Slide 1: FY 2016 Fourth Quarter Earnings Conference Call
FY 2016 FOURTH QUARTER EARNINGS CONFERENCE CALL November 14, 2016
Slide 2: Agenda
Agenda TransDigm Overview W. Nicholas Howley Chairman, President and CEO Highlights, Market Review, Operating W. Nicholas Howley Performance and Outlook Chairman, President and CEO Operations and Value Creation Kevin Stein COO – Power Financial Results Terrance Paradie Executive Vice Preside
Slide 3: Forward Looking Statements
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 future periods. These forward-looking statements are based on management’s current expectation
Slide 4: Special Notice Regarding Pro Forma and Non-GAAP Information
Special Notice Regarding Pro Forma and Non-GAAP Information 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 a
Slide 5: TransDigm Overview
TransDigm Overview DISTINGUISHING CHARACTERISTICS Highly engineered aerospace components Significant aftermarket content Proprietary and sole source products High free cash flow Proprietary Revenues (1) Pro Forma Revenues (1) Pro Forma EBITDA As Defined (1) Non- Proprietary OEM Defense Comm
Slide 6: 2016 Q4 Financial Performance by Markets – Pro Forma
2016 Q4 Financial Performance by Markets – Pro Forma Highlights⁽¹⁾ Q4 Market Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year Q4 YTD Commercial OEM Commercial OEM: Down 4% Flat FY 16 commercial transport revenues up ≈ 2% Commercial Aftermarket Commercial Aftermarket: Up 6.5% Up 6.5% FY 16 co
Slide 7: Fiscal 2017 Outlook
Fiscal 2017 Outlook FY 2017 Pro Forma Sales Mix (1) Market FY 2017 Expected Growth 31% Commercial OEM Up Low to Mid Single-Digit % 36% Commercial Aftermarket Up Mid to High Single-Digit % 33% Defense Flat to Slightly Up Assumptions Guidance Summary ($ in millions) Full year interest expense ≈ $580
Slide 8: Fourth Quarter 2016 Results
Fourth Quarter 2016 Results ($ in millions, except per share amounts) Q4 FY 2016 Q4 FY 2015 Revenue $875.2 $809.8 8.1% Increase Gross Profit $484.3 $427.6 2.5 Margin Point Increase Margin % 55.3% 52.8% ● Higher acquisition-related inventory step-up and integration costs ● Strength of our proprietary
Slide 9: Liquidity & Taxes
Liquidity & Taxes ($ in millions) Cash Taxes FY 9/30/2016 FY 9/30/2015 Net Cash Provided by Operating Activities $668.9 $520.9 FY 16 Full Year GAAP ETR: 23.7% Capital Expenditures ($44.0) ($54.9) Free Cash Flow $624.9 $466.0 FY 16 Full Year Adjusted ETR: 29.0% Cash on the Balance Sheet $1,587.0
Slide 10: Reconciliation of GAAP to Adjusted EPS - Guidance
Reconciliation of GAAP to Adjusted EPS - Guidance Full Year Guidance Thirteen Week Periods Ended Fifty-Two Week Periods Ended Mid-Point September 30, September 30, September 30, September 30, September 30, 2016 2015 2016 2015 2017 Earnings per share $ 2.77 $ 2.50 $ 10.39 $ 7.84 $ 8.65 Adjustments to
Slide 11: Appendix - Reconciliation of Net Income to EBITDA and EBITDA As Defined
Appendix - Reconciliation of Net Income to EBITDA and EBITDA As Defined Thirteen Week Fifty-Two Week ($ in thousands) Periods Ended Periods Ended September 30, September 30, September 30, September 30, 2016 2015 2016 2015 Net income $ 154,668 $ 141,673 $ 586,414 $ 447,212 Adjustments: Depreciation a
Slide 12: Appendix - Reconciliation of Reported EPS to Adjusted EPS
Appendix - Reconciliation of Reported EPS to Adjusted EPS ($ in thousands, except per share amounts) Thirteen Week Periods Ended Fifty-Two Week Periods Ended September 30, September 30, September 30, September 30, Reported Earnings Per Share 2016 2015 2016 2015 Net income $ 154,668 $ 141,673 $ 586,4
Slide 13: Appendix - Reconciliation of Net Cash Provided by Operating Activities to EBITDA
Appendix - Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined Fifty-Two Week Periods Ended ($ in thousands) September 30, 2016 September 30, 2015 Net cash provided by operating activities $ 668,930 $ 520,938 Adjustments: Changes in assets and liabilities, net