☒
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐
|
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
1301 East 9th Street,
|
Suite 3000,
|
Cleveland,
|
Ohio
|
|
44114
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||||
Title of each class:
|
|
Trading Symbol:
|
|
Name of each exchange on which registered:
|
Common Stock, $0.01 par value
|
|
TDG
|
|
New York Stock Exchange
|
|
|
|
Page
|
Part I
|
|
FINANCIAL INFORMATION
|
|
|
Item 1
|
Financial Statements
|
|
|
|
Condensed Consolidated Balance Sheets – June 29, 2019 and September 30, 2018
|
|
|
|
Condensed Consolidated Statements of Income – Thirteen and Thirty-Nine Week Periods Ended June 29, 2019 and June 30, 2018
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income – Thirteen and Thirty-Nine Week Periods Ended June 29, 2019 and June 30, 2018
|
|
|
|
Condensed Consolidated Statements of Changes in Stockholders’ Deficit – Thirty-Nine Week Periods Ended June 29, 2019 and June 30, 2018
|
|
|
|
Condensed Consolidated Statements of Cash Flows – Thirty-Nine Week Periods Ended June 29, 2019 and June 30, 2018
|
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
|
Item 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 3
|
Quantitative and Qualitative Disclosure About Market Risk
|
|
|
Item 4
|
Controls and Procedures
|
|
Part II
|
|
OTHER INFORMATION
|
|
|
Item 1
|
Legal Proceedings
|
|
|
Item 1A
|
Risk Factors
|
|
|
Item 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
Item 6
|
Exhibits
|
|
SIGNATURES
|
|
|
|
June 29, 2019
|
|
September 30, 2018
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,716,812
|
|
|
$
|
2,073,017
|
|
Trade accounts receivable - Net
|
1,162,345
|
|
|
704,310
|
|
||
Inventories - Net
|
1,413,934
|
|
|
805,292
|
|
||
Prepaid expenses and other
|
118,104
|
|
|
74,668
|
|
||
Total current assets
|
5,411,195
|
|
|
3,657,287
|
|
||
PROPERTY, PLANT AND EQUIPMENT - NET
|
745,538
|
|
|
388,333
|
|
||
GOODWILL
|
8,684,663
|
|
|
6,223,290
|
|
||
OTHER INTANGIBLE ASSETS - NET
|
2,734,014
|
|
|
1,788,404
|
|
||
DEFERRED INCOME TAXES
|
62,775
|
|
|
—
|
|
||
OTHER
|
64,413
|
|
|
140,153
|
|
||
TOTAL ASSETS
|
$
|
17,702,598
|
|
|
$
|
12,197,467
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
80,863
|
|
|
$
|
75,817
|
|
Short-term borrowings - trade receivable securitization facility
|
299,951
|
|
|
299,519
|
|
||
Accounts payable
|
310,448
|
|
|
173,603
|
|
||
Accrued liabilities
|
689,378
|
|
|
351,443
|
|
||
Total current liabilities
|
1,380,640
|
|
|
900,382
|
|
||
LONG-TERM DEBT
|
16,495,885
|
|
|
12,501,946
|
|
||
DEFERRED INCOME TAXES
|
641,002
|
|
|
399,496
|
|
||
OTHER NON-CURRENT LIABILITIES
|
495,685
|
|
|
204,114
|
|
||
Total liabilities
|
19,013,212
|
|
|
14,005,938
|
|
||
TD GROUP STOCKHOLDERS’ DEFICIT:
|
|
|
|
||||
Common stock - $.01 par value; authorized 224,400,000 shares; issued 57,450,206 and 56,895,686 at June 29, 2019 and September 30, 2018, respectively
|
575
|
|
|
569
|
|
||
Additional paid-in capital
|
1,339,050
|
|
|
1,208,742
|
|
||
Accumulated deficit
|
(1,709,790
|
)
|
|
(2,246,578
|
)
|
||
Accumulated other comprehensive (loss) income
|
(175,775
|
)
|
|
4,100
|
|
||
Treasury stock, at cost; 4,161,326 shares at June 29, 2019 and September 30, 2018, respectively
|
(775,304
|
)
|
|
(775,304
|
)
|
||
Total TD Group stockholders’ deficit
|
(1,321,244
|
)
|
|
(1,808,471
|
)
|
||
NONCONTROLLING INTERESTS
|
10,630
|
|
|
—
|
|
||
Total stockholders' deficit
|
(1,310,614
|
)
|
|
(1,808,471
|
)
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
17,702,598
|
|
|
$
|
12,197,467
|
|
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
NET SALES
|
$
|
1,658,319
|
|
|
$
|
980,662
|
|
|
$
|
3,847,559
|
|
|
$
|
2,761,692
|
|
COST OF SALES
|
896,845
|
|
|
411,142
|
|
|
1,862,648
|
|
|
1,181,448
|
|
||||
GROSS PROFIT
|
761,474
|
|
|
569,520
|
|
|
1,984,911
|
|
|
1,580,244
|
|
||||
SELLING AND ADMINISTRATIVE EXPENSES
|
274,557
|
|
|
112,816
|
|
|
561,307
|
|
|
326,208
|
|
||||
AMORTIZATION OF INTANGIBLE ASSETS
|
41,889
|
|
|
19,224
|
|
|
84,986
|
|
|
53,793
|
|
||||
INCOME FROM OPERATIONS
|
445,028
|
|
|
437,480
|
|
|
1,338,618
|
|
|
1,200,243
|
|
||||
INTEREST EXPENSE - NET
|
241,292
|
|
|
167,577
|
|
|
614,701
|
|
|
489,776
|
|
||||
REFINANCING COSTS
|
106
|
|
|
4,159
|
|
|
3,540
|
|
|
5,910
|
|
||||
OTHER (INCOME) EXPENSE
|
(1,889
|
)
|
|
203
|
|
|
(2,090
|
)
|
|
865
|
|
||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
205,519
|
|
|
265,541
|
|
|
722,467
|
|
|
703,692
|
|
||||
INCOME TAX PROVISION
|
60,909
|
|
|
48,150
|
|
|
179,183
|
|
|
(27,550
|
)
|
||||
INCOME FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTERESTS
|
144,610
|
|
|
217,391
|
|
|
543,284
|
|
|
731,242
|
|
||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
(2,943
|
)
|
||||
NET INCOME INCLUDING NONCONTROLLING INTERESTS
|
144,610
|
|
|
217,246
|
|
|
543,284
|
|
|
728,299
|
|
||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
(160
|
)
|
|
—
|
|
|
(384
|
)
|
|
—
|
|
||||
NET INCOME ATTRIBUTABLE TO TD GROUP
|
$
|
144,450
|
|
|
$
|
217,246
|
|
|
$
|
542,900
|
|
|
$
|
728,299
|
|
NET INCOME APPLICABLE TO TD GROUP COMMON STOCK
|
$
|
144,450
|
|
|
$
|
217,246
|
|
|
$
|
518,591
|
|
|
$
|
672,151
|
|
Net earnings per share attributable to TD Group stockholders:
|
|
|
|
|
|
|
|
||||||||
Net earnings per share from continuing operations - basic and diluted
|
$
|
2.57
|
|
|
$
|
3.91
|
|
|
$
|
9.22
|
|
|
$
|
12.14
|
|
Net loss per share from discontinued operations - basic and diluted
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.05
|
)
|
||||
Net earnings per share
|
$
|
2.57
|
|
|
$
|
3.91
|
|
|
$
|
9.22
|
|
|
$
|
12.09
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
56,265
|
|
|
55,597
|
|
|
56,265
|
|
|
55,598
|
|
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Net income including noncontrolling interests
|
$
|
144,610
|
|
|
$
|
217,246
|
|
|
$
|
543,284
|
|
|
$
|
728,299
|
|
Net income attributable to noncontrolling interests
|
(160
|
)
|
|
—
|
|
|
(384
|
)
|
|
—
|
|
||||
Net income attributable to TD Group
|
$
|
144,450
|
|
|
$
|
217,246
|
|
|
$
|
542,900
|
|
|
$
|
728,299
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
51,752
|
|
|
(32,543
|
)
|
|
27,603
|
|
|
(4,355
|
)
|
||||
Unrealized (loss) gain on derivatives
|
(70,144
|
)
|
|
2,307
|
|
|
(207,263
|
)
|
|
65,781
|
|
||||
Pensions and other postretirement benefits
|
(346
|
)
|
|
—
|
|
|
(215
|
)
|
|
—
|
|
||||
Other comprehensive (loss) income, net of tax, attributable to TD Group
|
(18,738
|
)
|
|
(30,236
|
)
|
|
(179,875
|
)
|
|
61,426
|
|
||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP
|
$
|
125,712
|
|
|
$
|
187,010
|
|
|
$
|
363,025
|
|
|
$
|
789,725
|
|
|
TD Group Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In
Capital
|
|
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||||||
|
Number
of Shares
|
|
Par
Value
|
|
|
Accumulated
Deficit
|
|
|
Number
of Shares
|
|
Value
|
|
Non-controlling Interest
|
|
Total
|
||||||||||||||||||
BALANCE, SEPTEMBER 30, 2018
|
56,895,686
|
|
|
$
|
569
|
|
|
$
|
1,208,742
|
|
|
$
|
(2,246,578
|
)
|
|
$
|
4,100
|
|
|
(4,161,326
|
)
|
|
$
|
(775,304
|
)
|
|
$
|
—
|
|
|
$
|
(1,808,471
|
)
|
Cumulative effect of ASC 606, adopted October 1, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
3,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,284
|
|
|||||||
Cumulative effect of ASU 2016-16, adopted October 1, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
(353
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(353
|
)
|
|||||||
Accrued unvested dividend equivalents and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,122
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,122
|
)
|
|||||||
Compensation expense recognized for employee stock options
|
—
|
|
|
—
|
|
|
16,645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,645
|
|
|||||||
Exercise of employee stock options
|
109,695
|
|
|
1
|
|
|
14,174
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,175
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
196,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196,042
|
|
|||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,228
|
)
|
|||||||
Unrealized (loss) gain on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,865
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,865
|
)
|
|||||||
BALANCE, DECEMBER 29, 2018
|
57,005,381
|
|
|
$
|
570
|
|
|
$
|
1,239,561
|
|
|
$
|
(2,050,727
|
)
|
|
$
|
(80,993
|
)
|
|
(4,161,326
|
)
|
|
$
|
(775,304
|
)
|
|
$
|
—
|
|
|
$
|
(1,666,893
|
)
|
Noncontrolling interests assumed related to acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,307
|
|
|
9,307
|
|
|||||||
Accrued unvested dividend equivalents and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,794
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,794
|
)
|
|||||||
Compensation expense recognized for employee stock options
|
—
|
|
|
—
|
|
|
18,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,381
|
|
|||||||
Exercise of employee stock options
|
298,240
|
|
|
3
|
|
|
32,952
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,955
|
|
|||||||
Common stock issued
|
476
|
|
|
—
|
|
|
209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
202,408
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
224
|
|
|
202,632
|
|
|||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,921
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,921
|
)
|
|||||||
Unrealized (loss) gain on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,254
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,254
|
)
|
|||||||
Pensions and other postretirement benefits adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
|||||||
BALANCE, MARCH 30, 2019
|
57,304,097
|
|
|
$
|
573
|
|
|
$
|
1,291,103
|
|
|
$
|
(1,851,113
|
)
|
|
$
|
(157,037
|
)
|
|
(4,161,326
|
)
|
|
$
|
(775,304
|
)
|
|
$
|
9,531
|
|
|
$
|
(1,482,247
|
)
|
Noncontrolling interests assumed related to acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
939
|
|
|
939
|
|
|||||||
Accrued unvested dividend equivalents and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,127
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,127
|
)
|
|||||||
Compensation expense recognized for employee stock options
|
—
|
|
|
—
|
|
|
30,794
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,794
|
|
|||||||
Exercise of employee stock options
|
146,109
|
|
|
2
|
|
|
17,153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,155
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
144,450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
160
