Land	$	14,823		$	11,372
Buildings and improvements		177,637			171,257
Leasehold improvements		18,765			17,884
Machinery and production equipment		265,898			270,126
Computer equipment and software		66,149			57,518
Other		25,191			22,854
Construction in progress		44,975			13,125
		613,438			564,136
Less accumulated depreciation		(406,713	)		(370,612	)
Property, plant and equipment, net	$	206,725		$	193,524

Schedule of Depreciation Expense

	Year Ending September 30,
	2011		2010		2009
Depreciation expense	$	40,400	$	40,502	$	37,828

Schedule of Capitalized Interest

	Year Ending September 30,
	2011		2010		2009
Capitalized interest	$	1,354	$	150	$	31

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Financial Instruments and Fair Value Measurements (Financial Assets that are Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Investments in money market funds	$ 74,539	$ 105,579
Total financial assets	16,678	56,572
Investments in Money Market Funds [Member]
Investments in money market funds	10,823	50,360
Investments in Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in money market funds	10,823	50,360
Investments in Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in money market funds	0	0
Investments in Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in money market funds	0	0
Equity Securities [Member]
Equity securities	5,855	5,633
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Equity securities	5,855	5,633
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Equity securities	0	0
Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Equity securities	0	0
Foreign Exchange Forward Contract [Member]
Foreign exchange forward contract	0	579
Foreign Exchange Forward Contract [Member] | Fair Value, Inputs, Level 1 [Member]
Foreign exchange forward contract	0	0
Foreign Exchange Forward Contract [Member] | Fair Value, Inputs, Level 2 [Member]
Foreign exchange forward contract	0	579
Foreign Exchange Forward Contract [Member] | Fair Value, Inputs, Level 3 [Member]
Foreign exchange forward contract	0	0
Fair Value, Inputs, Level 1 [Member]
Total financial assets	16,678	55,993
Fair Value, Inputs, Level 2 [Member]
Total financial assets	0	579
Fair Value, Inputs, Level 3 [Member]
Total financial assets	$ 0	$ 0

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Supplemental Quarterly Financial Data (Unaudited)

12 Months Ended

Sep. 30, 2011

Quarterly Financial Information Disclosure

Supplemental Quarterly Financial Data (Unaudited)

Note 22. Supplemental quarterly financial data (Unaudited)

Quarterly results for the fiscal years ending September 30, 2011 and September 30, 2010 follow:

	2011 Fiscal Quarters
	First		Second		Third		Fourth
Net sales	$	365,075	$	418,866	$	438,467	$	489,294
Gross margin (1)		103,898		126,346		134,026		149,279
Earnings before income taxes		31,475		46,487		50,855		58,750
Net Earnings:
Net earnings attributable to Woodward (2)		22,399		32,090		36,056		41,690
Net earnings attributable to noncontrolling interests		—		—		—		—
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward		0.33		0.47		0.52		0.61
Diluted earnings per share attributable to Woodward		0.32		0.46		0.51		0.60
Cash dividends per share		0.06		0.07		0.07		0.07

	2010 Fiscal Quarters
	First		Second		Third		Fourth
Net sales	$	339,308	$	349,352	$	356,367	$	412,003
Gross margin (1)		99,756		105,036		106,401		124,321
Earnings before income taxes		31,490		35,818		38,052		49,515
Net Earnings:
Net earnings attributable to Woodward (2)		22,356		24,068		31,745		32,675
Net earnings (losses) attributable to noncontrolling interests		90		108		120		—
Earnings per share attributable to Woodward:
Basic earnings per share attributable to Woodward		0.33		0.35		0.46		0.48
Diluted earnings per share attributable to Wooward		0.32		0.34		0.45		0.47
Cash dividends per share		0.06		0.06		0.06		0.06

Notes:

1.	Gross margin represents net sales less cost of goods sold excluding amortization expense.
2.	Woodward recognized $6,416 of benefit, in the third quarter of fiscal year 2010, related to favorable resolutions of prior year tax matters and the completion of certain internal revaluation assessments.

Quarterly results by segment for the fiscal years ending September 30, 2011 and September 30, 2010 follow:

	2011 Fiscal Quarters
	First			Second			Third			Fourth
External net sales:
Aerospace	$	181,144		$	204,945		$	215,242		$	241,701
Energy		183,931			213,921			223,225			247,593
Total	$	365,075		$	418,866		$	438,467		$	489,294
Segment earnings:
Aerospace	$	19,914		$	33,241		$	35,402		$	40,945
Energy		24,503			26,941			29,251			33,177
Total	$	44,417		$	60,182		$	64,653		$	74,122
Earnings reconciliation:
Total segment earnings	$	44,417		$	60,182		$	64,653		$	74,122
Nonsegment expenses		(6,564	)		(7,481	)		(7,554	)		(9,343	)
Interest expense, net		(6,378	)		(6,214	)		(6,244	)		(6,029	)
Consolidated earnings before income taxes	$	31,475		$	46,487		$	50,855		$	58,750

	2010 Fiscal Quarters
	First			Second			Third			Fourth
External net sales:
Aerospace	$	180,384		$	185,196		$	191,150		$	212,649
Energy		158,924			164,156			165,217			199,354
Total	$	339,308		$	349,352		$	356,367		$	412,003
Segment earnings:
Aerospace	$	26,204		$	26,678		$	28,564		$	30,725
Energy		18,837			21,659			22,425			31,093
Total	$	45,041		$	48,337		$	50,989		$	61,818
Earnings reconciliation:
Total segment earnings	$	45,041		$	48,337		$	50,989		$	61,818
Nonsegment expenses		(5,410	)		(5,315	)		(6,085	)		(5,624	)
Interest expense, net		(8,141	)		(7,204	)		(6,852	)		(6,679	)
Consolidated earnings before income taxes	$	31,490		$	35,818		$	38,052		$	49,515

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data	Sep. 30, 2011	Sep. 30, 2010
Current assets:
Allowance, accounts receivable	$ 2,322	$ 2,228
Stockholders' equity:
Preferred stock, par value	$ 0.003	$ 0.003
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001455	$ 0.001455
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	72,960	72,960
Treasury stock, shares	4,070	4,223
Treasury stock held for deferred compensation, shares	315	356

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Other Liabilities

12 Months Ended

Sep. 30, 2011

Other Liabilities

Other Liabilities

Note 15. Other liabilities

	September 30,		September 30,
	2011		2010
Net accrued retirement benefits, less amounts recognized within accrued liabilities	$	61,994	$	66,288
Uncertain tax positions, net of offsetting benefits, less amounts recognized within accrued liabilities (Note 17)		14,078		8,720
Other		12,622		8,967
	$	88,694	$	83,975

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Accrued Liabilities (Tables)

12 Months Ended

Sep. 30, 2011

Accrued Liabilities

Accrued Liabilities

	At September 30,
	2011		2010
Salaries and other member benefits	$	70,965	$	43,598
Current portion of restructuring and other charges		2,489		4,862
Warranties		14,083		10,851
Interest payable		11,611		11,925
Accrued retirement benefits		2,560		2,748
Deferred revenues		8,160		12,376
Taxes, other than income		5,097		4,618
Other		18,551		18,074
	$	133,516	$	109,052

Warranties

	At September 30,
	2011			2010
Warranties, beginning of period	$	10,851		$	10,005
Increases to accruals related to warranties during the period		5,402			5,555
Increases due to acquisition of IDS		2,250			—
Settlements of amounts accrued		(4,403	)		(4,494	)
Foreign currency exchange rate changes		(17	)		(215	)
Warranties, end of period	$	14,083		$	10,851

Restructuring and Other Charges

	At September 30,
	2011			2010
Non-acquisition related restructuring charges:
Accrued restructuring charges, beginning of period	$	667		$	3,196
Payments		(279	)		(2,027	)
Non-cash adjustments		(22	)		(463	)
Foreign currency exchange rates		(1	)		(39	)
Accrued restructuring charges, end of period	$	365		$	667
Business acquisition restructuring charges:
Accrued restructuring charges, beginning of period	$	5,446		$	9,668
Purchase accounting adjustments		—			1,834
Payments		(705	)		(6,330	)
Non-cash adjustments		(2,197	)		274
Accrued restructuring charges, end of period	$	2,544		$	5,446
Total restructuring charges	$	2,909		$	6,113

Accrued Restructuring Charges Included in Other Liabilities

	At September 30,
	2011		2010
Non-current accrued restructuring charges	$	420	$	1,251

