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8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 30, 2012

 

 

TransDigm Group Incorporated

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-32833   41-2101738

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

1301 East 9th Street, Suite 3000, Cleveland, Ohio   44114
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (216) 706-2960

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 7.01. Regulation FD Disclosure.

TransDigm Group Incorporated (the “Company”) has prepared presentation materials (the “Presentation Materials”) that it intends to use on or after January 30, 2012 in presentations to potential lenders in connection with the financing of the Company’s previously announced acquisition of AmSafe Global Holdings, Inc. The Presentation Materials are furnished as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated herein by reference.

The information in this Current Report on Form 8-K and in the Presentation Materials shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in filings under the Securities Act of 1933.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

99.1    Presentation to Public Lenders by TransDigm Group Incorporated

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

TRANSDIGM GROUP INCORPORATED
By:   /s/ Gregory Rufus
Name:   Gregory Rufus
Title:  

Executive Vice President, Chief Financial

Officer and Secretary

Dated: January 30, 2012

EXHIBIT INDEX

 

99.1    Presentation to Public Lenders by TransDigm Group Incorporated
EX-99.1
$500,000,000
First Lien Term Loan
Presentation to Public Lenders
January 30, 2012
Exhibit 99.1

Safe Harbor Statement
This
presentation
contains
forward-looking
statements
that
involve
substantial
risks
and
uncertainties.
You
can
identify
forward-looking
statements
by
words
such
as
“anticipate,”
“believe,”
“could,”
“estimate,”
“expect,”
“intend,”
“may,”
“plan,”
“should,”
“will,”
“would”
or
similar
words.
You
should
consider
these
statements
carefully
because
they
discuss
our
plans,
targets,
strategies,
prospects
and
expectations
concerning
our
business,
operating
results,
financial
condition
and
similar
matters.
We
believe
that
it
is
important
to
communicate
our
future
expectations
to
our
current
and
potential
investors.
There
will
be
events
in
the
future,
however,
that
we
are
not
able
to
predict
accurately
or
control.
Our
actual
results
may
differ
materially
from
the
expectations
we
describe
in
our
forward-looking
statements.
Factors
or
events
that
could
cause
our
actual
results
to
materially
differ
may
emerge
from
time
to
time,
and
it
is
not
possible
for
us
to
accurately
predict
all
of
them.
You
should
be
aware
that
the
occurrence
of
any
such
event
could
have
a
material
adverse
effect
on
our
business,
results
of
operation
and
financial
position.
Any
forward-
looking
statement
in
this
presentation
speaks
only
as
of
the
date
on
which
we
make
it.
We
undertake
no
obligation
to
update
or
revise
any
forward-looking
statements,
whether
as
a
result
of
new
information,
future
events
or
otherwise,
except
as
required
by
law
(See
next
page).
1

Safe Harbor Statement (cont’d)
These
events
include
but
are
not
limited
to:
the
sensitivity
of
our
business
to
the
number
of
flight
hours
that
our
customers’
planes
spend
aloft
and
our
customers’
profitability,
both
of
which
are
affected
by
general
economic
conditions;
future
terrorist
attacks;
our
reliance
on
certain
customers;
the
U.S.
defense
budget and
risks
associated
with
being
a
government
supplier;
failure
to
maintain
government
or
industry
approvals;
failure
to
complete
or
successfully
integrate
acquisitions;
our
substantial
indebtedness;
potential
environmental
liabilities;
and
other
factors.
2

