8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A
(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 8, 2009

WOODWARD GOVERNOR COMPANY
(Exact name of registrant as specified in its charter)

Delaware	0-8408	36-1984010
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1000 E. Drake Road Fort Collins, Colorado	80525
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (970) 482-5811

Not Applicable

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

This Amendment No. 1 to Current Report on Form 8-K/A (“Amendment”) is being filed by Woodward Governor Company (the “Company”) solely for the purpose of amending and supplementing Item 9.01 of that certain Current Report on Form 8-K originally filed by the Company with the Securities and Exchange Commission (“SEC”) on April 8, 2009 (the “Original Form 8-K”) in connection with the acquisition by the Company from Textron Inc. (the “U.S. Seller”) of all of the outstanding shares of stock of Woodward HRT, Inc. (formerly known as HR Textron Inc.) (“HRT”) and the acquisition by Woodward (U.K.) Limited, a wholly owned subsidiary of the Company (the “U.K. Purchaser” and, together with the Company, “Woodward”) from Textron Limited (the “U.K. Seller”) of substantially all of the assets and certain liabilities related to the U.K. Seller’s HRT business (together, “HR Textron”) pursuant to the terms of the definite purchase and sale agreement (the “Purchase Agreement”), dated February 27, 2009, by and among the Company, the U.K. Purchaser, the U.S. Seller and the U.K. Seller. The acquisition by Woodward of HR Textron closed on April 3, 2009. As indicated in the Original Form 8-K, this Amendment is being filed to provide the information required by Item 9.01(a) and (b) of Form 8-K, which was not previously filed with the Original Form 8-K, and is permitted to be filed by amendment no later than 71 calendar days after the date the Original Form 8-K was required to be filed with the SEC.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The following financial statements of HRT are being filed as exhibits to this amendment and are incorporated by reference herein:

Exhibit 99.1 – HRT’s audited combined financial statements, including the report of independent registered public accounting firm, as of and for the year ended December 31, 2008.

(b) Pro forma financial information.

The following pro forma financial information is being filed as an exhibit to this amendment and is incorporated by reference herein:

Exhibit 99.2 – Unaudited pro-forma condensed combined financial statements and explanatory notes for Woodward, after giving effect to the acquisition of HRT and adjustments described in such pro forma financial information.

(d) Exhibits.

The following exhibits are filed as part of this Current Report on Form 8-K/A.

Exhibit No.	Description
10.1	Purchase and Sale Agreement, dated February 27, 2009, by and among Textron Inc., Textron Limited, Woodward Governor Company and Woodward (U.K.) Limited (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on March 4, 2009).
23.1	Consent of Ernst & Young, LLP, Independent Registered Public Accounting Firm.
99.1	HRT’s audited combined financial statements, including the report of independent registered public accounting firm, as of and for the year ended December 31, 2008.
99.2	Unaudited pro-forma condensed combined financial statements and explanatory notes for Woodward, after giving effect to the acquisition of HRT and adjustments described in such pro forma financial information.

Forward-Looking Statements

Information in this Current Report on Form 8-K/A, together with the exhibits attached hereto, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties including, but not limited to, statements regarding the integration of HRT and Woodward; the integration of MPC Product Corporation (“MPC”) and Woodward; the expected benefits and costs of the HRT and MPC acquisitions; Woodward’s plans relating to the acquisitions; the future financial and accounting impact of the acquisitions; and any statements of expectation or belief or assumptions underlying any of the foregoing. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to, the possibility that the expected costs and benefits of the acquisitions may not materialize as expected; the failure of Woodward to successfully integrate the HRT and MPC businesses or realize synergies; conditions in the capital and financial markets generally; general economic conditions and other risk factors and other risks that are described in Woodward’s Annual Report on Form 10-K for the year ended September 30, 2008 and Woodward’s quarterly report on Form 10-Q for the periods ended December 31, 2008 and March 31, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Woodward Governor Company

Date: June 15, 2009

By: /s/ A. Christopher Fawzy
       Name: A. Christopher Fawzy
       Title: Vice President, General Counsel, and
                 Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
10.1	Purchase and Sale Agreement, dated February 27, 2009, by and among Textron Inc., Textron Limited, Woodward Governor Company and Woodward (U.K.) Limited (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on March 4, 2009).
23.1	Consent of Ernst & Young, LLP, Independent Registered Public Accounting Firm.
99.1	HRT’s audited combined financial statements, including the report of independent registered public accounting firm, as of and for the year ended December 31, 2008.
99.2	Unaudited pro-forma condensed combined financial statements and explanatory notes for Woodward, after giving effect to the acquisition of HRT and adjustments described in such pro forma financial information.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Nos. 333-133640, 333-112521, 333-82302, 333-66422, 333-10409) on Form S-8 of our report dated March 13, 2009, with respect to the combined financial statements of HR Textron (a wholly owned business unit of Textron Inc.) as of and for the year ended December 31, 2008, included in this Current Report on Form 8-K/A of the Woodward Governor Company.

/s/ Ernst & Young, LLP

Boston, Massachusetts
June 11, 2009

EX-99.1

Exhibit 99.1

Audited Combined Financial
Statements

HR Textron
For the Period Ended December 31, 2008

HR Textron

Audited Combined Financial Statements

For the Period Ended December 31, 2008

Contents

Report of Independent Registered Public Accounting Firm	1
Audited Combined Financial Statements
Combined Balance Sheet	2
Combined Statement of Operations	3
Combined Statement of Changes in Net Worth	4
Combined Statement of Cash Flows	5
Notes to Combined Financial Statements	7

Report of Independent Registered Public Accounting Firm

The Management of Textron Inc.

We have audited the accompanying combined balance sheet of HR Textron (a wholly owned business unit of Textron Inc., as described in Note 1)(the Business), as of December 31, 2008, and the related combined statements of operations, changes in net worth, and cash flows for the period from December 30, 2007 to December 31, 2008. These financial statements are the responsibility of the Business’ management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Business’ internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Business’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of HR Textron at December 31, 2008, and the combined results of its operations and its cash flows for the period from December 30, 2007 to December 31, 2008, in conformity with US generally accepted accounting principles.

March 13, 2009

1

HR Textron

Combined Balance Sheet

	December 31
	2008
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	12
Accounts receivable, net of allowance for doubtful accounts of $100		30,043
Related party receivables		3,884
Inventories		69,065
Deferred income taxes		6,679
Other current assets		942
Total current assets		110,625
Property, plant, and equipment, net		26,539
Goodwill		33,314
Other assets		15
Total assets	$	170,493
Liabilities and net worth
Current liabilities:
Accounts payable	$	15,991
Related party payables		32
Customer deposits		951
Salaries, wages, and employee taxes		4,030
Reserve for price redeterminations		2,843
Reserve for loss contracts		1,550
Other current liabilities		4,039
Total current liabilities		29,436
Other postretirement benefits		2,119
Workers’ compensation insurance reserves		2,299
Other long-term liabilities		2,473
Total liabilities		36,327
Commitments and contingencies
Net worth:
Accumulated net investment and earnings		134,758
Accumulated other comprehensive loss		(592	)
Total net worth		134,166
Total liabilities and net worth	$	170,493

See notes to combined financial statements.

2

HR Textron

Combined Statement of Operations

	December 30
	2007 to
	December 31
	2008
	(In thousands)
Revenues	$	261,025
Cost, expenses, and other
Costs of sales		185,897
Research and development		13,540
Selling and administrative		32,310
Other expense		254
Total costs, expenses, and other		232,001
Income before income taxes		29,024
Income taxes		10,820
Net income	$	18,204

See notes to combined financial statements.

3

HR Textron

Combined Statement of Changes in Net Worth

	Accumulated		Accumulated
	Net		Other
	Investment		Comprehensive			Total Net		Comprehensive
	And Earnings		Loss			Worth		Income
	(In thousands)
Balance at December 29, 2007	$	113,597	$	(857	)	$	112,740
Net income		18,204		—			18,204	$	18,204
Postretirement benefit adjustments, net of income taxes of $384		—		265			265		265
Net transfers to Textron		2,957		—			2,957		—
Balance at December 31, 2008	$	134,758	$	(592	)	$	134,166	$	18,469

See notes to combined financial statements.

4

HR Textron

Combined Statement of Cash Flows

For the Period from December 30, 2007 to December 31, 2008

	December 30
	2007 to
	December 31
	2008
	(In thousands)
Operating activities
Net income	$	18,204
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,930
Loss on disposal of property, plant, and equipment		57
Stock-based compensation		204
Deferred income taxes		(647	)
Changes in assets and liabilities:
Accounts receivable		1,312
Related party receivables		(1,600	)
Inventories		(9,572	)
Other current and non-current assets		(395	)
Accounts payable		(2,435	)
Related party payables		76
Customer deposits		(300	)
Other current and non-current liabilities		(304	)
Net cash provided by operating activities		7,530
Investing activities
Capital expenditures		(5,136	)
Net cash used in investing activities		(5,136	)
Financing activities
Net transfers to Textron		(2,600	)
Net cash used in financing activities		(2,600	)

5

HR Textron

Combined Statement of Cash Flows (continued)

	December 30
	2007 to
	December 31
	2008
	(In thousands)
Effect of exchange rate changes on cash and cash equivalents	$	(16	)
Net decrease in cash and cash equivalents		(222	)
Cash and cash equivalents at beginning of period		234
Cash and cash equivalents at end of period	$	12
Supplemental cash flow information
Cash paid during the period for:
Interest	$	—
Income taxes	$	—

See notes to combined financial statements.

6

HR Textron

Notes to Combined Financial Statements

For the Period Ended December 31, 2008
(In Thousands)

1. Summary of Significant Accounting Policies

Nature of Operations

HR Textron (HRT or the Business) is a wholly owned business unit of Textron Inc. (Textron), consisting of HR Textron Inc. and Cadillac Gage Textron Inc., both of which operate in Santa Clarita, California, and HR Textron – United Kingdom. HRT is an operating unit of Textron Systems, which is a segment of Textron Inc. HRT manufactures and sells aircraft and missile control actuators, valves, and related components, primarily to contractors as part of agreements with the United States Government, and also to commercial customers. HRT operates in five product lines: Precision Weapons Controls, Aircraft Controls, Servo Valves, Turret Controls, and Fuel and Pneumatics.

