Woodward, Inc.

Global Business Conditions

As global trade dynamics continue to evolve, the impact of increased trade tensions and related tariffs with U.S. trading partners remains a key factor in shaping global economic activity, supply chains, and market stability. Future tariff adjustments may emerge as countries negotiate trade agreements, respond to geopolitical shifts, and address the challenges of inflation and global competition. We expect increased cost pressure resulting from the already announced tariffs and there are uncertainties surrounding future tariff policy changes and enforcement. However, the Company’s production and supply bases are largely in the same regions where our products are sold, which should mitigate our exposure. Woodward is closely tracking early indicators from our end markets and customer forecasts regarding the potential impact of currently announced tariff levels, changes to such levels, and actual and potential retaliatory trade actions. We are proactively working to mitigate cost pressure and any supply chain disruptions, as well as sales risks.

Operational Highlights

Quarter and Year to Date Highlights

Adjusted net earnings, adjusted effective tax rate, adjusted earnings per share, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA are non-U.S. GAAP financial measures. A description of these measures as well as a reconciliation of these non-U.S. GAAP financial measures to the most directly comparable U.S. GAAP financial measures can be found under the caption “Non-U.S. GAAP Financial Measures” in this Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Liquidity Highlights

Net cash provided by operating activities for the first half of fiscal year 2025 was $112,341, compared to $144,118 for the first half of fiscal year 2024.

For the first half of fiscal year 2025, free cash flow was $60,351, compared to $87,817 for the first half of fiscal year 2024. We define free cash flow as net cash flow provided by operating activities less payments for property, plant, and equipment. The decrease in free cash flow for the first half of fiscal year 2025 as compared to the same period of the prior fiscal year was primarily attributable to an increase in working capital offset by lower capital expenditures. Free cash flow is a non-U.S. GAAP financial measure. A description of this measure as well as a reconciliation of this non-U.S. GAAP financial measure to the most directly comparable U.S. GAAP financial measure can be found under the caption “Non-U.S. GAAP

Financial Measures” in this Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

At March 31, 2025, we held $364,141 in cash and cash equivalents and had total outstanding debt of $911,910. We have additional borrowing availability of $731,014, net of outstanding letters of credit, under our revolving credit agreement. At March 31, 2025, we also had additional borrowing capacity of $22,853 under various foreign lines of credit and foreign overdraft facilities.