☒ | 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 – July 2, 2022 and September 30, 2021 | |||||||||||||||||
Condensed Consolidated Statements of Income – Thirteen and Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 | |||||||||||||||||
Condensed Consolidated Statements of Comprehensive Income – Thirteen and Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 | |||||||||||||||||
Condensed Consolidated Statements of Changes in Stockholders’ Deficit – Thirteen and Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 | |||||||||||||||||
Condensed Consolidated Statements of Cash Flows – Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 | |||||||||||||||||
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: Purchases of Equity Securities by the Issuer | ||||||||||||||||
ITEM 5 | Other Information | ||||||||||||||||
ITEM 6 | Exhibits | ||||||||||||||||
SIGNATURES |
July 2, 2022 | September 30, 2021 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 3,808 | $ | 4,787 | |||||||
Trade accounts receivable—Net | 883 | 791 | |||||||||
Inventories—Net | 1,320 | 1,185 | |||||||||
Prepaid expenses and other | 297 | 267 | |||||||||
Total current assets | 6,308 | 7,030 | |||||||||
PROPERTY, PLANT AND EQUIPMENT—NET | 814 | 770 | |||||||||
GOODWILL | 8,728 | 8,568 | |||||||||
OTHER INTANGIBLE ASSETS—NET | 2,771 | 2,791 | |||||||||
OTHER | 198 | 156 | |||||||||
TOTAL ASSETS | $ | 18,819 | $ | 19,315 | |||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Current portion of long-term debt | $ | 77 | $ | 277 | |||||||
Short-term borrowings—trade receivable securitization facility | 350 | 349 | |||||||||
Accounts payable | 248 | 227 | |||||||||
Accrued and other current liabilities | 669 | 810 | |||||||||
Total current liabilities | 1,344 | 1,663 | |||||||||
LONG-TERM DEBT | 19,382 | 19,372 | |||||||||
DEFERRED INCOME TAXES | 588 | 485 | |||||||||
OTHER NON-CURRENT LIABILITIES | 473 | 705 | |||||||||
Total liabilities | 21,787 | 22,225 | |||||||||
TD GROUP STOCKHOLDERS’ DEFICIT: | |||||||||||
Common stock - $.01 par value; authorized 224,400,000 shares; issued 59,906,055 and 59,403,100 at July 2, 2022 and September 30, 2021, respectively | 1 | 1 | |||||||||
Additional paid-in capital | 2,041 | 1,830 | |||||||||
Accumulated deficit | (3,114) | (3,705) | |||||||||
Accumulated other comprehensive loss | (198) | (248) | |||||||||
Treasury stock, at cost; 5,688,639 and 4,198,226 shares at July 2, 2022 and September 30, 2021, respectively | (1,706) | (794) | |||||||||
Total TD Group stockholders’ deficit | (2,976) | (2,916) | |||||||||
NONCONTROLLING INTERESTS | 8 | 6 | |||||||||
Total stockholders’ deficit | (2,968) | (2,910) | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 18,819 | $ | 19,315 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
NET SALES | $ | 1,398 | $ | 1,218 | $ | 3,919 | $ | 3,519 | |||||||||||||||
COST OF SALES | 582 | 563 | 1,706 | 1,731 | |||||||||||||||||||
GROSS PROFIT | 816 | 655 | 2,213 | 1,788 | |||||||||||||||||||
SELLING AND ADMINISTRATIVE EXPENSES | 184 | 172 | 537 | 531 | |||||||||||||||||||
AMORTIZATION OF INTANGIBLE ASSETS | 33 | 36 | 102 | 101 | |||||||||||||||||||
INCOME FROM OPERATIONS | 599 | 447 | 1,574 | 1,156 | |||||||||||||||||||
INTEREST EXPENSE—NET | 269 | 263 | 799 | 798 | |||||||||||||||||||
REFINANCING COSTS | — | 13 | — | 36 | |||||||||||||||||||
OTHER EXPENSE (INCOME) | 21 | (5) | 15 | (37) | |||||||||||||||||||
GAIN ON SALE OF BUSINESSES—NET | (3) | (68) | (6) | (69) | |||||||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 312 | 244 | 766 | 428 | |||||||||||||||||||
INCOME TAX PROVISION (BENEFIT) | 73 | (73) | 165 | (45) | |||||||||||||||||||
INCOME FROM CONTINUING OPERATIONS | 239 | 317 | 601 | 473 | |||||||||||||||||||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | — | — | 1 | — | |||||||||||||||||||
NET INCOME | 239 | 317 | 602 | 473 | |||||||||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (1) | — | (2) | (2) | |||||||||||||||||||
NET INCOME ATTRIBUTABLE TO TD GROUP | $ | 238 | $ | 317 | $ | 600 | $ | 471 | |||||||||||||||
NET INCOME APPLICABLE TO TD GROUP COMMON STOCKHOLDERS | $ | 238 | $ | 317 | $ | 554 | $ | 398 | |||||||||||||||
Earnings per share attributable to TD Group common stockholders | |||||||||||||||||||||||
Earnings per share from continuing operations—basic and diluted | $ | 4.10 | $ | 5.43 | $ | 9.42 | $ | 6.83 | |||||||||||||||
Earnings per share from discontinued operations—basic and diluted | — | — | 0.02 | — | |||||||||||||||||||
Earnings per share | $ | 4.10 | $ | 5.43 | $ | 9.44 | $ | 6.83 | |||||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||||
Basic and diluted | 58.0 | 58.4 | 58.7 | 58.4 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Net income | $ | 239 | $ | 317 | $ | 602 | $ | 473 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | (1) | — | (2) | (2) | |||||||||||||||||||
Net income attributable to TD Group | $ | 238 | $ | 317 | $ | 600 | $ | 471 | |||||||||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
Foreign currency translation adjustment | (155) | 10 | (208) | 121 | |||||||||||||||||||
Unrealized gain on derivatives | 24 | 2 | 252 | 58 | |||||||||||||||||||
Pension and postretirement benefit plans adjustment | 6 | — | 6 | — | |||||||||||||||||||
Other comprehensive (loss) income, net of tax, attributable to TD Group | (125) | 12 | 50 | 179 | |||||||||||||||||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | $ | 113 | $ | 329 | $ | 650 | $ | 650 |
TD Group Stockholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Par Value | Accumulated Deficit | Number of Shares | Value | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—September 30, 2020 | 58,612,028 | $ | 1 | $ | 1,581 | $ | (4,359) | $ | (401) | (4,198,226) | $ | (794) | $ | 4 | $ | (3,968) | |||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries, net | — | — | — | — | — | — | — | 3 | 3 | ||||||||||||||||||||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | (5) | — | — | — | — | (5) | ||||||||||||||||||||||||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | 43 | — | — | — | — | — | 43 | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 240,979 | — | 32 | — | — | — | — | — | 32 | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | 50 | — | — | — | — | 50 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | 111 | — | — | — | 111 | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | 13 | — | — | — | 13 | ||||||||||||||||||||||||||||||||||||||||||||
Pension and postretirement benefit plans adjustment, net of tax | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE—January 2, 2021 | 58,853,007 | $ | 1 | $ | 1,656 | $ | (4,314) | $ | (277) | (4,198,226) | $ | (794) | $ | 7 | $ | (3,721) | |||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries, net | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | (5) | — | — | — | — | (5) | ||||||||||||||||||||||||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | 21 | — | — | — | — | — | 21 | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 207,509 | — | 37 | — | — | — | — | — | 37 | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | 104 | — | — | — | — | 104 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | 43 | — | — | — | 43 | ||||||||||||||||||||||||||||||||||||||||||||
Pension and postretirement benefit plans adjustment, net of tax | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE—April 3, 2021 | 59,060,516 | $ | 1 | $ | 1,714 | $ | (4,215) | $ | (234) | (4,198,226) | $ | (794) | $ | 7 | $ | (3,521) | |||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries, net | — | — | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | (8) | — | — | — | — | (8) | ||||||||||||||||||||||||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | 32 | — | — | — | — | — | 32 | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 212,195 | — | 37 | — | — | — | — | — | 37 | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | 317 | — | — | — | — | 317 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | 10 | — | — | — | 10 | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | 2 | — | — | — | 2 | ||||||||||||||||||||||||||||||||||||||||||||
Pension and postretirement benefit plans adjustment, net of tax | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE—July 3, 2021 | 59,272,711 | $ | 1 | $ | 1,783 | $ | (3,906) | $ | (222) | (4,198,226) | $ | (794) | $ | 6 | $ | (3,132) |
TD Group Stockholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Par Value | Accumulated Deficit | Number of Shares | Value | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—September 30, 2021 | 59,403,100 | $ | 1 | $ | 1,830 | $ | (3,705) | $ | (248) | (4,198,226) | $ | (794) | $ | 6 | $ | (2,910) | |||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries, net | — | — | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | (3) | — | — | — | — | (3) | ||||||||||||||||||||||||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | 35 | — | — | — | — | — | 35 | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 215,817 | — | 40 | — | — | — | — | — | 40 | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | 163 | — | — | — | — | 163 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | (10) | — | — | — | (10) | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | 58 | — | — | — | 58 | ||||||||||||||||||||||||||||||||||||||||||||