Definitions
EBITDA
–
Earnings
before
interest,
income
taxes,
depreciation
and
amortization.
TransDigm
EBITDA
As
Defined
–
excludes
inventory
purchase
adjustments,
non-cash
compensation
and
deferred
compensation
charges,
acquisition
integration
costs,
refinancing
costs
and
one-time
IPO
related
costs
as
defined
in
TransDigm’s
existing
credit
agreements.
AmSafe
EBITDA
–
excludes
management
fees
and
expenses,
unrealized
gains
and
losses
on
interest
rate
swaps,
foreign
exchange
gains
and
losses,
goodwill
impairment
charges,
acquisition
related
costs
and
expenses
incurred
in
connection
with
the
sale
of
the
business.
Pro
forma
EBITDA
As
Defined
–
includes
TransDigm’s
EBITDA
as
Defined
plus
EBITDA
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition.
TransDigm’s fiscal year end is 9/30/11.
AmSafe’s fiscal year end is 12/31/11.
3
This
presentation
sets
forth
certain
pro
forma
financial
information.
This
pro
forma
financial
information
gives
effect
to
certain
recently
completed
acquisitions
and
divestitures. 
Such
pro
forma
information
is
based
on
certain
assumptions
and
adjustments
and
does
not
purport
to
present
TransDigm’s
actual
results
of
operations
or
financial
condition
has
the
transactions
reflected
in
such
pro
forma
financial
information
occurred
at
the
beginning
of
the
relevant
period,
in
the
case
of
income
statement
information,
or
at
the
end
of
such
period,
in
the
case
of
balance
sheet
information,
nor
is
it
necessarily
indicative
of
the
results
of
operations
that
may
be
achieved
in
the
future.
This
presentation
also
sets
forth
certain
non-GAAP
financial
information.
A
presentation
of
the
most
directly
comparable
GAAP
measures
and
a
reconciliation
to
such
measures
are
set
forth
on
pages
36
and
39.

Special Notice Regarding Pro Forma
and Non-GAAP Information
This
presentation
sets
forth
certain
pro
forma
financial
information.
This
pro
forma
financial
information
gives
effect
to
certain
recently
completed
acquisitions
and
divestitures.
Such
pro
forma
information
is
based
on
certain
assumptions
and
adjustments
and
does
not
purport
to
present
TransDigm’s
actual
results
of
operations
or
financial
condition
as
the
transactions
reflected
in
such
pro
forma
financial
information
occurred
at
the
beginning
of
the
relevant
period,
in
the
case
of
income
statement
information,
or
at
the
end
of
such
period,
in
the
case
of
balance
sheet
information,
nor
is
it
necessarily
indicative
of
the
results
of
operations
that
may
be
achieved
in
the
future.
This
presentation
also
sets
forth
certain
non-GAAP
financial
information.
A
presentation
of
the
most
directly
comparable
GAAP
measures
and
a
reconciliation
to
such
measures
are
set
forth
on
pages
36
and
39.
4

Transaction Overview
Credit Suisse
Hayes Smith, Managing Director
TransDigm & AmSafe Overview
TransDigm
Nick Howley, Chief Executive Officer
Key Credit Considerations
TransDigm
Nick Howley, Chief Executive Officer
Pro Forma Financial Overview
TransDigm
Greg Rufus, Chief Financial Officer
TransDigm Financial Overview
TransDigm
Greg Rufus, Chief Financial Officer
AmSafe Financial Overview
TransDigm
Greg Rufus, Chief Financial Officer
Syndication Overview & Timetable
Credit Suisse
Carly Baxter, Director
Public Q&A
Agenda
5