Basis of Presentation

The combined financial statements include the assets, liabilities, and results of operations attributable to HRT, including costs incurred by Textron’s shared services that are attributable to HRT’s operations. Central operating costs are allocated on the basis of direct usage or another reasonable basis when direct usage is not identifiable. See Note 2 for further discussion.

All significant transactions between HRT and other Textron businesses are included in these combined financial statements. The net amount of non-trade receivable from or payable to Textron is included in the combined balance sheet as a component of net worth. There are no terms of settlement or interest charges associated with the non-trade account balances. The net non-trade balance is primarily the result of HRT’s participation in Textron’s central cash management program, wherein all of HRT’s cash receipts in North America and Europe are pooled with those from other Textron businesses, and all cash disbursements are funded by Textron. All transactions with Textron are considered to be effectively settled for cash in the combined statement of cash flows at the time the transaction is recorded. Sales to Textron affiliates of $25,781, during the period from December 30, 2007 to December 31, 2008, are recorded on terms and provide margins similar to those with third parties. The financial information included herein may not reflect the operating results, financial position, and cash flows of HRT in the future, or had HRT been a separate, stand-alone entity for the periods presented.

7

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

1. Summary of Significant Accounting Policies (continued)

Use of Estimates

The combined financial statements have been prepared on the basis of accounting principles generally accepted in the United States (US GAAP). The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Some of the more significant estimates include the portion of costs incurred by Textron allocated to HRT, inventory valuation, allowance for losses on receivables, workers’ compensation accruals, actuarial assumptions for postretirement plans, warranty, and environmental reserves. Management’s estimates are based on the facts and circumstances available at the time estimates are made, historical experience, risk of loss, general economic conditions and trends, and management’s assessments of the probable future outcomes of these matters. Actual results could differ from such estimates. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the statement of operations in the period they are determined.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and short-term, highly liquid investments with original maturities of three months or less.

Revenue Recognition

Revenue is generally recognized when products are delivered or services are performed. All shipping and handling costs are expensed as incurred and, recorded in cost of sales in the combined statement of operations.

Accounting for Contract Costs

HRT accounts for contract costs using the guidance provided in Emerging Issues Task Force (EITF) Issue 99-5, Accounting for Pre-Production Costs Related to Long-Term Supply Arrangements. EITF Issue 99-5 addresses whether design and development costs related to long-term supply arrangements should be expensed or capitalized. HRT primarily produces goods to customers’ specifications.

8

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

1. Summary of Significant Accounting Policies (continued)

All pre-production costs to design, develop, and test prototypes, in excess of buyer’s funding, are expensed as incurred. In the event costs are equal to or less than buyer’s funding levels, the costs are capitalized.

Costs incurred to produce deliverable hardware are inventoried. On customer programs where such costs exceed market value, inventory is written down to reflect market value. In addition, losses are recorded for outstanding purchase orders for materials procured specifically for such programs.

Accounts Receivable and Allowance for Doubtful Accounts

An allowance for doubtful accounts is maintained based on a variety of factors, including the length of time receivables are past due, economic conditions, and historical experience. Specific allowances for individual accounts are recorded when HRT becomes aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s financial position. The allowance for doubtful accounts is adjusted as circumstances relating to the recoverability of receivables change. Receivables are written-off when deemed no longer collectible.

Inventories

Inventories are carried at the lower of cost or estimated net realizable value. We value our inventories using the first-in, first-out method.

Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost and are depreciated using the straight-line method. Land improvements and buildings are depreciated over their estimated lives ranging from 7 to 40 years, while machinery and equipment are depreciated over 3 to 10 years. Expenditures for improvements that increase asset values and extend useful lives are capitalized.

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying value of the asset held for use exceeds the sum of the undiscounted expected future cash flows, the carrying value of the asset is generally written down to fair value. Fair value is determined using pertinent market information, including estimated future discounted cash flows.

9

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

1. Summary of Significant Accounting Policies (continued)

Fair Values of Financial Instruments

Fair values of accounts receivable and accounts payable approximate carrying value. Fair values of financial instruments are based upon estimates at the balance sheet date of the price that would be received in an orderly transaction between market participants. These estimates are subjective in nature, and involve uncertainties and significant judgment in the interpretation of current market data.  Accordingly, the fair values presented may differ from amounts we could realize or settle currently.

Goodwill

Management evaluates the recoverability of goodwill annually or more frequently if events or changes in circumstances, such as declines in sales, earnings, or cash flows, or material adverse changes in the business climate, indicate that the carrying value of a reporting unit might be impaired. The reporting unit represents the operating segment unless discrete financial information is prepared and reviewed by segment management for businesses one level below that operating segment (a component), in which case such component is the reporting unit. Goodwill is considered to be potentially impaired when the net book value of a reporting unit exceeds its estimated fair value.  Fair values are established primarily using a discounted cash flow methodology. The determination of discounted cash flows is based on the business’ strategic plans and long-range planning forecasts.

There was no change in the carrying amount of goodwill in the period December 30, 2007 to December 31, 2008.

Reserve for Price Redeterminations

Provisions for pricing allowances on contracts based on “Not to Exceed” pricing are recorded as a reduction of revenue in the same period the related sales are recorded. Provisions are recorded based on historical activity with similar contracts within the Business’ customer base.

10

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

1. Summary of Significant Accounting Policies (continued)

Stock-Based Compensation

HRT participates in Textron’s 2007 Long-Term Incentive Plan (the Plan). The Plan awards employees options to purchase Textron shares and restricted stock. Options granted to purchase shares have a maximum term of ten years, and generally vest ratably over a three-year period. Restricted stock unit awards granted generally vest one-third each in the third, fourth, and fifth year following the grant, and generally are paid in shares of common stock. For awards granted or modified in 2005 and prospectively, compensation costs for awards with only service conditions that vest ratably are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The compensation expense that has been recorded in net income for HRT share-based compensation plans related to HRT employees for the period from December 30, 2007 to December 31, 2008 was $204. Share-based compensation costs are reflected primarily in selling and administrative expenses.  

Retirement Benefit Plans

Textron has various defined benefit and defined contribution plans, in which HRT employees participate. Salaried and hourly employees in the US participate in the Textron Master Retirement Plan (TMRP). The business unit accounts for costs related to the TMRP as a multi-employer plan and, therefore, is not required to report a liability beyond the contributions currently due and unpaid to the Textron sponsored plan. As a consequence, no assets or liabilities relative to the TMRP have been included in the combined balance sheet. Employees of HRT’s UK operation participate in a similar plan that is also treated as a multi-employer plan.

In addition to the TMRP and the UK plan, there are unfunded supplemental benefit plans that cover certain US-based employees. Liabilities related to the supplemental plans are not included in HRT’s balance sheet, but are considered as liabilities to Textron, and are, therefore, part of net worth. Actuarial gains and losses are amortized on a straight-line basis over the remaining estimated service life of plan participants for defined benefit plans. The measurement date for all plans is Textron’s year end. See Note 5 for a description of the retirement plans and their application to these combined financial statements.

11

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

1. Summary of Significant Accounting Policies (continued)

Income Taxes

Income taxes, as presented, are calculated on a separate tax return basis, although HRT’s operations have historically been included in Textron’s US federal and state tax returns, or non-US jurisdiction tax returns. Textron’s global tax model has been developed based on its entire portfolio of businesses.

Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. Valuation allowances are recognized to reduce deferred tax assets to the amount that is more likely than not to be realized.

Environmental Liabilities

Accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount is reasonably estimable. Environmental liabilities are undiscounted, and do not take into consideration possible future insurance proceeds or significant amounts from claims against other third parties.

Engineering, Research, and Development

Internally and externally funded engineering, research, and development costs related to products that will be sold are expensed as incurred. Engineering, research, and development costs were $13,540 during the period from December 30, 2007 to December 31, 2008.

Concentrations of Credit Risks

Financial instruments that potentially subject HRT to significant concentrations of credit risk consist principally of accounts receivable. The carrying values of such instruments approximate their fair value due to their short-term nature.

12

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

1. Summary of Significant Accounting Policies (continued)

At December 31, 2008, two commercial customers accounted for approximately 36%, and the US Government accounted for approximately 11%, of gross accounts receivables. Credit risk with respect to accounts receivable is generally diversified due to the number of entities comprising HRT’s customer base and their overall creditworthiness.

Recently Announced Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, effective for financial statements issued for fiscal years beginning after November 15, 2007. FAS No. 157 replaces multiple existing definitions of fair value with a single definition, establishes a consistent framework for measuring fair value, and expands financial statement disclosures regarding fair value measurements. This statement applies only to fair value measurements that already are required or permitted by other accounting standards, and does not require any new fair value measurements. In February 2008, the FASB delayed until the first quarter of 2009, the effective date of FAS No. 157 for non-financial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis.

The adoption of FAS No. 157 in the first quarter of 2008 did not have a material impact on our financial position or results of operations. Our non-financial assets and liabilities that meet the deferral criteria include goodwill and property, plant, and equipment. We do not expect that the adoption of FAS No. 157 for these non-financial assets and liabilities will have a material impact on our financial position or results of operations.

Other new pronouncements issued but not effective until after December 31, 2008 are not expected to have a significant effect on our combined financial position or results of operations.

2. Services and Support Provided by Textron and Textron Systems Headquarters

The costs associated with projects, services, and support functions incurred by Textron’s and Textron Systems Headquarter’s (HQ) shared services have been charged to HRT using methodologies established by Textron. Cost allocations are based primarily on estimates of time or resources spent supporting the HRT business line, headcount, or revenue. The financial information included herein may not reflect the operating results, financial position, and cash flows of HRT in the future, or had HRT been a separate, stand-alone entity during the periods presented.

