8-K/A

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

FORM 8-K/A
(Amendment No. 2)

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

Date of Report (Date of earliest event reported): October 1, 2008

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 is being filed by Woodard Governor Company (“Woodward”) solely for the purpose of amending and supplementing Item 9.01 of that certain Current Report on Form 8-K originally filed by Woodward with the Securities and Exchange Commission (“SEC”) on October 6, 2008 (the “Original Form 8-K”) in connection with the acquisition of all of the outstanding shares of stock of Techni-Core, Inc.(“Techni-Core”) and all of the outstanding shares of stock of MPC Products Corporation (“MPC”) not held by Techni-Core pursuant to the Stock Purchase Agreement (the “Acquisition Agreement”), as amended, by and among the Company, MPC, Techni-Core, and The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991 and the individuals and entities listed on Schedule I thereto (collectively, the “Sellers”). The acquisition by Woodward of the stock of MPC and Techni-Core closed on October 1, 2008. As indicated in the Original Form 8-K, this Form 8-K/A 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 8-K, and are permitted to be filed by amendment no later than 71 calendar days after the date the Original 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 Techni-Core are being filed as exhibits to this amendment and are incorporated by reference herein (The consolidated financial statements of Techni-Core, Inc. include MPC Products Corporation’s results for the indicated periods):

Exhibit 99.1 — Techni-Core’s audited consolidated financial statements, including the report of the independent accountant and Techni-Core’s audited consolidated balance sheets as of December 31, 2007 and 2006, and Techni-Core’s audited consolidated statements of income, stockholders’ equity, and cash flows for each of the years ended December 31, 2007 and 2006.

Exhibit 99.2 — Techni-Core’s unaudited consolidated financial statements, including Techni-Core’s unaudited consolidated balance sheets as of September 30, 2008 and September 29, 2007, and Techni-Core’s unaudited consolidated statements of income, stockholders’ equity, and cash flows for each of the nine month periods ended September 30, 2008 and September 29, 2007.

(b) Unaudited 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 99.3 — Unaudited pro-forma condensed combined financial statements and explanatory notes of Woodward as of September 30, 2008 after giving effect to the acquisition of MPC and Techni-Core 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.

Exhibit No.	Description
10.5	Stock Purchase Agreement, dated August 19, 2008, by and among Woodward Governor Company, MPC Products Corporation, Techni-Core, Inc., The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991 and the individuals and entities named in Schedule I thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on August 21, 2008).
10.6	Amendment No. 1, dated October 1, 2008, to the Stock Purchase Agreement, dated August 19, 2008, by and among Woodward Governor Company, MPC Products Corporation, Techni-Core, Inc., The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991 and the individuals and entities named in Schedule I thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on October 6, 2008).
23.1	Consent of McGladrey & Pullen, LLP, Independent Auditors and Accountants.
99.1	Techni-Core’s audited consolidated financial statements, including the report of the independent accountant and Techni-Core’s audited consolidated balance sheets as of December 31, 2007 and 2006, and Techni-Core’s audited consolidated statements of income, stockholders’ equity, and cash flows for each of the years ended December 31, 2007 and 2006.
99.2	Techni-Core’s unaudited consolidated financial statements, including Techni-Core’s unaudited consolidated balance sheets as of September 30, 2008 and September 29, 2007, and Techni-Core’s unaudited consolidated statements of income, stockholders’ equity, and cash flows for each of the nine month periods ended September 30, 2008 and September 29, 2007.
99.3	Unaudited pro-forma condensed combined financial statements and explanatory notes of Woodward as of September 30, 2008 after giving effect to the acquisition of MPC and Techni-Core 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 MPC and Woodward, the expected benefits and costs of the MPC acquisition; Woodward’s plans relating to the acquisition; the future financial and accounting impact of the acquisition; 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 actual 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 acquisition may not materialize as expected; the possibility that preliminary financial reporting estimates and assumptions may prove to be incorrect; the failure of Woodward to successfully integrate the MPC business 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 and other risk factors described in Woodward’s Annual Report on Form 10-K for the year ended September 30, 2008.

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: December 15, 2008	By:	/s/ A. Christopher Fawzy
		Name:	A. Christopher Fawzy
		Title:	Vice President, General Counsel, and Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
10.5	Stock Purchase Agreement, dated August 19, 2008, by and among Woodward Governor Company, MPC Products Corporation, Techni-Core, Inc., The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991 and the individuals and entities named in Schedule I thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on August 21, 2008).
10.6	Amendment No. 1, dated October 1, 2008, to the Stock Purchase Agreement, dated August 19, 2008, by and among Woodward Governor Company, MPC Products Corporation, Techni-Core, Inc., The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991 and the individuals and entities named in Schedule I thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on October 6, 2008).
23.1	Consent of McGladrey & Pullen, LLP, Independent Auditors and Accountants.
99.1	MPC’s audited consolidated financial statements, including the report of the independent accountant and related audited consolidated balance sheets as of December 31, 2007 and 2006, and MPC’s audited consolidated statements of income, stockholders’ equity, and cash flows for each of the years ended December 31, 2007 and 2006.
99.2	Techni-Core’s audited consolidated financial statements, including the report of the independent accountant and Techni-Core’s audited consolidated balance sheets as of December 31, 2007 and 2006, and Techni-Core’s audited consolidated statements of income, stockholders’ equity, and cash flows for each of the years ended December 31, 2007 and 2006.
99.3	Techni-Core’s unaudited consolidated financial statements, including Techni-Core’s unaudited consolidated balance sheets as of September 30, 2008 and September 29, 2007, and Techni-Core’s unaudited consolidated statements of income, stockholders’ equity, and cash flows for each of the nine month periods ended September 30, 2008 and September 29, 2007. The consolidated financial statements of Techni-Core, Inc. include MPC Products Corporation’s results for the indicated periods.
99.4	Unaudited pro-forma condensed combined financial statements and explanatory notes of Woodward as of September 30, 2008 after giving effect to the acquisition of MPC and Techni-Core and adjustments described in such pro forma financial information.

EX-23.1

Exhibit 23.1

Consent of Independent Auditor

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 Woodward Governor Company of our report dated August 25, 2008, except for the sixth paragraph of Note 10 as to which the date is October 1, 2008, relating to our audit of the consolidated financial statements of Techni-Core, Inc. and Subsidiaries as of and for the years ended December 31, 2007 and 2006, included in this Current Report on Form 8-K/A.

/s/ McGladrey & Pullen, LLP

Chicago, IL
December 15, 2008

EX-99.1

Exhibit 99.1

Techni-Core, Inc.
and Subsidiaries

Consolidated Financial Report
12.31.07

McGladrey & Pullen, LLP is a member firm of RSM International –
an affiliation of separate and independent legal entities.

Contents

Independent Auditor’s Report	1
Financial Statements
Consolidated Balance Sheets	2 - 3
Consolidated Statements of Income	4
Consolidated Statements of Stockholders’ Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7 - 15

Independent Auditor’s Report

To the Board of Directors
Techni-Core, Inc. and Subsidiaries
Skokie, Illinois

We have audited the accompanying consolidated balance sheets of Techni-Core, Inc. and Subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of income, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Techni-Core, Inc. and Subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Schaumburg, Illinois
August 25, 2008, except for the sixth paragraph of Note 10
as to which the date is October 1, 2008.

McGladrey & Pullen, LLP is a member firm of RSM International –
an affiliation of separate and independent legal entities.

1

Techni-Core, Inc. and Subsidiaries

Consolidated Balance Sheets
December 31, 2007 and 2006
($ in thousands)

	2007		2006
Assets
Cash	$	303		225
Accounts receivable, net of allowance for doubtful accounts 2007 $1,350; 2006 $1,473		34,822		38,720
Income taxes receivable		1,692		—
Inventories		64,934		57,116
Deferred income taxes		5,247		4,669
Prepaid expenses		652		989
Other		170		253
Total current assets		107,820		101,972
Property, Plant and Equipment
Land, buildings and improvements		15,043		13,914
Machinery and equipment		23,924		20,957
Office furniture and equipment		2,155		1,778
Computer equipment		13,603		14,867
Construction in process		3,152		1,451
		57,877		52,967
Less accumulated depreciation and amortization		40,776		39,262
		17,101		13,705
Deferred Income Taxes		1,558		1,162
Goodwill		4,510		4,510
Other		2,516		2,594
	$	133,505	$	123,943

See Notes to Consolidated Financial Statements.