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Other (Income) Expense, Net (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Net (gain) loss on sales of assets	$ 644	$ (131)	$ (1,093)
Rent income	(576)	(515)	(959)
Amount of (Income) Expense Recognized in Earnings on Derivative	1,774	(526)	226
Other	(61)	56	(271)
Other (income) expense, net	1,588	(1,791)	(2,441)
Derivatives in Foreign Currency Relationships [Member]
Amount of (Income) Expense Recognized in Earnings on Derivative	1,612	(681)	173
Investments in Deferred Compensation Plan [Member]
Net gain on investments in deferred compensation program	$ (31)	$ (520)	$ (291)

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Income Taxes

12 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

Note 17. Income taxes

Income taxes consisted of the following:

	Year Ending September 30,
	2011			2010			2009
Current:
Federal	$	48,041		$	9,818		$	(8,006	)
State		6,237			5,600			2,042
Foreign		9,743			13,112			18,441
Deferred
Federal		(8,680	)		13,789			16,436
State		(552	)		1,681			848
Foreign		543			(287	)		(1,701	)
	$	55,332		$	43,713		$	28,060

Earnings before income taxes by geographical area consisted of the following:

	Year Ending September 30,
	2011		2010		2009
United States	$	149,744	$	103,771	$	62,766
Other countries		37,823		51,104		59,710
	$	187,567	$	154,875	$	122,476

Deferred income taxes presented in the Consolidated Balance Sheets are related to the following:

	At September 30,
	2011			2010
Deferred tax assets:
Retirement healthcare and early retirement benefits	$	12,417		$	13,176
Foreign net operating loss carryforwards		4,276			2,245
Inventory		18,194			13,425
Deferred compensation		14,223			12,293
Defined benefit pension		7,681			2,943
Other		21,054			27,581
Valuation allowance		(3,201	)		(96	)
Total deferred tax assets, net of valuation allowance		74,644			71,567
Deferred tax liabilities:
Goodwill and intangibles — net		(103,393	)		(96,267	)
Other		(8,500	)		(21,237	)
Total deferred tax liabilities		(111,893	)		(117,504	)
Net deferred tax liabilities	$	(37,249	)	$	(45,937	)

Woodward has recorded a deferred tax asset of $4,276 as of September 30, 2011, reflecting the benefit of $25,024 in foreign net operating loss carryforwards. Of these carryforwards, $16,789 will expire by 2018 and is currently offset by a 100% valuation allowance; the net may be carried forward indefinitely.

At September 30, 2011, Woodward has not provided for taxes on undistributed foreign earnings of $113,788 that it considers indefinitely reinvested. These earnings could become subject to income taxes if they are remitted as dividends, are loaned to Woodward or any of Woodward's subsidiaries located in the United States, or if Woodward sells its stock in the foreign subsidiaries. However, the Company believes that foreign tax credits would largely offset any income tax that might otherwise be due.

Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Both positive and negative evidence are considered in forming Woodward's judgment as to whether a valuation allowance is appropriate, and more weight is given to evidence that can be objectively verified. Valuation allowances are reassessed whenever there are changes in circumstances that may cause a change in judgment.

The reasons for the differences between Woodward's effective income tax rate and the United States statutory federal income tax rate were as follows:

	Year Ending September 30,
Percent of pretax earnings	2011			2010			2009
Statutory tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		2.3			2.4			1.5
Foreign tax rate differences		(0.3	)		(1.4	)		(2.1	)
Dividends on stock shares allocated to retirement savings plans		(0.3	)		(0.4	)		(0.5	)
Research credit		(2.7	)		(0.5	)		(3.1	)
Retroactive extension of research credit		(2.1	)		—			(1.7	)
Domestic production activities deduction		(2.1	)		(0.9	)		(0.3	)
Adjustment of tax issues for previous periods and audit settlements		(0.2	)		(5.9	)		(6.6	)
Other items, net		(0.1	)		(0.1	)		0.7
Effective tax rate		29.5	%		28.2	%		22.9	%

The changes in estimate of taxes for previous periods are primarily related to the favorable resolution of certain tax matters. There were favorable resolutions of tax matters of $2,148, $4,667 and $6,846 in the fiscal years ending September 30, 2011, September 30, 2010 and September 30, 2009.

Income taxes for the fiscal year ending September 30, 2011 included an expense reduction of $3,908 related to the retroactive extension of the U.S. research and experimentation tax credit.

During the fiscal year ending September 30, 2010, the Internal Revenue Service concluded an examination of Woodward's U.S. Federal income tax returns for fiscal years 2007 and 2008. Also during the fiscal year ending September 30, 2010, Woodward completed certain internal revaluation assessments and certain statutes of limitations expired. As a result, Woodward reduced its liability for unrecognized tax benefits during the fiscal year ending September 30, 2010 by a net favorable amount of $6,784.

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:

Balance, September 30, 2008	$	22,576
Tax positions related to the current year		1,431
Tax positions related to prior years		(556	)
Lapse of applicable statute of limitations		(3,668	)
Balance, September 30, 2009		19,783
Tax positions related to the current year		1,734
Tax positions related to prior years		(7,320	)
Lapse of applicable statute of limitations		(3,611	)
Balance, September 30, 2010		10,586
Tax positions related to the current year		4,264
Tax positions related to prior years		3,160
Lapse of applicable statute of limitations		(1,079	)
Balance, September 30, 2011	$	16,931

Worldwide unrecognized tax benefits included $3,517 recorded in connection with the IDS Acquisition.

The amounts of unrecognized tax benefits that would impact Woodward's effective tax rate if recognized, net of expected offsetting adjustments, were $14,078 at September 30, 2011 and $8,720 at September 30, 2010. At this time, Woodward estimates it is reasonably possible that the liability for unrecognized tax benefits will decrease by as much as $600 in the next twelve months due to the completion of reviews by tax authorities and the expiration of certain statutes of limitations.

Woodward recognizes interest and penalties related to unrecognized tax benefits in tax expense. Woodward had accrued interest and penalties of the following:

	At September 30,
	2011		2010
Accrued interest and penalties	$	1,989	$	1,431

Woodward's tax returns are audited by U.S., state, and foreign tax authorities and these audits are at various stages of completion at any given time. Fiscal years remaining open to examination in significant foreign jurisdictions include 2003 and forward. Woodward has been subject to U.S. Federal income tax examinations for fiscal years through 2008. Woodward is subject to U.S. state income tax examinations for fiscal years 2007 and forward.

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Derivative Instruments and Hedging Activities (Unrecognized Gains and Losses and Recognized Gains Associated with Derivative Instruments in Balance Sheet) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Designated as Hedging Instrument [Member]
Unrecognized gain (loss)	$ (778)	$ (941)
Designated as Hedging Instrument [Member] | Accumulated Other Comprehensive Earnings [Member]
Unrecognized gain (loss)	(781)	(1,011)
Designated as Hedging Instrument [Member] | Current and Long-Term Debt [Member]
Unrecognized gain (loss)	3	70
Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Recognized gain (loss)	$ 0	$ 579

XML

Financial Instruments and Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009	Sep. 30, 2008
Financial Instruments and Fair Value Measurements
Cash and cash equivalents, Estimated Fair Value	$ 74,539	$ 105,579
Investments in deferred compensation program, Estimated Fair Value	5,855	5,633
Short-term borrowings, Estimated Fair Value	0	(22,099)
Long-term debt, including current portion, Estimated Fair Value	(482,776)	(506,120)
Cash and cash equivalents, Carrying Cost	74,539	105,579	100,863	109,833
Investments in deferred compensation program, Carrying Cost	5,855	5,633
Short-term borrowings, Carrying Cost	0	(22,099)
Long-term debt, including current portion, Carrying Cost	$ (425,246)	$ (443,673)