13

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

2. Services and Support Provided by Textron and Textron Systems Headquarters (continued)

Cost allocations included within selling and administrative expenses, were as follows:

	For the Period December 30, 2007 to December 31, 2008
			Allocated by
	Allocated by		Textron
	Textron		Systems HQ		Total
	(In thousands)
Oversight, strategy, and general management	$	—	$	1,487	$	1,487
Human resources and benefits management		966		408		1,374
Information services		936		3,154		4,090
Manufacturing and supply chain		186		1,242		1,428
Corporate six sigma and transformation		208		583		791
Marketing and customer leadership		49		623		672
Engineering		—		604		604
Finance, audit, legal and other		825		607		1,432
	$	3,170	$	8,708	$	11,878

3. Inventories

	December 31
	2008
	(In thousands)
Raw materials	$	37,661
Work in process		31,404
Finished goods		—
	$	69,065

Inventories are reported net of lower of cost or market reserves of $1,677 at December 31, 2008.

14

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

4. Property, Plant, and Equipment, Net

Property, plant, and equipment, net, is composed of the following:

	December 31
	2008
	(In thousands)
Land and land improvements	$	506
Buildings		8,808
Machinery, equipment, and software		53,963
Construction in progress		5,968
		69.245
Less accumulated depreciation		(42,706	)
	$	26,539

During the period from December 30, 2007 to December 31, 2008, HRT capitalized approximately $942 of internal-use software development costs.

5. Pension Benefits and Postretirement Benefits Other Than Pensions

Substantially all HRT employees are covered by Textron-sponsored defined benefit plans and/or defined contribution plans. A significant number of our US-based employees participate in the TMRP, which is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

The TMRP is a defined benefit pension plan that includes a defined contribution component created in 2007 called the Retirement Account Plan (RAP), which covers a portion of participants in the TMRP. Under the RAP, participants may not make contributions to the plan, but are eligible to receive contributions from Textron of 2% of their eligible compensation. Participants in the RAP may receive pension benefits from the TMRP that are reduced by benefits received under the RAP.

15

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

5. Pension Benefits and Postretirement Benefits Other Than Pensions (continued)

HRT accounts for US-defined benefit pension costs related to the TMRP as a multi-employer plan. The combined financial statements of HRT include pension income of $386 for the period from December 30, 2007 to December 31, 2008 related to TMRP defined benefit costs and the supplemental plans described below. The income allocated by Textron includes the service cost for the active employees of HRT, and a pro-rata portion of the interest expense, expected return on assets, and amortization of gains and losses.

Several defined contribution plans also are sponsored by our various businesses. The largest such plan is the Textron Savings Plan, which is a qualified 401(k) plan subject to ERISA. The costs of the defined contribution plans amounted to approximately $2,339 for the period from December 30, 2007 to December 31, 2008.

We also provide postretirement benefits other than pensions for certain retired employees in the US, which include healthcare, dental care, Medicare Part B reimbursement, and life insurance benefits which are included in the “Other Postretirement Benefits” caption below.

In addition to the TMRP, certain US-based employees are eligible for supplemental pension benefit plans that are not separately funded. The amount recorded in net worth related to these supplemental benefits was $1,796 at December 31, 2008.

Funded Status of Other Postretirement Benefits Plans

The following summarizes the changes in the benefit obligation and in the fair value of plan assets, and provides a reconciliation of the funded status to the amounts recognized in the balance sheet, for the postretirement benefit plan, along with the assumptions used to determine benefit obligations for the portion of HRT’s postretirement benefit plans associated with HRT employees (outside of the TMRP and supplemental plans discussed above).

16

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

5. Pension Benefits and Postretirement Benefits Other Than Pensions (continued)

	Postretirement
	Benefits
	Other
	Than
	Pensions
	December 31
	2008
Change in benefit obligation
Benefit obligation at December 29, 2007	$	2,907
Service cost		—
Interest cost		167
Plan participants’ contributions		2
Actuarial gains		(305	)
Benefits paid		(202	)
Amendments		(155	)
Benefit obligation at December 31, 2008	$	2,414
Change in fair value of plan assets
Fair value of plan assets at December 29, 2007		—
Actual return on plan assets		—
Plan participants’ contributions		—
Benefits paid		—
Foreign exchange rate changes		—
Fair value of plan assets at December 31, 2008		—
Funded status at December 31, 2008	$	2,414

17

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

5. Pension Benefits and Postretirement Benefits Other Than Pensions (continued)

	Postretirement
	Benefits
	Other
	Than
	Pensions
	December 31
	2008
Statement of financial position
Non-current assets	$	—
Current liabilities		(295	)
Non-current liabilities		(2,119	)
Amount recognized in the statement of financial position		(2,414	)
Accumulated other comprehensive loss
Net actuarial loss		1,264
Net prior service cost		(288	)
Total	$	976
Weighted-average assumptions used to determine benefit obligations at December 31, 2008
Discount rate		6.25	%

18

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

5. Pension Benefits and Postretirement Benefits Other Than Pensions (continued)

Components of Net Periodic Benefit Costs

	Postretirement
	Benefits
	Other
	Than
	Pensions
	December 31
	2008
Service cost	$	—
Interest cost		167
Expected return on plan assets		—
Amortization of prior service cost		(163	)
Amortization of net loss		168
Net periodic benefit cost	$	172
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate		6.00	%
Health care cost trend:
Initial medical rate		7.00	%
Initial prescription drug rate		12.00	%

19

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

5. Pension Benefits and Postretirement Benefits Other Than Pensions (continued)

Other Postretirement Benefits

For measurement purposes, HRT assumed an annual healthcare cost trend rate of 7% for covered healthcare benefits at December 31, 2008. The trend rate was assumed to decrease gradually to 5% in 2015, and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects on the amounts presented for HRT:

	One Percentage		One Percentage
	Point Increase		Point Decrease
	(In thousands)
Effect on total of service and interest cost components	$	7	$	(7	)
Effect on postretirement benefit obligations other than pensions		118		(109	)

Estimated Future Cash Flow Impact

The following benefit payments, which reflect expected future employee service, as appropriate, are expected to be paid. The benefit payments are based on the same assumptions used to measure related benefit obligations at December 31, 2008.

	Postretirement
	Benefit		Medicare
	Other Than		Part D
	Pensions		Subsidy
	(In thousands)
2009	$	295	$	(19	)
2010		302		(19	)
2011		306		(19	)
2012		305		(19	)
2013		302		(17	)
2014 – 2018		1,405		(72	)

6. Income Taxes

Historically, HRT’s operations have been included in Textron’s consolidated US federal and state income tax returns, or non-US jurisdictions tax returns. The provision for income taxes and related balance sheet items have been prepared and presented in the combined financial statements calculated on a separate return basis. The net amount of non-trade receivable from or payable to Textron is included in the combined balance sheet as a component of net worth.

20

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

6. Income Taxes (continued)

Income before income taxes is as follows:

	December 30 2007 to December 31 2008
	(In thousands)
United States	$	28,104
Foreign		920
Total	$	29,024

Income tax expense is summarized as follows:

	December 30
	2007 to
	December 31
	2008
	(In thousands)
Current:
Federal	$	9,188
State		2,221
Foreign		258
		11,667
Deferred:
Federal		(670	)
State		(177	)
Foreign		—
		(847	)
Income tax expense	$	10,820

21

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

6. Income Taxes (continued)

The following reconciles the federal statutory income tax rate to the effective income tax rate reflected in the combined statement of operations:

	December 30 2007 to December 31 2008
	(In percent)
Federal statutory income tax rate		35.0	%
Increase (decrease) in taxes resulting from:
State income taxes		4.7
Manufacturing deduction		(1.9	)
Research credit		(0.5	)
Non-US tax rate differential		(0.2	)
Other, net		0.2
Effective income tax rate		37.3	%

HRT assessed the realization of its deferred tax assets and the need for a valuation allowance on a separate return basis, and excluded from that assessment any potential realization of those deferred tax assets by Textron. This assessment required judgment on the part of management with respect to benefits that could be realized from future taxable income, as well as other positive and negative factors influencing the realization of deferred tax assets.

22

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

6. Income Taxes (continued)

The tax effects of temporary differences that give rise to significant portions of HRT’s net deferred tax assets and liabilities were as follows:

	December 31
	2008
	(In thousands)
Deferred tax assets:
Obligations of postretirement benefits	$	978
Self-insured liabilities		1,572
Deferred compensation		766
Inventory		2,999
Warranty and product maintenance		1,147
Other, principally timing of other expense deductions		2,106
Total deferred tax assets		9,568
Deferred tax liabilities:
Property, plant, and equipment, principally depreciation		(3,044	)
Total deferred tax liabilities		(3,044	)
Net deferred tax asset	$	6,524

23

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

6. Income Taxes (continued)

HRT’s operations in the UK were conducted as a division of a Textron subsidiary. All earnings of the division are included in the earnings of the separate Textron UK subsidiary, and as such, HRT does not have any unremitted earnings. If the earnings of the Textron UK foreign subsidiary were distributed, Textron would be the recipient of the distribution and become responsible for the tax.

HRT conducts business globally and, as a result, files numerous consolidated and separate income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, HRT is subject to examination by taxing authorities throughout the world, including such major jurisdictions as the UK and the US. With few exceptions, HRT is no longer subject to US federal, state, and local, or non-US income tax examinations for years before 1998 in these major jurisdictions.

HRT has no unrecognized tax benefits. HRT does not believe that it is reasonably possible that estimates of unrecognized tax benefits will change significantly in the next 12 months. HRT recognizes net tax related interest and penalties in income tax expense in the combined statement of operations.

7. Commitments and Contingencies

HRT is subject to legal proceedings and other claims arising out of the conduct of its business, including proceedings and claims relating to private sector transactions, government contracts, production partners, product liability, employment, and environmental, safety, and health matters. Some of these legal proceedings and claims seek damages, fines, or penalties in substantial amounts or remediation of environmental contamination. On the basis of information presently available, HRT believes that these proceedings and claims will not have a material effect on the Business’ financial position or results of operations.