2

	2007		2006
Liabilities and Stockholders’ Equity
Current Liabilities
Excess of outstanding checks over bank balance	$	639	$	1,818
Accounts payable		8,147		8,602
Accrued expenses		29,473		5,406
Accrued employee benefit plan contributions		3,076		3,070
Warranty reserve		1,666		1,119
Deferred revenue		1,142		438
Income taxes payable		52		660
Total current liabilities		44,195		21,113
Deferred Rent		506		—
Revolving Loan Payable		21,415		20,930
Financing Obligation		3,195		3,447
Total liabilities		69,311		45,490
Minority Interest		25,832		38,212
Stockholders’ Equity
Common stock, $1 par value; 10,000 shares authorized, 8,000 shares issued and outstanding		8		8
Additional paid-in capital		380		380
Retained earnings		37,974		39,853
		38,362		40,241
	$	133,505	$	123,943

3

Techni-Core, Inc. and Subsidiaries

Consolidated Statements of Income
Years Ended December 31, 2007 and 2006
($ in thousands)

	2007			2006
Sales	$	194,715			177,041
Cost of sales		136,621			123,907
Gross profit		58,094			53,134
Selling, general and administrative expenses		33,395			25,926
Research and development expenses		5,392			4,798
Settlement cost		25,000			—
		63,787			30,724
Operating (loss) income		(5,693	)		22,410
Interest expense		2,671			3,042
(Loss) income before income tax expense and minority interest		(8,364	)		19,368
Income tax expense		4,620			5,995
(Loss) income before minority interest		(12,984	)		13,373
Minority interest in net loss (income) of consolidated subsidiary		12,380			(10,380	)
Net (loss) income	$	(604	)	$	2,993

See Notes to Consolidated Financial Statements.

4

Techni-Core, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity
Years Ended December 31, 2007 and 2006
($ in thousands)

			Additional
	Common		Paid-in		Retained
	Stock		Capital		Earnings			Total
Balance, December 31, 2005	$	8	$	380	$	36,860		$	37,248
Net income		—		—		2,993			2,993
Balance, December 31, 2006		8		380		39,853			40,241
Net loss		—		—		(604	)		(604	)
Common stock dividends		—		—		(1,275	)		(1,275	)
Balance, December 31, 2007	$	8	$	380	$	37,974		$	38,362

See Notes to Consolidated Financial Statements.

5

Techni-Core, Inc. and Subsidiaries

Consolidated Statements of Cash Flows
Years Ended December 31, 2007 and 2006
($ in thousands)

	2007			2006
Cash Flows From Operating Activities
Net (loss) income	$	(604	)	$	2,993
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		4,150			3,434
Amortization of financing obligation		(252	)		(158	)
Deferred income taxes		(974	)		(982	)
Gain on disposal of property, plant and equipment		(5	)		(39	)
Minority interest in net (loss) income of consolidated subsidiary		(12,380	)		10,380
Changes in assets and liabilities:
Accounts receivable		3,898			(9,575	)
Income taxes receivable		(1,692	)		—
Inventories		(7,818	)		(2,807	)
Prepaid expenses		337			(242	)
Other assets		77			(143	)
Accounts payable		(455	)		2,898
Accrued expenses		24,067			2,611
Employee benefit plan contributions		6			1,570
Warranty reserve		547			167
Deferred revenue		704			(170	)
Income taxes payable		(608	)		(1,303	)
Deferred rent		506			—
Net cash provided by operating activities		9,504			8,634
Cash Flows From Investing Activities
Purchases of property, plant and equipment		(7,462	)		(3,995	)
Proceeds from sale of property, plant and equipment		5			52
Net cash used in investing activities		(7,457	)		(3,943	)
Cash Flows From Financing Activities
(Decrease) increase in excess of outstanding checks over bank balance		(1,179	)		1,818
Net borrowings (repayments) on revolving loan payable		485			(6,870	)
Common stock dividends paid		(1,275	)		—
Net cash used in financing activities		(1,969	)		(5,052	)
Net increase (decrease) in cash		78			(361	)
Cash:
Beginning of year		225			586
End of year	$	303		$	225
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest	$	3,016		$	3,031
Income taxes		7,894			8,280

See Notes to Consolidated Financial Statements.

6

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies

Nature of business: Techni-Core, Inc. (Techni-Core) is incorporated under the laws of the State of Delaware. Techni-Core owns all of the voting preferred stock as well as 15% of the common stock of MPC Products Corporation (MPC); 100% of Concorde Group Ltd. (CGL); and 100% of Electric Vehicle Systems (EVS). Techni-Core, Inc. and its subsidiaries are hereafter referred to as the “Company.”

The minority interest in the consolidated financial statements represents the 85.00% ownership of the non-controlling stockholders’ interest in MPC.

The Company designs, manufactures and markets control devices for the commercial airline, defense, aerospace, and industrial controls industries. Credit terms to worldwide customers generally range between 10 and 180 days. All of the Company’s operations are located in Skokie, Illinois.

A summary of the Company’s significant accounting policies follows:

Principles of consolidation: The consolidated financial statements include the accounts of Techni-Core and its wholly owned subsidiaries (Electric Vehicle Systems, Inc. and Concorde Group, Ltd.). The accounts of MPC have also been consolidated on the basis of Techni-Core, Inc.’s controlling ownership of MPC’s voting preferred stock. All significant intercompany transactions and accounts have been eliminated in consolidation.

Accounting estimates: The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Financial instruments: The Company has no financial instruments for which the carrying value materially differs from fair value.

Cash concentration: Substantially all of the Company’s cash is held in one financial institution.

Accounts receivable: Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a periodic basis. Management determines the allowance for doubtful receivables by identifying troubled accounts primarily by considering the age of the customer’s receivable and also by considering the creditworthiness of the customer as well as general economic conditions. Management considers an account receivable to be delinquent when it is more than sixty days past due. The Company generally does not charge interest on delinquent accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

Inventories: Basic stock and routinely manufactured orders inventory (which is included in work in process and finished goods) is valued at the lower of cost or market. Cost for this inventory is determined on a moving average basis. Work in process and finished goods inventory for prototype projects represents accumulated contract costs related to contracts in process, net of amounts recognized on a percentage-of-completion (units-of-delivery method) basis and losses on loss contracts.

7

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (continued)

Property, plant and equipment: Property, plant and equipment are stated at cost. Equipment is depreciated principally on the sum-of-the-years-digits method based on the estimated useful lives of the related assets ranging between 3 and 10 years.

Buildings and leasehold improvements are amortized over the terms of the respective lease or useful lives of the asset, whichever is shorter.

Warranty reserve: The Company accrues a percentage of its sales for warranty expenses based on historical experience. The Company typically extends a one-year warranty on most products it sells.

Goodwill and intangible assets: The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Intangible Assets, effective January 1, 2002. SFAS 142 requires, among other things, the annual testing of goodwill for impairment and discontinuance of goodwill amortization.

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in the Company’s acquisition of common stock of MPC during 2002. The Company has determined that there are no indications of impairment of the goodwill at December 31, 2007 and 2006.

The Company’s definite-lived intangible assets related primarily to the customer relationships of MPC and are being amortized over a period of five to ten years. The amortized cost of definite-lived intangible assets totaling approximately $322 and $406 at December 31, 2007 and 2006, are classified as other long-term assets in the accompanying consolidated balance sheets. Accumulated amortization on these intangibles approximates $467 and $383 at December 31, 2007 and 2006, respectively.

Revenue recognition: The Company accounts for revenues associated with routinely manufactured orders when the orders are shipped to the customer, which is typically when title, risk and reward of ownership transfer to the buyer.

Additionally, the Company generates substantial revenues under fixed-price and cost reimbursable contracts. Revenue from fixed-price contracts is recognized on the percentage-of-completion (units of delivery) method. Additionally, revenues recognized for services related to design and testing are based upon the completion of certain contractual milestones.

Revenue from cost-reimbursable-type contracts is recognized on the basis of reimbursable contract costs incurred during the period, including applicable fringe, overhead, and general administrative expenses, plus the fee earned.

Provision for estimated losses on uncompleted contracts is made in the period in which such losses are determined. Change in job performance, job conditions, and estimated profitability may result in revisions to costs and revenue, and are recognized in the period in which the revisions are determined.

