[1]

On June 1, 2018, Woodward acquired L’Orange. Net sales attributable to L’Orange were $87,680, $87,986, $78,517, and $77,826 in the first through fourth quarters of fiscal year 2019, respectively, as compared to $24,878 and $78,027 in the third and fourth quarters of fiscal year 2018, respectively.

[2]

Woodward adopted ASC 606 on October 1, 2018 and elected the modified retrospective transition method. The quarterly results for periods prior to fiscal year 2019 were not adjusted for the new standard. Subsequent to the adoption of ASC 606, Woodward’s management identified an inconsistency in the application of ASC 606. The inconsistency resulted in errors that were cumulatively not material in determining the percentage of completion calculation on over time product revenue recognition, which caused the Condensed Consolidated Financial Statements for the quarters ended December 31, 2018 and March 31, 2019, as well as the cumulative impact of the adoption of ASC 606 on the Condensed Consolidated Balance Sheet as of October 1, 2018, to be misstated by amounts that management concluded were not material (“ASC 606 adoption errors”). To correct the errors for the three-months ended December 31, 2018 and for the three and six-months ended March 31, 2019, Woodward made an out-of-period correction in the three-months ended June 30, 2019. The correction resulted in increases to net sales of $13,614, earnings before income taxes of $8,041, net earnings of $6,037, and diluted earnings per share of $0.09 for the three-months ended June 30, 2019, the majority of which relates to Woodward’s Aerospace segment.

[3]

To correct the ASC 606 adoption errors for the three-months ended December 31, 2018 and for the three and six-months ended March 31, 2019, Woodward made an out-of-period correction in the three-months ended June 30, 2019. The correction resulted in increases to net sales of $13,614, earnings before income taxes of $8,041, net earnings of $6,037, and diluted earnings per share of $0.09 for the three-months ended June 30, 2019, the majority of which relates to Woodward’s Aerospace segment.

[4]

Net Industrial segment sales attributable to L’Orange were $87,680, $87,986, $78,517, and $77,825 in the first through fourth quarters of fiscal year 2019, respectively, as compared to $24,878 and $78,027 in the third and fourth quarters of fiscal year 2018, respectively.