24

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

7. Commitments and Contingencies (continued)

Environmental Remediation

The Business’ accrued estimated environmental liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations, and are subject to a number of factors and uncertainties. Accrued liabilities relate to disposal costs, US Environmental Protection Agency oversight costs, legal fees, and operating and maintenance costs for both currently and formerly owned or operated facilities. Circumstances that can affect the reliability and precision of the accruals include the identification of additional sites, environmental regulations, level of cleanup required, technologies available, number and financial condition of other contributors to remediation, and the time period over which remediation may occur. We believe that any changes to the accruals that may result from these factors and uncertainties will not have a material effect on the Business’ financial position or results of operations. Based upon information currently available, we estimate our potential environmental liabilities to be in the range of $480 to $2,102. As of December 31, 2008, environmental reserves of $795 have been recorded in other long-term liabilities to address these specific estimated potential liabilities. We estimate that these environmental remediation liabilities will likely be paid over the next five to ten years.

Leases

Rental expense approximated $881 for the period December 30, 2007 to December 31, 2008. Future minimum rental commitments for non-cancelable operating leases in effect at December 31, 2008 are $519 for 2009, $506 for 2010, $498 for 2011, $493 for 2012, $427 for 2013, and $3,262 thereafter.

8. Warranty Liabilities

HRT provides limited warranty programs, including parts and labor, for certain products on average for periods of two years. HRT estimates the costs that may be incurred under warranty programs and records a liability in the amount of such costs at the time the product revenue is recognized. Factors that affect this liability include the number of products sold, historical and anticipated rates of warranty claims, and cost per claim. HRT assesses the adequacy of recorded warranty liabilities periodically and adjusts the amounts as necessary.

25

HR Textron

Notes to Combined Financial Statements (continued)
(In Thousands)

8. Warranty Liabilities (continued)

Below is a rollforward of accrued warranty expense:

	December 30
	2007 to
	December 31
	2008
Accrual at beginning of period	$	2,322
Provisions		1,309
Settlements		(797	)
Foreign exchange and other		(6	)
Accrual at end of period	$	2,828

9. Subsequent Events

On February 27, 2009, Textron signed a binding agreement to sell HR Textron to Woodward Governor Company for approximately $365,000 in cash. The sale is expected to be completed within the next several months.

26

EX-99.2

Exhibit 99.2

Unaudited Pro Forma Financial Information
WOODWARD GOVERNOR COMPANY AND HR TEXTRON

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On April 3, 2009, Woodward Governor Company (“Woodward”) acquired from Textron Inc. all of the outstanding shares of stock of HR Textron Inc. and Woodward (U.K.) Limited, a wholly owned subsidiary of Woodward, acquired from Textron Limited substantially all of the assets and certain liabilities related to the Textron Limited’s HR Textron business (the “HRT Acquisition”).

On October 1, 2008, Woodward acquired all of the outstanding stock of Techni-Core, Inc. (“Techni-Core”) and all of the outstanding shares of stock of MPC Products Corporation (“MPC Products”) not owned by Techni-Core (the “MPC Acquisition”).

The unaudited pro forma condensed consolidated balance sheet is derived from the unaudited condensed consolidated financial statements of Woodward, which includes the assets and liabilities of MPC, filed in Woodward’s Form 10-Q for the quarterly period ended March 31, 2009, and the unaudited historical combined balance sheet of HRT as of April 2, 2009.

The unaudited pro forma condensed consolidated statement of operations for the annual period presented is derived from the pro forma financial statements of Woodward and MPC for the year ended September 30, 2008, presented elsewhere in this document, and the audited combined statement of operations of HRT for the period from December 30, 2007 to December 31, 2008, included as Exhibit 99.1 to this Current Report on Form 8-K.

The unaudited pro forma condensed consolidated statement of earnings for the six month period presented is derived from the unaudited condensed consolidated statement of operations of Woodward for the six months ended March 31, 2009, as filed in Woodward’s Form 10-Q for the quarterly period ended March 31, 2009, which includes the combined results of Woodward and MPC and the historical unaudited combined statement of operations of HRT for the twenty-six weeks ending April 4, 2009.

The unaudited pro forma condensed consolidated financial statements have been prepared pursuant to the requirements of Article 11 of Regulation S-X, to give effect to the completed HRT Acquisition, which has been accounted for as a purchase business combination in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations (“SFAS 141”). The assumptions, estimates, and adjustments herein have been made solely for purposes of developing these unaudited pro forma consolidated financial statements and are based upon available information and certain assumptions that we believe are reasonable. The related purchase accounting should be considered preliminary.

The pro forma condensed consolidated balance sheet presented below is prepared as if the HRT acquisition, which was completed on April 3, 2009, as of the close of business on April 2, 2009, had been completed as of March 31, 2009, the end of Woodward’s second quarter of fiscal year 2009. The pro forma condensed consolidated statement of operations for the twelve month period presented below is prepared as if the HRT Acquisition and the MPC Acquisition were completed on October 1, 2007, the first day of Woodward’s fiscal year 2008, and includes the historic HRT results of operations for the twelve month period ended December 31, 2008. The pro forma condensed consolidated statement of operations for the six month period presented below is prepared as if the HRT Acquisition was completed on October 1, 2007, the first day of Woodward’s fiscal year 2009, and includes the historic HRT results of operations for the twenty-six weeks ended April 4, 2009.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with (i) the historical audited consolidated financial statements and related notes of Woodward, and “Management’s Discussion and Analysis of Financial Condition and results of Operations” contained in Woodward’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008, filed with the Securities and Exchange Commission (the “SEC”) on November 19, 2008, (ii) the historical unaudited condensed consolidated financial statements and related notes of Woodward, and “Management’s Discussions and Analysis of Financial Condition and results of Operations” contained in Woodward’s Quarterly reports on Form 10-Q for the fiscal quarter ended December 31, 2008, filed with the SEC on January 21, 2009, and the fiscal quarter ended March 31, 2009, filed with the SEC on April 23, 2009, (iii) the historical audited consolidated financial statements and related notes of Techni-Core, Inc. as of and for the years ended December 31, 2007 and 2006, which are filed as Exhibit 99.1 to Woodward’s Current Report on Form 8-K/A filed with the SEC on December 15, 2008, (iv) the historical unaudited consolidated condensed financial statements and related notes of Techni-Core, Inc. as of September 30, 2008 and September 29, 2007, and for each of the periods from January 1, 2008 through September 30, 2008 and from January 1, 2007 through September 29, 2007, which are filed as Exhibit 99.2 to Woodward’s Current Report on Form 8-K/A filed with the SEC on December 15, 2008, (v) the pro forma statements prepared in connection to Woodward’s acquisition of MPC, filed as exhibit 99.3 to Woodward’s Current Report on Form 8-K/A dated December 15, 2008 and (vi) the audited combined financial statements of HRT as of December 31, 2008 and for the period from December 30, 2007 to December 31, 2008 which are filed as Exhibit 99.1 to this Form 8-K/A.

The unaudited pro forma consolidated financial statements are not intended to represent or be indicative of the consolidated results of operations or financial condition of Woodward that would have been reported had the HRT Acquisition and the MPC Acquisition been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the combined entity.

2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
WOODWARD GOVERNOR COMPANY AND HR TEXTRON
AS OF MARCH 31, 2009

(in thousands)

	Woodward				Consolidated
	as of March		HRT as of		Pro Forma			Consolidated
	31, 2009 (1)		April 2, 2009		Adjustments			Total
ASSETS
Current assets:
Cash and cash equivalents	$	126,873	$	11	$	(51,060	) j	$	75,824
Accounts receivable, less allowance for losses		204,774		32,168		(149	) a		236,793
Inventories		290,625		69,967		12,500	b		373,092
Deferred income taxes		44,736		—		—			44,736
Other current assets		21,315		867		—			22,182
Total current assets		688,323		103,013		(38,709	)		752,627
Property, plant and equipment — net		180,611		26,240		11,916	n		218,767
Goodwill		325,424		33,314		107,024	d		465,762
Other intangibles — net		227,682		—		130,800	f		358,482
Deferred income taxes		4,289		—		—			4,289
Other assets		13,378		13		2,531	m		15,922
Total assets	$	1,439,707	$	162,580	$	213,562		$	1,815,849
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	$	—	$	—	$	87,000	j	$	87,000
Current portion of long-term debt		18,909		—		18,000	j		36,909
Accounts payable		71,724		13,447		(149	) a		85,022
Income taxes payable		5,735		—		—			5,735
Accrued liabilities		115,949		12,156		7,731	h,i,j,m		135,836
Total current liabilities		212,317		25,603		112,582			350,502
Long-term debt, less current portion		412,950		—		220,000	j		632,950
Deferred income taxes		93,921		—		—			93,921
Other liabilities		67,097		7,457		10,500	c,p		85,054
Total liabilities		786,285		33,060		343,082			1,162,427
Commitments and contingencies		—		—		—			—
Total stockholders’ equity		653,422		129,520		(129,520	) e		653,422
Total liabilities and stockholders’ equity	$	1,439,707	$	162,580	$	213,562		$	1,815,849

(1) Amounts reflect the unaudited combined assets and liabilities of Woodward and MPC as reported in Woodward’s quarterly report on Form 10-Q for the period ended March 31, 2009, filed with the SEC on April 23, 2009.

See notes to the unaudited pro forma condensed consolidated financial statements.

3

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
WOODWARD GOVERNOR COMPANY AND HR TEXTRON

(in thousands, except per share amounts)

	Consolidated
	pro forma			HRT for
	total for			the period						Consolidated
	Woodward			from						pro forma
	and MPC for			December						twelve
	the year ended			30, 2007 to			Consolidated			months for
	September 30,			December			Pro Forma			Woodward
	2008 (1)			31, 2008			Adjustments			and HRT
Net sales	$	1,462,521		$	261,025		$	(481	) a	$	1,723,065
Costs and expenses:
Cost of goods sold		1,034,817			185,897			725	a,n		1,221,439
Selling, general, and administrative expenses		149,724			32,310			(8,486	) g,n,q		173,548
Research and development costs		79,389			13,540			—			92,929
Amortization of intangible assets		20,057			—			15,349	f		35,406
Interest expense		21,570			—			16,063	l,k		37,633
Interest income		(2,120	)		—			—			(2,120	)
Other, net		20,941			254			—			21,195
Total costs and expenses		1,324,378			232,001			23,651			1,580,030
Earnings (loss) before income taxes		138,143			29,024			(24,132	)		143,035
Income tax (expense) benefit		(53,611	)		(10,820	)		9,170	o		(55,261	)
Net earnings (loss)	$	84,532		$	18,204		$	(14,962	)	$	87,774
Net earnings (loss) per share:
Basic	$	1.25								$	1.30
Diluted	$	1.22								$	1.26
Weighted-averages shares used to compute net earnings per share:
Basic		67,564									67,564
Diluted		69,560									69,560

(1) Based on calculations set forth in the unaudited pro forma condensed consolidated statement of operations for Woodward and MPC included on page 15 of this Exhibit.

See notes to the unaudited pro forma condensed consolidated financial statements.

4

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
WOODWARD GOVERNOR COMPANY AND HR TEXTRON

(in thousands, except per share amounts)

	Consolidated
	total for
	Woodward									Consolidated
	for the six			HRT for the						pro forma six
	months			twenty-six			Consolidated			months for
	ended March			weeks ended			Pro Forma			Woodward
	31, 2009 (1)			April 4, 2009			Adjustments			and HRT
Net sales	$	679,405		$	117,201		$	(834	) a	$	795,772
Costs and expenses:
Cost of goods sold		479,825			82,675			(231	) a,n		562,269
Selling, general, and administrative expenses		61,553			14,931			(3,580	) g,n,q		72,904
Research and development costs		37,880			7,003						44,883
Amortization of intangible assets		9,883			—			8,095	f		17,978
Restructuring and other charges		15,159									15,159
Interest expense		13,244			—			8,955	l,k		22,199
Interest income		(883	)		—			—			(883	)
Other, net		(182	)		(39	)		—			(221	)
Total costs and expenses		616,479			104,570			13,239			734,288
Earnings (loss) before income taxes		62,926			12,631			(14,073	)		61,484
Income tax (expense) benefit		(17,388	)		(4,715	)		5,348	o		(16,755	)
Net earnings (loss)	$	45,538		$	7,916		$	(8,725	)	$	44,729
Net earnings per share:
Basic	$	0.67								$	0.66
Diluted	$	0.66								$	0.65
Weighted-averages shares used to compute net earnings per share:
Basic		67,740									67,740
Diluted		68,997									68,997

(1) Amounts reflect the unaudited combined results of operations of Woodward and MPC as reported in Woodward’s quarterly report on Form 10-Q for the six month period ended March 31, 2009, filed with the SEC on April 23, 2009.

See notes to the unaudited pro forma condensed consolidated financial statements.

5

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
FOR WOODWARD GOVERNOR COMPANY AND HR TEXTRON

(in thousands, except per share amounts)

Note 1: Basis of unaudited pro forma presentation

On April 3, 2009, Woodward Governor Company (“Woodward”) acquired from Textron Inc. all of the outstanding shares of stock of HR Textron Inc. and Woodward (U.K.) Limited, a wholly owned subsidiary of Woodward, acquired from Textron Limited substantially all of the assets and certain liabilities related to the Textron Limited’s HR Textron business (the “HRT Acquisition”).

On October 1, 2008, Woodward acquired all of the outstanding stock of Techni-Core, Inc. (“Techni-Core”) and all of the outstanding shares of stock of MPC Products Corporation (“MPC Products”) not owned by Techni-Core (the “MPC Acquisition”).

The estimated purchase price and price allocation, below, are presented for pro-forma information purposes only and are likely to vary from the unaudited pro forma amounts presented, as Woodward finalizes its normal purchase accounting adjustments for the transaction. The estimated purchase price of the HRT Acquisition is as follows (in thousands):

Cash paid to owners	$	377,660
Cash acquired		(11	)
Estimated direct transaction costs		3,100
Total estimated purchase price	$	380,749

The unaudited pro forma condensed consolidated financial statements included herein have been prepared by Woodward pursuant to the rules and regulations of the SEC for the purposes of inclusion in this Amendment No. 1 to Woodward’s Current Report on Form 8-K/A prepared in connection with the HRT Acquisition.

The unaudited pro forma condensed consolidated balance sheet is derived from the unaudited condensed consolidated balance sheet of Woodward, as filed in Woodward’s 10-Q for the quarterly period ended March 31, 2009, which includes the assets and liabilities of Woodward and MPC and the unaudited historical financial statements of HRT as of April 2, 2009.

The unaudited pro forma condensed consolidated statement of operations for the annual period presented is derived from the pro forma financial statements of Woodward and MPC for the year ended September 30, 2008, presented elsewhere in this document, and the audited statement of operations of HRT for the period from December 30, 2007 to December 31, 2008, filed as Exhibit 99.1 to this Current Report on Form 8-K/A.

The unaudited pro forma condensed consolidated statement of earnings for the six month period presented is derived from unaudited condensed consolidated statement of operations of Woodward for the six months ended March 31, 2009, as filed in Woodward’s Form 10-Q for the quarterly period ended March 31, 2009 which includes the combined results of Woodward and MPC and the unaudited combined statement of operations of HRT for the twenty-six weeks ended April 4, 2009.

6

Prior to the HRT Acquisition, HRT was a wholly owned business unit of Textron Inc. and as such was not a stand-alone entity; therefore the historical operating results of HRT may not be indicative of the results that might have been achieved, historically or in the future, if HRT had been a stand-alone entity.

Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, Woodward believes that the disclosures provided herein, along with those included in Woodward’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008, filed on November 19, 2008, are adequate to make the information presented not misleading.

The unaudited pro forma condensed consolidated financial statements are provided for informational purposes only and do not purport to be indicative of Woodward’s financial position or results of operations which would actually have been obtained had such transaction been completed as of the date or for the periods presented, or for the financial position or results of operations that may be obtained in the future.

7

Note 2: Purchase price allocation

Under the purchase method of accounting, the total purchase price will be allocated to HRT’s assets acquired and liabilities assumed based on the estimated fair value of HRT’s tangible and intangible assets and liabilities as of the beginning of business on April 3, 2009, the HRT Acquisition date. The excess of the purchase price over the net tangible and intangible assets will be recorded as goodwill. Woodward has made a preliminary allocation of the estimated purchase price based on the unaudited historical combined balance sheet of HRT as April 2, 2009 and using estimates as described in the introduction to these unaudited pro forma condensed consolidated financial statements as follows:

Estimated Preliminary Purchase Price Allocation

Accounts receivable	$	32,168
Inventories		82,467
Other current assets		867
Property, plant, and equipment		38,156
Other assets		13
Tangible assets acquired		153,671
Accounts payable		(13,447	)
Accrued liabilities		(12,656	)
Other liabilities		(17,957	)
Total liabilities assumed		(44,060	)
Net tangible assets acquired		109,611
Amortizable intangible assets:
Favorable lease contracts		1,400
Non-compete agreements		1,000
Technology		29,000
Backlog		21,500
Software		9,400
Customer relationships		68,500
Total amortizable intangible assets		130,800
Goodwill		140,338
Total estimated preliminary purchase price	$	380,749

Woodward is in the process of finalizing valuations of inventory, property, plant and equipment, other intangibles, pension benefit obligations assumed, and estimates of other liabilities associated with the acquisition.

Of the total purchase price, a preliminary estimate of $109,611 has been allocated to net tangible assets acquired and a preliminary estimate of $130,800 has been allocated to amortizable assets acquired. The depreciation and amortization effect of the fair value adjustment to certain tangible assets and the amortization related to the amortizable assets are reflected as pro forma adjustments to the unaudited pro forma condensed consolidated statements of operations as described in Note 4 to these the unaudited pro forma condensed consolidated financial statements.

Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and identifiable intangible assets. This amount is subject to change based on finalization of the purchase accounting by Woodward.

The goodwill resulting from the HRT Acquisition will be tax deductible. Woodward made a 338(h)(10) election with the IRS, which allows the HRT Acquisition to be treated as an asset purchase for income tax purposes. Accordingly, any deferred tax assets and liabilities recorded by Textron at the acquisition date are not available to Woodward because the election causes the HRT Acquisition to be treated as though we did not purchase an ongoing business.

8

Woodward has evaluated and continues to evaluate pre-acquisition contingencies related to HRT that may exist as of the acquisition date. If these pre-acquisition contingencies become probable in nature and estimable during the remainder of the purchase price allocation period, amounts will be recorded to goodwill for such matters. If these pre-acquisition contingencies become probable in nature and estimable after the end of the purchase price allocation period, amounts will be recorded for such matters in Woodward’s results of operations.

Note 3: Financing Activities

On April 3, 2009, Woodward issued $220,000 of debt and borrowed $105,000 on its existing revolving line of credit to finance the HRT Acquisition. The debt is comprised of the following:

	Amount		Maturity	Interest
Unsecured Term Loan	$	120,000	April 3, 2012	Libor + 2.5% to 3.5%
Series E Notes		57,000	April 3, 2016		7.81%
Series F Notes		43,000	April 3, 2019		8.24%
	$	220,000

Interest on the revolving line of credit varies with LIBOR, the U.S. federal funds rate, or the prime rate.

Woodward incurred debt issuance costs of $3,081 as a result of issuing this debt, which are being amortized on a straight-line basis, which approximates the effective interest method, over the term of the debt to which the costs relate.

The $120,000 term loan issued on April 3, 2009 and $105,000 borrowings on the revolver are sensitive to changes in interest rates. An increase or decrease of 1/8% in the variable component of the interest rate on the unsecured term loan would result in a corresponding increase or decrease of $281 in related annual interest expense, assuming that no principal payments are made.

Note 4: Pro forma adjustments

The pro forma adjustments included in the unaudited pro forma condensed financial statements are as follows:

(a) To eliminate intercompany transactions between Woodward and HRT for the historical periods presented:

Accounts receivable	$	(149	)
Accounts payable		(149	)

	Twelve			Six
	Months			Months
Sales	$	(481	)	$	(834	)
Cost of goods sold		(481	)		(834	)

(b) To record the difference between preliminary estimated fair value and the historical value of inventory:

			Preliminary		Increase
	Historical		Estimated		in
	Value		Fair Value		Inventory
Inventory	$	69,967	$	82,467	$	12,500

The future impact of this adjustment on cost of goods sold is not reflected in the pro forma statement of operations for the annual or six month periods presented, however, Woodward anticipates that the increase in carrying value of the inventory acquired will be realized in Woodward’s result of operations as an increase to cost of goods sold over approximately a six month period following the HRT Acquisition.

9

(c) To record the estimated pension benefit obligation liability related to obligations of the Textron-sponsored defined benefit plan that will be assumed by a Woodward defined benefit plan established for certain HRT employees (the “Woodward HRT Plan”) in connection with the HRT Acquisition, net of the estimated value of related pension plan assets to be transferred directly to the trustee of the Woodward HRT Plan by the trustee of the related Textron-sponsored defined benefit plan. The value of the pension plan assets to be transferred will be equal to the present value of the accumulated benefit obligation as of the date of the HRT Acquisition based upon certain actuarial assumptions described in the purchase agreement relating to the HRT Acquisition, which is Filed as Exhibit 10.1 to Woodward’s Current Report on Form 8-K filed with the SEC on March 4, 2009, as adjusted for investment earnings and benefit payments between the date of the HRT Acquisition and the actual date of transfer. If, for any reason, the pension plan assets are not transferred to the trustee of the Woodward HRT Plan, Woodward is not contractually obligated to assume the pension benefit obligation.

Estimated pension benefit obligation	$	55,000
Accumulated pension benefit obligation		(45,000	)
Increase in other long-term liabilities	$	10,000

(d) To eliminate HRT’s historical goodwill and record preliminary estimated fair value of goodwill for the HRT Acquisition:

			Preliminary
	Historical		Estimated		Increase in
	Value		Fair Value		Goodwill
Goodwill	$	33,314	$	140,338	$	107,024

Under the purchase method of accounting, the total purchase price will be allocated to HRT’s assets acquired and liabilities assumed based on the estimated fair value of HRT’s tangible and intangible assets and liabilities as of the closing date of the HRT Acquisition. The excess of the purchase price over the net tangible and intangible asset will be recorded as goodwill. Woodward has made a preliminary allocation of the estimated purchase price using various estimates.

(e) To eliminate HRT’s historical stockholders’ equity totaling $129,520.

(f) To record the difference between the preliminary fair value and the historical value of HRT’s intangible assets and the resulting increase in amortization expense:

											Estimated
			Preliminary		Increase in		Estimated				Annual
	Historical		Estimated Fair		Intangible		First Year		Historical		Change in
	Value		Value		Assets		Amortization		Amortization		Amortization
Favorable lease contracts	$	—	$	1,400	$	1,400	$	200	$	—	$	200
Non-compete		—		1,000		1,000		333		—		333
Technology		—		29,000		29,000		2,045		—		2,045
Backlog		—		21,500		21,500		10,632		—		10,632
Software		—		9,400		9,400		735		—		735
Customer relationships		—		68,500		68,500		1,404		—		1,404
	$	—	$	130,800	$	130,800	$	15,349	$	—	$	15,349

	Twelve		Six
	Months		Months
Amortization	$	15,349	$	8,095

The amortization methods and estimated useful lives of the identifiable intangible assets are as follows:

	Amortization
	Method	Useful Life
Favorable lease contracts	Straight Line		7
Non-compete	Straight Line		3
Technology	Accelerated		15
Backlog	Accelerated		5
Software	Straight Line		10-20
Customer relationships	Accelerated		15

10

Amortization expense associated with the acquired intangible assets is expected to be as follows for the years ended September 30:

2009 (remaining from April 3 to September 30)	$	6,125
2010		15,288
2011		12,996
2012		11,406
2013		10,093
Thereafter		74,892
	$	130,800

(g) To reflect adjustments for estimated general and administrative costs for HRT’s historical management and administrative structure and functions. Prior to the HRT Acquisition, costs associated with projects, services, support functions, and shared services were charged to HRT by Textron and Textron System Headquarter using methodologies established by Textron. The pro forma amounts were estimated based on a detailed build-up of expected support costs by function for the HRT operations as they will integrate with the existing Woodward business for similar services, including estimated fees to be paid to Textron for a variety of services collectively defined under the terms of a transition services contract executed by and between Woodward and Textron in connection with the HRT Acquisition. The costs allocated to HRT by Textron are generally higher than HRT’s pro forma estimates because Woodward believes its existing infrastructure, which already supports a large-scale global business, is generally sufficient to support the HRT business for general and administrative services, with limited incremental costs. The detailed estimated build-up of expected support costs by function focused on those areas where the existing HRT and Woodward business infrastructures are inadequate to replace the services previously provided by Textron without the commitment of additional resources by Woodward or HRT.

	Twelve			Six
	Months			Months
Historical allocated costs	$	(11,878	)	$	(5,323	)
Estimated costs in lieu of historical costs		2,972			1,533
Reduction in selling, general, and administrative costs	$	(8,906	)	$	(3,790	)

Pro forma cost reductions by functional area for the annual period follow. Estimated future costs to be incurred include estimated amounts that will be paid to Textron for a variety of transition support services collectively agreed to in a transition services contract.

			Estimated Costs
			to be Incurred		Decrease in pro
			in the Twelve		forma Selling,
	Historical		Month Period		General and
	Allocated costs		Following the		Administrative
	for the Twelve		HRT		Costs for Twelve
	Month Period		Acquisition		Month Period
Information services	$	4,090	$	1,818	$	(2,272	)
Human resources and benefit management		1,374		850		(524	)
Oversight, strategy and general management		1,487		—		(1,487	)
Manufacturing and supply chain		1,428		—		(1,428	)
Other		3,499		304		(3,195	)
Total for twelve month period	$	11,878	$	2,972	$	(8,906	)

Estimated costs to be incurred are lower on a per month basis in the six month period compared to the twelve month period primarily due to favorable terms of the transition services contract with Textron for information services support.

11

(h) To record estimated restructuring costs of $2,500 to accrued liabilities for items such as those associated with integrating similar operations, workforce management and cancellation of some contracts.

(i)	To reduce accrued liabilities by $2,000 for pricing allowances on contracts based on “not to exceed” pricing.
(j)	To record the purchase price sources of funding:

							Increase in
							Current
			Increase in		Increase in		Portion of		Increase in
	Decrease in		Accrued		Long-term		Long-term		Short-term
	Cash		Liabilities		Debt		Debt		Borrowings		Total
Cash paid to former owners	$	51,060	$	—	$	—	$	—	$	—	$	51,060
Cash owed to former owners		—		1,600		—		—		—		1,600
Estimated professional fees		—		3,100		—		—		—		3,100
2009 Term loan		—		—		102,000		18,000		—		120,000
Series E notes		—		—		57,000		—		—		57,000
Series F notes		—		—		43,000		—		—		43,000
Revolving line of credit		—		—		18,000		—		87,000		105,000
Total	$	51,060	$	4,700	$	220,000	$	18,000	$	87,000		380,760
Cash acquired												(11	)
Estimated purchase price											$	380,749

(k) To expense costs incurred for unused bridge financing facility:

	Twelve		Six
	Months		Months
Interest expense	$	1,847	$	1,847

(l) To record interest expense on debt issued in connection with the acquisition, assuming that interest rates remain constant for the full periods shown and that no principle reductions occur, amortization of debt issuance costs and loss on LIBOR lock hedge transaction entered into in connection with the transaction:

	Twelve		Six
	Months		Months
Interest expense on issued debt	$	13,314	$	6,657
Amortization of debt issuance costs		715		358
Amortization of loss on LIBOR lock hedge		187		93
Interest expense	$	14,216	$	7,108

(m) To increase other assets and accrued liabilities by $2,531 for debt issuance costs incurred in connection with debt issued to partially fund the HRT Acquisition.

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(n) To record the difference between preliminary estimated fair value and the historical value of property, plant and equipment, and associated increases in depreciation expense:

							Estimated
					Increase in		Increase in
			Preliminary		Property,		Annual
	Historical		Estimated		Plant and		Depreciation		Useful
	Value		Fair Value		Equipment		Expense		Life
Property, plant, and equipment	$	26,240	$	38,156	$	11,916	$	1,608		1-17

	Twelve		Six
	Months		Months
Cost of goods sold	$	1,206	$	603
Selling, general, and administrative		402		201

(o)	To record the pro forma tax effect of $9,170 and $5,348 for the twelve and six month periods, respectively, on the adjustments to pro-forma earnings before income taxes based on an estimated prospective statutory rate of 38%.
(p)	To record increases in other liabilities for estimated reserves of $500 for uncertain income tax positions.

(q) To record impact of stock options issued to HRT employees, which had no dilutive impact on diluted shares outstanding or pro forma earnings per share for the twelve or six month periods.

	Twelve		Six
	Months		Months
Selling, general, and administrative	$	18	$	9

13

Unaudited Pro Forma Financial Information

WOODWARD GOVERNOR COMPANY AND MPC
AS OF SEPTEMBER 30, 2008

On October 1, 2008, Woodward acquired all of the outstanding stock of Techni-Core, Inc. (“Techni-Core”) and all of the outstanding shares of stock of MPC Products Corporation (“MPC Products”) not owned by Techni-Core (the “MPC Acquisition”)

The following unaudited pro forma condensed consolidated statement of operations for the year ended September 30, 2008 is derived from the audited historical financial statements of Woodward for the year ended September 30, 2008 and the unaudited consolidated financial statements of Techni-Core for the year ended September 30, 2008. The consolidated financial statements of Techni-Core, Inc. include MPC Products Corporation’s results for the indicated periods.

The unaudited consolidated statement of operations of Techni-Core, Inc. for the year ended September 30, 2008 was calculated by taking the audited consolidated statement of operations of Techni-Core for the year ended December 31, 2007 less the unaudited consolidated statement of operations of Techni-Core for the nine months ended September 30, 2007, plus the unaudited consolidated statement of operations of Techni-Core for the nine months ended September 30, 2008. The assumptions, estimates, and adjustments herein have been made solely for purposes of developing these unaudited pro forma consolidated financial statements.

The following unaudited condensed consolidated financial statements have been prepared pursuant to the requirements of Article 11 of regulation S-X, to give effect to the completed MPC Acquisition, which has been accounted for as a purchase business combination in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations (“SFAS 141”). The assumptions, estimates, and adjustments herein have been made solely for purposes of developing these unaudited pro forma consolidated financial statements and are based upon available information and certain assumptions that we believe are reasonable. The related purchase accounting should be considered preliminary.

The pro forma condensed consolidated statement of operations for the twelve month period presented below is prepared as if the MPC Acquisition was completed on October 1, 2007, the first day of Woodward’s fiscal year 2008, and includes the MPC historic results of operations for the twelve months ended September 30, 2009.

The pro forma condensed consolidated financial statements should be read in conjunction with (i) the historical audited consolidated financial statements and related notes of Woodward, and “Management’s Discussions and Analysis of Financial Condition and results of Operations” contained in Woodward’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008, filed on November 19, 2008, (ii) the historical audited financial statements and related notes of Techni-Core, Inc. as of and for the years ended December 31, 2007 and 2006, which were filed as Exhibit 99.1 to Woodward’s Current Report on Form 8-K/A dated December 15, 2008, and (iii) the historical unaudited financial statements and related notes of Techni-Core, Inc. as of September 30, 2008 and September 29, 2007, and for each of the periods from January 1, 2008 through September 30, 2008 and from January 1, 2007 through September 29, 2007, which were filed as Exhibit 99.2 to Woodward’s Current Report on Form 8-K/A dated December 15, 2008. Techni-Core, Inc.’s financial statements include MPC Products Corporation’s financial position and results of operation. The unaudited pro forma condensed consolidated financial statements are not intended to represent or be indicative of the consolidated results of operations or financial condition of Woodward that would have been reported had the MPC Acquisition been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the combined entity.

14

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
WOODWARD GOVERNOR COMPANY AND MPC
FOR THE YEAR ENDED SEPTEMBER 30, 2008

(in thousands, except per share amounts)

										Consolidated
										Pro Forma
							Consolidated			Total for
							Pro Forma			Woodward and
	Woodward			MPC (1)			Adjustments			MPC
Net sales	$	1,258,204		$	206,236		$	(1,919	) a, l	$	1,462,521
Costs and expenses:
Cost of goods sold		882,996			152,700			(879	) a, c, k, l		1,034,817
Selling, general, and administrative expenses		115,399			35,148			(823	) c, d, i, j, k, l		149,724
Research and development costs		73,414			6,142			(167	) c, l		79,389
Amortization of intangible assets		6,830			—			13,227	d		20,057
Interest expense		3,834			2,433			15,303	g, h, n		21,570
Interest income		(2,120	)		—			—			(2,120	)
Other income		(4,685	)		—			—			(4,685	)
Other expense		626			25,000			—			25,626
Total costs and expenses		1,076,294			221,423			26,661			1,324,378
Earnings (loss) before income taxes		181,910			(15,187	)		(28,580	)		138,143
Income tax (expense) benefit		(60,030	)		(3,269	)		9,688	e, l, m		(53,611	)
Income (loss) before minority interest		121,880			(18,456	)		(18,892	)		84,532
Minority interest		—			16,232			(16,232	) f		—
Net earnings (loss)	$	121,880		$	(2,224	)	$	(35,124	)	$	84,532
Net earnings (loss) per share:
Basic	$	1.80		$	(278.00	)				$	1.25
Diluted	$	1.75		$	(278.00	)				$	1.22
Weighted-averages shares used to compute net earnings (loss) per share:
Basic		67,564			8			(8	) o		67,564
Diluted		69,560			8			(8	) o		69,560

(1) Certain reclassifications were made to conform to Woodward’s financial statement presentation.

See notes to the unaudited pro forma condensed consolidated financial statements.

15

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
FOR WOODWARD GOVERNOR COMPANY AND MPC
FOR THE YEAR ENDED SEPTEMBER 30, 2008
(in thousands, except per share amounts)

Note 1: Basis of pro forma presentation

On October 1, 2008, Woodward acquired all of the outstanding stock of Techni-Core and all of the outstanding shares of stock of MPC Products not owned by Techni-Core for approximately $370,435.

Woodward paid cash at closing of approximately $334,702, a portion of which was used by Woodward to repay the outstanding debt of MPC in an aggregate amount equal to approximately $18,610. In addition, contractual change of control payments totaling $32,175 were made during October 2008. Change of control payments represent estimated payments to certain MPC employees as a result of employment agreements in place prior to the acquisition. Direct transaction costs include investment banking, legal and accounting fees and other external costs directly related to the acquisition.

The preliminary purchase price of the MPC Acquisition is as follows:

Cash paid to owners (net of cash acquired)	$	316,092
Long-term liabilities assumed		18,610
Contractual change in control obligations		32,175
Estimated direct transaction costs		3,558
Total estimated purchase price	$	370,435

Woodward is in the process of finalizing valuations of certain assets and liabilities associated with the MPC Acquisition, including the ultimate settlement of an investigation by the U.S. Department of Justice (“DOJ”) regarding certain practices prior to 2006 (See note 5. Commitments and contingencies). The payment, if any, of the DOJ accrual of approximately $25,000 will be paid upon agreement with the DOJ and the US District Court and such payments will be incremental to the estimated purchase price above. The amount paid to owners, as shown above, was reduced by this $25,000 contingency at closing.

The unaudited pro forma condensed consolidated statement of operation included herein has been prepared by Woodward pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for the purposes of inclusion in this Current Report on Form 8-K/A.

The unaudited pro forma condensed consolidated statements of operations for the year ended September 30, 2008 give effect to the MPC Acquisition as if it occurred on October 1, 2007.

The unaudited pro forma condensed consolidated statement of operations for the year ended September 30, 2008 is derived from the audited historical financial statements of Woodward for the year ended September 30, 2008 and the unaudited consolidated financial statements of Techni-Core, Inc. for the year ended September 30, 2008, which include MPC Products Corporation’s results of operations. The unaudited consolidated statement of operations of Techni-Core, Inc. for the year ended September 30, 2008 was calculated by taking the audited consolidated statement of operations of Techni-Core, Inc. for the year ended December 31, 2007 less the unaudited consolidated statement of operations of Techni-Core, Inc. for the nine months ended September 30, 2007, plus the unaudited consolidated statement of operations of Techni-Core, Inc. for the nine months ended September 30, 2008. The assumptions, estimates, and adjustments herein have been made solely for purposes of developing this unaudited pro forma condensed consolidated statement of operations. The consolidated financial statements of Techni-Core, Inc. include MPC Products Corporation’s results for the indicated periods.

Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, Woodward believes that the disclosures provided herein, along with those included in Woodward’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008, filed on November 19, 2008, are adequate to make the information presented not misleading.

The unaudited pro forma condensed consolidated statement of operations is provided for informational purposes only and does not purport to be indicative of Woodward’s financial position or results of operations which would actually have been obtained had such transaction been completed as of the date or for the period presented, or for the financial position or results of operations that may be obtained in the future.

16

Note 2: Purchase Price Allocation

Under the purchase method of accounting, the total purchase price will be allocated to MPC’s assets acquired and liabilities assumed based on the estimated fair value of MPC’s tangible and intangible assets and liabilities as of the date of the MPC Acquisition. The excess of the purchase price over the net tangible and intangible assets will be recorded as goodwill. Woodward has made a preliminary allocation of the estimated purchase price using estimates as described in the introduction to these unaudited pro forma condensed combined consolidated financial statements as follows:

Estimated Preliminary Purchase Price Allocation

Accounts receivable	$	36,752
Inventories		71,348
Income taxes receivable		3,083
Other current assets		986
Property, plant, and equipment		21,885
Deferred income taxes		23,940
Other assets		1,513
Tangible assets acquired		159,507
Accounts payable		(12,757	)
Accrued liabilities		(55,927	)
Deferred income taxes		(65,009	)
Other liabilities		(2,164	)
Total liabilities assumed		(135,857	)
Net tangible assets acquired		23,650
Amortizable intangible assets
Trade name		3,700
Non-compete agreements		1,000
Technology		25,600
Backlog		13,500
Software		6,200
Customer relationships		114,200
Total amortizable intangible assets		164,200
Goodwill		182,585
Total estimated preliminary purchase price	$	370,435

Woodward is in the process of finalizing valuations of property, plant and equipment, other intangibles, estimates of liabilities, including the DOJ matter, and related income tax adjustments associated with the acquisition.

Of the total purchase price, a preliminary estimate of $159,507 has been allocated to net tangible assets acquired and a preliminary estimate of $164,200 has been allocated to amortizable intangible assets acquired. The depreciation and amortization effect of the fair value adjustment to certain tangible assets and the amortization related to the amortizable assets are reflected as pro forma adjustments to the unaudited pro forma condensed consolidated statements of operations as described in Note 4 to these the unaudited pro forma condensed consolidated financial statements.

Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and identifiable intangible assets. This amount is subject to change based on finalization of the purchase accounting by Woodward. The goodwill resulting from the MPC Acquisition will not be deductible for income tax purposes.

17

Woodward has evaluated and continues to evaluate pre-acquisition contingencies related to HRT that may exist as of the acquisition date. If these pre-acquisition contingencies become probable in nature and estimable during the remainder of the purchase price allocation period, amounts will be recorded to goodwill for such matters. If these pre-acquisition contingencies become probable in nature and estimable after the end of the purchase price allocation period, amounts will be recorded for such matters in Woodward’s results of operations.

Note 3: Financing Activities

On October 1, 2008, Woodward issued approximately $350,000 of debt to finance the MPC Acquisition and to repay the short-term borrowings and other obligations of MPC Products Corporation. The debt is comprised of the following:

	Amount		Maturity	Interest
Unsecured Term Loan	$	150,000	October 1, 2013	Libor + 1% to 2.25%
Series B Notes		80,000	October 1, 2013	5.63%
Series C Notes		40,000	October 1, 2015	5.92%
Series D Notes		80,000	October 1, 2018	6.39%
	$	350,000

Woodward incurred debt issuance costs of $3,081 as a result of the issuing this debt, which are being amortized on a straight-line basis, which approximates the effective interest method, over the term of the debt to which the costs relate.

The term loan debt issued on October 1, 2009 is sensitive to changes in interest rates. An increase or decrease of 1/8% in the variable component of the interest rate on the unsecured term loan would result in a corresponding increase or decrease of $187.5 in related annual interest expense, assuming that no principal payments are made.

Note 4: Pro forma adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations are as follows:

(a) To eliminate intercompany sales transactions between Woodward and MPC for the historical periods presented:

Sales	$	(1,784	)
Cost of goods sold		(1,784	)

(b) To reflect the increase in inventory related to the difference between preliminary estimated fair value and the historical value of inventory, which had no impact on the statement of operations:

			Preliminary		Increase
	Historical		Estimated		to
	Value		Fair Value		Inventory
Inventory	$	65,116	$	66,980	$	1,864

The future impact of this adjustment on cost of goods sold is not reflected in the pro forma statement of operations for the annual period presented, however, Woodward anticipates that the increase in carrying value of the inventory acquired will be realized in Woodward’s result of operations as an increase to cost of goods sold over approximately a twelve month period following the MPC Acquisition.

18

(c) To record the change in depreciation expense due to the difference between the preliminary fair value and the historical value of MPC’s property, plant, and equipment:

			Preliminary				Increase in
	Historical		Estimated				Depreciation		Useful
	Value		Fair Value		Increase		Expense		Life
Property, plant, and equipment	$	15,117	$	21,849	$	6,732	$	1,739		3-5
Allocation of depreciation expense:
Cost of goods sold							$	1,523
Research and development								7
Selling, general, and administrative								209
							$	1,739

(d) To record the difference between the preliminary fair value and the historical value of MPC’s intangible assets and the resulting increase in amortization expense:

			Preliminary								Change in
	Historical		Estimated				New		Historical		Amortization
	Value		Fair Value		Increase		Amortization		Amortization		Expense
Trade name	$	—	$	3,700	$	3,700	$	636	$	—	$	636
Technology		—		25,600		25,600		1,711		—		1,711
Non-compete Agreements		—		1,000		1,000		500		—		500
Backlog		—		13,500		13,500		8,522		—		8,522
Product software		—		6,200		6,200		111		—		111
Customer Relationships		259		114,200		113,941		1,747		84		1,663
	$	259	$	164,200	$	163,941	$	13,227	$	84	$	13,143
Allocation of amortization
Amortization of intangibles							$	13,227	$	—	$	13,227
Selling, general, and administrative								—		84		(84	)
							$	13,227	$	84	$	13,143

The amortization method and estimated useful lives of the identifiable intangible assets are as follows:

	Amortization	Useful
	Method	Life
Trade name	Accelerated	5
Technology	Accelerated	15
Non-compete agreements	Straight Line	2
Backlog	Accelerated	3
Product software	Accelerated	13
Customer relationships	Accelerated	16

19

Amortization expense associated with the acquired intangible assets is expected to as follows for the years ended September 30:

2009	$	13,227
2010		16,047
2011		14,871
2012		13,769
2013		12,787
Thereafter		93,499
	$	164,200

(e) To record the pro forma impact of implementing Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN 48”) and valuing acquired tax assets and liabilities.

FIN 48 provides guidance on the financial statement recognition, measurement, reporting, and disclosure of uncertain tax positions taken or expected to be taken in a tax return. FIN 48 addresses the determination of whether tax benefits, either permanent or temporary, should be recorded in the financial statements. For those tax benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The change in measurement criteria requires MPC to recognize a decrease in the retained earnings component of stockholders’ equity of $999 and current year income tax for changes in research credits of $220.

The changes in tax liabilities related to implementing FIN 48, changes in research credits and reserve increases related to current and prior year tax matters were included in other liabilities:

				Retained		Income
	Other			Earnings -		Tax
	Liabilities			Beginning		Expense
Increase reserves related to research credits	$	(220	)	$	—	$	220
FIN 48 adjustments		(999	)		999		—
Increases in reserves		(945	)		—		945
Net increase in other liabilities	$	(2,164	)	$	999	$	1,165

(f) To eliminate minority interest income of $16,232.

(g) To record interest expense and amortization of debt issuance costs associated with the issuance of the long-term debt used to finance the MPC Acquisition:

Unsecured Term Loan	$	5,249
Series B Notes		4,504
Series C Notes		2,368
Series D Notes		5,112
Scheduled interest payments		17,233
Amortization of debt issuance costs		520
Reclassification of deferred gain on hedge transaction to interest expense		(16	)
	$	17,737

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On October 1, 2008, Woodward issued $350,000 of debt to finance the acquisition of MPC and to repay the short-term borrowings of MPC Products Corporation. The debt is comprised of the following:

	Amount		Maturity	Interest
Unsecured Term Loan	$	150,000	October 1, 2013	Libor + 1% to 2.25%
Series B Notes		80,000	October 1, 2013	5.63%
Series C Notes		40,000	October 1, 2015	5.92%
Series D Notes		80,000	October 1, 2018	6.39%
Total new debt	$	350,000

Interest expense on long-term debt reflected in the unaudited pro forma condensed combined consolidated statements of operations and in the table above reflects actual interest rates in effect or committed to from the date of issuance through May 29, 2009 and assumes constant interest rates equal to those that existed as of May 29, 2009 and that scheduled principal payments will be made as scheduled. The unaudited pro forma condensed combined consolidated statements of operations and the table above do not reflect any reductions in interest expense that may result from unscheduled repayments of Woodward’s debt or any changes in interest rates that may result from the refinancing of those borrowings.

Debt issuance cost amortization is calculated on a straight line basis, which approximates the effective interest method, over the term of the debt to which the cost relates. The related amortization is included in interest expense.

The Woodward historical balance sheet as of September 30, 2008 included a deferred gain of $109 related to the settlement of interest rate derivatives hedging the forecasted issuance of debt. The resulting gain is reclassified to interest expense over the term of the underlying debt.

(h) To eliminate interest expense totaling $1,383 related to the repayment of short-term borrowings.

(i) To eliminate nonrecurring payments totaling $815 made to the estate of MPC’s owners from selling, general and administrative expenses.

(j) To record estimated management bonuses totaling $235 to selling, general and administrative expenses for certain MPC employees based on Woodward’s management incentive plan for fiscal 2008.

(k) To record stock based compensation expense of $1,132 associated with the issuance of 69,673 shares of Woodward restricted common stock awarded to certain MPC employees related to their employment agreements and the related compensation expense allocated 15% to cost of goods sold and the remaining portion to selling, general, and administrative expense.

Allocation of Compensation Expense
Cost of goods sold	$	170
Selling, general, and administrative		962

(l) To eliminate the $2,149 loss of a business sold by MPC prior to the MPC Acquisition.

Net sales	$	135
Cost of goods sold		(788	)
Selling, general, and administrative expenses		(1,330	)
Research and development		(174	)
Income tax benefit		8
Total loss	$	(2,149	)

(m) To record the pro forma tax effect of $10,861 on the adjustments to pro forma earnings before income taxes based on an estimated prospective statutory rate of 38%.

(n) To eliminate $1,051 of interest expense associated with the deferred gain on the sale and leaseback of production facilities by MPC to an affiliated party treated as a financing transaction.

(o) To eliminate MPC shares outstanding from earnings per share calculations.

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Note 5: Commitments and contingencies

MPC is subject to an investigation by the U.S. Department of Justice regarding certain of its pricing practices prior to 2006 related to government contracts. MPC and the U.S. Attorney for the Northern District of Illinois have reached a settlement in principle and are in the process of finalizing and obtaining approvals from the DOJ. Final disposition will be subject to acceptance and approval by the U.S. District Court. It is anticipated that any settlement of the matter would involve the payment of monetary fines and other amounts by MPC. Collateral administrative consequences of the MPC settlement agreement could include debarment of MPC from future federal procurement. MPC is in the process of working with the U.S. Department of Defense in an effort to resolve, without debarment, any administrative matters that may arise out of the investigation. There can be no assurance as to the resolution of these matters. The purchase price paid by Woodward in connection with the acquisition of MPC was reduced by $25,000, which represents the amount agreed to in principle by MPC with the U.S. Attorney. Any resulting fines or other sanctions beyond this amount could have a material negative impact on Woodward.

The MPC Statement of Operations for the year ended September 30, 2008 included in these pro forma statements includes $25,000 of expense related to the DOJ matter and $5,000 related to the settlement of a warranty adjustment to a significant customer. This total associated $30,000 expense is not eliminated from the pro forma statement of operations.

Note 6: Reconciliation to previously filed Form 8 K/A

The following schedule reconciles the preliminary purchase price on this Current Report on Form 8-K/A to the Current Report on Form 8-K/A previously filed with the SEC on December 15, 2008:

						As presented
	As filed on					in Note 1,
	Form 8-K/A		Adjustments			above
Cash paid to owners (net of cash acquired)	$	331,850	$	(15,758	)a,b	$	316,092
Cash held in escrow		5,000		(5,000	)a		—
Long-term liabilities assumed		—		18,610	b		18,610
Contractual change in control obligations		—		32,175	c		32,175
Estimated direct transaction costs		1,758		1,800	d		3,558
Total estimated purchase price	$	338,608	$	31,827		$	370,435

When settled, the payment, if any, of the DOJ settlement will be classified as an increase to the purchase price.

(a)	To reflect payment of $5,000 cash held in escrow to owners.
(b)	To clarify composition of funds paid at closing:

	Impact on purchase price
	Decrease in cash			Increase in long-
	paid to borrower			term debt assumed
Short-term borrowings classified as part of purchase price rather than as an assumed liability	$	(18,610	)	$	18,610
Accrued liabilities assumed and paid at closing		(1,400	)		—
Non-acquired asset paid from closing funds		(748	)		—
	$	(20,758	)	$	18,610

(c)	To reclassify $32,175 contractual change of control obligations out of accrued liabilities to the purchase price calculation.
(d)	To record increase in direct transaction costs and goodwill of $1,800.

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