Transaction Overview

7
Executive Summary
TransDigm
Inc.,
a
subsidiary
of
TransDigm
Group
Incorporated
(NYSE:
TDG)
(“TransDigm”
or
the
“Company”),
intends
to
raise
$500
million
in
financing
to
support
its
acquisition
of
AmSafe
Global
Holdings,
Inc.
(“AmSafe”
or
the
“Target”).
The
new
financing
will
consist
of
a
$500
million
First
Lien
Term
Loan.
On
January
20,
2012
TransDigm
announced
its
acquisition
of
AmSafe
for
$750
million,
approximately
12.4x
AmSafe’s
FY
12/31/11
EBITDA.
The
purchase
includes
significant
tax
benefits
of
approximately
$70
million
(on
a
net
present
value
basis)
to
be
realized
in
2012
and
beyond.
Proceeds
will
be
used
to
fund
the
$750
million
acquisition
of
AmSafe
and
associated
fees
and
expenses.
TransDigm
is
a
leading
supplier
of
highly
engineered
aircraft
components
for
use
on
nearly
all
commercial
and
military
aircraft
in
service
today.
For
the
fiscal
year
ended
September
30,
2011(excluding
AmSafe),
the
Company
generated
pro
forma
revenues
and
pro
forma
EBITDA
As
Defined
of
$1,366
million
and
$644
million
(47%
EBITDA
margin),
respectively.
AmSafe
is
a
global
manufacturer
and
supplier
of
aerospace,
military,
and
ground
transportation
seatbelts,
specialty
restraints,
cargo
and
lift
nets
and
other
products.
For
the
fiscal
year
ended
December
31,
2011,
AmSafe
generated
Revenues
and
AmSafe
EBITDA
of
$260
million
and
$61
million
(23%
EBITDA
margin),
respectively.
TransDigm currently has the following debt outstanding:
Existing
Term
Loan
of
$1,538
million
(approximately
2.4x
9/30/11
Pro
forma
EBITDA
As
Defined)
$1,600 million of 7.75% Senior Subordinated Notes (total gross leverage of approximately 4.9x 9/30/11
Pro forma EBITDA As Defined)
The transaction is expected to close in February 2012
Note:
Pro forma revenue and pro forma EBITDA as Defined includes TransDigm revenue and EBITDA as Defined, plus revenue and EBITDA, attributable to recent 
acquisitions of McKechnie (less divestitures of the fasteners business and AQS), Talley Actuation, Schneller and Harco prior to the date of acquisition for fiscal 9/30/11.

8
Sources & Uses and Pro Forma Capitalization
Sources
Uses
Revolver
(1)
$0.0
Equity consideration
$750.0
Excess cash
265.0
Transaction fees
15.0
New First Lien Term Loan
500.0
Total sources
$765.0
Total uses
$765.0
Sources and Uses
($ in millions)
(1)
Increase
existing
$245
million
Revolving
Credit
Facility
to
$300
million.
Pro Forma Capitalization
($ in millions)
(1)
Increase
existing
$245
million
Revolving
Credit
Facility
to
$300
million.
(2)
Pro
forma
EBITDA
As
Defined
includes
TransDigm’s
EBITDA
as
Defined
plus
EBITDA
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners 
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition.
(3)
Pro
forma
for
the
AmSafe
acquisition
including
AmSafe’s
12/31/11
EBITDA
of
$61
million.
Actual
Cum. EBITDA
Combined
Cum. EBITDA
% of Debt
9/30/11
multiple
FY11
multiple
Capitalization
Maturity
Cash
$376.2
$111.2
Revolver
. 
(1)
$0.0
0.0x
$0.0
0.0x
0.0%
December 2015
First Lien Term Loan
1,538.4
2.4x
1,538.4
2.2x
42.3%
February 2017
New First Lien Term Loan
0.0
2.4x
500.0
2.9x
13.7%
February 2017
Total senior secured debt
$1,538.4
2.4x
$2,038.4
2.9x
56.0%
Senior Subordinated Notes
1,600.0
4.9x
1,600.0
5.2x
44.0%
December 2018
Total debt
$3,138.4
4.9x
$3,638.4
5.2x
100.0%
Total debt capitalization
$3,138.4
4.9x
$3,638.4
5.2x
100.0%
Net Debt to EBITDA
4.3x
5.0x
FY11 Pro forma EBITDA as Defined
644.4
705.0
(3)
(2)

TransDigm & AmSafe
Overview

Highly engineered aerospace components
Proprietary and sole source products
Significant aftermarket content
High free cash flow conversion
($ in millions)
DISTINGUISHING
CHARACTERISTICS
Business FY11
Business Overview
10
(1)
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition
for
fiscal
9/30/11.
(2)
Based
on
TransDigm’s
9/30/11
pro
forma
revenue
of
$1,366
million
which
includes
the
full
impact
of
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition
for
fiscal
9/30/11,
and
AmSafe’s
FY
12/31/11
revenue
of
$260
million.
(3)
Based
on
TransDigm's
9/30/11
pro
forma
EBITDA
as
Defined
of
$644
million
which
includes
the
full
impact
of
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition
for
fiscal
9/30/11,
and
AmSafe’s
FY
12/31/11
EBITDA
of
$61
million.
Pro forma
TransDigm
Combined 
Pro forma
TransDigm with
AmSafe
Revenue:
$1,366
$1,626
EBITDA As Defined:
$644
  $705
EBITDA As Defined Margin:
47.2%
43.4%
Formed: 
1993
(2)
(3)
(1)
Pro
forma
revenue
and
pro
forma
EBITDA
as
Defined
includes
TransDigm
revenue
and
EBITDA
as
Defined,
as
applicable,
plus
revenue
and
EBITDA,
as
applicable,