Pension and postretirement benefit plans adjustment, net of tax | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE—January 1, 2022 | 59,618,917 | $ | 1 | $ | 1,905 | $ | (3,545) | $ | (200) | (4,198,226) | $ | (794) | $ | 7 | $ | (2,626) | |||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries, net | — | — | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | (4) | — | — | — | — | (4) | ||||||||||||||||||||||||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | 39 | — | — | — | — | — | 39 | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 191,403 | — | 40 | — | — | — | — | — | 40 | ||||||||||||||||||||||||||||||||||||||||||||
Stock repurchases under repurchase program | — | — | — | — | — | (1,046,815) | (667) | — | (667) | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | 199 | — | — | — | — | 199 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | (43) | — | — | — | (43) | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | 170 | — | — | — | 170 | ||||||||||||||||||||||||||||||||||||||||||||
Pension and postretirement benefit plans adjustment, net of tax | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE—April 2, 2022 | 59,810,320 | $ | 1 | $ | 1,984 | $ | (3,350) | $ | (73) | (5,245,041) | $ | (1,461) | $ | 6 | $ | (2,893) | |||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries, net | — | — | — | — | — | — | — | 2 | 2 | ||||||||||||||||||||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | (2) | — | — | — | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | 38 | — | — | — | — | — | 38 | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of employee stock options | 95,735 | — | 19 | — | — | — | — | — | 19 | ||||||||||||||||||||||||||||||||||||||||||||
Stock repurchases under repurchase program | — | — | — | — | — | (443,598) | (245) | — | (245) | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | 238 | — | — | — | — | 238 | ||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | — | — | — | — | (155) | — | — | — | (155) | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | 24 | — | — | — | 24 | ||||||||||||||||||||||||||||||||||||||||||||
Pension and postretirement benefit plans adjustment, net of tax | — | — | — | — | 6 | — | — | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE—July 2, 2022 | 59,906,055 | $ | 1 | $ | 2,041 | $ | (3,114) | $ | (198) | (5,688,639) | $ | (1,706) | $ | 8 | $ | (2,968) |
Thirty-Nine Week Periods Ended | |||||||||||
July 2, 2022 | July 3, 2021 | ||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 602 | $ | 473 | |||||||
Income from discontinued operations, net of tax | (1) | — | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 85 | 87 | |||||||||
Amortization of intangible assets and product certification costs | 103 | 101 | |||||||||
Amortization of debt issuance costs, original issue discount and premium | 26 | 26 | |||||||||
Amortization of inventory step-up | 1 | 6 | |||||||||
Amortization of loss contract reserves | (28) | (47) | |||||||||
Refinancing costs | — | 36 | |||||||||
Gain on sale of businesses, net | (6) | (69) | |||||||||
Non-cash stock compensation expense | 115 | 105 | |||||||||
Deferred income taxes | (1) | (55) | |||||||||
Foreign currency exchange (gain) loss | (22) | 20 | |||||||||
Gain on insurance proceeds from fire | — | (21) | |||||||||
Loss on settlement of the Esterline Retirement Plan (the “ERP”) | 21 | — | |||||||||
Contribution to the unfunded portion of the ERP | (16) | — | |||||||||
Changes in assets/liabilities, net of effects from acquisitions and sales of businesses: | |||||||||||
Trade accounts receivable | (91) | 23 | |||||||||
Inventories | (108) | 40 | |||||||||
Income taxes payable (receivable) | 21 | (21) | |||||||||
Other assets | (23) | (35) | |||||||||
Accounts payable | 23 | (19) | |||||||||
Accrued interest | (18) | (3) | |||||||||
Accrued and other liabilities | (8) | (23) | |||||||||
Net cash provided by operating activities | 675 | 624 | |||||||||
INVESTING ACTIVITIES: | |||||||||||
Capital expenditures | (86) | (80) | |||||||||
Acquisition of businesses, net of cash acquired | (422) | (951) | |||||||||
Net proceeds from sale of businesses | 3 | 259 | |||||||||
Insurance proceeds for fixed assets damaged from fire | — | 24 | |||||||||
Net cash used in investing activities | (505) | (748) | |||||||||
FINANCING ACTIVITIES: | |||||||||||
Proceeds from exercise of stock options | 99 | 106 | |||||||||
Dividend equivalent payments | (46) | (73) | |||||||||
Repurchases of common stock | (912) | — | |||||||||
Proceeds from issuance of senior subordinated notes, net | — | 1,932 | |||||||||
Repayments of senior subordinated notes, net | — | (1,982) | |||||||||
Proceeds from revolving credit facility | — | 200 | |||||||||
Repayment on revolving credit facility | (200) | (200) | |||||||||
Repayment on term loans | (56) | (56) | |||||||||
Financing costs and other, net | (1) | (1) | |||||||||
Net cash used in financing activities | (1,116) | (74) | |||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (33) | 10 | |||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (979) | (188) | |||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 4,787 | 4,717 | |||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 3,808 | $ | 4,529 | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||
Cash paid during the period for interest | $ | 791 | $ | 774 | |||||||
Cash paid during the period for income taxes, net of refunds | $ | 138 | $ | 51 |
Preliminary Allocation | Measurement Period Adjustments | Final Allocation | ||||||||||||||||||
Assets acquired (excluding cash): | ||||||||||||||||||||
Trade accounts receivable | $ | 31 | $ | 1 | $ | 32 | ||||||||||||||
Inventories | 27 | 2 | 29 | |||||||||||||||||
Prepaid expenses and other | 10 | (3) | 7 | |||||||||||||||||
Property, plant and equipment | 18 | 3 | 21 | |||||||||||||||||
Goodwill | 636 | 61 | 697 | (1) | ||||||||||||||||
Other intangible assets | 309 | 15 | 324 | (1) | ||||||||||||||||
Other | 34 | (3) | 31 | |||||||||||||||||
Total assets acquired (excluding cash) | 1,065 | 76 | 1,141 | |||||||||||||||||
Liabilities assumed: | ||||||||||||||||||||
Accounts payable | 15 | 3 | 18 | |||||||||||||||||
Accrued and other current liabilities | 38 | 6 | (2) | 44 | ||||||||||||||||
Deferred income taxes | 38 | (7) | 31 | |||||||||||||||||
Other non-current liabilities | 29 | 74 | (2) | 103 | ||||||||||||||||
Total liabilities assumed | 120 | 76 | 196 | |||||||||||||||||
Net assets acquired | $ | 945 | $ | — | $ | 945 |
July 2, 2022 | September 30, 2021 | ||||||||||
Contract assets, current (1) | $ | 107 | $ | 72 | |||||||
Contract assets, non-current (2) | 1 | 2 | |||||||||
Total contract assets | 108 | 74 | |||||||||
Contract liabilities, current (3) | 46 | 27 | |||||||||
Contract liabilities, non-current (4) | 8 | 5 | |||||||||
Total contract liabilities | 54 | 32 | |||||||||
Net contract assets | $ | 54 | $ | 42 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Numerator for earnings per share: | |||||||||||||||||||||||
Income from continuing operations | $ | 239 | $ | 317 | $ | 601 | $ | 473 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | (1) | — | (2) | (2) | |||||||||||||||||||
Net income from continuing operations attributable to TD Group | 238 | 317 | 599 | 471 | |||||||||||||||||||
Less: Special dividends declared or paid on participating securities, including dividend equivalent payments | — | — | (46) | (73) | |||||||||||||||||||
Income from discontinued operations, net of tax | — | — | 1 | — | |||||||||||||||||||
Net income applicable to TD Group common stockholders—basic and diluted | $ | 238 | $ | 317 | $ | 554 | $ | 398 | |||||||||||||||
Denominator for basic and diluted earnings per share under the two-class method: | |||||||||||||||||||||||
Weighted-average common shares outstanding | 54.4 | 55.0 | 55.0 | 54.8 | |||||||||||||||||||
Vested options deemed participating securities | 3.6 | 3.4 | 3.7 | 3.6 | |||||||||||||||||||
Total shares for basic and diluted earnings per share | 58.0 | 58.4 | 58.7 | 58.4 | |||||||||||||||||||
Earnings per share from continuing operations—basic and diluted | $ | 4.10 | $ | 5.43 | $ | 9.42 | $ | 6.83 | |||||||||||||||
Earnings per share from discontinued operations—basic and diluted | — | — | 0.02 | — | |||||||||||||||||||
Earnings per share | $ | 4.10 | $ | 5.43 | $ | 9.44 | $ | 6.83 |
July 2, 2022 | September 30, 2021 | ||||||||||
