Slide 1: FY 2018 Third Quarter Earnings Conference Call
FY 2018 Third Quarter Earnings Conference Call August 7, 2018
Slide 2: Agenda
Agenda TransDigm Overview, W. Nicholas Howley Highlights and Outlook Executive Chairman Operating Performance Kevin Stein and Market Review President and CEO Financial Results James Skulina Senior Vice President of Finance Q&A 1
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 Comm Defense
Slide 6: 2018 Q3 Financial Performance by Markets – Pro Forma
2018 Q3 Financial Performance by Markets – Pro Forma Q3 Market Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year Q3 YTD Commercial OEM: Up 1% Flat Commercial Aftermarket: Up 8% Up 11% Defense: Up 4.5% Up 3% (1) Information is on a pro forma basis versus the prior year period and includes the full
Slide 7: Fiscal 2018 Outlook
Fiscal 2018 Outlook FY 2017 Pro Forma FY 2018 Expected Growth - Sales Mix (1) Market Updated 29% Commercial OEM ≈ Flat 36% Commercial Aftermarket Up High-Single-Digit % 35% Defense Up Mid-Single-Digit % Assumptions Guidance Summary ($ in millions) Full year interest expense ≈ $670 million Low High
Slide 8: Third Quarter 2018 Results
Third Quarter 2018 Results ($ in millions, except per share amounts) Q Q3 FY 2018 Q3 FY 2017 Revenue $980.7 $897.7 9.2% Increase Gross Profit $569.5 $519.7 0.2% Margin Point Increase Margin % 58.1% 57.9% ● Dilutive impact from acquisitions ● Strength of our proprietary products and productivity impr
Slide 9: Liquidity & Taxes
Liquidity & Taxes Cash Taxes ($ in millions) YTD Q3 FY 2018 FY 9/30/2017 Net Cash Provided by YTD FY 18 GAAP ETR: (3.9%) Operating Activities $690.9 $788.7 Capital Expenditures ($50.1) ($71.0) YTD FY 18 Adjusted ETR: 2.9% Free Cash Flow $640.8 $717.7 Cash on the Balance Sheet $1,853.4 $650.6 Cap
Slide 10: Reconciliation of GAAP to Adjusted EPS - Guidance
Reconciliation of GAAP to Adjusted EPS - Guidance Full Year Guidance Thirteen Week Periods Ended Thirty-Nine Week Periods Ended Mid-Point June 30, July 1, June 30. July 1, September 30, 2018 2017 2018 2017 2018 Earnings per share from continuing operations $ 3.91 $ 3.09 $ 12.14 $ 6.25 $ 15.84 Adjust
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 Periods Ended Thirty-Nine Week Periods Ended ($ in thousands) June 30, July 1, June 30, July 1, 2018 2017 2018 2017 Net i ncome $ 217,246 $ 169,053 $ 728,299 $ 443,429 (1) Les s : Los s from Di s conti nued Opera t
Slide 12: Appendix - Reconciliation of Reported EPS to Adjusted EPS
Appendix - Reconciliation of Reported EPS to Adjusted EPS Thirteen Week Thirty-Nine Week ($ in thousands, except per Periods Ended Periods Ended share amounts) Reported Earnings Per Share June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Net income from continuing operations $ 217,391 $ 169,832
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 Thirty-Nine Week Periods Ended ($ in thousands) June 30, 2018 July 1, 2017 Net cash provided by operating activities $ 690,910 $ 555,216 Adjustments: Changes in assets and liabilities, net of effec