2016 ANALYST DAY

JUNE 23, 2016

Agenda
Time

Event

8:30

Registration

9:00

Start

Presenter

TDG Overview

Nick Howley

Management Process & Value Creation

Kevin Stein

Business Unit Structure & Process

Jorge Valladares

Mergers & Acquisitions

Bernie Iversen

Recent Acquisitions & Integration

Bob Henderson

Break
Product Presentations Breakout:
Recent Acquisitions - Telair International & Telair US Cargo Systems

Jim Skulina & Tim Dumbauld

Recent Acquisitions - Breeze-Eastern, Pexco, PneuDraulics

Roger Jones, Herb Mardany, Pete Palmer

Power & Conditioning Products - AeroFluid, AdelWiggins, Champion

Paula Wheeler, Jeff Zielinski, Jason Marlin

Airframe & Interiors Products - AvtechTyee, Hartwell, Schneller

Harry Ray, Mike Couitt, John Kuss

Lunch

2:00

New Business & Innovation

Joel Reiss

Financial Review

Terry Paradie

Q&A

Panel

End

ForwardLookingStatements
ThispresentationcontainsforwardlookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995,
includinginformationregardingourguidanceforfutureperiods.Theseforwardlookingstatementsarebasedonmanagements
currentexpectationsandbeliefs,aswellasanumberofassumptionsconcerningfutureevents,manyofwhichareoutsideofour
control.Thesestatementsaresubjecttorisksanduncertaintiesthatcouldcauseactualresultstodiffermateriallyfromthose
expressedorimpliedintheforwardlookingstatement.Theserisksanduncertaintiesincludebutarenotlimitedto:thesensitivityof
ourbusinesstothenumberofflighthoursthatourcustomersplanesspendaloftandourcustomersprofitability,bothofwhichare
affectedbygeneraleconomicconditions;futureterroristattacks;cybersecuritythreatsandnaturaldisasters;ourrelianceon
certaincustomers;theU.S.defensebudgetandrisksassociatedwithbeingagovernmentsupplier;failuretomaintaingovernment
orindustryapprovals;failuretocompleteorsuccessfullyintegrateacquisitions;oursubstantialindebtedness;potential
environmentalliabilities;increasesincoststhatcannotberecoveredinproductpricing;risksassociatedwithourinternationalsales
andoperations;andotherfactors.Furtherinformationregardingtheimportantfactorsthatcouldcauseactualresultstodiffer
materiallyfromprojectedresultscanbefoundinTransDigmGroupsAnnualReportonForm10KandotherreportsthatTransDigm
GrouporitssubsidiarieshavefiledwiththeSecuritiesandExchangeCommission.

Youarecautionednottoplaceunduerelianceonourforwardlookingstatements.TransDigmGroupassumesnoobligationto,and
expresslydisclaimsanyobligationto,updateorreviseanyforwardlookingstatements,whetherasaresultofnewinformation,
futureeventsorotherwise.

SpecialNoticeRegardingProForma
andNonGAAPInformation
This presentation sets forth certain pro forma financial information. This pro forma financial information gives effect to certain
recently completed acquisitions. Such pro forma information is based on certain assumptions and adjustments and does not
purport to present TransDigm's actual results of operations or financial condition had the transactions reflected in such pro forma
financial information occurred at the beginning of the relevant period, in the case of income statement information, or at the end of
such period, in the case of balance sheet information, nor is it necessarily indicative of the results of operations that may be
achieved in the future.
This presentation also sets forth certain nonGAAP financial measures. A presentation of the most directly comparable GAAP
measures and a reconciliation to such measures are set forth in the appendix.

TRANSDIGM OVERVIEW
NICK HOWLEY

ExperiencedSeniorManagementTeamwith
ProvenTrackRecord
EXECUTIVE

TITLE

Proven track record

Nick Howley

Chairman & CEO

Kevin Stein

COO - Power

Managed the business through

multiple cycles

Bob Henderson

COO- Airframe

Terry Paradie

Executive VP CFO

Bernie Iversen

Executive VP M&A

Roger Jones

Executive VP

Experienced with a leveraged

capital structure

Pete Palmer

Executive VP

Joel Reiss

Executive VP

Deep bench

Jim Skulina

Executive VP

Jorge Valladares

Executive VP

Shared values and operating

strategies

Management is the largest

stakeholder

Officers:

Operating Unit Management Participating In Analyst Day:

Jeff Zielinski
Paula Wheeler
Harry Ray
Jason Marlin
Mike Couitt
Herb Mardany
John Kuss
Tim Dumbauld

President, Adel Wiggins Group

President, AeroFluid Products
President, AvtechTyee
President, Champion Aerospace
President, Hartwell Corporation
President, Pexco Aerospace Inc.
Director of Operations, Schneller
President, Telair U.S. Cargo Systems

SuperiorStockPricePerformance
TDG 5 YR & 10 YR Return CAGR
Aero Peers 5 YR & 10 YR Return CAGR
35%
30%

30%
10%

32%
30%

25%
20%
15%
10%

12%12%

10%
6%

5%
0%

10 YR Return CAGR 5 YR Return CAGR

TDG

(1)

S&P 500

(2)

Aero Peers

(3)

(1) TransDigm adjusted for dividends paid of $67.50 in 10-year period and $$59.85 in 5-year period.
(2) S&P adjusted for dividends estimated to be 1%.
(3) Aerospace Peers include: BE Aerospace, Boeing, Esterline, Heico, Moog, Rockwell Collins, Triumph and United Technologies. Adjusted for dividends
estimated to be 1%.

OurObjective

Private Equity-Like Growth in Value

with Liquidity of a Public Market

+ 15% - 20% /year on average

Unique&ConsistentBusinessStrategy
Private&Public
TransDigms Consistent Goal Private Equity-Like Returns to Shareholders

Proprietary

3-Part

Aerospace Products with Significant Aftermarket

Value-Based Operating Strategy

Decentralized, Organization/ Aligned with Shareholders

Focused Discipline Acquisition Strategy

Private Equity-Like Capital Structure & Culture

8

KeyBusinessEventsSinceLastInvestorDay
Continued, Consistent Outstanding Value Creation

Six

Acquisitions for a Total Purchase Price of $3 Billion

New

Debt and/or Refinanced $5 Billion

Purchased

Created

1.5 Million TDG Shares

$5 Billion of Shareholder Value

CompanyOverview
Business Snapshot
($ in millions)

Revenue

2014
$ 2,373

2015
$ 2,707

PF LTM 4/2/16
with DDC (2)
$3,289

EBITDA as Defined (1)

$ 1,073

$ 1,234

$1,477

EBITDA as Defined margin

45%

46%

45%

FYE Share Price

$184

$212

$259 (4)

%
Change
+ 39%
+ 38%

+ 41%

Enterprise Value $23 Billion

(3)

(1)
(2)
(3)
(4)

EBITDA as Defined is a non-GAAP financial measure. For a historical reconciliation of EBITDA as Defined to Net Income, please see the appendix.
PF LTM 4/2/16 Includes the full year impacts of the recently completed acquisitions of Pexco, PneuDraulics and Breeze, as well as the pending
acquisition of DDC totaling $289 million and $113 million in revenue and EBITDA as Defined, respectively. Please see the Special Notice
Regarding Pro Forma and Non-GAAP Information.
Enterprise value calculated as of 6/17/16 equals equity value (shares outstanding as of 5/01/16 multiplied by the TDG closing stock price on
6/17/16) plus pro forma total net debt (total debt less cash).
TDG closing stock price on 6/17/16.