11
Diverse Products, Platforms and Markets

12
AmSafe –
Diverse Products, Platforms and Markets
Aviation
FY11 Revenue: $177 million
FY11 EBITDA: $53 million
Products include:
Traditional seatbelts
Seatbelt airbags
Cargo handling products / nets
~95% world market share in
commercial transport seat belts
Military
FY11 Revenue: $24 million
FY11 EBITDA: $3 million
Products include:
Ground vehicle restraints / seat belts
Aircraft restraints / seatbelts
Cargo and lift nets
Insulation blankets
Ground Transportation
FY11 Revenue: $59 million
FY11 EBITDA: $5 million
Products include:
Specialty and recreational vehicle
restraints
Child restraints

TransDigm & AmSafe –
Significant Expansion Of Our
Global Footprint
13

Key Credit Highlights

15
Key Credit Considerations
MULTIPLE
GROWTH PATHS
PROVEN
OPERATING
STRATEGY
Experienced management team
Demonstrated value generation
Proven acquisition / integration
Market growth
High margins
Acquisitions
Low Capex
Strong free cash flow
ATTRACTIVE
MARKET
POSITION
Niche market positions
High margin aftermarket
Diverse mix
Favorable long-term industry
dynamics
Consistent Cash Generation and Long-Term Performance

Steady Growth in Passenger Traffic Drives Stable
Aftermarkets Sales…
16

0
200
400
600
800
1,000
1,200
1,400
'96
'98
'00
'02
'04
'06
'08
10
'12E '14E
17
COMMERCIAL TRANSPORTS
Source:  Wall Street Research / Airline Monitor / Management estimates as of  October  2011.
REGIONAL & BUSINESS JETS
(units delivered)
(units delivered)
17
With OEM Production Rebounding…
0
250
500
750
1,000
1,250
1,500
'96
'98
'00
'02
'04
'06
'08
10
12E
14E
Regional Jet
Business Jet

$0
$50
$100
$150
$200
$250
$300
'10
'11
'12
'13
'14
'15
'16
18
O&M
Base + Supplemental Budget
(Nominal Dollars)
($ in billions)
Source: Department of Defense, Wall Street research and Management estimates as of  November  2011.
18
O&M
Base Budget
(Nominal Dollars)
U.S. Department of Defense
Outlook for Military Spending
CAGR
= (0.2%)
$0
$50
$100
$150
$200
$250
$300
$350
'10
'11
'12
'13
'14
'15
'16

19
Selection / Qualification Process
FAA Certification
Niche Markets
Risk / Reward Trade-Off
19
Strong Market Positions –
TDG
& AmSafe

20
TransDigm
NET SALES
AmSafe
NET SALES
(excl. Ground Transportation)
TransDigm:
Based on management estimates for the fiscal year ended 9/30/11.
AmSafe:
Based on TransDigm management estimates for the fiscal year ended 12/31/11 (Excluding Ground Transportation sales of ~ $60 million).
TransDigm and AmSafe –
Strong Focus on High-
Margin Aftermarket
Aftermarket ~56%
OEM ~44%
Aftermarket ~85%
OEM ~15%
Comm
Aftmkt
42%
Comm
OEM
31%
Def Aftmkt
14%
Def OEM
13%
Comm Aftmkt
74%
Def OEM
1%
Comm OEM
14%
Def Aftmkt
11%

Comm
Aftmkt
46%
Def Aftmkt
14%
Def OEM
11%
Comm
OEM
29%
21
Approximately 60% of combined pro forma net sales and a much higher percentage
of combined EBITDA As Defined are from the stable, high-margin aftermarket.
Combined
NET SALES
(excl. Ground Transportation)
Combined
EBITDA As Defined
(excl. Ground Transportation)
Combined Strong Focus on High-Margin Aftermarket
Aftermarket ~60%
OEM ~40%
OEM
Aftermarket
TransDigm:
Based on management estimates for the fiscal year ended 9/30/11.
AmSafe:
Based on TransDigm management estimates for the fiscal year ended 12/31/11 (Excluding Ground Transportation sales of ~ $60 million or ~ 4% of combined sales).

