Income Taxes (Tables)

12 Months Ended

Sep. 30, 2021

Components of Income Tax Expense (Benefit)

Income taxes consisted of the following:

	Year Ended September 30,
	2021			2020			2019
Current:
Federal	$	15,109		$	15,976		$	40,173
State		853			1,383			2,402
Foreign		34,354			22,588			34,660
Deferred:
Federal		(8,369	)		10,784			(2,015	)
State		(2,658	)		(547	)		(2,948	)
Foreign		(2,139	)		(8,698	)		(11,262	)
	$	37,150		$	41,486		$	61,010

Earnings Before Income Taxes by Geographical Area

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

	Year Ended September 30,
	2021		2020		2019
United States	$	136,280	$	180,753	$	211,267
Other countries		109,519		101,128		109,345
	$	245,799	$	281,881	$	320,612

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, 2021			September 30, 2020
Deferred tax assets:
Defined benefit plans, other postretirement	$	5,364		$	6,238
Foreign net operating loss carryforwards		2,110			6,106
Inventory		51,011			53,867
Stock-based and other compensation		36,343			35,919
Defined benefit plans, pension		—			5,624
Deferred revenue net of unbilled receivables		46,002			39,990
Other reserves		10,619			10,119
Tax credits and incentives		22,756			14,340
Lease obligations		5,818			5,764
Other		7,936			9,223
Valuation allowance		(4,138	)		(1,833	)
Total deferred tax assets, net of valuation allowance		183,821			185,357
Deferred tax liabilities:
Goodwill and intangibles - net		(210,911	)		(218,900	)
Property, plant and equipment		(105,724	)		(107,862	)
Right of use assets		(5,497	)		(4,837	)
Defined benefit plans, pension		(2,837	)		—
Other		(2,722	)		(2,673	)
Total deferred tax liabilities		(327,691	)		(334,272	)
Net deferred tax liabilities	$	(143,870	)	$	(148,915	)

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, 2021, September 30, 2020 and September 30, 2019 to Woodward’s effective income tax rate:

	Year Ending September 30,
	2021			2020			2019
Percent of pretax earnings
Statutory tax rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal tax benefit		(0.5	)		0.3			(0.1	)
Taxes on international activities		(0.1	)		(2.1	)		0.2
Research credit		(3.1	)		(3.6	)		(3.3	)
Net excess income tax benefit from stock-based compensation		(4.2	)		(2.8	)		(3.5	)
Adjustments of prior period tax items		0.4			1.0			0.9
Compensation and benefits		0.5			0.4			0.3
Transition Tax		—			—			3.3
Other items, net		1.1			0.5			0.2
Effective tax rate		15.1	%		14.7	%		19.0	%

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,
	2021			2020			2019
Beginning balance	$	9,851		$	10,305		$	8,364
Additions to current year tax positions		2,289			1,890			1,930
Reductions to prior year tax positions		—			(2,415	)		—
Additions to prior year tax positions		3,166			71			11
Lapse of applicable statute of limitations		(107	)		—			—
Ending balance	$	15,199		$	9,851		$	10,305