XML

Condensed Consolidated Statements of Stockholders' Equity (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Earnings [Member]	Foreign Currency Translation Adjustments [Member]	Unrealized Derivative Gains (Losses) [Member]	Minimum Retirement Benefit Liability Adjustments [Member]	Deferred Compensation in Equity [Member]	Retained Earnings [Member]	Treasury Stock at Cost [Member]	Treasury Stock Held for Deferred Compensaton [Member]	Noncontrolling Interest in Consolidated Subsidiary [Member]	Total
Balances at Sep. 30, 2008	$ 106,000	$ 68,520,000	$ 20,485,000	$ 23,709,000	$ (137,000)	$ (3,087,000)	$ 5,283,000	$ 663,442,000	$ (122,759,000)	$ (5,283,000)	$ 2,622,000	$ 632,416,000
Balance, Treasury Stock, shares at Sep. 30, 2008									(5,261,000)
Balance, Common Stock, shares at Sep. 30, 2008	72,960,000
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2008										(404,000)
Net earnings								94,352,000			64,000	94,416,000
Cash dividends paid								(16,289,000)			(575,000)	(16,864,000)
Purchase of treasury stock									(866,000)			(866,000)
Purchase of treasury stock, shares									(42,000)
Sale of treasury stock		(3,821,000)							7,778,000			3,957,000
Sale of treasury stock, shares									647,000
Tax benefit attributable to exercise of stock options		2,695,000										2,695,000
Stock-based compensation		5,499,000										5,499,000
Purchase of stock by deferred compensation plan		304,000					96,000		369,000	(96,000)		673,000
Purchase of stock by deferred compensation plan, shares									35,000	(38,000)
Distribution of stock from deferred compensation plan							(475,000)			475,000
Distribution of stock from deferred compensation plan, shares										53,000
Foreign currency translation adjustments			6,098,000	6,098,000							(87,000)	6,011,000
Reclassification of unrecognized derivative losses to earnings			237,000		237,000							237,000
Realized loss on cash flow hedge			(1,308,000)		(1,308,000)							(1,308,000)
Minimum retirement benefits liability adjustment			(26,790,000)			(26,790,000)						(26,790,000)
Taxes on changes in accumulated other comprehensive earnings			11,407,000	(343,000)	407,000	11,343,000					32,000	11,439,000
Balances at Sep. 30, 2009	106,000	73,197,000	10,129,000	29,464,000	(801,000)	(18,534,000)	4,904,000	741,505,000	(115,478,000)	(4,904,000)	2,056,000	711,515,000
Balance, Treasury Stock, shares at Sep. 30, 2009									(4,621,000)
Balance, Common Stock, shares at Sep. 30, 2009	72,960,000
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2009										(389,000)
Net earnings								110,844,000			318,000	111,162,000
Cash dividends paid								(16,430,000)			(655,000)	(17,085,000)
Purchase of treasury stock									(8,703,000)			(8,703,000)
Purchase of treasury stock, shares									(307,000)
Sale of treasury stock		(4,929,000)							11,049,000			6,120,000
Sale of treasury stock, shares									702,000
Purchase of noncontrolling interest		(6,180,000)	(116,000)	(116,000)							(1,824,000)	(8,120,000)
Tax benefit attributable to exercise of stock options		5,115,000										5,115,000
Stock-based compensation		6,686,000										6,686,000
Purchase of stock by deferred compensation plan		26,000					169,000		44,000	(169,000)		70,000
Purchase of stock by deferred compensation plan, shares									3,000	(3,000)
Distribution of stock from deferred compensation plan							(185,000)			185,000
Distribution of stock from deferred compensation plan, shares										36,000
Foreign currency translation adjustments			(8,602,000)	(8,602,000)							163,000	(8,439,000)
Reclassification of unrecognized derivative losses to earnings			282,000		282,000							282,000
Realized loss on cash flow hedge												0
Minimum retirement benefits liability adjustment			4,409,000			4,409,000						4,409,000
Taxes on changes in accumulated other comprehensive earnings			240,000	2,406,000	(108,000)	(2,058,000)					(58,000)	182,000
Balances at Sep. 30, 2010	106,000	73,915,000	6,342,000	23,152,000	(627,000)	(16,183,000)	4,888,000	835,919,000	(113,088,000)	(4,888,000)		803,194,000
Balance, Treasury Stock, shares at Sep. 30, 2010									(4,223,000)			(4,223,000)
Balance, Common Stock, shares at Sep. 30, 2010	72,960,000											72,960,000
Balance, Preferred Stock, shares at Sep. 30, 2010												0
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2010										(356,000)		(356,000)
Net earnings								132,235,000				132,235,000
Cash dividends paid								(18,581,000)				(18,581,000)
Purchase of treasury stock									(9,700,000)			(9,700,000)
Purchase of treasury stock, shares									(301,000)
Sale of treasury stock		(2,643,000)							7,127,000			4,484,000
Sale of treasury stock, shares									452,000
Tax benefit attributable to exercise of stock options		3,558,000										3,558,000
Stock-based compensation		6,590,000										6,590,000
Purchase of stock by deferred compensation plan		33,000					149,000			(149,000)		33,000
Purchase of stock by deferred compensation plan, shares									2,000	(5,000)
Distribution of stock from deferred compensation plan							(456,000)			456,000
Distribution of stock from deferred compensation plan, shares										46,000
Foreign currency translation adjustments			(2,653,000)	(2,653,000)								(2,653,000)
Reclassification of unrecognized derivative losses to earnings			229,000		229,000							229,000
Realized loss on cash flow hedge												0
Minimum retirement benefits liability adjustment			(2,930,000)			(2,930,000)						(2,930,000)
Taxes on changes in accumulated other comprehensive earnings			2,638,000	1,604,000	(86,000)	1,120,000						2,638,000
Balances at Sep. 30, 2011	$ 106,000	$ 81,453,000	$ 3,626,000	$ 22,103,000	$ (484,000)	$ (17,993,000)	$ 4,581,000	$ 949,573,000	$ (115,661,000)	$ (4,581,000)		$ 919,097,000
Balance, Treasury Stock, shares at Sep. 30, 2011									(4,070,000)			(4,070,000)
Balance, Common Stock, shares at Sep. 30, 2011	72,960,000											72,960,000
Balance, Preferred Stock, shares at Sep. 30, 2011												0
Balance, Treasury stock held for deferred compensation, Shares at Sep. 30, 2011										(315,000)		(315,000)

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Property, Plant, and Equipment - Net

12 Months Ended

Sep. 30, 2011

Property, Plant, and Equipment - Net

Property, Plant and Equipment - Net

Note 9. Property, plant, and equipment

	At September 30,
	2011			2010
Land	$	14,823		$	11,372
Buildings and improvements		177,637			171,257
Leasehold improvements		18,765			17,884
Machinery and production equipment		265,898			270,126
Computer equipment and software		66,149			57,518
Other		25,191			22,854
Construction in progress		44,975			13,125
		613,438			564,136
Less accumulated depreciation		(406,713	)		(370,612	)
Property, plant and equipment, net	$	206,725		$	193,524

	Year Ending September 30,
	2011		2010		2009
Depreciation expense	$	40,400	$	40,502	$	37,828

During fiscal year 2010, Woodward began construction of a new 48,000 square foot system test facility in Rockford, Illinois. The facility, which will house numerous environmental system test cells and a vibration lab, will support, among other development projects, Aerospace segment development efforts of next generation fuel systems for aircraft turbines. The test facility is expected to be completed and placed into service in early fiscal year 2012. Included in construction in progress at September 30, 2011 and September 30, 2010 are $20,090 and $4,836, respectively, of costs associated with the construction of the test facility, including $1,087 and $165, respectively, of capitalized interest.

In addition at September 30, 2011 and September 30, 2010, Woodward recognized as construction in progress, $11,827 and $1,604, respectively, of costs associated with the development of a new Enterprise Resource Planning ("ERP") system for its Airframe Systems group, including capitalized interest of $432 and $24, respectively.

For the fiscal years ending September 30, 2011, 2010 and 2009, Woodward had capitalized interest that would have otherwise been included in interest expense of the following:

	Year Ending September 30,
	2011		2010		2009
Capitalized interest	$	1,354	$	150	$	31

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Operations and summary of significant accounting policies (Schedule of property, plant, and equipment useful lives) (Details)	12 Months Ended
	Sep. 30, 2011 years
Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life, Minimum	1
Property, Plant and Equipment, Useful Life, Maximum	40
Building and Building Improvements [Member]
Property, Plant and Equipment, Useful Life, Minimum	2
Property, Plant and Equipment, Useful Life, Maximum	40
Machinery and Equipment [Member]
Property, Plant and Equipment, Useful Life, Minimum	2
Property, Plant and Equipment, Useful Life, Maximum	15
Computer Equipment and Software [Member]
Property, Plant and Equipment, Useful Life, Minimum	3
Property, Plant and Equipment, Useful Life, Maximum	10
Other Capitalized Property Plant and Equipment [Member]
Property, Plant and Equipment, Useful Life, Minimum	2
Property, Plant and Equipment, Useful Life, Maximum	20