10

DiverseProducts,PlatformsandMarkets

11

TransDigm ExpandingGlobalFootprint

12

ConsistentRecordofGrowthandMarginExpansion
Revenue

EBITDA as Defined and margin

(1)

($ in millions)

$3,289

($ in millions)
$1,477

$2,707

(1)

$1,234

$2,373

$1,073

$900

$1,924

$809

$1,700

$590
$1,206

$412
$375
$333

$828
$762
$714

$275

$593

$44 $51 $54

$72

$98

$194
$164
$139
$124

1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
PF LTM

2015

PF LTM

2014

2013

2012

2011

2010

2009

2008

$10 $10 $13 $17 $25

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

$48 $52 $57 $63 $78

$435
$374
$293$301
$249
$201
$151
$111$131

% of revenue:
20% 19% 23% 27% 31% 39% 39% 36% 36% 39% 42% 46% 44% 45% 46% 47% 49% 50% 49% 48% 47% 45% 46% 45%

Note: EBITDA as Defined is a non-GAAP financial measure. See the appendix for a historical reconciliation of EBITDA as Defined to Net Income.
(1)
Pro Forma Revenue and EBITDA as Defined Include the full year impact of the recently completed acquisitions of Pexco, PneuDraulics and
Breeze-Eastern, as well as the pending acquisition of DDC totaling $289 million and $113 million in revenue and EBITDA as Defined,
respectively. Please see the Special Notice Regarding Pro Forma and Non-GAAP Information.

13

SignificantBarrierstoEntry

Selection / Qualification Process

FAA Certification

Niche Markets

Risk / Reward Trade-Off

14

RecurringStreamofProfitableAftermarketRevenue
Profitability %

Aftermarket

OE Production

10

15

20

25

30

35

40

45

50

55

60

65

70

Airframe Program Life Cycle (Years)

15

StrongFocusonHighmarginAftermarket
ProFormawithDDC
FY 2015 Pro Forma Revenues
(excluding the non-aviation segment)(1)

Defense
33%

EBITDA As Defined (1)

Commercial
aftermarket
36%

OEM

Aftermarket

Commercial
OEM
31%

Aftermarket: 55%
OEM: 45%

(1)

Pro forma revenue is for the fiscal year ended 9/30/15 (excluding the Non-Aviation Segment sales of ~$96 million or ~3% of total sales).
Includes the full year impact of FY 15 and FY 16 acquisitions of Telair, Franke, Pexco, PneuDraulics, and Breeze-Eastern, as well as the
pending acquisition of DDC.
Please see the Special Notice Regarding Pro Forma and Non-GAAP Information.

16

SignificantProprietaryandSoleSourceRevenueBase
ProFormawithDDC
Proprietary Revenue

Sole Source Revenue

Nonproprietary
~10%

Non-sole
source
20%

Proprietary
~90%
Sole source
~80%

Results in strong market positions and a stable,

recurring revenue stream

Note:

Based on management estimates of pro forma TransDigm sales for the fiscal year ended 9/30/15. Please
see the Special Notice Regarding Pro Forma and Non-GAAP Information.

17

SteadyGrowthinPassengerTrafficandInstalledBase
DrivesStableAftermarketSales
Worldwide Installed Base Growth
33,000
30,000
27,000
24,000
21,000
18,000
15,000
12,000
9,000
2020E

2019E

2018E

2017E

2015

2016E

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

4.1% CAGR

Worldwide Installed Base Growth

6,000

Worldwide RPM Growth

5,000
4,000
3,000

5.3% CAGR

2,000
1,000

2020E

2019E

2018E

2017E

2016E

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

Worldwide RPM Growth

Source: June 2016 Airline Monitor

18

CommercialAftermarketTrends
Commercial Aftermarket Growth Last Five Years

25.0%

TDG
Peer Group

5 Yr Avg

2 Yr Avg

10.1%

8.1%

7.8%

4.2%

20.0%

15.0%

10.0%

5.0%

0.0%

Global Long-Term Avg Annual Growth (RPM's)

Installed Base Avg Annual Long-Term Growth

Peer Group Growth Rolling 4Qtr (%)

TransDigm Growth Rolling 4Qtr (%)

Sources:
Peer Group: component parts growth rate from Canaccord Genuity (average of Crane CAM, HEICO FSG, Honeywell CAM, Meggitt CAM, ROC CAM, UTC CAM)
RPM growth and installed base as reported by Airline Monitor

19

TransDigmsAddressedMarketfor
CommercialAftermarket
Global Airline Operating Expenses
2015 Total = $660B
Other 33%

Global Maintenance Spend

2015 Total = $64.3B

Global
Maintenance
$64.3B

Others

TDG
Addressed
$30.6B

52%

Labor &
Benefits
30%

10%

TDG Addressed Market

2015 Total = $30.6B
TDG Commercial
Aftermarket
$1.1B
Others

48%

4%

96%

Fuel
27%

TransDigms Addressed Market for Commercial Aftermarket is $30.6B

of Which We Hold a 4% Market Share
Source: IATA June 2016 / ICF SH&E Analysis / TDG
Addressed market refers to the material market where TDG currently has content on by aircraft model and part type

20

TransDigmsDiverseCommercialAftermarket
RevenueBase
Total FY 2015 Commercial
Aftermarket Worldwide Revenue by
Annual Sales $ Per Part

Top 15 Airlines
American Airlines
Delta Airlines

> $2 million
Sales per year
10%

United Continental
Air France-KLM
Emirates Airlines
British Airways/Iberia
Lufthansa (w/Swiss)
China Southern Airlines
Southwest Airlines

50%
Worldwide
RPMs

Air China
< $2 million
sales per year
90%

China Eastern Airlines

Ryanair
Cathay Pacific
Turkish Airlines
LATAM Airlines
21

CommercialOEMMarket
(units delivered)

Commercial Transport Deliveries

(55 Year History)

Commercial Transport Deliveries

(Boeing, Airbus & Regionals)

Trough to
Current
12
Years

1800

1600

Trough to
Peak
7 Years

1400

Trough to
Peak
7 Years

2,000

1200
1,800

1000
1,600

800
1,400

Trough to
Peak
5 Years
Trough to
Peak
4 Years

600
1,200

400
1,000

200

800

'11

'12

'13

'14

'15

'16E '17E '18E '19E

'20E '21E

1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016

600

Total Deliveries (Airline Monitor)

Source: June 2016 Airline Monitor

22

MilitaryOutlook FlattoModestlyUp
2016 - 2021 TransDigm Base Military Revenue Forecast*
$ Millions (Constant $)
1,000
900
800
700
600
500
400

Aftermarket

300

OEM

200
100
0

2015

2016

2017

2018

2019

2020

2021

A400M and F-35 are Major Military Growth Platforms

*Excludes price increase and initial provisioning; based on current products and platforms
Source: ICF SH&E analysis and management estimates

239

StrongPositionsonDiverseandGrowingPlatforms
TOP PLATFORMS

B737
A320
B777
A330/A340
B787

30%Sales

B757/B767A380
C130
B747
BlackhawkA400M
A350
GulfstreamSeries

Note: Based on Management estimates of sales for 2015.

18%Sales

24

OrganizationalPhilosophy
CORPORATE
Local
Autonomy

Corporate
Control

Value Generation Strategy

OPERATING UNIT

Mgmt
Resources

Economy
of Scale

Structure

Local
Autonomy

Central
Control

Execution

Employees

Owners

Motivation

25

UniqueCompensationConcept
Think/actlikeanowner

TDG Ownership

Low

High

`
Cash Compensation

Low

High

Equity Based Compensation

100% Performance Vesting

Very High Shareholder Alignment
26

ReproducibleCorporateStructure
CEO

COO

CFO

EVP

68OpUnits

EVP&M&A

EVP

EVP

EVP

EVP

68OpUnits

68OpUnits

68OpUnits

68OpUnits

27

ProvenOperatingStrategy

Profitable
New
Business

Productivity
and Cost
Improvements

Value Based
Pricing

3 Value Drivers

28

ProvenRecordofAcquisition&Integration
NYSE

Privately Held
1993 2006

2006 2010

2011 2012

Adel
Aeroproducts

Sweeney

Electra-Motion

Hartwell
Electromech

Wiggins
Controlex

CDA InterCorp.

