Note 16. Accrued liabilities

Product warranties and related liabilities

Provisions of Woodward’s sales agreements include product warranties customary to these types of agreements. Accruals are established for specifically identified warranty issues and related liabilities that are probable to result in future costs. Warranty costs are accrued as revenue is recognized on a non-specific basis whenever past experience indicates a normal and predictable pattern exists.

Restructuring charges

On January 12, 2026, the Company approved a plan to wind-down its on-highway natural gas truck manufacturing operations in China (the “China OH Business”). This decision follows prior unsuccessful efforts to divest the China OH Business and is a strategic step to align the Industrial segment portfolio with priority end-markets and long-term growth opportunities. In connection with this action, the Company has incurred restructuring charges of $14,206 in the nine months ended June 30, 2026 related to severance, equipment relocation, accelerated depreciation, and inventory write-offs. We do not expect to incur any additional significant charges in the remainder of fiscal year 2026, as the wind-down is expected to be substantially completed. All of the restructuring charges recorded during fiscal year 2026 were recorded as nonsegment expenses and are expected to be paid within twelve months.

On March 31, 2026, the Company announced a plan to relocate the servo valve production line from the Santa Clarita facility in California to the Rockford facility in Illinois, following an ongoing operational review (the "Servo valve transition"). The decision was based on sustained performance issues at the Santa Clarita facility, including recurring quality deficiencies, elevated cost of poor quality, and excess inventory, as compared with stronger performance at the Rockford facility in

delivery, quality, and first-pass yield. In connection with this action, the Company has incurred $1,873 of restructuring related charges in the nine months ended June 30, 2026. In addition to the restructuring charges recognized in the first nine months of fiscal year 2026, the Company anticipates incurring additional costs associated with the transition such as expenses associated with equipment relocation, accelerated depreciation, and inventory write-offs over the coming year. The Company anticipates these additional expenses, which are expected to be approximately $15,000 in total, will be substantially complete by the end of calendar year 2027. All of the restructuring charges recorded during fiscal year 2026 were recorded as nonsegment expenses and are expected to be paid within twelve months.