Non Sole
Source
25%
Sole
Source
75%
~
~
22
We believe AmSafe’s proprietary and sole source revenue base (excl. Ground
Transportation) is similar to TransDigm.
TransDigm
PROPRIETARY SALES
Based
on
management
estimates
of
pro
forma
TDG
sales
for
the
fiscal
year
ended
9/30/11.
TransDigm
SOLE SOURCE SALES
Significant Proprietary and Sole Source Revenue Base
Proprietary
~90%
Non-Proprietary
~10%
Results in strong market positions and
a
stable, recurring revenue stream.

23
Proven Operating Strategy
3 VALUE DRIVERS
Profitable new business
Productivity and cost improvement
Value-based pricing

24
1993 –
2001
2002 –
2006
2006 –
2009
Adel
Aeroproducts
Wiggins
Controlex
Marathon
Adams Rite
Aerospace
Christie
Champion
Honeywell Lube
Pump
Fuelcom
Norco
Avionic
Instruments
Skurka
Fluid Regulators
Eaton Motors
Dukes
Semco
Hartwell
Electromech
Tyee
TAC
Linread
(1)
Valley-Todeco
(1)
AQS
(1)
Talley Actuation
Schneller
Harco
AmSafe
(2)
TransDigm has acquired 39 businesses since 1993,
including 24 since its IPO.
2010 –
2012
Sweeney
Electra-Motion
CDA InterCorp.
Avtech
ADS/ Transicoil
Bruce
CEF
Unison/GE
APC/GE
Acme
Woodward HRT
Proven Record of Acquisition & Integration
Privately Held
NYSE
(1)
Divested in Q2 and Q3 of FY11.
(2)
Pending regulatory approval.

Pro Forma
Financial
Overview

26
Consistent Historical Growth and Performance
(1)
Based
on
TransDigm’s
pro
forma
9/30/11
revenue,
including
revenue
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition,
of
$1,366
million
and
AmSafe’s
12/31/11
revenue
of
$260
million.
(2)
Based
on
TransDigm’s
pro
forma
9/30/11
EBITDA
As
Defined,
including
EBITDA
as
Defined
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition,
of
$644
million
and
AmSafe's
12/31/11
EBITDA
of
$61
million.

Adams Rite
Schneller
Proven Ability to Realize Value
TransDigm
has been very successful in realizing EBITDA growth in each of its
acquisitions.
Norco
2011
Price
Productivity
Volume
Target
Year 0
Price
Productivity
Volume
Year 6
Year 0
Price
Productivity
Volume
Year 2
Source:
Company materials.
27

TransDigm & AmSafe –
Combined FY11
Combined financial metrics continue to be very attractive.
($ in millions)
Pro Forma Revenue
(1)
Pro Forma EBITDA
(2)
Pro Forma EBITDA Margin
28
TransDigm
84%
Amsafe
16%
23.3%
43.4%
47.2%
TransDigm
Amsafe
Combined
Amsafe
9%
TransDigm
91%
(1)
Based
on
TransDigm’s
pro
forma
9/30/11
revenue,
including
revenue
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition,
of
$1,366
million
and
AmSafe’s
12/31/11
revenue
of
$260
million.
(2)
Based
on
TransDigm’s
pro
forma
9/30/11
EBITDA
As
Defined,
including
EBITDA
as
Defined
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition,
of
$644
million
and
AmSafe's
12/31/11
EBITDA
of
$61
million.

