Segment Information

12 Months Ended

Sep. 30, 2014

Segment Information

Segment Information

Note 20.  Segment information

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

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

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

	Year Ended September 30,
	2014		2013		2012
Segment external net sales:
Aerospace	$	1,084,025	$	1,061,477	$	896,083
Energy		917,215		874,499		969,544
Total consolidated net sales	$	2,001,240	$	1,935,976	$	1,865,627
Segment earnings:
Aerospace	$	159,200	$	166,122	$	130,192
Energy		134,278		98,940		126,441
Total segment earnings		293,478		265,062		256,633
Nonsegment expenses		(43,701)		(39,061)		(33,365)
Interest expense, net		(22,533)		(26,430)		(25,461)
Consolidated earnings before income taxes	$	227,244	$	199,571	$	197,807

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

	Year Ended September 30,
	2014		2013		2012
Segment assets:
Aerospace	$	1,440,355	$	1,361,861	$	1,059,754
Energy		610,345		599,007		605,842
Total segment assets		2,050,700		1,960,868		1,665,596
Unallocated corporate property, plant and equipment, net		72,992		50,115		15,763
Other unallocated assets		273,510		207,535		178,605
Consolidated total assets	$	2,397,202	$	2,218,518	$	1,859,964
Segment depreciation and amortization:
Aerospace	$	46,895	$	49,887	$	43,840
Energy		22,672		20,890		21,738
Total segment depreciation and amortization		69,567		70,777		65,578
Unallocated corporate amounts		7,786		3,456		3,039
Consolidated depreciation and amortization	$	77,353	$	74,233	$	68,617
Segment capital expenditures:
Aerospace	$	134,307	$	74,964	$	32,244
Energy		55,780		28,137		22,590
Total segment capital expenditures		190,087		103,101		54,834
Unallocated corporate amounts		17,019		38,499		10,066
Consolidated capital expenditures	$	207,106	$	141,600	$	64,900

Sales to General Electric were made by all of Woodward’s reportable segments and totaled approximately 15% of net sales in fiscal year 2014, 15% of net sales in fiscal year 2013, and 14% of net sales in fiscal year 2012.  Accounts receivable from General Electric totaled approximately 12% of accounts receivable at September 30, 2014 and 11% of accounts receivable at September 30, 2013.

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

	Direct U.S. Government Sales		Indirect U.S. Government Sales		Total U.S. Government Related Sales
Fiscal year ended September 30, 2014
Aerospace	$	76,982	$	254,806	$	331,788
Energy		2,517		5,588		8,105
Total net external sales	$	79,499	$	260,394	$	339,893
Percentage of total net sales		4%		13%		17%
Fiscal year ended September 30, 2013
Aerospace	$	104,410	$	289,197	$	393,607
Energy		3,649		8,106		11,755
Total net external sales	$	108,059	$	297,303	$	405,362
Percentage of total net sales		6%		15%		21%
Fiscal year ended September 30, 2012
Aerospace	$	78,075	$	254,636	$	332,711
Energy		3,904		7,228		11,132
Total net external sales	$	81,979	$	261,864	$	343,843
Percentage of total net sales		4%		14%		18%

Accounts receivable from the U.S. Government totaled approximately 2% of accounts receivable at September 30, 2014 and 4% of accounts receivable at September 30, 2013.

The customers who account for approximately 10% or more of sales to each of Woodward’s reporting segments for the fiscal year ended September 30, 2014 follow:

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

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

	Year Ended September 30,
	2014		2013		2012
United States	$	1,025,149	$	1,058,912	$	927,345
Europe (1)		519,721		480,922		542,753
Asia		299,755		287,742		288,738
Other countries		156,615		108,400		106,791
Consolidated net sales	$	2,001,240	$	1,935,976	$	1,865,627

(1) As a percentage of consolidated net sales, net sales to customers in Germany accounted for 9% for the year ended September 30, 2014, 9% for the year ended September 30, 2013 and 13% for the year ended September 30, 2012.

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

	At September 30,
	2014		2013
United States	$	457,563	$	285,038
Germany		26,898		29,619
Other countries		28,818		35,391
Consolidated property, plant and equipment, net	$	513,279	$	350,048