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Stockholders' Equity (Activity for Stock Option Awards) (Details) (Stock Options [Member], USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011
Stock Options [Member]
Number of options, beginning balance	4,011
Weighted Average Exercise Price Per Share, beginning balance	$ 16.87
Options granted, Number of options	709
Options granted, Weighted Average Exercise Price Per Share	$ 32.10
Options exercised, Number of options	(451)
Options exercised, Weighted Average Exercise Price Per Share	$ 9.75
Options expired unexercised, Number of options	(2)
Options expired unexercised, Weighted Average Exercise Price Per Share	$ 32.73
Options forfeited, Number of options	(39)
Options forfeited, Weighted Average Exercise Price Per Share	$ 26.61
Number of options, ending balance	4,228
Weighted Average Exercise Price Per Share, ending balance	$ 20.12

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Earnings Per Share (Reconciliation of Net Earnings to Net Earnings Per Share Basic and Diluted) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Earnings Per Share
Net earnings attributable to Woodward	$ 41,690	$ 36,056	$ 32,090	$ 22,399	$ 32,675	$ 31,745	$ 24,068	$ 22,356	$ 132,235	$ 110,844	$ 94,352
Basic shares outstanding									68,797	68,472	67,891
Dilutive effect of employee stock options									1,343	1,392	1,212
Diluted shares outstanding									70,140	69,864	69,103
Basic earnings per share attributable to Woodward	$ 0.61	$ 0.52	$ 0.47	$ 0.33	$ 0.48	$ 0.46	$ 0.35	$ 0.33	$ 1.92	$ 1.62	$ 1.39
Diluted earnings per share attributable to Woodward	$ 0.60	$ 0.51	$ 0.46	$ 0.32	$ 0.47	$ 0.45	$ 0.34	$ 0.32	$ 1.89	$ 1.59	$ 1.37

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Retirement Benefits (Schedule of Future Postretirement Company Contributions) (Details) (USD $) In Thousands	Sep. 30, 2011
United States Pension Plans of US Entity, Defined Benefit [Member]
Company contributions in fiscal 2012	$ 600
United Kingdom Plan, Defined Benefit [Member]
Company contributions in fiscal 2012	1,787
Japan Plan, Defined Benefit [Member]
Company contributions in fiscal 2012	1,382
Switzerland Plan, Defined Benefit [Member]
Company contributions in fiscal 2012	191
Other Postretirement Benefit Plans, Defined Benefit [Member]
Company contributions in fiscal 2012	4,493
2013	4,763
2014	4,911
2015	4,834
2016	4,841
2017 - 2021	$ 21,991

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Financial Instruments and Fair Value Measurements (Schedule of Weighted Average Interest Rates Used to Calculate Long-Term Debt Fair Value) (Details)	Sep. 30, 2011	Sep. 30, 2010
Financial Instruments and Fair Value Measurements
Long-term debt, weighted-average interest rate used to estimate fair value	2.60%	2.90%

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Business Acquisitions (Tables)

12 Months Ended

Sep. 30, 2011

Business Acquisition, Acquiree - HRT [Member]

Schedule of Unaudited Pro Forma Results

	Year Ending September 30, 2009
	As reported		Pro froma
Net sales	$	1,430,125	$	1,532,181
Net earnings attributable to Woodward		94,352		93,144
Earnings per share:
Basic earnings per share attributable to Woodward	$	1.39	$	1.37
Diluted earnings per share attributable to Woodward		1.37		1.35

Business Acquisition, Acquiree - IDS [Member]

Schedule of the Estimated Purchase Price

Cash paid to seller	$	48,412
Less cash acquired		(1,251	)
Total estimated purchase price		47,161
Less marketable securities acquired		(8,463	)
Estimated price paid for business assets	$	38,698

Schedule of Estimated Purchase Price Allocation

Current assets	$	14,627
Investments in marketable securities		8,463
Property, plant, and equipment		1,954
Goodwill		24,188
Intangible assets		11,882
Total assets acquired		61,114
Other current liabilities		5,505
Warranty accrual		2,250
Postretirement benefits		434
Deferred tax liabilities		2,472
Other tax — noncurrent		3,292
Total liabilities assumed		13,953
Net assets acquired	$	47,161

Schedule of Finite-Lived Intangible Assets Acquired

			Weighted
			Average Useful	Amortization
	Amount		Life	Method
Customer relationships	$	3,452	9years	Straight-line
Process technology		7,752	8.5years	Straight-line
Other		678	2.5years	Straight-line
Total	$	11,882	8years

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Retirement Benefits (Schedule of Amounts Expected to be Amortized from Accumulated Other Comprehensive Income (Loss) and Reported as a Component of Net Periodic Benefit Cost During the Next Fiscal Year) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011
Pension Plans, Defined Benefit [Member]
Prior service (benefit) cost	$ 66
Net actuarial (gains) losses	1,191
United States Pension Plans of US Entity, Defined Benefit [Member]
Prior service (benefit) cost	75
Net actuarial (gains) losses	524
Foreign Pension Plans, Defined Benefit [Member]
Prior service (benefit) cost	(9)
Net actuarial (gains) losses	$ 667

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Long-term Debt

12 Months Ended

Sep. 30, 2011

Debt Disclosure

Long-term Debt

 

Note 13. Long-term debt

Long-term debt consisted of the following:

	At September 30,
	2011			2010
2008 Term loan — Variable rate of 1.78% at September 30, 2011, matures October 2013; unsecured	$	64,375		$	71,875
Series B notes — 5.63%, due October 2013; unsecured		100,000			100,000
Series C notes — 5.92%, due October 2015; unsecured		50,000			50,000
Series D notes — 6.39%, due October 2018; unsecured		100,000			100,000
Series E notes — 7.81%, due April 2016; unsecured		57,000			57,000
Series F notes — 8.24%, due April 2019; unsecured		43,000			43,000
Senior notes — 6.39%, due October 2011; unsecured		10,714			21,429
Term notes — 5.95%, due June 2012; secured by land and buildings		157			369
Fair value hedge adjustment for unrecognized discontinued hedge gains		3			70
Total long-term debt		425,249			443,743
Less: current portion		(18,374	)		(18,493	)
Long-term debt, less current portion	$	406,875		$	425,250

Under certain circumstances, the interest rate on each series of the Series B, C and D Notes is subject to increase if Woodward's leverage ratio of consolidated net debt to consolidated earnings before interest, taxes, depreciation and amortization, plus any unusual non-cash charges to the extent deducted in computing net income minus any unusual non-cash gains to the extent added in computing net income ("Debt Covenant EBITDA") increases beyond a ratio of 3.5:1.0.

Required future principal payments of outstanding long-term debt as of September 30, 2011 are as follows:

Year Ending September 30:
2012	$	18,371
2013		7,500
2014		149,375
2015		—
2016		107,000
Thereafter		143,000
	$	425,246

The current portion of long-term debt includes $3 at September 30, 2011 compared to $67 at September 30, 2010 related to the fair value hedge adjustment for unrecognized discontinued hedge gains on certain interest rate swaps entered into in 2002 in connection with the issuance of the senior notes due in October 2011.

The 2008 term loan, the Series B, C, D, E and F Notes (together, the "Notes") and the senior notes due October 2011 are held by multiple institutions. The term notes are held by banks in Germany.

Woodward's obligations under the 2008 term loan, the Notes, and the senior notes due October 2011 are guaranteed by Woodward FST, Inc., MPC Products Corporation and Woodward HRT, Inc., each of which is a wholly owned subsidiary of Woodward

Certain financial and other covenants under Woodward's debt agreements contain customary restrictions on the operation of its business. In the event of non-compliance with these covenants, certain additional restrictions might apply, including restrictions on the Company's ability to pay dividends or make distributions on its capital stock. Management believes that Woodward was in compliance with the covenants under the long-term debt agreements at September 30, 2011.

2008 Term Loan

In October 2008, Woodward entered into a term loan credit agreement (the "2008 Term Loan Credit Agreement"), by and among Woodward; the institutions from time to time parties thereto as lenders; and JPMorgan Chase Bank, National Association as administrative agent; which provides for an initial $150,000 unsecured term loan facility, and may, from time to time, be expanded by up to $50,000 of additional indebtedness, subject to the Company's compliance with certain conditions and the lenders' participation. The 2008 Term Loan Credit Agreement bears interest at LIBOR plus 1.00% to 2.25%, requires quarterly principal payments of $1,875, and can be prepaid, or prepaid and terminated, without penalty.