($ in millions)
Free Cash Flow
The Pro forma Company will generate significant free cash flow.
FY11 Pro forma
Combined
EBITDA
$705.0
Capital Expenditures
(20.6)
Cash Interest Expense
(207.8)
Cash Taxes
(94.4)
Free Cash Flow Before WC
$382.2
% of EBITDA
54.2%
(1)
29
(1)
Based
on
TransDigm’s
pro
forma
9/30/11
EBITDA
As
Defined,
including
EBITDA
as
Defined
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition,
of
$644
million
and
AmSafe's
12/31/11
EBITDA
of
$61
million.

TransDigm Financial
Overview

Consistent Track Record of Financial Success
TransDigm’s sales have grown every year since its founding.
31

TransDigm Financial Highlights
($ in millions)
PF
CAGR
2007
2008
2009
2010
2011
9/30/2011
(1)
2007-2011PF
Income statement information:
Net sales
$592.8
$713.7
$761.5
$827.7
$1,206.0
$1,366.0
23.2%
Cost of sales
283.8
327.8
332.2
354.6
544.8
Gross profit
$309.0
$385.9
$429.3
$473.1
$661.2
NM
% Sales
52.1%
54.1%
56.4%
57.2%
54.8%
Selling and administrative expenses
62.9
74.6
80.0
94.9
133.7
Amortization of intangibles
12.3
12.0
13.9
15.1
40.3
Refinancing costs
–
–
–
–
72.5
Income from operations
$233.8
$299.3
$335.4
$363.1
$414.7
NM
% Sales
39.4%
41.9%
44.0%
43.9%
34.4%
Net interest expense
91.7
92.7
84.4
112.2
185.3
Income before income taxes
$142.1
$206.6
$251.0
$250.8
$229.4
Income tax provision
53.5
73.5
88.1
87.4
77.2
Net income
$88.6
$133.1
$162.9
$163.4
$152.2
NM
% Sales
14.9%
18.6%
21.4%
19.7%
12.6%
Other financial information:
EBITDA As Defined
$274.7
$333.1
$374.7
$411.6
$589.9
$644.4
23.8%
As % of sales
46.3%
46.7%
49.2%
49.7%
48.9%
47.2%
Capital expenditures
10.3
10.9
13.2
12.9
18.0
EBITDA As Defined - CapEx
264.4
322.2
361.5
398.7
571.9
NM
As % of sales
44.6%
45.1%
47.5%
48.2%
47.4%
Balance sheet information:
Total assets
$2,061.1
$2,255.8
$2,454.4
$2,677.8
$4,513.6
Total debt
1,357.9
1,357.2
1,356.8
1,771.6
3,138.4
Source:
Company materials.
(1)
Pro
forma
revenue
and
pro
forma
EBITDA
as
Defined
includes
TransDigm
revenue
and
EBITDA
as
Defined,
as
applicable,
plus
revenue
and
EBITDA,
as
applicable, 
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition
for fiscal 9/30/11.
32

TransDigm Free Cash Flow
TransDigm generates significant free cash flow.
33
($ in millions)
Fiscal Year Ending September 30,
2007
2008
2009
2010
2011
EBITDA
$274.7
$333.1
$374.7
$411.6
$589.9
CapEx
(10.3)
(10.9)
(13.2)
($12.9)
($18.0)
Cash Interest Expense
(90.7)
(95.1)
(82.2)
($97.7)
($155.8)
Cash Taxes
(18.6)
(39.9)
(75.3)
(72.5)
(88.4)
Free Cash Flow Before WC
$155.1
$187.2
$204.0
$228.5
$327.7
% of EBITDA
56.5%
56.2%
54.4%
55.5%
55.6%

TransDigm Deleveraging Profile (Total Debt / EBITDA as Defined)
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
5.0x
5.5x
6.0x
6.5x
FY00
FY01
FY02
07/03
FY03
FY04
FY05
4/06
FY06
FY07
FY08
FY09
10/09
FY10
12/10
FY11
PF
FY11
(1)
34
(1)
Total
Debt
(Including
new
$500
million
term
loan)
÷
Combined
Pro
forma
EBITDA
as
Defined
(TDG
+
AmSafe).
Pro
forma
EBITDA
As
Defined
includes
TransDigm’s
EBITDA
as
Defined
plus
EBITDA
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition
and
AmSafe’s
12/31/11
EBITDA
of
$61
million.
Warburg
Pincus Recap
IPO
Recap &
Dividend
McKechnie
Acquisition
AmSafe
Acquisition

