Slide 1: Pay for Value Creation
Pay for Value Creation Pay for Value Creation Exhibit 99.1 Proposing g unique public company option plan Goal • Generate superior returns by . . . . • Maintain the value focus & culture of private equity in a public environment Simple concept • Management / shareholders are partners • If management
Slide 2: TransDigm
TRANSDIGM
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Slide 8: Successful Culture and Organization
1 Successful Culture and Organization Successful Culture and Organization Successful Culture and Organization Corporate Control Local Autonomy Economy of Scale Mgmt Resources Value Generation Strategy Structure Execution Central Control Local Autonomy Emp- loyees Owners CORPORATE OPERATING UNIT Moti
Slide 9: Compensation Concept – Think / act like an owner
2 Compensation Concept – “Think / act like an owner” Compensation Concept – “Think / act like an owner” Compensation Concept – “Think / act like an owner” Low High Low Equity Based Compensation (2) (1) Salary and Bonus (2) Options High Cash Compensation (1) • We want managers who can think & act lik
Slide 10: Key Managers Aligned with Shareholders
3 Key Managers Aligned with Shareholders Key Managers Aligned with Shareholders Key Managers Aligned with Shareholders Value Generating Activities We want to maintain our clear management alignment with shareholders A. 3 Value Drivers 1. Price 2. Productivity 3. New Business B. Maintain Efficient Ca
Slide 11: Proven Record of Growth and Margin Expansion
4 Proven Record of Growth and Margin Expansion ($ in millions) % of Sales 20% 19% 23% 27% 31% 39% 39% 36% 36% 39% 42% 46% 44% 45% 46% (1) (1) EBITDA As Defined is a non-GAAP financial measure presented here as supplemental disclosures to net income. For a presentation of the most directly comparable
Slide 12: . KEISO —s
. KEISO —s & COMPANY ODYSSEY INVESTMENT i —+ NYSE| TRANSDIGM u
Slide 13: Management Ownership / Options
6 Management Ownership / Options (% of total shares) (1) 1993 New Awards 15% 1998 Rollover 10% Recap New Awards 12% Total 22% 2003 Rollover 7% Recap New Awards 10% Total 17% 2008 Rollover 8% New Plan New Awards 7% Total 15% Management Ownership / Options Management Ownership / Options Historical Pat
Slide 14: Unique Performance Based Option Plan
7 Unique Performance Based Option Plan Unique Performance Based Option Plan Unique Performance Based Option Plan Public Private Equity Equity Current Historical Proposal Time Based 20% 20% Operating Performance (1) 80% 40% Market Performance --- 40% 100% 100% (1) Includes annual and 5 year targets.
Slide 15: Vest Criteria – Meet Targets After Dilution for Options to Vest
8 Vest Criteria – Meet Targets After Dilution for Options to Vest Vest Criteria – Meet Targets After Dilution for Options to Vest Vest Criteria – Meet Targets After Dilution for Options to Vest Definitions Operating (EBITDA As Defined x multiple) - net debt) / diluted shares Performance Market Perfo
Slide 16: Skin in The Game
9 “Skin in The Game” “Skin in The Game” “Skin in The Game” Minimum Rollover Investment Required $35 Million * Top 5 Officers $25 Million Years of base compensation 14 years Minimum hold for 30% of new awards $35 Million Top 5 Officers $18 Million * @ $40/share
Slide 17: Net Result – Shareholders Make Superior Return Management Share Increases
10 Net Result – Shareholders Make Superior Return Management Share Increases Net Result – Shareholders Make Superior Return Management Share Increases Net Result – Shareholders Make Superior Return Management Share Increases IRR (1) Gain In Mkt.Cap. Mgmt. $ Mgmt. % of Gain 10.0% 1,465 $ $ 1.1% 12.5%
Slide 18: TransDigm
TRANSDIGM
Slide 19: New Plan EPS Impact
12 New Plan EPS Impact New Plan EPS Impact New Plan EPS Impact Peer (1) 2008 2009 2013 2009 2013 Average Est. 12.5% IRR 12.5% IRR 20% IRR 20% IRR EPS Diluted 2.31 $ 2.72 $ 3.06 $ 4.90 $ 3.26 $ 6.77 $ Option Expense (Per Share) 0.10 $ 0.06 $ 0.05 $ 0.08 $ 0.08 $ 0.12 $ % of EPS Diluted 4.4% 2.2% 1.6%
Slide 20: Pay for Value Creation
Pay for Value Creation Pay for Value Creation Pay for Value Creation
Slide 21: Appendix: Reconciliation of Net Income to EBITDA As Defined
14 Appendix Reconciliation of Net Income to EBITDA As Defined (in millions) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Net Income ($5) $0 $1 $3 $14 ($17) $11 $14 $31 ($76) $14 $35 $25 $89 Depreciation and amortization Interest expense, net Income tax provision (2) - (2) (4