|
|
|
144,610
|
|
|||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,752
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,752
|
|
|||||||
Unrealized (loss) gain on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,144
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,144
|
)
|
|||||||
Pensions and other postretirement benefits adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(346
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(346
|
)
|
|||||||
BALANCE, JUNE 29, 2019
|
57,450,206
|
|
|
$
|
575
|
|
|
$
|
1,339,050
|
|
|
$
|
(1,709,790
|
)
|
|
$
|
(175,775
|
)
|
|
(4,161,326
|
)
|
|
$
|
(775,304
|
)
|
|
$
|
10,630
|
|
|
$
|
(1,310,614
|
)
|
|
Common Stock
|
|
Additional Paid-In
Capital
|
|
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Treasury Stock
|
|
|
||||||||||||||||||
|
Number
of Shares
|
|
Par
Value
|
|
|
Accumulated
Deficit
|
|
|
Number
of Shares
|
|
Value
|
|
Total
|
||||||||||||||||
BALANCE, SEPTEMBER 30, 2017
|
56,093,659
|
|
|
$
|
561
|
|
|
$
|
1,095,319
|
|
|
$
|
(3,187,220
|
)
|
|
$
|
(85,143
|
)
|
|
(4,159,207
|
)
|
|
$
|
(774,721
|
)
|
|
$
|
(2,951,204
|
)
|
Accrued unvested dividend equivalents and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,509
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,509
|
)
|
||||||
Compensation expense recognized for employee stock options and restricted stock
|
—
|
|
|
—
|
|
|
10,533
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,533
|
|
||||||
Exercise of employee stock options, restricted stock activity and other, net
|
189,082
|
|
|
2
|
|
|
7,290
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,292
|
|
||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
314,775
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314,775
|
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,152
|
|
|
—
|
|
|
—
|
|
|
5,152
|
|
||||||
Unrealized gain on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,248
|
|
|
—
|
|
|
—
|
|
|
18,248
|
|
||||||
BALANCE, DECEMBER 30, 2017
|
56,282,741
|
|
|
$
|
563
|
|
|
$
|
1,113,142
|
|
|
$
|
(2,876,954
|
)
|
|
$
|
(61,743
|
)
|
|
(4,159,207
|
)
|
|
$
|
(774,721
|
)
|
|
$
|
(2,599,713
|
)
|
Accrued unvested dividend equivalents and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,156
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,156
|
)
|
||||||
Compensation expense recognized for employee stock options and restricted stock
|
—
|
|
|
—
|
|
|
11,409
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,409
|
|
||||||
Exercise of employee stock options, restricted stock activity and other, net
|
230,743
|
|
|
2
|
|
|
19,015
|
|
|
—
|
|
|
—
|
|
|
(2,119
|
)
|
|
(583
|
)
|
|
18,434
|
|
||||||
Common Stock Issued
|
505
|
|
|
—
|
|
|
149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149
|
|
||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
196,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196,278
|
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,036
|
|
|
—
|
|
|
—
|
|
|
23,036
|
|
||||||
Unrealized gain on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,226
|
|
|
—
|
|
|
—
|
|
|
45,226
|
|
||||||
BALANCE, MARCH 31, 2018
|
56,513,989
|
|
|
$
|
565
|
|
|
$
|
1,143,715
|
|
|
$
|
(2,684,832
|
)
|
|
$
|
6,519
|
|
|
(4,161,326
|
)
|
|
$
|
(775,304
|
)
|
|
$
|
(2,309,337
|
)
|
Accrued unvested dividend equivalents and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,989
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,989
|
)
|
||||||
Compensation expense recognized for employee stock options and restricted stock
|
—
|
|
|
—
|
|
|
13,518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,518
|
|
||||||
Exercise of employee stock options, restricted stock activity and other, net
|
203,536
|
|
|
2
|
|
|
14,316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,318
|
|
||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
217,246
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
217,246
|
|
||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,543
|
)
|
|
—
|
|
|
—
|
|
|
(32,543
|
)
|
||||||
Unrealized gain on derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,307
|
|
|
—
|
|
|
—
|
|
|
2,307
|
|
||||||
BALANCE, JUNE 30, 2018
|
56,717,525
|
|
|
$
|
567
|
|
|
$
|
1,171,549
|
|
|
$
|
(2,471,575
|
)
|
|
$
|
(23,717
|
)
|
|
(4,161,326
|
)
|
|
$
|
(775,304
|
)
|
|
$
|
(2,098,480
|
)
|
|
Thirty-Nine Week Periods Ended
|
||||||
|
June 29, 2019
|
|
June 30, 2018
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net income from continuing operations including noncontrolling interests
|
$
|
543,284
|
|
|
$
|
728,299
|
|
Net loss from discontinued operations
|
—
|
|
|
2,943
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
61,752
|
|
|
41,248
|
|
||
Amortization of intangible assets
|
85,792
|
|
|
54,286
|
|
||
Amortization of debt issuance costs, original issue discount and premium
|
20,198
|
|
|
16,179
|
|
||
Amortization of inventory step-up
|
109,348
|
|
|
3,165
|
|
||
Refinancing costs
|
3,540
|
|
|
5,910
|
|
||
Non-cash equity compensation
|
70,082
|
|
|
36,411
|
|
||
Deferred income taxes
|
5,150
|
|
|
(166,783
|
)
|
||
Changes in assets/liabilities, net of effects from acquisitions of businesses:
|
|
|
|
||||
Trade accounts receivable
|
(65,346
|
)
|
|
(861
|
)
|
||
Inventories
|
(100,042
|
)
|
|
(25,157
|
)
|
||
Income taxes receivable/payable
|
(9,400
|
)
|
|
6,730
|
|
||
Other assets
|
(24,475
|
)
|
|
(2,500
|
)
|
||
Accounts payable
|
(7,436
|
)
|
|
724
|
|
||
Accrued interest
|
95,012
|
|
|
6,670
|
|
||
Accrued and other liabilities
|
(19,103
|
)
|
|
(16,354
|
)
|
||
Net cash provided by operating activities
|
768,356
|
|
|
690,910
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(80,421
|
)
|
|
(50,097
|
)
|
||
Payments made in connection with acquisitions, net of cash acquired
|
(3,956,944
|
)
|
|
(582,262
|
)
|
||
Proceeds in connection with the sale of discontinued operations
|
—
|
|
|
57,686
|
|
||
Net cash used in investing activities
|
(4,037,365
|
)
|
|
(574,673
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from exercise of stock options
|
64,279
|
|
|
40,621
|
|
||
Dividend equivalent payments
|
(24,309
|
)
|
|
(56,148
|
)
|
||
Proceeds from term loans, net
|
—
|
|
|
12,779,772
|
|
||
Repayments on term loans
|
(57,321
|
)
|
|
(12,155,198
|
)
|
||
Cash tender and redemption of senior subordinated notes due 2020
|
(550,000
|
)
|
|
—
|
|
||
Proceeds from senior subordinated notes due 2027, net
|
544,462
|
|
|
—
|
|
||
Proceeds from senior secured notes due 2026, net
|
3,935,715
|
|
|
—
|
|
||
Proceeds from senior subordinated notes due 2026, net
|
—
|
|
|
490,411
|
|
||
Financing fees and other
|
(1,186
|
)
|
|
(9,904
|
)
|
||
Net cash provided by financing activities
|
3,911,640
|
|
|
1,089,554
|
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
1,164
|
|
|
(2,979
|
)
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
643,795
|
|
|
1,202,812
|
|
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
2,073,017
|
|
|
650,561
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
2,716,812
|
|
|
$
|
1,853,373
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
533,187
|
|
|
$
|
469,667
|
|
Cash paid during the period for income taxes
|
$
|
183,480
|
|
|
$
|
123,597
|
|
|
Assets acquired:
|
|
||
Current assets, excluding cash acquired
|
$
|
1,417,467
|
|
Property, plant, and equipment
|
338,843
|
|
|
Other intangible assets
|
992,000
|
|
|
Goodwill
|
2,503,798
|
|
|
Other
|
71,130
|
|
|
Total assets acquired
|
5,323,238
|
|
|
Liabilities assumed:
|
|
||
Current liabilities
|
918,649
|
|
|
Other noncurrent liabilities
|
480,739
|
|
|
Total liabilities assumed
|
1,399,388
|
|
|
Net assets acquired
|
$
|
3,923,850
|
|
(Amounts in thousands, except per share amounts)
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Net sales
|
$
|
1,658,319
|
|
|
$
|
1,477,729
|
|
|
$
|
4,723,660
|
|
|
$
|
4,253,811
|
|
Income from continuing operations attributable to TD Group
|
$
|
252,159
|
|
|
$
|
197,030
|
|
|
$
|
611,750
|
|
|
$
|
377,215
|
|
Net earnings per share attributable to TD Group stockholders from continuing operations - basic and diluted
|
$
|
4.48
|
|
|
$
|
3.54
|
|
|
$
|
10.44
|
|
|
$
|
5.77
|
|
Assets acquired:
|
|
||
Current assets, excluding cash acquired
|
$
|
53,325
|
|
Property, plant, and equipment
|
4,103
|
|
|
Other intangible assets
|
105,000
|
|
|
Goodwill
|
407,046
|
|
|
Total assets acquired
|
569,474
|
|
|
Liabilities assumed:
|
|
||
Current liabilities
|
9,876
|
|
|
Other noncurrent liabilities
|
26,453
|
|
|
Total liabilities assumed
|
36,329
|
|
|
Net assets acquired
|
$
|
533,145
|
|
|
Thirteen Week Period Ended
|
|
Thirty-Nine Week Period Ended
|
||||
|
June 30, 2018
|
|
June 30, 2018
|
||||
Net sales
|
$
|
—
|
|
|
$
|
11,808
|
|
Income from discontinued operations before income taxes
|
—
|
|
|
354
|
|
||
Income tax benefit
|
—
|
|
|
2,016
|
|
||
Income from discontinued operations, net of tax
|
—
|
|
|
2,370
|
|
||
Net loss on sale of discontinued operations, net of tax
|
(145
|
)
|
|
(5,313
|
)
|
||
Loss from discontinued operations
|
$
|
(145
|
)
|
|
$
|
(2,943
|
)
|
|
September 30, 2018
|
|
Adjustments due to ASC 606
|
|
October 1, 2018
|
||||||
Assets
|
|
|
|
|
|
||||||
Unbilled receivables(1)
|
$
|
10,056
|
|
|
$
|
8,272
|
|
|
$
|
18,328
|
|
Inventories - Net
|
805,292
|
|
|
(3,977
|
)
|
|
801,315
|
|
|||
|
|
|
|
|
|
||||||
Liabilities and Stockholders' Deficit
|
|
|
|
|
|
||||||
Deferred income taxes
|
$
|
399,496
|
|
|
$
|
1,011
|
|
|
$
|
400,507
|
|
Accumulated deficit
|
(2,246,578
|
)
|
|
3,284
|
|
|
(2,243,294
|
)
|
(1)
|
Included in prepaid expenses and other on the condensed consolidated balance sheet.
|
|
June 29, 2019
|
|
October 1, 2018
|
|
Change
|
||||||
Contract assets, current (1)
|
$
|
43,717
|
|
|
$
|
18,328
|
|
|
$
|
25,389
|
|
Contract assets, non-current (2)
|
9,596
|
|
|
118
|
|
|
9,478
|
|
|||
Total contract assets
|
53,313
|
|
|
18,446
|
|
|
34,867
|
|
|||
Contract liabilities, current (3)
|
7,765
|
|
|
2,742
|
|
|
5,023
|
|
|||
Contract liabilities, non-current (4)
|
7,341
|
|
|
—
|
|
|
7,341
|
|
|||
Total contract liabilities
|
15,106
|
|
|
2,742
|
|
|
12,364
|
|
|||
Net contract assets
|
$
|
38,207
|
|
|
$
|
15,704
|
|
|
$
|
22,503
|
|
(1)
|
Included in prepaid expenses and other on the condensed consolidated balance sheet.
|
(2)
|
Included in other non-current assets on the condensed consolidated balance sheet.
|
(3)
|
Included in accrued liabilities on the condensed consolidated balance sheet.
|
(4)
|
Included in other non-current liabilities on the condensed consolidated balance sheet.