Realized
Realized
Total
First 2 years
Years 3-10
Net Operating Loss Carryforward
$11.1
$11.1
-
Redemption of Stock Options on Sale
$11.6
$11.6
-
Amortizable Tax Intangible Assets (338 (h) (10) election)
$50.9
$13.0
$37.9
NPV Current Estimate
$73.6
$35.7
$37.9
($ in millions)
NPV
Cash Benefit of Tax Savings
35

EBITDA As Defined Reconciliation
($ in millions)
(1)
Pro
forma
EBITDA
As
Defined
includes
TransDigm’s
EBITDA
as
Defined
plus
EBITDA
attributable
to
recent
acquisitions
of
McKechnie
(less
divestitures
of
the
fasteners
business
and
AQS),
Talley
Actuation,
Schneller
and
Harco
prior
to
the
date
of
acquisition.
36
Source:
Company materials.
Fiscal year ended September 30,
PF
(1)
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2011
Net Income
($5)
–
$1
$3
$14
($17)
$11
$14
$31
($76)
$14
$35
$25
$89
$133
$163
$163
$172
$205
Less: income from discontinued opeations
(20)
(22)
Depreciation and amortization
7
7
7
6
7
6
7
9
13
10
18
17
16
24
25
28
30
61
67
Interest expense, net
5
5
5
3
3
23
28
32
37
43
75
80
77
92
93
84
112
185
185
Income tax provision
(2)
–
2
5
13
(2)
8
9
17
(45)
6
23
16
53
74
88
88
77
94
Warrant put value adjustment
1
1
2
5
7
–
–
–
–
–
–
–
–
–
–
–
–
–
Extraordinary item
–
–
–
2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
EBITDA
$6
$13
$17
$24
$44
$10
$54
$64
$98
($68)
$113
$155
$134
$258
$325
$363
$393
$475
$529
Merger expense
–
–
–
–
–
40
–
–
–
176
–
–
–
–
–
–
–
–
–
Refinancing costs
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
72
72
Acquisition-related costs
4
–
–
1
–
1
–
8
–
15
20
2
1
9
2
6
12
30
30
Non-cash compensation and
   deferred compensation costs
–
–
–
–
–
–
–
–
–
1
6
7
1
6
6
6
7
13
13
One-time special bonus
–
–
–
–
–
–
–
–
–
–
–
–
6
–
–
–
–
–
–
Public offering costs
–
–
–
–
–
–
–
–
–
–
–
–
3
2
–
–
–
–
–
Refinancing costs
–
–
–
–
–
–
–
–
–
–
–
–
49
–
–
–
–
–
–
EBITDA As Defined
$10
$13
$17
$25
$44
$51
$54
$72
$98
$124
$139
$164
$194
$275
$333
$375
$412
$590
$644

AmSafe
Financial
Overview

AmSafe
Financial Highlights
($ in millions)
Source:
Company materials.
Fiscal Year Ended December 31,
2008
2009
2010
2011
Net sales
$207.4
$176.3
$212.6
$260.0
EBITDA
$41.1
$41.8
$46.4
$60.5
As % of Sales
19.8%
23.7%
21.8%
23.3%
Capital expenditures
(1.5)
(3.1)
(3.9)
(2.6)
EBITDA - CapEx
$39.6
$38.7
$42.5
$57.9
As % of Sales
19.1%
22.0%
20.0%
22.3%
38