8

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (continued)

Income taxes: Techni-Core and its wholly owned subsidiaries file a consolidated federal income tax return. MPC files a separate federal income tax return. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Newly issued accounting pronouncements: In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”) Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If there are changes in net assets as a result of application of FIN 48 these will be accounted for as an adjustment to the opening balance of retained earnings. Additional disclosures about the amounts of such liabilities will also be required. In February 2008, the FASB delayed the effective date of FIN 48 for certain nonpublic enterprises to annual financial statements for fiscal years beginning after December 15, 2007. The Company will be required to adopt FIN 48 in its 2008 annual financial statements. The Company is currently assessing the impact that the adoption of FIN 48 may have on its consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurement. SFAS No. 157 also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under SFAS No. 157, fair value measurements are disclosed by level within that hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, except for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis for which delayed application is permitted until fiscal years beginning after November 15, 2008. The adoption of SFAS No. 157 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). This Statement provides greater consistency in the accounting and financial reporting for business combinations. SFAS 141(R) establishes new disclosure requirements and, among other things, requires the acquiring entity in a business combination to record contingent consideration payable, to expense transaction costs, and to recognize all assets acquired and liabilities assumed at acquisition-date fair value. This standard is effective for the beginning of the Company’s first fiscal year beginning after December 15, 2008. SFAS 141(R) will have a significant impact on the accounting for future business combinations after the effective date and will impact financial statements both on the acquisition date and subsequent periods.

9

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies (continued)

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS No. 160”). SFAS No. 160 amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the minority or noncontrolling interests in a subsidiary or variable interest entity and for the deconsolidation of a subsidiary or variable interest entity. Minority interests will be recharacterized as noncontrolling interests and classified as a component of equity. It also establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary and requires expanded disclosures. SFAS No. 160 is effective for the beginning of the Company’s first fiscal year beginning after December 15, 2008, and requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. The Company has not yet determined the impact of adoption on its results of operations or financial position.

Reclassifications: Certain items in the 2006 consolidated financial statements have been reclassified to conform to the 2007 presentation.

Note 2. Inventories

Inventories at December 31 2007 and 2006 consist of the following:

	2007			2006
Basic stock	$	52,835		$	45,536
Work-in-process and finished goods		15,945			16,898
Customer contracts in progress, net		3,566			1,263
Slow-moving and obsolescence reserves		(7,412	)		(6,581	)
	$	64,934		$	57,116

Note 3. Pledged Assets and Revolving Loan Payable

Through an amendment to the credit agreement dated August 18, 2008 and retroactively effective as of December 31, 2007, the Company replaced its $35,000 revolving loan agreement with a new $55,000 revolving loan agreement with its existing bank. The new loan agreement expires November 10, 2011, provides for a maximum borrowing of $55,000 which can be used for general corporate purposes, including business acquisitions and stand-by letters of credit, and payment to the United States Government for settlement of the Company’s federal investigation (Note 9). The Company can borrow at the bank’s prime rate (7.25 percent at December 31, 2007) or London Interbank Offered Rate (LIBOR) (4.70 percent at December 31, 2007) plus 1.75 percent. Advances borrowed under the revolving loan payable at December 31, 2007 and 2006, were $21,415 and $20,930 respectively. Amounts borrowed under the agreement are secured by substantially all of the assets of the Company and a mortgage on specific real property owned by Concorde Country Manor, Inc., an affiliate through common ownership. Additionally, borrowings under the revolving loan are guaranteed by Concorde Country Manor, Inc.

The agreement contains provisions which restrict the declaration or payment of dividends (other than stock dividends) or other distributions on, and the acquisition of, the Company’s common stock. The credit agreement also contains certain financial covenants. At December 31, 2007 and 2006, the Company was in compliance with all financial covenants.

10

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 4. Employee Benefit Plans

The Company has a defined contribution pension plan and a profit sharing plan. Employees with one year of service are eligible to participate.

The Company’s defined contribution pension plan required Company contributions, including forfeitures, equal to ten percent of the compensation of plan participants. It was the Company’s policy to fund accrued costs on an annual basis. The plan was amended effective January 1, 2000. The Company no longer makes contributions to the plan.

Prior to 2000, contributions to the profit sharing plan were at the Company’s discretion. The profit sharing plan was amended effective January 1, 2000. A 401(k) portion of the plan was added, to which employees can specify a fixed percentage of eligible compensation to be contributed, up to 60 percent of gross wages, to the extent permitted by law. The plan provides that the Company make a “safe harbor” contribution equal to three percent of each participant’s eligible compensation into their 401(k) on an annual basis, and it also allows the Company to make discretionary contributions. The plan was amended effective January 1, 2007 to provide for a base matching contribution. The plan provides that the Company contribute 50 percent of an employee’s contributions to the plan up to 4 percent of his/her contributions. The Company’s safe harbor contributions totaled approximately $1,843 and $1,562 in 2007 and 2006, respectively. The Company’s discretionary contributions totaled approximately $1,229 and $1,553 in 2007 and 2006, respectively. The Company’s matching contributions totaled approximately $889 and $0 in 2007 and 2006, respectively.

Note 5. Income Taxes

Deferred tax assets consist of the following components as of December 31, 2007 and 2006:

	2007			2006
Deferred tax assets:
Accounts receivable	$	524		$	571
Inventories		4,532			4,156
Accrued expenses		1,075			774
Loss carryforward		547			480
Financing obligation		1,739			1,740
		8,417			7,721
Less valuation allowance		830			684
		7,587			7,037
Deferred tax liabilities:
Property, plant and equipment		(404	)		(702	)
Prepaid expenses		(253	)		(347	)
Other		(125	)		(157	)
		(782	)		(1,206	)
	$	6,805		$	5,831

At December 31, 2007, the Company had net operating loss carryforwards of approximately $1,608 which begin to expire in 2023.

11

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 5. Income Taxes (continued)

As of December 31, 2007 and 2006, management has provided a valuation allowance of $830 and $684, respectively, due to the uncertainty of realizing certain deferred tax assets in the future.

The Company’s deferred tax assets are classified in the accompanying consolidated balance sheets at December 31, 2007 and 2006, as follows:

	2007		2006
Current assets	$	5,247	$	4,669
Noncurrent assets		1,558		1,162
	$	6,805	$	5,831

Income tax expense for the year ended December 31, 2007 and 2006, consisted of the following:

	2007			2006
Current expense	$	5,594		$	6,977
Deferred benefit		(974	)		(982	)
	$	4,620		$	5,995

Reconciliations of income tax expense computed at the statutory federal income tax rate to the Company’s income tax expense for the year ended December 31, 2007 and 2006, are as follows:

	2007			2006
Computed “expected” tax expense	$	(2,844	)	$	6,585
Increase (decrease) resulting from:
State income tax, net of federal tax benefit		(428	)		933
Nondeductible expenses		9,997			139
Research and development credits		(1,300	)		(1,064	)
Extraterritorial income exclusion		—			(171	)
Domestic manufacturer’s deduction		(402	)		(351	)
Other		(403	)		(76	)
	$	4,620		$	5,995

12

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 6. Operating Leases and Related Party Transactions

The Company and its subsidiaries lease certain production facilities under various operating leases, expiring in February 2011 or January 2022, including several leases from an affiliate. Under the terms of the leases, the Company bears the costs of maintaining the leased property, real estate taxes and insurance.

Approximate future minimum lease payments under these operating leases at December 31, 2007, are as follows:

	Leases from		Other
	Related Parties		Leases
2008	$	2,408	$	1,064
2009		2,449		1,096
2010		2,498		1,129
2011		418		1,163
2012		—		1,197
Thereafter		—		12,663
	$	7,773	$	18,312

These future minimum rental payments include rental payments related to the sales leaseback transaction discussed below. Total lease expenses, including common area maintenance, real estate taxes and insurance expenses, totaled $4,532 and $3,922 in 2007 and 2006, respectively, of which $2,401 and $2,354, respectively, was paid to an affiliate.

Security deposits totaling approximately $2,185 and $2,187 paid by the Company to a related party in connection with the operating leases are classified as other long-term assets in the accompanying consolidated balance sheets at December 31, 2007 and 2006, respectively.

During 2002, the Company sold two of its production facilities to Concorde Country Manor, a company affiliated by common ownership and entered into operating leases for these facilities. As a result of continued involvement in the leased asset, recognition of the sale of the property and the related gain have been deferred. A financing obligation amounting to $4,483 was recorded in connection with the sale. Rent expense paid by the Company under lease agreements for these facilities has been offset by interest expense and a reduction of the financing obligation in the consolidated financial statements.

Note 7. Shareholders’ Agreement

A Shareholders’ Agreement (the “Agreement”) between the Company’s shareholders provides that if a shareholder intends to sell or transfer shares, the Company has the option, but not an obligation, to purchase the shares at a price and at terms as defined in the Agreement.

13

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 8. Warranty Reserve

Changes in the Company’s warranty reserve during 2007 and 2006 are as follows:

	2007			2006
Balance at the beginning of the year	$	1,119		$	952
Provision for warranties issued during the year		3,282			903
Settlements made during the year		(2,735	)		(736	)
Balance at the end of the year	$	1,666		$	1,119

Note 9. Contingencies and Commitments

Federal Investigation

In June 2005, the Company became aware of an investigation being conducted by the United States Attorney’s Office for the Northern District of Illinois and the Department of Defense (“DoD”) involving pricing of the Company’s government contracts. The Company retained counsel to represent it, has cooperated in the investigation, and has reached a settlement in principle of all claims with the United States Attorney’s Office.