The 2008 Term Loan Credit Agreement contains customary terms and conditions, including, among others, covenants that place limits on the Company's ability to incur liens on assets, incur additional debt (including a leverage or coverage based maintenance test), transfer or sell the Company's assets, merge or consolidate with other persons, make certain investments, make certain restricted payments, and enter into material transactions with affiliates. The 2008 Term Loan Credit Agreement contains financial covenants requiring that (a) the Company's ratio of consolidated net debt to Debt Covenant EBITDA, not exceed a ratio of 3.5:1.0 and (b) the Company have a minimum consolidated net worth of $400,000, plus 50% of net income for any fiscal year and 50% of the net proceeds of certain issuances of capital stock, in each case on a rolling four quarter basis. The 2008 Term Loan Credit Agreement also contains customary events of default, including certain cross-default provisions related to Woodward's other outstanding debt arrangements in excess of $15,000, the occurrence of which would permit the lenders to accelerate the amounts due thereunder.

Series B, C, D, E and F Notes

In October 2008, Woodward entered into a note purchase agreement (the "2008 Note Purchase Agreement") relating to the Series B, C, and D Notes. In April 2009, Woodward entered into a note purchase agreement (the "2009 Note Purchase Agreement" and, together with the 2008 Note Purchase Agreement, the "Note Purchase Agreements") relating to the Series E and F Notes.

The Notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Holders of the Notes do not have any registration rights.

Woodward's obligations under the Notes rank equal in right of payment with all of Woodward's other unsecured unsubordinated debt, including its outstanding debt under the 2008 Term Loan Credit Agreement, revolving credit facility (see Note 12, Credit facilities and short-term borrowings) and note purchase agreement relating to the senior notes due October 2011.

The Note Purchase Agreements contain customary restrictive covenants, including, among other things, covenants that place limits on Woodward's ability to incur liens on assets, incur additional debt (including a leverage or coverage based maintenance test), transfer or sell Woodward's assets, merge or consolidate with other persons, and enter into material transactions with affiliates. The Note Purchase Agreements also contain customary events of default, including certain cross-default provisions related to Woodward's other outstanding debt arrangements in excess of $25,000 with respect to the 2008 Note Purchase Agreement and $30,000 with respect to the 2009 Note Purchase Agreement, the occurrence of which would permit the holders of the respective Notes to accelerate the amounts due.

The 2008 Note Purchase Agreement contains financial covenants requiring that Woodward's (a) ratio of consolidated net debt to consolidated Debt Covenant EBITDA not exceed a ratio of 4.0:1.0 during any material acquisition period, or a ratio of 3.5:1.0 at any other time on a rolling four quarter basis and (b) consolidated net worth at any time equal or exceed $425,000 plus 50% of consolidated net earnings for each fiscal year beginning with the fiscal year ending September 30, 2008. Additionally, under the 2008 Note Purchase Agreement, Woodward may not permit the aggregate amount of priority debt to at any time exceed 20% of its consolidated net worth at the end of the then most recently ended fiscal quarter. Priority debt generally refers to certain unsecured debt of Woodward's subsidiaries and all debt of Woodward and its subsidiaries secured by liens other than certain permitted liens.

The 2009 Note Purchase Agreement contains financial covenants requiring that Woodward's (a) ratio of consolidated net debt to consolidated Debt Covenant EBITDA not exceed a ratio of 3.5:1.0 at any time on a rolling four quarter basis, and (b) consolidated net worth at all times equal or exceed $485,940 plus 50% of consolidated net earnings for each fiscal year beginning with the fiscal year ending September 30, 2009. Additionally, under the 2009 Note Purchase Agreement, Woodward may not permit the aggregate amount of priority debt to at any time exceed 20% of its consolidated net worth at the end of the then most recently ended fiscal quarter. Priority debt generally refers to certain unsecured debt of Woodward's subsidiaries and all debt of Woodward and its subsidiaries secured by liens other than certain permitted liens.

Woodward is permitted at any time, at its option, to prepay all, or from time to time prepay any part of, the then outstanding principal amount of any series of the Notes at 100% of the principal amount of the series of the Notes to be prepaid (but, in the case of partial prepayment, not less than $1,000), together with interest accrued on such amount to be prepaid to the date of payment, plus any applicable make-whole amount. The make-whole amount is computed by discounting the remaining scheduled payments of interest and principal of the Notes being prepaid at a discount rate equal to the sum of 50 basis points and the yield to maturity of U.S. Treasury securities having a maturity equal to the remaining average life of the Notes being prepaid.

Debt Issuance Costs

During the fiscal year ending September 30, 2009, Woodward incurred $5,892 of debt issuance costs, which are being amortized using the effective interest method or patterns that approximate the effective interest method, over the term of the debt to which the costs relate. The related amortization is recognized as interest expense. Recognition of interest expense on the debt issuance costs associated with the 2009 term loan, which was paid-off in full and terminated in 2010, were accelerated and the remaining unamortized amount of debt issuance costs associated with the 2009 term loan were recognized in 2010. Amounts recognized as interest expense from the amortization of debt issuance costs were $764 in fiscal year 2011, $1,515 in fiscal year 2010, and $2,031 in fiscal year 2009. Woodward had $2,153 of unamortized debt issuance costs as of September 30, 2011 and $2,917 of unamortized debt issuance costs as of September 30, 2010. Amortization of debt issuance costs is included in operating activities in the Consolidated Statements of Cash Flows.

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Commitments and Contingencies (Rent Expense for All Operating Leases) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Commitments and Contingencies Disclosure
Rent expense	$ 10,159	$ 9,604	$ 11,155

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Condensed Consolidated Statements of Earnings (USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Condensed Consolidated Statements of Earnings
Net sales	$ 1,711,702	$ 1,457,030	$ 1,430,125
Costs and expenses:
Cost of goods sold	1,198,153	1,021,516	1,029,095
Selling, general and administrative expenses	148,903	135,880	128,682
Research and development costs	115,633	82,560	78,536
Amortization of intangible assets	34,993	35,114	26,120
Restructuring and other charges	0	0	15,159
Interest expense	25,399	29,385	33,629
Interest income	(534)	(509)	(1,131)
Other (income) expense, net	1,588	(1,791)	(2,441)
Total costs and expenses	1,524,135	1,302,155	1,307,649
Earnings before income taxes	187,567	154,875	122,476
Income tax expense	55,332	43,713	28,060
Net earnings	132,235	111,162	94,416
Earnings attributable to noncontrolling interest, net of taxes	0	(318)	(64)
Net earnings attributable to Woodward	$ 132,235	$ 110,844	$ 94,352
Earnings per share (Note 3):
Basic earnings per share attributable to Woodward	$ 1.92	$ 1.62	$ 1.39
Diluted earnings per share attributable to Woodward	$ 1.89	$ 1.59	$ 1.37
Weighted Average Common Shares Outstanding (Note 3):
Basic	68,797	68,472	67,891
Diluted	70,140	69,864	69,103
Cash dividends per share paid to Woodward common stockholders	$ 0.27	$ 0.24	$ 0.24

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Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

Sep. 30, 2011

Derivative Instruments and Hedging Activities

Unrecognized Gains and Losses and Recognized Gains Associated with Derivative Intruments in Balance Sheet

	At September 30,
	2011			2010
Derivatives designated as hedging instruments	Unrecognized Gain (Loss)
Classified in accumulated other comprehensive earnings	$	(781	)	$	(1,011	)
Classified in current and long-term debt		3			70
	$	(778	)	$	(941	)
Derivatives not designated as hedging instruments	Recognized Gain (Loss)
Classified in other current assets	$	—		$	579

Impact of Derivative Instruments on Earnings

		Year Ending September 30, 2011
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(67	)	$	—	$	—
Cash flow hedging relationships	Interest expense		229			—		229
Foreign currency relationships	Other (income) expense, net		1,612			—		—
		$	1,774		$	—	$	229
		Year Ending September 30, 2010
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(127	)	$	—	$	—
Cash flow hedging relationships	Interest expense		282			—		282
Foreign currency relationships	Other (income) expense, net		(681	)		—		—
		$	(526	)	$	—	$	282
		Year Ending September 30, 2009
		Amount of			Amount of		Amount of
		(Income)			(Gain) Loss		(Gain) Loss
		Expense			Recognized		Reclassified
		Recognized			in		from
		in Earnings			Accumulated		Accumulated
	Location of (Gain) Loss	on			OCI on		OCI into
Derivatives in:	Recognized in Earnings	Derivative			Derivative		Earnings
Fair value hedging relationships	Interest expense	$	(184	)	$	—	$	—
Cash flow hedging relationships	Interest expense		237			1,199		237
Foreign currency relationships	Other (income) expense, net		173			—		—
		$	226		$	1,199	$	237