Avtech

Christie

Champion

CEF
Unison/GE

Honeywell Lube Pump

Fuelcom

APC/GE
Acme

Norco

Avionic Instruments

Skurka

Fluid Regulators

Eaton Motors

Linread

(1)

Valley-Todeco

AQS

Talley Actuation

Schneller

Harco

Woodward HRT
Dukes
Semco

AmSafe Passenger
Restraints

AmSafe Commercial
Products

AmSafe Cargo Restraints

& Specialty Devises

Aero-Instruments

Beams

Aerosonic

Arkwin

Whippany Actuation

Airborne Systems North

America

Airborne Systems
Europe

(1)

(1)

Elektro-Metall Export
Telair International

AAR Cargo Systems

Nordisk Aviation

Telair

Adams Rite Aerospace

Marathon

Tyee
TAC

AmSafe

ADS/Transicoil
Bruce

McKechnie

2013 - 2016

Franke Aquarotter
Pexco

PneuDraulics
Breeze-Eastern

DDC (pending)

Including DDC, TransDigm has acquired 57 businesses

since 1993, including 42 since its IPO.
(1)

Divested in Q2 and Q3 of FY2011.

29

TransDigmDeleveringProfile
(NetDebt/PFEBITDAAsDefined)
Refi &
Dividend

7.0x
Telair,
Franke and
Pexco

6.5x

6.0x

Special
Dividend

McKechnie
Acquisition

Warburg
Pincus
Recap

DDC
Acquisition
& GCP

5.5x

5.0x

4.5x

IPO

Special
Dividend
Recap &
Dividend

AmSafe
Acquisition

4.0x

3.5x

3.0x

2.5x

2.0x

07/03 FY03 FY04 FY05 4/06 FY06 FY07 FY08 FY09 10/09 FY10 12/10 FY11 3/12 FY12 12/12 3/13

6/13 FY13 12/13 3/14 FY14 3/15 FY15 3/16 PF

(1)
LTM 4/16

Note: EBITDA as Defined is a non-GAAP financial measure. For a historical reconciliation of EBITDA as Defined to Net Income, please see the appendix.
(1)

PF LTM period includes the full year impact of the recently completed acquisitions of Pexco, PneuDraulics, and Breeze Eastern, as well as the
pending acquisition of DDC and the recently completed financing in June 2016.

30

ConsistentStrategy&ValueCreation
Proprietary Aerospace and Aftermarket

Value Based Operating Strategy

Decentralized Organization / Aligned with
Shareholders

Private EquityLike Returns

with
Public Liquidity

Disciplined Acquisition Strategy

Efficient Capital Structure

31

MANAGEMENT PROCESS &

VALUE CREATION
KEVIN STEIN

CorporateStructure
Nick Howley
President &
CEO

Terry Paradie
CFO

Roger Jones
EVP

Kevin Stein
COO-Power

Jim Skulina
EVP

Bob Henderson
COO-Airframe

Greg Ruu
Senior EVP

Pete Palmer
EVP

Joel Reiss
EVP

Jorge Valladares
EVP

Bernie Iversen
EVP M&A

John Leary
EVP

Target EVP to Have 6-8 Businesses

33

ExecutiveVicePresidentRole

EVP
OpUnit1

OpUnit2
OpUnit3
New
President
LastYear
Acquisition
Recent
Acquisition

EVP - Value Creation Driver/Culture Carrier

Op Unit Business Guidance
Quarterly Reviews
Presidential coaching
Value Driver Emphasis
Talent Development
President/Staff
Weed & Feed
Acquisition Value Creation
Assist Due Diligence
Guide Integration Process
Assess Revise Management
34

OperatingUnitPhilosophy
Structure
Small Operating Units
Focus on Products and
Customers
Few Management
Layers

Execution
Significant Local
Autonomy

Motivation
Think Like Owner
Create Value

Local Decisions
Front Line Value
Generation

Lower Cash Comp &

Higher Equity

Product Line Discipline

Price
Productivity
NewBusiness
VALUECREATION
35

DivisionOrganizationalStructure
President

Director
Sales &
Marketing

Director
Operations

Director
Engineering

Business Unit
Manager

Business
Unit Team

Business Unit
Manager

Business
Unit Team

Business Unit
Manager

Controller

Business
Unit Team

Business Unit Value Focus

Business Unit Teams

Co-Located
Detail Value Focused
New Business Development
Pricing and Contracting
Productivity

36

BusinessUnit ValueFocus

31+ Operating Units

80+ Business Units

37

ProvenOperationStrategy
3 Value Drivers

Profitable new
business
Productivity and
cost improvement

Value-based
pricing

Operating Unit Accountability

Value driven down through

each Business Unit

Mid-quarter and quarter-end

reporting

Emphasize value creation,

ownership and accountability

38

ManagementFocus
ProductLineValueReportingTools
Consistent Product Line Metrics

Accountability

Pricing

Budgets
Product Line
Income
Statement

Quarterly
Reviews

%
Market Segments

Projects
Machinery
Outsourcing
Automation

$
New Business Orders

Savings
$
$
$
$$

Mid-Year
Site Visits

Productivity Progress

39

Productivity

Purchasing Savings
PCBA Offshore (China)
Machine Components

29
47
5
10

YTD
Plan

Full Yr
Forecast
54
35
5
0

58
70
10
25

Full Yr
Plan

Product Line

108
71
12
0

$400

Sales Per Head (less Price)

170
91
58
11

94
108
19

163
116
19

191
217
30

Outsourcing/ Offshore Savings

Prod Redesigns
RIF
Transfer to Mexico plant
CNC Milling Cells
Tooling / Fixture
New equipment

69
0
152
76
89

127
17
114
57
87

135
20
288
144
180

247
35
228
144
174

10

72

57

Labor Savings
Scrap Reduction
OT Reduction
Rent Savings
Repairs Projects
Energy Savings
Reduce tooling & supply expense
Quality Projects
VIP Ideas

316
130
50
25
10
30
8
16
13

285
110
60
25
20
30
0
0
6

704
250
120
100
25
60
15
18
13

638
220
116
100
40
60
0
0
13

Other Spending Reduction

152

141

351

329

Total Productivity Savings

628

648

1,352

1,404

Product Line 1 Savings

Product Line 2 Savings

253
375

203
445

472
881

399
1,006

$350

167
$325

$334

$346

$352
150

149

$300

130
129
$250

126
110

$200

90

$150

Heads = Full Time + Temps

2nd Source Motors

Titanium Purchase
Volume Discount
Vendor LTAs
Outside Processing (OSP)

YTD
Enacted

$ / Head ($000)

PROJECTS

70

$100

50
2013

2014

2015
YTD
Plan

2015
YTD Act

40

NewBusinessModeling
Analytical Approach

Data Driven

Realistic OEM Production Rates

Historical NRE Investment Estimates

Actual-cost Production Cost Estimates

Cumulative Cash Flow Analysis

Takes Emotion out of Decisions

EXAMPLE ONLY
New Business Model Excerpt
2016

2017

2018

2019

2020

2021

NRE
($422)

$494
($435)
$58
0%

$740
($640)
$100
2%

$987
($830)
$157
4%

$1,234
($1,010)
$224
6%

$1,481
($1,150)
$331
10%

SparesSales
SparesCOS
SparesMargin

$109
($52)
$56

$271
($125)
$147

$813
($350)
$464

$1,243
($497)
$746

$2,660
($1,011)
$1,649

EBITDAMargin

40%

42%

45%

48%

50%

TotalSales
TotalCOS
ProductMargin
EBITDAMargin

$602
($487)
$115
7%

$1,012
($765)
$247
12%

$1,800
($1,180)
$621
22%

$2,477
($1,507)
$970
27%

$4,141
($2,161)
$1,980
36%

$43
($379)

$125
($254)

$404
$151

$672
$823

$1,483
$2,306

AnnualData
ProductionSales
ProductionCOS
ProductMargin
EBITDAMargin

NetCashflow
CumCashflow

($422)
($422)

ReturnonInvestment6yrs

60%

Focus: Profitable New Business

41

ValueCreationFocus Acquisitions
Narrow Acquisition Target Yields Strong Potential Value Creation
Proprietary, Sole Source Aerospace
Businesses with Significant Aftermarket
Analyze Target & Model Value
Negotiate Purchase & Raise Cash
Acquire & Create Value
Restructure into Product Lines
Maximize Pricing
Improve Productivity
Grow New Business
42

TalentDevelopment

43

GrowingValueRequiresGrowingTalent
Talent Demand

Organic Growth
& Mgt. Turnover

Acquired Growth
& Mgt. Transitions

Growth Requires Talent

44

TalentDistribution

Talent Pool
Weed-out or Promote
Develop
Expand
Test

Weed-out
Low

Promote

Individual Efficacy

High
45

Succession,Development,Promotion

President
Dir of
S&M

Dir of Eng

Dir of Mfg

Biz Unit
Mgr

Eng Lead

Mfg Mgr

President

Controller

HR, QC
Other

Dir of
S&M

Dir of Eng

Dir of Mfg

Biz Unit
Mgr

Eng Lead

Mfg Mgr

Controller

HR, QC
Other

Key Positions
Dir S&M
Dir Mfg
Biz Unit Mgr
Mfg Mgr

New Acquisition
.

OR

Existing Unit
.

46

TalentDevelopment Structured
Financial Competency
Income
Statement

Value Creation

Balance
Sheet

Value Pricing New Business Productivity

Modeling
Management

Planning & Leadership

Contracting & Negotiations

Risk Management
I.P. Protection
Aftermarket Access

Forecasting
Tools

Leadership
Skills

Pricing

47

TalentDevelopment Operational
Quarterly Business Unit Reviews & Forums

Job Rotations & Promotions

President

Site Visits & Operational Reviews

Dir of
S&M

Dir of Eng

Dir of Mfg

Biz Unit
Mgr

Eng Lead

Mfg Mgr

Controller

HR, QC
Other

LTM Promotions Source

External
25%
Internal
75%

48

PerformanceStability
Solid Value Growth Process

Consistent Value Creation

Strategy

Product Line Detail Focus

Active Talent Growth

Disciplined Acquisition Integration

49

BUSINESSUNITSTRUCTUREAND
PROCESS
JORGEVALLADARES

BusinessUnit ValueFocus

31+ Operating Units

80+ Business Units

51

BusinessUnitValueCreation
Business Unit Teams

Grouping of Related Products

Integrated Cross Functional Team
Business Unit Manager Drives Performance

Value Driver Focus

Profitable New Business

Productivity and Cost Improvement
Value-based Pricing

Accountability

Standardized Business Metrics Across Operating Units

Quarterly Reviews and Mid-Year Reviews
Ownership of Results

52

SAMPLE

BusinessUnit IncomeStatement
Prior Year
Actual
36,814

100.0%

8,870
2,812
7,000
947
19,629

24.1%
7.6%
19.0%
2.6%
0.0%
53.3%

17,185

46.7%

61
681
1,249
(41)
64
2,015
16,181

Q3
Actual

% to
Sls

0.2%
1.9%
3.4%
-0.1%
0.2%
5.5%
44.0%

Sales
Product Costs:
Material
Direct Labor
Overhead
Depreciation
Other
Total Product Costs
Gross Profit
G&A Costs:
Engineering
Sales
Admin
Other
Depreciation
Total G&A Costs
Product Line EBITDA

% to
Sls

YTD
Actual

% to
Sls

YTD
Plan

% to
Sls

9,819

100%

26,216

100%

25,974

100%

2,326
730
1,801
215
5,072

23.7%
7.4%
18.3%
2.2%
0.0%
51.7%

6,229
1,984
4,865
623
13,701

23.8%
7.6%
18.6%
2.4%
0.0%
52.3%

6,284
1,924
4,932
628
13,768

24.2%
7.4%
19.0%
2.4%
0.0%
53.0%

4,746

48.3%

12,515

47.7%

12,206

47.0%

16
188
273
17
494

0.2%
1.9%
2.8%
0.0%
0.2%
5.0%

46
549
637
50
1,282

0.2%
2.1%
2.4%
0.0%
0.2%
4.9%

40
562
641
20
1,263

0.2%
2.2%
2.5%
0.0%
0.1%
4.9%

4,485

45.7%

11,906

45.4%

11,591

44.6%

53

SAMPLE

BusinessUnit YTDSales

Prior
OEM
Year
Commercial
10.0
Reg/Biz Jet
3.7
Other Aerospace
1.8
Defense
2.0
Total
17.5

Actual
Actual
Plan Actual vs Plan vs Plan
10.3
10.3
0.0
0%
3.9
3.9
0.0
0%
1.5
1.4
(0.1)
-7%
2.0
1.9
(0.1)
-5%
17.7
17.5
(0.2)
-1%

Actual
vs PY
3%
5%
-22%
-5%
0%

Aftermarket
Commercial
Defense
Total
Grand Total

Prior
Actual
Actual
Year Plan Actual vs Plan vs Plan
13.5
14.0
14.5
0.5
4%
5.8
5.6
5.5
(0.1)
-2%
19.3
19.6
20.0
0.4
2%
36.8

37.3

37.5

0.2

1%

Actual
vs PY
7%
-5%
4%
2%

54

SAMPLE

BusinessUnit YTDBookings

Prior
Year
OEM
Commercial
10.5
Reg/Biz Jet
4.0
Other Aerospace
2.0
Defense
2.0
Total
18.5

Actual
Actual
Plan Actual vs Plan vs Plan
10.8
10.7
(0.1)
-1%
4.1
4.2
0.1
2%
1.8
1.4
(0.4)
-22%
2.1
2.1
0.0
0%
18.8
18.4
(0.4)
-2%

Actual
vs PY
2%
5%
-30%
5%
-1%

Aftermarket
Commercial
Defense
Total
Grand Total

Prior
Actual
Actual
Year Plan Actual vs Plan vs Plan
14.0
15.0
15.2
0.2
1%
6.2
6.5
6.3
(0.2)
-3%
20.2
21.5
21.5
0.0
0%
38.7

40.3

39.9

(0.4)

-1%

Actual
vs PY
9%
2%
6%
3%

55

SAMPLE

YTDBookingMargins
YTD Bookings

PLAN

ACTUAL

Base Business

51%

53%

New Business

32%

35%

Total YTD

45%

47%

PLAN

FORECAST

46%

48%

Full Yr Forecast

Margin Comments
Product Z strong YTD bookings
Q1-Q3 New Business bookings light on high margin product X

56

SAMPLE

BusinessUnit A/BList
Status
A
A
A
A
A

Customer
Platform
Customer A
Customer B
Customer C
Customer D
Customer E
Other
Sub-Total products available for sale
Status
B
B
B
B
B
B
B

Customer
Platform
Customer F
Customer G
Customer H
Customer I
Customer J
Customer K
Customer L
Other
Sub-Total Products in development
Grand Total

Program Description
Audio Product
Lavatory Product
Cargo Product
Engine Product
Waste System Product

Program Description
Fuel System Product
Airframe Product
Interior Product
Engine Product
Water System Product
Avionics Product
Actuation Product

Sponsor Name

Sponsor Name

3 Year
Current Year
Potential $
Plan $
YTD Act $
3,326
1,854
1,236
768
432
440
673
75
55
576
213
185
382
66
25
1,540
678
265
7,265
3,318
2,206
3 Yr.
Potential $
3,158
2,167
1,984
376
318
0
0
1,147
9,150

