Transdigm Group Inc. · NYSE:TDG

Transdigm — Q2 FY2011 Earnings Presentation

18 slides from Transdigm's earnings presentation, May 10, 2011

1. Slide 1: FY11 Second Quarter Earnings Call

   FY11 Second Quarter Earnings Call May 10, 2011 May 2011

2. Slide 2: Agenda

   Agenda „ TransDigm Overview W. Nicholas Howley Chairman and CEO „ Highlights, Market Review, Operating W. Nicholas Howley Performance and Outlook Chairman and CEO „ Operations, New Business and Value Creation Raymond F. Laubenthal President and COO „ Financial Results Gregory Rufus Executive Vice Pr

3. 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

4. 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, which is summarized in the appendix. This pro forma financial information gives effect to certain recently completed acquisitions and divestitures. Such pro forma informa

5. Slide 5: TransDigm Overview

   TransDigm Overview DISTINGUISHING CHARACTERISTICS „ Highly Hi hl engineered i d aerospace components t „ Significant Si ifi t aftermarket ft k t content t t „ Proprietary and sole source products „ High free cash flow Proprietary Pro Forma Pro Forma EBITDA Revenues Revenues⁽¹⁾ As Defined Non- Propri

6. Slide 6: Underlying Markets

   Underlying Markets Highlights⁽¹⁾ Full Year Revenue Expectations⁽¹⁾ „ Commercial OEM „ Airbus & Boeing rate increases proceeding Pro forma „ BizJet OEM – has stabilized FY11 vs. FY10 Commercial „ Commercial Aftermarket OEM OEM: U Mid T Up Teen % „ Seeing positive data Commercial „ So far no obvious i

7. Slide 7: Financial Performance by Market Channel

   Financial Performance by Market Channel Highlights⁽¹⁾ Market Review – Pro Forma Revenues⁽¹⁾ „ Q2 Performance vs. Prior Year „ 4th qtr in a row of y/y organic growth Q2 YTD „ Commercial Aftermarket: Commercial „ Revenues up ~12% sequentially OEM: Up Mid to High Teen % „ Incoming Orders: running above

8. Slide 8: Fiscal 2011 Outlook

   Fiscal 2011 Outlook FY 2010 Pro forma FY 2011 Sales Mix⁽¹⁾ Mix Market Expected Growth⁽¹⁾ Growth ~ 30% Commercial OEM Up Mid Teen % ~ 40% Commercial Aftermarket Up ~ 20% ~ 30% Defense Flat to Down Assumptions Guidance Summary ($ in millions) Low High „ Worldwide RPM growth of 5 to 6% Revenues $ 1,172

9. Slide 9: Operations & Value Creation

   Operations & Value Creation „ 4 Plant Consolidations Underway „ McKechnie Tyee y „ McKechnie Electromech „ Talley Actuation „ Dukes Aerospace „ Product Line Structure „ Focus on Value Creation „ Value Pricing „ Profitable New Business „ Productivity Improvement „ Expect Margin Expansion in 2nd Half

10. Slide 10: Select New Business Examples

    Select New Business Examples Commercial „ A350: Cockpit Security Door System „ 737: Cockpit Audio Sealed Panel Upgrade „ 737: Light weight Robust Galley Water Heater „ 737: Energy Efficient “White White Light Light” LED System „ Business Jet Applications: Fuel Isolators, Engine Ignition System, Moto

11. Slide 11: Financing Activities

    Financing Activities Q1 2011 „ Acquired McKechnie ~ $1.27B $ on Dec. 6th „ Acquired Talley ~ $94M on Dec. 31st „ $1.5B $1 5B New Term Loan „ $1.6B New Sr. Secured Subordinated Notes Q2 2011 „ Re-priced $1.5B Term Loan „ Libor + 3% and a Libor floor of 1.0% „ Remove the two maintenance covenants Mar.

12. Slide 12: Second Quarter 2010 Results

    Second Quarter 2010 Results ($ in millions) Q2 FY11 Q2 FY10 Revenue $311.3 $206.1 51.1% Increase ● Organic sales growth 11.7% Gross Profit $158.6 $115.2 5.0 Margin Point Decrease Margin % 50.9% 55.9% ● Improvement in the base business ~3 margin points ● Dilutive acquisition mix of ~5 margin points S

13. Slide 13: Liquidity & Taxes

    Liquidity & Taxes ($ in millions) Cash Q2 FY11 FY10 (9/30/10) Net Cash Provided by Operating Activities $129.2 $197.3 Taxes Capital Expenditures ($8.4) ($12.9) „ Q2 ETR: 36.1% Free Cash Flow $120 8 $120.8 $184 4 $184.4 „ FY11 ETR Estimate: ~36% Cash on the Balance Sheet $505.3 $234.1 Liquidity EBITD

14. Slide 14: Appendix

    TRANSDIGIVI GROUP INC. Be Appendix

15. Slide 15: Reconciliation of EBITDA and EBITDA As Defined to Net Income

    Reconciliation of EBITDA and EBITDA As Defined to Net Income Thirteen Week Twenty-Six Week Periods Ended Periods Ended April 2, April 3, April 2, April 3, 2011 2010 2011 2010 Net income $ 55,817 $ 38,045 $ 48,459 $ 68,804 Less income from discontinued operations 19,144 - 18,762 - Income from continu

16. Slide 16: Reconciliation of Reported EPS to Adjusted EPS

    Reconciliation of Reported EPS to Adjusted EPS Thirteen Week Twenty-Six Week Periods Ended Periods Ended April 2, April 3, April 2, April 3, Reported Earnings Per Share 2011 2010 2011 2010 Net income from continuing operations $ 36 673 36,673 $ 38 045 38,045 $ 29 697 29,697 $ 68 804 68,804 Less: div

17. Slide 17: Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined

    Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined Twenty-Six Week Periods Ended April 2, April 3, 2011 2010 Net Cash Provided by Operating Activities $ 129,151 $ 83,831 Adj t Adjustments: t Changes in assets and liabilities, net of effects from acquisitions

18. Slide 18: FY11 Second Quarter Earnings Call

    FY11 Second Quarter Earnings Call May 10, 2011 17 May 2011

TransDigm Group — Q2 FY2011 Earnings Presentation on 6ix