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Goodwill (Narrative) (Details) (USD $)	3 Months Ended		12 Months Ended
	Sep. 30, 2011	Mar. 31, 2011	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Reduction to goodwill due to favorable resolution of lease termination recorded in restructuring reserve			$ 103,000	$ 0	$ 0
Goodwill addition			24,188,000	0
Impairment	0		0	0	0
Weighted average cost of capital assumption		11.30%
Assumed annual compound growth rate after five or ten years	4.30%	4.40%
Disclosure of Change of Date for Annual Goodwill Impairment Test			Woodward changed the annual testing date for its goodwill impairment test from March 31 to July 31.
Reason for Change in Date of Annual Goodwill Impairment Test			The change in the goodwill impairment test date is preferable as it better aligns the impairment testing procedures with the completion of the annual financial and strategic planning process.
Minimum [Member]
Weighted average cost of capital assumption	10.00%
Maximum [Member]
Weighted average cost of capital assumption	10.20%
Aerospace [Member]
Reduction to goodwill due to favorable resolution of lease termination recorded in restructuring reserve			103,000
Goodwill addition			0	0
Energy [Member]
Goodwill addition			$ 24,188,000	$ 0

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Retirement Benefits (Schedule of Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Net (gain) loss	$ 3,088	$ (7,873)	$ 25,311
Prior service (benefit) cost	0	3,963	(1,427)
Amortization of net (gains) losses	(1,339)	(1,525)	(574)
Amortization of transition obligation asset	0	(86)	(84)
Amortization of prior service benefit (cost)	805	1,517	3,499
Settlement loss	0	(345)	(246)
Foreign currency exchange rate changes	376	(60)	311
Total recognized in accumulated other comprehensive income	(2,930)	4,409	(26,790)
Pension Plans, Defined Benefit [Member]
Net (gain) loss	6,233	(3,949)
Prior service (benefit) cost	0	3,963
Amortization of net (gains) losses	(1,211)	(1,336)
Amortization of transition obligation asset	0	(86)
Amortization of prior service benefit (cost)	(66)	268
Settlement loss	0	(345)
Foreign currency exchange rate changes	376	(60)
Total recognized in accumulated other comprehensive income	5,332	(1,545)
United States Pension Plans of US Entity, Defined Benefit [Member]
Net (gain) loss	7,897	(6,182)
Prior service (benefit) cost	0	3,963
Amortization of net (gains) losses	(312)	(583)
Amortization of transition obligation asset	0	0
Amortization of prior service benefit (cost)	(75)	260
Settlement loss	0	0
Foreign currency exchange rate changes	0	0
Total recognized in accumulated other comprehensive income	7,510	(2,542)
Foreign Pension Plans, Defined Benefit [Member]
Net (gain) loss	(1,664)	2,233
Prior service (benefit) cost	0	0
Amortization of net (gains) losses	(899)	(753)
Amortization of transition obligation asset	0	(86)
Amortization of prior service benefit (cost)	9	8
Settlement loss	0	(345)
Foreign currency exchange rate changes	376	(60)
Total recognized in accumulated other comprehensive income	(2,178)	997
Other Postretirement Benefit Plans, Defined Benefit [Member]
Net (gain) loss	(3,145)	(3,924)
Amortization of net (gains) losses	(128)	(189)
Amortization of prior service benefit (cost)	871	1,249
Total recognized in accumulated other comprehensive income	$ (2,402)	$ (2,864)

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Stockholders' Equity (Stock-Based Compensation Narrative) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Sep. 30, 2011 years	Sep. 30, 2010
Number of stock shares authorized for grants	7,410
Number of shares available for future grants	4,550
Minimum [Member] | Stock Options [Member]
Exercise prices of stock options outstanding	$ 6.15
Maximum [Member] | Stock Options [Member]
Exercise prices of stock options outstanding	$ 35.00
Stock Options [Member]
Vesting period, in years	4
Vested contractual term, in years	10
Exercise prices of stock options outstanding	$ 20.12	$ 16.87
Total unrecognized compensation cost related to non-vested stock-based compensation arrangements	$ 9,964
Unrecognized compensation cost is expected to be recognized over a weighted-average period, in years	2.5
Restricted Stock Award [Member]
Vesting period, in years	2

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Other Liabilities (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Other Liabilities
Net accrued retirement benefits, less amounts recognized with accrued liabilities	$ 61,994	$ 66,288
Uncertain tax positions, net of offsetting benefits, less amounts recognized within accrued liabilities (Note 17)	14,078	8,720
Other	12,622	8,967
Other liabilities, net	$ 88,694	$ 83,975

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Supplemental Statements of Cash Flows Information (Schedule of Cash Flow Supplemental Disclosures) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Supplemental Statements of Cash Flows Information
Interest paid, net of amounts capitalized	$ 26,140	$ 28,317	$ 20,479
Income taxes paid	50,360	41,533	21,875
Income tax refunds received	9,496	10,867	2,825
Long-term debt assumed in business acquisition	0	0	18,610
Purchases of property, plant and equipment on account	6,333	2,270	3,880
Sales of assets on account	0	0	760
Equity investment funded by transfer of property, plant and equipment	0	0	165
Cashless exercise of stock options	1,982	4,190	0
Settlement of receivable through purchase of treasury shares in connection with the cashless exercise of stock options	881	0	0
Reduction of accounts receivable and short-term borrowing due to the settlement of accounts receivable previously sold with recourse	3,228	0	0
Reduction of accounts payable due to the assignment of accounts receivable with recourse	570	0	0
Reduction to goodwill due to favorable resolution of lease termination recorded in restructuring reserve	103	0	0
Payment of director fees through issuance of treasury stock	$ 52	$ 0	$ 0

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Stockholders' Equity (Tables)

12 Months Ended

Sep. 30, 2011

Dividends Declared and Paid

	Year Ending September 30,
	2011		2010		2009
Dividends declared and paid	$	18,581	$	17,085	$	16,864
Dividend per share amount		0.27		0.24		0.24

Stock-based Compensation Expense Recognized

	Year Ending September 30,
	2011		2010		2009
Employee stock-based compensation expense	$	6,590	$	6,686	$	5,499

Schedule of Assumptions Used in Estimate of Fair Value of Stock Option Awards

	Year Ending September 30,
	2011	2010	2009
Expected term	5.8- 8.7 years	6.5years	7years
Estimated volatility	48% - 54%	51.0%	43.0%
Estimated dividend yield	1.0% - 1.3%	1.4%	1.4%
Risk-free interest rate	1.8% - 2.6%	3.4%	3.1%
Weighted-average forfeiture rate	0% - 7.8%	7.9%	8.2%

Weighted Average Grant Date Fair Value of Options Granted

	Year Ending September 30,
	2011		2010		2009
Weighted-average grant date fair value of options	$	15.00	$	11.04	$	7.73

Activity for Stock Option Awards

				Weighted-
				Average
	Number			Exercise Price
Balance at September 30, 2010		4,011		$	16.87
Options granted		709			32.10
Options exercised		(451	)		9.75
Options expired unexercised		(2	)		32.73
Options forfeited		(39	)		26.61
Balance at September 30, 2011		4,228			20.12

Stock Options Vested, Or Expected to Vest and Are Exercisable

					Weighted-
			Weighted-		Average		Aggregate
			Average		Remaining Life		Intrinsic
	Number		Exercise Price		in Years		Value
Options outstanding		4,228	$	20.12		5.5	$	36,390
Options expected to vest		1,302		27.70		8.3		3,065
Options exercisable		2,860		16.44		4.2		33,130

Other Stock Option Information

	Year Ending September 30,
	2011		2010		2009
Total fair value of stock options vested	$	5,587	$	3,786	$	4,344
Total intrinsic value of options exercised		10,145		14,083		8,695
Cash received from exercises of stock options		4,402		6,084		3,922
Excess tax benefit realized from exercise of stock options		3,558		5,115		2,695

Changes in Restricted Stock Awards

				Weighted-
				Average Grant
				Date Fair Value
	Number			per Share
Balance at September 30, 2010		70		$	33.49
Shares granted		—			n/a
Shares vested		(70	)		33.49
Shares forfeited		—			n/a
Balance at September 30, 2011		—			n/a

Stock Options [Member]

Changes in Nonvested Stock Options

				Weighted-
				Average
	Number			Exercise Price
Balance at September 30, 2010		1,256		$	23.37
Options granted		709			32.10
Options vested		(558	)		23.57
Options forfeited		(39	)		26.61
Balance at September 30, 2011		1,368			27.71

