Income Taxes (Tables)

12 Months Ended

Sep. 30, 2022

Components of Income Tax Expense (Benefit)

Income taxes consisted of the following:

	Year Ended September 30,
	2022			2021			2020
Current:
Federal	$	21,869		$	15,109		$	15,976
State		2,310			853			1,383
Foreign		27,577			34,354			22,588
Deferred:
Federal		(13,216	)		(8,369	)		10,784
State		(8,623	)		(2,658	)		(547	)
Foreign		(1,717	)		(2,139	)		(8,698	)
	$	28,200		$	37,150		$	41,486

Earnings Before Income Taxes by Geographical Area

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

	Year Ended September 30,
	2022		2021		2020
United States	$	99,427	$	136,280	$	180,753
Other countries		100,471		109,519		101,128
	$	199,898	$	245,799	$	281,881

Schedule of Deferred Tax Assets and Liabilities

Significant components of deferred income taxes presented in the Consolidated Balance Sheets are related to the following:

	September 30, 2022			September 30, 2021
Deferred tax assets:
Defined benefit plans, other postretirement	$	4,144		$	5,364
Foreign net operating loss carryforwards		3,449			2,110
Inventory		57,102			51,011
Stock-based and other compensation		42,428			36,343
Deferred revenue net of unbilled receivables		49,491			46,002
Other reserves		8,017			10,619
Tax credits and incentives		25,623			22,756
Lease obligations		7,150			5,818
Other		3,402			7,936
Valuation allowance		(2,537	)		(4,138	)
Total deferred tax assets, net of valuation allowance		198,269			183,821
Deferred tax liabilities:
Goodwill and intangibles - net		(187,988	)		(210,911	)
Property, plant and equipment		(100,215	)		(105,724	)
Right of use assets		(7,013	)		(5,497	)
Defined benefit plans, pension		(3,969	)		(2,837	)
Other		(2,832	)		(2,722	)
Total deferred tax liabilities		(302,017	)		(327,691	)
Net deferred tax liabilities	$	(103,748	)	$	(143,870	)

Reconciliation of U.S. Statutory Tax Rate to Effective Tax Rate

The following is a reconciliation of the U.S. Federal statutory tax 21% in the fiscal years ended September 30, 2022, September 30, 2021 and September 30, 2020 to Woodward’s effective income tax rate:

	Year Ending September 30,
	2022			2021			2020
Percent of pretax earnings
Statutory tax rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal tax benefit		(2.5	)		(0.5	)		0.3
Taxes on international activities		0.8			(0.1	)		(2.1	)
Research credit		(4.5	)		(3.1	)		(3.6	)
Net excess income tax benefit from stock-based compensation		(2.5	)		(4.2	)		(2.8	)
Adjustments of prior period tax items		—			0.4			1.0
Compensation and benefits		0.3			0.5			0.4
Other items, net		1.5			1.1			0.5
Effective tax rate		14.1	%		15.1	%		14.7	%

Reconciliation of the Beginning and Ending Amounts of Gross Unrecognized Tax Benefits

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

	Year Ending September 30,
	2022			2021			2020
Beginning balance	$	15,199		$	9,851		$	10,305
Additions to current year tax positions		1,783			2,289			1,890
Reductions to prior year tax positions		(963	)		—			(2,415	)
Additions to prior year tax positions		112			3,166			71
Lapse of applicable statute of limitations		(4,193	)		(107	)		—
Ending balance	$	11,938		$	15,199		$	9,851