Raw materials and purchased component parts | $ | 939 | $ | 850 | |||||||
Work-in-progress | 369 | 322 | |||||||||
Finished goods | 209 | 207 | |||||||||
Total | 1,517 | 1,379 | |||||||||
Reserves for excess and obsolete inventory | (197) | (194) | |||||||||
Inventories—Net | $ | 1,320 | $ | 1,185 |
July 2, 2022 | September 30, 2021 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
Trademarks & trade names | $ | 1,000 | $ | — | $ | 1,000 | $ | 983 | $ | — | $ | 983 | |||||||||||||||||||||||
Technology | 2,054 | 760 | 1,294 | 2,009 | 679 | 1,330 | |||||||||||||||||||||||||||||
Order backlog | 10 | 1 | 9 | 16 | 11 | 5 | |||||||||||||||||||||||||||||
Customer relationships | 560 | 98 | 462 | 545 | 78 | 467 | |||||||||||||||||||||||||||||
Other | 10 | 4 | 6 | 18 | 12 | 6 | |||||||||||||||||||||||||||||
Total | $ | 3,634 | $ | 863 | $ | 2,771 | $ | 3,571 | $ | 780 | $ | 2,791 |
Gross Amount | Amortization Period | ||||||||||
Intangible assets not subject to amortization: | |||||||||||
Goodwill | $ | 260 | |||||||||
Trademarks and trade names | 27 | ||||||||||
287 | |||||||||||
Intangible assets subject to amortization: | |||||||||||
Technology | 65 | 20 years | |||||||||
Order backlog | 8 | 1 year | |||||||||
Customer relationships | 32 | 20 years | |||||||||
105 | |||||||||||
Total | $ | 392 |
Power & Control | Airframe | Non-aviation | Total | ||||||||||||||||||||
Balance at September 30, 2021 | $ | 4,149 | $ | 4,326 | $ | 93 | $ | 8,568 | |||||||||||||||
Goodwill acquired during the period | 24 | 236 | — | 260 | |||||||||||||||||||
Purchase price allocation adjustments (1) | — | 3 | — | 3 | |||||||||||||||||||
Currency translation adjustments and other | (31) | (72) | — | (103) | |||||||||||||||||||
Balance at July 2, 2022 | $ | 4,142 | $ | 4,493 | $ | 93 | $ | 8,728 |
July 2, 2022 | |||||||||||||||||||||||
Gross Amount | Debt Issuance Costs | Original Issue (Discount) or Premium | Net Amount | ||||||||||||||||||||
Short-term borrowings—trade receivable securitization facility | $ | 350 | $ | — | $ | — | $ | 350 | |||||||||||||||
Term loans | $ | 7,317 | $ | (32) | $ | (14) | $ | 7,271 | |||||||||||||||
8.00% senior secured notes due 2025 (“2025 Secured Notes”) | 1,100 | (6) | — | 1,094 | |||||||||||||||||||
6.375% senior subordinated notes due 2026 (“6.375% 2026 Notes”) | 950 | (4) | — | 946 | |||||||||||||||||||
6.875% senior subordinated notes due 2026 (“6.875% 2026 Notes”) | 500 | (3) | (2) | 495 | |||||||||||||||||||
6.25% secured notes due 2026 (“2026 Secured Notes”) | 4,400 | (38) | 4 | 4,366 | |||||||||||||||||||
7.50% senior subordinated notes due 2027 (“7.50% 2027 Notes”) | 549 | (3) | — | 546 | |||||||||||||||||||
5.50% senior subordinated notes due 2027 (“5.50% 2027 Notes”) | 2,650 | (16) | — | 2,634 | |||||||||||||||||||
4.625% senior subordinated notes due 2029 (“4.625% 2029 Notes”) | 1,200 | (9) | — | 1,191 | |||||||||||||||||||
4.875% senior subordinated notes due 2029 (“4.875% 2029 Notes”) | 750 | (6) | — | 744 | |||||||||||||||||||
Government refundable advances | 26 | — | — | 26 | |||||||||||||||||||
Finance lease obligations | 146 | — | — | 146 | |||||||||||||||||||
19,588 | (117) | (12) | 19,459 | ||||||||||||||||||||
Less: current portion | 77 | — | — | 77 | |||||||||||||||||||
Long-term debt | $ | 19,511 | $ | (117) | $ | (12) | $ | 19,382 |
September 30, 2021 | |||||||||||||||||||||||
Gross Amount | Debt Issuance Costs | Original Issue (Discount) or Premium | Net Amount | ||||||||||||||||||||
Short-term borrowings—trade receivable securitization facility | $ | 350 | $ | (1) | $ | — | $ | 349 | |||||||||||||||
Term loans | $ | 7,374 | $ | (39) | $ | (17) | $ | 7,318 | |||||||||||||||
Revolving credit facility | 200 | — | — | 200 | |||||||||||||||||||
2025 Secured Notes | 1,100 | (7) | — | 1,093 | |||||||||||||||||||
6.375% 2026 Notes | 950 | (5) | — | 945 | |||||||||||||||||||
6.875% 2026 Notes | 500 | (4) | (2) | 494 | |||||||||||||||||||
2026 Secured Notes | 4,400 | (45) | 4 | 4,359 | |||||||||||||||||||
7.50% 2027 Notes | 550 | (4) | — | 546 | |||||||||||||||||||
5.50% 2027 Notes | 2,650 | (18) | — | 2,632 | |||||||||||||||||||
4.625% 2029 Notes | 1,200 | (10) | — | 1,190 | |||||||||||||||||||
4.875% 2029 Notes | 750 | (7) | — | 743 | |||||||||||||||||||
Government refundable advances | 29 | — | — | 29 | |||||||||||||||||||
Finance lease obligations | 100 | — | — | 100 | |||||||||||||||||||
19,803 | (139) | (15) | 19,649 | ||||||||||||||||||||
Less: current portion | 278 | (1) | — | 277 | |||||||||||||||||||
Long-term debt | $ | 19,525 | $ | (138) | $ | (15) | $ | 19,372 |
July 2, 2022 | September 30, 2021 | ||||||||||||||||||||||||||||
Level | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | 1 | $ | 3,808 | $ | 3,808 | $ | 4,787 | $ | 4,787 | ||||||||||||||||||||
Interest rate swap agreements (1) | 2 | 3 | 3 | — | — | ||||||||||||||||||||||||
Interest rate swap agreements (2) | 2 | 23 | 23 | — | — | ||||||||||||||||||||||||
Interest rate cap agreements (2) | 2 | 31 | 31 | 8 | 8 | ||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||
Interest rate swap agreements (3) | 2 | — | — | 100 | 100 | ||||||||||||||||||||||||
Interest rate swap agreements (4) | 2 | — | — | 180 | 180 | ||||||||||||||||||||||||
Foreign currency forward exchange contracts (3) | 2 | 4 | 4 | 4 | 4 | ||||||||||||||||||||||||
Short-term borrowings - trade receivable securitization facility (5) | 2 | 350 | 350 | 349 | 349 | ||||||||||||||||||||||||
Long-term debt, including current portion: | |||||||||||||||||||||||||||||
Term loans (5) | 2 | 7,271 | 6,951 | 7,318 | 7,268 | ||||||||||||||||||||||||
Revolving credit facility (5) | 2 | — | — | 200 | 200 | ||||||||||||||||||||||||
2025 Secured Notes (5) | 1 | 1,094 | 1,117 | 1,093 | 1,170 | ||||||||||||||||||||||||
6.375% 2026 Notes (5) | 1 | 946 | 881 | 945 | 981 | ||||||||||||||||||||||||
6.875% 2026 Notes (5) | 1 | 495 | 473 | 494 | 527 | ||||||||||||||||||||||||
2026 Secured Notes (5) | 1 | 4,366 | 4,246 | 4,359 | 4,593 | ||||||||||||||||||||||||
7.50% 2027 Notes (5) | 1 | 546 | 517 | 546 | 578 | ||||||||||||||||||||||||
5.50% 2027 Notes (5) | 1 | 2,634 | 2,246 | 2,632 | 2,730 | ||||||||||||||||||||||||
4.625% 2029 Notes (5) | 1 | 1,191 | 972 | 1,190 | 1,196 | ||||||||||||||||||||||||
4.875% 2029 Notes (5) | 1 | 744 | 611 | 743 | 751 | ||||||||||||||||||||||||
Government refundable advances | 2 | 26 | 26 | 29 | 29 | ||||||||||||||||||||||||
Finance lease obligations | 2 | 146 | 146 | 100 | 100 |
Aggregate Notional Amount (in millions) | Start Date | End Date | Related Term Loans | Conversion of Related Variable Rate Debt to Fixed Rate of: | ||||||||||||||||||||||
$500 | 6/29/2018 | 3/31/2025 | Tranche E | 5.25% (3.0% plus the 2.25% margin percentage) | ||||||||||||||||||||||
$1,500 | 6/30/2022 | 3/31/2025 | Tranche E | 5.35% (3.1% plus the 2.25% margin percentage) | ||||||||||||||||||||||
$700 | 3/31/2023 | 9/30/2025 | Tranche F | 3.55% (1.3% plus the 2.25% margin percentage) | ||||||||||||||||||||||
$1,400 | 6/30/2021 | 3/31/2023 | Tranche F | 5.25% (3.0% plus the 2.25% margin percentage) | ||||||||||||||||||||||
$400 | 9/30/2017 | 9/30/2022 | Tranche G | 4.15% (1.9% plus the 2.25% margin percentage) | ||||||||||||||||||||||
$900 | 12/31/2021 | 6/28/2024 | Tranche G | 5.35% (3.1% plus the 2.25% margin percentage) | ||||||||||||||||||||||
$400 | 9/30/2022 | 6/28/2024 | Tranche G | 5.25% (3.0% plus the 2.25% margin percentage) |
Aggregate Notional Amount (in millions) | Start Date | End Date | Related Term Loans | Offsets Variable Rate Debt Attributable to Fluctuations Above: | ||||||||||||||||||||||
$700 | 3/31/2023 | 9/30/2025 | Tranche F | Three month LIBOR rate of 1.25% |
July 2, 2022 | September 30, 2021 | |||||||||||||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||||||||||||
Interest rate cap agreements | $ | 31 | $ | — | $ | 8 | $ | — | ||||||||||||||||||
Interest rate swap agreements | 26 | — | — | 280 | ||||||||||||||||||||||
Net derivatives as classified in the condensed consolidated balance sheets (1) | $ | 57 | $ | — | $ | 8 | $ | 280 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Net sales to external customers | |||||||||||||||||||||||
Power & Control | |||||||||||||||||||||||
Commercial and non-aerospace OEM | $ | 158 | $ | 135 | $ | 446 | $ | 388 | |||||||||||||||
Commercial and non-aerospace aftermarket | 219 | 139 | 623 | 419 | |||||||||||||||||||
Defense | 360 | 354 | 1,026 | 1,063 | |||||||||||||||||||
Total Power & Control | 737 | 628 | 2,095 | 1,870 | |||||||||||||||||||
Airframe | |||||||||||||||||||||||
Commercial and non-aerospace OEM | 193 | 158 | 513 | 441 | |||||||||||||||||||
Commercial and non-aerospace aftermarket | 201 | 149 | 549 | 390 | |||||||||||||||||||
Defense | 226 | 243 | 643 | 696 | |||||||||||||||||||
Total Airframe | 620 | 550 | 1,705 | 1,527 | |||||||||||||||||||
Total Non-aviation | 41 | 40 | 119 | 122 | |||||||||||||||||||
