Year-to-Date Highlights:

Cash generated from operations during the first six months of fiscal 2009 was $51.8 million, up from $29.2 million generated in the year-ago period.

Total sales for the six-month period of $679.4 million, up 18% over the year-ago period. Operating earnings for the six months of $75.3 million. Excluding pre-tax special charges of $16.6 million, operating earnings were up 11% from $83.1 million for the year-ago period.

Year-to-date earnings per share for the six-month period were $0.66, or $0.82 excluding special charges of $0.16 per share, compared to $0.79 per share for the year-ago period.

Total organic sales were in line with the year-ago period. Organic operating earnings, excluding the $16.6 million of special charges, increased 5% to $86.9 million from $83.1 million.

Net earnings for the current quarter included special charges of $0.16 per share as shown below. These charges are included in our nonsegment results. Sales growth would have been around 14% compared to 2008’s second quarter without the negative impact of exchange rates. Foreign exchange did not have a significant impact on net earnings. Earnings benefitted from cost control actions, offset by the effects of the decline in sales volumes.

Net sales for the six-month period were $679.4 million, up 18% from $577.8 million for the year-ago period. Net earnings for the six-month period were $45.5 million, or $0.66 per share, compared with $55.0 million, or $0.79 per share, in 2008’s six-month period. Net earnings for the current quarter included special charges of $0.16 per share, as detailed above. Exchange rates had a negative impact of around 3% on net sales and around $0.04 per share on net earnings for the first six months of fiscal 2009.

Quarterly Segment Results

Turbine Systems

Turbine Systems’ segment net sales for the second quarter were $157.8 million, an increase of 7% from $147.5 million for the second quarter a year ago. Segment earnings for the second quarter increased 12% to $34.8 million from $31.0 million for the same quarter a year ago. Segment earnings as a% of sales were 22.0% this quarter compared to 21.0% in the same quarter for the prior year. Our sales performance reflected strong demand for our industrial offerings, partially offset by a decline in demand in the business jet segment of the market. Commercial and military aerospace sales, excluding the business jet segment, were generally consistent with the prior year.

Engine Systems

Engine Systems’ segment net sales for the second quarter were $92.5 million compared to $125.8 million for 2008’s second quarter, a decrease of 27%. Segment earnings for the quarter decreased 41% to $7.7 million from $13.0 million for the same period a year ago. Segment earnings as a% of sales were 8.3% this quarter compared to 10.3% in the same quarter 2008. The sales decline was experienced broadly across the power generation and transportation markets. Exchange rates negatively affected net sales by around $4 million but the impact on segment earnings was not significant when compared to the prior year. While profitability was affected by the significant decline in volumes, our cost reduction actions substantially limited the decline in earnings.

Electrical Power Systems

Electrical Power Systems’ segment net sales for the second quarter were $58.5 million, a decrease of 10% from $64.9 million for the second quarter a year ago. Without the negative effects of exchange rates, sales were flat compared to the second quarter a year ago. Segment earnings for the quarter were $9.1 million compared to $9.5 million for the same quarter a year ago. Segment earnings as a% of sales increased to 15.6% this quarter compared to 14.7% for the same quarter 2008. Significant growth in wind inverter sales was offset by declines in sales of products related to power generation and distribution produced by the segment. Earnings were negatively affected by around $1 million of exchange rate impact partially offset by cost control actions.

Airframe Systems

During the first quarter Woodward acquired MPC, which formed our Airframe Systems segment. Segment net sales for the second quarter were $51.6 million and segment earnings were $3.2 million, or 6.3% of sales. Airframe’s military business experienced moderate growth in this quarter compared to the same quarter 2008 while commercial sales were relatively stable. Segment earnings reflect $3.4 million of intangible amortization, a non-cash charge, related to the MPC acquisition. Airframe began to realize anticipated cost savings in the second quarter, and further cost savings and synergies are expected in coming quarters. Additionally, restructuring actions at Airframe Systems totaling $10 million were accrued in the initial consolidation of MPC, of which around $7 million will be paid by the end of the third quarter of 2009.

Nonsegment

Nonsegment expenses of $23.6 million for the quarter include the impact of previously discussed special charges of $16.6 million. Nonsegment expenses for this quarter without these charges were $7.0 million or 2.1% of net external sales, down from $9.3 million or 3.0% of net external sales for the same quarter 2008.

Woodward’s effective tax rate this quarter was lower than normal as a result of the resolution of a prior year tax matter and the reinstatement of the U.S. research credit.

We are extremely pleased that we are realizing our long-term strategy of targeted expansion in the dynamic aerospace market with the acquisitions of MPC and HRT. Together with our existing technology, this combination provides a solid base in the airframe segment of this market, continued Mr. Gendron. We are confident these actions will deliver significant shareholder value as we go forward.

Year-to-Date Segment Results

Turbine Systems

Turbine Systems’ segment net sales for the six-month period were $302.5 million, an increase of 9% from $278.2 million for the same period a year ago. Segment earnings for the six-month period increased 10% to $63.9 million from $58.2 million for the same period a year ago. Segment earnings as a% of sales were 21.1% for the first six months of fiscal 2009 compared to 20.9% in the same period for the prior year.

Engine Systems

Engine Systems’ segment net sales for the first six months of fiscal 2009 were $206.7 million compared to $239.9 million for the year-ago period, a decrease of 14%. Segment earnings for the six-month period decreased 23% to $19.4 million from $25.1 million for the same period a year ago. Segment earnings as a% of sales were 9.4% this six-month period compared to 10.5% in the year-ago period.

Electrical Power Systems

Electrical Power Systems’ segment net sales for the six-month period were $120.4 million, a decrease of 2% from $122.4 million for the same period a year ago. Segment earnings for the six-month period increased 9% to $18.3 million from $16.7 million for the same period a year ago. Segment earnings as a% of sales increased to 15.2% during the six-month period compared to 13.7% for the year-ago period.

Airframe Systems

Segment net sales for the six-month period were $103.9 million and segment earnings for the six-month period were $5.0 million, or 4.8% of sales. Segment earnings reflect $6.6 million of intangible amortization, a non-cash charge, related to the MPC acquisition.