As agreed in principle, the settlement will involve the Company’s payment of approximately $25,000 in fines, penalties and restitution, which is classified as accrued expenses in the accompanying consolidated balance sheet reported in Accrued Expenses. The Company has adequate financial resources to pay the $25,000 through a combination, at the Company’s discretion, of government provided financing and through an additional $20,000 of expanded financing capacity provided under the Company’s revolving loan payable (Note 3). Final settlement language is still being negotiated.

The Company is engaged in settlement discussions with the DoD to resolve administrative suspension or debarment matters. While the DoD has not indicated that an administrative suspension or debarment will be imposed, such action could have a material adverse effect on the Company’s financial condition, results of operations and prospects. To improve its compliance, the Company has implemented several courses of action which include improving internal controls, strengthening policies and procedures, providing employee training, and conducting internal audits. Management currently believes that the actions taken may allow the Company to avoid a debarment or suspension by the DoD.

The Company’s reputation could be adversely affected. The Company relies on its long-term customer relationships to maintain its operations. The Company is devoting resources to maintain customer confidence and the Company’s economic growth, which could be adversely impacted by this investigation. The existence of the government investigation was published in the media in 2005. As a result, most of the Company’s major customers have inquired about the investigation. To date, the Company believes each inquiring customer has been satisfied that the Company will continue to supply product, and the Company has not suffered any loss of business and sales volume as the result of the investigation.

14

Techni-Core, Inc. and Subsidiaries
($ in thousands)
Notes to Consolidated Financial Statements

Note 10. Subsequent Events

On March 14, 2008, MPC dissolved the wholly owned subsidiary, MMP Acquisition Corporation (“MMP”). MMP did not have ongoing operations, assets, or liabilities and the dissolution will have no material impact to the Company’s financial position, results of operations or cash flow.

On April 30, 2008, MPC formed a wholly owned subsidiary in Toulouse, France, called MPC Products Europe. MPC Products Europe is established primarily to support maintenance, repair, and overhaul for the Company’s customers in the European region.

On June 27, 2008, Techni-Core completed the sale of its wholly owned subsidiary EVS for $46 in gross cash proceeds and buyer’s assumption of certain liabilities and obligations totaling approximately $254. The sale resulted in a loss of approximately $419.

On July 30, 2008, MPC and a customer entered into a Settlement Agreement and General Release regarding a product manufactured by the MPC. As consideration in the agreement, MPC will reimburse the customer for certain costs incurred (estimated at $150), and MPC will provide the customer specific deliverables at a reduced price.

On August 8, 2008, the Company dissolved the wholly owned subsidiary Concorde Group Limited (“Concorde”). Concorde did not have ongoing operations, assets, or liabilities and the dissolution will have no material impact to the Company’s financial position, results of operations or cash flow.

On August 19, 2008, The Company entered into a definitive stock purchase agreement with Woodward Governor Company (Woodward), whereby Woodward would acquire all of the stock in the Company. The transaction is scheduled to close in October 1, 2008, and Woodward paid the final purchase price of approximately $383 million in cash.

15

EX-99.2

Exhibit 99.2

Techni-Core, Inc. and Subsidiaries

Consolidated Condensed Balance Sheets
September 30, 2008 and September 29, 2007
(in thousands)

	September 30,		September 29,
	2008		2007
	(unaudited)		(unaudited)
Assets
Cash	$	422	$	282
Accounts receivable, net of allowance for doubtful accounts 2008 $505; 2007 $1,348		36,752		33,162
Income taxes receivable		3,504		518
Inventories		65,116		64,924
Deferred income taxes		6,959		6,627
Prepaid expenses		986		748
Total current assets		113,739		106,261
Property, Plant and Equipment
Land, buildings and improvements		15,518		14,176
Machinery and equipment		27,612		22,204
Office furniture and equipment		2,353		1,988
Computer equipment		14,554		14,706
Construction in process		2,281		5,222
		62,318		58,296
Less accumulated depreciation and amortization		43,747		41,749
		18,571		16,547
Deferred Income Taxes		—		764
Goodwill		4,510		4,510
Other		1,772		2,704
	$	138,592	$	130,786

The accompanying unaudited notes are an integral part of these consolidated condensed financial statements.

	September 30,		September 29,
	2008		2007
	(unaudited)		(unaudited)
Liabilities and Stockholders’ Equity (in thousands)
Current Liabilities
Excess of outstanding checks over bank balance	$	—	$	2,499
Accounts payable		12,726		7,723
Accrued expenses		33,927		4,548
Accrued employee benefit plan contributions		1,566		2,263
Warranty reserve		2,054		1,370
Deferred revenue		113		12
Revolving loan payable		18,610		—
Financing obligation		2,921		—
Income taxes payable		621		—
Total current liabilities		72,538		18,415
Deferred Income Taxes		73		—
Deferred Rent		662		142
Revolving Loan Payable		—		23,912
Financing Obligation		—		3,267
Total liabilities		73,273		45,736
Minority Interest		27,946		44,178
Stockholders’ Equity
Common stock, $1 par value; 10,000 shares authorized, 8,000 shares issued and outstanding		8		8
Additional paid-in capital		380		380
Retained earnings		36,985		40,484
		37,373		40,872
	$	138,592	$	130,786

The accompanying unaudited notes are an integral part of these consolidated condensed financial statements.

2

Techni-Core, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations
Period from January 1, 2008 through September 30, 2008
and Period from January 1, 2007 through September 29, 2007
(in thousands)

	Period from			Period from
	January 1, 2008			January 1, 2007
	through			through
	September 30,			September 29,
	2008			2007
	(unaudited)			(unaudited)
Sales	$	152,312		$	140,791
Cost of sales		113,853			97,774
Gross profit		38,459			43,017
Selling, general and administrative expenses		27,965			26,212
Research and development expenses		4,434			3,684
		32,399			29,896
Operating income		6,060			13,121
Interest expense		1,687			1,925
Income before income tax expense and minority interest		4,373			11,196
Income tax expense		2,292			3,643
Income before minority interest		2,081			7,553
Minority interest in net income of consolidated subsidiary		(2,114	)		(5,966	)
Net (loss) income	$	(33	)	$	1,587

The accompanying unaudited notes are an integral part of these consolidated condensed financial statements.

3

Techni-Core, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations
Period from June 29, 2008 through September 30, 2008
and Period from July 1, 2007 through September 29, 2007
(in thousands)

	Period from			Period from
	June 29, 2008			July 1, 2007
	through			through
	September 30,			September 29,
	2008			2007
	(unaudited)			(unaudited)
Sales	$	51,973		$	48,059
Cost of sales		42,603			35,617
Gross profit		9,370			12,442
Selling, general and administrative expenses		10,348			10,329
Research and development expenses		1,644			1,195
		11,992			11,524
Operating (loss) income		(2,622	)		918
Interest expense		608			666
(Loss) income before income tax benefit and minority interest		(3,230	)		252
Income tax benefit		(1,706	)		(1,232	)
(Loss) income before minority interest		(1,524	)		1,484
Minority interest in net loss (income) of consolidated subsidiary		2,366			(205	)
Net income	$	842		$	1,279

The accompanying unaudited notes are an integral part of these consolidated condensed financial statements.

4

Techni-Core, Inc. and Subsidiaries

Consolidated Condensed Statements of Cash Flows
Period from January 1, 2008 through September 30, 2008
and Period from January 1, 2007 through September 29, 2007
(in thousands)

	Period from			Period from
	January 1, 2008			January 1, 2007
	through			through
	September 30,			September 29,
	2008			2007
	(unaudited)			(unaudited)
Cash Flows From Operating Activities
Net (loss) income	$	(33	)	$	1,587
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		3,157			2,810
Amortization of financing obligation		(274	)		(180	)
Deferred income taxes		(81	)		(1,560	)
Loss on disposal of property, plant and equipment		490			—
Minority interest in net income of consolidated subsidiary		2,114			5,966
Changes in assets and liabilities:
Accounts receivable		(1,930	)		5,558
Income taxes receivable		(1,812	)		(518	)
Inventories		(182	)		(7,808	)
Prepaid expenses		(334	)		241
Other assets		852			(140	)
Accounts payable		4,579			(879	)
Accrued expenses		4,454			(858	)
Employee benefit plan contributions		(1,510	)		(807	)
Warranty reserve		388			251
Deferred revenue		(1,029	)		(426	)
Income taxes payable		569			(660	)
Deferred rent		156			142
Net cash provided by operating activities		9,574			2,719
Cash Flows From Investing Activities
Purchases of property, plant and equipment,
Net cash used in investing activities		(5,055	)		(5,369	)
Cash Flows From Financing Activities
(Decrease) increase in excess of outstanding checks over bank balance		(639	)		681
Net (repayments) borrowings on revolving loan payable		(2,805	)		2,982
Common stock dividends paid		(956	)		(956	)
Net cash (used in) provided by financing activities		(4,400	)		2,707
Net increase in cash		119			57
Cash:
Beginning of period		303			225
End of period	$	422		$	282
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest	$	912		$	1,068
Income taxes		3,733			6,410

The accompanying unaudited notes are an integral part of these consolidated condensed financial statements.