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Retirement Benefits (Schedule of Changes in Projected Benefit Obligations and Fair Value of Plan Assets) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Pension Plans, Defined Benefit [Member]
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	$ 154,443	$ 143,001
Obligation assumed in IDS Acquisition	2,038	0
Service cost	4,425	4,431	2,125
Interest cost	7,930	7,151	5,139
Net actuarial (gains) losses	(1,812)	25
Contribution by participants	122	25
Benefits paid	(4,300)	(4,691)
Amounts paid by Company for Pension Protection Fund levy	(67)	0
Curtailment loss	0	165
Plan amendments	0	3,962
Foreign currency exchange rate changes	917	374
Projected benefit obligation at end of year	163,696	154,443	143,001
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	128,667	104,828
Plan assets received in connection with IDS Acquisition	1,604	0
Actual return on plan assets	1,190	11,207
Contributions by the company	10,731	17,373
Contributions by plan participants	122	25
Benefits paid	(4,300)	(4,691)
Foreign currency exchange rate changes	333	(75)
Fair value of plan assets at end of year	138,347	128,667	104,828
Underfunded status at end of year	(25,349)	(25,776)
United States Pension Plans of US Entity, Defined Benefit [Member]
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	97,786	89,551
Obligation assumed in IDS Acquisition	0	0
Service cost	3,433	3,647	1,409
Interest cost	5,646	4,890	2,964
Net actuarial (gains) losses	1,686	(2,877)
Contribution by participants	0	0
Benefits paid	(2,210)	(1,552)
Amounts paid by Company for Pension Protection Fund levy	0	0
Curtailment loss	0	165
Plan amendments	0	3,962
Foreign currency exchange rate changes	0	0
Projected benefit obligation at end of year	106,341	97,786	89,551
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	85,128	64,102
Plan assets received in connection with IDS Acquisition	0	0
Actual return on plan assets	482	7,998
Contributions by the company	6,580	14,580
Contributions by plan participants	0	0
Benefits paid	(2,210)	(1,552)
Foreign currency exchange rate changes	0	0
Fair value of plan assets at end of year	89,980	85,128	64,102
Underfunded status at end of year	(16,361)	(12,658)
Foreign Pension Plans, Defined Benefit [Member]
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	56,657	53,450
Obligation assumed in IDS Acquisition	2,038	0
Service cost	992	784	716
Interest cost	2,284	2,261	2,175
Net actuarial (gains) losses	(3,498)	2,902
Contribution by participants	122	25
Benefits paid	(2,090)	(3,139)
Amounts paid by Company for Pension Protection Fund levy	(67)	0
Curtailment loss	0	0
Plan amendments	0	0
Foreign currency exchange rate changes	917	374
Projected benefit obligation at end of year	57,355	56,657	53,450
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	43,539	40,726
Plan assets received in connection with IDS Acquisition	1,604	0
Actual return on plan assets	708	3,209
Contributions by the company	4,151	2,793
Contributions by plan participants	122	25
Benefits paid	(2,090)	(3,139)
Foreign currency exchange rate changes	333	(75)
Fair value of plan assets at end of year	48,367	43,539	40,726
Underfunded status at end of year	(8,988)	(13,118)
United Kingdom Plan, Defined Benefit [Member]
Changes in projected benefit obligation:
Projected benefit obligation at end of year	39,677
Changes in fair value of plan assets:
Fair value of plan assets at end of year	37,546
Japan Plan, Defined Benefit [Member]
Changes in projected benefit obligation:
Projected benefit obligation at end of year	15,140
Changes in fair value of plan assets:
Fair value of plan assets at end of year	8,947
Switzerland Plan, Defined Benefit [Member]
Changes in projected benefit obligation:
Projected benefit obligation at end of year	2,538
Changes in fair value of plan assets:
Fair value of plan assets at end of year	1,874
Other Postretirement Benefit Plans, Defined Benefit [Member]
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	37,222	42,427
Obligation assumed in IDS Acquisition			2,251
Service cost	92	120	169
Interest cost	1,974	2,081	2,330
Net actuarial (gains) losses	(3,146)	(3,932)
Contribution by participants	2,133	2,274
Benefits paid	(5,349)	(5,738)
Foreign currency exchange rate changes	(3)	(10)
Projected benefit obligation at end of year	32,923	37,222	42,427
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	0	0
Contributions by the company	3,216	3,464
Contributions by plan participants	2,133	2,274
Benefits paid	(5,349)	(5,738)
Fair value of plan assets at end of year	0	0	0
Underfunded status at end of year	$ (32,923)	$ (37,222)

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Operations and summary of significant accounting policies (Schedule of Effects of Purchasing Non-controlling Interest on Stockholders' Equity) (Details) (USD $) In Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Net earnings attributable to Woodward	$ 41,690	$ 36,056	$ 32,090	$ 22,399	$ 32,675	$ 31,745	$ 24,068	$ 22,356	$ 132,235	$ 110,844	$ 94,352
Decrease in Woodward's additional paid in capital related to purchase of noncontrolling interest										(6,180)
Change from net earnings attributable to Woodward and transfers to noncontrolling interest									$ 132,235	$ 104,664	$ 94,352

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Retirement Benefits (Schedule of Allocation of Plan Assets, Fair Value Hierarchy) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | United States Pension Plans of US Entity, Defined Benefit [Member]
Fair value of plan assets	$ 198
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	125
Mutual funds: U.S. corporate bond fund [Member] | Fair Value, Inputs, Level 1 [Member] | United States Pension Plans of US Entity, Defined Benefit [Member]
Fair value of plan assets	36,958
Mutual funds: U.S. equity large cap fund [Member] | Fair Value, Inputs, Level 1 [Member] | United States Pension Plans of US Entity, Defined Benefit [Member]
Fair value of plan assets	29,169
Mutual funds: International equity large cap growth fund [Member] | Fair Value, Inputs, Level 1 [Member] | United States Pension Plans of US Entity, Defined Benefit [Member]
Fair value of plan assets	23,655
Fair Value, Inputs, Level 1 [Member] | United States Pension Plans of US Entity, Defined Benefit [Member]
Fair value of plan assets	89,980
Fair Value, Inputs, Level 1 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	125
Pooled funds: Index linked U.K. government securities fund [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	3,646
Pooled funds: Index linked U.K. long-term government securities fund [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	6,440
Pooled funds: Index linked U.K. corporate bonds fund [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	13,255
Pooled funds: Japanese fixed income securities [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	3,958
Pooled funds: International fixed income securities [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,336
Pooled funds: Japanese equity securities [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,921
Pooled funds: International equity securities [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,652
Pooled funds: Index linked U.K. equity fund [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	7,098
Pooled funds: Index linked international equity fund [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	7,062
Fair Value, Inputs, Level 2 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	46,368
Insurance Backed Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,874
Fair Value, Inputs, Level 3 [Member] | Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,874
Cash and Cash Equivalents [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	323
Pooled funds: Index linked U.K. government securities fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	3,646
Pooled funds: Index linked U.K. long-term government securities fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	6,440
Pooled funds: Index linked U.K. long-term government securities fund [Member] | United Kingdom Plan, Defined Benefit [Member]
Fair value of plan assets		5,707
Mutual funds: U.S. corporate bond fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	36,958
Pooled funds: Index linked U.K. corporate bonds fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	13,255
Pooled funds: Japanese fixed income securities [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	3,958
Pooled funds: International fixed income securities [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,336
Mutual funds: U.S. equity large cap fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	29,169
Mutual funds: International equity large cap growth fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	23,655
Pooled funds: Japanese equity securities [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,921
Pooled funds: International equity securities [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,652
Pooled funds: Index linked U.K. equity fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	7,098
Pooled funds: Index linked international equity fund [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	7,062
Insurance Backed Assets [Member] | Pension Plans, Defined Benefit [Member]
Fair value of plan assets	1,874
Pension Plans, Defined Benefit [Member]
Fair value of plan assets	138,347	128,667	104,828
United States Pension Plans of US Entity, Defined Benefit [Member]
Fair value of plan assets	89,980	85,128	64,102
Foreign Pension Plans, Defined Benefit [Member]
Fair value of plan assets	48,367	43,539	40,726
United Kingdom Plan, Defined Benefit [Member]
Fair value of plan assets	37,546
Japan Plan, Defined Benefit [Member]
Fair value of plan assets	8,947
Switzerland Plan, Defined Benefit [Member]
Fair value of plan assets	1,874
Other Postretirement Benefit Plans, Defined Benefit [Member]
Fair value of plan assets	$ 0	$ 0	$ 0