Net Sales | $ | 1,398 | $ | 1,218 | $ | 3,919 | $ | 3,519 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
EBITDA As Defined | |||||||||||||||||||||||
Power & Control | $ | 398 | $ | 331 | $ | 1,100 | $ | 944 | |||||||||||||||
Airframe | 292 | 233 | 791 | 618 | |||||||||||||||||||
Non-aviation | 16 | 14 | 45 | 45 | |||||||||||||||||||
Total segment EBITDA As Defined | 706 | 578 | 1,936 | 1,607 | |||||||||||||||||||
Less: Unallocated corporate expenses | 10 | 19 | 42 | 55 | |||||||||||||||||||
Total Company EBITDA As Defined | 696 | 559 | 1,894 | 1,552 | |||||||||||||||||||
Depreciation and amortization expense | 61 | 65 | 188 | 188 | |||||||||||||||||||
Interest expense, net | 269 | 263 | 799 | 798 | |||||||||||||||||||
Acquisition and divestiture transaction-related expenses and adjustments | 5 | 6 | 13 | 24 | |||||||||||||||||||
Non-cash stock compensation expense | 36 | 35 | 115 | 105 | |||||||||||||||||||
Refinancing costs | — | 13 | — | 36 | |||||||||||||||||||
COVID-19 pandemic restructuring costs | — | 1 | — | 40 | |||||||||||||||||||
Gain on sale of businesses, net | (3) | (68) | (6) | (69) | |||||||||||||||||||
Other, net | 16 | — | 19 | 2 | |||||||||||||||||||
Income from continuing operations before income taxes | $ | 312 | $ | 244 | $ | 766 | $ | 428 |
July 2, 2022 | September 30, 2021 | ||||||||||
Total assets | |||||||||||
Power & Control | $ | 6,982 | $ | 6,980 | |||||||
Airframe | 7,908 | 7,472 | |||||||||
Non-aviation | 228 | 229 | |||||||||
Corporate | 3,701 | 4,634 | |||||||||
$ | 18,819 | $ | 19,315 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
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 | $ | — | $ | 1 | $ | — | $ | 3 | $ | 2 | $ | 4 | |||||||||||||||||||||||||||||||
Interest cost | 1 | 1 | 2 | 1 | 4 | 3 | 5 | 3 | |||||||||||||||||||||||||||||||||||||||
Expected return on plan assets | (2) | (1) | (5) | (1) | (6) | (5) | (14) | (5) | |||||||||||||||||||||||||||||||||||||||
Amortization of net loss | — | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||||
Settlement charge | 21 | — | — | — | 21 | — | — | — | |||||||||||||||||||||||||||||||||||||||
Net periodic pension benefit cost (income) | $ | 20 | $ | 1 | $ | (3) | $ | 1 | $ | 19 | $ | 2 | $ | (7) | $ | 3 |
Unrealized gains (losses) on derivatives designated and qualifying as cash flow hedges (1) | Pension and postretirement benefit plans activity (2) | Foreign currency translation adjustment | Total | ||||||||||||||||||||
Balance at September 30, 2021 | $ | (229) | $ | (18) | $ | (1) | $ | (248) | |||||||||||||||
Current-period other comprehensive income (loss) before reclassification | 257 | — | (208) | 49 | |||||||||||||||||||
Amounts reclassified from AOCI | (5) | 6 | — | 1 | |||||||||||||||||||
Net current-period other comprehensive income (loss) | 252 | 6 | (208) | 50 | |||||||||||||||||||
Balance at July 2, 2022 | $ | 23 | $ | (12) | $ | (209) | $ | (198) | |||||||||||||||
Balance at September 30, 2020 | $ | (302) | $ | (8) | $ | (91) | $ | (401) | |||||||||||||||
Net current-period other comprehensive income | 58 | — | 121 | 179 | |||||||||||||||||||
Balance at July 3, 2021 | $ | (244) | $ | (8) | $ | 30 | $ | (222) |
Description of reclassifications out of AOCI | Amount Reclassified | |||||||
Amortization from redesignated interest rate swap and cap agreements (1) | $ | 2 | ||||||
Losses from settlement of foreign currency forward exchange contracts (2) | (5) | |||||||
Settlement charges from termination of the ERP (3) | 6 | |||||||
Deferred tax expense on reclassifications out of AOCI | (2) | |||||||
Amounts reclassified into earnings, net of tax | $ | 1 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||||||||
Classification | July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | |||||||||||||||||||||||||
Operating lease cost | Cost of sales or selling and administrative expenses | $ | 6 | $ | 9 | $ | 18 | $ | 23 | ||||||||||||||||||||
Finance lease cost | |||||||||||||||||||||||||||||
Amortization of leased assets | Cost of sales | 2 | 1 | 4 | 3 | ||||||||||||||||||||||||
Interest on lease liabilities | Interest expense - net | 3 | 2 | 7 | 4 | ||||||||||||||||||||||||
Total lease cost | $ | 11 | $ | 12 | $ | 29 | $ | 30 |
Thirty-Nine Week Periods Ended | ||||||||||||||
July 2, 2022 | July 3, 2021 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
Operating cash outflows from operating leases | $ | 18 | $ | 23 | ||||||||||
Operating cash outflows from finance leases | 6 | 4 | ||||||||||||
Financing cash outflows from finance leases | 2 | 1 | ||||||||||||
Lease assets obtained in exchange for new lease obligations: | ||||||||||||||
Operating leases | $ | 18 | $ | 39 | ||||||||||
Financing leases | 34 | 25 |
Classification | July 2, 2022 | September 30, 2021 | |||||||||||||||
Operating Leases | |||||||||||||||||
Operating lease right-of-use assets | Other assets | $ | 89 | $ | 94 | ||||||||||||
Current operating lease liabilities | Accrued and other current liabilities | 18 | 20 | ||||||||||||||
Long-term operating lease liabilities | Other non-current liabilities | 75 | 79 | ||||||||||||||
Total operating lease liabilities | $ | 93 | $ | 99 | |||||||||||||
Finance Leases | |||||||||||||||||
Finance lease right-of-use assets, net | Property, plant and equipment - net | $ | 133 | $ | 104 | ||||||||||||
Current finance lease liabilities | Current portion of long-term debt | 2 | 2 | ||||||||||||||
Long-term finance lease liabilities | Long-term debt | 144 | 98 | ||||||||||||||
Total finance lease liabilities | $ | 146 | $ | 100 |
Weighted-average remaining lease term | |||||
Operating leases | 8.1 years | ||||
Finance leases | 20.2 years | ||||
Weighted-average discount rate | |||||
Operating leases | 6.0% | ||||
Finance leases | 7.1% |
Operating Leases | Finance Leases | ||||||||||
2022 | $ | 6 | $ | 3 | |||||||
2023 | 20 | 12 | |||||||||
2024 | 17 | 13 | |||||||||
2025 | 15 | 13 | |||||||||
2026 | 12 | 13 | |||||||||
Thereafter | 49 | 243 | |||||||||
Total future minimum lease payments | 119 | 297 | |||||||||
Less: imputed interest | 26 | 151 | |||||||||
Present value of lease liabilities reported | $ | 93 | $ | 146 |
Thirteen Week Periods Ended | |||||||||||||||||||||||
July 2, 2022 | % of Net Sales | July 3, 2021 | % of Net Sales | ||||||||||||||||||||
Net sales | $ | 1,398 | 100.0 | % | $ | 1,218 | 100.0 | % | |||||||||||||||
Cost of sales | 582 | 41.6 | % | 563 | 46.2 | % | |||||||||||||||||
Selling and administrative expenses | 184 | 13.2 | % | 172 | 14.1 | % | |||||||||||||||||
Amortization of intangible assets | 33 | 2.4 | % | 36 | 3.0 | % | |||||||||||||||||
Income from operations | 599 | 42.8 | % | 447 | 36.7 | % | |||||||||||||||||
Interest expense, net | 269 | 19.2 | % | 263 | 21.6 | % | |||||||||||||||||
Refinancing costs | — | — | % | 13 | 1.1 | % | |||||||||||||||||
Other expense (income) | 21 | 1.5 | % | (5) | (0.4) | % | |||||||||||||||||
Gain on sale of businesses, net | (3) | (0.2) | % | (68) | (5.6) | % | |||||||||||||||||
Income tax provision (benefit) | 73 | 5.2 | % | (73) | (6.0) | % | |||||||||||||||||
Income from continuing operations | 239 | 17.1 | % | 317 | 26.0 | % | |||||||||||||||||
Less: Net income attributable to noncontrolling interests | (1) | (0.1) | % | — | — | % | |||||||||||||||||
Income from continuing operations attributable to TD Group | 238 | 17.0 | % | 317 | 26.0 | % | |||||||||||||||||
Net income attributable to TD Group | $ | 238 | 17.0 | % | $ | 317 | 26.0 | % | |||||||||||||||
Net income applicable to TD Group common stockholders | $ | 238 | (1) | 17.0 | % | $ | 317 | (1) | 26.0 | % | |||||||||||||
Earnings per share: | |||||||||||||||||||||||
Earnings per share from continuing operations—basic and diluted | $ | 4.10 | (2) | $ | 5.43 | (2) | |||||||||||||||||
Earnings per share from discontinued operations—basic and diluted | — | (2) | — | (2) | |||||||||||||||||||
Earnings per share | $ | 4.10 | $ | 5.43 | |||||||||||||||||||
Weighted-average shares outstanding—basic and diluted | 58.0 | 58.4 | |||||||||||||||||||||
Other Data: | |||||||||||||||||||||||
EBITDA | $ | 643 | (3) | $ | 572 | (3) | |||||||||||||||||
EBITDA As Defined | $ | 696 | (3) | 49.8 | % | $ | 559 | (3) | 45.9 | % |
Thirty-Nine Week Periods Ended | |||||||||||||||||||||||
July 2, 2022 | % of Net Sales | July 3, 2021 | % of Net Sales | ||||||||||||||||||||
Net sales | $ | 3,919 | 100.0 | % | $ | 3,519 | 100.0 | % | |||||||||||||||
Cost of sales | 1,706 | 43.5 | % | 1,731 | 49.2 | % | |||||||||||||||||
Selling and administrative expenses | 537 | 13.7 | % | 531 | 15.1 | % | |||||||||||||||||
Amortization of intangible assets | 102 | 2.6 | % | 101 | 2.9 | % | |||||||||||||||||
Income from operations | 1,574 | 40.2 | % | 1,156 | 32.9 | % | |||||||||||||||||
Interest expense, net | 799 | 20.4 | % | 798 | 22.7 | % | |||||||||||||||||
Refinancing costs | — | — | % | 36 | 1.0 | % | |||||||||||||||||
Other expense (income) | 15 | 0.4 | % | (37) | (1.1) | % | |||||||||||||||||