5

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 1. Nature of Business and Significant Accounting Policies

Nature of business: Techni-Core, Inc. (Techni-Core) is incorporated under the laws of the State of Delaware. Techni-Core owns all of the voting preferred stock as well as 15% of the common stock of MPC Products Corporation (MPC); 100% of Concorde Group Ltd. (CGL); and 100% of Electric Vehicle Systems (EVS). Techni-Core and its subsidiaries are hereafter referred to as the “Company.”

The minority interest in the consolidated financial statements represents the 85.00% ownership of the non-controlling stockholders’ interest in MPC.

The Company designs, manufactures and markets control devices for the commercial airline, defense, aerospace, and industrial controls industries. Credit terms to worldwide customers generally range between 10 and 180 days. All of the Company’s operations are located in Skokie, Illinois.

A summary of the Company’s significant accounting policies follows:

Principles of consolidation: The consolidated financial statements include the accounts of Techni-Core and its wholly owned subsidiaries (Electric Vehicle Systems, Inc. and Concorde Group, Ltd.). The accounts of MPC have also been consolidated on the basis of Techni-Core’s controlling ownership of MPC’s voting preferred stock. All significant intercompany transactions and accounts have been eliminated in consolidation.

On June 27, 2008, Techni-Core completed the sale of its wholly owned subsidiary EVS for $46 in gross cash proceeds and buyer’s assumption of certain liabilities and obligations totaling approximately $254. The sale resulted in a loss of approximately $419.

On August 8, 2008, the Company dissolved the wholly owned subsidiary CGL. CGL did not have ongoing operations, assets, or liabilities and the dissolution will have no material impact to the Company’s financial position, results of operations or cash flow.

Basis of presentation: The accompanying unaudited interim consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments, consisting only of adjustments of a normal recurring nature considered necessary for a fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. These unaudited interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2007, and notes thereto, included in Exhibit 99.1.

Accounting estimates: The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

6

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 1. Nature of Business and Significant Accounting Policies (continued)

Financial instruments: The Company has no financial instruments for which the carrying value materially differs from fair value.

Cash concentration: Substantially all of the Company’s cash is held in one financial institution.

Accounts receivable: Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a periodic basis. Management determines the allowance for doubtful receivables by identifying troubled accounts primarily by considering the age of the customer’s receivable and also by considering the creditworthiness of the customer as well as general economic conditions. Management considers an account receivable to be delinquent when it is more than sixty days past due. The Company generally does not charge interest on delinquent accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

Inventories: Basic stock and routinely manufactured orders inventory (which is included in work in process and finished goods) is valued at the lower of cost or market. Cost for this inventory is determined on a moving average basis. Work in process and finished goods inventory for prototype projects represents accumulated contract costs related to contracts in process, net of amounts recognized on a percentage-of-completion (units-of-delivery method) basis and losses on loss contracts.

Property, plant and equipment: Property, plant and equipment are stated at cost. Equipment is depreciated principally on the sum-of-the-years-digits method based on the estimated useful lives of the related assets ranging between 3 and 10 years.

Buildings and leasehold improvements are amortized over the terms of the respective lease or useful lives of the asset, whichever is shorter.

Warranty reserve: The Company accrues a percentage of its sales for warranty expenses based on historical experience. The Company typically extends a one-year warranty on most products it sells.

Goodwill and intangible assets: The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Intangible Assets, effective January 1, 2002. SFAS 142 requires, among other things, the annual testing of goodwill for impairment and discontinuance of goodwill amortization.

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in the Company’s acquisition of common stock of MPC during 2002.

The Company’s definite-lived intangible assets related primarily to the customer relationships of MPC and are being amortized over a period of five to ten years. The amortized cost of definite-lived intangible assets totaling approximately $259 and $343 at September 30, 2008 and September 29, 2007, respectively, are classified as other long-term assets in the accompanying consolidated balance sheets. Accumulated amortization on these intangibles approximates $530 and $446 at September 30, 2008 and September 29, 2007, respectively.

Revenue recognition: The Company accounts for revenues associated with routinely manufactured orders when the orders are shipped to the customer, which is typically when title, risk and reward of ownership transfer to the buyer.

7

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 1. Nature of Business and Significant Accounting Policies (continued)

Additionally, the Company generates substantial revenues under fixed-price and cost reimbursable contracts. Revenue from fixed-price contracts is recognized on the percentage-of-completion (units of delivery) method. Additionally, revenues recognized for services related to design and testing are based upon the completion of certain contractual milestones.

Revenue from cost-reimbursable-type contracts is recognized on the basis of reimbursable contract costs incurred during the period, including applicable fringe, overhead, and general administrative expenses, plus the fee earned.

Provision for estimated losses on uncompleted contracts is made in the period in which such losses are determined. Change in job performance, job conditions, and estimated profitability may result in revisions to costs and revenue, and are recognized in the period in which the revisions are determined.

Income taxes: Techni-Core and its wholly owned subsidiaries file a consolidated federal income tax return. MPC files a separate federal income tax return. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Newly issued accounting pronouncements: In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”) Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If there are changes in net assets as a result of application of FIN 48 these will be accounted for as an adjustment to the opening balance of retained earnings. Additional disclosures about the amounts of such liabilities will also be required. In October 2008, the FASB delayed the effective date of FIN 48 for certain nonpublic enterprises to annual financial statements for fiscal years beginning after December 15, 2008.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value, and requires additional disclosures about a Company’s financial assets and liabilities that are measured at fair value. SFAS 157 does not change existing guidance on whether or not an instrument is carried at fair value. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In February 2008, the FASB issued FASB Staff Position (“FSP”) No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 (“FSP FAS 157-1”), which excludes SFAS No. 13, Accounting for Leases, and certain other accounting pronouncements that address fair value measurements, from the scope of SFAS 157. In February 2008, the FASB issued FSP No. FAS 157-2, Effective Date of FASB Statement No. 157 (“FSP FAS 157-2”), which provides a one-year delayed application of SFAS 157 for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No. 157 was adopted effective January 1, 2008, and it did not have a material impact on the Company’s consolidated financial statements.

8

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 1. Nature of Business and Significant Accounting Policies (continued)

In October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset in a Market That Is Not Active (“FSP FAS 157-3”), which clarifies the application of SFAS 157 when the market for a financial asset is inactive. Specifically, FSP FAS 157-3 clarifies how (1) management’s internal assumptions should be considered in measuring fair value when observable data are not present, (2) observable market information from an inactive market should be taken into account and (3) the use of broker quotes or pricing services should be considered in assessing the relevance of observable and unobservable data to measure fair value. The guidance in FSP FAS 157-3 did not have a material impact on the Company’s consolidated financial statements upon adoption of SFAS 157.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115 (“SFAS 159”). SFAS 159 is expected to expand the use of fair value accounting but does not affect existing standards which require certain assets or liabilities to be carried at fair value. The objective of SFAS 159 is to improve financial reporting by providing companies with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. Under SFAS 159, a company may choose, at specified election dates, to measure eligible items at fair value and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company did not elect the option to measure any existing financial instruments at fair value under SFAS 159.

In June 2007, the Emerging Issues Task Force (“EITF”) issued EITF 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities (“EITF 07-3”). EITF 07- 3 addresses the diversity that exists with respect to the accounting for the non-refundable portion of a payment made by a research and development entity for future research and development activities. The EITF concluded that an entity must defer and capitalize non-refundable advance payments made for research and development activities, and expense these amounts as the related goods are delivered or the related services are performed. EITF 07-3 is effective for interim or annual reporting periods in fiscal years beginning after December 15, 2007. The Company does not expect the adoption of EITF 07-03 to have a material impact on its consolidated financial statements.

