Financial Analysis

Note 22. Commitments and contingencies Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations and/or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, workers compensation claims, contractual disputes, product warranty claims, and alleged violations of various laws and regulations. Woodward accrues for known individual matters using estimates of the most likely amount of loss where it believes that it is probable the matter will result in a loss when ultimately resolved and such loss is reasonably estimable. Legal costs are expensed as incurred and are classified in Selling, general and administrative expenses on the Condensed Consolidated Statements of Earnings. Woodward is partially self-insured in the United States for healthcare and workers compensation up to predetermined amounts, above which third-party insurance applies. Management regularly reviews the probable outcome of related claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities. While the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings, and investigations will not have a material effect on …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Note 15. Credit facilities, short-term borrowings, and long-term debt As of June 30, 2026, Woodwards short-term borrowings and availability under its various short-term credit facilities were as follows: Total availability Outstanding letters of credit and guarantees Banker acceptance notes issued Outstanding borrowings Remaining availability Revolving credit facility $ 1,000,000 $ ( 7,964 ) $ $ ( 592,426 ) $ 399,610 Foreign lines of credit and overdraft facilities 25,600 ( 45 ) 25,555 Foreign performance guarantee facilities 33 33 $ 1,025,633 $ ( 8,009 ) $ $ ( 592,426 ) $ 425,198 Revolving credit facility As of May 27, 2026, Woodward maintained a revolving credit agreement dated as of October 21, 2022 (the Second Amended and Restated Revolving Credit Agreement). On May 28, 2026 Woodward amended the Second Amended and Restated Revolving Credit Agreement (such amended agreement, the ""Third Amended and Restated Revolving Credit Agreement"") to, among other things continue the commitments of the lenders thereunder to make revolving loans in an aggregate principal amount of up to $ 1,000,000 and extend the termination date of the revolving loan commitments of all the lenders from October 21, 2027 to May 28, 2031. Woodward is a party to the Third Amended and Restated Revolving Credit Agreement with certain foreign subsidiaries party thereto from time to time as borrowers, a syndicate of lenders, and Wells Fargo Bank, National Association, as administrative agent. Pursuant to the …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Revenue by primary market for the Aerospace reportable segment was as follows: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Commercial OEM $ 234,398 $ 175,226 $ 640,352 $ 496,763 Commercial services 267,849 215,451 788,129 581,162 Defense OEM 140,725 150,358 429,890 401,068 Defense services 65,701 54,955 188,520 172,608 Total Aerospace segment net sales $ 708,673 $ 595,990 $ 2,046,891 $ 1,651,601 Revenue by primary market for the Industrial reportable segment was as follows: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Power generation $ 144,675 $ 122,070 $ 403,385 $ 363,560 Transportation 180,155 128,942 523,377 368,303 Oil and gas 76,202 68,444 223,074 188,336 Total Industrial segment net sales $ 401,032 $ 319,456 $ 1,149,836 $ 920,199 Based on changes in market dynamics, the Company has refined its Industrial end market presentation to better align certain sales within power generation, transportation, and oil and gas. Accordingly, sales for the three and nine months ended June 30, 2025 have been reclassified for comparability. The reclassification had no impact on total Industrial segment net sales or the Company's financial results. T he customers who each account for approximately 10% or more of net sales of each of Woodwards reportable segments were as follows: Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Aerospace RTX Corporation, GE Aerospace, The Boeing Company RTX Corporation, GE Aeros …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Note 7. Financial instruments and fair value measurements The table below presents information about Woodwards 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 Woodwards 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 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 19. Income taxes The determination of the estimated annual effective tax rate is based upon a number of significant estimates and judgments. In addition, as a global commercial enterprise, Woodwards tax expense can be impacted by changes in tax rates, tax laws, the finalization of tax audits and reviews, changes in the estimate of the amount of undistributed foreign earnings that Woodward considers indefinitely reinvested, issuance of future guidance, interpretation, and rule-making, and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions. The