|
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Numerator for earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations including noncontrolling interests
|
$
|
144,610
|
|
|
$
|
217,391
|
|
|
$
|
543,284
|
|
|
$
|
731,242
|
|
Net income attributable to noncontrolling interests
|
(160
|
)
|
|
—
|
|
|
(384
|
)
|
|
—
|
|
||||
Net income from continuing operations attributable to TD Group
|
144,450
|
|
|
217,391
|
|
|
542,900
|
|
|
731,242
|
|
||||
Less dividends paid on participating securities
|
—
|
|
|
—
|
|
|
(24,309
|
)
|
|
(56,148
|
)
|
||||
|
144,450
|
|
|
217,391
|
|
|
518,591
|
|
|
675,094
|
|
||||
Loss from discontinued operations, net of tax
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
(2,943
|
)
|
||||
Net income applicable to TD Group common stock - basic and diluted
|
$
|
144,450
|
|
|
$
|
217,246
|
|
|
$
|
518,591
|
|
|
$
|
672,151
|
|
Denominator for basic and diluted earnings per share under the two-class method:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
53,208
|
|
|
52,470
|
|
|
52,994
|
|
|
52,241
|
|
||||
Vested options deemed participating securities
|
3,057
|
|
|
3,127
|
|
|
3,271
|
|
|
3,357
|
|
||||
Total shares for basic and diluted earnings per share
|
56,265
|
|
|
55,597
|
|
|
56,265
|
|
|
55,598
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net earnings per share from continuing operations - basic and diluted
|
$
|
2.57
|
|
|
$
|
3.91
|
|
|
$
|
9.22
|
|
|
$
|
12.14
|
|
Net loss per share from discontinued operations - basic and diluted
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.05
|
)
|
||||
Net earnings per share
|
$
|
2.57
|
|
|
$
|
3.91
|
|
|
$
|
9.22
|
|
|
$
|
12.09
|
|
|
June 29, 2019
|
|
September 30, 2018
|
||||
Raw materials and purchased component parts
|
$
|
839,458
|
|
|
$
|
540,290
|
|
Work-in-progress
|
457,894
|
|
|
237,335
|
|
||
Finished goods
|
233,103
|
|
|
127,018
|
|
||
Total
|
1,530,455
|
|
|
904,643
|
|
||
Reserves for excess and obsolete inventory
|
(116,521
|
)
|
|
(99,351
|
)
|
||
Inventories - Net
|
$
|
1,413,934
|
|
|
$
|
805,292
|
|
|
June 29, 2019
|
|
September 30, 2018
|
||||||||||||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Trademarks and trade names
|
$
|
1,037,316
|
|
|
$
|
—
|
|
|
$
|
1,037,316
|
|
|
$
|
799,749
|
|
|
$
|
—
|
|
|
$
|
799,749
|
|
Technology
|
1,867,800
|
|
|
474,621
|
|
|
1,393,179
|
|
|
1,347,314
|
|
|
416,579
|
|
|
930,735
|
|
||||||
Order backlog
|
89,628
|
|
|
24,352
|
|
|
65,276
|
|
|
12,200
|
|
|
5,409
|
|
|
6,791
|
|
||||||
Customer relationships
|
251,718
|
|
|
21,453
|
|
|
230,265
|
|
|
62,561
|
|
|
14,277
|
|
|
48,284
|
|
||||||
Other
|
16,848
|
|
|
8,870
|
|
|
7,978
|
|
|
10,873
|
|
|
8,028
|
|
|
2,845
|
|
||||||
Total
|
$
|
3,263,310
|
|
|
$
|
529,296
|
|
|
$
|
2,734,014
|
|
|
$
|
2,232,697
|
|
|
$
|
444,293
|
|
|
$
|
1,788,404
|
|
|
Power &
Control
|
|
Airframe
|
|
Non-
aviation
|
|
Total
|
||||||||
Balance - September 30, 2018
|
$
|
3,677,683
|
|
|
$
|
2,452,332
|
|
|
$
|
93,275
|
|
|
$
|
6,223,290
|
|
Goodwill acquired during the year
|
668,355
|
|
|
1,224,542
|
|
|
553,789
|
|
|
2,446,686
|
|
||||
Purchase price allocation adjustments
|
13,111
|
|
|
13,979
|
|
|
(4,969
|
)
|
|
22,121
|
|
||||
Currency translation adjustment
|
268
|
|
|
(5,824
|
)
|
|
(1,878
|
)
|
|
(7,434
|
)
|
||||
Balance - June 29, 2019
|
$
|
4,359,417
|
|
|
$
|
3,685,029
|
|
|
$
|
640,217
|
|
|
$
|
8,684,663
|
|
|
June 29, 2019
|
||||||||||||||
|
Gross Amount
|
|
Debt Issuance Costs
|
|
Original Issue Discount or Premium
|
|
Net Amount
|
||||||||
Short-term borrowings—trade receivable securitization facility
|
$
|
300,000
|
|
|
$
|
(49
|
)
|
|
$
|
—
|
|
|
$
|
299,951
|
|
Term loans
|
$
|
7,542,612
|
|
|
$
|
(60,847
|
)
|
|
$
|
(18,168
|
)
|
|
$
|
7,463,597
|
|
6.00% senior subordinated notes due 2022 (2022 Notes)
|
1,150,000
|
|
|
(4,421
|
)
|
|
—
|
|
|
1,145,579
|
|
||||
6.50% senior subordinated notes due 2024 (2024 Notes)
|
1,200,000
|
|
|
(5,984
|
)
|
|
—
|
|
|
1,194,016
|
|
||||
6.50% senior subordinated notes due 2025 (2025 Notes)
|
750,000
|
|
|
(3,109
|
)
|
|
3,226
|
|
|
750,117
|
|
||||
6.375% senior subordinated notes due 2026 (6.375% 2026 Notes)
|
950,000
|
|
|
(7,042
|
)
|
|
—
|
|
|
942,958
|
|
||||
6.875% senior subordinated notes due 2026 (6.875% 2026 Notes)
|
500,000
|
|
|
(5,723
|
)
|
|
(3,254
|
)
|
|
491,023
|
|
||||
6.25% secured notes due 2026 (2026 Secured Notes)
|
4,000,000
|
|
|
(61,799
|
)
|
|
1,883
|
|
|
3,940,084
|
|
||||
7.50% senior subordinated notes due 2027 (2027 Notes)
|
550,000
|
|
|
(5,259
|
)
|
|
—
|
|
|
544,741
|
|
||||
Government refundable advances
|
39,641
|
|
|
—
|
|
|
—
|
|
|
39,641
|
|
||||
Capital lease obligations
|
64,992
|
|
|
—
|
|
|
—
|
|
|
64,992
|
|
||||
|
16,747,245
|
|
|
(154,184
|
)
|
|
(16,313
|
)
|
|
16,576,748
|
|
||||
Less current portion
|
81,634
|
|
|
(771
|
)
|
|
—
|
|
|
80,863
|
|
||||
Long-term debt
|
$
|
16,665,611
|
|
|
$
|
(153,413
|
)
|
|
$
|
(16,313
|
)
|
|
$
|
16,495,885
|
|
|
September 30, 2018
|
||||||||||||||
|
Gross Amount
|
|
Debt Issuance Costs
|
|
Original Issue Discount or Premium
|
|
Net Amount
|
||||||||
Short-term borrowings—trade receivable securitization facility
|
$
|
300,000
|
|
|
$
|
(481
|
)
|
|
$
|
—
|
|
|
$
|
299,519
|
|
Term loans
|
$
|
7,599,932
|
|
|
$
|
(69,697
|
)
|
|
$
|
(21,030
|
)
|
|
$
|
7,509,205
|
|
5.50% 2020 Notes
|
550,000
|
|
|
(2,187
|
)
|
|
—
|
|
|
547,813
|
|
||||
6.00% 2022 Notes
|
1,150,000
|
|
|
(5,501
|
)
|
|
—
|
|
|
1,144,499
|
|
||||
6.50% 2024 Notes
|
1,200,000
|
|
|
(6,866
|
)
|
|
—
|
|
|
1,193,134
|
|
||||
6.50% 2025 Notes
|
750,000
|
|
|
(3,505
|
)
|
|
3,636
|
|
|
750,131
|
|
||||
6.375% 2026 Notes
|
950,000
|
|
|
(7,798
|
)
|
|
—
|
|
|
942,202
|
|
||||
6.875% 2026 Notes
|
500,000
|
|
|
(5,616
|
)
|
|
(3,605
|
)
|
|
490,779
|
|
||||
|
12,699,932
|
|
|
(101,170
|
)
|
|
(20,999
|
)
|
|
12,577,763
|
|
||||
Less current portion
|
76,427
|
|
|
(610
|
)
|
|
—
|
|
|
75,817
|
|
||||
Long-term debt
|
$
|
12,623,505
|
|
|
$
|
(100,560
|
)
|
|
$
|
(20,999
|
)
|
|
$
|
12,501,946
|
|
|
|
|
June 29, 2019
|
|
September 30, 2018
|
|||||||||||||
|
Level
|
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
1
|
|
|
$
|
2,716,812
|
|
|
$
|
2,716,812
|
|
|
$
|
2,073,017
|
|
|
$
|
2,073,017
|
|
Interest rate cap agreements (1)
|
2
|
|
|
3,007
|
|
|
3,007
|
|
|
36,160
|
|
|
36,160
|
|
||||
Interest rate swap agreements (2)
|
2
|
|
|
687
|
|
|
687
|
|
|
11,634
|
|
|
11,634
|
|
||||
Interest rate swap agreements (1)
|
2
|
|
|
—
|
|
|
—
|
|
|
61,126
|
|
|
61,126
|
|
||||
Foreign currency forward exchange contracts and other (2)
|
2
|
|
|
548
|
|
|
548
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward exchange contracts and other (1)
|
2
|
|
|
242
|
|
|
242
|
|
|
—
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate swap agreements (3)
|
2
|
|
|
8,914
|
|
|
8,914
|
|
|
528
|
|
|
528
|
|
||||
Interest rate swap agreements (4)
|
2
|
|
|
165,065
|
|
|
165,065
|
|
|
142
|
|
|
142
|
|
||||
Foreign currency forward exchange contracts and other (3)
|
2
|
|
|
7,497
|
|
|
7,497
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward exchange contracts and other (4)
|
2
|
|
|
337
|
|
|
337
|
|
|
—
|
|
|
—
|
|
||||
Short-term borrowings - trade receivable securitization facility (5)
|
1
|
|
|
299,951
|
|
|
299,951
|
|
|
299,519
|
|
|
299,519
|
|
||||
Long-term debt, including current portion:
|
|
|
|
|
|
|
|
|
|
|||||||||
Term loans (5)
|
2
|
|
|
7,463,597
|
|
|
7,358,955
|
|
|
7,509,205
|
|
|
7,607,323
|
|
||||
5.50% 2020 Notes (5)
|
1
|
|
|
—
|
|
|
—
|
|
|
547,813
|
|
|
548,625
|
|
||||
6.00% 2022 Notes (5)
|
1
|
|
|
1,145,579
|
|
|
1,161,500
|
|
|
1,144,499
|
|
|
1,155,750
|
|
||||
6.50% 2024 Notes (5)
|
1
|
|
|
1,194,016
|
|
|
1,209,000
|
|
|
1,193,134
|
|
|
1,215,000
|
|
||||
6.50% 2025 Notes (5)
|
1
|
|
|
750,117
|
|
|
753,750
|
|
|
750,131
|
|
|
757,500
|
|
||||
6.375% 2026 Notes (5)
|
1
|
|
|
942,958
|
|
|
954,750
|
|
|
942,202
|
|
|
942,875
|
|
||||
6.875% 2026 Notes (5)
|
1
|
|
|
491,023
|
|
|
502,500
|
|
|
490,779
|
|
|
507,500
|
|
||||
6.25% 2026 Notes (5)
|
1
|
|
|
3,940,084
|
|
|
4,190,000
|
|
|
—
|
|
|
—
|
|
||||
7.50% 2027 Notes (5)
|
1
|
|
|
544,741
|
|
|
572,000
|
|
|
—
|
|
|
—
|
|
||||
Government Refundable Advances
|
2
|
|
|
39,641
|
|
|
39,641
|
|
|
—
|
|
|
—
|
|
||||
Capital Lease Obligations
|
2
|
|
|
64,992
|
|
|
64,992
|
|
|
—
|
|
|
—
|
|
(1)
|
Included in other non-current assets on the condensed consolidated balance sheets.
|
(2)
|
Included in prepaid expenses and other on the condensed consolidated balance sheets.
|
(3)
|
Included in accrued liabilities on the condensed consolidated balance sheets.
|
(4)
|
Included in other non-current liabilities on the condensed consolidated balance sheets.
|
(5)
|
The carrying amount of the debt instrument is presented net of debt issuance costs, premium and discount. Refer to Note 9, "Debt," for gross carrying amounts.
|
Aggregate Notional Amount
(in millions)
|
Start Date
|
End Date
|
Related Term Loans
|
Conversion of Related Variable Rate Debt to
Fixed Rate of:
|
$750
|
3/31/2016
|
6/30/2020
|
Tranche E
|
5.3% (2.8% plus the 2.5% margin percentage)
|
$500
|
6/29/2018
|
3/31/2025
|
Tranche E
|
5.5% (3.0% plus the 2.5% margin percentage)
|
$750
|
6/30/2020
|
6/30/2022
|
Tranche E
|
5.0% (2.5% plus the 2.5% margin percentage)
|
$1,500
|
6/30/2022
|
3/31/2025
|
Tranche E
|
5.6% (3.1% plus the 2.5% margin percentage)
|
$1,000
|
6/28/2019
|
6/30/2021
|
Tranche F
|
4.3% (1.8% plus the 2.5% margin percentage)
|
$1,400
|
6/30/2021
|
3/31/2023
|
Tranche F
|
5.5% (3.0% plus the 2.5% margin percentage)
|
$500
|
12/30/2016
|
12/31/2021
|
Tranche G
|
4.4% (1.9% plus the 2.5% margin percentage)
|
$400
|
9/30/2017
|
9/30/2022
|
Tranche G
|
4.4% (1.9% plus the 2.5% margin percentage)
|
$900
|
12/31/2021
|
6/28/2024
|
Tranche G
|
5.6% (3.1% plus the 2.5% margin percentage)
|
$400
|
9/30/2022
|
6/28/2024
|
Tranche G
|
5.5% (3.0% plus the 2.5% margin percentage)
|
|
|
June 29, 2019
|
|
September 30, 2018
|
||||||||||||
|
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||
Interest rate cap agreements
|
|
$
|
3,007
|
|
|
$
|
—
|
|
|
$
|
36,160
|
|
|
$
|
—
|
|
Interest rate swap agreements (1)
|
|
—
|
|
|
(173,292
|
)
|
|
72,090
|
|
|
—
|
|
||||
Total
|
|
3,007
|
|
|
(173,292
|
)
|
|
108,250
|
|
|
—
|
|
||||
Effect of counterparty netting
|
|
687
|
|
|
(687
|
)
|
|
670
|
|
|
(670
|
)
|
||||
Net derivatives as classified in the balance sheet (2)
|
|
$
|
3,694
|
|
|
$
|
(173,979
|
)
|
|
$
|
108,920
|
|
|
$
|
(670
|
)
|
(1)
|
The increase in the interest rate swap liability is primarily attributable to a downward trend in the LIBO rate during fiscal 2019.
|
(2)
|
Refer to Note 11, "Fair Value Measurements," for the condensed consolidated balance sheet classification of our interest rate swap and cap agreements.
|
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Net sales to external customers
|
|
|
|
|
|
|
|
||||||||
Power & Control
|
|
|
|
|
|
|
|
||||||||
Commercial OEM
|
$
|
142,539
|
|
|
$
|
130,935
|
|
|
$
|
404,207
|
|
|
$
|
367,818
|
|
Commercial Aftermarket
|
185,727
|
|
|
180,895
|
|
|
524,631
|
|
|
500,098
|
|
||||
Defense
|
293,631
|
|
|
235,075
|
|
|
854,096
|
|
|
690,167
|
|
||||
Esterline (1)
|
146,651
|
|
|
—
|
|
|
177,106
|
|
|
—
|
|
||||
Total Power & Control
|
768,548
|
|
|
546,905
|
|
|
1,960,040
|
|
|
1,558,083
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Airframe
|
|
|
|
|
|
|
|
||||||||
Commercial OEM
|
153,218
|
|
|
137,030
|
|
|
437,567
|
|
|
368,172
|
|
||||
Commercial Aftermarket
|
197,750
|
|
|
179,337
|
|
|
567,208
|
|
|
511,156
|
|
||||
Defense
|
103,264
|
|
|
82,229
|
|
|
284,765
|
|
|
222,443
|
|
||||
Esterline (1)
|
257,304
|
|
|
—
|
|
|
319,820
|
|
|
—
|
|
||||
Total Airframe
|
711,536
|
|
|
398,596
|
|
|
1,609,360
|
|
|
1,101,771
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Non-aviation
|
178,235
|
|
|
35,161
|
|
|
278,159
|
|
|
101,838
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
$
|
1,658,319
|
|
|
$
|
980,662
|
|
|
$
|
3,847,559
|
|
|
$
|
2,761,692
|
|
(1)
|
The sales market classifications associated with the acquired Esterline businesses are currently being assessed by TransDigm management to ensure the reported market classifications are in compliance with TransDigm policy and being computed consistently with that of the existing TransDigm legacy businesses. Therefore, the sales associated with the Esterline acquisition are excluded from the market classifications reported above as of June 29, 2019.
|
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
EBITDA As Defined
|
|
|
|
|
|
|
|
||||||||
Power & Control
|
$
|
377,469
|
|
|
$
|
288,202
|
|
|
$
|
1,005,955
|
|
|
$
|
808,539
|
|
Airframe
|
306,027
|
|
|
196,746
|
|
|
740,146
|
|
|
541,171
|
|
||||
Non-aviation
|
45,172
|
|
|
11,075
|
|
|
73,207
|
|
|
30,392
|
|
||||
Total segment EBITDA As Defined
|
728,668
|
|
|
496,023
|
|
|
1,819,308
|
|
|
1,380,102
|
|
||||
Unallocated corporate expenses
|
37,671
|
|
|
8,882
|
|
|
69,865
|
|
|
28,305
|
|
||||
Total Company EBITDA As Defined
|
690,997
|
|
|
487,141
|
|
|
1,749,443
|
|
|
1,351,797
|
|
||||
Depreciation and amortization expense
|
71,318
|
|
|
33,925
|
|
|
147,544
|
|
|
95,534
|
|
||||
Interest expense - net
|
241,292
|
|
|
167,577
|
|
|
614,701
|
|
|
489,776
|
|
||||
Acquisition-related costs
|
136,385
|
|
|
10,381
|
|
|
186,451
|
|
|
16,940
|
|
||||
Stock compensation expense
|
31,809
|
|
|
13,708
|
|
|
70,082
|
|
|
36,411
|
|
||||
Refinancing costs
|
106
|
|
|
4,159
|
|
|
3,540
|
|
|
5,910
|
|
||||
Other, net
|
4,568
|
|
|
(8,150
|
)
|
|
4,658
|
|
|
3,534
|
|
||||
Income from continuing operations before income taxes
|
$
|
205,519
|
|
|
$
|
265,541
|
|
|
$
|
722,467
|
|
|
$
|
703,692
|
|
|
June 29, 2019
|
|
September 30, 2018
|
||||
Total assets
|
|
|
|
||||
Power & Control
|
$
|
7,587,184
|
|
|
$
|
5,698,524
|
|
Airframe
|
7,371,933
|
|
|
4,091,011
|
|
||
Non-aviation
|
1,284,616
|
|
|
234,770
|
|
||
Corporate
|
1,458,865
|
|
|
2,173,162
|
|
||
|
$
|
17,702,598
|
|
|
$
|
12,197,467
|
|
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||||||||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||||||||||||||||||
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
||||||||||||||||
Service cost
|
$
|
1,974
|
|
|
$
|
1,516
|
|
|
$
|
73
|
|
|
$
|
54
|
|
|
$
|
2,921
|
|
|
$
|
2,054
|
|
|
$
|
218
|
|
|
$
|
162
|
|
Interest cost
|
3,251
|
|
|
1,467
|
|
|
189
|
|
|
46
|
|
|
4,914
|
|
|
2,014
|
|
|
519
|
|
|
136
|
|
||||||||
Expected return on plan assets
|
(4,574
|
)
|
|
(1,705
|
)
|
|
(131
|
)
|
|
—
|
|
|
(6,654
|
)
|
|
(2,356
|
)
|
|
(390
|
)
|
|
2
|
|
||||||||
Amortization of actuarial loss
|
93
|
|
|
4
|
|
|
79
|
|
|
6
|
|
|
272
|
|
|
11
|
|
|
205
|
|
|
17
|
|
||||||||
Amortization of transition obligation
|
90
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
258
|
|
|
—
|
|
|
149
|
|
|
—
|
|
||||||||
Total pension cost
|
$
|
834
|
|
|
$
|
1,282
|
|
|
$
|
260
|
|
|
$
|
106
|
|
|
$
|
1,711
|
|
|
$
|
1,723
|
|
|
$
|
701
|
|
|
$
|
317
|
|
|
Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges (1)
|
|
Defined benefit pension plan activity (2)
|
|
Currency translation adjustment
|
|
Total
|
||||||||
Balance at September 30, 2018
|
$
|
67,191
|
|
|
$
|
(10,729
|
)
|
|
$
|
(52,362
|
)
|
|
$
|
4,100
|
|
Current-period other comprehensive (loss) gain
|
(210,585
|
)
|
|
(215
|
)
|
|
27,603
|
|
|
(183,197
|
)
|
||||
Amounts reclassified from AOCI related to derivative instruments
|
3,322
|
|
|
—
|
|
|
—
|
|
|
3,322
|
|
||||
Balance at June 29, 2019
|
$
|
(140,072
|
)
|
|
$
|
(10,944
|
)
|
|
$
|
(24,759
|
)
|
|
$
|
(175,775
|
)
|
(1)
|
Unrealized (loss) gain represents derivative instruments, net of taxes of $22,281 and $(954) for the thirteen week periods ended June 29, 2019 and June 30, 2018, respectively and $63,761 and $(25,679) for the thirty-nine week periods ended June 29, 2019 and June 30, 2018, respectively.
|
(2)
|
Defined benefit pension plan and other postretirement plan activity represents pension liability adjustments, net of taxes of $130 and $79 for the thirteen and thirty-nine week periods ended June 29, 2019, respectively.
|
|
|
Amount reclassified
|
||||||
|
|
Thirty-Nine Week Periods Ended
|
||||||
Description of reclassifications out of accumulated other comprehensive (loss) income
|
|
June 29, 2019
|
|
June 30, 2018
|
||||
Amortization from redesignated interest rate swap and cap agreements (1)
|
|
$
|
2,277
|
|
|
$
|
2,816
|
|
Losses from settlement of foreign currency forward exchange contracts (2)
|
|
413
|
|
|
—
|
|
||
Deferred tax expense (benefit) on reclassifications out of accumulated other comprehensive (loss) income
|
|
632
|
|
|
(777
|
)
|
||
Losses reclassified into earnings, net of tax
|
|
$
|
3,322
|
|
|
$
|
2,039
|
|
(1)
|
This component of accumulated other comprehensive (loss) income is included in interest expense (see Note 12, “Derivatives and Hedging Activities,” for additional information).
|
(2)
|
This component of accumulated other comprehensive (loss) income is included in net sales (see Note 12, “Derivatives and Hedging Activities,” for additional information).
|
|
TransDigm
Group
|
|
TransDigm
Inc.
|
|
TransDigm UK
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
Consolidated
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
6,036
|
|
|
$
|
2,295,239
|
|
|
$
|
280
|
|
|
$
|
(12,394
|
)
|
|
$
|
427,651
|
|
|
$
|
—
|
|
|
$
|
2,716,812
|
|
Trade accounts receivable - Net
|
—
|
|
|
—
|
|
|
—
|
|
|
214,145
|
|
|
948,200
|
|
|
—
|
|
|
1,162,345
|
|
|||||||
Inventories - Net
|
—
|
|
|
52,727
|
|
|
—
|
|
|
922,218
|
|
|
453,696
|
|
|
(14,707
|
)
|
|
1,413,934
|
|
|||||||
Prepaid expenses and other
|
—
|
|
|
29,572
|
|
|
—
|
|
|
44,549
|
|
|
43,983
|
|
|
—
|
|
|
118,104
|
|
|||||||
Total current assets
|
6,036
|
|
|
2,377,538
|
|
|
280
|
|
|
1,168,518
|
|
|
1,873,530
|
|
|
(14,707
|
)
|
|
5,411,195
|
|
|||||||
INVESTMENT IN SUBSIDIARIES AND INTERCOMPANY BALANCES
|
(1,327,280
|
)
|
|
20,451,875
|
|
|
974,678
|
|
|
11,087,173
|
|
|
5,835,834
|
|
|
(37,022,280
|
)
|
|
—
|
|
|||||||
PROPERTY, PLANT AND
EQUIPMENT - NET
|
—
|
|
|
18,615
|
|
|
—
|
|
|
482,399
|
|
|
244,524
|
|
|
—
|
|
|
745,538
|
|
|||||||
GOODWILL
|
—
|
|
|
82,924
|
|
|
—
|
|
|
6,453,835
|
|
|
2,147,904
|
|
|
—
|
|
|
8,684,663
|
|
|||||||
OTHER INTANGIBLE ASSETS - NET
|
—
|
|
|
25,670
|
|
|
—
|
|
|
1,900,577
|
|
|
807,767
|
|
|
—
|
|
|
2,734,014
|
|
|||||||
DEFERRED INCOME TAXES
|
—
|
|
|
18,270
|
|
|
—
|
|
|
7
|
|
|
44,498
|
|
|
—
|
|
|
62,775
|
|
|||||||
OTHER
|
—
|
|
|
9,619
|
|
|
—
|
|
|
34,290
|
|
|
20,504
|
|
|
—
|
|
|
64,413
|
|
|||||||
TOTAL ASSETS
|
$
|
(1,321,244
|
)
|
|
$
|
22,984,511
|
|
|
$
|
974,958
|
|
|
$
|
21,126,799
|
|
|
$
|
10,974,561
|
|
|
$
|
(37,036,987
|
)
|
|
$
|
17,702,598
|
|
LIABILITIES AND STOCKHOLDERS’
(DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current portion of long-term debt
|
$
|
—
|
|
|
$
|
75,656
|
|
|
$
|
—
|
|
|
$
|
1,745
|
|
|
$
|
3,462
|
|
|
$
|
—
|
|
|
$
|
80,863
|
|
Short-term borrowings - trade receivable securitization facility
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299,951
|
|
|
—
|
|
|
299,951
|
|
|||||||
Accounts payable
|
—
|
|
|
16,556
|
|
|
—
|
|
|
166,610
|
|
|
127,282
|
|
|
—
|
|
|
310,448
|
|
|||||||
Accrued liabilities
|
—
|
|
|
252,767
|
|
|
4,297
|
|
|
213,292
|
|
|
219,022
|
|
|
—
|
|
|
689,378
|
|
|||||||
Total current liabilities
|
—
|
|
|
344,979
|
|
|
4,297
|
|
|
381,647
|
|
|
649,717
|
|
|
—
|
|
|
1,380,640
|
|
|||||||
LONG-TERM DEBT
|
—
|
|
|
15,905,437
|
|
|
491,023
|
|
|
57,770
|
|
|
41,655
|
|
|
—
|
|
|
16,495,885
|
|
|||||||
DEFERRED INCOME TAXES
|
—
|
|
|
560,530
|
|
|
—
|
|
|
19
|
|
|
80,453
|
|
|
—
|
|
|
641,002
|
|
|||||||
OTHER NON-CURRENT LIABILITIES
|
—
|
|
|
265,776
|
|
|
—
|
|
|
152,382
|
|
|
77,527
|
|
|
—
|
|
|
495,685
|
|
|||||||
Total liabilities
|
—
|
|
|
17,076,722
|
|
|
495,320
|
|
|
591,818
|
|
|
849,352
|
|
|
—
|
|
|
19,013,212
|
|
|||||||
TD GROUP STOCKHOLDERS'
(DEFICIT) EQUITY
|
(1,321,244
|
)
|
|
5,907,789
|
|
|
479,638
|
|
|
20,534,981
|
|
|
10,114,579
|
|
|
(37,036,987
|
)
|
|
(1,321,244
|
)
|
|||||||
NONCONTROLLING INTEREST
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,630
|
|
|
—
|
|
|
10,630
|
|
|||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
$
|
(1,321,244
|
)
|
|
$
|
22,984,511
|
|
|
$
|
974,958
|
|
|
$
|
21,126,799
|
|
|
$
|
10,974,561
|
|
|
$
|
(37,036,987
|
)
|
|
$
|
17,702,598
|
|
|
TransDigm
Group
|
|
TransDigm
Inc.
|
|
TransDigm UK
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
Consolidated
|
||||||||||||||
NET SALES
|
$
|
—
|
|
|
$
|
136,514
|
|
|
$
|
—
|
|
|
$
|
2,981,434
|
|
|
$
|
872,715
|
|
|
$
|
(143,104
|
)
|
|
$
|
3,847,559
|
|
COST OF SALES
|
—
|
|
|
144,252
|
|
|
—
|
|
|
1,285,205
|
|
|
576,295
|
|
|
(143,104
|
)
|
|
1,862,648
|
|
|||||||
GROSS PROFIT
|
—
|
|
|
(7,738
|
)
|
|
—
|
|
|
1,696,229
|
|
|
296,420
|
|
|
—
|
|
|
1,984,911
|
|
|||||||
SELLING AND ADMINISTRATIVE EXPENSES
|
—
|
|
|
198,924
|
|
|
14
|
|
|
257,146
|
|
|
105,223
|
|
|
—
|
|
|
561,307
|
|
|||||||
AMORTIZATION OF INTANGIBLE ASSETS
|
—
|
|
|
(7,047
|
)
|
|
—
|
|
|
66,588
|
|
|
25,445
|
|
|
—
|
|
|
84,986
|
|
|||||||
(LOSS) INCOME FROM OPERATIONS
|
—
|
|
|
(199,615
|
)
|
|
(14
|
)
|
|
1,372,495
|
|
|
165,752
|
|
|
—
|
|
|
1,338,618
|
|
|||||||
INTEREST EXPENSE (INCOME) - NET
|
—
|
|
|
604,886
|
|
|
26,501
|
|
|
(6,605
|
)
|
|
(10,081
|
)
|
|
—
|
|
|
614,701
|
|
|||||||
REFINANCING COSTS
|
—
|
|
|
3,272
|
|
|
268
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,540
|
|
|||||||
OTHER (INCOME) EXPENSE
|
—
|
|
|
(69,698
|
)
|
|
89,539
|
|
|
(593,642
|
)
|
|
571,711
|
|
|
—
|
|
|
(2,090
|
)
|
|||||||
EQUITY IN INCOME OF SUBSIDIARIES
|
(542,900
|
)
|
|
(1,280,975
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,823,875
|
|
|
—
|
|
|||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
542,900
|
|
|
542,900
|
|
|
(116,322
|
)
|
|
1,972,742
|
|
|
(395,878
|
)
|
|
(1,823,875
|
)
|
|
722,467
|
|
|||||||
INCOME TAX PROVISION
|
—
|
|
|
—
|
|
|
—
|
|
|
112,108
|
|
|
67,075
|
|
|
—
|
|
|
179,183
|
|
|||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTERESTS
|
542,900
|
|
|
542,900
|
|
|
(116,322
|
)
|
|
1,860,634
|
|
|
(462,953
|
)
|
|
(1,823,875
|
)
|
|
543,284
|
|
|||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS
|
542,900
|
|
|
542,900
|
|
|
(116,322
|
)
|
|
1,860,634
|
|
|
(462,953
|
)
|
|
(1,823,875
|
)
|
|
543,284
|
|
|||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(384
|
)
|
|
—
|
|
|
(384
|
)
|
|||||||
NET INCOME (LOSS) ATTRIBUTABLE TO TD GROUP
|
$
|
542,900
|
|
|
$
|
542,900
|
|
|
$
|
(116,322
|
)
|
|
$
|
1,860,634
|
|
|
$
|
(463,337
|
)
|
|
$
|
(1,823,875
|
)
|
|
$
|
542,900
|
|
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX
|
(179,875
|
)
|
|
57,853
|
|
|
—
|
|
|
12,290
|
|
|
(9,011
|
)
|
|
(61,132
|
)
|
|
(179,875
|
)
|
|||||||
TOTAL COMPREHENSIVE INCOME (LOSS)
|
$
|
363,025
|
|
|
$
|
600,753
|
|
|
$
|
(116,322
|
)
|
|
$
|
1,872,924
|
|
|
$
|
(472,348
|
)
|
|
$
|
(1,885,007
|
)
|
|
$
|
363,025
|
|
|
TransDigm
Group
|
|
TransDigm
Inc.
|
|
TransDigm UK
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
Consolidated
|
||||||||||||||
NET SALES
|
$
|
—
|
|
|
$
|
118,783
|
|
|
$
|
—
|
|
|
$
|
2,243,838
|
|
|
$
|
459,571
|
|
|
$
|
(60,500
|
)
|
|
$
|
2,761,692
|
|
COST OF SALES
|
—
|
|
|
68,022
|
|
|
—
|
|
|
895,381
|
|
|
278,545
|
|
|
(60,500
|
)
|
|
1,181,448
|
|
|||||||
GROSS PROFIT
|
—
|
|
|
50,761
|
|
|
—
|
|
|
1,348,457
|
|
|
181,026
|
|
|
—
|
|
|
1,580,244
|
|
|||||||
SELLING AND ADMINISTRATIVE EXPENSES
|
—
|
|
|
74,949
|
|
|
—
|
|
|
200,298
|
|
|
50,961
|
|
|
—
|
|
|
326,208
|
|
|||||||
AMORTIZATION OF INTANGIBLE ASSETS
|
—
|
|
|
1,038
|
|
|
—
|
|
|
46,533
|
|
|
6,222
|
|
|
—
|
|
|
53,793
|
|
|||||||
(LOSS) INCOME FROM OPERATIONS
|
—
|
|
|
(25,226
|
)
|
|
—
|
|
|
1,101,626
|
|
|
123,843
|
|
|
—
|
|
|
1,200,243
|
|
|||||||
INTEREST EXPENSE (INCOME) - NET
|
—
|
|
|
478,341
|
|
|
2,569
|
|
|
(4
|
)
|
|
8,870
|
|
|
—
|
|
|
489,776
|
|
|||||||
REFINANCING COSTS
|
—
|
|
|
5,839
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,910
|
|
|||||||
OTHER (INCOME) EXPENSE
|
—
|
|
|
(241
|
)
|
|
—
|
|
|
(1,646
|
)
|
|
2,752
|
|
|
—
|
|
|
865
|
|
|||||||
EQUITY IN INCOME OF SUBSIDIARIES
|
(728,299
|
)
|
|
(913,523
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,641,822
|
|
|
—
|
|
|||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
728,299
|
|
|
404,358
|
|
|
(2,640
|
)
|
|
1,103,276
|
|
|
112,221
|
|
|
(1,641,822
|
)
|
|
703,692
|
|
|||||||
INCOME TAX PROVISION
|
—
|
|
|
(323,941
|
)
|
|
—
|
|
|
283,975
|
|
|
12,416
|
|
|
—
|
|
|
(27,550
|
)
|
|||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NONCONTROLLING INTERESTS
|
728,299
|
|
|
728,299
|
|
|
(2,640
|
)
|
|
819,301
|
|
|
99,805
|
|
|
(1,641,822
|
)
|
|
731,242
|
|
|||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,310
|
)
|
|
(633
|
)
|
|
—
|
|
|
(2,943
|
)
|
|||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS
|
728,299
|
|
|
728,299
|
|
|
(2,640
|
)
|
|
816,991
|
|
|
99,172
|
|
|
(1,641,822
|
)
|
|
728,299
|
|
|||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
NET INCOME (LOSS) ATTRIBUTABLE TO TD GROUP
|
$
|
728,299
|
|
|
$
|
728,299
|
|
|
$
|
(2,640
|
)
|
|
$
|
816,991
|
|
|
$
|
99,172
|
|
|
$
|
(1,641,822
|
)
|
|
$
|
728,299
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
61,426
|
|
|
66,480
|
|
|
—
|
|
|
8,553
|
|
|
(15,123
|
)
|
|
(59,910
|
)
|
|
61,426
|
|
|||||||
TOTAL COMPREHENSIVE INCOME (LOSS)
|
$
|
789,725
|
|
|
$
|
794,779
|
|
|
$
|
(2,640
|
)
|
|
$
|
825,544
|
|
|
$
|
84,049
|
|
|
$
|
(1,701,732
|
)
|
|
$
|
789,725
|
|
|
TransDigm
Group
|
|
TransDigm
Inc.
|
|
TransDigm UK
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
Consolidated
|
||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
$
|
—
|
|
|
$
|
(420,927
|
)
|
|
$
|
(110,835
|
)
|
|
$
|
1,951,008
|
|
|
$
|
(660,749
|
)
|
|
$
|
9,859
|
|
|
$
|
768,356
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(2,760
|
)
|
|
—
|
|
|
(69,992
|
)
|
|
(7,669
|
)
|
|
—
|
|
|
(80,421
|
)
|
|||||||
Payments made in connection with acquisitions, net of cash acquired
|
—
|
|
|
(3,923,850
|
)
|
|
—
|
|
|
(33,094
|
)
|
|
—
|
|
|
—
|
|
|
(3,956,944
|
)
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(3,926,610
|
)
|
|
—
|
|
|
(103,086
|
)
|
|
(7,669
|
)
|
|
—
|
|
|
(4,037,365
|
)
|
|||||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Intercompany activities
|
(34,323
|
)
|
|
946,145
|
|
|
112,012
|
|
|
(1,858,553
|
)
|
|
844,578
|
|
|
(9,859
|
)
|
|
—
|
|
|||||||
Proceeds from exercise of stock options
|
64,279
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,279
|
|
|||||||
Dividend equivalent payments
|
(24,309
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,309
|
)
|
|||||||
Repayment on term loans
|
—
|
|
|
(57,321
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,321
|
)
|
|||||||
Cash tender and redemption of 2020 Notes
|
—
|
|
|
(550,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(550,000
|
)
|
|||||||
Proceeds from 2027 Notes, net
|
—
|
|
|
544,462
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
544,462
|
|
|||||||
Proceeds from 2026 Secured Notes, net
|
—
|
|
|
3,935,715
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,935,715
|
|
|||||||
Financing fees and other
|
—
|
|
|
2,338
|
|
|
(1,022
|
)
|
|
—
|
|
|
(2,502
|
)
|
|
—
|
|
|
(1,186
|
)
|
|||||||
Net cash provided by (used in) financing activities
|
5,647
|
|
|
4,821,339
|
|
|
110,990
|
|
|
(1,858,553
|
)
|
|
842,076
|
|
|
(9,859
|
)
|
|
3,911,640
|
|
|||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,164
|
|
|
—
|
|
|
1,164
|
|
|||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
5,647
|
|
|
473,802
|
|
|
155
|
|
|
(10,631
|
)
|
|
174,822
|
|
|
—
|
|
|
643,795
|
|
|||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
389
|
|
|
1,821,437
|
|
|
125
|
|
|
(1,763
|
)
|
|
252,829
|
|
|
—
|
|
|
2,073,017
|
|
|||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
6,036
|
|
|
$
|
2,295,239
|
|
|
$
|
280
|
|
|
$
|
(12,394
|
)
|
|
$
|
427,651
|
|
|
$
|
—
|
|
|
$
|
2,716,812
|
|
|
TransDigm
Group
|
|
TransDigm
Inc.