In November 2007, the EITF issued EITF 07-1, Accounting for Collaborative Arrangements (“EITE 07-1”). EITF 07-1, which will be applied retrospectively, requires expanded disclosures for contractual arrangements with third parties that involve joint operating activities and may require reclassifications to previously issued financial statements. EITF 07-1 is effective for interim or annual reporting periods beginning after December 15, 2008. The Company is currently evaluating the impact EITF 07-1 may have on consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (Revised) Business Combinations (“SFAS 141(R)”). SFAS 141(R) is intended to improve, simplify, and converge internationally the accounting for business combinations. Under SFAS 141(R), an acquiring entity in a business combination must recognize the assets acquired, liabilities assumed, and any noncontrolling interest in the acquired entity at the acquisition date fair values, with limited exceptions. In addition, SFAS 141(R) requires the acquirer to disclose all information that investors and other users need to evaluate and understand the nature and financial impact of the business combination. SFAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after December 15, 2008. Earlier adoption is prohibited.

9

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 1. Nature of Business and Significant Accounting Policies (continued)

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an Amendment of Accounting Research Bulletin (“ARB”) 51 (“SFAS 160”). This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest (minority interest) in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 establishes accounting and reporting standards that require (i) noncontrolling interests to be reported as a component of equity, (ii) changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions, and (iii) any retained noncontrolling equity investment upon the deconsolidation of a subsidiary be initially measured at fair value. SFAS 160 is to be applied prospectively to business combinations consummated on or after the beginning of the first annual reporting period on or after December 15, 2008. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact SFAS 160 may have on its consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS 162”). The new standard is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. GAAP for nongovernmental entities. The new standard is effective 60 days following the Security and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company is currently assessing the impact that SFAS 162 may have on its consolidated financial statements.

Note 2. Inventories

Inventories at September 30, 2008 and September 29, 2007, consist of the following:

	2008			2007
Basic stock	$	51,647		$	54,615
Work-in-process and finished goods		18,048			15,682
Customer contracts in progress, net		2,116			4,079
Slow-moving and obsolescence reserves		(6,695	)		(9,452	)
	$	65,116		$	64,924

Note 3. Pledged Assets and Revolving Loan Payable

Through an amendment to the credit agreement dated August 18, 2008, and retroactively effective as of December 31, 2007, the Company replaced its $35,000 revolving loan agreement with a new $55,000 revolving loan agreement with its existing bank. The new loan agreement expires November 10, 2011, provides for a maximum borrowing of $55,000 which can be used for general corporate purposes, including business acquisitions and stand-by letters of credit, and payment to the United States Government for settlement of the Company’s federal investigation (Note 8). The Company can borrow at the bank’s prime rate (5.0 percent at September 30, 2008) or London Interbank Offered Rate (LIBOR) plus 1.75 percent. No borrowings were outstanding under LIBOR as of September 30, 2008. Advances borrowed under the revolving loan payable at September 30, 2008 and September 29, 2007, were $18,610 and $23,912, respectively. Amounts borrowed under the agreement are secured by substantially all of the assets of the Company and a mortgage on specific real property owned by Concorde Country Manor, Inc., an affiliate through common ownership. Additionally, borrowings under the revolving loan are guaranteed by Concorde Country Manor, Inc.

10

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 3. Pledged Assets and Revolving Loan Payable (continued)

The agreement contains provisions which restrict the declaration or payment of dividends (other than stock dividends) or other distributions on, and the acquisition of, the Company’s common stock. The credit agreement also contains certain financial covenants. At September 30, 2008 and September 29, 2007, the Company was in compliance with all financial covenants.

Note 4. Employee Benefit Plans

The Company has a defined contribution pension plan and a profit sharing plan. Employees with one year of service are eligible to participate.

The Company’s defined contribution pension plan required Company contributions, including forfeitures, equal to ten percent of the compensation of plan participants. It was the Company’s policy to fund accrued costs on an annual basis. The plan was amended effective January 1, 2000. The Company no longer makes contributions to the plan.

Prior to 2000, contributions to the profit sharing plan were at the Company’s discretion. The profit sharing plan was amended effective January 1, 2000. A 401(k) portion of the plan was added, to which employees can specify a fixed percentage of eligible compensation to be contributed, up to 60 percent of gross wages, to the extent permitted by law. The plan provides that the Company make a “safe harbor” contribution equal to three percent of each participant’s eligible compensation into their 401(k) on an annual basis, and it also allows the Company to make discretionary contributions. The plan was amended effective January 1, 2007 to provide for a base matching contribution. The plan provides that the Company contribute 50 percent of an employee’s contributions to the plan up to 4 percent of his/her contributions. The Company’s safe harbor contributions totaled approximately $1,575 and $1,485 for the periods ending September 30, 2008 and September 29, 2007, respectively. The Company’s discretionary contributions totaled approximately $0 and $727 for the periods ending September 30, 2008 and September 29, 2007, respectively. The Company’s matching contributions totaled approximately $769 and $638 for the periods ending September 30, 2008 and September 29, 2007, respectively.

11

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 5. Income Taxes

Deferred tax assets consist of the following components as of September 30, 2008 and September 29, 2007:

	2008			2007
Deferred tax assets:
Accounts receivable	$	192		$	1,193
Inventories		4,343			5,106
Accrued expenses		2,874			372
Loss carryforward		—			547
Financing obligation		1,704			1,739
Other		—			101
		9,113			9,058
Less valuation allowance		336			810
		8,777			8,248
Deferred tax liabilities:
Property, plant and equipment		(1,460	)		(567	)
Prepaid expenses		(431	)		(290	)
		(1,891	)		(857	)
	$	6,886		$	7,391

At September 30, 2008, the Company had net operating loss carryforwards of approximately $1,608 which begin to expire in 2023.

As of September 30, 2008 and September 29, 2007, management has provided a valuation allowance of $336 and $810, respectively, due to the uncertainty of realizing certain deferred tax assets in the future.

The Company’s deferred tax assets are classified in the accompanying consolidated balance sheets at September 30, 2008 and September 29, 2007, as follows:

	2008			2007
Current assets	$	6,959		$	6,627
Noncurrent assets		—			764
Noncurrent liabilities		(73	)		—
	$	6,886		$	7,391

12

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 5. Income Taxes (continued)

Income tax expense for the period from January 1, 2008 through September 30, 2008 and the period from January 1, 2007 through September 29, 2007, consisted of the following:

	2008			2007
Current expense	$	2,373		$	5,203
Deferred benefit		(81	)		(1,560	)
	$	2,292		$	3,643

Reconciliations of income tax expense computed at the statutory federal income tax rate to the Company’s income tax expense for the period from January 1, 2008 through September 30, 2008 and the period from January 1, 2007 through September 29, 2007, are as follows:

	2008			2007
Computed “expected” tax expense	$	1,487		$	3,807
Increase (decrease) resulting from:
State income tax, net of federal tax benefit		430			723
Nondeductible expenses		266			72
Research and development credits		—			(988	)
Domestic manufacturer’s deduction		(108	)		(290	)
Other		217			319
	$	2,292		$	3,643

Research and development credits were not available to the Company under current tax laws between January 1, 2008 and September 30, 2008; however, the credits were retroactively extended on October 1, 2008, through legislation. The Company’s management intends to utilize qualifying expenditures during 2008 to obtain research and development credits.

13

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 6. Operating Leases and Related Party Transactions

The Company and its subsidiaries lease certain production facilities under various operating leases, expiring in February 2011 or January 2022, including several leases from an affiliate. Under the terms of the leases, the Company bears the costs of maintaining the leased property, real estate taxes and insurance.

Approximate future minimum lease payments under these operating leases at September 30, 2008, are as follows:

	Leases from		Other
	Related Parties		Leases
2008	$	602	$	290
2009		2,449		1,191
2010		2,498		1,224
2011		418		1,258
2012		—		1,293
Thereafter		—		12,805
	$	5,967	$	18,061

These future minimum rental payments include rental payments related to the sale leaseback transaction discussed below. Total lease expenses, including common area maintenance, real estate taxes and insurance expenses, totaled $3,414 and $3,248 for the periods ending September 30, 2008 and September 29, 2007, respectively, of which $1,806 and $1,799, respectively, was paid to an affiliate.

Security deposits totaling approximately $1,487 and $2,185 paid by the Company to a related party in connection with the operating leases are classified as other long-term assets in the accompanying consolidated balance sheets at September 30, 2008 and September 29, 2007, respectively.

During 2002, the Company sold two of its production facilities to Concorde Country Manor, a company affiliated by common ownership and entered into operating leases for these facilities. As a result of continued involvement in the leased asset, recognition of the sale of the property and the related gain have been deferred. A financing obligation amounting to $4,483 was recorded in connection with the sale. Rent expense paid by the Company under lease agreements for these facilities has been offset by interest expense and a reduction of the financing obligation in the consolidated financial statements.

