Sustainability Report

From Our CEO In 2016, we celebrated the grand opening of our new campus in Fort Collins, Colorado. The design of this modern facility and our other new US facilities demonstrates our ongoing commitment to establish Woodward as the global standard in manufacturing for the aerospace and industrial markets. “Our commitment to sustainability is encapsulated in the message that is at the core of our corporate brand: Always innovating for a better future.” The Woodward Constitution provides the foundation for all Woodward activities, including our commitment to sustainability. Our Constitution defines...

Investing in Our Members We recognize that Woodward members are the Company's most valuable resource and they are at the heart of our success. With a focus on each member, Woodward promotes the values of respect, inclusion, honesty and engagement. This legacy in work ethic - known in the company as "the Woodward Way" - continues to distinguish us as an employer of choice. As part of our investment in our members, our Fort Collins corporate headquarters now houses Woodward University, our new state-of-the-art training facility that will allow our members to have in-house access to training to...

Our Business at a Glance Aerospace Industrial Board Oversight of Risk 10 A Tradition of Integrity 11 Product Material Compliance 12 Investments in Infrastructure and R&D 14 Lincoln Campus - Fort Collins, Colorado 15 Rock Cut Campus - Loves Park, Illinois 16 Niles Howard Street - Niles, Illinois 17 Woodward's Workplace 18 Environmental Health and Safety 19 Woodward University 20 Environmental and Member Wellness 21 Supply Chain Responsibility 22 Giving Back to our Communities 24 Human Rights 25 Natural Resource Conservation

OUR BUSINESS AT A GLANCE Woodward, Inc. is a publicly owned company, traded on the NASDAQ under the symbol "WWD", with 2016 sales of approximately US $2 billion. Woodward's vision to set the global standard in energy control is built on a foundation of core values, strategic vision and quality performance. Woodward employs more than 7,000 people worldwide with a strong presence in North America, Europe, South America, and Asia. We recognize that our members continue to be the source of our success. Woodward products are conceived, designed and produced by some of the most talented experts in...

Woodward’s core values provide the foundation for all of our business decisions. These values, which are set forth in the Woodward Constitution, include: respect for the individual, integrity and ethics, accountability, teamwork, customer satisfaction, initiative, and being results-driven. The Woodward Constitution acknowledges all of the stakeholders who are impacted by our success, such as: shareholders, customers, members, suppliers and communities. These values and principles establish the framework for our key business processes, as well as our policies and practices. Our commitment to these...

The demand for improved operational efficiency in air transportation is a critical driver in the aerospace industry. Woodward continues to develop and deliver innovative fuel and actuation system solutions that improve operation and performance. Our Aerospace business provides integrated propulsion systems, flight deck controls, and aircraft actuation systems and solutions. For decades we have made investments in new technology, and we have secured and increased Woodward content on key commercial aircraft programs such as Boeing's 737MAX, 777X and 787 and Airbus' A320neo, A330neo and A350. We...

While demand for energy is increasing globally, there are corresponding changes in expectations that energy production should be more efficient, reliable, secure and affordable. These expectations have contributed to recent shifts in the energy market, supporting the production of natural gas, the development of new low-emission technologies, flexible system designs that allow for multiple fuels, and increasing utilization of renewable energy technologies. Our industrial business designs, manufactures and sells industrial turbine, reciprocating engine and renewable energy products, systems and...

BOARD OVERSIGHT OF RISK On behalf of Woodward’s shareholders, our Board of Directors (the “Board”) oversees and advises our leadership team with regard to risk identification and mitigation, particularly in areas of governance, business strategy, compensation, succession planning, ethics, and compliance. To facilitate this oversight, the Board has established various committees composed entirely of independent directors. Woodward Board of Directors Audit Committee The Audit Committee is responsible for: • Overseeing risks relating to the Company’s financial statements and financial reporting...

A Tradition of Integrity Our Code of Business Conduct and Ethics (the “Code”), titled “A Tradition of Integrity,” was significantly rewritten in 2016 to align with the Woodward Constitution, and reflects our growing business. The Code provides more detailed guidance to members regarding key areas of compliance and ethics and points members to other more detailed resources if additional information is needed. The Code is a written expression of our continuous commitment to our values and principles, and to the Tradition of Integrity that has been central to Woodward’s culture since the Company’s...

As an independent provider of control solutions to the global industrial and aerospace markets, Woodward must comply with an increasing number of government compliance regulations regarding the materials within our products. Most prominent among these regulations are the Restriction of Hazardous Substances (RoHS) regulations and the registration, Evaluation, Authorization and restriction of Chemicals (Reach) regulations. Woodward also acknowledges that the funding of and trade associated with extracting, processing, and exporting certain minerals from conflict-affected and high risk geographic areas,...