AmSafe EBITDA Reconciliation
($ in millions)
Source:
Company materials.
Fiscal Year Ended December 31,
2008
2009
2010
2011
Net Income (loss)
($29.5)
($25.9)
($30.5)
($3.7)
Add:
Loss (income) from discontinued operations
(2.0)
(0.9)
2.8
2.6
Interest expense, net
29.1
27.1
28.5
30.0
Provision for income taxes (benefit)
4.8
4.7
(2.4)
0.6
Less:
Foreign exchange gain (loss)
2.8
(0.3)
(0.6)
(0.4)
Other income
–
–
–
–
Operating Profit/(Loss)
($0.4)
$5.3
($1.0)
$29.9
Add:
Depreciation and amortization
3.3
3.1
3.5
3.4
Amortization
26.4
24.4
24.6
24.6
Goodwill Impairment Write-off
(1)
7.2
3.3
17.6
–
One-time related costs
(2)
2.4
3.8
–
1.3
Management Service Fee
(3)
1.0
1.0
1.1
1.3
Non-cash compensation
(4)
1.2
0.9
0.6
–
EBITDA
$41.1
$41.8
$46.4
$60.5
(1)
Represents the charges taken to income for the impairment of goodwill.
(2)
Represents one-time costs associated with acquisition accounting, start-up and interest rate swap.
(3)
Represents
the
expenses
recognized
by
the
Company
under
the
agreement
with
Berkshire
Partners
and
Greenbriar
Equity
Group.
(4)
Represents the expenses recognized by the Company under their stock option plan.
39

Syndication Overview &
Timetable

January 2012
 
February 2012
Su
Mo
Tu
We
Th
Fr
Sa
Su
Mo
Tu
We
Th
Fr
Sa
1
2
3
4
5
6
7
1
2
3
4
8
9
10
11
12
13
14
5
6
7
8
9
10
11
15
16
17
18
19
20
21
12
13
14
15
16
17
18
22
23
24
25
26
27
28
19
20
21
22
23
24
25
29
30
31
26
27
28
29
30
31
Holiday
  
Key date
Week of
Event
January 23
Rating Agencies Meetings (Jan 24)
January 30
Bank meeting conference call (Jan 30)
February 6
TransDigm Q1 earnings release (Feb 7)
Lender commitments due (Feb 8)
February 13
Allocation
Close and fund transaction (Feb 13)
Preliminary Transaction Timeline
41
(1)
Pending HRS approval.
(1)

Summary Terms
Borrower:
TransDigm, Inc (the "Company" or the "Borrower", and together with TransDigm Group Incorporated (“Holdings”) and certain of the Company’s
subsidiaries, the "Credit Group").
Lead Arranger, Bookrunner & 
Administrative Agent:
Credit Suisse ("CS", the "Lead Arranger" and "Administrative Agent").
Facilities:
$500 million incremental term loan facility (the "Term Loan").
Tenor:
Same as existing term loan; February 14, 2017.
Use of proceeds:
To pay purchase price consideration and to pay fees and expenses associated with the transaction and to repay certain indebtedness of AmSafe.
Lenders:
CS and a group of financial institutions as may be acceptable to the Lead Arranger and the Borrower.
Interest rate:
LIBOR + 3.25%
Term Loan Issue price:
99.0
LIBOR Floor:
1.00%
Term loan amortization:
1% per year
Guarantors:
Same as existing term loan credit agreement; Holdings and certain of the Borrower's present and future, direct and indirect domestic subsidiaries (the
"Guarantors").
Security:
Same as existing term loan credit agreement; First priority perfected lien on substantially all of the property and assets (tangible and intangible, and
including all outstanding capital stock of the Company and each of its subsidiaries(subject to certain customary exceptions)) of the Credit Group.
Affirmative covenants:
Same as existing term loan credit agreement; Customary for facilities of this type.
Negative covenants:
Same as existing term loan credit agreement; Customary for facilities of this type and including limitations on indebtedness, liens, guarantees, mergers
and acquisitions, asset sales, restricted payments, transactions with affiliates, capital expenditures and investments.
Financial covenants:
None
(1)
.
(1) Financial covenants in Revolver will remain in place.
42
Amendment Request:
Permit
the
incurrence
of
the
new
proposed
$500
million
term
loan
facility
Existing
$500
million
Incremental
Term
Loan
capacity
in
the
Term
Loan
Credit
Agreement
remains unchanged

Public Q&A