Gain on sale of businesses, net | (6) | (0.2) | % | (69) | (2.0) | % | |||||||||||||||||
Income tax provision (benefit) | 165 | 4.2 | % | (45) | (1.3) | % | |||||||||||||||||
Income from continuing operations | 601 | 15.3 | % | 473 | 13.4 | % | |||||||||||||||||
Less: Net income attributable to noncontrolling interests | (2) | (0.1) | % | (2) | (0.1) | % | |||||||||||||||||
Income from continuing operations attributable to TD Group | 599 | 15.3 | % | 471 | 13.4 | % | |||||||||||||||||
Income from discontinued operations, net of tax | 1 | — | % | — | — | % | |||||||||||||||||
Net income attributable to TD Group | $ | 600 | 15.3 | % | $ | 471 | 13.4 | % | |||||||||||||||
Net income applicable to TD Group common stockholders | $ | 554 | (1) | 14.1 | % | $ | 398 | (1) | 11.3 | % | |||||||||||||
Earnings per share: | |||||||||||||||||||||||
Earnings per share from continuing operations—basic and diluted | $ | 9.42 | (2) | $ | 6.83 | (2) | |||||||||||||||||
Earnings per share from discontinued operations—basic and diluted | 0.02 | (2) | — | (2) | |||||||||||||||||||
Earnings per share | $ | 9.44 | $ | 6.83 | |||||||||||||||||||
Weighted-average shares outstanding—basic and diluted | 58.7 | 58.4 | |||||||||||||||||||||
Other Data: | |||||||||||||||||||||||
EBITDA | $ | 1,753 | (3) | $ | 1,414 | (3) | |||||||||||||||||
EBITDA As Defined | $ | 1,894 | (3) | 48.3 | % | $ | 1,552 | (3) | 44.1 | % |
Thirteen Week Periods Ended | % Change Net Sales | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | Change | |||||||||||||||||||||
Organic sales | $ | 1,387 | $ | 1,184 | $ | 203 | 16.7 | % | |||||||||||||||
Acquisition and divestiture sales | 11 | 34 | (23) | (1.9) | % | ||||||||||||||||||
Net sales | $ | 1,398 | $ | 1,218 | $ | 180 | 14.8 | % |
Thirteen Week Periods Ended | |||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | Change | % Change | ||||||||||||||||||||
Cost of sales - excluding costs below | $ | 604 | $ | 580 | $ | 24 | 4.1 | % | |||||||||||||||
% of net sales | 43.2 | % | 47.6 | % | |||||||||||||||||||
Non-cash stock compensation expense | 4 | 4 | — | — | % | ||||||||||||||||||
% of net sales | 0.3 | % | 0.3 | % | |||||||||||||||||||
Inventory acquisition accounting adjustments | 1 | — | 1 | 100.0 | % | ||||||||||||||||||
% of net sales | 0.1 | % | — | % | |||||||||||||||||||
Acquisition integration costs | 1 | 2 | (1) | (50.0) | % | ||||||||||||||||||
% of net sales | 0.1 | % | 0.2 | % | |||||||||||||||||||
COVID-19 pandemic restructuring costs | — | 1 | (1) | (100.0) | % | ||||||||||||||||||
% of net sales | — | % | 0.1 | % | |||||||||||||||||||
Foreign currency gains | (20) | (4) | (16) | (400.0) | % | ||||||||||||||||||
% of net sales | (1.4) | % | (0.3) | % | |||||||||||||||||||
Loss contract amortization | (8) | (20) | 12 | 60.0 | % | ||||||||||||||||||
% of net sales | (0.6) | % | (1.6) | % | |||||||||||||||||||
Total cost of sales | $ | 582 | $ | 563 | $ | 19 | 3.4 | % | |||||||||||||||
% of net sales | 41.6 | % | 46.2 | % | |||||||||||||||||||
Gross profit | $ | 816 | $ | 655 | $ | 161 | 24.6 | % | |||||||||||||||
Gross profit percentage | 58.4 | % | 53.8 | % | |||||||||||||||||||
Thirteen Week Periods Ended | |||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | Change | % Change | ||||||||||||||||||||
Selling and administrative expenses - excluding costs below | $ | 147 | $ | 136 | $ | 11 | 8.1 | % | |||||||||||||||
% of net sales | 10.5 | % | 11.2 | % | |||||||||||||||||||
Non-cash stock compensation expense | 32 | 32 | — | — | % | ||||||||||||||||||
% of net sales | 2.3 | % | 2.6 | % | |||||||||||||||||||
Bad debt expense | 1 | — | 1 | 100.0 | % | ||||||||||||||||||
% of net sales | 0.1 | % | — | % | |||||||||||||||||||
Acquisition integration costs | 1 | 2 | (1) | (50.0) | % | ||||||||||||||||||
% of net sales | 0.1 | % | 0.2 | % | |||||||||||||||||||
Acquisition and divestiture transaction-related expenses | 3 | 2 | 1 | 50.0 | % | ||||||||||||||||||
% of net sales | 0.2 | % | 0.2 | % | |||||||||||||||||||
Total selling and administrative expenses | $ | 184 | $ | 172 | $ | 12 | 7.0 | % | |||||||||||||||
% of net sales | 13.2 | % | 14.1 | % | |||||||||||||||||||
Thirteen Week Periods Ended | |||||||||||||||||||||||||||||||||||
July 2, 2022 | % of Net Sales | July 3, 2021 | % of Net Sales | Change | % Change | ||||||||||||||||||||||||||||||
Power & Control | $ | 737 | 52.7 | % | $ | 628 | 51.5 | % | $ | 109 | 17.4 | % | |||||||||||||||||||||||
Airframe | 620 | 44.4 | % | 550 | 45.2 | % | 70 | 12.7 | % | ||||||||||||||||||||||||||
Non-aviation | 41 | 2.9 | % | 40 | 3.3 | % | 1 | 2.5 | % | ||||||||||||||||||||||||||
Net sales | $ | 1,398 | 100.0 | % | $ | 1,218 | 100.0 | % | $ | 180 | 14.8 | % |
Thirteen Week Periods Ended | |||||||||||||||||||||||||||||||||||
July 2, 2022 | % of Segment Net Sales | July 3, 2021 | % of Segment Net Sales | Change | % Change | ||||||||||||||||||||||||||||||
Power & Control | $ | 398 | 54.0 | % | $ | 331 | 52.7 | % | $ | 67 | 20.2 | % | |||||||||||||||||||||||
Airframe | 292 | 47.1 | % | 233 | 42.4 | % | 59 | 25.3 | % | ||||||||||||||||||||||||||
Non-aviation | 16 | 39.0 | % | 14 | 35.0 | % | 2 | 14.3 | % | ||||||||||||||||||||||||||
$ | 706 | 50.5 | % | $ | 578 | 47.5 | % | $ | 128 | 22.1 | % |
Thirty-Nine Week Periods Ended | % Change Net Sales | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | Change | |||||||||||||||||||||
Organic sales | $ | 3,867 | $ | 3,387 | $ | 480 | 13.6 | % | |||||||||||||||
Acquisition and divestiture sales | 52 | 132 | (80) | (2.3) | % | ||||||||||||||||||
Net sales | $ | 3,919 | $ | 3,519 | $ | 400 | 11.4 | % |
Thirty-Nine Week Periods Ended | |||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | Change | % Change | ||||||||||||||||||||
Cost of sales - excluding costs below | $ | 1,741 | $ | 1,710 | $ | 31 | 1.8 | % | |||||||||||||||
% of net sales | 44.4 | % | 48.6 | % | |||||||||||||||||||
Non-cash stock compensation expense | 12 | 10 | 2 | 20.0 | % | ||||||||||||||||||
% of net sales | 0.3 | % | 0.3 | % | |||||||||||||||||||
Inventory acquisition accounting adjustments | 1 | 6 | (5) | (83.3) | % | ||||||||||||||||||
% of net sales | — | % | 0.2 | % | |||||||||||||||||||
Acquisition integration costs | 2 | 3 | (1) | (33.3) | % | ||||||||||||||||||
% of net sales | 0.1 | % | 0.1 | % | |||||||||||||||||||
COVID-19 pandemic restructuring costs | — | 29 | (29) | (100.0) | % | ||||||||||||||||||
% of net sales | — | % | 0.8 | % | |||||||||||||||||||
Foreign currency (gains) losses | (22) | 20 | (42) | (210.0) | % | ||||||||||||||||||
% of net sales | (0.6) | % | 0.6 | % | |||||||||||||||||||
Loss contract amortization | (28) | (47) | 19 | 40.4 | % | ||||||||||||||||||
% of net sales | (0.7) | % | (1.2) | % | |||||||||||||||||||
Total cost of sales | $ | 1,706 | $ | 1,731 | $ | (25) | (1.4) | % | |||||||||||||||
% of net sales | 43.5 | % | 49.2 | % | |||||||||||||||||||
Gross profit | $ | 2,213 | $ | 1,788 | $ | 425 | 23.8 | % | |||||||||||||||
Gross profit percentage | 56.5 | % | 50.8 | % | |||||||||||||||||||
Thirty-Nine Week Periods Ended | |||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | Change | % Change | ||||||||||||||||||||
Selling and administrative expenses - excluding costs below | $ | 419 | $ | 405 | $ | 14 | 3.5 | % | |||||||||||||||
% of net sales | 10.7 | % | 11.5 | % | |||||||||||||||||||
Non-cash stock compensation expense | 103 | 95 | 8 | 8.4 | % | ||||||||||||||||||
% of net sales | 2.6 | % | 2.7 | % | |||||||||||||||||||
Acquisition integration costs | 6 | 7 | (1) | (14.3) | % | ||||||||||||||||||
% of net sales | 0.2 | % | 0.2 | % | |||||||||||||||||||
Bad debt expense | 5 | 5 | — | — | % | ||||||||||||||||||
% of net sales | 0.1 | % | 0.1 | % | |||||||||||||||||||
Acquisition and divestiture transaction-related expenses | 4 | 8 | (4) | (50.0) | % | ||||||||||||||||||
% of net sales | 0.1 | % | 0.2 | % | |||||||||||||||||||
COVID-19 pandemic restructuring costs | — | 11 | (11) | (100.0) | % | ||||||||||||||||||
% of net sales | — | % | 0.3 | % | |||||||||||||||||||
Total selling and administrative expenses | $ | 537 | $ | 531 | $ | 6 | 1.1 | % | |||||||||||||||
% of net sales | 13.7 | % | 15.1 | % | |||||||||||||||||||
Thirty-Nine Week Periods Ended | |||||||||||||||||||||||||||||||||||
July 2, 2022 | % of Net Sales | July 3, 2021 | % of Net Sales | Change | % Change | ||||||||||||||||||||||||||||||
Power & Control | $ | 2,095 | 53.5 | % | $ | 1,870 | 53.1 | % | $ | 225 | 12.0 | % | |||||||||||||||||||||||
Airframe | 1,705 | 43.5 | % | 1,527 | 43.4 | % | 178 | 11.7 | % | ||||||||||||||||||||||||||
Non-aviation | 119 | 3.0 | % | 122 | 3.5 | % | (3) | (2.5) | % | ||||||||||||||||||||||||||
Net sales | $ | 3,919 | 100.0 | % | $ | 3,519 | 100.0 | % | $ | 400 | 11.4 | % |
Thirty-Nine Week Periods Ended | |||||||||||||||||||||||||||||||||||
July 2, 2022 | % of Segment Net Sales | July 3, 2021 | % of Segment Net Sales | Change | % Change | ||||||||||||||||||||||||||||||
Power & Control | $ | 1,100 | 52.5 | % | $ | 944 | 50.5 | % | $ | 156 | 16.5 | % | |||||||||||||||||||||||
Airframe | 791 | 46.4 | % | 618 | 40.5 | % | 173 | 28.0 | % | ||||||||||||||||||||||||||
Non-aviation | 45 | 37.8 | % | 45 | 36.9 | % | — | — | % | ||||||||||||||||||||||||||
$ | 1,936 | 49.4 | % | $ | 1,607 | 45.7 | % | $ | 329 | 20.5 | % |
July 2, 2022 | September 30, 2021 | ||||||||||
Selected Balance Sheet Data: | |||||||||||
Cash and cash equivalents | $ | 3,808 | $ | 4,787 | |||||||
Working capital (Total current assets less total current liabilities) | 4,964 | 5,367 | |||||||||
Total assets | 18,819 | 19,315 | |||||||||
Total debt (1) | 19,809 | 19,998 | |||||||||
TD Group stockholders’ deficit | (2,976) | (2,916) |
Thirty-Nine Week Periods Ended | |||||||||||
July 2, 2022 | July 3, 2021 | ||||||||||
Selected Cash Flow and Other Financial Data: | |||||||||||
Cash flows provided by (used in): | |||||||||||
Operating activities | $ | 675 | $ | 624 | |||||||
Investing activities | (505) | (748) | |||||||||
Financing activities | (1,116) | (74) | |||||||||
Capital expenditures | 86 | 80 | |||||||||
Ratio of earnings to fixed charges (1) | 2.0x | 1.5x |
As of July 2, 2022 | |||||
Cash and cash equivalents | $ | 3,808 | |||
Availability on revolving credit facility (1) | 779 | ||||
Cash liquidity (2) | $ | 4,587 |
Term Loans Facility | Aggregate Principal | Maturity Date | Interest Rate | |||||||||||||||||
Tranche E | $2,160 million | May 30, 2025 | LIBOR + 2.25% | |||||||||||||||||
Tranche F | $3,427 million | December 9, 2025 | LIBOR + 2.25% | |||||||||||||||||
Tranche G | $1,730 million | August 22, 2024 | LIBOR + 2.25% |
Description | Aggregate Principal | Maturity Date | Interest Rate | |||||||||||||||||
2025 Secured Notes | $1,100 million | December 15, 2025 | 8.00% | |||||||||||||||||
2026 Secured Notes | $4,400 million | March 15, 2026 | 6.25% | |||||||||||||||||
6.875% 2026 Notes | $500 million | May 15, 2026 | 6.875% | |||||||||||||||||
6.375% 2026 Notes | $950 million | June 15, 2026 | 6.375% | |||||||||||||||||
7.50% 2027 Notes | $550 million | March 15, 2027 | 7.50% | |||||||||||||||||
5.50% 2027 Notes | $2,650 million | November 15, 2027 | 5.50% | |||||||||||||||||
4.625% 2029 Notes | $1,200 million | July 15, 2029 | 4.625% | |||||||||||||||||
4.875% 2029 Notes | $750 million | October 15, 2029 | 4.875% |
(in millions) | July 2, 2022 | ||||
Current assets | $ | 4,570 | |||
Goodwill | 6,780 | ||||
Other non-current assets | 2,705 | ||||
Current liabilities | 659 | ||||
Non-current liabilities | 20,097 | ||||
Amounts (from) due to subsidiaries that are non-issuers and non-guarantors - net | (687) |
Thirty-Nine Week Period Ended | |||||
(in millions) | July 2, 2022 | ||||
Net sales | $ | 3,040 | |||
Sales to subsidiaries that are non-issuers and non-guarantors | 29 | ||||
Cost of sales | 1,247 | ||||
Expense from subsidiaries that are non-issuers and non-guarantors - net | 48 | ||||
Income from continuing operations | 439 | ||||
Net income attributable to TD Group | 439 |
Thirteen Week Periods Ended | Thirty-Nine Week Periods Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Income from continuing operations | $ | 239 | $ | 317 | $ | 601 | $ | 473 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Depreciation and amortization expense | 61 | 65 | 188 | 188 | |||||||||||||||||||
Interest expense, net | 269 | 263 | 799 | 798 | |||||||||||||||||||
Income tax provision (benefit) | 74 | (73) | 165 | (45) | |||||||||||||||||||
EBITDA | 643 | 572 | 1,753 | 1,414 | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Acquisition and divestiture transaction-related expenses and adjustments (1) | 5 | 6 | 13 | 24 | |||||||||||||||||||
Non-cash stock compensation expense (2) | 36 | 35 | 115 | 105 | |||||||||||||||||||
Refinancing costs (3) | — | 13 | — | 36 | |||||||||||||||||||
COVID-19 pandemic restructuring costs (4) | — | 1 | — | 40 | |||||||||||||||||||
Gain on sale of businesses, net (5) | (3) | (68) | (6) | (69) | |||||||||||||||||||
Other, net (6) | 15 | — | 19 | 2 | |||||||||||||||||||
EBITDA As Defined | $ | 696 | $ | 559 | $ | 1,894 | $ | 1,552 |
(1) | Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when inventory was sold; costs incurred to integrate acquired businesses and product lines into TD Group’s operations, facility relocation costs and other acquisition-related costs; transaction-related costs for both acquisitions and divestitures comprising deal fees, legal, financial and tax due diligence expenses, and valuation costs that are required to be expensed as incurred. | |||||||
(2) | Represents the compensation expense recognized by TD Group under our stock incentive plans. | |||||||
(3) | Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements. | |||||||
(4) | Represents restructuring costs related to the Company's cost reduction measures in response to the COVID-19 pandemic of $36 million for the thirteen and thirty-nine week periods ended July 3, 2021, respectively. These are costs related to the Company's actions to reduce its workforce and consolidate certain facilities to align with customer demand. This also includes $1 million and $4 million for the thirteen and thirty-nine week periods ended July 3, 2021, respectively, of incremental costs related to the pandemic that are not expected to recur once the pandemic has subsided and are clearly separable from normal operations (e.g., additional cleaning and disinfecting of facilities by contractors above and beyond normal requirements, personal protective equipment, etc.). Restructuring costs incurred in response to the COVID-19 pandemic for the thirteen and thirty-nine week periods ended July 2, 2022 were not material. | |||||||
(5) | Represents the net gain on sale of businesses. Refer to Note 3, “Acquisitions and Divestitures,” in the notes to the condensed consolidated financial statements included herein for further information. | |||||||
(6) | Primarily represents foreign currency transaction gain or loss, payroll withholding taxes related to special dividend and dividend equivalent payments and stock option exercises, non-service related pension costs including the pension settlement charge for the Esterline Retirement Plan (further detailed in Note 15, “Retirement Plans”), deferred compensation and gain or loss on sale of fixed assets. |
Thirty-Nine Week Periods Ended | |||||||||||
July 2, 2022 | July 3, 2021 | ||||||||||
Net cash provided by operating activities | $ | 675 | $ | 624 | |||||||
Adjustments: | |||||||||||
Changes in assets and liabilities, net of effects from acquisitions and sales of businesses | 220 | 33 | |||||||||
Interest expense, net (1) | 773 | 772 | |||||||||
Income tax provision - current | 166 | 10 | |||||||||
Loss contract amortization | 28 | 47 | |||||||||
Non-cash stock compensation expense (2) | (115) | (105) | |||||||||
Refinancing costs (3) | — | (36) | |||||||||
Gain on sale of businesses, net (4) | 6 | 69 | |||||||||
EBITDA | 1,753 | 1,414 | |||||||||
Adjustments: | |||||||||||
Acquisition and divestiture transaction-related expenses and adjustments (5) | 13 | 24 | |||||||||
Non-cash stock compensation expense (2) | 115 | 105 | |||||||||
Refinancing costs (3) | — | 36 | |||||||||
COVID-19 pandemic restructuring costs (6) | — | 40 | |||||||||
Gain on sale of businesses, net (4) | (6) | (69) | |||||||||
Other, net (7) | 19 | 2 | |||||||||
EBITDA As Defined | $ | 1,894 | $ | 1,552 |
(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 costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements. | |||||||
(4) | Represents the net gain on sale of businesses. Refer to Note 3, “Acquisitions and Divestitures,” in the notes to the condensed consolidated financial statements included herein for further information. | |||||||
(5) | Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when inventory was sold; costs incurred to integrate acquired businesses and product lines into TD Group’s operations, facility relocation costs and other acquisition-related costs; transaction-related costs for both acquisitions and divestitures comprising deal fees, legal, financial and tax due diligence expenses, and valuation costs that are required to be expensed as incurred. | |||||||
(6) | Represents restructuring costs related to the Company's cost reduction measures in response to the COVID-19 pandemic of $36 million for the thirty-nine week period ended July 3, 2021. These are costs related to the Company's actions to reduce its workforce and consolidate certain facilities to align with customer demand. This also includes $4 million for the thirty-nine week period ended July 3, 2021 of incremental costs related to the pandemic that are not expected to recur once the pandemic has subsided and are clearly separable from normal operations (e.g., additional cleaning and disinfecting of facilities by contractors above and beyond normal requirements, personal protective equipment, etc.). Restructuring costs incurred in response to the COVID-19 pandemic for the thirty-nine week period ended July 2, 2022 were not material. | |||||||
(7) | Primarily represents foreign currency transaction gain or loss, payroll withholding taxes related to special dividend and dividend equivalent payments and stock option exercises, non-service related pension costs including the pension settlement charge for the Esterline Retirement Plan (further detailed in Note 15, “Retirement Plans”), deferred compensation and gain or loss on sale of fixed assets. |
Total Number of Shares | Dollar Value of Shares | |||||||||||||||||||||||||
Total Number | Average Price | Repurchased as Part | That May Yet Be | |||||||||||||||||||||||
of Shares | Paid | of Publicly Announced | Purchased Under the | |||||||||||||||||||||||
Period | Repurchased | Per Share | Plans or Programs | Plans or Programs (1) (2) | ||||||||||||||||||||||
April 3, 2022 - April 30, 2022 | — | $ | — | — | $ | 1,533 | ||||||||||||||||||||
May 1, 2022 - May 28, 2022 | 443,598 | 553.62 | 443,598 | 1,288 | ||||||||||||||||||||||
May 29, 2022 - July 2, 2022 | — | — | — | 1,288 | ||||||||||||||||||||||
Total | 443,598 | $ | 553.62 | 443,598 |
(1) | On November 8, 2017, the Company's Board of Directors, authorized a stock repurchase program permitting repurchases of our outstanding shares not to exceed $650 million in the aggregate (the “$650 million stock repurchase program”), subject to any restrictions specified in the Credit Agreement and/or Indentures governing the existing Notes. This plan was effective through January 26, 2022. | |||||||
(2) | On January 27, 2022, our Board of Directors authorized a new stock repurchase program permitting repurchases of our outstanding shares not to exceed $2,200 million in the aggregate (the “$2,200 million stock repurchase program”), replacing the $650 million stock repurchase program, subject to any restrictions specified in the Credit Agreement and/or Indentures governing the existing Notes. There is no expiration date for this program. As of July 2, 2022, $1,288 million remains available for repurchase under the $2,200 million stock repurchase program. Refer to Note 7, “Stock Repurchase Program” in the notes to the condensed consolidated financial statements included herein for further information. |
Exhibit No. | Description | Filed Herewith or Incorporated by Reference From | ||||||||||||
Articles of Incorporation, filed November 13, 1995, of Apical Industries, Inc. | ||||||||||||||
Bylaws of Apical Industries, Inc. | ||||||||||||||
Articles of Incorporation of Century Helicopters, Inc. | ||||||||||||||
By-laws of Century Helicopters, Inc. | ||||||||||||||
Articles of Incorporation, filed April 11, 1997, of Dart Aerospace USA, Inc. | ||||||||||||||
Bylaws of Dart Aerospace USA, Inc. | ||||||||||||||
Certificate of Incorporation, filed February 28, 2019, of Dart Buyer, Inc. | ||||||||||||||
Bylaws of Dart Buyer, Inc. | ||||||||||||||
Certificate of Incorporation, filed July 29, 2011, of Dart Helicopter Services, Inc. | ||||||||||||||
Bylaws of Dart Helicopter Services, Inc. | ||||||||||||||
Certificate of Incorporation, filed February 28, 2019, of Dart Intermediate, Inc. | ||||||||||||||
Bylaws of Dart Intermediate, Inc. | ||||||||||||||
Second Amended and Restated Certificate of Incorporation, filed May 25, 2022, of Dart TopCo, Inc. | ||||||||||||||
Bylaws of Dart TopCo, Inc. | ||||||||||||||
Amended and Restated Articles of Incorporation, filed February 8, 2010, of Heli Tech, Inc. | ||||||||||||||
Amendment No. 1, filed July 12, 2010, to the Amended and Restated Articles of Incorporation of Heli Tech, Inc. | ||||||||||||||
Amendment No. 2, filed January 25, 2013, to the Amended and Restated Articles of Incorporation of Heli Tech, Inc. | ||||||||||||||
Amended and Restated By-laws of Heli Tech, Inc. | ||||||||||||||
Amended and Restated Articles of Incorporation, filed June 28, 2022, of Offshore Helicopter Support Services, Inc. | ||||||||||||||
Bylaws of Offshore Helicopter Support Services, Inc. | ||||||||||||||
Articles of Incorporation of Paravion Technology, Inc. | ||||||||||||||
By-laws of Paravion Technology, Inc. | ||||||||||||||
Articles of Incorporation, filed July 28, 1965, of Simplex Manufacturing Co. | ||||||||||||||
Articles of Amendment, filed November 9, 1973, of Simplex Manufacturing Co. | ||||||||||||||
Articles of Amendment, filed December 2, 1988, of Simplex Manufacturing Co. | ||||||||||||||
Articles of Amendment, filed August 21, 2000, of Simplex Manufacturing Co. | ||||||||||||||
Articles of Amendment, filed March 12, 2001, of Simplex Manufacturing Co. | ||||||||||||||
Articles of Amendment, filed October 29, 2007, of Simplex Manufacturing Co. | ||||||||||||||
Amended and Restated By-laws of Simplex Manufacturing Co., as amended | ||||||||||||||
Fourth Amended and Restated TransDigm Group Incorporated 2006 Stock Incentive Plan Dividend Equivalent Plan* | ||||||||||||||
Amended and Restated TransDigm Group Incorporated 2014 Stock Option Plan Dividend Equivalent Plan* | ||||||||||||||
Form of Amendment to Director Options to Effect Changes in Dividend Equivalent Payment Method* | ||||||||||||||
Listing of Subsidiary Guarantors | ||||||||||||||
Certification by Principal Executive Officer of TransDigm Group Incorporated pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||||||||
Certification by Principal Financial Officer of TransDigm Group Incorporated pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||||||||
Certification by Principal Executive Officer of TransDigm Group Incorporated pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||||||||
Certification by Principal Financial Officer of TransDigm Group Incorporated pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||||||||
101.INS | Inline XBRL Instance Document: The XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | Filed Herewith | ||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema | Filed Herewith | ||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | Filed Herewith | ||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | Filed Herewith | ||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | Filed Herewith | ||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | Filed Herewith | ||||||||||||
104 | Cover Page Interactive Data File: the cover page XBRL tags are embedded within the Inline XBRL document and are contained within Exhibit 101 | Filed Herewith |
* | Indicates management contract or compensatory plan contract or arrangement. |
SIGNATURE | TITLE | DATE | ||||||||||||||||||
/s/ Kevin Stein | President, Chief Executive Officer and Director (Principal Executive Officer) | August 9, 2022 | ||||||||||||||||||
Kevin Stein | ||||||||||||||||||||
/s/ Michael Lisman | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | August 9, 2022 | ||||||||||||||||||
Michael Lisman |
NAME | ADDRESS | ||||
N. Larry Hansen | 2230 Iroquois, Fort Collins, Colorado 80524 | ||||
Mary J. Hansen | 2230 Iroquois, Fort Collins, Colorado 80524 | ||||
Norman E. Hansen | 301 Main Street, Broomfield, Colorado 80020 |
NAME | ADDRESS | ||||
Samuel L. Anderson | P.O. Box 2166, Fort Collins, Colorado 80522 | ||||
Robin Wick | P.O. Box 2166, Fort Collins, Colorado 80522 | ||||
Mayo Sommermeyer | P.O. Box 2166, Fort Collins, Colorado 80522 |
Name | Address | ||||
James Bradley | 2071 Malaview Avenue Sidney, B.C. V8L 5X6 Canada | ||||
Linda Bradley | 2071 Malaview Avenue Sidney, B.C. V8L 5X6 Canada |
Name | Address | ||||
Jeffrey A. Peterson | c/o Bogle & Gates P.L.L.C. 1300 Park Place 666 Burrard Street Vancouver, B.C. V6C 3J8 Canada |
Date: April 11, 1997. |
Name | Address | ||||
Patrick Tucker | c/o Kirkland & Ellis LLP 601 Lexington Avenue, 35th Floor New York, NY 10022 |
By: | /s/ Francois Bolduc | ||||
Authorized Officer | |||||
Name: | Francois Bolduc | ||||
Print or Type |
Name | Address | ||||
Patrick Tucker | c/o Kirkland & Ellis LLP 601 Lexington Avenue, 35th Floor New York, NY 10022 |
NAME | ADDRESS | ||||
Norman F. Steiner | 7421 Mt. Sherman Road Longmont, CO 80501 | ||||
N. Larry Hansen | 2230 Iroquois Fort Collins, CO 80524 | ||||
Norman E. Hansen | 518 Cortez Court Fort Collins, CO 80525 | ||||
John C. Dilts | Box 707 Douglas, WY 82633 |
NAME | ADDRESS | ||||
N. Larry Hansen | 116 North Racquette Drive Fort Collins, CO 80524 |
-i- |
-ii- |
Articles of Incorporation | ||
OF | ||
SIMPLEX MANUFACTURING CO. | ||
Name | Address (Street and Number, if any) | ||||
Dorsey M. Liebhart | 5224 N.E. 42nd Ave., Portland, Oregon | ||||
Alice Liebhart | 5224 N.E. 42nd Ave., Portland, Oregon | ||||
Daniel A. Conti | 5524 N.E. 42nd Ave., Portland Oregon |
Name | Address (Street and Number, if any) | ||||
Dorsey M. Liebhart | 5224 N.E. 42nd Ave., Portland, Oregon | ||||
Alice Liebhart | 5224 N.E. 42nd Ave., Portland, Oregon | ||||
Daniel A. Conti | 5524 N.E. 42nd Ave., Portland Oregon |
Notes: | '(1) | The procedure for the formation of business corporations is set forth in ORS 57.306 to 57.331. See ORS 57.311 for the context of Articles of Incorporation | |||||||||
'(2) | The corporate name must contain the word “Corporation,” “Company”, “Incorporated” or “Limited” or an abbreviation of one of such words | ||||||||||
'(3) | It is not necessary to set forth in the articles any of the corporate powers enumerated in ORS 57.030 and 57.035. It is sufficient to state, either alone or with other purpose “That the corporation may engage in any lawful activity for which the corporation may be organized under ORS Chapter 57”; however, it may be desirable to state the primary purpose of the corporation in conjunction with such statement | ||||||||||
'(4) | Insert statement as to par value of such shares – a statement that all of such shares are to be without par value. If there is more than one class of stock, insert a statement as to the preferences, limitations and relative rights of each class | ||||||||||
Mail to Corporation Commissioner, 301 Labor and Industries Bldg., Salem, Oregon 97310 |
Articles of Amendment | ||
of | ||
SIMPLEX MANUFACTURING CO. | ||
(PRESENT (NOT NEW) CORPORATE NAME) |
SIMPLEX MANUFACTURING CO. |
Class | Number of Shares Outstanding and Entitled to Vote | Number of Shares Voted | |||||||||
For | Against | ||||||||||
Subscribed and sworn to before this 20th day of October, 1973 | |||||||||||
My Commission expires: 5-14-75 | |||||||||||
Class or Series of Shares | Number of Shares Outstanding | Number of Votes Entitled to be Cast | Number of Votes Cast For | Number of Votes Cast Against | ||||||||||
Common | 1800 | 1800 | 1800 | None |
Execution: | Daniel A. Conti | Chairman of the Board | ||||||||||||
Printed Name | Title | |||||||||||||
to contact about this filing: | B. Rupert Koblegarde, Attorney | (503) 227-1411 | ||||||||||||
Name | Daytime Phone Number |
Pursuant to Section 60.211 of the Oregon Revised Statutes |
Date of Grant | Number of Shares Underlying Options Outstanding as of the Date Hereof | ||||
TRANSDIGM GROUP INCORPORATED | PARTICIPANT | |||||||||||||||||||||||||
By: | By: | |||||||||||||||||||||||||
Print Name: | Michael Lisman | Print Name: | ||||||||||||||||||||||||
Title: | Executive Vice President and Chief Financial Officer | |||||||||||||||||||||||||
Address: | 1301 E. 9th St., Suite 3000 Cleveland OH 44114 | Address: |
Registered Debt Securities | |||||
8.00% Senior Secured Notes due 2025 (2025 Secured Notes) | |||||
6.375% Senior Subordinated Notes due 2026 (6.375% 2026 Notes) | |||||
6.875% Senior Subordinated Notes due 2026 (6.875% 2026 Notes) | |||||
6.25% Senior Secured Notes due 2026 (2026 Secured Notes) | |||||
7.50% Senior Subordinated Notes due 2027 (7.50% 2027 Notes) | |||||
5.50% Senior Subordinated Notes due 2027 (5.50% 2027 Notes) | |||||
4.625% Senior Subordinated Notes due 2029 (4.625% 2029 Notes) | |||||
4.875% Senior Subordinated Notes due 2029 (4.875% 2029 Notes) |
Subsidiary Guarantors | Jurisdiction of Incorporation or Organization | ||||||||||
17111 Waterview Pkwy LLC | Delaware | ||||||||||
Acme Aerospace, Inc. | Delaware | ||||||||||
Adams Rite Aerospace, Inc. | California | ||||||||||
AeroControlex Group, Inc. | Delaware | ||||||||||
Aerosonic LLC | Delaware | ||||||||||
Airborne Acquisition, Inc. | Delaware | ||||||||||
Airborne Global, Inc. | Delaware | ||||||||||
Airborne Holdings, Inc. | Delaware | ||||||||||
Airborne Systems NA Inc. | Delaware | ||||||||||
Airborne Systems North America Inc. | Delaware | ||||||||||
Airborne Systems North America of CA Inc. | Delaware | ||||||||||
Airborne Systems North America of NJ Inc. | New Jersey | ||||||||||
AmSafe Global Holdings, Inc. | Delaware | ||||||||||
AmSafe, Inc. | Delaware | ||||||||||
Angus Electronics Co. | Delaware | ||||||||||
Apical Industries, Inc. | Delaware | ||||||||||
Arkwin Industries, Inc. | New York | ||||||||||
Armtec Countermeasures Co. | Delaware | ||||||||||
Armtec Countermeasures TNO Co. | Delaware | ||||||||||
Armtec Defense Products Co. | Delaware | ||||||||||
Auxitrol Weston USA, Inc. | Delaware | ||||||||||
Aviation Technologies, Inc. | Delaware | ||||||||||
Avionic Instruments LLC | Delaware | ||||||||||
Avionics Specialties, Inc. | Virginia | ||||||||||
AvtechTyee, Inc. | Washington | ||||||||||
Beta Transformer Technology Corporation | New York | ||||||||||
Beta Transformer Technology LLC | Delaware | ||||||||||
Breeze-Eastern LLC | Delaware | ||||||||||
Bridport Erie Aviation, Inc. | Delaware |
Subsidiary Guarantors | Jurisdiction of Incorporation or Organization | ||||||||||
Bridport Holdings, Inc. | Delaware | ||||||||||
Bridport-Air Carrier, Inc. | Washington | ||||||||||
Bruce Aerospace Inc. | Delaware | ||||||||||
CDA InterCorp LLC | Florida | ||||||||||
CEF Industries, LLC | Delaware | ||||||||||
Century Helicopters, Inc. | Colorado | ||||||||||
Champion Aerospace LLC | Delaware | ||||||||||
Chelton Avionics Holdings, Inc. | Delaware | ||||||||||
Chelton Avionics, Inc. | Delaware | ||||||||||
CMC Electronics Aurora LLC | Delaware | ||||||||||
Chelton Defense Products, Inc. | Delaware | ||||||||||
Dart Buyer, Inc. | Delaware | ||||||||||
Dart Helicopter Services, Inc. | Delaware | ||||||||||
Dart Intermediate, Inc. | Delaware | ||||||||||
Dart TopCo, Inc. | Delaware | ||||||||||
Data Device Corporation | Delaware | ||||||||||
Dukes Aerospace, Inc. | Delaware | ||||||||||
Electromech Technologies LLC | Delaware | ||||||||||
Esterline Europe Company LLC | Delaware | ||||||||||
Esterline International Company | Delaware | ||||||||||
Esterline Technologies Corporation | Delaware | ||||||||||
Esterline Technologies SGIP LLC | Delaware | ||||||||||
Extant Components Group Holdings, Inc. | Delaware | ||||||||||
Extant Components Group Intermediate, Inc. | Delaware | ||||||||||
HarcoSemco LLC | Connecticut | ||||||||||
Hartwell Corporation | California | ||||||||||
Heli Tech Inc. | Oregon | ||||||||||
Hytek Finishes Co. | Delaware | ||||||||||
ILC Holdings, Inc. | Delaware | ||||||||||
Janco Corporation | California | ||||||||||
Johnson Liverpool LLC | Delaware | ||||||||||
Kirkhill Inc. | Delaware | ||||||||||
Korry Electronics Co. | Delaware | ||||||||||
Leach Holding Corporation | Delaware | ||||||||||
Leach International Corporation | Delaware | ||||||||||
Leach Mexico Holding LLC | Delaware | ||||||||||
Leach Technology Group, Inc. | Delaware | ||||||||||
MarathonNorco Aerospace, Inc. | Delaware | ||||||||||
Mason Electric Co. | Delaware | ||||||||||
McKechnie Aerospace DE, Inc. | Delaware | ||||||||||
McKechnie Aerospace Holdings, Inc. | Delaware | ||||||||||
McKechnie Aerospace US LLC | Delaware | ||||||||||
NAT Seattle Inc. | Delaware |
Subsidiary Guarantors | Jurisdiction of Incorporation or Organization | ||||||||||
NMC Group, Inc. | California | ||||||||||
Nordisk Aviation Products LLC | Delaware | ||||||||||
North Hills Signal Processing Corp. | Delaware | ||||||||||
North Hills Signal Processing Overseas LLC | Delaware | ||||||||||
Norwich Aero Products, Inc. | New York | ||||||||||
Offshore Helicopter Support Services, Inc. | Louisiana | ||||||||||
Palomar Products, Inc. | Delaware | ||||||||||
Paravion Technologies Inc. | Oregon | ||||||||||
Pexco Aerospace, Inc. | Delaware | ||||||||||
PneuDraulics, Inc. | California | ||||||||||
Schneller LLC | Delaware | ||||||||||
Semco Instruments, Inc. | Delaware | ||||||||||
Shield Restraint Systems, Inc. | Delaware | ||||||||||
Simplex Manufacturing Co. | Oregon | ||||||||||
Skandia, Inc. | Illinois | ||||||||||
Skurka Aerospace, Inc. | Delaware | ||||||||||
Symetrics Industries, LLC | Florida | ||||||||||
Symetrics Technology Group, LLC | Florida | ||||||||||
TA Aerospace Co. | California | ||||||||||
Tactair Fluid Controls, Inc. | New York | ||||||||||
TDG ESL Holdings Inc. | Delaware | ||||||||||
TEAC Aerospace Holdings, Inc. | Delaware | ||||||||||
TEAC Aerospace Technologies, Inc. | Delaware | ||||||||||
Telair US LLC | Delaware | ||||||||||
Texas Rotronics, Inc. | Texas | ||||||||||
(1) | TransDigm Inc. | Delaware | |||||||||
(1) | TransDigm UK Holdings plc | United Kingdom | |||||||||
Transicoil LLC | Delaware | ||||||||||
Whippany Actuation Systems, LLC | Delaware | ||||||||||
Young & Franklin Inc. | New York |
(1) | Entity is also a subsidiary issuer. |
/s/ Kevin Stein | ||
Name: Kevin Stein | ||
Title: President, Chief Executive Officer and Director | ||
(Principal Executive Officer) |
/s/ Michael Lisman | ||
Name: Michael Lisman | ||
Title: Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
/s/ Kevin Stein | ||
Name: Kevin Stein | ||
Title: President, Chief Executive Officer and Director | ||
(Principal Executive Officer) |
/s/ Michael Lisman | ||
Name: Michael Lisman | ||
Title: Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |