Slide 1: FY 2022 Q4 Earnings Call
FY 2022 Q4 Earnings Call November 10, 2022
Slide 2: Agenda
Agenda TransDigm Overview, Highlights and Outlook Kevin Stein President and CEO Market Review Jorge L. Valladares III COO Operating Performance and Financial Results Mike Lisman CFO Q&A 1
Slide 3: Forward Looking Statements & Special Notice Regarding Pro Forma and Non-GAAP Information
Forward Looking Statements & Special Notice Regarding Pro Forma and Non‐GAAP Information FORWARD LOOKING STATEMENTS This presentation contains forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including information regarding our guidance for futur
Slide 4: TransDigm Overview
TransDigm Overview Distinguishing Characteristics Highly engineered aerospace components Significant aftermarket content Proprietary products High free cash flow Proprietary Revenues (1) Pro Forma Revenues (1) Pro Forma EBITDA As Defined (1) Non‐ Proprietary Comm OEM 27% OEM Defense 42% Prop
Slide 5: 2022 Q4 Financial Performance by Markets – Pro Forma
2022 Q4 Financial Performance by Markets – Pro Forma Highlights Q4 Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year 25% Biz Jet/Heli Q4 YTD Commercial OEM: Q4 ’22 Commercial Transport Revenue Up 24% Commercial OEM: Up 29% Up 24% 75% Com Transport Q4 ’22 Business Jet/Helicopter Revenue Up 39%
Slide 6: Fourth Quarter 2022 Select Financial Results
Fourth Quarter 2022 Select Financial Results ($ in millions, except per share amounts) Q4 FY Q4 FY 2022 2021 Revenue $1,510 $1,279 18% Increase Gross Profit $885 $725 • Favorable Aftermarket vs. OEM sales mix • Fixed overhead spread over higher production volumes 58.6% 56.7% 1.9% SG&A $210 $154 • Hi
Slide 7: Full Year 2022 Select Financial Results
Full Year 2022 Select Financial Results ($ in millions, except per share amounts) FY 2022 FY 2021 Revenue $5,429 $4,798 13% Increase • Favorable Aftermarket vs. OEM sales mix Gross Profit $3,099 $2,513 • Fixed overhead spread over higher production volumes 57.1% 52.4% 4.7% SG&A $748 $685 • Realizati
Slide 8: Fiscal 2023 Outlook
Fiscal 2023 Outlook Market Growth Assumptions FY 2022 Pro FY 2023 Expected Forma Sales Mix (1) Market Growth 27% Commercial OEM Up Mid-Teens % Range 31% Commercial Aftermarket Up Mid-Teens % Range 42% Defense Up LSD to MSD % Range Guidance Summary FY 2023 Guidance Low High Revenues $ 5,990 $ 6,190 E
Slide 9: Fiscal 2023 Select Financial Assumptions
Fiscal 2023 Select Financial Assumptions Select Financial Assumptions for Fiscal 2023 Capital Expenditures $155 to $185 million Full Year Net Interest Expense ≈ $1.14 billion (includes $80 million of interest income) Full Year Effective Tax Rate ≈ 24% to 26% for GAAP EPS, Adjusted EPS and Cash Taxes
Slide 10: Reconciliation of Fiscal 2023 Outlook
Reconciliation of Fiscal 2023 Outlook ($ in millions, except per share amounts) FY 2023 Guidance Midpoint Net income $ 1,076 Adjustments: Includes approx. $4m of Depreciation and amortization expense 272 backlog amortization Interest expense - net 1,140 Income tax provision 360 EBITDA 2,848 Adjustme
Slide 11: Reconciliation of GAAP EPS to Adjusted EPS - Guidance
Reconciliation of GAAP EPS to Adjusted EPS ‐ Guidance Full Year Guidance Thirteen Week Periods Ended Fiscal Years Ended Mid‐Point September 30, September 30, September 30, September 30, September 30, 2022 2021 2022 2021 2023 GAAP earnings per share from continuing operations $ 3.98 $ 3.58 $ 13.38 $
Slide 12: Capital Structure
Capital Structure Pro Forma Capital Structure ($ in millions) Actual 9/30/22 Rate Cash $3,001 $810mm revolver – L + 2.50% $350mm AR securitization facility 350 S +1.30% First lien term loan E due 2025 2,155 L + 2.25% First lien term loan F due 2025 3,418 L + 2.25% First lien term loan G due 2024 1,7
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity • Interest rates on TDG’s $20Bn of gross Debt is 85% fixed rate through fiscal year 2025 • Achieved via a combination of interest rate caps and swaps • Significantly reduces near-term exposure to any LIBOR rate increases $ in millions Current FY 23 Assumptions LIBOR % ~ 4.9
Slide 14: Debt Maturity Profile
Debt Maturity Profile Debt Maturity Profile ($MM) $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 2023 2024 2025 2026 2027 2028 2029 Secured Term Loans Secured Notes Sr Sub Notes Note: $350M AR Securitization renews annually in July 13
Slide 15: Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined Thirteen Week Periods Ended Fiscal Years Ended ($ in millions) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Income from continuing operations $ 266 $ 209 $ 866 $ 681 Adjustmen
Slide 16: Appendix: Reconciliation of Reported EPS to Adjusted EPS
Appendix: Reconciliation of Reported EPS to Adjusted EPS ($ in millions, except per share amounts) Thirteen Week Periods Ended Fiscal Years Ended Reported Earnings Per Share September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Income from continuing operations $ 266 $ 209 $ 86
Slide 17: Appendix: Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined Fiscal Years Ended ($ in millions) September 30, 2022 September 30, 2021 Net cash provided by operating activities $ 948 $ 913 Adjustments: Changes in assets and liabilities, net of effects from acq