following table sets forth the tax expense and the effective tax rate for Woodwards earnings before income taxes: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Earnings before income taxes $ 193,512 $ 126,836 $ 530,090 $ 361,653 Income tax expense 46,837 18,388 115,683 57,165 Effective tax rate 24.2 % 14.5 % 21.8 % 15.8 % The increases in the effective tax rates for the three months ended June 30, 2026 and the nine months ended June 30, 2026 compared to the same periods of the prior fiscal year were primarily attributable to the current year elimination of the U.S. intangible income tax benefit due to the one-time reversal of research costs previously capitalized, an increase in U.S. taxes on foreign earnings, a decrease in the tax benefit from stock-based compensation, a reduction to the U.S. Federal Research and Development Cred …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 20. Retirement benefits Woodward provides various retirement benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits, and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on member location. Woodward's U.S. employees receive an annual contribution of Woodward stock, equal to 5 % of their eligible prior year wages, to their personal Woodward Retirement Saving Plan accounts. Woodward fulfilled its annual Woodward stock contribution obligation using shares held in treasury stock by issuing a total of 78 shares of common stock for a value of $ 29,813 in the second quarter of fiscal year 2026, compared to a total of 126 shares of common stock for a value of $ 24,058 in the second quarter of fiscal year 2025. Defined contribution plans Most of the Companys U.S. members are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows members to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes matching contributions to eligible member accounts, which are also deferred for member personal income tax purposes. Certain non-U.S. members are also eligible to participate in similar non-U.S. plans. T he amount of expense associated with defined contribution plans was as follows: Three Months E …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Note 3. Revenue The amount of revenue recognized as point in time or over time was as follows: Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Aerospace Industrial Consolidated Aerospace Industrial Consolidated Point in time $ 313,537 $ 240,202 $ 553,739 $ 235,566 $ 182,698 $ 418,264 Over time 395,136 160,830 555,966 360,424 136,758 497,182 Total net sales $ 708,673 $ 401,032 $ 1,109,705 $ 595,990 $ 319,456 $ 915,446 Nine Months Ended June 30, 2026 Nine Months Ended June 30, 2025 Aerospace Industrial Consolidated Aerospace Industrial Consolidated Point in time $ 845,737 $ 675,244 $ 1,520,981 $ 650,576 $ 516,567 $ 1,167,143 Over time 1,201,154 474,592 1,675,746 1,001,025 403,632 1,404,657 Total net sales $ 2,046,891 $ 1,149,836 $ 3,196,727 $ 1,651,601 $ 920,199 $ 2,571,800 Accounts Receivable Accounts receivable consisted of the following: June 30, 2026 September 30, 2025 Billed receivables Trade accounts receivable $ 617,905 $ 477,217 Other (Chinese financial institutions) 104 Total billed receivables 617,905 477,321 Current unbilled receivables (contract assets) 409,588 363,520 Total accounts receivable 1,027,493 840,841 Less: Allowance for uncollectible amounts ( 15,012 ) ( 9,725 ) Total accounts receivable, net $ 1,012,481 $ 831,116 As of June 30, 2026, Other assets on the Condensed Consolidated Balance Sheets included $ 15,820 of unbilled receivables not expected to be invoiced and collected within a period of 12 months, compared to $ 10,963 as of Septem …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 23. Segment information Woodwards segments are composed of similar product groupings that serve the same or similar end markets. Based on this approach, Woodward has two reportable segments that are also its operating segments: Aerospace and Industrial, as described below in further detail. Woodward uses segment information internally to manage its business, including the assessment of segment performance and decisions for the allocation of resources between segments. Our Aerospace segment designs, manufactures, and services systems and products for the management of fuel, air, combustion, and motion control. These products include fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles, as well as flight deck controls, actuators, servocontrols, motors, and sensors for aircraft. These products are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems. Our Industrial segment designs, produces, and services systems and products for the management of energy in the form of fuel, air, fluids, gases, motion, combustion, and electricity. These products include actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, control systems, electronics and software, and sensors. Our products are used on industrial gas turbines (including heavy frame, aeroderivative, …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing