8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2011

Woodward, Inc.

(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 2.02 Results of Operations and Financial Condition.

On November 14, 2011, Woodward, Inc. (the “Registrant”) reported its results of operations for its fourth fiscal quarter ended September 30, 2011, and conducted its related earnings call. A copy of the press release, earnings call transcript, and presentation slides issued by the Registrant concerning the foregoing results is furnished herewith as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated by reference.

Item 7.01 Regulation FD Disclosure.

The information set forth in item 2.02 above is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements: None

(b) Pro forma financial information: None

(c) Shell company transactions: None

(d) Exhibits

99.1	Press release of Woodward, Inc. dated November 14, 2011
99.2	November 14, 2011 Earnings Call Transcript
99.3	Presentation Slides

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, INC.
Date: November 18, 2011	By:	/s/ A. Christopher Fawzy
		Name:	A. Christopher Fawzy
		Title:	Corporate Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release of Woodward, Inc. dated November 14, 2011
99.2	November 14, 2011 Earnings Call Transcript
99.3	Presentation Slides

EX-99.1

Exhibit 99.1

News Release

Woodward, Inc.
1000 East Drake Road
Fort Collins, Colorado 80525, USA
Tel: 970-482-5811
Fax: 970-498-3058

FOR IMMEDIATE RELEASE

CONTACT: Robert F. Weber, Jr.
Vice Chairman, Chief Financial Officer and Treasurer
970-498-3112

Woodward Reports Fourth Quarter and Fiscal Year 2011 Results

Fort Collins, Colo., November 14, 2011—Woodward, Inc. (NASDAQ:WWD) today reported financial results for its fourth quarter and fiscal year 2011. (All per share amounts are presented on a fully diluted basis.)

Fourth Quarter Fiscal 2011 Highlights

• Net sales for the fourth quarter of 2011 were $489.3 million, an increase of 19 percent from $412.0 million in the fourth quarter of last year.

• Earnings per share¹ were $0.60 in the fourth quarter of 2011, up 28 percent from $0.47 in the fourth quarter of last year.

• Total EBIT² for the quarter was $64.8 million compared to $56.2 million in the fourth quarter of the prior year, an increase of 15 percent.

• Free cash flow³ for the fourth quarter of 2011 was $52.2 million.

“Woodward concluded fiscal 2011 with record sales and earnings for the quarter and the year,” said Thomas A. Gendron, Chairman and Chief Executive Officer. “We delivered on important organic growth strategies and laid the groundwork for broad expansion in our energy control solutions for future years with our platform wins, system development and market positioning.”

Net sales for the fiscal 2011 fourth quarter were $489.3 million, an increase of 19 percent from $412.0 million for the 2010 fourth quarter. Foreign currency exchange rates had a favorable impact of approximately $9 million on net sales for the fourth quarter of 2011.

-more-

Net earnings¹ for the 2011 fourth quarter were $41.7 million, or $0.60 per share, an increase of 28 percent from $32.7 million, or $0.47 per share in the 2010 fourth quarter.

EBIT² was $64.8 million for the fourth quarter of 2011 compared to $56.2 million for the fourth quarter of 2010. Foreign currency exchange rates had a favorable impact on EBIT of approximately $4 million for the fourth quarter of 2011. The current quarter EBIT was also positively impacted by increased volumes, partially offset by increased variable compensation costs and research and development costs. Total variable compensation expense increased $10 million from the fourth quarter of 2010. Research and development costs incurred in the fourth quarter of 2011 increased by $8 million, excluding a $4 million increase in variable compensation costs, compared to the same quarter of the prior year. This increase reflects investments related to growth opportunities in most of our businesses.

Quarterly Segment Results

Please note that segment results discussed below reflect the change in segment reporting announced November 7, 2011.

Aerospace

Aerospace net sales for the fourth quarter of fiscal 2011 were $241.7 million, an increase of 14 percent from $212.6 million for the fourth quarter a year ago. Segment earnings for the fourth quarter of 2011 increased to $40.9 million from $30.7 million for the same quarter a year ago, an increase of 33 percent. Segment earnings as a percent of segment net sales were 16.9 percent this quarter compared to 14.4 percent in the same quarter of the prior year.

The sales increase was attributable to higher commercial aftermarket sales, as well as original equipment sales for commercial and business jets. Segment earnings benefitted from the increased sales volumes and price increases, partially offset by increased variable compensation costs and research and development costs.

-more-

Energy

Energy net sales for the fourth quarter of fiscal 2011 were $247.6 million, an increase of 24 percent from $199.4 million for last year’s fourth quarter. Segment earnings for this quarter increased to $33.2 million, up 7 percent from $31.1 million for last year’s fourth quarter. Segment earnings as a percent of segment net sales were 13.4 percent this quarter compared to 15.6 percent in the same quarter of the prior year.

The sales increase was attributable to broad strength in control systems and components for industrial turbines, wind turbines and reciprocating engines. Segment earnings benefitted from the increased sales volume and the impact of foreign currency exchange rate fluctuation, offset by increased variable compensation, costs associated with integration of the IDS acquisition, and increased research and development.

Nonsegment

Nonsegment expenses totaled $9.3 million for the fourth quarter of fiscal 2011, compared to $5.6 million for the same quarter last year. Nonsegment expenses were 1.9 percent of consolidated sales for the fourth quarter of 2011, up from 1.4 percent of sales for the same quarter of the prior year. The increase in nonsegment expenses from last year’s fourth quarter was primarily attributable to increased variable compensation costs and non-recurring expenses.

Full Year 2011 Results

Net sales for fiscal 2011 were $1.712 billion, an increase of 17 percent from $1.457 billion last year. Net earnings for fiscal 2011 were $132.2 million, or $1.89 per share, compared with $110.8 million, or $1.59 per share, last year. Earnings per share for fiscal year 2011 reflected increased variable compensation costs of $26 million or approximately $0.26 per share as well as increased research and development costs of $26 million, excluding a $7 million increase in variable compensation. Earnings per share for fiscal 2010 included special tax benefits of $6.4 million, or $0.09 per share.

Full year segment results can be found in the tables included herein.

-more-

Cash Flow, Financial Position and Other Matters

Net cash generated from operating activities was $114.6 million for fiscal 2011, compared to $184.6 million for the prior year. Free cash flow was $66.4 million for 2011, compared to $156.5 million in 2010. Cash flow for 2011 reflected significantly increased investments in working capital in anticipation of higher levels of business activity. Capital expenditures for 2011 were $48.3 million compared with $28.1 million in 2010.

Total debt declined to $425.2 million at September 30, 2011 from $465.8 million at September 30, 2010. The ratio of debt-to-debt-plus-equity was 31.6 percent at September 30, 2011, down from 36.7 percent at September 30, 2010.

Outlook

“We anticipate the markets we serve will see moderate growth in 2012, although we believe significant uncertainty in the overall economy will continue. Our fiscal 2012 outlook reflects growth in excess of our underlying markets primarily as a result of market share gains and the launch of key platforms,” said Mr. Gendron. “Therefore, we expect our sales to be between $1.85 billion and $1.95 billion and earnings per share to be between $2.20 and $2.35 per share for fiscal 2012.”

Non- U.S. GAAP Financial Measures: EBIT (earnings before interest and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization) and free cash flow are financial measures not prepared and presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Management uses EBIT to evaluate Woodward’s operating performance without the impacts of financing and tax related considerations. Management uses EBITDA in evaluating Woodward’s operating performance, making business decisions, including developing budgets, managing expenditures, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. Management uses free cash flow, which is derived from cash flows provided by operating activities, in reviewing the financial performance of Woodward’s various business segments and evaluating cash generation levels. Securities analysts, investors, and others frequently use EBIT, EBITDA and free cash flow in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets that are subject to amortization. The use of these non-U.S. GAAP financial measures

-more-

is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. Because EBIT and EBITDA exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded. Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Management’s calculations of EBIT, EBITDA and free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures.

1	Represents net earnings or earnings per share (as applicable) attributable to Woodward, Inc. (i.e., excluding any noncontrolling interests).
2	EBIT is defined as net earnings attributable to both Woodward, Inc. and any noncontrolling interest before interest and taxes.
3	Free cash flow is defined as net cash provided by operating activities less capital expenditures.

Conference Call

Woodward will hold an investor conference call at 4:30 p.m. EST, November 14, 2011 to provide an overview of the financial performance for the fourth quarter and fiscal 2011, business highlights, and outlook for fiscal 2012. You are invited to listen to the live webcast of our conference call, or a recording, and view or download accompanying presentation slides at our website, www.woodward.com.

You may also listen to the call by dialing 1-866-835-8906 (domestic) or 1-703-639-1413 (international). Participants should call prior to the start time to allow for registration; the Conference ID is 1548416. An audio replay will be available by telephone from 7:30 p.m. EST on November 14, 2011 until 11:59 p.m. EST on November 19, 2011. The telephone number to access the replay is 1-888-266-2081 (domestic) or 1-703-925-2533 (international), reference access code 1548416.

A webcast presentation will be available on the website by clicking the Investors tab, then the Calendar of Events menu selection and associated webcast link. The call and presentation will remain accessible at the website for 14 days.

-more-

About Woodward, Inc.

Woodward is an independent designer, manufacturer, and service provider of control solutions for the aerospace and energy markets. Our aerospace systems and components optimize the performance of fixed wing and rotorcraft platforms in the commercial, business and military aircraft, ground vehicles and other equipment. Our energy-related systems and components enhance the performance of industrial gas and steam turbines, reciprocating engines, compressors, wind turbines, electrical grids and other energy-related industrial equipment. The company’s innovative fluid energy, combustion control, electrical energy, and motion control systems help customers offer cleaner, more reliable and more efficient equipment. Our customers include leading original equipment manufacturers and end users of their products. Woodward is headquartered in Fort Collins, Colorado, USA. Visit our website at www.woodward.com.

Information in this press release 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 future sales, earnings, liquidity, growth, market share gains, key product launches, relative profitability, and the impact of economic conditions and downturns on Woodward. 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 actual results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to, the instability in the financial markets or other prolonged unfavorable economic and industry conditions; any failure to fully comply with the Company’s administrative agreement with the U.S. Department of Defense; Woodward’s ability to implement and realize the intended effects of its restructuring efforts; Woodward’s ability to manage its expenses relative to sales; the ability of Woodward’s suppliers to meet their obligations; Woodward’s ability to integrate acquisitions and manage the costs related thereto; the success of, or expenses associated with, our product development activities; Woodward’s debt obligations, debt service requirements, and any limitations regarding its ability to operate its business and pursue business strategies and incur additional debt in light of certain restrictive covenants in its outstanding debt documents; risks relating to U.S. government contracting activities, including any decline in the level of U.S. defense spending; future impairment charges resulting from changes in the estimated fair value of reporting units or of long-lived assets; unforeseen events that significantly reduce commercial airline travel; risks from operating internationally, including the impact on reported earnings from fluctuations in foreign currency exchange rates, and other risk factors described in Woodward’s Annual Report on Form 10-K for the year ended September 30, 2011, to be filed shortly.

Woodward, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	Three-Months Ending						Year Ending
	September 30,						September 30,
(Unaudited - in thousands except per share amounts)	2011			2010			2011			2010
Net sales	$	489,294		$	412,003		$	1,711,702		$	1,457,030
Costs and expenses:
Cost of goods sold		340,015			287,682			1,198,153			1,021,516
Selling, general and administrative expenses		39,322			37,521			148,903			135,880
Research and development costs		35,572			23,129			115,633			82,560
Amortization of intangible assets		8,973			8,643			34,993			35,114
Interest expense		6,238			6,861			25,399			29,385
Interest income		(209	)		(182	)		(534	)		(509	)
Other (income) expense, net		633			(1,166	)		1,588			(1,791	)
Total costs and expenses		430,544			362,488			1,524,135			1,302,155
Earnings before income taxes		58,750			49,515			187,567			154,875
Income taxes		17,060			16,840			55,332			43,713
Net earnings		41,690			32,675			132,235			111,162
Net earnings attributable to noncontrolling interests, net of tax		—			—			—			(318	)
Net earnings attributable to Woodward	$	41,690		$	32,675		$	132,235		$	110,844
Earnings per share amounts:
Basic earnings per share attributable to Woodward	$	0.61		$	0.48		$	1.92		$	1.62
Diluted earnings per share attributable to Woodward	$	0.60		$	0.47		$	1.89		$	1.59
Weighted average common shares outstanding:
Basic		68,830			68,068			68,797			68,472
Diluted		70,062			69,264			70,140			69,864
Cash dividends per share paid to Woodward common stockholders	$	0.07		$	0.06		$	0.27		$	0.24

Woodward, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,
(Unaudited - in thousands)	2011		2010
Assets
Current assets:
Cash and cash equivalents	$	74,539	$	105,579
Accounts receivable		297,614		248,513
Inventories		381,555		295,034
Income taxes receivable		2,456		18,170
Deferred income tax assets		33,270		33,689
Other current assets		23,359		18,157
Total current assets		817,793		719,142
Property, plant, and equipment - net		206,725		193,524
Goodwill		462,282		438,594
Intangible assets - net		268,897		292,149
Deferred income tax assets		10,466		8,623
Other assets		15,271		11,201
Total assets	$	1,781,434	$	1,663,233
Liabilities and stockholders’ equity
Current liabilities:
Short-term borrowings	$	—	$	22,099
Current portion of long-term debt		18,374		18,493
Accounts payable		123,453		107,468
Income taxes payable		5,440		5,453
Deferred income tax liabilities		74		—
Accrued liabilities		133,516		109,052
Total current liabilities		280,857		262,565
Long-term debt, less current portion		406,875		425,250
Deferred income tax liabilities		85,911		88,249
Other liabilities		88,694		83,975
Total liabilities		862,337		860,039
Stockholders’ equity		919,097		803,194
Total liabilities and stockholders’ equity	$	1,781,434	$	1,663,233

Woodward, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ending
	September 30,
(Unaudited - in thousands)	2011			2010
Net cash provided by operating activities	$	114,623		$	184,572
Cash flows from investing activities:
Business acquisitions, net of cash and marketable securities acquired		(38,698	)		(25,000	)
Business acquisition, marketable securities acquired		(8,463	)		—
Proceeds from sale of marketable securities		8,217			—
Payments for property, plant, and equipment		(48,255	)		(28,104	)
Proceeds from sale of other assets		59			312
Proceeds from disposal of Fuel & Pneumatics product line		—			660
Net cash used in investing activities		(87,140	)		(52,132	)
Cash flows from financing activities:
Cash dividends paid		(18,581	)		(17,085	)
Proceeds from sales of treasury stock		2,482			1,999
Payments for repurchases of common stock		(6,837	)		(4,513	)
Payments for purchase of noncontrolling interest		—			(8,120	)
Excess tax benefits from stock compensation		3,558			5,115
Payments of long-term debt		(18,430	)		(128,420	)
Borrowings on revolving lines of credit and short-term borrowings		164,557			106,019
Payments on revolving lines of credit and short-term borrowings		(182,728	)		(83,980	)
Net cash used in financing activities		(55,979	)		(128,985	)
Effect of exchange rate changes on cash and cash equivalents		(2,544	)		1,261
Net change in cash and cash equivalents		(31,040	)		4,716
Cash and cash equivalents at beginning of period		105,579			100,863
Cash and cash equivalents at end of period	$	74,539		$	105,579

Woodward, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	Three Months Ending						Year Ending
	September 30,						September 30,
(Unaudited - in thousands)	2011			2010			2011			2010
Net sales:
Aerospace	$	241,701		$	212,649		$	843,032		$	769,379
Energy		247,593			199,354			868,670			687,651
Total consolidated net sales	$	489,294		$	412,003		$	1,711,702		$	1,457,030
Segment earnings*:
Aerospace	$	40,945		$	30,725		$	129,502		$	112,171
As a percent of segment sales		16.9	%		14.4	%		15.4	%		14.6	%
Energy		33,177			31,093			113,872			94,014
As a percent of segment sales		13.4	%		15.6	%		13.1	%		13.7	%
Total segment earnings		74,122			61,818			243,374			206,185
Nonsegment expenses		(9,343	)		(5,624	)		(30,942	)		(22,434	)
EBIT		64,779			56,194			212,432			183,751
Interest expense, net		(6,029	)		(6,679	)		(24,865	)		(28,876	)
Consolidated earnings before income taxes	$	58,750		$	49,515		$	187,567		$	154,875
Capital expenditures	$	15,615		$	13,968		$	48,255		$	28,104
Depreciation expense		9,121			10,518			40,400			40,502

* This schedule reconciles segment earnings, which exclude certain costs, to consolidated earnings before taxes.

Woodward, Inc. and Subsidiaries

RECONCILIATION OF NET EARNINGS TO EBIT AND EBITDA

	Three-Months Ending						Year Ending
	September 30,						September 30,
(Unaudited - in thousands)	2011			2010			2011			2010
Net earnings	$	41,690		$	32,675		$	132,235		$	111,162
Income taxes		17,060			16,840			55,332			43,713
Interest expense		6,238			6,861			25,399			29,385
Interest income		(209	)		(182	)		(534	)		(509	)
EBIT		64,779			56,194			212,432			183,751
Amortization of intangible assets		8,973			8,643			34,993			35,114
Depreciation expense		9,121			10,518			40,400			40,502
EBITDA	$	82,873		$	75,355		$	287,825		$	259,367

Woodward, Inc. and Subsidiaries

RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW

	Year Ending
	September 30,
(Unaudited - in thousands)	2011			2010
Net cash provided by operating activities	$	114,623		$	184,572
Capital expenditures		(48,255	)		(28,104	)
Free cash flow	$	66,368		$	156,468

EX-99.2

Exhibit 99.2

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

PRESENTATION

[Bracketed language reflects minor modifications and corrections to the language used during the earnings call.]

Operator

Welcome to the Woodward Incorporated fourth quarter fiscal 2011 earnings call. At this time I’d like to inform you that this call is being recorded for rebroadcast and that all participants are in a listen-only mode. Following the presentation, you will be invited to participate in the question-and-answer session. Joining us today from the Company are Mr. Tom Gendron, Chairman and Chief Executive Officer, and Mr. Bob Weber, Vice Chairman and Chief Financial Officer and Treasurer. I would now like turn the call over to Mr. Weber.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Thank you, Operator. We would like to welcome all of you to Woodward’s fourth quarter fiscal 2011 conference call. In a few minutes I’ll cover the financial highlights of our fourth quarter and Tom will comment on our results, strategies, and markets. I will then comment on today’s earnings release and at the end of our presentation we will take questions. For those who have not seen the release you can find it on our website at www.Woodward.com. As noted in the press release, we have included some visual presentation materials to go along with today’s call that are also accessible on our website. An audio replay of this call will be available through November 19, 2011. The phone number for the audio replay is on the press release announcing this call, and will be repeated by the Operator at the end of the call. In addition a replay of this call will be accessible on our website for 14 days.

Before we begin I would like to summarize our cautionary statement as shown on slide three. In the course of this call when we present information and answer questions, any statements we make other than actual results or business facts may contain forward-looking statements. Such statements involve risks and uncertainties and actual results may differ materially from those we currently anticipate. Factors that might cause a material difference include, but are not limited to, future sales, earnings, business performance and economic conditions that would impact demand in the aerospace and energy markets. We caution investors not to place undue reliance on these forward-looking statements as predictive of future results. In addition, the Company disclaims any obligation to update the forward-looking statements made herein. For more information on risks and uncertainties facing Woodward, we encourage you to consult the press release and our public filings with the Securities and Exchange Commission including our 10K for fiscal 2011, which we expect to file shortly.

2

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

When we refer to net earnings during this call we are technically speaking to net earnings attributable to Woodward. In addition, segment earnings, EBIT, EBITDA, and free cash flow are non-US GAAP operating measures that we use in the press release and during this call. A description of these measures and a reconciliation of each to the most comparable US GAAP measures is included in the appendix to our slide presentation and in our earnings release and related schedules, all of which are posted on our website. Management uses this information in monitoring and evaluating the ongoing performance of Woodward and each business segment.

I’d like to now switch to our financial highlights. We achieved record sales and earnings in this fiscal year and the fourth quarter. Sales for the fourth quarter were $489 million, up 19% from $412 million in the fourth quarter of last year. Earnings per diluted share were $0.60 for the fourth quarter, up from $0.47 for the fourth quarter last year, a 28% increase. Free cash flow for the quarter was $52 million. Now I will turn the call over to Tom to comment on our results, strategies, and markets.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Thank you, Bob, and welcome to those joining us today. We had a solid fourth quarter with strong financial results and further market share gains and extensions of our product portfolio, highlighted by our August announcement and our CFM LEAP-X win. Our record financial results were achieved while simultaneously increasing our investment in research and development by $12 million for the fourth quarter, and by $33 million for the full year. R&D investments and alignment with our customers have been critical to both our recent wins and preparations for future opportunities.

Last week, we announced that our financial results will now be presented through two reporting segments, aerospace and energy. This reflects our strategic approach to these markets, which we believe is leading to broader organic opportunities for Woodward and areas beyond our traditional scope. We see many synergies between our business groups. For example, opportunities may exist for Woodward in the future by linking our capabilities in aircraft propulsion and motion control for the benefit of the entire aircraft. This new segmentation is based on these broad market based terms. In summary, we remain focused on our core competencies by applying them on a broader scale.

Turning to our markets, with respect to aerospace, Boeing and Airbus continue to increase production rates, supported by solid orders this year and a very strong order backlog. Increased air traffic drove demand for our spares, repair and overhaul services. We expect these commercial aerospace improvements to lead to further growth in Woodward in 2012. In August, we announced that we reached an agreement with GE to supply fuel, air, and actuation systems on CFM International’s LEAP-X engine for the upgraded A320 Neo and the 737 Max. Coupled with our 2009 announcement of wins on the Pratt & Whitney Purepower engine, these were very large wins for Woodward, doubling our presence on narrow body aircraft over the next 6 years, and tripling our average content on each engine compared to similar current generation engines. And we continue to pursue additional content on both the A320 Neo and the 737 Max which represent by far the largest portion of the commercial aerospace market.

The ramp-up of deliveries related to the Boeing 787 and 747-8 has begun, which will represent market share gains for Woodward going forward. The recovery in regional business jets continues, and has begun to contribute to our aerospace business growth. Defense spending in our markets remains fairly steady, where foreign military sales offset some declines in US government spending. Considerable uncertainty for defense spending remains. Our broad exposure to rotorcraft, fighters, transports, UAVs, and weapons systems reduces individual platform risks. For example, while certain guided weapons sales may be slowing, we see growth in F-35 Weapons Station and UAV sales.

Turning to our energy markets, industrial gas turbine industry remains well-positioned to deliver on the world’s growing power needs and desire for energy independence and lower emissions. We believe that the economics, availability, and reduced environmental impact of natural gas will increase industrial turbines’ share of the power generation market over the long term. OEMs are ramping deliveries tied to power generation projects as well as oil and gas production and processing. We have a growing position in the industrial compressor control market, which leverages our industrial turbine capabilities. We see the industrial compressor market as an important opportunity for further growth as we expand our capabilities and customer relationships, stemming largely from increased need for compressors used in the extraction, distribution, and processing of natural gas. Industrial reciprocating engine related demand has also benefiting from increasing power generation needs particularly those fueled by natural gas and alternative fuels. We’ve seen accelerating growth for larger diesel, natural gas, and multifuel engines, particularly those used in a variety of infrastructure applications such as power generation, shipping, and natural resource extraction. Small engine demand continues to grow, but at a more moderate pace.

3

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Turning to wind, our efforts in recent years continue to drive market share gains given a significant year-over-year sales growth. Over the long-term, renewables will be a growing source of energy for the world and we continue to see numerous opportunities to grow our content and share in this market. However, government incentives around the world will continue to have an impact on the growth rate of the wind market. In other electrical markets, electrical power generation distribution projects across the globe continue to pick up. We remain optimistic about our ability to grow our sales of products and services into this market, as increasing complexity and demand require a more sophisticated solutions.

In summary, the aerospace and energy markets reflect rising OEM production rates and equipment usage. Woodward’s careful and consistent investment in technology and product capabilities address our customer needs for the next generation of their equipment. By investing wisely over many years, we are delivering market share gains that will support our sales and earnings growth. While we are watching the world economic situation closely, we anticipate a mix of growth rates in our markets, that when coupled with our market share gains will support solid growth in Woodward’s sales for 2012. Now let me turn over to Bob to go over our financials.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Thank you, Tom. Woodward net sales this quarter were $489 million compared to $412 million for the 2010 fourth quarter. Foreign currency exchange rates favorably impacted sales by approximately $9 million. Net earnings for the fourth quarter of 2011 were $42 million, or $0.60 per share, compared to $33 million or $0.47 per share in last year’s fourth quarter. EBIT, or earnings before interest and taxes, was $65 million for this quarter compared to $56 million for the prior year’s quarter. Foreign currency exchange rates favorably impacted EBIT by approximately $4 million. Total variable compensation expense increased $10 million from the fourth quarter of 2010. Research and development costs increased $8 million, excluding a $4 million increase in variable compensation costs. As a percent of total sales, EBIT was 13.2% this quarter, compared to 13.6% in the same quarter a year ago.

As Tom mentioned, our November 7, 2011 press release announced a change in our reporting segments, and we’ve provided revised historical segment information with that release. Today’s earnings release and my comments that follow reflect our new reporting structure. Our aerospace segment sales for the fourth quarter of fiscal 2011 were $242 million, compared to $213 million for the fourth quarter a year ago. Commercial after-market sales increased, as well as original equipment sales for commercial and business jets. Aerospace earnings for the fourth quarter of 2011 increased to $41 million from $31 million for the same quarter a year ago. As a percent of segment sales, segment earnings were 16.9% this quarter, compared to 14.4% in the same quarter a year ago. Segment earnings benefited from increased volume and price increases, partially offset by increased variable compensation, and research and development costs.

Moving to our energy results. Our energy segment sales for the fourth quarter of fiscal 2011 were $248 million, compared to $199 million for the fourth quarter a year ago. The sales increase was driven by broad strength in our controls for industrial turbines, wind turbines, and reciprocating engines. Energy earnings for the fourth quarter of 2011 increased to $33 million from $31 million for the same quarter last year. As a percent of segment sales, segment earnings were 13.4% this quarter, compared to 15.6% in the same quarter a year ago. Segment earnings benefited from increased sales volumes, and foreign currency exchange rates fluctuation, offset by increased variable compensation, costs associated with acquisitions, and increased research and development. Non-segment expenses for this quarter were $9 million, compared to $6 million for the same quarter last year. Non-segment expenses were 1.9% of external sales for the fourth quarter of 2011, up from 1.4% of sales for the same quarter last year. The increase resulted primarily from increased variable compensation, and nonrecurring expenses.

Now I’d like to focus on certain specific elements of our consolidated financial statements. Gross margin, defined as net sales less cost of goods sold, was 30.5% of sales in the fourth quarter of 2011, compared to 30.2% for the fourth quarter of 2010. Research and development costs were $36 million for the fourth quarter of fiscal 2011, compared to $23 million for the fourth quarter of 2010. $4 million of this increase is attributable to the increase in variable compensation mentioned earlier. As a percent of net sales, research and development was 7.3% in the fourth quarter of 2011 compared to 5.6% in the fourth quarter of 2010. The increase relates to our efforts on both previously awarded programs and future opportunities with respect to new platforms and market share gains. For 2012 we expect our R&D expense to be between 7% and 7.5% of sales, reflecting both recent wins and other opportunities currently being pursued. Selling, general, and administrative expenses were $39 million or 8% of net sales this quarter compared to $38 million or 9.1% of net sales in the same period of 2010.

Our effective tax rate for the fourth quarter of 2011 was 29%, compared to 34% for the same quarter last year. For 2012, we anticipate that our tax rate will be approximately 33% reflecting the scheduled expiration of the US research credit. As you may know, this credit is scheduled to expire for the fifteenth time in its history on December 31, 2011. If the credit were to remain in effect for fiscal 2012, we anticipate our effective tax rate would be approximately 31%. Our earnings guidance does not assume an extension of the research credit.

4

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Capital expenditures were $16 million for the fourth quarter of [2011] compared to $9 million for the fourth quarter 2010. As you may recall, we are completing construction of a $20 million test facility for aircraft turbine control systems. Capital expenditures for all of 2011 were $48 million. We anticipate increasing investments in coming quarters to support the growth resulting from our recent program wins. For 2012 we anticipate capital expenditures of approximately $80 million.

Looking at the balance sheet, working capital defined as current assets less current liabilities, was $537 million at September 30, 2011, and $457 million at September 30, 2010. Woodward generated $68 million of cash flow from operations, and $52 million of free cash flow for the fourth quarter of 2011. The ratio of debt to debt-plus-equity was 31.6% at the end of the fourth quarter, compared to 36.7% at September 30, 2010.

Lastly, let me turn to our outlook. We continue to anticipate moderate growth in our markets for 2012, and our results will be further supported by a number of market share gains across our businesses. We continue to manage the business by carefully pursuing the opportunities we see within our aerospace and energy markets while monitoring the uncertain global economic situation. For fiscal 2012 we expect sales to be between $1.85 billion and $1.95 billion, with earnings per share to be between $2.20 per share and $2.35 per share. We anticipate 2012 sales growth in our aerospace segment to be approximately 8%, and approximately 16% in our energy segment. We anticipate that segment operating margins for the full year for aerospace will be approximately 17% and for energy will be approximately 14.5%.

That concludes comments on our business and results for the fourth quarter of fiscal 2011 and our 2012 outlook. I would like to point out that on December 7, Woodward will host an Investor and Analyst Day in New York City as mentioned in the press release issued earlier today. Tom and I, as well as other members of the management team, will spend the morning reviewing Woodward’s growth prospects and strategic positioning as well as answering questions. We look forward to seeing many of you there. Operator, we are now ready to open the call to questions.

QUESTION AND ANSWER

Operator

Thank you. The question and answer session will begin at this time. (Operator Instructions) And our first question comes from Pete Skibitski from SunTrust.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Good evening, guys. Nice quarter.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Thank you.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

I was wondering, can you give us some more color on the potential synergies between engine controls and motion controls that you kind of spoke to during your opening remarks? And then was cost take-out a reason for the consolidation at all, as well? And if you can quantify how much cost take-out there could be?

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

In terms of the first part, what we are starting to see and I think as you kind of look forward, a lot of interaction between engines and the cells, engines and other parts of the aircraft, we’re actually seeing some of our actuators that were used on the turbine side of our business begin to get some traction in the motion control side of the business. So I think there’s lots of opportunities as we go forward where the aircraft will be viewed more as a total system as opposed to propulsion being separated from motion.

I can’t say that at this point in time a cost reduction was any significant driver in the combination. We do envision, as we mentioned with respect to synergies, that going forward, we should see those reflected in lower total cost or in more synergistic use of costs across both businesses, but at this point, that’s not a significant driver.

5

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Okay, got it. And I’ll ask one more before I get back in the queue. I want to make sure I understand your content on the geared turbo fan for the 320neo. Is that as big — is your content on the geared turbofan as big as your content on the GE engine for the neo? Or is it some fraction? And are there further competitions on the GTF?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

The content is close. We’ll talk [a] little bit more about some of that at our Analyst Day. But both engines represent a multiple of content in respect to dollars over our current content on their respective engines. So we’re pleased and I think as you know, the PurePower and the LEAP-X are the engines that are on every narrow body being discussed today. So for Woodward, that’s a huge increase in market penetration on those new platforms coming online.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Yes. I mean, I think they’re talking about on a 40% delivery growth between Boeing and Airbus over the next four years, and it sounds like maybe you could even exceed that, given your market share gains.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes, we have to first look at just for clarity, is they’re ramping up the current versions, and then 2016 and 2017, the new versions come online. So the big increases for Woodward with this increased content will start kicking in in 2016.

Now, we are well represented on the A320, less so on the current 737. So as those ramp-ups come, they’re good for our business and we’re counting on those in our outlook, but the big increase comes when the new engines come online.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Got it. Okay. Thanks very much.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes.

Operator

Thank you. Our next question comes from Tyler Hojo from Sidoti & Co.

Tyler Hojo - Sidoti & Company — Analyst

Good evening, guys. Thanks for all the incremental detail in the presentation there. First question, if you could maybe just talk a little bit about the wind market? Were you able to achieve your market share gain goals for this year in the wind inverter market? I think you were looking for something like 20%, 25% year-on-year growth? And as a follow on to that, maybe you could talk a little bit in regards to what your share gain expectations are for your fiscal year 2012?

6

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Sure. From the standpoint of how we did this year, we did largely achieve our goals with respect to market share gains. As we indicated with respect to incentives, it is a very interesting, challenging environment out there. And so in terms of the future, we do anticipate that next year should remain strong, and then a lot of the incentives that we’re seeing, there is some questions as to whether or not they would be extended in 2013. So the longer-term growth may be more a function of whether or not the incentives are restated in 2013, but hopefully next year, we’ll still see some strong growth in wind.

Tyler Hojo - Sidoti & Company — Analyst

So I mean, would you — but would you expect it to moderate from the growth rates you saw this fiscal year? Or how should we think about that?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

No, there were be, there would be about the same level.

Tyler Hojo - Sidoti & Company — Analyst

Okay. Great. And as a follow-up from me, I appreciate the fact that you guys have changed your segment reporting. But I’m just trying to understand how the MPC and the HRT business, or the acquisitions, performed in the quarter. It seems like they performed pretty well, but maybe if you could talk about that and —?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes, they’re on our plan, they’re improving. Aftermarket revenue was up nicely in the quarter. So we’re starting — that was one of our big drivers, so we’re seeing overall aftermarket in aerospace up quite a bit. But it was represented across all the business activity. All segments. So that was good. The increases then productivity, and also on the sales growth are all there. So we’re feeling pretty good about it.

Tyler Hojo - Sidoti & Company — Analyst

Okay. Great. And actually just lastly, maybe you could talk about, you know, I know you don’t give quarterly guidance, but if you could just talk about perhaps seasonality for fiscal 2012? I think typically you guys start out pretty slow, but is that going to be the case next year?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes, I mean, always the first quarter is slow. We have so many holidays built in the first quarter. And the end of the calendar year, companies, it always is a little slower on the growth, or sales side in the first quarter than it increases the remainder of the year. So that pattern will probably repeat itself.

Tyler Hojo - Sidoti & Company — Analyst

Okay. Great. Thanks a lot.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Sure.

Operator

Thank you. Our next question comes from Peter Lisnic from Robert W. Baird.

7

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Josh Chan - Robert W. Baird & Co. — Analyst

Good afternoon. This is Josh Chan filling in for Pete.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Hello, Josh.

Josh Chan - Robert W. Baird & Co. — Analyst

Hi. Looking at the strong growth at the commercial aerospace aftermarket business, I would assume that that comes from, maybe, deferred maintenance during the downturn? I mean I guess one would be would that be correct? And then second, how much runway from that deferred maintenance do you think we still have in terms of the market?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

I don’t — I wouldn’t categorize it as deferred maintenance. That’s a little hard to, always say — a lot of the activity is scheduled and so when the hours are being flown, we can kind of predict on that. There is maybe sometimes a little bit, but what I would say is that the fleet size and the activity we’re on continues to grow. We have more and more installed base particularly if you take A320s, 777s, they keep increasing over time and that’s driving up the share. Also, we put a big focus on — I think the question Tyler asked just before, how are we doing on the businesses we acquired? And part of that was to really increase our aftermarket and we have been succeeding at that. So that combination has led to strong aftermarket.

Josh Chan - Robert W. Baird & Co. — Analyst

Okay. That makes sense. And then could you also comment on as the GEnx engine shipments start to ramp through next year, will this be a noticeable impact on your aerospace margins? I mean, from your commentary it doesn’t seem like it has that much of an impact. But could you comment on, on the mix about that?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

We would not see it change in the margin, so we believe margins will hold. I think we put some outlook in there for you. So the — they will be ramping, so we will see it on the sales side as we go through the year. You’ll start seeing more of an impact on the sales, and we expect that it will be neutral to the margins.

Josh Chan - Robert W. Baird & Co. — Analyst

Okay. Great. And then just final question, what was the top line contribution from the IDS acquisition this quarter?

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

The IDS acquisition is largely a technology acquisition for advanced technology for our wind business. The top line is really not significant at all to the total business at this time.

Josh Chan - Robert W. Baird & Co. — Analyst

Okay. Great. Thanks for your time and congrats on the quarter.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Thank you.

8

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Operator

Thank you. Our next question comes from William Bremer from Maxim Group.

William Bremer - Maxim Group — Analyst

Good evening, gentlemen. Great quarter.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Thank you.

William Bremer - Maxim Group — Analyst

Tom, you mentioned the compressor market. I was hoping you could give us a little more color on that, as well as maybe the steam turbines?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Sure. When we start — you know, we’re real bullish on the industrials turbo machinery in total, so we look at gas turbine, steam turbines, and compressors. The steam market is doing well, largely driven by increases in process activity and power generation. Compressor market, we’ve always played in the compressor market, but we’re putting a big focus on driving to a larger share of the compressor control market, and in particular we see just huge investments over the next 2 decades being made in the gas infrastructure worldwide.

If you also think about all the shale gas finds that have been around the world, more emphasis on LNG [liquid natural gas], pushing to make natural gas more of a global commodity than a regional commodity. Every aspect of that is going to drive needs for turbines and for compressors. And then also you have an aging infrastructure in the US and the West, so we see a large increase in demand for new compressor controls. So it’s one of our adjacent targets that we’ve highlighted in the past. And we’re making a big push there and we see a sizable growth opportunity.

William Bremer - Maxim Group — Analyst

I agree. Thank you. Also, you mentioned the power market on the generation and distribution. You’ve seen the projects starting to pick up here. Can you give us a sense on the size and what you’re bidding on at this time? What the market looks like?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Well it — on those type projects, literally what we’re seeing is across-the-board increases occurring in the power management and power distribution control, so that’s just showing a wide base of the activity. We’re also seeing some increases in what we call our power station controls. That’s more for distributive power generation. We’re seeing increases in that. A lot of that in particular South America, Middle East, some activities with that.

And one of the comments we also made in there, we see — if you really take a look at the large power generation demand, again, you’ve got to think of the next two, three decades there’s a sizable increase in projected power demand. With the issues that occurred in Japan, there’s really not that many new [nuclear power plants] that are going to come online and we also see real pushback environmentally on coal plants. So we see a very large portion of that power demand, especially for the baseload being met by natural gas turbines. We’re starting to see that pick up already, and think that’s going to accelerate over the next decade.

So that’s kind of the whole picture. It’s across-the-board, every aspect of it we’re seeing increases. But we are extremely bullish on the larger machines using natural gas.

9

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

William Bremer - Maxim Group — Analyst

And finally, to hit the upper end of your guidance, what needs to go right?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Well, we need the economy to stay. In there, I think we kind of highlighted, we’re looking at basically near zero growth for the economy — global economy with that outlook. And most of all, our share — all our growth is coming from share gains. As long as that holds, we feel good and if we have a little bit of better on the economic side we could hit the top of the range.

William Bremer - Maxim Group — Analyst

Thanks, Tom. Good color.

Operator

Thank you. Your next question comes from Greg McKinley from Dougherty.

Greg McKinley - Dougherty & Company — Analyst

Yes, thank you. Within the aerospace segment, you’ve already announced some significant content wins for re-engining. But I know you continue to say there is some open items there for further content that maybe come available. How significant are those yet-to-be-determined content wins in relation to the ones you’ve already announced?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes, we’re still pursuing a sizable amount of new business in relation to, maybe on the order of 20% to 30% of what we’ve won is still out and still being looked at.

Greg McKinley - Dougherty & Company — Analyst

Okay. In terms of your view on the defense market, I think you said having content on a variety of different programs is what allowed you to continue to perform throughout 2011. In terms of looking forward to 2012, do you still feel like that’s the case? Or does your view potentially contemplate some overall contraction in your defense business?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

[Yes, right now, with 2012, our outlook is approximately flat.]

Greg McKinley - Dougherty & Company — Analyst

Okay.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

So when you look at our aerospace growth rate, you can see that’s, all the growth is coming from commercial. But we’re pleased with being able to hold relatively flat on the defense side, and that’s back to the — we have lots of applications, but no one that’s so significant that it takes down all our defense sales.

10

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Greg McKinley - Dougherty & Company — Analyst

Okay. And in terms of the areas there that are the most vulnerable, you said is it missile and weapons guidance systems?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

We’ve seen some contraction in some of our smart weapon controls. But on the other hand, we’ve seen some pickup in some of the other weapons stations. So it’s just a mix, and depending on timing of sometimes some of the logistics buys, based on the usage of the equipment. So that’s kind of where we’re seeing a little decline, and as I said, it’s been offset with some foreign military and offset with some other increases.

Greg McKinley - Dougherty & Company — Analyst

And then getting back to the wind market for a moment, I think you made some comment around its growth in 2011 and expected incentives to still provide for pretty healthy outlook in that market in 2012. Just remind me please, what is that growth outlook? And then what geographies — is there any shift in terms of regions of the world that you’re becoming more exposed to in that market?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Well, we are — we’re in good position. A lot of our customers are European-based. I guess I’d say that they’re selling around the world. We also have done well in India. And we have penetrated China, but on a lesser extent.

The comments that we’re highlighting is we’re seeing an increase in demand in some of the orders in the US, and we’re attributing that to the potential for the production tax credit to end at the end of 2012. So I think some people are pulling orders then, so we actually see North American orders increasing, Europe relatively flat, India and China up. Overall, probably, for Woodward, about a 20% increase overall.

Greg McKinley - Dougherty & Company — Analyst

In 2012.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes.

Greg McKinley - Dougherty & Company — Analyst

Thank you.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Sure.

Operator

Thank you. Our next question comes from J.B. Groh from D.A. Davidson.

J.B. Groh - D.A. Davidson & Co. — Analyst

Hi guys. Thanks for taking my call and congratulations on the quarter.

11

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Thank you.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Thank you.

J.B. Groh - D.A. Davidson & Co. — Analyst

Could you talk about how the R&D allocates between the two new segments and how we should think about that? What’s —?

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Well, it’s actually remarkably well balanced between the two. So there’s not a lot of difference between our two segments in terms of how the variable comp and R&D spreads out.

J.B. Groh - D.A. Davidson & Co. — Analyst

So that doesn’t explain the margin differential year-over-year? I was just wondering if there was more R&D spend in energy Q4 or not? But you’re saying it’s pretty balanced year-to-year?

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Pretty balanced, yes. Now, it would not be a significant element of difference between the two businesses.

J.B. Groh - D.A. Davidson & Co. — Analyst

Okay. Okay. And then did you — you gave us the R&D for 2012, so that’s good Did you talk about free cash flow conversion expectations for 2012?

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

No, we did not. Glad you asked the question. We anticipate that we will be — this year, we had significant investment in working capital. We believe that will moderate next year, and will be somewhere around about the $100 million, north of $100 million, $120 million is neighborhood we’re looking at, at the moment.

J.B. Groh - D.A. Davidson & Co. — Analyst

Okay. Okay. And the use for that is debt paydown and other acquisitions, that sort of thing?

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

We do have approximately $150 million roughly over the next three years.

J.B. Groh - D.A. Davidson & Co. — Analyst

Okay. In maturities?

12

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

$175 million, excuse me.

J.B. Groh - D.A. Davidson & Co. — Analyst

Yes, okay. Okay. Great, hey, thanks for your time and looking forward to the Analyst Day.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Thank you.

Operator

Thank you. And our next question comes from Gary Farber from CL King.

Gary Farber - CL King & Associates — Analyst

Yes, good afternoon.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

Hi Gary.

Gary Farber - CL King & Associates — Analyst

Hey, just a question. Can you talk about your major geographies and sort of what you’ve seen since the quarter closed? Has been any sort of significant changes or just sort of, just sort of moderating in certain areas?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

I think what we would say, pretty consistent. You know, a lot of our growth in both on aerospace and the energy side is being driven out of Asia, China — the rest of Asia and China, and the Middle East. So I’d say those are the biggest drivers, and they continue to be at the moment.

Gary Farber - CL King & Associates — Analyst

And then North America, how would you characterize that?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

As more steady. We see — the interesting thing where we have to say is where is the end demand? And it’s always a little tricky for us. But a lot of our large North American customers are doing very well, but a lot of that’s being exported. And sometimes we can’t tell exactly where it’s going. Our North American business is holding nicely, but a lot of the demand is being driven by, as I said, you know, China, Asia, and the Middle East.

13

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Gary Farber - CL King & Associates — Analyst

In your review, you commented on before as far as, you know, global economic growth not being much. Is that because of a waiting towards Europe review, or is it something else?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Well, I think it’s — we do a lot of economic modeling, and that’s kind of the area of the business cycle right now. It is getting some pressure obviously from Europe and the uncertainty in Europe. There’s pressure on, I’d say, some of the uncertainty in the US. And we have higher growth in some of the developing world. So that’s basically the macroeconomic model that we’re running against and using for our business planning purposes. And then on top of that, as I said, we’re building in the market share gains and the like that are leading us to still get double digits overall sales growth.

Gary Farber - CL King & Associates — Analyst

Great. Okay. Thanks.

Operator

Thank you. (Operator Instructions) You have a follow-up from Mr. Pete Skibitski from SunTrust.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Hey guys, just want to make sure I understood cash flow next year. it sounds like CapEx is going to step up pretty good. Is that going to come back down in fiscal 2013, or will it stay at that higher level going forward? And maybe you could just let us know what your expectation is for free cash on next year?

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes. I will let Bob answer free cash, but I was just going to say that’s a nice leading question to the Analyst Day, because we’re going to talk then about our five-year outlook, which we have a very nice growth outlook. We do not expect capital expenditures to drop over the next couple of years. We expect a sizable amount of investment in organic growth and we’re trying to outline that more on December 7, 2011.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Okay.

Bob Weber - Woodward Inc — Vice Chairman, CFO, Treasurer

From a free cash flow standpoint, I think I mentioned we’re going to be around the $120 million mark, we believe.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Got you. Okay. And then, and last one, in terms of trends in the commercial aerospace aftermarket, it seemed like a lot of the airlines seem to be trying to keep capacity in check next year. And so I’m just wondering what your expectation is for aftermarket growth in commercial aero next year?

14

Final Transcript

Nov 14, 2011 / 09:30PM GMT, WWD — Q4 2011 Woodward Inc Earnings Conference Call

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Yes, well I’d say is we still expect sizable aftermarket growth. The fleet is flying. We are well represented on the fleet, and as we’ve said we’ve been accumulating more and more hours on some of the premier platforms. Very little of our product has been parked. We talked about that in the past, we’re represented on the aircraft flying, so we see good growth and we expect to continue to pick up some growth across all the product lines. So we expect a strong aftermarket year.

Pete Skibitski - SunTrust Robinson Humphrey — Analyst

Great. Thank you.

Operator

Thank you. I’m showing no further questions at this time. I’d like to hand the conference over to Mr. Tom Gendron for closing remarks.

Tom Gendron - Woodward Inc — Chairman, Executive Officer

Okay. Well I appreciate everybody joining us today. We are really looking forward to seeing a lot of you in New York in a few weeks. It’s the first Investor Analyst Day we’ve ever done. You know, I think you’ll enjoy meeting some of the group presidents that will be there. Get a better feel for the whole management team and our long-term outlook. So look forward to seeing you shortly and thanks again for joining us.

Operator

Ladies and gentlemen, this concludes our conference call today. If you’d like to listen to a rebroadcast of this conference call, it will be available today at 7.30PM Eastern Standard time by dialing 1-888-266-2081, or 1-703-925-2533 and by entering the access code 154-8416. A rebroadcast will also be available at Company’s website at www.Woodward.com for 14 days.

We thank you for your participation in today’s conference call, and ask you to please disconnect your lines. Thank you.

15

EX-99.3

Exhibit 99.3

November 14, 2011 FY 2011 Fourth Quarter Results

Today's Agenda Highlights & Market Review Tom Gendron Financial Results & Outlook Bob Weber Q&A 2

Cautionary Statement 3 Information in this conference call and slide presentation 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 future sales, earnings, liquidity, relative profitability, and the impact of economic conditions and downturns on Woodward. 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 actual results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to, a decline in business with, or financial distress of, our significant customers; instability in the financial markets or other prolonged unfavorable economic and other industry conditions; any failure to fully comply with the Company's administrative agreement with the U.S. Department of Defense; Woodward's ability to obtain financing, on acceptable terms or at all; Woodward's ability to implement and realize the intended effects of restructuring efforts; Woodward's ability to successfully manage competitive factors; Woodward's ability to manage expenses while responding to sales increases or decreases; the ability of Woodward's subcontractors and suppliers to meet their obligations; the success of, or expenses associated with, Woodward's product development activities; Woodward's ability to integrate acquisitions and manage costs thereto; Woodward's debt obligations, debt service requirements and ability to operate its business and pursue its business strategies in light of restrictive covenants in its outstanding debt agreements; risks related to U.S. Government contracting activities; future impairment charges resulting from changes in the estimates of fair value of reporting units or of long-lived assets; future subsidiary results or changes in domestic and international tax statutes; environmental liabilities; Woodward's continued access to a stable workforce and favorable labor relations; Woodward's ability to successfully manage regulatory, tax and legal matters; liabilities that may result from legal and regulatory proceedings, inquiries, or investigations by private or U.S. Government persons or entities; risk of operating internationally including the impact on reported earnings from fluctuations in foreign currency exchange rates; fair value of defined benefit plan assets and assumptions used in determining Woodward's retirement pension and other postretirement benefit obligations and related expenses, and other risk factors described in Woodward's Annual Report on Form 10-K for the year ended September 30, 2011 which we expect to file shortly.

Q4 FY 2011 Fiscal Highlights Net Sales of $489 million Up 19% YOY Earnings of $0.60 per diluted share, up from $0.47 last year 28% increase YOY Significant increases in Variable compensation R&D EBIT of $65 million Up 15% YOY Free cash flow of $52 million 4

Business Highlights - Aerospace Aftermarket WWD commercial aftermarket +36% in Q4 Traffic remained solid Good exposure on A320, 777 fleets OEM Strong 2011 industry orders, production rates Ramping 787 and 747-8 deliveries WWD share gain with GEnx engine Regional & business jet - recovery 737 MAX & A320neo Important recent WWD wins LEAP-X PurePower Step change in content, share Military Challenging market Foreign military - offsetting US headwind KC-46 tanker win - significant boom controls 5 Airbus A320 737 MAX

Business Highlights - Energy Industrial Turbines & Compressors Improving OEM build rates Significant exposure to natural gas Gas-fueled electricity generation Gas production, compression, transportation Reciprocating Engines Power gen, natural resources, shipping Significant natural gas exposure, opportunity Wind Share gains continue for WWD Market uncertainty regarding incentives Electrical Power gen and distribution picking up Increasing complexity and grid demands 6

Woodward Business Summary Rising OEM production rates, equipment usage In Aerospace and Energy Woodward long-term investments Technology and capabilities Delivering share gains on next generation of OEM platforms 2012 outlook favorable Moderate growth rates in our markets Share gains support growth 7

Q4 Consolidated Results 8 * Earnings attributable to Woodward

Aerospace Q4 Results Revenues Improvement in Aerospace revenues Commercial Aftermarket Sales OEM Sales for Commercial and Business Jets Earnings Increased volumes & price increases, partially offset by Increased variable compensation Increased R&D for new platforms 9

10 Aerospace Segment - 2011 Sales Civil 61% Military 39% Aftermarket 38% Original Equipment 62% Propulsion Control 56% Motion Control 44%

Energy Q4 Results Revenues Broad strength in control systems and components Industrial turbines, wind turbines, and reciprocating engines Earnings Volume increases and currency exchange benefit offset by Increased variable compensation Acquisition integration costs Increased R&D expenditures 11

(CHART) 12 Energy Segment - 2011 Sales Reciprocating Engines 43% Wind 15%

Selected Financial Items - Q4 13 * Gross margin defined as (Net Sales less Cost of Goods Sold) / (Net Sales); ** EBT defined as Net Earnings Before Taxes *** EBITDA reconciliation to Net Earnings and Free Cash Flow calculation are shown in the appendix

Outlook Fiscal 2012 Revenue Between $1.85 and $1.95 billion Earnings per Diluted Share Between $2.20 and $2.35 per share 14

Appendix

Q4 EBITDA, Free Cash Flow & Leverage Ratio * Non-US GAAP Measures: EBIT (Earnings Before Interest and Taxes), EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and free cash flow are non-US GAAP financial measures. The use of these measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America. Securities analysts, investors, and others frequently use EBIT, EBITDA and free cash flow in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets that are subject to amortization. Management uses EBIT to evaluate its performance without financing and tax related considerations, as these elements may not fluctuate with operating results. EBITDA is used in reviewing compliance with our debt covenants and in evaluating capital structure impacts of various strategic scenarios. Free cash flow is a non-US GAAP financial measure which Woodward and others define as cash from operations less capital expenditures. (Unaudited) (Unaudited) 16

Long Term Targeted Segment Operating Margins Aerospace Segment ~20% Energy Segment ~16% 17