Current Yr.
Plan $
0
375
145
50
62
0
215
235
1,082

16,415

4,400

YTD Act $
0
425
126
25
125
87
96
113
997
3,203

57

SAMPLE

BusinessUnit NewBusinessBookings
10,000
8,000

A/B Trend
A

3 Yr Potential ($000)

6,000
4,000
2,000
0
2Q15

3Q15

4Q15

1Q16

2Q16

16
14
12
10
8
6
4
2
0

Prototype Trend

2Q15

3Q15

4Q15

1Q16

2Q16

New Business as a % of Sales

12%
10%
8%
6%

8%
6%

7%

FY13

FY14

9%

10%
8%

4%
2%
0%
FY15

YTD
Plan

YTD
Act

4 Yr
Avg

58

SAMPLE

ProductivitySummary($000)
YTD Enacted

YTD Plan

Full Yr
Forecast

Full Yr Plan

Raw Material LTA

$688

$600

$688

$600

PCBA second source

$420

$420

$420

$420

Connector LTA

$64

$24

$64

$24

S92 Housing casting second source

$166

$166

$166

$50

$50

$84

$75

$115

$100

$1,422

$1,119

$1,503

$1,360

Switch outsource

$170

$139

$170

$139

Anodize second source

$20

$25

$30

$25

$15

$15

$15

Outsourcing Savings

$190

$179

$215

$179

Machine set-up reduction

$218

$200

$300

$300

Assembly projects

$174

$142

$286

$229

Overhaul projects

$22

$20

$32

$42

Labor Savings

$414

$362

$618

$571

IT projects

$385

$126

$385

$126

Facility projects

$62

$50

$86

$75

Finance process improvements

$10

$10

Other Spending Reductions

$457

$176

$481

$201

$2,483

$1,836

$2,817

$2,311

Project Description

Spring multi-year buy

Other purchasing projects
Purchasing Savings

Buckle outsource

Total

59

SAMPLE

BusinessUnit Pricing

Percent Increase

YTD Product Line A Pricing Results

CommTransOEM RegBusJetOEM

DefenseOEM
YTD

CommAftmkt
FYPlan

GovAftmkt

Total

Inflation

60

SAMPLE

BusinessUnit Forecast

($000's)
QTR
Fcst

QTR
Plan

FY
Fcst

FY
Plan

Bookings

12,300

12,000

300

40,850

40,000

850

Sales

10,750

10,500

250

40,125

39,375

750

EBITDA

5,075

4,800

275

18,535

18,400

135

EBITDA %

47%

46%

1%

47%

46%

1%

61

BusinessUnitStructure DrivingValueCreation

Consistent
Value Generation

Detailed Accountability

Clear Metrics

Value Creation
Focus

62

MERGERS & ACQUISITIONS

BERNIE IVERSEN

FY15andFY16inReview
Invested almost $3B in acquiring $760M in Revenue and $230M in EBITDA
Stayed within Acquisition Criteria

March2015
Price:$725M
Seller:Strategic

March2015
Price:$75M
Seller:Strategic

May2015
Price:$496M
Seller:PrivateEquity

August2015
Price:$325M
Seller:PrivatelyHeld

January2016
Price:$206M
Seller:PublicCompany

FY16
Price:$1.0B
Seller:PrivateEquity

64

DDCOverview
Military
75%

~650employees
HQ/MainplantinBohemia,NY.

Commercial
~25%

Aftermarket
~70%
OEM
~30%

ProductLineBreakdown

Databus
~60%

AnnouncedsigningofMergerAgreementon5/24/16

Marketleaderinprovidingproprietarydatabuscomponents

Dominantworldwidestandardformilitaryavionics

NewplatformsincludingA350,A400M,JSFand777X

Motion
Feedback
~10%

Largeinstalledbase,withupgradestoexistingplatformsdriving
aftermarketsales

Other
~10%

Littleprogramconcentrationandlargeinstalledbaseminimizesrisk
tospecificprograms

Longstandingrelationshipswithtoptierprimecontractorsand
leadingmilitarysubsystemsuppliers

PowerSupplies&
Controls
~20%

65

DDCApplications
EmergingApplications

Where

LargeInstalledBaseofExistingApplications

WhatitDoes

MilitaryAircraft

CommercialAircraft

Prioritizes,deliversandmanages
datafromconnectedonboard
systems
RecentSelections:JSF;A400M;777X
A350XWB

WeaponsSystems

MilitaryVehicles

Coordinates
information
flowduring
flightofthe
weapon.

Formsdata
linksbetween
thevehicles
electrical
subsystems.

Space

Formsa
commondata
linkand
protocol.

Verylargeinstalledbasewith new opportunities forgrowth

66

ProductsareonHundredsofDifferentPlatforms
CompanyProducts
Platform
A320
A330
A330
A340
A350XWB
A380
A400M
A400M
AEHF
AH64
AIM9X
AMPV
AMRAAM
APACHE/LONGBOW
B2
B737
B747
B767Tanker
B777
B787
BLACKHAWK
BRADLEY
Brimstone
C130
C130J
C17
CH47
EFATyphoon
EHF
EUROFIGHTER

Data
Bus

CompanyProducts

SSPC/Power
Supply

Motion
Feedback

Other

Platform
F15
F16
F18
F22
F35
GALILEO
GLOBALHAWK
GULFSTREAM
Harrier
Hawk
JAGM
JLTV
KC135
LPPV
Lynx
M1A2
MATV
Meteor
MRAP
NH90
PAC3
Paladin
PREDATOR
SBIRS
SCOUT
Spear
STORMSHADOW
STRYKER
SU27
V22

Data
Bus

PowerSupplies
&Controllers

Motion
Feedback

Other

67

DDCValueCreationPlan

Target EBITDA Bridge

Highaftermarketcontent

ReviseSparesandR&OPricing

Productivity Plantconsolidations
&Restructuring

2016

Price

Productivity

New Biz &

Market
(Volume)

GoodNewBusinessGrowth

PushtheTDGValueTransition

2021

68

M&AOrganizationalStructure

Exceptionallystrongandstableteam
B.Iversen
EVP M&Aand
BusinessDevelopment

RotationalDirectorrole

UtilizeBrokersforUS&Europe

Director M&A

Director M&A

GeneralCounsel

RotationalSpot

U.S.Broker

EuropeanBroker

69

EuropeanExpansion
2011

EuropeanBroker

FocusonUnitedKingdomandGermany

Buildingrelationshipswithinothercountriestoo

2016

70

ActiveAcquisitionProcess
Typical Results

Typical Multiple:
9 12x EBITDA
Post Acquisition:
50%+ multiple reduction

71

ProvenRecordofAcquisition&Integration
NYSE

Privately Held
1993 2006

2006 2010

2011 2012

Adel
Aeroproducts

Sweeney

Electra-Motion

Hartwell
Electromech

Wiggins
Controlex

CDA InterCorp.

Avtech

Christie

Champion

CEF
Unison/GE

Honeywell Lube Pump

Fuelcom

APC/GE
Acme

Norco

Avionic Instruments

Skurka

Fluid Regulators

Eaton Motors

Linread

(1)

Valley-Todeco

AQS

Talley Actuation

Schneller

Harco

Woodward HRT
Dukes
Semco

AmSafe Passenger
Restraints

AmSafe Commercial
Products

AmSafe Cargo Restraints

& Specialty Devises

Aero-Instruments

Beams

Aerosonic

Arkwin

Whippany Actuation

Airborne Systems North

America

Airborne Systems
Europe

(1)

(1)

Elektro-Metall Export
Telair International

AAR Cargo Systems

Nordisk Aviation

Telair

Adams Rite Aerospace

Marathon

Tyee
TAC

AmSafe

ADS/Transicoil
Bruce

McKechnie

2013 - 2016

Franke Aquarotter
Pexco

PneuDraulics
Breeze-Eastern

DDC (pending)

Including DDC, TransDigm has acquired 57 businesses

since 1993, including 42 since its IPO.
(1)

Divested in Q2 and Q3 of FY2011.