|
|
TransDigm UK
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
Consolidated
|
||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
$
|
—
|
|
|
$
|
(291,416
|
)
|
|
$
|
2,110
|
|
|
$
|
863,173
|
|
|
$
|
117,043
|
|
|
$
|
—
|
|
|
$
|
690,910
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures
|
—
|
|
|
(1,372
|
)
|
|
—
|
|
|
(41,999
|
)
|
|
(6,726
|
)
|
|
—
|
|
|
(50,097
|
)
|
|||||||
Payments made in connection with acquisitions, net of cash acquired
|
—
|
|
|
(582,262
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(582,262
|
)
|
|||||||
Proceeds in connection with sale of discontinued operations
|
—
|
|
|
57,686
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,686
|
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(525,948
|
)
|
|
—
|
|
|
(41,999
|
)
|
|
(6,726
|
)
|
|
—
|
|
|
(574,673
|
)
|
|||||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Intercompany activities
|
14,035
|
|
|
1,392,169
|
|
|
(492,371
|
)
|
|
(820,946
|
)
|
|
(92,887
|
)
|
|
—
|
|
|
—
|
|
|||||||
Proceeds from exercise of stock options
|
40,621
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,621
|
|
|||||||
Dividend equivalent payments
|
(56,148
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,148
|
)
|
|||||||
Proceeds from term loans, net
|
—
|
|
|
12,779,772
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,779,772
|
|
|||||||
Repayment on term loans
|
—
|
|
|
(12,155,198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,155,198
|
)
|
|||||||
Proceeds from 6.875% 2026 Notes, net
|
—
|
|
|
—
|
|
|
490,411
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
490,411
|
|
|||||||
Financing fees and other
|
—
|
|
|
(9,904
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,904
|
)
|
|||||||
Net cash (used in) provided by financing activities
|
(1,492
|
)
|
|
2,006,839
|
|
|
(1,960
|
)
|
|
(820,946
|
)
|
|
(92,887
|
)
|
|
—
|
|
|
1,089,554
|
|
|||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,979
|
)
|
|
—
|
|
|
(2,979
|
)
|
|||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(1,492
|
)
|
|
1,189,475
|
|
|
150
|
|
|
228
|
|
|
14,451
|
|
|
—
|
|
|
1,202,812
|
|
|||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
2,416
|
|
|
439,473
|
|
|
—
|
|
|
(203
|
)
|
|
208,875
|
|
|
—
|
|
|
650,561
|
|
|||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
924
|
|
|
$
|
1,628,948
|
|
|
$
|
150
|
|
|
$
|
25
|
|
|
$
|
223,326
|
|
|
$
|
—
|
|
|
$
|
1,853,373
|
|
|
Thirteen Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
% of Sales
|
|
June 30, 2018
|
|
% of Sales
|
||||||
Net sales
|
$
|
1,658,319
|
|
|
100.0
|
%
|
|
$
|
980,662
|
|
|
100.0
|
%
|
Cost of sales
|
896,845
|
|
|
54.1
|
%
|
|
411,142
|
|
|
41.9
|
%
|
||
Selling and administrative expenses
|
274,557
|
|
|
16.6
|
%
|
|
112,816
|
|
|
11.5
|
%
|
||
Amortization of intangible assets
|
41,889
|
|
|
2.5
|
%
|
|
19,224
|
|
|
2.0
|
%
|
||
Income from operations
|
445,028
|
|
|
26.8
|
%
|
|
437,480
|
|
|
44.6
|
%
|
||
Interest expense, net
|
241,292
|
|
|
14.6
|
%
|
|
167,577
|
|
|
17.1
|
%
|
||
Refinancing costs
|
106
|
|
|
—
|
%
|
|
4,159
|
|
|
0.4
|
%
|
||
Other (income) expense
|
(1,889
|
)
|
|
(0.1
|
)%
|
|
203
|
|
|
—
|
%
|
||
Income tax provision
|
60,909
|
|
|
3.7
|
%
|
|
48,150
|
|
|
4.9
|
%
|
||
Income from continuing operations including noncontrolling interests
|
144,610
|
|
|
8.7
|
%
|
|
217,391
|
|
|
22.2
|
%
|
||
Net income attributable to noncontrolling interests
|
(160
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Net income from continuing operations attributable to TD Group
|
144,450
|
|
|
8.7
|
%
|
|
217,391
|
|
|
22.2
|
%
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
%
|
|
(145
|
)
|
|
—
|
%
|
||
Net income attributable to TD Group
|
$
|
144,450
|
|
|
8.7
|
%
|
|
$
|
217,246
|
|
|
22.2
|
%
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
% of Sales
|
|
June 30, 2018
|
|
% of Sales
|
||||||
Net sales
|
$
|
3,847,559
|
|
|
100.0
|
%
|
|
$
|
2,761,692
|
|
|
100.0
|
%
|
Cost of sales
|
1,862,648
|
|
|
48.4
|
%
|
|
1,181,448
|
|
|
42.8
|
%
|
||
Selling and administrative expenses
|
561,307
|
|
|
14.6
|
%
|
|
326,208
|
|
|
11.8
|
%
|
||
Amortization of intangible assets
|
84,986
|
|
|
2.2
|
%
|
|
53,793
|
|
|
2.0
|
%
|
||
Income from operations
|
1,338,618
|
|
|
34.8
|
%
|
|
1,200,243
|
|
|
43.5
|
%
|
||
Interest expense, net
|
614,701
|
|
|
15.9
|
%
|
|
489,776
|
|
|
17.7
|
%
|
||
Refinancing costs
|
3,540
|
|
|
0.1
|
%
|
|
5,910
|
|
|
0.2
|
%
|
||
Other (income) expense
|
(2,090
|
)
|
|
(0.1
|
)%
|
|
865
|
|
|
—
|
%
|
||
Income tax provision
|
179,183
|
|
|
4.7
|
%
|
|
(27,550
|
)
|
|
(1.0
|
)%
|
||
Income from continuing operations including noncontrolling interests
|
543,284
|
|
|
14.1
|
%
|
|
731,242
|
|
|
26.5
|
%
|
||
Net income attributable to noncontrolling interests
|
(384
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Net income from continuing operations attributable to TD Group
|
542,900
|
|
|
14.1
|
%
|
|
731,242
|
|
|
26.5
|
%
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
%
|
|
(2,943
|
)
|
|
(0.1
|
)%
|
||
Net income attributable to TD Group
|
$
|
542,900
|
|
|
14.1
|
%
|
|
$
|
728,299
|
|
|
26.4
|
%
|
•
|
Net Sales. Net organic sales and acquisition sales and the related dollar and percentage changes for the thirteen week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirteen Week Periods Ended
|
|
|
|
% Change
Total Sales
|
|||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
Change
|
|
||||||||
Organic sales
|
$
|
1,096.9
|
|
|
$
|
980.7
|
|
|
116.2
|
|
|
11.8
|
%
|
|
Acquisition sales
|
561.4
|
|
|
—
|
|
|
561.4
|
|
|
57.2
|
%
|
|||
|
$
|
1,658.3
|
|
|
$
|
980.7
|
|
|
$
|
677.6
|
|
|
69.0
|
%
|
•
|
Cost of Sales and Gross Profit. Cost of sales increased by $485.7 million, or 118.1%, to $896.8 million for the thirteen week period ended June 29, 2019 compared to $411.1 million for the thirteen week period ended June 30, 2018. Cost of sales and the related percentage of total sales for the thirteen week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirteen Week Periods Ended
|
|
|
|
|
|||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
Change
|
|
% Change
|
|||||||
Cost of sales - excluding costs below
|
$
|
790.3
|
|
|
$
|
412.4
|
|
|
$
|
377.9
|
|
|
91.6
|
%
|
% of total sales
|
47.7
|
%
|
|
42.1
|
%
|
|
|
|
|
|||||
Inventory acquisition accounting adjustments
|
88.9
|
|
|
3.2
|
|
|
85.7
|
|
|
2,678.1
|
%
|
|||
% of total sales
|
5.4
|
%
|
|
0.3
|
%
|
|
|
|
|
|||||
Foreign currency loss (gain)
|
5.1
|
|
|
(9.4
|
)
|
|
14.5
|
|
|
154.3
|
%
|
|||
% of total sales
|
0.3
|
%
|
|
(1.0
|
)%
|
|
|
|
|
|||||
Acquisition integration costs
|
9.3
|
|
|
3.5
|
|
|
5.8
|
|
|
165.7
|
%
|
|||
% of total sales
|
0.6
|
%
|
|
0.4
|
%
|
|
|
|
|
|||||
Stock compensation expense
|
3.2
|
|
|
1.4
|
|
|
1.8
|
|
|
128.6
|
%
|
|||
% of total sales
|
0.2
|
%
|
|
0.1
|
%
|
|
|
|
|
|||||
Total cost of sales
|
$
|
896.8
|
|
|
$
|
411.1
|
|
|
$
|
485.7
|
|
|
118.1
|
%
|
% of total sales
|
54.1
|
%
|
|
41.9
|
%
|
|
|
|
|
|||||
Gross profit
|
$
|
761.5
|
|
|
$
|
569.5
|
|
|
$
|
192.0
|
|
|
33.7
|
%
|
Gross profit percentage
|
45.9
|
%
|
|
58.1
|
%
|
|
-12.2
|
|
|
•
|
Gross profit on the sales from acquisitions included above (excluding acquisition-related costs) was approximately $215.1 million for the quarter ended June 29, 2019, which represented gross profit of approximately 38% of acquisition sales.
|
•
|
Organic sales growth as described above, application of our three core value-driven operating strategies (obtaining profitable new business, continually improving our cost structure, and providing highly engineered value-added products to customers) and positive leverage on our fixed overhead costs spread over a higher production volume resulted in an increase in gross profit of approximately $84.7 million for the quarter ended June 29, 2019.
|
•
|
Offsetting increases in gross profit by $107.8 million compared to the same period in the prior fiscal year was attributable to increased inventory acquisition accounting adjustments, foreign currency losses, higher integration costs and stock compensation expense.
|
•
|
Selling and Administrative Expenses. Selling and administrative expenses increased by $161.8 million to $274.6 million, or 16.5% of sales, for the thirteen week period ended June 29, 2019 from $112.8 million, or 11.6% of sales, for the thirteen week period ended June 30, 2018. Selling and administrative expenses and the related percentage of total sales for the thirteen week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirteen Week Periods Ended
|
|
|
|
|
|||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
Change
|
|
% Change
|
|||||||
Selling and administrative expenses - excluding costs below
|
$
|
207.9
|
|
|
$
|
96.8
|
|
|
$
|
111.1
|
|
|
114.8
|
%
|
% of total sales
|
12.5
|
%
|
|
9.9
|
%
|
|
|
|
|
|||||
Acquisition-related expenses
|
38.1
|
|
|
3.7
|
|
|
34.4
|
|
|
929.7
|
%
|
|||
% of total sales
|
2.3
|
%
|
|
0.4
|
%
|
|
|
|
|
|||||
Stock compensation expense
|
28.6
|
|
|
12.3
|
|
|
16.3
|
|
|
132.5
|
%
|
|||
% of total sales
|
1.7
|
%
|
|
1.3
|
%
|
|
|
|
|
|||||
Total selling and administrative expenses
|
$
|
274.6
|
|
|
$
|
112.8
|
|
|
$
|
161.8
|
|
|
143.4
|
%
|
% of total sales
|
16.5
|
%
|
|
11.6
|
%
|
|
|
|
|
•
|
Amortization of Intangible Assets. Amortization of intangible assets was $41.9 million for the quarter ended June 29, 2019 compared to $19.2 million in the quarter ended June 30, 2018. The increase in amortization expense of $22.7 million was primarily due to the amortization expense on the definite-lived intangible assets recorded in connection with the fiscal 2019 acquisition of Esterline.
|
•
|
Refinancing Costs. Refinancing costs of $0.1 million were recorded for the quarter ended June 29, 2019 primarily related to the debt financing activities that occurred in the second quarter of fiscal 2019. Refinancing costs of $4.2 million were recorded for the quarter ended June 30, 2018 representing debt issuance costs expensed in connection with the fiscal year 2018 debt financing activity.
|
•
|
Interest Expense-Net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs, original issue discount and premium and revolving credit facility fees slightly offset by interest income. Interest expense-net increased $73.7 million, or 44.0%, to $241.3 million for the quarter ended June 29, 2019 from $167.6 million for the comparable quarter last year. The net increase in interest expense-net was primarily due to an increase in the weighted average level of outstanding borrowings, which was approximately $17.0 billion for the quarter ended June 29, 2019 and approximately $13.0 billion for the quarter ended June 30, 2018. The increase in the weighted average level of borrowings was primarily due to the activity in the second quarter of fiscal 2019 consisting of the issuance of $4.0 billion in 2026 Secured Notes and $550 million in 2027 Notes and the activity in the third quarter of fiscal 2018 consisting of the issuance of additional term loans of $700 million (gross) and issuance of $500 million in 6.875% 2026 Notes. The increases in new debt described above were partially offset by principal payments made on the term loans over the comparable period and redemption of the 2020 Notes. The weighted average interest rate for cash interest payments on the total borrowings outstanding at June 29, 2019 was 5.7%.
|
•
|
Income Taxes. Income tax expense as a percentage of income before income taxes was approximately 29.6% for the quarter ended June 29, 2019 compared to 18.1% for the quarter ended June 30, 2018. The Company's higher effective tax rate for the thirteen week period ended June 29, 2019 was primarily due to a net interest expense limitation under IRC Section 163(j) resulting from the provisions of The Tax Cuts and Jobs Act described in Note 10, "Income Taxes" in addition to a discrete detriment associated with the entity restructuring in anticipation of the Souriau-Sunbank Companies transaction described further in Note 17, "Subsequent Events." The Company’s effective tax rate for the period ended June 29, 2019 was higher than the Federal statutory rate of 21% primarily resulting from a net interest expense limitation under IRC Section 163(j), foreign earnings taxed at rates higher than the U.S. statutory rate, the taxes resulting from the entity restructuring described above offset by the benefit associated with the deduction for foreign-derived intangible income (FDII) and excess tax benefits for share-based payments.
|
•
|
Loss from Discontinued Operations. On January 26, 2018, the Company completed the sale of Schroth in a management buyout to a private equity fund and certain members of Schroth management for approximately $61.4 million which included a working capital adjustment of $0.3 million paid in July 2018. There was no activity from the discontinued operations for the quarter ended June 29, 2019. Loss from discontinued operations was $0.1 million for the quarter ended June 30, 2018.
|
•
|
Net Income Attributable to TD Group. Net income attributable to TD Group decreased $72.8 million, or 33.5%, to $144.5 million for the quarter ended June 29, 2019 compared to net income attributable to TD Group of $217.2 million for the quarter ended June 30, 2018, primarily as a result of the factors referred to above.
|
•
|
Earnings per Share. Basic and diluted earnings per share was $2.57 for the quarter ended June 29, 2019 and $3.91 per share for the quarter ended June 30, 2018. There was no impact on earnings per share from discontinued operations for the quarter ended June 29, 2019 and June 30, 2018.
|
•
|
Segment Net Sales. Net sales by segment for the thirteen week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirteen Week Periods Ended
|
|
|
|
|
|||||||||||||||
|
June 29, 2019
|
|
% of Sales
|
|
June 30, 2018
|
|
% of Sales
|
|
Change
|
|
% Change
|
|||||||||
Power & Control
|
$
|
768.6
|
|
|
46.4
|
%
|
|
$
|
546.9
|
|
|
55.8
|
%
|
|
$
|
221.7
|
|
|
40.5
|
%
|
Airframe
|
711.5
|
|
|
42.9
|
%
|
|
398.6
|
|
|
40.6
|
%
|
|
312.9
|
|
|
78.5
|
%
|
|||
Non-aviation
|
178.2
|
|
|
10.7
|
%
|
|
35.2
|
|
|
3.6
|
%
|
|
143.0
|
|
|
406.3
|
%
|
|||
|
$
|
1,658.3
|
|
|
100.0
|
%
|
|
$
|
980.7
|
|
|
100.0
|
%
|
|
$
|
677.6
|
|
|
69.1
|
%
|
•
|
EBITDA As Defined. EBITDA As Defined by segment for the thirteen week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirteen Week Periods Ended
|
|
|
|
|
|||||||||||||||
|
June 29, 2019
|
|
% of Segment
Sales
|
|
June 30, 2018
|
|
% of Segment
Sales
|
|
Change
|
|
% Change
|
|||||||||
Power & Control
|
$
|
377.5
|
|
|
49.1
|
%
|
|
$
|
288.2
|
|
|
52.7
|
%
|
|
$
|
89.3
|
|
|
31.0
|
%
|
Airframe
|
306.0
|
|
|
43.0
|
%
|
|
196.7
|
|
|
49.4
|
%
|
|
109.3
|
|
|
55.6
|
%
|
|||
Non-aviation
|
45.2
|
|
|
25.3
|
%
|
|
11.1
|
|
|
31.5
|
%
|
|
34.1
|
|
|
307.2
|
%
|
|||
|
$
|
728.7
|
|
|
43.9
|
%
|
|
$
|
496.0
|
|
|
50.6
|
%
|
|
$
|
232.7
|
|
|
46.9
|
%
|
•
|
Net Sales. Net organic sales and acquisition sales and the related dollar and percentage changes for the thirty-nine week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirty-Nine Week Periods Ended
|
|
|
|
% Change
Total Sales
|
|||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
Change
|
|
||||||||
Organic sales
|
$
|
3,079.0
|
|
|
$
|
2,761.7
|
|
|
$
|
317.3
|
|
|
11.5
|
%
|
Acquisition sales
|
768.6
|
|
|
—
|
|
|
768.6
|
|
|
27.8
|
%
|
|||
|
$
|
3,847.6
|
|
|
$
|
2,761.7
|
|
|
$
|
1,085.9
|
|
|
39.3
|
%
|
•
|
Cost of Sales and Gross Profit. Cost of sales increased by $681.2 million, or 57.7%, to $1,862.6 million for the thirty-nine week period ended June 29, 2019 compared to $1,181.4 million for the thirty-nine week period ended June 30, 2018. Cost of sales and the related percentage of total sales for the thirty-nine week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirty-Nine Week Periods Ended
|
|
|
|
|
|||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
Change
|
|
% Change
|
|||||||
Cost of sales - excluding costs below
|
$
|
1,731.9
|
|
|
$
|
1,168.8
|
|
|
$
|
563.1
|
|
|
48.2
|
%
|
% of total sales
|
45.0
|
%
|
|
42.3
|
%
|
|
|
|
|
|||||
Inventory acquisition accounting adjustments
|
109.3
|
|
|
3.2
|
|
|
106.1
|
|
|
3,315.6
|
%
|
|||
% of total sales
|
2.8
|
%
|
|
0.1
|
%
|
|
|
|
|
|||||
Acquisition integration costs
|
12.1
|
|
|
7.0
|
|
|
5.1
|
|
|
72.9
|
%
|
|||
% of total sales
|
0.3
|
%
|
|
0.3
|
%
|
|
|
|
|
|||||
Foreign currency loss (gain)
|
2.3
|
|
|
(1.2
|
)
|
|
3.5
|
|
|
291.7
|
%
|
|||
% of total sales
|
0.1
|
%
|
|
—
|
%
|
|
|
|
|
|||||
Stock compensation expense
|
7.0
|
|
|
3.6
|
|
|
3.4
|
|
|
94.4
|
%
|
|||
% of total sales
|
0.2
|
%
|
|
0.1
|
%
|
|
|
|
|
|||||
Total cost of sales
|
$
|
1,862.6
|
|
|
$
|
1,181.4
|
|
|
$
|
681.2
|
|
|
57.7
|
%
|
% of total sales
|
48.4
|
%
|
|
42.8
|
%
|
|
|
|
|
|||||
Gross profit
|
$
|
1,984.9
|
|
|
$
|
1,580.2
|
|
|
$
|
404.7
|
|
|
25.6
|
%
|
Gross profit percentage
|
51.6
|
%
|
|
57.2
|
%
|
|
|
|
|
•
|
Gross profit on the sales from the acquisitions indicated above (excluding acquisition-related costs) was approximately $280.8 million for the thirty-nine week period ended June 29, 2019, which represented gross profit of approximately 36% of the acquisition sales.
|
•
|
Organic sales growth described above, application of our three core value-driven operating strategies (obtaining profitable new business, continually improving our cost structure, and providing highly engineered value-added products to
|
•
|
Offsetting increases in gross profit by $118.1 million compared to the same period in the prior fiscal year was attributable to increased inventory acquisition accounting adjustments, foreign currency losses, stock compensation expense and acquisition integration costs.
|
•
|
Selling and Administrative Expenses. Selling and administrative expenses increased by $235.1 million to $561.3 million, or 14.6% of sales, for the thirty-nine week period ended June 29, 2019 from $326.2 million, or 11.8% of sales, for the thirty-nine week period ended June 30, 2018. Selling and administrative expenses and the related percentage of total sales for the thirty-nine week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirty-Nine Week Periods Ended
|
|
|
|
|
|||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
Change
|
|
% Change
|
|||||||
Selling and administrative expenses - excluding costs below
|
$
|
433.2
|
|
|
$
|
286.6
|
|
|
$
|
146.6
|
|
|
51.2
|
%
|
% of total sales
|
11.3
|
%
|
|
10.4
|
%
|
|
|
|
|
|||||
Acquisition-related expenses
|
65.0
|
|
|
6.8
|
|
|
58.2
|
|
|
855.9
|
%
|
|||
% of total sales
|
1.7
|
%
|
|
0.2
|
%
|
|
|
|
|
|||||
Stock compensation expense
|
63.1
|
|
|
32.8
|
|
|
30.3
|
|
|
92.4
|
%
|
|||
% of total sales
|
1.6
|
%
|
|
1.2
|
%
|
|
|
|
|
|||||
Total selling and administrative expenses
|
$
|
561.3
|
|
|
$
|
326.2
|
|
|
$
|
235.1
|
|
|
72.1
|
%
|
% of total sales
|
14.6
|
%
|
|
11.8
|
%
|
|
|
|
|
•
|
Amortization of Intangible Assets. Amortization of intangible assets was $85.0 million for the thirty-nine week period ended June 29, 2019 compared to $53.8 million in the thirty-nine week period ended June 30, 2018. The increase in amortization expense of $31.2 million was primarily due to the amortization expense on the definite-lived intangible assets recorded in connection with the fiscal 2019 acquisition of Esterline.
|
•
|
Refinancing Costs. Refinancing costs of $3.5 million were recorded for the thirty-nine week period ended June 29, 2019 and primarily related to the debt financing activities that occurred in the second quarter of fiscal 2019. Refinancing costs of $5.9 million were recorded for the thirty-nine week period ended June 30, 2018 representing debt issuance costs expensed in connection with the fiscal 2018 debt financing activity.
|
•
|
Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs, original issue discount and premium and revolving credit facility fees slightly offset by interest income. Interest expense-net increased $124.9 million, or 25.5%, to $614.7 million for the thirty-nine week period ended June 29, 2019 from $489.8 million for the comparable thirty-nine week period last year. The net increase in interest expense-net was primarily due to an increase in the weighted average level of outstanding borrowings, which was approximately $15.1 billion for the thirty-nine week period ended June 29, 2019 and approximately $12.5 billion for the thirty-nine week period ended June 30, 2018. The increase in weighted average level of borrowings was primarily due to the activity in the second quarter of fiscal 2019 consisting of the issuance of $4.0 billion in 2026 Secured Notes and $550 million in 2027 Notes and the activity in the third quarter of fiscal 2018 consisting of issuing additional term loans of $700 million (gross) and issuing $500 million in 6.875% 2026 Notes. The increases in new debt described above were partially offset by principal payments on the term loans over the comparable period and redemption of the 2020 Notes. The weighted average interest rate for cash interest payments on total borrowings outstanding at June 29, 2019 was 4.2%.
|
•
|
Income Taxes. Income tax expense as a percentage of income before income taxes was approximately 24.8% for the thirty-nine week period ended June 29, 2019 compared to (3.9)% for the thirty-nine week period ended June 30, 2018. The Company's higher effective tax rate for the thirty-nine week period ended June 29, 2019 was due to the discrete benefit recognized in the thirty-nine week period ended June 30, 2018 related to the enactment of the Tax Cuts and Jobs Act along with additional taxes recognized in the thirty-nine week period ended June 29, 2019 as described in Note 10, "Income Taxes".
|
•
|
Loss from Discontinued Operations. On January 26, 2018, the Company completed the sale of Schroth in a management buyout to a private equity fund and certain members of Schroth management for approximately $61.4 million which included a working capital adjustment of $0.3 million paid in July 2018. There was no activity from the discontinued operations for
|
•
|
Net Income Attributable to TD Group. Net income attributable to TD Group decreased $185.4 million, or 25.5%, to $542.9 million for the thirty-nine week period ended June 29, 2019 compared to net income attributable to TD Group of $728.3 million for the thirty-nine week period ended June 30, 2018, primarily as a result of the factors referred to above.
|
•
|
Earnings per Share. Basic and diluted earnings per share was $9.22 for the thirty-nine week period ended June 29, 2019 and $12.09 per share for the thirty-nine week period ended June 30, 2018. There was no impact on earnings per share from discontinued operations for the thirty-nine week period ended June 29, 2019. For the thirty-nine week period ended June 30, 2018, basic and diluted earnings (loss) per share from continuing operations and discontinued operations were $12.14 and $(0.05), respectively. Net income attributable to TD Group for the thirty-nine week period ended June 29, 2019 of $542.9 million was decreased by dividend equivalent payments of $24.3 million, or $0.43 per share, resulting in net income available to common shareholders of $518.6 million, or $9.22 per share. Net income for the thirty-nine week period ended June 30, 2018 of $728.3 million was decreased by dividend equivalent payments of $56.1 million, or $1.01 per share, resulting in net income available to common shareholders of $672.2 million, or $12.09 per share.
|
•
|
Segment Net Sales. Net sales by segment for the thirty-nine week period ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirty-Nine Week Periods Ended
|
|
|
|
|
|||||||||||||||
|
June 29, 2019
|
|
% of Sales
|
|
June 30, 2018
|
|
% of Sales
|
|
Change
|
|
% Change
|
|||||||||
Power & Control
|
$
|
1,960.0
|
|
|
51.0
|
%
|
|
$
|
1,558.1
|
|
|
56.4
|
%
|
|
$
|
401.9
|
|
|
25.8
|
%
|
Airframe
|
1,609.4
|
|
|
41.8
|
%
|
|
1,101.8
|
|
|
39.9
|
%
|
|
507.6
|
|
|
46.1
|
%
|
|||
Non-aviation
|
278.2
|
|
|
7.2
|
%
|
|
101.8
|
|
|
3.7
|
%
|
|
176.4
|
|
|
173.3
|
%
|
|||
|
$
|
3,847.6
|
|
|
100.0
|
%
|
|
$
|
2,761.7
|
|
|
100.0
|
%
|
|
$
|
1,085.9
|
|
|
39.3
|
%
|
•
|
EBITDA As Defined. EBITDA As Defined by segment for the thirty-nine week periods ended June 29, 2019 and June 30, 2018 were as follows (amounts in millions):
|
|
Thirty-Nine Week Periods Ended
|
|
|
|
|
|||||||||||||||
|
June 29, 2019
|
|
% of Segment
Sales
|
|
June 30, 2018
|
|
% of Segment
Sales
|
|
Change
|
|
% Change
|
|||||||||
Power & Control
|
$
|
1,006.0
|
|
|
51.3
|
%
|
|
$
|
808.5
|
|
|
51.9
|
%
|
|
$
|
197.5
|
|
|
24.4
|
%
|
Airframe
|
740.1
|
|
|
46.0
|
%
|
|
541.2
|
|
|
49.1
|
%
|
|
198.9
|
|
|
36.8
|
%
|
|||
Non-aviation
|
73.2
|
|
|
26.3
|
%
|
|
30.4
|
|
|
29.8
|
%
|
|
42.8
|
|
|
140.8
|
%
|
|||
|
$
|
1,819.3
|
|
|
47.3
|
%
|
|
$
|
1,380.1
|
|
|
50.0
|
%
|
|
$
|
439.2
|
|
|
31.8
|
%
|
Term Loans Facility
|
|
Aggregate Principal
|
|
Maturity Date
|
|
Interest Rate
|
Tranche E
|
|
$2,226.8 million
|
|
May 30, 2025
|
|
LIBO rate + 2.5%
|
Tranche F
|
|
$3,533.0 million
|
|
June 9, 2023
|
|
LIBO rate + 2.5%
|
Tranche G
|
|
$1,782.8 million
|
|
August 22, 2024
|
|
LIBO rate + 2.5%
|
Senior Subordinated Notes
|
|
Aggregate Principal
|
|
Maturity Date
|
|
Interest Rate
|
2022 Notes
|
|
$1,150 million
|
|
July 15, 2022
|
|
6.00%
|
2024 Notes
|
|
$1,200 million
|
|
July 15, 2024
|
|
6.50%
|
2025 Notes
|
|
$750 million
|
|
May 15, 2025
|
|
6.50%
|
2026 Secured Notes
|
|
$4,000 million
|
|
March 15, 2026
|
|
6.250%
|
6.875% 2026 Notes
|
|
$500 million
|
|
May 15, 2026
|
|
6.875%
|
6.375% 2026 Notes
|
|
$950 million
|
|
June 15, 2026
|
|
6.375%
|
2027 Notes
|
|
$550 million
|
|
March 15, 2027
|
|
7.50%
|
•
|
neither EBITDA nor EBITDA As Defined reflects the significant interest expense, or the cash requirements, necessary to service interest payments on our indebtedness;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor EBITDA As Defined reflects any cash requirements for such replacements;
|
•
|
the omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA and EBITDA As Defined;
|
•
|
neither EBITDA nor EBITDA As Defined includes the payment of taxes, which is a necessary element of our operations; and
|
•
|
EBITDA As Defined excludes the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions.
|
|
Thirteen Week Periods Ended
|
|
Thirty-Nine Week Periods Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Net income including noncontrolling interests
|
$
|
144,610
|
|
|
$
|
217,246
|
|
|
$
|
543,284
|
|
|
$
|
728,299
|
|
Less: Loss from discontinued operations, net of tax(1)
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
(2,943
|
)
|
||||
Income from continuing operations including noncontrolling interests
|
144,610
|
|
|
217,391
|
|
|
543,284
|
|
|
731,242
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization expense
|
71,318
|
|
|
33,925
|
|
|
147,544
|
|
|
95,534
|
|
||||
Interest expense, net
|
241,292
|
|
|
167,577
|
|
|
614,701
|
|
|
489,776
|
|
||||
Income tax provision
|
60,909
|
|
|
48,150
|
|
|
179,183
|
|
|
(27,550
|
)
|
||||
EBITDA
|
518,129
|
|
|
467,043
|
|
|
1,484,712
|
|
|
1,289,002
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Inventory acquisition accounting adjustments(2)
|
88,923
|
|
|
3,165
|
|
|
109,348
|
|
|
3,165
|
|
||||
Acquisition integration costs(3)
|
42,355
|
|
|
5,486
|
|
|
49,768
|
|
|
10,815
|
|
||||
Acquisition transaction-related expenses(4)
|
5,107
|
|
|
1,730
|
|
|
27,335
|
|
|
2,960
|
|
||||
Non-cash stock compensation expense(5)
|
31,809
|
|
|
13,708
|
|
|
70,082
|
|
|
36,411
|
|
||||
Refinancing costs(6)
|
106
|
|
|
4,159
|
|
|
3,540
|
|
|
5,910
|
|
||||
Other, net(7)
|
4,568
|
|
|
(8,150
|
)
|
|
4,658
|
|
|
3,534
|
|
||||
EBITDA As Defined
|
$
|
690,997
|
|
|
$
|
487,141
|
|
|
$
|
1,749,443
|
|
|
$
|
1,351,797
|
|
(1)
|
Refer to Note 3, "Acquisitions and Divestitures," to the condensed consolidated financial statements included herein for further information.
|
(2)
|
Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold.
|
(3)
|
Represents costs incurred to integrate acquired businesses and product lines into TD Group’s operations, facility relocation costs and other acquisition-related costs.
|
(4)
|
Represents transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses, and valuation costs that are required to be expensed as incurred.
|
(5)
|
Represents the compensation expense recognized by TD Group under our stock incentive plans.
|
(6)
|
Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements.
|
(7)
|
Primarily represents foreign currency transaction gain or loss, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation and gain or loss on sale of fixed assets.
|
|
Thirty-Nine Week Periods Ended
|
||||||
|
June 29, 2019
|
|
June 30, 2018
|
||||
Net cash provided by operating activities
|
$
|
768,356
|
|
|
$
|
690,910
|
|
Adjustments:
|
|
|
|
||||
Changes in assets and liabilities, net of effects from acquisitions of businesses
|
21,442
|
|
|
31,112
|
|
||
Interest expense, net (1)
|
594,503
|
|
|
473,597
|
|
||
Income tax provision - current
|
174,033
|
|
|
139,233
|
|
||
Non-cash stock compensation expense (2)
|
(70,082
|
)
|
|
(36,411
|
)
|
||
Refinancing costs (6)
|
(3,540
|
)
|
|
(5,910
|
)
|
||
EBITDA from discontinued operations (8)
|
—
|
|
|
(364
|
)
|
||
EBITDA
|
1,484,712
|
|
|
1,292,167
|
|
||
Adjustments:
|
|
|
|
||||
Inventory acquisition accounting adjustments (3)
|
109,348
|
|
|
3,165
|
|
||
Acquisition integration costs (4)
|
49,768
|
|
|
10,815
|
|
||
Acquisition transaction-related expenses (5)
|
27,335
|
|
|
2,960
|
|
||
Non-cash stock compensation expense (2)
|
70,082
|
|
|
36,411
|
|
||
Refinancing costs (6)
|
3,540
|
|
|
5,910
|
|
||
Other, net (7)
|
4,658
|
|
|
3,534
|
|
||
EBITDA As Defined
|
$
|
1,749,443
|
|
|
$
|
1,354,962
|
|
(1)
|
Represents interest expense excluding the amortization of debt issuance costs and premium and discount on debt.
|
(2)
|
Represents the compensation expense recognized by TD Group under our stock incentive plans.
|
(3)
|
Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold.
|
(4)
|
Represents costs incurred to integrate acquired businesses and product lines into TD Group’s operations, facility relocation costs and other acquisition-related costs.
|
(5)
|
Represents transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses, and valuation costs that are required to be expensed as incurred.
|
(6)
|
Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements.
|
(7)
|
Primarily represents foreign currency transaction gain or loss, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation and gain or loss on sale of fixed assets.
|
(8)
|
Refer to Note 3, "Acquisitions and Divestitures," to the condensed consolidated financial statements included herein for further information.
|
Exhibit No.
|
|
Description
|
|
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101
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Financial Statements and Notes to the Condensed Consolidated Financial Statements formatted in XBRL
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SIGNATURE
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TITLE
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DATE
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/s/ Kevin Stein
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President, Chief Executive Officer and Director
(Principal Executive Officer)
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August 7, 2019
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Kevin Stein
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/s/ Michael Lisman
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Chief Financial Officer
(Principal Financial Officer)
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August 7, 2019
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Michael Lisman
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1.
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I have reviewed this quarterly report on Form 10-Q of TransDigm Group Incorporated;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors:
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Kevin Stein
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Name: Kevin Stein
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Title: President, Chief Executive Officer and Director
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of TransDigm Group Incorporated;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors:
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Michael Lisman
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Name: Michael Lisman
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Title: Chief Financial Officer
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(Principal Financial Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents in all material respects, the financial condition of the Company as of the dates indicated and results of operations of the Company for the periods indicated.
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/s/ Kevin Stein
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Name: Kevin Stein
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Title: President, Chief Executive Officer and Director
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(Principal Executive Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents in all material respects, the financial condition of the Company as of the dates indicated and results of operations of the Company for the periods indicated.
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/s/ Michael Lisman
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Name: Michael Lisman
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Title: Chief Financial Officer
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(Principal Financial Officer)
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