14

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 7. Warranty Reserve

Changes in the Company’s warranty reserve for the periods ending September 30, 2008 and September 29, 2007, are as follows:

	2008			2007
Balance at the beginning of the period	$	1,666		$	1,119
Provision for warranties issued during the period		1,924			1,362
Settlements made during the period		(1,536	)		(1,111	)
Balance at the end of the period	$	2,054		$	1,370

Note 8. Contingencies and Commitments

Federal Investigation

In June 2005, the Company became aware of an investigation being conducted by the United States Attorney’s Office for the Northern District of Illinois and the Department of Defense (“DoD”) involving pricing of the Company’s government contracts. The Company retained counsel to represent it, has cooperated in the investigation, and has reached a settlement in principle of all claims with the United States Attorney’s Office.

As agreed in principle, the settlement will involve the Company’s payment of approximately $25,252 in fines, penalties, restitution and legal costs, which are classified as accrued expenses in the accompanying consolidated balance sheet reported in Accrued Expenses. The Company has adequate financial resources to pay the $25,252 through a combination, at the Company’s discretion, of government provided financing and through an additional $20,000 of expanded financing capacity provided under the Company’s revolving loan payable (Note 3). Final settlement language is still being negotiated.

The Company is engaged in settlement discussions with the DoD to resolve administrative suspension or debarment matters. While the DoD has not indicated that an administrative suspension or debarment will be imposed, such action could have a material adverse effect on the Company’s financial condition, results of operations and prospects. To improve its compliance, the Company has implemented several courses of action which include improving internal controls, strengthening policies and procedures, providing employee training, and conducting internal audits. Management currently believes that the actions taken may allow the Company to avoid a debarment or suspension by the DoD.

The Company’s reputation could be adversely affected. The Company relies on its long-term customer relationships to maintain its operations. The Company is devoting resources to maintain customer confidence and the Company’s economic growth, which could be adversely impacted by this investigation. The existence of the government investigation was published in the media in 2005. As a result, most of the Company’s major customers have inquired about the investigation. To date, the Company believes each inquiring customer has been satisfied that the Company will continue to supply product, and the Company has not suffered any loss of business and sales volume as the result of the investigation.

15

Techni-Core, Inc. and Subsidiaries

Notes to Consolidated Condensed Financial Statements (Unaudited)
(in thousands)

Note 9. Subsequent Event

On October 1, 2008, Woodward Governor Company and Subsidiaries (“Woodward”) acquired all of the outstanding stock of Techni-Core and all of the outstanding stock of MPC not held by Techni-Core for approximately $383,000. Woodward paid cash at closing of approximately $338,000, a portion of which was used by Woodward to repay the Revolving Loan Payable balance of MPC in an aggregate amount equal to approximately $18,610. Due to the Woodward acquisition, the Revolving Loan Payable and the Financing Obligation have both been classified as a current liability in the accompanying balance sheet at September 30, 2008. Otherwise both obligations would have been properly classified as long term liabilities at September 30, 2008.

16

EX-99.3

EXHIBIT 99.3

Unaudited Pro Forma Financial Information

On August 19, 2008, Woodward Governor Company (“Woodward”) entered into a definitive Stock Purchase Agreement (“Purchase Agreement”) by and among Woodward Governor Company, MPC Products Corporation, Techni-Core, Inc. (MPC Products Corporation and Techni-Core, Inc., collectively “MPC”), The Successor Trustees of the Joseph M. Roberti Revocable Trust dated December 29, 1992, Maribeth Gentry, as Successor Trustee of the Vincent V. Roberti Revocable Trust dated April 4, 1991, and the individuals and entities named in Schedule I thereto. Pursuant to the terms and conditions of Purchase Agreement, on October 1, 2008, MPC was acquired by Woodward and MPC became a wholly owned subsidiary of Woodward (the “Acquisition”).

The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2008 and the unaudited pro forma condensed consolidated statement of operations for the year ended September 30, 2008 are 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. 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, 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 these unaudited pro forma consolidated financial statements.

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

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 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 pro forma condensed consolidated financial statements, which are filed as Exhibit 99.3 to this Amendment No. 2 to Current Report on Form 8-K/A, 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 are filed as Exhibit 99.1 to this Amendment No. 1 to Current Report on Form 8-K/A, 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 are filed as Exhibit 99.2 to this Amendment No. 1 to Current Report on Form 8-K/A. Techni-Core, Inc.’s financial statements include MPC Products Corporation’s financial position and results of operation. 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 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.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
WOODWARD GOVERNOR COMPANY
AS OF SEPTEMBER 30, 2008

(in thousands)

					Consolidated Pro				Consolidated
	Woodward		MPC (1)		Forma Adjustments				Total
ASSETS
Current assets:
Cash and cash equivalents	$	109,833	$	422	$	(7,218	)	j, k	$	103,037
Accounts receivable, less allowance for losses		178,128		36,752		(359	)	a		214,521
Inventories		208,317		65,116		7,076		b		280,509
Income taxes receivable		—		3,504						3,504
Deferred income taxes		25,128		6,959						32,087
Other current assets		16,649		986		810		j		18,445
Total current assets		538,055		113,739		309				652,103
Property, plant and equipment — net		168,651		18,571		4,774		c, d		191,996
Goodwill		139,577		4,510		141,601		e		285,688
Other intangibles — net		66,106		259		162,541		f		228,906
Deferred income taxes		6,208		20						6,228
Other assets		8,420		1,513		4,251		j		14,184
Total assets	$	927,017	$	138,612	$	313,476			$	1,379,105
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	$	4,031	$	18,610	$	(18,610	)	k	$	4,031
Current portion of long-term debt		11,560		2,921		5,625		j		20,106
Accounts payable		65,427		12,726		(359	)	a		77,794
Income taxes payable		2,235		621						2,856
Accrued liabilities		85,591		37,660		47,054		h, j, p		170,305
Total current liabilities		168,844		72,538		33,710				275,092
Long-term debt, less current portion		33,337		—		344,375		j		377,712
Deferred income taxes		27,513		93						27,606
Other liabilities		67,695		662		2,164		g, i		70,521
Total liabilities		297,389		73,293		380,249				750, 931
Commitments and contingencies (Note 6)
Minority interest		—		27,946		(27,946	)	l		—
Total stockholders’ equity		629,628		37,373		(38,827	)	g, p , r		628,174
Total liabilities and shareholders’ equity	$	927,017	$	138,612	$	313,476			$	1,379,105

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

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

2

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

(in thousands, except per share amounts)

							Consolidated Pro				Consolidated
	Woodward			MPC (1)			Forma Adjustments				Total
Net sales	$	1,258,204		$	206,236			1,919		a, s	$	1,466,359
Costs and expenses:
Cost of goods sold		882,996			152,700			(618	)	a, d, q, s		1,035,078
Selling, general, and administrative expenses		115,399			35,148			(787	)	d, f, o, p, q, s		149,760
Research and development costs		73,414			6,142			(166	)	d, s		79,390
Amortization of intangible assets		6,830			—			12,885		f		19,715
Interest expense		3,834			2,433			19,720		m, n		25,987
Interest income		(2,120	)		—							(2,120	)
Other income		(4,685	)		—							(4,685	)
Other expense (Note 6)		626			25,000							25,626
Total costs and expenses		1,076,294			221,423			31,034				1,328,751
Earnings before income taxes		181,910			(15,187	)		(29,115	)			137,608
Income taxes		(60,030	)		(3,269	)		9,891		g, i, s, t		(53,408	)
Income before minority interest		121,880			(18,456	)		(19,224	)			84,200
Minority interest		—			16,232			(16,232	)	l		—
Net earnings (loss)	$	121,880		$	(2,224	)	$	(35,456	)		$	84,200
Net earnings (loss) per share:
Basic	$	1.80		$	(278.00	)					$	1.24
Diluted	$	1.75		$	(278.00	)					$	1.21
Weighted-averages shares used to compute net earnings (loss) per share (Note 5):
Basic		67,564			8			70		q		67,634
Diluted		69,560			8			70		q		69,630

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

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

3

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS OF
WOODWARD GOVERNOR COMPANY

Note 1: Basis of pro forma presentation

On October 1, 2008, Woodward Governor Company (“Woodward”) completed its acquisition of the outstanding common stock of MPC Products Corporation and Techni-Core, Inc. (together “MPC”) and MPC became a wholly-owned subsidiary of Woodward (the “Acquisition”). The estimated purchase price and price allocation, as presented below, are preliminary, and may change materially, as Woodward is in the process of finalizing the majority of the amounts presented.