72

Acquisition Sourcing SinceIPO

Number of Businesses

EBITDA at Time of Acquisition

22%

23%
34%

16%

62%

43%

Strategic

Private Holder

Private Equity

Note: Statistics include businesses acquired but later divested.

73

AcquisitionMetrics WeightedHistoricalValues
(ExcludingDivestitures)
100%
80%

Sole Source
88%

89%

84%
71%

78%

74%

80% 83%

87%

81%

66%

60%
40%
20%
0%
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Avg.

100%

Commercial vs. Military

100%

80%

80%

60%

60%

40%

40%

20%

20%

0%

0%

FY0 FY0 FY0 FY1 FY1 FY1 FY1 FY1 FY1 FY1
Avg.
7
8
9
0
1
2
3
4
5
6
Comm. 75% 43% 66% 62% 92% 90% 50% 16% 89% 32% 67%
Military 25% 57% 34% 38% 8% 10% 50% 84% 11% 68% 33%

OEM vs. Aftermarket

FY0 FY0 FY0 FY1 FY1 FY1 FY1 FY1 FY1 FY1
Avg.
7
8
9
0
1
2
3
4
5
6
OEM 54% 30% 38% 62% 56% 39% 58% 50% 57% 33% 49%
Aft. 46% 70% 62% 38% 44% 61% 42% 50% 43% 67% 51%

74

WhatWeDontLookFor
Synergy

Bigger is better

Market share

Globalization

Fill out product line

Diversify

Excess capacity

Consolidating Industry

Access to markets

Spend $ to make $

Blah, Blah, blah

Blah, Blah, blah

Name in Paper
Increase salary
Get promoted
Be fun
Bigger Boss
Bragging Rights

Get fee
Get promoted

75

WhatWeDOLookFor
Increase Shareholder Value

76

ActualPerformance Example1

Acq. Target EBITDA Bridge

2011

Price

Productivity

New Biz &

Market
(Volume)

2016

Act/Fcst EBITDA Bridge

2011

Price

Productivity

New Biz &

Market
(Volume)

2016 Fcst

EBITDA considerably ahead of the model creating significant value

77

ActualPerformance Example2

Acq. Target EBITDA Bridge

2012

Price

Productivity

New Biz &

Market
(Volume)

2017

Act/Fcst EBITDA Bridge

2012

Price

Productivity

New Biz &

Market
(Volume)

2016 Fcst

EBITDA targeted to be just under the 5-year model in 4 years

78

ACQUISITIONINTEGRATIONPROCESS
BOBHENDERSON

AcquisitionIntegrationProcess

NowThatWeOwnIt
WHATDOWEDO?!

80

AcquisitionIntegrationProcess General
Basics All Acquisitions are Different

PastOperatingHistoryImpactsModelandIntegrationNeeds/Process
DifferentValueGenerationApproachesinAcquisitionModel
ConsolidateorStandAlone ProductivityOpportunities
ContractualOpportunities&Constraints
NewBusinessPipeline
StrengthinSeniorManagementVariesWildly
However, There is Significant Commonality in Our Actions

81

AcquisitionIntegrationProcess Timeline
Actions General

TimeAfter
Acquisition(days)

PresentTransDigm, OurCultureandValueGenerationStrategy. 0 15
ControlWorkingCapitalandEstablishFinancialPlan 0 90
EvaluateKeyStaffPersonnelCompetency 0 30
ReviewOE/AMContractsandEffectActions 15 45
ImplementProductivityPlan(BusinessWide)and
OngoingProductionImprovementProcesses.

0 90

OrganizeCompanyintoBusinessUnits.

30 180

ReviewNewBusinessProjects Weed&Focus.

30 60

VariousHR,Legal&AccountingReviews/Activities.......0 120

Integration Activities First 180 Days

82

TelairCargoGroup
March2015
Price:$725M
MainLocations:Miesbach,Germany,
Goldsboro,NCandHolmstrand,Norway
Employees:Justover600
Seller:Strategic

83

AerospaceBusinessofFrankeAquarotter

March2015
Price:$75M
MainLocation:Ludwigsfelde,Germany
Employees:50
Seller:Strategic

84

AerospaceBusinessofPexco

May2015
Price:$496M
MainLocation:Yakima,WA
Employees:300
Seller:PrivateEquity

85

PneuDraulics,Inc.

August2015
Price:$325M
MainLocation:RanchoCucamonga,CA
Employees:275
Seller:PrivatelyHeld

86

BreezeEasternCorporation

(1)

January2016
Price:$206M
MainLocation:Whippany,NJ
Employees:175
Seller:PublicCompany

87

ProductPresentationBreakout
Starting Location

Presentations
Roger Jones
Herb Mardany
Pete Palmer

Breeze-Eastern
Pexco Aerospace
PneuDraulics

EVP
President, Pexco Aerospace
EVP

Group A

Harry Ray
Mike Couitt
John Kuss

AvtechTyee
Hartwell
Schneller

President, AvtechTyee
President, Hartwell
Director of Operations, Schneller

Group B

Jim Skulina
Tim Dumbauld

Telair International
Telair U.S. Cargo
Systems

EVP
President, Telair U.S. Cargo
Systems

Group C

Jeff Zielinski
Paula Wheeler
Jason Marlin

AdelWiggins Group
Aero Fluid Products
Champion Aerospace

President, AdelWiggins Group

President, Aero Fluid Products
President, Champion Aerospace

Group D

Ballroom

Ballroom

Arcade

Arcade

Hold Non-Presentation Related Questions for the Panel Q&A

88

NEW BUSINESS &

INNOVATION
JOEL REISS

NewBusinessOverview
Drives Organic Growth

Customer-Driven Business Opportunities

Focus on Profitable
New Business

Innovative State of the Art Solutions

Responsive and Agile Development

90

NewBusinessHowWeDoIt
Focused Engagement
with Procurement and Engineering
Identify Opportunities
Establish Sponsorship

Contracting Initial
Focus
Design and Development
Contract Award

Key Business
Decision Gates

Full Scale Development

Negotiate Final Terms and Conditions

Qualification and Certification

Production Deliveries
91

NewBusinessHowWeDoIt
Customer Relationships

Strong Operational Performance

Engineer to Engineer Selling
Solve Customer Technical Issues

Contracting Focus

Strong Attention to Detail

Control IP/Aftermarket

Manage Scope Creep

Establish Technical Baseline

Track Engineering Changes
Proactive Communication

Existing Part
with
New
Customer
New Part
with
Existing
Customer

New Part
with
New
Customer

Profitable
New
Business

92

NewBusinessHowWeDoIt
Team Based Development

Business Unit Teams

Cross-functional
Partner with Suppliers

Design Reviews

Informal Meetings
Formal Gate Process

New Business Focus

Rapid Prototype Development

New Technologies
New Processes

93

NewBusinessModeling
Analytical Approach

EXAMPLE ONLY

Data Driven

New Business Model Excerpt

Realistic OEM Production Rates

AnnualData

Historical NRE Investment Estimates

Actual-cost Production Cost Estimates

Cumulative Cash Flow Analysis

Takes Emotion out of Decisions

2016

2017

2018

2019

2020

2021

NRE
($422)

$494
($435)
$58
12%
12%
0%

$740
($640)
$100
14%
12%
2%

$987
($830)
$157
16%
12%
4%

$1,234
($1,010)
$224
18%
12%
6%

$1,481
($1,150)
$331
22%
12%
10%

SparesSales
SparesCOS
SparesMargin
SpareMargin%
SG&A%
EBITDAMargin

$109
($52)
$56
52%
12%
40%

$271
($125)
$147
54%
12%
42%

$813
($350)
$464
57%
12%
45%

$1,243
($497)
$746
60%
12%
48%

$2,660
($1,011)
$1,649
62%
12%
50%

TotalSales
TotalCOS
ProductMargin
Margin%
SG&A%
EBITDAMargin

$602
($487)
$115
19%
12%
7%

$1,012
($765)
$247
24%
12%
12%

$1,800
($1,180)
$621
34%
12%
22%

$2,477
($1,507)
$970
39%
12%
27%

$4,141
($2,161)
$1,980
48%
12%
36%

$43
($379)

