v3.26.1
Financial Instruments and Fair Value Measurements
 9 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Financial Instruments and Fair Value Measurements

Note 7. Financial instruments and fair value measurements

The table below presents information about Woodward’s financial assets and liabilities 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.

 

 

At June 30, 2026

 

 

At September 30, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in money markets and depository accounts

 

$

16,220

 

 

$

—

 

 

$

—

 

 

$

16,220

 

 

$

30,256

 

 

$

—

 

 

$

—

 

 

$

30,256

 

Equity securities

 

 

43,526

 

 

 

—

 

 

 

—

 

 

 

43,526

 

 

 

37,846

 

 

 

—

 

 

 

—

 

 

 

37,846

 

Total financial assets

 

$

59,746

 

 

$

—

 

 

$

—

 

 

$

59,746

 

 

$

68,102

 

 

$

—

 

 

$

—

 

 

$

68,102

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cross-currency interest rate swaps

 

$

—

 

 

$

18,376

 

 

$

—

 

 

$

18,376

 

 

$

—

 

 

$

27,406

 

 

$

—

 

 

$

27,406

 

Total financial liabilities

 

$

—

 

 

$

18,376

 

 

$

—

 

 

$

18,376

 

 

$

—

 

 

$

27,406

 

 

$

—

 

 

$

27,406

 

Investments in money markets and depository accounts: The Company sometimes invests excess cash in various highly liquid financial instruments that Woodward believes are with creditworthy financial institutions. Such investments are reported in “Cash and cash equivalents” at fair value, with realized gains from interest income recognized in earnings. The carrying value of Woodward’s investments in money markets and depository accounts are considered equal to the fair value given the highly liquid nature of the investments.

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 “Other income, net” on the Condensed Consolidated Statements of Earnings. The trading securities are included in “Other assets” in the Condensed Consolidated Balance Sheets. 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.

Cross-currency interest rate swaps: Woodward holds cross-currency interest rate swaps, which are accounted for at fair value. The swaps in an asset position are included in “Other current assets” and “Other assets,” and swaps in a liability position are included in “Accrued liabilities” and “Other liabilities” in the Condensed Consolidated Balance Sheets. The fair values of Woodward’s cross-currency interest rate swaps are determined using a market approach that is based on observable inputs other than quoted market prices, including contract terms, interest rates, currency rates, and other market factors.

Cash, trade accounts receivable, accounts payable, and short-term borrowings are not remeasured to fair value, as the carrying cost of each approximates its respective fair value.

The estimated fair values and carrying costs of other financial instruments that are not required to be remeasured at fair value in the Condensed Consolidated Balance Sheets were as follows:

 

 

 

 

At June 30, 2026

 

 

At September 30, 2025

 

 

 

Fair Value
Hierarchy
Level

 

Estimated
Fair Value

 

 

Carrying
Cost

 

 

Estimated
Fair Value

 

 

Carrying
Cost

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes receivable from municipalities

 

2

 

$

5,186

 

 

$

5,105

 

 

$

5,444

 

 

$

5,392

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

2

 

 

734,915

 

 

 

750,014

 

 

 

566,582

 

 

 

580,547

 

In connection with certain economic incentives related to Woodward’s development of a second campus in the greater Rockford, Illinois area for its Aerospace segment and Woodward’s development of its corporate headquarters in Fort Collins, Colorado, Woodward received long-term notes from municipalities within the states of Illinois and Colorado. The fair value of the long-term notes was estimated based on a model that discounted future principal and interest payments received at an interest rate available to Woodward at the end of the period for similarly rated municipal notes of similar maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy. The interest rates used to estimate the fair value of the long-term notes were 3.1% at June 30, 2026 and 3.0% at September 30, 2025.

The fair value of long-term debt 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, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy. The weighted-average interest rates used to estimate the fair value of long-term debt were 4.5% at June 30, 2026 and 4.2% at September 30, 2025.

Woodward does not have expected credit losses related to any financial assets that are not required to be remeasured at fair value.