The preliminary purchase price of the Acquisition is as follows (in thousands):

Cash paid to owners	$	331,850
Cash held in escrow		5,000
Estimated direct transaction costs (See Note 4 (h))		1,758
Total estimated purchase price	$	338,608

MPC was purchased primarily through the issuance of debt (see Note 3).

The unaudited pro forma condensed consolidated financial statements included herein have been prepared by Woodward pursuant to the rules and regulations of the Securities and Exchange Commission for the purposes of inclusion in Woodward’s Amendment No. 2 to Current Report on Form 8-K/A prepared in connection with the Acquisition.

The unaudited pro forma condensed consolidated balance sheet as of September 30, 2008 and the unaudited pro forma condensed consolidated statements of operations for the year ended September 30, 2008 are 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 these unaudited pro forma consolidated financial statements. 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 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.

4

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 October 1, 2008 closing date of the 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 estimates as described in the introduction to these unaudited pro forma condensed combined consolidated financial statements as follows (in thousands):

Estimated Preliminary Purchase Price Allocation

Cash and cash equivalents	$	422
Accounts receivable, less allowance for losses		36,752
Inventories		72,192
Income taxes receivable		3,504
Other current assets		986
Property, plant, and equipment		23,345
Other assets		1,513
Deferred income taxes, net		6,886
Short-term borrowings		(18,610	)
Current portion of long-term debt		(2,921	)
Accounts payable		(12,726	)
Income taxes payable		(621	)
Accrued liabilities		(79,418	)
Other liabilities		(1,607	)
Net tangible assets acquired		29,697
Amortizable intangible assets:
Trade name		3,700
Technology		25,600
Non-compete agreements		1,000
Backlog		12,200
Software		6,200
Customer relationships		114,100
Total amortizable intangible assets		162,800
Goodwill		146,111
Total estimated preliminary purchase price	$	338,608

Of the total purchase price, a preliminary estimate of approximately $29.7 million has been allocated to net tangible assets acquired and a preliminary estimate of approximately $162.8 million 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 combined consolidated statements of operations as described in Note 4 to these the unaudited pro forma condensed combined consolidated financial statements.

Of the total estimated purchase price, approximately $146.1 million has been allocated to goodwill. 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.

Woodward has evaluated and continues to evaluate pre-Acquisition contingencies related to MPC that existed 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.

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Note 3: Financing activities

On October 1, 2008, Woodward issued approximately $350.0 million of debt to finance the Acquisition and to repay the short-term borrowings and other obligations of MPC Products Corporation. The debt is comprised of the following (in thousands):

	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

The interest rates were those in effect on the date of the issuance of the debt. Finance costs incurred as a result of issuing this debt totaled $5.1 million.

Note 4: Pro forma adjustments

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

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

Accounts receivable	$	(359	)
Accounts payable		359
Sales		1,784
Cost of goods sold		(1,784	)

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

			Preliminary
	Historical		Estimated
	Value		Fair Value		Increase
Inventory	$	65,116	$	72,082	$	6,966

(c) To eliminate Techni-Core assets which were not included in the Acquisition.

Property, plant, and equipment, net $ (3,340 )

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

			Preliminary
	Historical		Estimated				Change in		Useful
	Value		Fair Value		Increase		Depreciation		Life
Property, plant, and equipment	$	15,231	$	23,345	$	8,114	$	2,038		3 - 10
Allocation of depreciation expense
Cost of goods sold							$	1,785
Research and development								8
Selling, general, and administrative		.						245
							$	2,038

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(e) To eliminate MPC’s historical goodwill and record preliminary estimated fair value of goodwill for the Acquisition (in thousands):

			Preliminary
	Historical		Estimated
	Value		Fair Value		Increase
Goodwill	$	4,510	$	146,111	$	141,601

(f) 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 (in thousands):

			Preliminary
	Historical		Estimated				New		Historical		Change in
	Value		Fair Value		Increase		Amortization		Amortization		Amortization
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		—		12,200		12,200		7,831		—		7,831
Product software		—		6,200		6,200		477		—		477
Customer Relationships		259		114,100		113,841		1,730		84		1,646
	$	259	$	162,800	$	162,541	$	12,885	$	84	$	12,801
Allocation of amortization
Amortization of intangibles							$	12,885	$	—	$	12,885
Selling, general, and administrative								—		84		(84	)
							$	12,885	$	84	$	12,801

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

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(g) 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”) which 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 thousand and current year income tax for changes in various credits of $220 thousand. The changes in tax liabilities related to implementing FIN 48 and changes in various credits were included in other liabilities (in thousands):

Increase reserves related to research credits	$	(220	)
FIN 48 adjustments		(999	)
Net increase in other liabilities	$	(1,219	)
Income tax expense	$	220
Retained earnings- beginning		999

(h) To record direct acquisition costs and restructuring charges (in thousands):

Restructuring Charges	$	10,000
Change of control payments		30,000
Professional fees		1,758
	$	41,758

Restructuring charges will include a number of items such as those associated with integrating similar operations, workforce management, vacating certain facilities, and the cancellation of some contracts. No adjustment related to the estimated restructuring charges has been included in the unaudited pro forma condensed consolidated statement of operations since the costs associated with these restructuring activities are non-recurring in nature. These restructuring charges and related actions are expected to provide for future cost reductions and other earnings improvements.
Change of control payments represent estimated payments to certain MPC employees as a result of employment agreements in place prior to the Acquisition. Professional fees include legal and accounting costs directly associated with the Acquisition.
These estimated liabilities are expected to be recorded during purchase price allocation period as an adjustment to goodwill. These estimates are subject to change based on Woodward’s further assessments.
(i)	To increase reserves related to current and prior year tax matters totaling $945 thousand.
(j)	To record debt and cash issued to finance the acquisition of MPC and related finance costs (in thousands):

Long-Term Debt
Current portion of long-term debt	$	5,625
Long-term debt		344,375
Total debt	$	350,000
Use of Proceeds
Cash paid to owners	$	331,850
Cash held in escrow		5,000
Direct transaction costs		1,738
Repayment of short-term borrowings		18,610
		357,218
Less amount paid from cash on hand		(7,218	)
	$	350,000
Finance Costs
Prepaid Finance Costs — Current	$	810
Prepaid Finance Costs — NonCurrent		4,251
	$	5,061

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(k) To record repayment of $18,610 thousand of short-term borrowings upon completion of the Acquisition.

(l)	To eliminate minority interest.
(m)	To record interest expense and amortization of finance costs associated with the issuance of the long-term debt used to finance the acquisition (in thousands):

Unsecured Term Loan	$	8,590
Series B Notes		4,671
Series C Notes		2,661
Series D Notes		5,185
	$	21,107

Interest expense on long-term debt reflected in the unaudited pro forma condensed combined consolidated statements of operations and in the table above assumes that interest rates and principal amounts will remain equal to those that existed at the date of issuance. 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 repayments of Woodward’s debt or any changes in interest rates that may result from the refinancing of those borrowings.
(n)	To eliminate interest expense totaling $1,387 thousand related to the repayment of short-term borrowings.
(o)	To eliminate nonrecurring payments totaling $815 thousand made to the estate of MPC’s owners.
(p)	To record estimated management bonuses totaling $235 thousand for certain MPC employees based on Woodward’s management incentive plan for fiscal 2008.
(q)	To record 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 (in thousands)
Cost of goods sold	170
Selling, general, and administrative	962

(r)	To eliminate MPC’s remaining historical stockholders’ equity totaling $37,373 thousand.
(s)	To eliminate the loss of business sold by MPC prior to the Acquisition (in thousands):

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

(t) To record the pro forma tax effect of the adjustments based on an estimated prospective statutory rate of 38%.

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Note 5: Pro forma earnings per share

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined consolidated statements of operations are based upon the weighted-average number of Woodward common shares outstanding and are adjusted for the estimated common stock dilution assuming stock options were exercised. Restricted common stock granted on the date of the Acquisition are treated as if those awards had been outstanding at the beginning of the period presented without consideration of any subsequent cancellations.

Note 6: Commitments and contingencies

MPC Products Corporation is subject to an investigation by the U.S. Department of Justice (the “DOJ”) regarding certain of its pricing practices prior to 2006 related to government contracts. MPC Products Corporation 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 within 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 Products Corporation. MPC Products Corporation is also in the process of working with the U.S. Department of Defense to resolve 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 consummation of the Acquisition was reduced by $25.0 million, which represents the amount agreed to in principle by MPC with the U.S. Attorney and is reflected in MPC’s statement of operations and opening balance sheet.

MPC Products Corporation expensed $5.0 million during the 12 months ended September 30, 2008 related to the settlement of a warranty adjustment to one of its significant customers.

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