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Financial Instruments and Fair Value Measurements (Narrative) (Details) (USD $) In Thousands			3 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2010 Derivatives in Foreign Currency Relationships [Member]	Dec. 31, 2009 Derivatives in Foreign Currency Relationships [Member]
Financial liability on recurring basis	$ 0	$ 0
Realized loss on settlement of forward contract			$ 1,033	$ 71

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Stockholders' Equity (Changes in Restricted Stock Awards) (Details) (Restricted Stock Award [Member], USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011
Restricted Stock Award [Member]
Number of shares, beginning balance	70
Weighted-Average Grant Date Fair Value Per Share, beginning balance	$ 33.49
Shares granted, Number of Shares	0
Shares vested, Number of Shares	(70)
Shares vested, Weighted-Average Grant Date Fair Value Per Share	$ 33.49
Shares forfeited, Number of Shares	0
Number of shares, ending balance	0

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Income Taxes (Reconciliation of Effective Tax Rate to U.S. Statutory Tax Rate) (Details)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes
Statutory tax rate	35.00%	35.00%	35.00%
State income taxes, net of federal tax benefit	2.30%	2.40%	1.50%
Foreign tax rate differences	(0.30%)	(1.40%)	(2.10%)
Dividends on stock shares allocated to retirement savings plans	(0.30%)	(0.40%)	(0.50%)
Research credit	(2.70%)	(0.50%)	(3.10%)
Retroactive extension of research credit	(2.10%)	0.00%	(1.70%)
Domestic production activities deduction	(2.10%)	(0.90%)	(0.30%)
Adjustment of tax issues for previous periods and audit settlements	(0.20%)	(5.90%)	(6.60%)
Other items, net	(0.10%)	(0.10%)	0.70%
Effective tax rate	29.50%	28.20%	22.90%

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Income Taxes (Earings Before Income Taxes by Geographical Area) (Details) (USD $) In Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes
United States									$ 149,744	$ 103,771	$ 62,766
Other countries									37,823	51,104	59,710
Consolidated earnings before income taxes	$ 58,750	$ 50,855	$ 46,487	$ 31,475	$ 49,515	$ 38,052	$ 35,818	$ 31,490	$ 187,567	$ 154,875	$ 122,476

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Income Taxes (Accrued Interest and Penalties) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Income Taxes
Accrued interest and penalties	$ 1,989	$ 1,431

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Retirement Benefits (Schedule of Assumptions Used) (Details)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
United States Pension Plans of US Entity, Defined Benefit [Member]
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate	5.55%	5.85%	5.50%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate Support, Methodology and Source Data	In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding.
Rate of compensation increase	4.00%	4.00%	4.00%
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate	5.85%	5.50%	6.50%
Rate of compensation increase	4.00%	4.00%
Long-term rate of return on plan assets	7.90%	7.50%	7.50%
United Kingdom Plan, Defined Benefit [Member]
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate	5.10%	4.90%	5.40%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate Support, Methodology and Source Data	In the United Kingdom, Woodward used the iBoxx AA-rated corporate bond index (applicable for bonds over 15 years) to determine a blended rate to use as the benchmark.
Rate of compensation increase	4.30%	4.30%	4.10%
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate	4.90%	5.40%	6.90%
Rate of compensation increase	4.30%	4.10%	4.70%
Long-term rate of return on plan assets	6.00%	6.50%	6.50%
Japan Plan, Defined Benefit [Member]
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate	1.50%	1.25%	1.75%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate Support, Methodology and Source Data	In Japan, Woodward used Standard & Poors AA-rated corporate bond yields (applicable for bonds over 10 years) as the benchmark.
Rate of compensation increase	2.00%	2.00%	2.50%
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate	1.25%	1.75%	1.90%
Rate of compensation increase	2.00%	2.50%	2.00%
Long-term rate of return on plan assets	3.00%	3.30%	3.11%
Switzerland Plan, Defined Benefit [Member]
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate	2.50%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate Support, Methodology and Source Data	In Switzerland, Woodward used high quality swap rates plus a credit spread of 0.36% as high quality swaps are available in Switzerland at various durations and trade at higher volumes than bonds.
Rate of compensation increase	2.00%
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate	3.00%
Rate of compensation increase	2.00%
Long-term rate of return on plan assets	3.00%
Other Postretirement Benefit Plans, Defined Benefit [Member]
Weighted-average assumptions to determine benefit obligation at September 30:
Discount rate	5.54%	5.84%	5.50%
Weighted-average assumptions to determine periodic benefit costs for years ending September 30:
Discount rate	5.84%	5.50%	6.51%
United States Postretirement Benefit Plans of US Entity, Defined Benefit [Member]
Weighted-average assumptions to determine benefit obligation at September 30:
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate Support, Methodology and Source Data	In the U.S., Woodward used a bond portfolio matching analysis based on recently traded, non-callable bonds rated AA or better, which have at least $50 million outstanding.

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Other Liabilities (Tables)

12 Months Ended

Sep. 30, 2011

Other Liabilities

Schedule of Other Liabilities

	September 30,		September 30,
	2011		2010
Net accrued retirement benefits, less amounts recognized within accrued liabilities	$	61,994	$	66,288
Uncertain tax positions, net of offsetting benefits, less amounts recognized within accrued liabilities (Note 17)		14,078		8,720
Other		12,622		8,967
	$	88,694	$	83,975

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Other (Income) Expense, Net (Tables)

12 Months Ended

Sep. 30, 2011

Other (Income) Expense, Net

Schedule of Other (Income) Expense, Net

	Year Ending September 30,
	2011			2010			2009
Net (gain) loss on sale of assets	$	644		$	(131	)	$	(1,093	)
Rent income		(576	)		(515	)		(959	)
Net gain on investments in deferred compensation program		(31	)		(520	)		(291	)
Net (income) expense recognized in earnings on foreign currency derivatives (Note 6)		1,612			(681	)		173
Other		(61	)		56			(271	)
	$	1,588		$	(1,791	)	$	(2,441	)

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Operations and summary of significant accounting policies (Narrative) (Details) (USD $)	3 Months Ended		12 Months Ended
	Sep. 30, 2011	Jun. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Basis of Presentation
Selling, general, and administrative expenses include net foreign currency transaction gains (losses)			$ 575,000	$ 425,000	$ 251,000
Disclosure of Change of Date for Annual Goodwill Impairment Test			Woodward changed the annual testing date for its goodwill impairment test from March 31 to July 31.
Goodwill, Impairment Loss	0		0	0	0
Asset Impairment Charges			0	0	0
Amount of noncontrolling interest purchased by the Company		26.00%
Purchase of noncontrolling interest		$ 8,120,000	$ 0	$ 8,120,000	$ 0
Ownership percentage in Woodward Governor India Limited after purchase of minority interest	100.00%		100.00%

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Segment Information (External Net Sales by Geographical Area) (Details) (USD $) In Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
External net sales, United States									$ 874,791	$ 797,826	$ 730,545
Consolidated external net sales	489,294	438,467	418,866	365,075	412,003	356,367	349,352	339,308	1,711,702	1,457,030	1,430,125
Europe [Member]
External net sales, foreign countries									473,054	377,094	406,910
Asia [Member]
External net sales, foreign countries									264,493	191,761	188,958
All Other Countries [Member]
External net sales, foreign countries									$ 99,364	$ 90,349	$ 103,712

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Supplemental Statements of Cash Flows Information (Tables)

12 Months Ended

Sep. 30, 2011

Supplemental Statements of Cash Flows Information

Schedule of Cash Flow Supplemental Disclosures

	Year Ending September 30,
	2011		2010		2009
Interest paid, net of amounts capitalized	$	26,140	$	28,317	$	20,479
Income taxes paid		50,360		41,533		21,875
Income tax refunds received		9,496		10,867		2,825
Non-cash activities:
Long-term debt assumed in business acquisition		—		—		18,610
Purchases of property, plant and equipment on account		6,333		2,270		3,880
Sales of assets on account		—		—		760
Equity investment funded by transfer of property, plant and equipment		—		—		165
Cashless exercise of stock options		1,982		4,190		—
Settlement of receivable through purchase of treasury shares in connection with the cashless exercise of stock options		881		—		—
Reduction of accounts receivable and short-term borrowing due to the settlement of accounts receivable previously sold with recourse		3,228		—		—
Reduction of accounts payable due to the assignment of accounts receivable with recourse		570		—		—
Reduction to goodwill due to favorable resolution of lease termination recorded in restructuring reserve		103		—		—
Payment of director fees through issuance of treasury stock		52		—		—