$125
($254)

$404
$151

$672
$823

$1,483
$2,306

ProductionSales
ProductionCOS
ProductMargin
Margin%
SG&A%
EBITDAMargin

NetCashflow
CumCashflow

Focus: Profitable New Business

($422)
($422)

ReturnonInvestment6yrs

60%

94

NewBusinessInnovation
People

Strong Engineering Talent

Cross-functional Teams
Management Focus

Design Approach

Solution Focused
Iterative Design Approach
Multiple Alternative Designs
Incorporate Customer Feedback

Customer
Feedback

Rapid
Prototyping

Iterative
Design

Idea
Generation

Rapid
Prototyping

Customer
Feedback

95

MajorNewBusinessContent:
CommercialNewAircraft
$ / Shipset Growth Over Prior Platforms
B787

A350

+62%

Prior Platforms

A380

+61%

+96%

B787

Prior Platforms

C-Series

+90%

A350

Prior Platforms

A380

Prior Platforms

C-Series

96
96

MajorNewBusinessContent:
CommercialReEngining
$ / Shipset Growth Over Prior Platforms
B777X

A320neo

B737Max

+4%

+13%
+14%

Prior Platforms

E2

+91%

B777X

Prior Platforms

A320neo

Prior Platforms

B737max

Prior Platforms

E2

97

Airbus350Content

Compositedielectricisolators
Compositedielectricisolator

tubes

Fuelsystemflexibletube

connectors
Waterwastesystemflexibletube

connectors

Engineandelectricalsystem

elastomerichightemp/high

vibrationclamps
Water/wastesystemantifreeze

heaters

Cockpitdoorlockcontroller
Wingstructureexteriorlatches

andhinges
Bellystructureexteriorlatches

andhinges
Passengerseatbelts
Airbagseatbelts
Flightattendantrestraintsystems
Doorbarrierstraps
Lifelinestraps
Cabinharnesses
Bulkheadfinishsurfaces
Sidewallfinishsurfaces
Lavfinishsurfaces
Galleyfinishsurfaces
Premiumseats
Thermoplasticsflooringforgalley
Lavatoryflooring
Bellyholdnetassemblies
TrentXWBengineignitionsystem

APUHamiltonSundstrandigniter
Trent1000enginevalve
Hydraulicsystem,landinggear
valves
Water/Wastesystemvalves
Fuelsystempumpvalves
Passengerdoormechanism
structuralandspringrods
Mainlandinggeardoorrods
Cabinetsupportrods
SpoilerEBHArotor/stator
assemblies
Cabinthermoplastics
Interiorthermoplastics
AileronEHArotor/stator
assemblies

Cockpitdoormodule
Interiorbinlatches
Lavatorymechanical
decompressionlatch
Lavatorylatchoverride
mechanism
Emergencyramairactuator
APUdooractuator
APUdatamemorymodule
eGDOSelectricgrounddoor
Openingvalveactuators
Hydraulicpriorityvalves
Brakecontrolvalves
Onboardcargoloadingsystem
9898

Boeing787Content

Compositedielectricisolators

Engineandelectricalsystem

elastomerichightemp/high
vibrationclamps

Water/wastesystemantifreeze

heaters
Interiorcompositestructuralrods

Aluminumdoorrods
Audiocontrolpanelandjackboxes
Audiogatewayunits,speakersand

headsets

Nacelle/fancowllatches

Thrustreverserlatches
Crewescapeandcargodoor
latches
Electricalpaneldoorlatches
Passengerseatbelts
Airbagseatbelts
Flightattendantrestraintsystems
Pilot/copilotrestrainsystems
Doordarrierstraps
Lifelinestraps
Bulkheadfinishsurfaces
Sidewallfinishsurfaces

Lavfinishsurfaces

Galleyfinishsurfaces

Premiumseats

Thermoplastics
Fancowlandthrustreversertel.

rods

Cargoholdbilgebarriers
Cargoholdendwallpanels
Baggagerestraintbarriernets
Thermalbarriernets
Medicaloutletfrequencyconverter
Trent1000ignitionsystem

Mainenginelubesystem
Hydraulicfiltrationmanifold
UVwatersystempowersupply
Hydraulicvalvesandpump
EMUbackupflat/slat
APUdooractuators
Cockpitstickactuator

99

CSeriesContent

Fuelsystemcompositelightning
isolators
Hydraulicsystemcomposite
lightningisolators
Fuelsystemflexibletube
connectors
Block,loop,saddleclamps
Tailconeexteriorlatches
Fuselageexteriorlatchesand
hinges

Passengerseatbelts
Airbagseatbelts
Flightattendantrestraintsystems
Lifelinestraps
Bulkheadfinishsurfaces
Sidewallfinishsurfaces
Galleyfinishsurfaces
Ceilingfinishsurfaces
ThermoplasticsFlooringforgalley
Lavatoryflooring

PWengineignitionsystem
APUignitionsystem
Fuelsystempumpvalves
Nacellelatches
PreCoolerexhaustdoor
Holdopenrods
Bleedairvalves
Pneumaticcheckvalves
Cargonets
Bifurcationlatchactuator

Mainhydraulicspriorityvalves
PTUselectvalve
Heatexchangerbypassvalve
Flightdeckcontrolsreversion
switchingpanels
nacellestemperaturesensors
environmentalsystemsRTDs

100
100

ConsistentValueCreation
Profitable New Business

Technical Innovation

Engineered Solutions

Grow Faster Than The Markets We Serve

Disciplined Data Driven Approach

Business Team Ownership

High Sense of Urgency and Responsiveness

Key Operating Value Driver

101

FINANCIAL OVERVIEW
TERRY PARADIE

HistoricalFinancialHighlights
Revenue

EBITDA as Defined

($ in millions)

$3,289
$2,373
$1,700

$1,477

$2,707
$1,073

$1,924

$809

$1,206

2011

($ in millions)

$1,234

$900

$590

2012

2013

2014

2015

Adjusted Earnings Per Share

PF LTM
4/2/16 (1)

48.9%

47.6%

46.8%

45.2%

2011

2012

2013
EBITDA

2014
2015
% margin

45.6%

44.9%
PF LTM
4/2/16 (1)

Enterprise Value
($ in billions)

$23
$20

$9.01
$6.67

$6.90

$13
$11

$4.48

2011

$16

$7.76

$7

2012

2013

2014

2015

2011

2012

2013

2014

2015

2016

TransDigm Continues to Grow and Generate Significant Value

Note: EBITDA as Defined is a non-GAAP financial measure. For a historical reconciliation of EBITDA as Defined to Net Income, please see the appendix.
(1)
PF LTM 4/2/16 Includes the full year impacts of the recently completed acquisitions of Pexco, PneuDraulics and Breeze, as well as the pending
acquisition of DDC totaling $289 million and $113 million in revenue and EBITDA as Defined, respectively. Please see the Special Notice
Regarding Pro Forma and Non-GAAP Information.
(2)
Enterprise value calculated as of 6/17/16 equals equity value (shares outstanding as of 5/01/16 multiplied by the TDG closing stock price on
6/17/16) plus pro forma total net debt (total debt less cash).

103

SignificantFreeCashFlow
Free
Cash Flow Before WC Exceeds 50% of EBITDA As Defined
(Units)

$800

70%

$700

60%

$600

50%

$500

40%

$400
30%
$300
20%

$200
$100

10%

$-

0%

2007 2008 2009 2010 2011 2012 2013 2014 2015

2007 2008 2009 2010 2011 2012 2013 2014 2015

Free Cash Flow

Cash Interest Expense

Cash Taxes

Capex

Note: Free Cash Flow before WC equals EBTIDA less Capex, Cash Interest Expense and Cash Taxes. Free Cash Flow before WC IS a non-GAAP financial
measure. Please see appendix for a reconciliation of Free Cash Flow before WC.

104

TransDigmDeleveringProfile
(NetDebt/PFEBITDAasDefined)
Refi &
Dividend

7.0x

Telair,
Franke and
Pexco

6.5x

6.0x

Special
Dividend

McKechnie
Acquisition

Warburg
Pincus
Recap

DDC
Acquisition
& GCP

5.5x
IPO

5.0x

Special
Dividend
Recap &
Dividend

AmSafe
Acquisition

4.5x

4.0x

3.5x

3.0x

2.5x

2.0x

Note:
(1)

07/03 FY03 FY04 FY05 4/06 FY06 FY07 FY08 FY09 10/09 FY10 12/10 FY11 3/12 FY12 12/12 3/13

(1)

6/13 FY13 12/13 3/14 FY14 3/15 FY15 3/16 4/2/16

EBITDA as Defined is a non-GAAP financial measure. For a historical reconciliation of EBITDA as Defined to Net Income, please see the appendix.
Pro forma includes the full year impacts of the recently completed acquisitions of Telair, Franke and Pexco, PneuDraulics and Breeze-Eastern, as well as the pending
acquisition of DDC.

105

ProFormaCapitalizationStructure
Pro forma capitalization
($ in millions)

Cum. net

4/2/16

EBITDA (x)

Adj.

Pro forma

Cum. net

4/2/16

EBITDA (x)

Rate

$612

858

$1,470

L + 3.00%

$350mm A/R securitization facility

200

200

L + 0.80%

First lien term loan C due 2020

2,025

1,235

L + 3.00%

Cash

$600mm revolver

(790)

First lien term loan D due 2021

811

811

L + 3.00%

First lien term loan E due 2022

1,525

1,525

L + 3.00%

1,740

1,740

L + 3.00%

NEW - First lien term loan F due 2023

Total net secured debt

$3,949

(1)

2.8x

$4,041

2.7x

Senior subordinated notes due 2020

550

550

5.50%

Senior subordinated notes due 2021

500

500

7.50%

Senior subordinated notes due 2022

1,150

1,150

6.00%

Senior subordinated notes due 2024

1,200

1,200

6.50%

Senior subordinated notes due 2025

450

450

6.50%

950

950

6.375%

NEW - Senior subordinated notes due 2026

Total net debt
TDG PF LTM EBITDA as Defined
Note:
(1)

Actual

$7,799

5.6x

$8,841
(1)

6.0x

$1,477

EBITDA as Defined is a non-GAAP financial measure. For a historical reconciliation of EBITDA as Defined to Net Income, please see the appendix.
Assumes completion of the pending DDC acquisition. Includes the full year impact of the recently completed acquisitions of Pexco, PneuDraulics and
Breeze-Eastern, as well as pending acquisition of DDC totaling $113 million in EBITDA as Defined. Please see the Special Notice Regarding Pro Forma and
Non-GAAP Information.

106

Sources andUsesofRecentFinancing
Sources & Uses
($ in millions)

Sources
Upsize RCF to $600m and extend maturity
New first lien term loan due 2023
New senior subordinated notes due 2026
Total sources

1,740
950
$2,690

Uses

(1)

Pending Acquisition of DDC purchase price

Repay portion of existing term loan C
General corporate purposes and financing related fees

$1,000
790
900

Total uses

$2,690

Assumes completion of the pending DDC acquisition.

107

DebtMaturityProfileandInterestRates
Old Debt Maturity Profile
3,000

Weighted Average
Interest Rate

($MM)

550

1,150

2,000

2,025

1,000

Pre-Financing

5.3%

500
1,525

1,200

811
0

200
2016

0
2017 - 2019

2020

2021

2022

0
2023

450
2024

2025

New Pro Forma Debt Maturity Profile

3,000

Weighted Average
Interest Rate

($MM)

Post-Financing
1,150

2,000

5.3%

550
500

1,000
1,235
0

200
2016

0
2017 - 2019

2020

Secured Loans

1,525

1,740
1,200

811
2021

450
2022

2023

2024

2025

950
2026

Sr. Sub Notes

Fixed Debt 75% Post-Financing

108

DryPowderAvailableforAcquisitions

Dry Powder in Excess of $1.5 B Available Immediately After Recent

Financing and Assuming Completion of DDC Acquisition

Pro Forma Cash 4/2/2016

$1,450

Additional Borrowing Available

Under Credit Agreement

400

Dry Powder Available for Acquisitions

$1,850

109

APPENDIX:ReconciliationofEBITDAandEBITDAAsDefined
toNetIncomeandNetIncometoAdjustedNetIncome
($ in millions)
1994

Income from continuing ops.

Depreciation and amortization
Interest expense, net
Income tax provision
Warrant put value adjustment
Extraordinary item

1995

1996

1997

1998

($5)
7
5
(2)
1
-

$0
7
5
1
-

$1
7
5
2
2
-

$3
6
3
5
5
2

$14
7
3
13
7
-

13

17

24

44

EBITDA, excluding discontinued

operations
Merger expense
Acquisition-related costs
Non-cash compensation and
deferred compensation costs
One-time special bonus
Public offering costs
Refinancing costs

EBITDA As Defined
Acquisitions
PF EBITDA As Defined (1)

$10

$13

$17

$25

$44

1999

2000

2001

2002

($17)
6
23
(2)
-

$11
7
28
8
-

$14
9
32
9
-

$31
13
37
17
-

10

54

64

98

40
1

2005

2006

2007

($76)
10
43
(45)
-

$14
18
75
6
-

$35
17
80
23
-

$25
16
77
16
-

$89
24
92
53
-

$133
25
93
74
-

$163
28
84
88
-

$163
30
112
88
-

$152
61
185
77
-

$325
68
212
163
-

$303
73
271
146
-

$307
96
348
142
-

$447
94
419
189
-

$495
109
443
208

(68)

113

155

134

258

325

$363

$393

$475

$768

$793

$893

$1,149

$1,255

176
15

$124

$139

$164

$51

$54

$72

$98

20

1
6
3
49
$194

2008

2009

$275

$333

6
$375

12

$412

30

7
-

2012

13
72
$590

2013

2014

19

26

22

22

49
32

26
132

$900

$1,073

$809

2015

35

55

32

40

18
$1,234

18
$1,364

113
$1,477

(in millions)

2011

2012

2013

2014

2015

Net income from continuing operations

Gross adjustments from EBITDA to EBITDA as Defined
Purchase accounting backlog amortization
Tax adjustment

152
115
16
(44)

325
41
11
(17)

303
107
7
(37)

307
181
17
(63)

447
84
5
(26)

Adjusted net income

239

360

380

442

510

(1)

2011

2010

LTM
4/12/16

2004

2003

Includes the full year impacts of the recently completed acquisitions of Pexco, Pneudraulics and Breeze Eastern, as well as the pending acquisition of
DDC. Please see the Special Notice Regarding Pro Forma and Non GAAP Information.

110

APPENDIX:ReconciliationofSignificant
FreeCashFlow
($ in millions)

Fiscal Year Ended September 30,

2011

2012

2013

2014

2015

EBITDA As Defined

$590

$809

$900

$1,073

$1,234

CapEx

($18)

($25)

($36)

($34)

($55)

($156)

($198)

($238)

($320)

($399)

Cash Taxes

($88)

($104)

($82)

($98)

($127)

Free Cash Flow before WC

$328

$482

$544

$621

$653

Cash Interest Expense

% of EBITDA As Defined

56%

60%

60%

58%

53%

111