false--09-30FY201900012602214000000000.012244000000.030.030.030.03000.0250.0250.0250.0250.0650.0550.0750.060.0650.0637500.0650.05500.060.0650.063750.068754000004000004000000.0250.0250.0250.0250.0250.0250.0250.0250.0250.0250.0250.0250.0550.0560.0550.0560.0550.030.0250.0310.0280.0180.030.0310.0190.030.0190.350.2450.210.0114960000000.02010.02840.03030.01560.02010.02334161326 0001260221 2018-10-01 2019-09-30 0001260221 tdg:EsterlineMember 2018-10-01 2019-09-30 0001260221 tdg:ExtantMember 2018-10-01 2019-09-30 0001260221 2019-03-31 0001260221 2019-11-17 0001260221 2019-09-30 0001260221 2018-09-30 0001260221 2017-10-01 2018-09-30 0001260221 2016-10-01 2017-09-30 0001260221 us-gaap:CommonStockMember 2017-10-01 2018-09-30 0001260221 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001260221 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-09-30 0001260221 us-gaap:TreasuryStockMember 2016-10-01 2017-09-30 0001260221 us-gaap:NoncontrollingInterestMember 2018-09-30 0001260221 us-gaap:NoncontrollingInterestMember 2016-09-30 0001260221 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-10-01 2019-09-30 0001260221 us-gaap:AdditionalPaidInCapitalMember 2018-10-01 2019-09-30 0001260221 us-gaap:NoncontrollingInterestMember 2018-10-01 2019-09-30 0001260221 us-gaap:AdditionalPaidInCapitalMember 2017-10-01 2018-09-30 0001260221 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-10-01 2018-09-30 0001260221 us-gaap:TreasuryStockMember 2017-09-30 0001260221 us-gaap:NoncontrollingInterestMember 2017-09-30 0001260221 us-gaap:TreasuryStockMember 2018-09-30 0001260221 us-gaap:AdditionalPaidInCapitalMember 2016-10-01 2017-09-30 0001260221 us-gaap:AdditionalPaidInCapitalMember 2017-09-30 0001260221 2017-09-30 0001260221 us-gaap:AccountingStandardsUpdate201616Member 2018-10-01 2019-09-30 0001260221 us-gaap:CommonStockMember 2018-09-30 0001260221 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001260221 us-gaap:RetainedEarningsMember 2016-10-01 2017-09-30 0001260221 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-10-01 2017-09-30 0001260221 us-gaap:CommonStockMember 2016-10-01 2017-09-30 0001260221 us-gaap:TreasuryStockMember 2019-09-30 0001260221 us-gaap:NoncontrollingInterestMember 2019-09-30 0001260221 us-gaap:CommonStockMember 2019-09-30 0001260221 us-gaap:TreasuryStockMember 2016-09-30 0001260221 us-gaap:AccountingStandardsUpdate201409Member us-gaap:RetainedEarningsMember 2018-10-01 2019-09-30 0001260221 us-gaap:CommonStockMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccountingStandardsUpdate201616Member us-gaap:RetainedEarningsMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccountingStandardsUpdate201409Member 2018-10-01 2019-09-30 0001260221 us-gaap:RetainedEarningsMember 2017-10-01 2018-09-30 0001260221 us-gaap:AccountingStandardsUpdate201802Member us-gaap:RetainedEarningsMember 2018-10-01 2019-09-30 0001260221 us-gaap:CommonStockMember 2016-09-30 0001260221 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0001260221 us-gaap:AccountingStandardsUpdate201802Member 2018-10-01 2019-09-30 0001260221 us-gaap:RetainedEarningsMember 2018-10-01 2019-09-30 0001260221 us-gaap:RetainedEarningsMember 2019-09-30 0001260221 us-gaap:CommonStockMember 2017-09-30 0001260221 us-gaap:TreasuryStockMember 2017-10-01 2018-09-30 0001260221 2016-09-30 0001260221 us-gaap:RetainedEarningsMember 2017-09-30 0001260221 us-gaap:RetainedEarningsMember 2016-09-30 0001260221 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-09-30 0001260221 us-gaap:AdditionalPaidInCapitalMember 2016-09-30 0001260221 us-gaap:RetainedEarningsMember 2018-09-30 0001260221 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0001260221 tdg:EsterlineMember 2019-03-14 0001260221 tdg:ExtantMember 2018-04-24 0001260221 tdg:SchrothMember 2017-02-22 2017-02-22 0001260221 tdg:SouriauSunbankMember 2019-09-30 0001260221 tdg:SchrothMember 2018-01-26 2018-01-26 0001260221 tdg:ExtantMember 2018-04-24 2018-04-24 0001260221 tdg:SkandiaMember 2018-07-13 2018-07-13 0001260221 srt:MinimumMember 2018-10-01 2019-09-30 0001260221 tdg:EsterlineMember 2019-09-30 0001260221 tdg:NavComMember 2018-10-01 2018-10-01 0001260221 tdg:StormscopeMember 2019-08-30 0001260221 tdg:ExtantMember 2017-10-01 2018-09-30 0001260221 tdg:EsterlineMember 2019-03-14 2019-03-14 0001260221 tdg:ThirdQuarter2017AcquisitionsMember 2017-10-01 2018-03-31 0001260221 tdg:KirkhillMember 2018-03-15 2018-03-15 0001260221 tdg:NavComMember 2018-10-01 0001260221 tdg:EsterlineMember 2017-10-01 2018-09-30 0001260221 tdg:SouriauSunbankMember 2018-10-01 2019-09-30 0001260221 tdg:SchrothMember 2018-10-01 2019-09-30 0001260221 tdg:SkandiaMember 2017-10-01 2018-09-30 0001260221 tdg:StormscopeMember 2019-08-30 2019-08-30 0001260221 tdg:ThirdQuarter2017AcquisitionsMember 2018-09-30 0001260221 tdg:SchrothMember 2017-10-01 2018-09-30 0001260221 srt:MaximumMember 2018-10-01 2019-09-30 0001260221 tdg:SchrothMember 2019-09-30 0001260221 tdg:EsterlineInterfaceTechnologyGroupMember 2019-09-20 2019-09-20 0001260221 tdg:KirkhillMember 2017-10-01 2018-09-30 0001260221 2017-10-01 2018-03-31 0001260221 srt:MaximumMember us-gaap:BuildingAndBuildingImprovementsMember 2018-10-01 2019-09-30 0001260221 srt:MaximumMember tdg:TechnologyFiniteLivedIntangibleAssetMember 2018-10-01 2019-09-30 0001260221 srt:MinimumMember us-gaap:LandImprovementsMember 2018-10-01 2019-09-30 0001260221 srt:MaximumMember us-gaap:FurnitureAndFixturesMember 2018-10-01 2019-09-30 0001260221 srt:MaximumMember us-gaap:LandImprovementsMember 2018-10-01 2019-09-30 0001260221 srt:MinimumMember us-gaap:FurnitureAndFixturesMember 2018-10-01 2019-09-30 0001260221 srt:MinimumMember us-gaap:MachineryAndEquipmentMember 2018-10-01 2019-09-30 0001260221 srt:MinimumMember tdg:TechnologyFiniteLivedIntangibleAssetMember 2018-10-01 2019-09-30 0001260221 srt:MinimumMember us-gaap:BuildingAndBuildingImprovementsMember 2018-10-01 2019-09-30 0001260221 srt:MinimumMember us-gaap:OrderOrProductionBacklogMember 2018-10-01 2019-09-30 0001260221 srt:MaximumMember us-gaap:MachineryAndEquipmentMember 2018-10-01 2019-09-30 0001260221 srt:MinimumMember us-gaap:OtherIntangibleAssetsMember 2018-10-01 2019-09-30 0001260221 tdg:Customer1Member us-gaap:SalesRevenueNetMember 2017-10-01 2018-03-31 0001260221 tdg:Customer1Member us-gaap:SalesRevenueNetMember 2016-10-01 2017-09-30 0001260221 us-gaap:GeographicDistributionForeignMember 2017-10-01 2018-03-31 0001260221 us-gaap:GeographicDistributionForeignMember 2018-10-01 2019-09-30 0001260221 tdg:Customer2Member us-gaap:SalesRevenueNetMember 2018-10-01 2019-09-30 0001260221 us-gaap:GeographicDistributionForeignMember 2016-10-01 2017-09-30 0001260221 tdg:Customer2Member us-gaap:SalesRevenueNetMember 2017-10-01 2018-03-31 0001260221 tdg:Customer2Member us-gaap:SalesRevenueNetMember tdg:PowerAndControlMember 2018-10-01 2019-09-30 0001260221 tdg:Customer2Member us-gaap:SalesRevenueNetMember 2016-10-01 2017-09-30 0001260221 tdg:Customer2Member us-gaap:SalesRevenueNetMember tdg:AirframeMember 2018-10-01 2019-09-30 0001260221 2018-10-01 0001260221 us-gaap:AccountingStandardsUpdate201409Member us-gaap:RetainedEarningsMember 2018-09-30 0001260221 us-gaap:AccountingStandardsUpdate201409Member 2018-09-30 0001260221 tdg:Customer1Member us-gaap:AccountsReceivableMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccountsReceivableMember us-gaap:GeographicDistributionForeignMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccountsReceivableMember 2018-10-01 2019-09-30 0001260221 tdg:Customer2Member us-gaap:AccountsReceivableMember 2018-10-01 2019-09-30 0001260221 tdg:NonAviationRelatedBusinessMember 2018-10-01 2019-09-30 0001260221 tdg:PowerAndControlMember 2017-10-01 2018-03-31 0001260221 tdg:NonAviationRelatedBusinessMember 2017-10-01 2018-03-31 0001260221 tdg:PowerAndControlMember 2017-09-30 0001260221 tdg:AirframeMember 2017-10-01 2018-03-31 0001260221 tdg:AirframeMember 2018-09-30 0001260221 tdg:AirframeMember 2018-10-01 2019-09-30 0001260221 tdg:NonAviationRelatedBusinessMember 2018-09-30 0001260221 tdg:PowerAndControlMember 2019-09-30 0001260221 tdg:NonAviationRelatedBusinessMember 2017-09-30 0001260221 tdg:PowerAndControlMember 2018-10-01 2019-09-30 0001260221 tdg:NonAviationRelatedBusinessMember 2019-09-30 0001260221 tdg:AirframeMember 2019-09-30 0001260221 tdg:PowerAndControlMember 2018-09-30 0001260221 tdg:AirframeMember 2017-09-30 0001260221 us-gaap:OtherIntangibleAssetsMember 2019-09-30 0001260221 us-gaap:TrademarksAndTradeNamesMember 2018-09-30 0001260221 us-gaap:OtherIntangibleAssetsMember 2018-09-30 0001260221 us-gaap:OrderOrProductionBacklogMember 2019-09-30 0001260221 us-gaap:TrademarksAndTradeNamesMember 2019-09-30 0001260221 us-gaap:OrderOrProductionBacklogMember 2018-09-30 0001260221 us-gaap:CustomerRelatedIntangibleAssetsMember 2019-09-30 0001260221 tdg:TechnologyMember 2018-09-30 0001260221 us-gaap:CustomerRelatedIntangibleAssetsMember 2018-09-30 0001260221 tdg:TechnologyMember 2019-09-30 0001260221 tdg:TechnologyMember 2018-10-01 2019-09-30 0001260221 us-gaap:OrderOrProductionBacklogMember 2018-10-01 2019-09-30 0001260221 us-gaap:TrademarksAndTradeNamesMember 2018-10-01 2019-09-30 0001260221 us-gaap:CustomerRelatedIntangibleAssetsMember 2018-10-01 2019-09-30 0001260221 us-gaap:GoodwillMember 2018-10-01 2019-09-30 0001260221 tdg:TermLoansMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20266.375Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:LongtermDebtCurrentMaturitiesMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20226.00Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotes550MDue20277.50Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:GovernmentRefundableAdvancesMember 2019-09-30 0001260221 tdg:Seniorsubordinatednotesdue20266.875Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 us-gaap:AssetBackedSecuritiesMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20256.50Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:SeniorSecuredNotes4BDue20266.25Member us-gaap:SeniorNotesMember 2019-09-30 0001260221 us-gaap:CapitalLeaseObligationsMember 2019-09-30 0001260221 tdg:A6.50SeniorSubordinatedNotesDue2024Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:TrancheFMember tdg:TermLoansMember 2019-09-30 0001260221 tdg:TrancheFMember tdg:TermLoansMember 2018-09-30 0001260221 tdg:TrancheEMember tdg:TermLoansMember 2019-09-30 0001260221 tdg:TrancheGMember tdg:TermLoansMember 2019-09-30 0001260221 tdg:TrancheGMember tdg:TermLoansMember 2018-09-30 0001260221 tdg:TrancheEMember tdg:TermLoansMember 2018-09-30 0001260221 tdg:SeniorSecuredNotes200MDue20266.25Member us-gaap:SecuredDebtMember 2019-09-30 0001260221 us-gaap:AssetBackedSecuritiesSecuritizedLoansAndReceivablesMember us-gaap:AssetBackedSecuritiesMember 2019-09-30 0001260221 tdg:SeniorSecuredNotes3.8BDue20266.25Member us-gaap:SecuredDebtMember 2019-01-30 0001260221 tdg:SeniorSecuredNotes3.8BDue20266.25Member us-gaap:SecuredDebtMember 2019-01-30 2019-01-30 0001260221 tdg:MulticurrencyRevolvingCommitmentMember 2019-03-14 0001260221 tdg:SeniorSubordinatedNotes2650MDue20275.50Member us-gaap:SeniorSubordinatedNotesMember us-gaap:SubsequentEventMember 2019-10-29 0001260221 tdg:SeniorSecuredNotes4BDue20266.25Member us-gaap:SecuredDebtMember 2019-02-01 0001260221 us-gaap:RevolvingCreditFacilityMember 2019-03-14 0001260221 us-gaap:RevolvingCreditFacilityMember 2018-09-30 0001260221 us-gaap:RevolvingCreditFacilityMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20226.00Member us-gaap:SeniorSubordinatedNotesMember us-gaap:SubsequentEventMember 2019-10-29 0001260221 tdg:SeniorSubordinatedNotesDue20205.50Member us-gaap:SeniorSubordinatedNotesMember 2019-03-15 0001260221 us-gaap:AssetBackedSecuritiesMember 2013-10-01 2014-09-30 0001260221 us-gaap:AssetBackedSecuritiesSecuritizedLoansAndReceivablesMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotes550MDue20277.50Member us-gaap:SeniorSubordinatedNotesMember 2019-02-01 0001260221 tdg:SeniorSecuredNotes200MDue20266.25Member us-gaap:SecuredDebtMember 2019-02-01 2019-02-01 0001260221 tdg:MulticurrencyRevolvingCommitmentMember 2019-09-30 0001260221 tdg:SeniorSecuredNotes200MDue20266.25Member us-gaap:SecuredDebtMember 2019-02-01 0001260221 tdg:SeniorSubordinatedNotesDue20205.50Member us-gaap:SeniorSubordinatedNotesMember 2018-10-01 2019-09-30 0001260221 tdg:SeniorSecuredNotes4BDue20266.25Member us-gaap:SecuredDebtMember 2018-10-01 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20256.50Member us-gaap:SeniorSubordinatedNotesMember 2017-03-01 0001260221 tdg:TermLoansMember 2018-09-30 0001260221 tdg:SeniorSecuredNotes4BDue20266.25Member us-gaap:SecuredDebtMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotes2650MDue20275.50Member us-gaap:SeniorSubordinatedNotesMember us-gaap:SubsequentEventMember 2019-10-29 2019-10-29 0001260221 tdg:SeniorSubordinatedNotesDue20266.375Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:Seniorsubordinatednotesdue20266.875Member us-gaap:SeniorSubordinatedNotesMember 2018-05-08 0001260221 tdg:SeniorSubordinatedNotesDue20205.50Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20226.00Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:A6.50SeniorSubordinatedNotesDue2024Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:LongtermDebtCurrentMaturitiesMember 2018-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20256.50Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 us-gaap:AssetBackedSecuritiesMember 2018-09-30 0001260221 tdg:Seniorsubordinatednotesdue20266.875Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:TrancheDMember tdg:TermLoansMember 2017-10-01 2018-03-31 0001260221 tdg:TrancheFMember tdg:TermLoansMember 2017-10-01 2018-03-31 0001260221 tdg:TrancheGMember tdg:TermLoansMember 2017-10-01 2018-03-31 0001260221 tdg:TrancheCMember tdg:TermLoansMember 2017-10-01 2018-03-31 0001260221 tdg:TrancheGMember tdg:TermLoansMember 2018-10-01 2019-09-30 0001260221 tdg:TrancheDMember tdg:TermLoansMember 2018-10-01 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20217.50Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:TrancheEMember tdg:TermLoansMember 2017-10-01 2018-03-31 0001260221 tdg:TrancheFMember tdg:TermLoansMember 2018-10-01 2019-09-30 0001260221 tdg:TrancheEMember tdg:TermLoansMember 2018-10-01 2019-09-30 0001260221 tdg:TrancheCMember tdg:TermLoansMember 2018-10-01 2019-09-30 0001260221 country:US us-gaap:PensionPlansDefinedBenefitMember 2016-10-01 2017-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2016-10-01 2017-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2017-10-01 2018-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2018-10-01 2019-09-30 0001260221 country:US us-gaap:PensionPlansDefinedBenefitMember 2017-10-01 2018-09-30 0001260221 country:US us-gaap:PensionPlansDefinedBenefitMember 2018-10-01 2019-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-10-01 2018-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2019-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2018-09-30 0001260221 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-09-30 0001260221 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2019-09-30 0001260221 country:US us-gaap:PensionPlansDefinedBenefitMember 2017-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2019-09-30 0001260221 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-10-01 2018-09-30 0001260221 country:US us-gaap:PensionPlansDefinedBenefitMember 2019-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-09-30 0001260221 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-10-01 2019-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-09-30 0001260221 country:US us-gaap:PensionPlansDefinedBenefitMember 2018-09-30 0001260221 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-10-01 2019-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2017-09-30 0001260221 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-10-01 2017-09-30 0001260221 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-10-01 2017-09-30 0001260221 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember 2018-09-30 0001260221 us-gaap:ForeignCorporateDebtSecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember us-gaap:FairValueInputsLevel1Member 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember 2018-09-30 0001260221 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2018-09-30 0001260221 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member 2018-09-30 0001260221 us-gaap:FairValueInputsLevel1Member 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:DomesticCorporateDebtSecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesUsMember us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesUsMember us-gaap:FairValueInputsLevel1Member 2018-09-30 0001260221 us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:FairValueInputsLevel12And3Member 2018-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesUsMember 2018-09-30 0001260221 us-gaap:EquitySecuritiesMember 2018-09-30 0001260221 us-gaap:DebtSecuritiesMember 2018-09-30 0001260221 us-gaap:EquitySecuritiesMember 2019-09-30 0001260221 us-gaap:CashAndCashEquivalentsMember 2018-09-30 0001260221 us-gaap:DebtSecuritiesMember 2019-09-30 0001260221 us-gaap:CashAndCashEquivalentsMember 2019-09-30 0001260221 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2019-09-30 0001260221 us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesUsMember 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesUsMember us-gaap:FairValueInputsLevel1Member 2019-09-30 0001260221 us-gaap:DomesticCorporateDebtSecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2019-09-30 0001260221 us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-09-30 0001260221 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember us-gaap:FairValueInputsLevel1Member 2019-09-30 0001260221 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2019-09-30 0001260221 us-gaap:ForeignCorporateDebtSecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesUsMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember 2019-09-30 0001260221 us-gaap:FairValueInputsLevel12And3Member 2019-09-30 0001260221 us-gaap:FairValueInputsLevel1Member 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember 2019-09-30 0001260221 us-gaap:ForeignGovernmentDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 us-gaap:DefinedBenefitPlanEquitySecuritiesNonUsMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 us-gaap:USTreasuryAndGovernmentMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember 2019-09-30 0001260221 country:US us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember 2019-09-30 0001260221 country:US us-gaap:QualifiedPlanMember 2018-10-01 2019-09-30 0001260221 tdg:UnqualifiedPlanMember 2018-10-01 2019-09-30 0001260221 us-gaap:ForeignPlanMember 2018-10-01 2019-09-30 0001260221 us-gaap:QualifiedPlanMember 2018-10-01 2019-09-30 0001260221 us-gaap:QualifiedPlanMember 2017-10-01 2018-09-30 0001260221 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-10-01 2017-09-30 0001260221 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-10-01 2018-03-31 0001260221 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-10-01 2019-09-30 0001260221 tdg:FederalAndForeignCountryJurisdictionMember country:DE 2019-09-30 0001260221 tdg:U.S.TaxCutsandJobsActEffective2018Member 2018-01-01 2018-01-01 0001260221 tdg:U.S.TaxCutsandJobsActEffective2018Member 2018-10-01 2019-09-30 0001260221 tdg:FederalAndForeignCountryJurisdictionMember country:FR 2019-09-30 0001260221 us-gaap:StateAndLocalJurisdictionMember 2019-09-30 0001260221 tdg:FederalAndForeignCountryJurisdictionMember country:GB 2019-09-30 0001260221 tdg:FederalAndForeignCountryJurisdictionMember country:BE 2019-09-30 0001260221 2017-12-31 2018-03-31 0001260221 tdg:November82017StockRepurchaseProgramMember 2017-11-08 0001260221 tdg:November82017StockRepurchaseProgramMember 2019-09-30 0001260221 us-gaap:MaterialReconcilingItemsMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:NonAviationRelatedBusinessMember 2018-10-01 2019-09-30 0001260221 us-gaap:CorporateNonSegmentMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:AirframeMember 2017-10-01 2018-09-30 0001260221 tdg:SouriauSunbankandEITMember 2018-10-01 2019-09-30 0001260221 tdg:SchrothMember 2018-10-01 2019-09-30 0001260221 us-gaap:MaterialReconcilingItemsMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:NonAviationRelatedBusinessMember 2016-10-01 2017-09-30 0001260221 us-gaap:MaterialReconcilingItemsMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:NonAviationRelatedBusinessMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:PowerAndControlMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:AirframeMember 2016-10-01 2017-09-30 0001260221 us-gaap:CorporateNonSegmentMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:PowerAndControlMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:PowerAndControlMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember 2018-10-01 2019-09-30 0001260221 us-gaap:CorporateNonSegmentMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:AirframeMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialOEMMember tdg:PowerAndControlMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:EsterlineMember tdg:PowerAndControlMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialOEMMember tdg:AirframeMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialAftermarketMember tdg:PowerAndControlMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialOEMMember tdg:PowerAndControlMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:DefenseMember tdg:PowerAndControlMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:DefenseMember tdg:PowerAndControlMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialOEMMember tdg:PowerAndControlMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialOEMMember tdg:AirframeMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:EsterlineMember tdg:PowerAndControlMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:EsterlineMember tdg:AirframeMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:EsterlineMember tdg:PowerAndControlMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:EsterlineMember tdg:AirframeMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:DefenseMember tdg:PowerAndControlMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialAftermarketMember tdg:PowerAndControlMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:DefenseMember tdg:AirframeMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialAftermarketMember tdg:PowerAndControlMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialAftermarketMember tdg:AirframeMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:DefenseMember tdg:AirframeMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:EsterlineMember tdg:AirframeMember 2016-10-01 2017-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialAftermarketMember tdg:AirframeMember 2017-10-01 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialOEMMember tdg:AirframeMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:CommercialAftermarketMember tdg:AirframeMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:DefenseMember tdg:AirframeMember 2018-10-01 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:PowerAndControlMember 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:AirframeMember 2019-09-30 0001260221 us-gaap:CorporateNonSegmentMember 2019-09-30 0001260221 us-gaap:DiscontinuedOperationsHeldforsaleMember 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:NonAviationRelatedBusinessMember 2019-09-30 0001260221 us-gaap:CorporateNonSegmentMember 2018-09-30 0001260221 us-gaap:DiscontinuedOperationsHeldforsaleMember 2019-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:NonAviationRelatedBusinessMember 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:PowerAndControlMember 2018-09-30 0001260221 us-gaap:OperatingSegmentsMember tdg:AirframeMember 2018-09-30 0001260221 tdg:A2003StockOptionPlanMember 2017-10-01 2018-09-30 0001260221 tdg:A2006StockIncentivePlanMember 2018-10-01 2019-09-30 0001260221 tdg:VestedStockOptionsMember 2018-10-01 2019-09-30 0001260221 tdg:A2003StockOptionPlanMember 2013-09-30 0001260221 tdg:A2003StockOptionPlanMember 2002-10-01 2003-09-30 0001260221 tdg:VestedStockOptionsMember 2016-10-01 2017-09-30 0001260221 tdg:A2003StockOptionPlanMember 2018-10-01 2019-09-30 0001260221 tdg:A2014StockOptionPlanMember 2014-10-02 0001260221 tdg:EmployeeServiceMember tdg:A2003StockOptionPlanMember 2002-10-01 2003-09-30 0001260221 tdg:OtherThanEmployeeServiceMember tdg:A2003StockOptionPlanMember 2002-10-01 2003-09-30 0001260221 tdg:A2006StockIncentivePlanMember 2011-03-01 2011-03-31 0001260221 tdg:A2003StockOptionPlanMember 2016-10-01 2017-09-30 0001260221 tdg:A2006StockIncentivePlanMember 2011-03-31 0001260221 tdg:TimeVestedStockOptionsMember tdg:A2003StockOptionPlanMember 2018-09-30 0001260221 tdg:A2019StockOptionPlanMember us-gaap:SubsequentEventMember 2019-10-03 0001260221 tdg:VestedStockOptionsMember 2017-10-01 2018-09-30 0001260221 tdg:A2003StockOptionPlanMember 2003-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2006StockIncentivePlanMember 2019-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2006StockIncentivePlanMember 2018-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2006StockIncentivePlanMember 2018-10-01 2019-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2003StockOptionPlanMember 2019-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2003StockOptionPlanMember 2018-10-01 2019-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2003StockOptionPlanMember 2018-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2014StockOptionPlanMember 2019-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2014StockOptionPlanMember 2018-10-01 2019-09-30 0001260221 tdg:PerformanceVestedStockOptionsMember tdg:A2014StockOptionPlanMember 2018-09-30 0001260221 tdg:SeniorSecuredNotes4BDue20266.25Member us-gaap:FairValueInputsLevel1Member us-gaap:SecuredDebtMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotes550MDue20277.50Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 us-gaap:OtherNoncurrentAssetsMember 2019-09-30 0001260221 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2019-09-30 0001260221 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20266.375Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 us-gaap:AccruedLiabilitiesMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20256.50Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:GovernmentRefundableAdvancesMember 2018-09-30 0001260221 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2018-09-30 0001260221 us-gaap:OtherNoncurrentLiabilitiesMember 2018-09-30 0001260221 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20205.50Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:Seniorsubordinatednotesdue20266.875Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:SeniorSubordinatedNotes550MDue20277.50Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 us-gaap:OtherNoncurrentLiabilitiesMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20205.50Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 us-gaap:OtherNoncurrentAssetsMember 2018-09-30 0001260221 tdg:SeniorSecuredNotes4BDue20266.25Member us-gaap:FairValueInputsLevel1Member us-gaap:SecuredDebtMember 2018-09-30 0001260221 us-gaap:FairValueInputsLevel1Member us-gaap:AssetBackedSecuritiesMember 2019-09-30 0001260221 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:AccruedLiabilitiesMember 2018-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20256.50Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:A6.50SeniorSubordinatedNotesDue2024Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 us-gaap:OtherNoncurrentAssetsMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20226.00Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 us-gaap:FairValueInputsLevel2Member us-gaap:CapitalLeaseObligationsMember 2019-09-30 0001260221 us-gaap:AccruedLiabilitiesMember us-gaap:FairValueInputsLevel2Member 2019-09-30 0001260221 tdg:A6.50SeniorSubordinatedNotesDue2024Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20205.50Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:SeniorSecuredNotes4BDue20266.25Member us-gaap:SecuredDebtMember 2018-09-30 0001260221 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:AccruedLiabilitiesMember us-gaap:FairValueInputsLevel2Member 2018-09-30 0001260221 us-gaap:FairValueInputsLevel2Member us-gaap:CapitalLeaseObligationsMember 2018-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20226.00Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2018-09-30 0001260221 us-gaap:FairValueInputsLevel1Member us-gaap:AssetBackedSecuritiesMember 2018-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20266.375Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 us-gaap:CapitalLeaseObligationsMember 2018-09-30 0001260221 tdg:Seniorsubordinatednotesdue20266.875Member us-gaap:FairValueInputsLevel1Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 us-gaap:FairValueInputsLevel2Member tdg:TermLoansMember 2018-09-30 0001260221 us-gaap:FairValueInputsLevel2Member tdg:TermLoansMember 2019-09-30 0001260221 tdg:SeniorSubordinatedNotesDue20217.50Member us-gaap:SeniorSubordinatedNotesMember 2019-09-30 0001260221 tdg:TrancheFMember tdg:InterestratecapagreementsbeginningJune302016Member 2019-09-30 0001260221 tdg:TrancheGMember us-gaap:InterestRateCapMember 2019-09-30 0001260221 tdg:TrancheEMember tdg:InterestratecapbeginningJune302020Member 2019-09-30 0001260221 tdg:TrancheEMember tdg:InterestratecapbeginningSeptember302015Member 2019-09-30 0001260221 tdg:TrancheEMember tdg:InterestrateswapbeginningJune302022Member 2019-09-30 0001260221 tdg:TrancheGMember tdg:InterestrateswapbeginningSeptember302022Member 2019-09-30 0001260221 tdg:TrancheEMember tdg:InterestrateswapbeginningJune302020Member 2019-09-30 0001260221 tdg:TrancheGMember us-gaap:InterestRateSwapMember 2019-09-30 0001260221 tdg:TrancheEMember tdg:InterestrateswapbeginningMarch312016Member 2019-09-30 0001260221 tdg:TrancheFMember tdg:InterestrateswapJune282019Member 2019-09-30 0001260221 tdg:TrancheEMember tdg:InterestrateswapbeginningJune292018Member 2019-09-30 0001260221 tdg:TrancheGMember tdg:InterestrateswapbeginningSeptember302017Member 2019-09-30 0001260221 tdg:TrancheGMember tdg:InterestrateswapbeginningDecember312021Member 2019-09-30 0001260221 tdg:TrancheFMember tdg:InterestrateswapbeginningJune302021Member 2019-09-30 0001260221 us-gaap:InterestRateCapMember 2019-09-30 0001260221 us-gaap:InterestRateCapMember 2018-09-30 0001260221 us-gaap:InterestRateSwapMember 2018-09-30 0001260221 us-gaap:InterestRateSwapMember 2019-09-30 0001260221 us-gaap:InterestRateSwapMember tdg:March312018RedesignationMember 2018-10-01 2019-09-30 0001260221 us-gaap:SalesMember 2018-10-01 2019-09-30 0001260221 us-gaap:InterestRateSwapMember tdg:December302017RedesignationMember 2018-10-01 2019-09-30 0001260221 us-gaap:ForeignExchangeForwardMember 2019-09-30 0001260221 tdg:March312018RedesignationMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-10-01 2019-09-30 0001260221 us-gaap:InterestRateCapMember 2018-10-01 2019-09-30 0001260221 tdg:TrancheFMember us-gaap:InterestRateCapMember 2019-09-30 0001260221 tdg:TrancheFMember us-gaap:InterestRateSwapMember 2019-09-30 0001260221 tdg:September302016RedesignationMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-10-01 2019-09-30 0001260221 us-gaap:ForeignExchangeForwardMember 2018-10-01 2019-09-30 0001260221 tdg:TrancheEMember us-gaap:InterestRateCapMember 2019-09-30 0001260221 tdg:March312018RedesignationMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-10-01 2018-09-30 0001260221 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-10-01 2019-09-30 0001260221 tdg:September302016RedesignationMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-10-01 2018-09-30 0001260221 tdg:December302017RedesignationMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-10-01 2019-09-30 0001260221 tdg:December302017RedesignationMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-10-01 2018-09-30 0001260221 tdg:TrancheFMember tdg:InterestrateswapJune282016Member 2019-09-30 0001260221 tdg:InterestRateSwapandCapMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-09-30 0001260221 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-10-01 2018-09-30 0001260221 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-09-30 0001260221 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccumulatedTranslationAdjustmentMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccumulatedTranslationAdjustmentMember 2017-10-01 2018-09-30 0001260221 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-09-30 0001260221 us-gaap:AccountingStandardsUpdate201802Member us-gaap:AccumulatedTranslationAdjustmentMember 2018-10-01 2019-09-30 0001260221 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2017-09-30 0001260221 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2017-10-01 2018-09-30 0001260221 us-gaap:AccumulatedTranslationAdjustmentMember 2019-09-30 0001260221 us-gaap:AccumulatedTranslationAdjustmentMember 2017-09-30 0001260221 us-gaap:AccumulatedTranslationAdjustmentMember 2018-09-30 0001260221 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-09-30 0001260221 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-09-30 0001260221 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-10-01 2019-09-30 0001260221 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-10-01 2018-09-30 0001260221 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-10-01 2018-03-31 0001260221 tdg:SouriauSunbankMember 2019-09-30 0001260221 tdg:SchrothMember 2017-10-01 2018-09-30 0001260221 tdg:SchrothMember 2016-10-01 2017-09-30 0001260221 tdg:SchrothMember 2016-10-01 2017-09-30 0001260221 tdg:EITMember 2018-10-01 2019-09-30 0001260221 srt:ParentCompanyMember 2019-06-30 2019-09-30 0001260221 srt:ParentCompanyMember 2018-10-01 2018-12-29 0001260221 srt:ParentCompanyMember 2018-12-30 2019-03-30 0001260221 srt:ParentCompanyMember 2019-03-31 2019-06-29 0001260221 srt:ParentCompanyMember 2017-12-31 2018-03-31 0001260221 srt:ParentCompanyMember 2018-07-01 2018-09-30 0001260221 srt:ParentCompanyMember 2017-10-01 2017-12-30 0001260221 srt:ParentCompanyMember 2018-04-01 2018-06-30 0001260221 srt:NonGuarantorSubsidiariesMember 2017-10-01 2018-09-30 0001260221 srt:GuarantorSubsidiariesMember 2017-10-01 2018-09-30 0001260221 srt:ParentCompanyMember 2017-10-01 2018-09-30 0001260221 srt:SubsidiariesMember 2017-10-01 2018-09-30 0001260221 tdg:TransDigmUKMember 2017-10-01 2018-09-30 0001260221 srt:ConsolidationEliminationsMember 2017-10-01 2018-09-30 0001260221 srt:SubsidiariesMember 2018-09-30 0001260221 srt:ParentCompanyMember 2018-09-30 0001260221 srt:ConsolidationEliminationsMember 2018-09-30 0001260221 srt:NonGuarantorSubsidiariesMember 2018-09-30 0001260221 tdg:TransDigmUKMember 2018-09-30 0001260221 srt:GuarantorSubsidiariesMember 2018-09-30 0001260221 srt:NonGuarantorSubsidiariesMember 2017-09-30 0001260221 srt:ConsolidationEliminationsMember 2016-10-01 2017-09-30 0001260221 tdg:TransDigmUKMember 2016-10-01 2017-09-30 0001260221 srt:SubsidiariesMember 2016-10-01 2017-09-30 0001260221 srt:ParentCompanyMember 2016-10-01 2017-09-30 0001260221 srt:ParentCompanyMember 2017-09-30 0001260221 srt:NonGuarantorSubsidiariesMember 2016-10-01 2017-09-30 0001260221 srt:GuarantorSubsidiariesMember 2016-10-01 2017-09-30 0001260221 srt:GuarantorSubsidiariesMember 2017-09-30 0001260221 srt:GuarantorSubsidiariesMember 2016-09-30 0001260221 srt:ConsolidationEliminationsMember 2017-09-30 0001260221 srt:ConsolidationEliminationsMember 2016-09-30 0001260221 tdg:TransDigmUKMember 2017-09-30 0001260221 srt:SubsidiariesMember 2016-09-30 0001260221 srt:SubsidiariesMember 2017-09-30 0001260221 tdg:TransDigmUKMember 2016-09-30 0001260221 srt:NonGuarantorSubsidiariesMember 2016-09-30 0001260221 srt:ParentCompanyMember 2016-09-30 0001260221 srt:GuarantorSubsidiariesMember 2019-09-30 0001260221 srt:NonGuarantorSubsidiariesMember 2019-09-30 0001260221 tdg:TransDigmUKMember 2019-09-30 0001260221 srt:ConsolidationEliminationsMember 2019-09-30 0001260221 srt:SubsidiariesMember 2019-09-30 0001260221 srt:ParentCompanyMember 2019-09-30 0001260221 srt:ConsolidationEliminationsMember 2018-10-01 2019-09-30 0001260221 srt:GuarantorSubsidiariesMember 2018-10-01 2019-09-30 0001260221 tdg:TransDigmUKMember 2018-10-01 2019-09-30 0001260221 srt:SubsidiariesMember 2018-10-01 2019-09-30 0001260221 srt:ParentCompanyMember 2018-10-01 2019-09-30 0001260221 srt:NonGuarantorSubsidiariesMember 2018-10-01 2019-09-30 0001260221 us-gaap:AllowanceForCreditLossMember 2018-09-30 0001260221 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2018-10-01 2019-09-30 0001260221 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2019-09-30 0001260221 us-gaap:InventoryValuationReserveMember 2016-10-01 2017-09-30 0001260221 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2016-09-30 0001260221 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2016-10-01 2017-09-30 0001260221 us-gaap:AllowanceForCreditLossMember 2017-10-01 2018-09-30 0001260221 tdg:SECSchedule1209InventoryReserveMember 2018-09-30 0001260221 us-gaap:InventoryValuationReserveMember 2017-09-30 0001260221 us-gaap:InventoryValuationReserveMember 2018-10-01 2019-09-30 0001260221 us-gaap:InventoryValuationReserveMember 2017-10-01 2018-09-30 0001260221 us-gaap:AllowanceForCreditLossMember 2019-09-30 0001260221 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2017-09-30 0001260221 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2017-10-01 2018-09-30 0001260221 us-gaap:AllowanceForCreditLossMember 2016-10-01 2017-09-30 0001260221 us-gaap:InventoryValuationReserveMember 2018-09-30 0001260221 us-gaap:InventoryValuationReserveMember 2019-09-30 0001260221 us-gaap:AllowanceForCreditLossMember 2017-09-30 0001260221 us-gaap:AllowanceForCreditLossMember 2018-10-01 2019-09-30 0001260221 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2018-09-30 0001260221 us-gaap:InventoryValuationReserveMember 2016-09-30 0001260221 us-gaap:AllowanceForCreditLossMember 2016-09-30 iso4217:USD xbrli:shares iso4217:USD xbrli:pure xbrli:shares tdg:Segment
Table of Contents

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2019
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number 001-32833
TransDigm Group Incorporated
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)
41-2101738
(I.R.S. Employer Identification No.)
1301 East 9th Street,
Suite 3000,
Cleveland,
Ohio
 
44114
(Address of principal executive offices)
 
(Zip Code)

(216) 706-2960
(Registrants’ telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading symbol
 
Name of exchange on which registered
Common Stock, $0.01 par value
 
TDG
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
  
Accelerated Filer
Non-Accelerated Filer
  
Smaller Reporting Company
Emerging Growth Company
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of March 31, 2019, based upon the last sale price of such voting and non-voting common stock on that date, was $24,193,750,882.
The number of shares outstanding of TransDigm Group Incorporated’s common stock, par value $.01 per share, was 53,548,349 as of November 17, 2019.
Documents incorporated by reference: Certain sections of the registrant’s definitive Proxy Statement to be filed in connection with its 2020 Annual Meeting of Shareholders, are incorporated by reference into Part III of this Annual Report on Form 10-K.
 


Table of Contents

TABLE OF CONTENTS
 
 
Page
PART I
 
 
PART II
 
 
PART III
 
 
PART IV
 
 
 


Table of Contents

Special Note Regarding Forward-Looking Statements
This report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 27A of the Securities Act of 1933, as amended. Discussions containing such forward-looking statements may be found in Items 1, 1A, 2, 3, 5, 7 and 7A hereof and elsewhere within this Report generally. In addition, when used in this Report, the words “believe,” “may,” “will,” “should,” “expect,” “intend,” “plan,” “predict,” “anticipate,” “estimate” or “continue” and other words and terms of similar meaning are intended to identify forward-looking statements. Although the Company (as defined below) believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made in this Report. The more important of such risks and uncertainties are set forth under the caption “Risk Factors” and elsewhere in this Report. Many such factors are outside the control of the Company. Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We do not undertake, and specifically decline, any obligation, to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.
Important factors that could cause actual results to differ materially from the forward-looking statements made in this Annual Report on Form 10-K 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 geopolitical or worldwide events; cyber-security threats and natural disasters; our reliance on certain customers; the U.S. defense budget and risks associated with being a government supplier including government audits and investigations; failure to maintain government or industry approvals; failure to complete or successfully integrate acquisitions, including our acquisition of Esterline; our indebtedness; potential environmental liabilities; liabilities arising in connection with litigation; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with our international sales and operations; and other risk factors.
In this report, the term “TD Group” refers to TransDigm Group Incorporated, which holds all of the outstanding capital stock of TransDigm Inc. The terms “Company,” “TransDigm,” “we,” “us,” “our” and similar terms, unless the context otherwise requires, refer to TD Group, together with TransDigm Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest. References to “fiscal year” mean the year ending or ended September 30. For example, “fiscal year 2019” or “fiscal 2019” means the period from October 1, 2018 to September 30, 2019.

PART I
ITEM 1.    BUSINESS
The Company
TransDigm Inc. was formed in 1993 in connection with a leveraged buyout transaction. TD Group was formed in 2003 to facilitate a leveraged buyout of TransDigm Inc. The Company was owned by private equity funds until its initial public offering in 2006. TD Group’s common stock is publicly traded on the New York Stock Exchange, or NYSE, under the ticker symbol “TDG.”
We believe we are a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Our business is well diversified due to the broad range of products we offer to our customers. We estimate that approximately 90% of our net sales for fiscal year 2019 were generated by proprietary products. In addition for fiscal year 2019, we estimate that we generated approximately 80% of our net sales from products in which we are the sole source provider.
Most of our products generate significant aftermarket revenue. Once our parts are designed into and sold on a new aircraft, we generate net sales from aftermarket consumption over the life of that aircraft, which is generally estimated to be approximately 25 to 30 years. A typical platform can be produced for 20 to 30 years, giving us an estimated product life cycle in excess of 50 years. We estimate that approximately 52% of our net sales in fiscal year 2019 were generated from aftermarket sales, the vast majority of which come from the commercial and military aftermarkets. These aftermarket revenues have historically produced a higher gross margin and been more stable than sales to original equipment manufacturers, or OEMs.
Products
We primarily design, produce and supply highly engineered proprietary aerospace components (and certain systems/subsystems) with significant aftermarket content. We seek to develop highly customized products to solve specific needs for aircraft operators and manufacturers. We attempt to differentiate ourselves based on engineering, service and manufacturing capabilities. We typically choose not to compete for non-proprietary “build to print” business because it frequently offers lower margins than proprietary

1

Table of Contents

products. We believe that our products have strong brand names within the industry and that we have a reputation for high quality, reliability and strong customer support.
Our business is well diversified due to the broad range of products that we offer to our customers. Some of our more significant product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, databus and power controls, cockpit security components and systems, specialized cockpit displays, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered interior surfaces and related components, advanced sensor products, switches and relay panels, advanced displays, thermal protection and insulation, lighting and control technology, military personnel parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems.
Acquisition of Esterline Technologies Corporation
On March 14, 2019, TransDigm completed the acquisition of all the outstanding stock of Esterline Technologies Corporation (“Esterline”) for $122.50 per share in cash, plus the repayment of Esterline debt. The purchase price, net of cash acquired of approximately $398.2 million, totaled approximately $3,923.9 million. Of the $3,923.9 million purchase price, $3,536.3 million was paid at closing and the remaining $387.6 million was classified as restricted cash for the redemption of Esterline’s outstanding senior notes due 2023 (herein the "2023 Notes"). The 2023 Notes were redeemed on April 15, 2019. Esterline, through its subsidiaries, is an industry leader in specialized manufacturing for the aerospace and defense industry, primarily within three core disciplines: advanced materials, avionics and controls and sensors and systems. The acquisition of Esterline expands TransDigm's platform of proprietary and sole source content for the aerospace and defense industry and the Esterline products have significant aftermarket exposure.
For further details on the acquisitions and divestitures that occurred during fiscal 2019, refer to Note 2, “Acquisitions and Divestitures,” to the consolidated financial statements included herein.
Segments
The Company’s businesses are organized and managed in three reporting segments: Power & Control, Airframe and Non-aviation.
The Power & Control segment includes operations that primarily develop, produce and market systems and components that predominately provide power to or control power of the aircraft utilizing electronic, fluid, power and mechanical motion control technologies. Major product offerings include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, databus and power controls, advanced sensor products, switches and relay panels, high performance hoists, winches and lifting devices and cargo loading and handling systems. Primary customers of this segment are engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies and repair depots. Products are sold in the original equipment and aftermarket market channels.
The Airframe segment includes operations that primarily develop, produce and market systems and components that are used in non-power airframe applications utilizing airframe and cabin structure technologies. Major product offerings include engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered interior surfaces and related components, advanced displays, thermal protection, lighting and control technology, military personnel parachutes and cargo delivery systems. Primary customers of this segment are airframe manufacturers and cabin system suppliers and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies and repair depots. Products are sold in the original equipment and aftermarket market channels.
The Non-aviation segment includes operations that primarily develop, produce and market products for non-aviation markets. Major product offerings include seat belts and safety restraints for ground transportation applications, mechanical/electro-mechanical actuators and controls for space applications, hydraulic/electromechanical actuators and fuel valves for land based gas turbines, and refueling systems for heavy equipment used in mining, construction and other industries and turbine controls for the energy and oil and gas markets. Primary customers of this segment are off-road vehicle suppliers and subsystem suppliers, child restraint system suppliers, satellite and space system suppliers, manufacturers of heavy equipment used in mining, construction and other industries and turbine original equipment manufacturers, gas pipeline builders and electric utilities.
The Esterline businesses were acquired towards the end of the second quarter of fiscal 2019 and preliminarily assessed as a separate segment of the Company. During the third quarter of fiscal 2019, the Esterline businesses were integrated into TransDigm's existing Power & Control, Airframe and Non-aviation segments.
For financial information about our segments, see Note 17, “Segments,” to the consolidated financial statements included herein.


2

Table of Contents

Sales and Marketing
Consistent with our overall strategy, our sales and marketing organization is structured to continually develop technical solutions that meet customer needs. In particular, we attempt to focus on products and programs that will lead to high-margin, repeatable sales in the aftermarket.
We have structured our sales efforts along our major product offerings, assigning a business unit manager to certain products. Each business unit manager is expected to grow the sales and profitability of the products for which he or she is responsible and to achieve the targeted annual level of bookings, sales, new business and profitability for such products. The business unit managers are assisted by account managers and sales engineers who are responsible for covering major OEM and aftermarket accounts. Account managers and sales engineers are expected to be familiar with the personnel, organization and needs of specific customers to achieve total bookings and new business goals for each account and, together with the business unit managers, to determine when additional resources are required at customer locations. Most of our sales personnel are evaluated, in part, on their bookings and their ability to identify and obtain new business opportunities.
Though typically performed by employees, the account manager function may be performed by independent representatives depending on the specific customer, product and geographic location. We also use a number of distributors to provide logistical support as well as serve as a primary customer contact with certain smaller accounts. Our major distributors are Aviall, Inc. (a subsidiary of The Boeing Company) and Satair A/S (a subsidiary of Airbus S.A.S.).
Manufacturing and Engineering
We maintain approximately 110 manufacturing facilities. Most of our manufacturing facilities are comprised of manufacturing, distribution and engineering functions, and most facilities have certain administrative functions, including management, sales and finance. We continually strive to improve productivity and reduce costs, including rationalization of operations, developing improved control systems that allow for accurate accounting and reporting, investing in equipment, tooling, information systems and implementing broad-based employee training programs. Management believes that our manufacturing systems and equipment contribute to our ability to compete by permitting us to meet the rigorous tolerances and cost sensitive price structure of aircraft component customers.
We attempt to differentiate ourselves from our competitors by producing uniquely engineered products with high quality and timely delivery. Our engineering costs are recorded in cost of sales and in selling and administrative expenses in our consolidated statements of income. Research and development costs are recorded in selling and administrative expenses in our consolidated statements of income. The aggregate of engineering expense and research and development expense represents approximately 9% of our operating units’ aggregate costs, or approximately 5% of our consolidated net sales for fiscal year 2019. Our proprietary products, and particularly our new product initiatives, are designed by our engineers and are intended to serve the needs of the aircraft component industry. These proprietary designs must withstand the extraordinary conditions and stresses that will be endured by products during use and meet the rigorous demands of our customers’ tolerance and quality requirements.
We use sophisticated equipment and procedures to comply with quality requirements, specifications and Federal Aviation Administration (“FAA”) and OEM requirements. We perform a variety of testing procedures as required by our customers, such as testing under different temperature, humidity and altitude levels, flammability testing, shock and vibration testing and X-ray fluorescent measurement. These procedures, together with other customer approved techniques for document, process and quality control, are used throughout our manufacturing facilities. Refer to Note 3, “Summary of Significant Accounting Policies,” to the consolidated financial statements included herein with respect to total costs of research and development.
Customers
We predominantly serve customers in the commercial, regional, business jet and general aviation aftermarket, which accounts for approximately 32% of total sales; the commercial aerospace OEM market, comprising large commercial transport manufacturers and regional and business jet manufacturers, which accounts for approximately 26% of total sales; and the defense market, which accounts for approximately 37% of total sales. Non-aerospace sales comprise approximately 5% of our total sales.
Our customers include: (1) distributors of aerospace components; (2) worldwide commercial airlines, including national and regional airlines; (3) large commercial transport and regional and business aircraft OEMs; (4) various armed forces of the United States and friendly foreign governments; (5) defense OEMs; (6) system suppliers; and (7) various other industrial customers. For the fiscal year ended September 30, 2019, The Boeing Company (which includes Aviall, Inc., a distributor of commercial aftermarket parts to airlines throughout the world) accounted for approximately 11% of our net sales. Our top ten customers for fiscal year 2019 accounted for approximately 42% of our net sales. Products supplied to many of our customers are used on multiple platforms.
The markets in which we sell our products are, to varying degrees, cyclical and have experienced upswings and downturns. The demand for our commercial aftermarket parts and services depends on, among other things, the breadth of our installed OEM base, revenue passenger miles (“RPMs”), the size and age of the worldwide aircraft fleet, the percentage of the worldwide fleet

3

Table of Contents

that is in warranty, and airline profitability. The demand for defense products is specifically dependent on government budget trends, military campaigns and political pressures.
Competition
The niche markets within the aerospace industry that we serve are relatively fragmented and we face several competitors for many of the products and services we provide. Due to the global nature of the commercial aircraft industry, competition in these categories comes from both U.S. and foreign companies. Competitors in our product offerings range in size from divisions of large public corporations to small privately-held entities with only one or two components in their entire product portfolios.
We compete on the basis of engineering, manufacturing and marketing high quality products, which we believe meet or exceed the performance and maintenance requirements of our customers, consistent and timely delivery, and superior customer service and support. The industry’s stringent regulatory, certification and technical requirements and the investments necessary in the development and certification of products may create disincentives for potential new competitors for certain products. If customers receive products that meet or exceed expectations and performance standards, we believe that they will have a reduced incentive to certify another supplier because of the cost and time of the technical design and testing certification process. In addition, we believe that the availability, dependability and safety of our products are reasons for our customers to continue long-term supplier relationships.
Government Contracts
Companies engaged in supplying defense-related equipment and services to U.S. Government agencies are subject to business risks specific to the defense industry. These risks include the ability of the U.S. Government to unilaterally: (1) suspend us from receiving new contracts; (2) terminate existing contracts; (3) reduce the value of existing contracts; (4) audit our contract-related costs and fees, including allocated indirect costs; (5) control and potentially prohibit the export of our products; and (6) seek repayment of contract related payments under certain circumstances. Violations of government procurement laws could result in civil or criminal penalties.
Governmental Regulation
The commercial aircraft component industry is highly regulated by the FAA in the United States and by the Joint Aviation Authorities in Europe and other agencies throughout the world, while the military aircraft component industry is governed by military quality specifications. We, and the components we manufacture, are required to be certified by one or more of these entities or agencies, and, in many cases, by individual OEMs, in order to engineer and service parts and components used in specific aircraft models.
We must also satisfy the requirements of our customers, including OEMs and airlines that are subject to FAA regulations, and provide these customers with products and services that comply with the government regulations applicable to commercial flight operations. In addition, the FAA requires that various maintenance routines be performed on aircraft components. We believe that we currently satisfy or exceed these maintenance standards in our repair and overhaul services. We also maintain several FAA approved repair stations.
In addition, our businesses are subject to many other laws and requirements typically applicable to manufacturers and exporters. Without limiting the foregoing, sales of many of our products that will be used on aircraft owned by foreign entities are subject to compliance with export control laws and the manufacture of our products and the operations of our businesses, including the disposal of hazardous wastes, are subject to compliance with applicable environmental laws.
Market Channels
The commercial aerospace industry, including the aftermarket and OEM market, is impacted by the health of the global economy and geopolitical events around the world. The commercial aerospace industry has shown strength with increases in revenue passenger miles, or RPMs, since 2010, and positive growth continued through 2019 with increase in RPMs , as well as general growth in the large commercial OEM sector (aircraft with 100 or more seats) with order announcements by The Boeing Company and Airbus S.A.S leading to planned increases in production. The primary exception to this was the production rate decrease on the Boeing 737 MAX, although not material to TransDigm’s financial results. The 2020 leading indicators or industry consensus suggest a continuation of current trends in the commercial transport market sector supported by continued RPM growth and increases in production at the OEM level.
The defense aerospace market is dependent on government budget constraints, the timing of orders, political pressures and the extent of global conflicts. It is not necessarily affected by general economic conditions that affect the commercial aerospace industry.
Our presence in both the commercial aerospace and military sectors of the aerospace industry may mitigate the impact on our business of any specific industry risk. We service a diversified customer base in the commercial and military aerospace industry, and we provide components to a diverse installed base of aircraft, which mitigates our exposure to any individual airframe platform. At times, declines in sales in one channel have been offset by increased sales in another channel. However, due to differences

4

Table of Contents

between the profitability of our products sold to OEM and aftermarket customers, variation in product mix can cause variation in gross margin.
There are many short-term factors (including inventory corrections, unannounced changes in order patterns, strikes, facility shutdowns caused by fires, hurricanes or other incidents and mergers and acquisitions) that can cause short-term disruptions in our quarterly shipment patterns as compared to previous quarters and the same periods in prior years. As such, it can be difficult to determine longer-term trends in our business based on quarterly comparisons. To normalize for short-term fluctuations, we tend to look at our performance over several quarters or years of activity rather than discrete short-term periods.
There are also fluctuations in OEM and aftermarket ordering and delivery requests from quarter-to-quarter, as well as variations in product mix from quarter-to-quarter, that may cause positive or negative variations in gross profit margins since commercial aftermarket sales have historically produced a higher gross margin than sales to commercial OEMs. Again, in many instances these are timing events between quarters and must be balanced with macro aerospace industry indicators.
Commercial Aftermarket
The key growth factors in the commercial aftermarket include worldwide RPMs and the size and activity level of the worldwide fleet of aircraft and the percentage of the fleet that is in warranty.
Commercial OEM Market
The commercial transport market sector, the largest sector in the commercial OEM market, declined in 2019 primarily due to the 737 MAX production rate cuts at The Boeing Company. However, the rate cuts did not have a material impact on our commercial OEM revenue as our revenue growth outperformed the general market. Our commercial transport OEM shipments and revenues generally run ahead of The Boeing Company and Airbus S.A.S airframe delivery schedules. As a result and consistent with prior years, our fiscal 2020 shipments will be a function of, among other things, the estimated 2020 and 2021 commercial airframe production rates. We have been experiencing increased sales in the large commercial OEM sector (aircraft with 100 or more seats) driven by an increase in production by The Boeing Company and Airbus S.A.S tied to previous order announcements. Industry consensus indicates this production increase will continue in 2020 but may begin to moderate or modestly decline in 2021.
Defense
Our military business fluctuates from year to year, and is dependent, to a degree, on government budget constraints, the timing of orders, macro and micro dynamics with respect to Department of Defense procurement policy and the extent of global conflicts. For a variety of reasons, the military spending outlook is very uncertain. For planning purposes, we assume that military-related sales of our types of products to be flat in future years over the recent high levels.
Raw Materials
We require the use of various raw materials in our manufacturing processes. We also purchase a variety of manufactured component parts from various suppliers. We also purchase replacement parts, which are utilized in our various repair and overhaul operations. At times, we concentrate our orders among a few suppliers in order to strengthen our supplier relationships. Most of our raw materials and component parts are generally available from multiple suppliers at competitive prices.
Intellectual Property
We have various trade secrets, proprietary information, trademarks, trade names, patents, copyrights and other intellectual property rights, which we believe, in the aggregate but not individually, are important to our business.
Backlog
As of September 30, 2019, the Company estimated its sales order backlog at $3,437 million compared to an estimated sales order backlog of $2,026 million as of September 30, 2018. The increase in backlog is due to growth from recent acquisitions, particularly the Esterline acquisition, and organic growth in the commercial aftermarket, commercial OEM and defense markets. The majority of the purchase orders outstanding as of September 30, 2019 are scheduled for delivery within the next twelve months. Purchase orders may be subject to cancellation or deferral by the customer prior to shipment. The level of unfilled purchase orders at any given date during the year will be materially affected by the timing of the Company’s receipt of purchase orders and the speed with which those orders are filled. Accordingly, the Company’s backlog as of September 30, 2019 may not necessarily represent the actual amount of shipments or sales for any future period.

5

Table of Contents

Foreign Operations
Although we manufacture a significant portion of our products in the United States, we manufacture some products in Belgium, Canada, China, the Dominican Republic, France, Germany, Hong Kong, Hungary, India, Japan, Malaysia, Mexico, Morocco, Norway, Singapore, Sri Lanka, Sweden and the United Kingdom. Although the majority of sales of our products are made to customers (including distributors) located in the United States, our products are ultimately sold to and used by customers (including airlines and other end users of aircraft) throughout the world. A number of risks inherent in international operations could have a material adverse effect on our results of operations, including currency fluctuations, difficulties in staffing and managing multi-national operations, general economic and political uncertainties and potential for social unrest in countries in which we operate, limitations on our ability to enforce legal rights and remedies, restrictions on the repatriation of funds, change in trade policies, tariff regulation, difficulties in obtaining export and import licenses and the risk of government financed competition.
Environmental Matters
Our operations and facilities are subject to a number of federal, state, local and foreign environmental laws and regulations that govern, among other things, discharges of pollutants into the air and water, the generation, handling, storage and disposal of hazardous materials and wastes, the remediation of contamination and the health and safety of our employees. Environmental laws and regulations may require that the Company investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. Certain facilities and third-party sites utilized by the Company have been identified as potentially responsible parties under the federal superfund laws and comparable state laws. The Company is currently involved in the investigation and remediation of a number of sites under applicable laws. For information regarding environmental accruals, see Note 15, “Environmental Liabilities,” to the consolidated financial statements included herein.
Employees
As of September 30, 2019, we had approximately 18,300 full-time, part-time and temporary employees from business units in continuing operations. Approximately 18% of our full-time and part-time employees were represented by labor unions. Collective bargaining agreements between us and these labor unions expire at various dates ranging from November 2019 to May 2023. We consider our relationship with our employees generally to be satisfactory.
Available Information
TD Group’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including any amendments, will be made available free of charge on the Company’s website, www.transdigm.com, as soon as reasonably practicable, following the filing of the reports with the Securities and Exchange Commission. In addition, the Company’s website allows investors and other interested persons to sign up to automatically receive e-mail alerts when news releases and financial information is posted on the website. The SEC also maintains a website, www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The information on or obtainable through our website is not incorporated into this Annual Report on Form 10-K.
ITEM 1A.    RISK FACTORS
Set forth below are important risks and uncertainties that could negatively affect our business and financial condition and could cause our actual results to differ materially from those expressed in forward-looking statements contained in this report.
Our commercial business is sensitive to the number of flight hours that our customers’ planes spend aloft, the size and age of the worldwide aircraft fleet and our customers’ profitability. These items are, in turn, affected by general economic and geopolitical and other worldwide conditions.
Our commercial business is directly affected by, among other factors, changes in revenue passenger miles (RPMs), the size and age of the worldwide aircraft fleet, the percentage of the fleet that is out-of-warranty and changes in the profitability of the commercial airline industry. RPMs and airline profitability have historically been correlated with the general economic environment, although national and international events also play a key role. For example, in the past, the airline industry has been severely affected by the downturn in the global economy, higher fuel prices, the increased security concerns among airline customers following the events of September 11, 2001, the Severe Acute Respiratory Syndrome (SARS) epidemic, and the conflicts abroad, and could be impacted by future geopolitical or other worldwide events, such as war, terrorist acts, or a worldwide infectious disease outbreak. In addition, global market and economic conditions have been challenging with turbulence in the U.S. and international markets and economies and have prolonged declines in business and consumer spending. As a result of the substantial reduction in airline traffic resulting from these events, the airline industry incurred large losses and financial difficulties. Some carriers have also parked or retired a portion of their fleets and have reduced workforces and flights. During periods of reduced airline profitability, some airlines may delay purchases of spare parts, preferring instead to deplete existing inventories, and delay refurbishments and discretionary spending. If demand for spare parts decreases, there would be a decrease in demand for certain of our products. An adverse change in demand could impact our results of operations, collection of accounts receivable and our

6

Table of Contents

expected cash flow generation from current and acquired businesses which may adversely impact our financial condition and access to capital markets.
Our sales to manufacturers of aircraft are cyclical, and a downturn in sales to these manufacturers may adversely affect us.
Our sales to manufacturers of large commercial aircraft, such as The Boeing Company, Airbus S.A.S, and related OEM suppliers, as well as manufacturers of business jets (which collectively accounted for approximately 26% of our net sales in fiscal year 2019) have historically experienced periodic downturns. In the past, these sales have been affected by airline profitability, which is impacted by, among other things, fuel and labor costs, price competition, interest rates, downturns in the global economy and national and international events. In addition, sales of our products to manufacturers of business jets are impacted by, among other things, downturns in the global economy. Downturns adversely affect our net sales, gross margin and net income.
We rely heavily on certain customers for much of our sales.
Our largest customer for fiscal year 2019 was The Boeing Company (which includes Aviall, Inc.). The Boeing Company accounted for approximately 11% of our net sales in fiscal year 2019. Our top ten customers for fiscal year 2019 accounted for approximately 42% of our net sales. A material reduction in purchasing by one of our larger customers for any reason, including but not limited to economic downturn, decreased production, strike or resourcing, could have a material adverse effect on our net sales, gross margin and net income. In 2019, The Boeing Company announced a production rate decrease on the Boeing 737 MAX from 52 to 42 airplanes per month. The Company does not anticipate the current production rate decrease to have a material impact on the Company’s financial results.
We generally do not have guaranteed future sales of our products. Further, when we enter into fixed price contracts with some of our customers, we take the risk for cost overruns.
As is customary in our business, we do not generally have long-term contracts with most of our aftermarket customers and, therefore, do not have guaranteed future sales. Although we have long-term contracts with many of our OEM customers, many of those customers may terminate the contracts on short notice and, in most cases, our customers have not committed to buy any minimum quantity of our products. In addition, in certain cases, we must anticipate the future volume of orders based upon the historic purchasing patterns of customers and upon our discussions with customers as to their anticipated future requirements, and this anticipated future volume of orders may not materialize.
We also have entered into multi-year, fixed-price contracts with some of our customers, pursuant to which we have agreed to perform the work for a fixed price and, accordingly, realize all the benefit or detriment resulting from any decreases or increases in the costs of making these products. Sometimes we accept a fixed-price contract for a product that we have not yet produced, and this increases the risk of cost overruns or delays in the completion of the design and manufacturing of the product. Most of our contracts do not permit us to recover increases in raw material prices, taxes or labor costs.
U.S. military spending is dependent upon the U.S. defense budget.
The military and defense market is significantly dependent upon government budget trends, particularly the U.S. Department of Defense (the “DOD”) budget. In addition to normal business risks, our supply of products to the United States Government is subject to unique risks largely beyond our control. DOD budgets could be negatively impacted by several factors, including, but not limited to, a change in defense spending policy by the current presidential administration, the U.S. Government’s budget deficits, spending priorities, the cost of sustaining the U.S. military presence internationally and possible political pressure to reduce U.S. Government military spending, each of which could cause the DOD budget to remain unchanged or to decline. A significant decline in U.S. military expenditures could result in a reduction in the amount of our products sold to the various agencies and buying organizations of the U.S. Government.
We intend to pursue acquisitions. Our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms, or if we cannot effectively integrate acquired operations.
A significant portion of our growth has occurred through acquisitions. Any future growth through acquisitions will be partially dependent upon the continued availability of suitable acquisition candidates at favorable prices and upon advantageous terms and conditions. We intend to pursue acquisitions that we believe will present opportunities consistent with our overall business strategy. However, we may not be able to find suitable acquisition candidates to purchase or may be unable to acquire desired businesses or assets on economically acceptable terms or may be unable to receive necessary regulatory approvals or support. In addition, we may not be able to raise the capital necessary to fund future acquisitions. Because we may actively pursue a number of opportunities simultaneously, we may encounter unforeseen expenses, complications and delays, including regulatory complications or difficulties in employing sufficient staff and maintaining operational and management oversight.
We regularly engage in discussions with respect to potential acquisition and investment opportunities. If we consummate an acquisition, our capitalization and results of operations may change significantly. Future acquisitions could result in margin dilution and further likely result in the incurrence of additional debt and contingent liabilities and an increase in interest and amortization

7

Table of Contents

expenses or periodic impairment charges related to goodwill and other intangible assets as well as significant charges relating to integration costs.
Acquisitions involve risks that the businesses acquired will not perform in accordance with expectations and that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove incorrect. In addition, we may not be able to successfully integrate any business we acquire into our existing business. The successful integration of new businesses depends on our ability to manage these new businesses and cut excess costs. The successful integration of future acquisitions may also require substantial attention from our senior management and the management of the acquired business, which could decrease the time that they have to service, attract customers and develop new products and services or attend to other acquisition opportunities.
We are subject to many of the foregoing risks in connection with our acquisition of Esterline completed in March 2019, and these risks may be exacerbated due to the scale and complexity of that acquisition as compared to our recent acquisitions. The acquisition has required and will continue to require extensive integration efforts. These efforts could result in significant unforeseen costs and require substantial attention from our senior management. If we are unable to successfully integrate Esterline or the acquisition otherwise does not perform to our expectations, our results of operations and financial condition may be adversely affected. It is also possible that the substantial management attention required by, and the indebtedness incurred in connection with the transaction could cause us to forgo other acquisition opportunities, particularly if we encounter unexpected costs or the acquisition otherwise does not perform to our expectations.
We are subject to certain unique business risks as a result of supplying equipment and services to the U.S. Government.
Companies engaged in supplying defense-related equipment and services to U.S. Government agencies, whether through direct contracts with the U.S. government or a as a subcontractor to customers contracting with the U.S. government, are subject to business risks specific to the defense industry. These risks include the ability of the U.S. Government to unilaterally:
suspend us from receiving new contracts based on alleged violations of procurement laws or regulations;
terminate existing contracts;
revoke required security clearances;
reduce the value of existing contracts; and
audit our contract-related costs and fees, including allocated indirect costs.
Most of our U.S. Government contracts can be terminated by the U.S. Government at its convenience without significant notice. Termination for convenience provisions provide only for our recovery of costs incurred or committed, settlement expenses and profit on the work completed prior to termination.
On contracts for which the price is based on cost, the U.S. Government may review our costs and performance, as well as our accounting and general business practices. Based on the results of such audits, the U.S. Government may adjust our contract-related costs and fees, including allocated indirect costs. In addition, under U.S. Government purchasing regulations, some of our costs, including most financing costs, amortization of intangible assets, portions of research and development costs, and certain marketing expenses may not be subject to reimbursement.
Furthermore, even where the price is not based on cost, the U.S. Government may seek to review our costs to determine whether our pricing is “fair and reasonable.” Our subsidiaries are periodically subject to pricing reviews and government buying agencies that purchase some of our subsidiaries’ products are periodically subject to audits by the DOD Office of Inspector General (“OIG”) with respect to prices paid for such products. In the third quarter of fiscal 2019, we voluntarily refunded $16 million to the U.S. government following an OIG audit, and another OIG audit is underway. In addition, our defense-related business is the subject of an ongoing Congressional inquiry by the House Oversight Committee. Pricing reviews and government audits, including the audit underway, and the Congressional inquiry are costly and time consuming for our management and could distract from our ability to effectively manage the business. As a result of these reviews, audits and inquiries, we could be subject to providing further refunds to the U.S. Government or we could be asked to enter into an arrangement whereby our prices would be based on cost, the DOD could seek to pursue alternative sources of supply for our parts, or the U.S. government could take other adverse actions with respect to our contracts. Any of those occurrences could lead to a reduction in our revenue from, or the profitability of certain of our supply arrangements with, certain agencies and buying organizations of the U.S. Government.
If a government inquiry or investigation uncovers improper or illegal activities, we could be subject to civil or criminal penalties or administrative sanctions, including contract termination, fines, forfeiture of fees, suspension of payment and suspension or debarment from doing business with U.S. government agencies, any of which could materially adversely affect our reputation, business, financial condition and results of operations.
Moreover, U.S. Government purchasing regulations contain a number of additional operational requirements, which do not apply to entities not engaged in government contracting. Failure to comply with such government contracting requirements could result in civil and criminal penalties that could have a material adverse effect on the Company’s results of operations.

8

Table of Contents

Our business may be adversely affected if we would lose our government or industry approvals or if more stringent government regulations are enacted or if industry oversight is increased.
The aerospace industry is highly regulated in the United States and in other countries. In order to sell our components, we and the components we manufacture must be certified by the FAA, the DOD and similar agencies in foreign countries and by individual manufacturers. If new and more stringent government regulations are adopted or if industry oversight increases, we might incur significant expenses to comply with any new regulations or heightened industry oversight. In addition, if material authorizations or approvals were revoked or suspended, our business would be adversely affected.
In addition to the aviation approvals, we are at times required to obtain approval from U.S. Government agencies to export our products. U.S. laws and regulations applicable to us include the Arms Export Control Act, the International Traffic in Arms Regulations ("ITAR"), the Export Administration Regulations ("EAR") and the trade sanctions laws and regulations administered by the United States Department of the Treasury's Office of Foreign Assets Control ("OFAC"). EAR restricts the export of dual-use products and technical data to certain countries, while ITAR restricts the export of defense products, technical data and defense services.
Failure to obtain approval to export or determination by the U.S. Government that we failed to receive required approvals or licenses could eliminate or restrict our ability to sell our products outside the United States, and the penalties that could be imposed by the U.S. Government for failure to comply with these laws could be significant.
Our indebtedness could adversely affect our financial health and could harm our ability to react to changes to our business and prevent us from fulfilling our obligations under our indebtedness.
We have a significant amount of indebtedness. As of September 30, 2019, our total indebtedness, excluding approximately $41.5 million of letters of credit outstanding, was approximately $16.9 billion, which was 120.7% of our total book capitalization as a result of special dividends being funded, in part, with indebtedness and the addition of approximately $4.0 billion in net new incremental borrowings during fiscal 2019 in connection with the financing of the Esterline acquisition.
In addition, we may be able to incur substantial additional indebtedness in the future. For example, on October 29, 2019, the Company entered into a purchase agreement in connection with a private offering of $2.65 billion aggregate principal amount in 5.50% senior subordinated notes due November 15, 2027. The settlement of the debt financing transaction occurred on November 13, 2019. The notes were issued at a price of 100% of their principal amount. The Company will use a portion of the net proceeds from the offering of the notes to redeem all of its outstanding (aggregate principal amount of $1.15 billion) 6.000% senior subordinated notes due 2022. Also, as of September 30, 2019, we had approximately $718.5 million of unused commitments under our revolving loan facility. Although our senior secured credit facility and the indentures governing the various senior subordinated notes outstanding (the “Indentures”) contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and the indebtedness incurred in compliance with these qualifications and exceptions could be substantial. For example, if the usage of the revolving loan facility exceeds 35% of the total revolving commitments, the Company will be required to maintain a maximum consolidated net leverage ratio of net debt, as defined, to trailing four-quarter EBITDA As Defined. A breach of any of the covenants or an inability to comply with the required leverage ratio could result in a default under the senior secured credit facility or the Indentures.
An increase in our substantial indebtedness could also have other important consequences to investors. For example, it could:
increase our vulnerability to general economic downturns and adverse competitive and industry conditions;
increase the risk we are subjected to downgrade or put on a negative watch by the ratings agencies;
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital requirements, capital expenditures, acquisitions, research and development efforts and other general corporate requirements;
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
place us at a competitive disadvantage compared to competitors that have less debt; and
limit, along with the financial and other restrictive covenants contained in the documents governing our indebtedness, among other things, our ability to borrow additional funds, make investments and incur liens.
All of our debt under the senior secured credit facility, which includes $7.5 billion in term loans and a revolving loan facility of $760 million, bears interest at variable rates primarily based on the London interbank offered rate (LIBOR) for deposits of U.S. dollars. Accordingly, if LIBOR or other variable interest rates increase, our debt service expense will also increase. Interest rate swap and cap agreements are used to manage interest rate risk associated with variable rate borrowings under our credit facilities. For information about our interest rate swap and cap agreements, see Note 21, “Derivatives and Hedging Instruments,” in the notes to the consolidated financial statements included herein.

9

Table of Contents

In addition, on July 27, 2017, the Financial Conduct Authority (FCA) in the U.K. announced that it would phase out LIBOR as a benchmark by the end of calendar year 2021. The expected discontinuation of LIBOR may require us to amend certain agreements governing our debt and, although the U.S. and other jurisdictions are working to replace LIBOR with alternative reference rates, we cannot predict what alternative index, margin adjustments and related terms would be negotiated with our counterparties. As a result, our interest expense could increase.
Our substantial level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respect of our indebtedness, including the Indentures. We cannot assure that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under the senior secured credit facility or otherwise in amounts sufficient to enable us to service our indebtedness. If we cannot service our debt, we will have to take actions such as reducing or delaying capital investments, selling assets, restructuring or refinancing our debt or seeking additional equity capital.
To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and any failure to meet our debt service obligations could harm our business, financial condition and results of operations.
Our ability to make payments on and to refinance our indebtedness, including the Indentures, amounts borrowed under the senior secured credit facility, amounts due under our Securitization Facility, and to fund our operations, will depend on our ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
We cannot assure that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized on schedule, or at all, or that future borrowings will be available to us under the senior secured credit facility or otherwise in amounts sufficient to enable us to service our indebtedness, including the amounts borrowed under the senior secured credit facility, amounts borrowed under our Securitization Facility and the Indentures, or to fund our other liquidity needs. If we cannot service our debt, we will have to take actions such as reducing or delaying capital investments, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We cannot assure that any of these remedies could, if necessary, be effected on commercially reasonable terms, or at all. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments, the Securitization Facility, the Indentures and the senior secured credit facility may restrict us from adopting any of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness on acceptable terms and would otherwise adversely affect the Indentures.
The terms of the senior secured credit facility and Indentures may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
Our senior secured credit facility and the Indentures contain a number of restrictive covenants that impose significant operating and financial restrictions on TD Group, TransDigm Inc. and its subsidiaries (in the case of the senior secured credit facility) and TransDigm Inc. and its subsidiaries (in the case of the Indentures) and may limit their ability to engage in acts that may be in our long-term best interests. The senior secured credit facility and Indentures include covenants restricting, among other things, the ability of TD Group, TransDigm Inc. and its subsidiaries (in the case of the senior secured credit facility) and TransDigm Inc. and its subsidiaries (in the case of the Indentures) to:
incur or guarantee additional indebtedness or issue preferred stock;
pay distributions on, redeem or repurchase our capital stock or redeem or repurchase our subordinated debt;
make investments;
sell assets;
enter into agreements that restrict distributions or other payments from our restricted subsidiaries to us;
incur or allow to exist liens;
consolidate, merge or transfer all or substantially all of our assets;
engage in transactions with affiliates;
create unrestricted subsidiaries; and
engage in certain business activities.

10

Table of Contents

A breach of any of these covenants could result in a default under the senior secured credit facility or the Indentures. If any such default occurs, the lenders under the senior secured credit facility and the holders of the senior subordinated notes may elect to declare all outstanding borrowings, together with accrued interest and other amounts payable thereunder, to be immediately due and payable. The lenders under the senior secured credit facility also have the right in these circumstances to terminate any commitments they have to provide further borrowings. In addition, following an event of default under the senior secured credit facility, the lenders under that facility will have the right to proceed against the collateral granted to them to secure the debt, which includes our available cash, and they will also have the right to prevent us from making debt service payments on the senior subordinated notes. If the debt under the senior secured credit facility or the senior subordinated notes were to be accelerated, we cannot assure that our assets would be sufficient to repay in full our debt.
We could incur substantial costs as a result of violations of or liabilities under environmental laws and regulations.
Our operations and facilities are subject to a number of federal, state, local and foreign environmental laws and regulations that govern, among other things, discharges of pollutants into the air and water, the generation, handling, storage and disposal of hazardous materials and wastes, the remediation of contamination and the health and safety of our employees. Environmental laws and regulations may require that the Company investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. Certain facilities and third-party sites utilized by subsidiaries of the Company have been identified as potentially responsible parties under the federal superfund laws and comparable state laws. The Company is currently involved in the investigation and remediation of a number of sites under applicable laws.
Estimates of the Company’s environmental liabilities are based on current facts, laws, regulations and technology. These estimates take into consideration the Company’s prior experience and professional judgment of the Company’s environmental advisors. Estimates of the Company’s environmental liabilities are further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluations and cost estimates, the extent of corrective actions that may be required and the number and financial condition of other potentially responsible parties, as well as the extent of their responsibility for the remediation.
Accordingly, as investigation and remediation proceed, it is likely that adjustments in the Company’s accruals will be necessary to reflect new information. The amounts of any such adjustments could have a material adverse effect on the Company’s results of operations or cash flows in a given period. Based on currently available information, however, the Company does not believe that future environmental costs in excess of those accrued with respect to sites for which the Company has been identified as a potentially responsible party are likely to have a material adverse effect on the Company’s financial condition.
We are dependent on our senior management team and highly trained employees and any work stoppage or difficulty hiring similar employees could adversely affect our business.
Because our products are complicated and highly engineered, we depend on an educated and trained workforce. There is substantial competition for skilled personnel in the aircraft component industry, and we could be adversely affected by a shortage of skilled employees. We may not be able to fill new positions or vacancies created by expansion or turnover or attract and retain qualified personnel.
Although we believe that our relations with our employees are satisfactory, we cannot assure that we will be able to negotiate a satisfactory renewal of collective bargaining agreements or that our employee relations will remain stable. Because we maintain a relatively small inventory of finished goods, any work stoppage could materially and adversely affect our ability to provide products to our customers.
In addition, our success depends in part on our ability to attract and motivate our senior management and key employees. Achieving this objective may be difficult due to a variety of factors, including fluctuations in economic and industry conditions, competitors’ hiring practices, and the effectiveness of our compensation programs. Competition for qualified personnel can be intense. A loss of senior management and key personnel, or failure to attract qualified new talent could prevent us from capitalizing on business opportunities, and our operating results and/or market value could be adversely affected. The Board continually monitors this risk and we believe that the Board’s succession plan, together with our straightforward strategy, clear value drivers, decentralized nature and the quality of managers running our operating units helps to mitigate this risk.
We may be subject to periodic litigation and regulatory proceedings, including Fair Labor Standards Act and state wage and hour class action lawsuits, which may adversely affect our business and financial performance.
From time to time, we are involved in lawsuits and regulatory actions brought or threatened against us in the ordinary course of business. These actions and proceedings may involve claims for, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, or breach of contract. In addition, we may be subject to class action lawsuits, including those involving allegations of violations of consumer product statutes or the Fair Labor Standards Act and state wage and hour laws. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such actions or proceedings. The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify, as plaintiffs may seek recovery of very large or indeterminate amounts in these types of lawsuits, and the magnitude of the potential

11

Table of Contents

loss may remain unknown for substantial periods of time. In addition, plaintiffs in many types of actions may seek punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief. These proceedings could result in substantial cost and may require us to devote substantial resources to defend ourselves. The ultimate resolution of these matters through settlement, mediation, or court judgment could have a material impact on our financial condition, results of operations, and cash flows.
Our business is dependent on the availability of certain components and raw materials from suppliers.
Our business is affected by the price and availability of the raw materials and component parts that we use to manufacture our components. Our business, therefore, could be adversely impacted by factors affecting our suppliers (such as the destruction of our suppliers’ facilities or their distribution infrastructure, a work stoppage or strike by our suppliers’ employees or the failure of our suppliers to provide materials of the requisite quality), or by increased costs of such raw materials or components if we were unable to pass along such price increases to our customers. Because we maintain a relatively small inventory of raw materials and component parts, our business could be adversely affected if we were unable to obtain these raw materials and components from our suppliers in the quantities we require or on favorable terms. Although we believe in most cases that we could identify alternative suppliers, or alternative raw materials or component parts, the lengthy and expensive FAA and OEM certification processes associated with aerospace products could prevent efficient replacement of a supplier, raw material or component part.
Our operations depend on our manufacturing facilities, which are subject to physical and other risks that could disrupt production.
A number of our manufacturing facilities are located in the greater Los Angeles area, an area known for earthquakes and fires, and are thus vulnerable to damage. In addition, a number of our manufacturing facilities are located along the Eastern seaboard area susceptible to hurricanes. We are also vulnerable to damage from other types of disasters, including power loss, fire, explosions, floods, communications failures, terrorist attacks and similar events. Disruptions could also occur due to cyber-attacks, computer or equipment malfunction (accidental or intentional), operator error or process failures. Should insurance or other risk transfer mechanisms, such as our existing disaster recovery and business continuity plans, be insufficient to recover all costs, we could experience a material adverse effect on our business, financial condition and results of operations.    
Operations and sales outside of the United States may be subject to additional risks.
A number of risks inherent in international operations could have a material adverse effect on our results of operations, including currency fluctuations, difficulties in staffing and managing multi-national operations, general economic and political uncertainties and potential for social unrest in countries in which we operate, limitations on our ability to enforce legal rights and remedies, restrictions on the repatriation of funds, change in trade policies, tariff regulation, difficulties in obtaining export and import licenses and the risk of government financed competition. Furthermore, the Company is subject to laws and regulations, such as the Foreign Corrupt Practices Act, UK Bribery Act and similar local anti-bribery laws, which generally prohibit companies and their employees, agents and contractors from making improper payments for the purpose of obtaining or retaining business. Failure to comply with these laws could subject the Company to civil and criminal penalties that could materially adversely affect the Company’s results of operations.
We face significant competition.
We operate in a highly competitive global industry and compete against a number of companies. Competitors in our product lines are both U.S. and foreign companies and range in size from divisions of large public corporations to small privately held entities. We believe that our ability to compete depends on high product performance, consistent high quality, short lead-time and timely delivery, competitive pricing, superior customer service and support and continued certification under customer quality requirements and assurance programs. We may have to adjust the prices of some of our products to stay competitive.
We could be adversely affected if one of our components causes an aircraft to crash.
Our operations expose us to potential liabilities for personal injury or death as a result of the failure of an aircraft component that we have designed, manufactured or serviced. While we maintain liability insurance to protect us from future product liability claims, in the event of product liability claims our insurers may attempt to deny coverage or any coverage we have may not be adequate. We also may not be able to maintain insurance coverage in the future at an acceptable cost. Any liability not covered by insurance or for which third party indemnification is not available could result in significant liability to us.
In addition, a crash caused by one of our components could damage our reputation for quality products. We believe our customers consider safety and reliability as key criteria in selecting a provider of aircraft components. If a crash were to be caused by one of our components, or if we were to otherwise fail to maintain a satisfactory record of safety and reliability, our ability to retain and attract customers may be materially adversely affected.

12

Table of Contents

We could incur substantial costs as a result of data protection concerns.
The interpretation and application of data protection laws in the U.S., Europe, including but not limited to the General Data Protection Regulation (the “GDPR”) and the California Consumer Privacy Act (the “CCPA”), and elsewhere are uncertain and evolving. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. Complying with these various laws is difficult and could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. Further, although we have implemented internal controls and procedures designed to ensure compliance with the GDPR, CCPA and other privacy-related laws, rules and regulations (collectively, the “Data Protection Laws”), there can be no assurance that our controls and procedures will enable us to be fully compliant with all Data Protection Laws.
Despite our efforts to protect sensitive information and confidential and personal data, comply with applicable laws, rules and regulations and implement data security measures, our facilities, and systems may be vulnerable to security breaches and other data loss, including cyber-attacks and, in fact, we have experienced data security incidents that have not had a material impact on our financial results. In addition, it is not possible to predict the impact on our business of the future loss, alteration or misappropriation of information in our possession related to us, our employees, former employees, customers, suppliers or others. This could lead to negative publicity, legal claims, theft, modification or destruction of proprietary information or key information, damage to or inaccessibility of critical systems, manufacture of defective products, production downtimes, operational disruptions and other significant costs, which could adversely affect our reputation, financial condition and results of operations.
We have recorded a significant amount of intangible assets, which may never generate the returns we expect.
Mergers and acquisitions have resulted in significant increases in identifiable intangible assets and goodwill. Identifiable intangible assets, which primarily include trademarks, trade names, customer relationships, and technology, were approximately $2.7 billion at September 30, 2019, representing approximately 17% of our total assets. Goodwill recognized in accounting for the mergers and acquisitions was approximately $7.8 billion at September 30, 2019, representing approximately 48% of our total assets. We may never realize the full value of our identifiable intangible assets and goodwill, and to the extent we were to determine that our identifiable intangible assets or our goodwill were impaired within the meaning of applicable accounting standards, we would be required to write-off the amount of any impairment.
Volatility in the equity markets or interest rates could substantially increase our pension costs and required pension contributions.
The Company sponsors qualified defined benefit pension plans and a nonqualified postretirement plan. Certain qualified defined benefit pension plans are funded with trust assets invested in a diversified portfolio of debt and equity securities and other investments. Among other factors, changes in interest rates, investment returns and the market value of plan assets can (i) affect the level of plan funding; (ii) cause volatility in the net periodic pension cost; and (iii) increase our future contribution requirements. A significant decrease in investment returns or the market value of plan assets or a significant decrease in interest rates could increase our net periodic pension costs and adversely affect our results of operations. A significant increase in our contribution requirements with respect to our qualified defined benefit pension plans could have an adverse impact on our cash flow.
We may be subject to risks relating to changes in its tax rates or exposure to additional income tax liabilities.
We are subject to income taxes in the United States and various non-U.S. jurisdictions. The Company’s domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions. The Company’s future results of operations could be adversely affected by changes in the Company’s effective tax rate as a result of changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets, challenges by tax authorities or changes in tax laws or regulations. In addition, the amount of income taxes paid by the Company is subject to ongoing audits by U.S. federal, state and local tax authorities and by non-U.S. tax authorities. If these audits result in assessments different from amounts reserved, future financial results may include unfavorable adjustments to the Company’s tax liabilities, which could have a material adverse effect on the Company’s results of operations.
Our stock price may be volatile, and an investment in our common stock could suffer a decline in value.
There has been significant volatility in the market price and trading volume of equity securities, which is unrelated to the operating performance of the companies issuing the securities. These market fluctuations may negatively affect the market price of our common stock. Shareholders may not be able to sell their shares at or above the purchase price due to fluctuations in the market price of our common stock. Such changes could be caused by changes in our operating performance or prospects, including possible changes due to the cyclical nature of the aerospace industry and other factors such as fluctuations in OEM and aftermarket ordering, which could cause short-term swings in profit margins. Or such changes could be unrelated to our operating performance, such as changes in market conditions affecting the stock market generally or the stocks of aerospace companies or changes in the outlook for our common stock, such as changes to or the confidence in our business strategy, changes to or confidence in our management, or expectations for future growth of the Company.

13

Table of Contents

Future sales of our common stock in the public market could lower our share price.
We may sell additional shares of common stock into the public markets or issue convertible debt securities to raise capital in the future. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the public markets or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities to raise capital at a time and price that we deem appropriate.
Our corporate documents and Delaware law contain certain provisions that could discourage, delay or prevent a change in control of our company.
Provisions in our amended and restated certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider favorable. For example, our amended and restated certificate of incorporation authorizes our Board of Directors to issue up to 149,600,000 shares of “blank check” preferred stock. Without stockholder approval, the Board of Directors has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights, holders of preferred stock could make it more difficult for a third party to acquire us. Our amended and restated certificate of incorporation also provides that the affirmative vote of the holders of at least 75% of the voting power of our issued and outstanding capital stock, voting together as a single class, is required for the alteration, amendment or repeal of certain provisions of our amended and restated certificate of incorporation and certain provisions of our amended and restated bylaws, including the provisions relating to our stockholders’ ability to call special meetings, notice provisions for stockholder business to be conducted at an annual meeting, requests for stockholder lists and corporate records, nomination and removal of directors, and filling of vacancies on our Board of Directors.
We are also subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law. Under these provisions, if anyone becomes an “interested stockholder,” we may not enter into a “business combination” with that person for three years without special approval, which could discourage a third party from making a takeover offer and could delay or prevent a change of control. For purposes of Section 203, “interested stockholder” means, generally, someone owning 15% or more of our outstanding voting stock or an affiliate of ours that owned 15% or more of our outstanding voting stock during the past three years, subject to certain exceptions as described in Section 203.
We do not regularly declare and pay quarterly or annual cash dividends on our stock.
Notwithstanding special cash dividends, of which the most recent declaration by the Company’s Board of Directors occurred on August 6, 2019 in the amount of $30.00 per outstanding share of common stock and and cash dividend equivalent payments on options granted under its stock incentive plans, we do not anticipate declaring regular quarterly or annual cash dividends on our common stock or any other equity security in the foreseeable future.
The amounts that may be available to us to pay future special cash dividends are restricted under our debt and other agreements. Any payment of special cash dividends on our common stock in the future will be at the discretion of our Board of Directors and will depend on our results of operations, earnings, capital requirements, financial condition, future prospects, contractual restrictions and other factors deemed relevant by our Board of Directors. Therefore, shareholders should not rely on regular quarterly or annual dividend income from shares of our common stock and should not rely on special dividends with any regularity or at all.
ITEM 1B.    UNRESOLVED STAFF COMMENTS
None.

14

Table of Contents

ITEM 2.    PROPERTIES
TransDigm’s principal owned properties (defined as greater than 20,000 square feet or related to a principal operation) as of September 30, 2019 are as follows:
Location
Reporting Segment
Square
Footage
Brea, CA
Airframe
315,000

Stillington, United Kingdom
Airframe
274,800

Montreal, Canada
Airframe
271,700

Miesbach, Germany
Power & Control
242,000

Liberty, SC
Power & Control
219,000

Waco, TX
Power & Control
218,800

Ingolstadt, Germany
Airframe
191,900

Champagne, France
Airframe
189,100

Kent, OH
Airframe
185,000

Liverpool, NY
Power & Control
176,800

Bridport, United Kingdom
Airframe
174,700

Union Gap, WA
Airframe
142,000

Coachella, CA
Power & Control
140,000

Marolles, France
Power & Control
139,900

Phoenix, AZ
Airframe
138,700

Paks, Hungary
Airframe
137,800

Los Angeles, CA
Power & Control
131,000

Kortrijk, Belgium
Airframe
130,000

Bohemia, NY
Power & Control
124,000

Buena Park, CA
Power & Control
115,000

Westbury, NY
Power & Control
112,300

Llangeinor, United Kingdom
Airframe
110,000

Bourges, France
Power & Control
109,500

Kent, WA
Airframe
100,000

Valencia, CA
Airframe
88,400

Letchworth, United Kingdom
Airframe
88,200

Placentia, CA
Airframe
86,600

Addison, IL
Power & Control
83,300

Herstal, Belgium
Airframe
73,700

Niort, France
Airframe
69,000

Painesville, OH
Power & Control
63,900

Clearwater, FL
Power & Control
61,000

South Euclid, OH
Power & Control
60,000

Wichita, KS
Power & Control
57,000

Branford, CT
Airframe
52,000

Xenia, OH
Airframe
51,000

Avenel, NJ
Power & Control
48,500

Rancho Cucamonga, CA
Power & Control
47,000

Sarralbe, France
Power & Control
45,200

Valencia, CA
Airframe
38,000

Pennsauken, NJ
Airframe
38,000

Ryde, United Kingdom
Power & Control
33,200

Rancho Cucamonga, CA
Airframe
32,700

Sarralbe, France
Non-aviation
32,700

Cluses, France
Non-aviation
29,500

Melaka, Malaysia
Power & Control
24,800

Coimbatore, India
Non-aviation
21,000

Deerfield Beach, FL
Non-aviation
20,000


15

Table of Contents

The Brea, Liberty, Kent (Ohio), Union Gap, Bohemia, Addison, Kent (Washington), 88,400 square feet Valencia, Coachella and 47,000 square feet Rancho Cucamonga properties are subject to mortgage liens under our senior secured credit facility and our 6.25% secured notes due March 15, 2026.
TransDigm’s principal leased properties (defined as greater than 20,000 square feet or related to a principal operation) as of September 30, 2019 are as follows:
Location
Reporting Segment
Square
Footage
East Camden, AR
Power & Control
276,000

Everett, WA
Airframe
216,000

Nittambuwa, Sri Lanka
Airframe
168,000

Santa Ana, CA
Airframe
159,200

Holmestrand, Norway
Airframe
149,300

Dayton, NV
Airframe
144,000

Tijuana, Mexico
Airframe
141,000

Tijuana, Mexico
Non-aviation
129,200

Everett, WA
Airframe
121,000

Whippany, NJ
Power & Control
115,300

Tanger, Morocco
Non-aviation
115,200

Whippany, NJ
Power & Control
114,300

Farnborough, United Kingdom
Power & Control
103,400

Sylmar, CA
Airframe
103,000

Goldsboro, NC
Power & Control
101,000

Kunshan, China
Airframe
100,600

Fullerton, CA
Airframe
100,000

Anaheim, CA
Airframe
99,900

Elkhart, IN
Non-aviation
91,500

Davis Junction, IL
Airframe
84,500

Kanata, Canada
Airframe
82,900

Miesbach, Germany
Power & Control
80,800

Kunshan, China
Non-aviation
75,300

Paso Robles, CA
Non-aviation
72,600

Camarillo, CA
Power & Control
70,000

Gloucestor, United Kingdom
Airframe
67,800

Tijuana, Mexico
Power & Control
63,500

Tijuana, Mexico
Non-aviation
61,300

Matamoros, Mexico
Power & Control
60,500

Melbourne, FL
Power & Control
52,100

Lillington, NC
Power & Control
48,800

Sugar Grove, IL
Airframe
45,000

Zunyi, China
Power & Control
43,000

La Ferte Benard, France
Non-aviation
42,000

Harelbeke, Belgium
Airframe
40,500

Tempe, AZ
Power & Control
40,200

Santiago, Dominican Republic
Non-aviation
40,000

Brea, CA
Airframe
39,000

Chongqing, China
Airframe
37,700

Collegeville, PA
Airframe
37,000

Rancho Santa Margarita, CA
Airframe
35,200

Northridge, CA
Power & Control
35,000

Bangalore, India
Non-aviation
28,200

Ashford, United Kingdom
Power & Control
28,000

London, United Kingdom
Airframe
27,400

Nogales, Mexico
Airframe
27,000


16

Table of Contents

Location
Reporting Segment
Square
Footage
Toulouse, France
Airframe
26,000

Bridgend, United Kingdom
Airframe
24,800

Harrow, United Kingdom
Non-aviation
24,500

Duluth, GA
Airframe
22,800

Ravenna, OH
Airframe
22,500

Platteville, WI
Airframe
21,200

Pennsauken, NJ
Airframe
20,500

Cleveland, OH
Corporate
20,100

Our Cleveland, OH and Pasadena, CA corporate facilities house our principal executive offices, and we currently lease approximately 20,100 square feet and 5,300 square feet, respectively, for those purposes. TransDigm also leases certain of its other non-material facilities. Management believes that our machinery, plants and offices are in satisfactory operating condition and that it will have sufficient capacity to meet foreseeable future needs without incurring significant additional capital expenditures.
ITEM 3.    LEGAL PROCEEDINGS
We and certain of our current or former officers and directors are defendants in a consolidated securities class action captioned In re TransDigm Group, Inc. Securities Litigation, Case No. 1:17-cv-01677-DCN (N.D. Ohio). The cases were originally filed on August 10, 2017, and September 18, 2017 and were consolidated on December 5, 2017. The plaintiffs allege that the defendants made false or misleading statements with respect to, or failed to disclose, the impact of certain alleged business practices in connection with sales to the U.S. government on the Company’s growth and profitability. The plaintiffs assert claims under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act, and seek unspecified monetary damages and other relief. In addition, we, as nominal defendant, and certain of our current or former officers and directors are defendants in a shareholder derivative action captioned Sciabacucchi v. Howley et al., No. 1:17-cv-1971-DCN (N.D. Ohio). The case was filed on September 19, 2017. The plaintiffs allege breach of fiduciary duty and other claims arising out of substantially the same actions or inactions alleged in the securities class actions described above. This action has been stayed pending the outcome of a motion to dismiss on the securities class action. Although we are only a nominal defendant in the derivative action, we could have indemnification obligations and/or be required to advance the costs and expenses of the officer and director defendants in the action.
We intend to vigorously defend these matters and believe they are without merit. We also believe we have sufficient insurance coverage available for these matters. Therefore, we do not expect these matters to have a material adverse impact on our financial condition or results of operations. However, given the preliminary status of the litigation, it is difficult to predict the likelihood of an adverse outcome or estimate a range of any potential loss.
PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is traded on the New York Stock Exchange, or NYSE, under the ticker symbol “TDG.”
Holders
As of October 21, 2019, there were 33 stockholders of record of our common stock and approximately 134,000 of beneficial stockholders, which includes an estimated amount of stockholders who have their shares held in their accounts by banks and brokers.
Dividend Policy
During fiscal 2019, TD Group’s Board of Directors authorized and declared a special cash dividend of $30.00 (in August 2019) on each outstanding share of common stock and cash dividend equivalent payments under options granted under its stock incentive plans. No dividends were declared during fiscal 2018.
We do not anticipate declaring regular quarterly or annual cash dividends on our common stock in the near future. Any declaration of special cash dividends on our common stock in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital requirements, financial condition, future prospects, contractual restrictions under the senior secured credit facility and Indentures, the availability of surplus under Delaware law and other factors deemed relevant by our Board of Directors. TD Group is a holding company and conducts all of its operations through direct and indirect subsidiaries.

17

Table of Contents

Unless TD Group receives dividends, distributions, advances, transfers of funds or other payments from our subsidiaries, TD Group will be unable to pay any dividends on our common stock in the future. The ability of any subsidiaries to take any of the foregoing actions is limited by the terms of our senior secured credit facility and Indentures and may be limited by future debt or other agreements that we may enter into. Also, the Company currently has an accumulated deficit which could limit or restrict our ability to pay dividends in the future.

18

Table of Contents

Performance Graph
Set forth below is a line graph comparing the cumulative total return of a hypothetical investment in the shares of common stock of TD Group with the cumulative total return of a hypothetical investment in each of the S&P 500 Index, the S&P Aerospace & Defense Select Index and the S&P MidCap 400 Aerospace & Defense Index. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each of the indexes on September 30, 2014, and its relative performance is tracked through September 30, 2019
The following performance graph and related information shall not be deemed “soliciting material” nor to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent we specifically incorporate it by reference into such filing.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among TransDigm Group Inc., the S&P 500 Index, S&P Aerospace & Defense Select Index and
the S&P MidCap 400 Aerospace & Defense Index
chart-9ba999dc56e45da29e9.jpg
*$100 invested on 9/30/14 in stock or index, including reinvestment of dividends.
Copyright 2019 Standard & Poor’s, a division of S&P Global. All rights reserved.
 
9/30/14
 
9/30/15
 
9/30/16
 
9/30/17
 
9/30/18
 
9/30/19
TransDigm Group Inc.
100.00

 
115.23
 
156.85

 
164.27

 
239.22

 
354.00

S&P 500 Index
100.00

 
99.39
 
114.72

 
136.07

 
160.44

 
167.27

S&P Aerospace & Defense Select Index
100.00

 
102.94
 
119.95

 
171.11

 
213.77

 
225.91

S&P MidCap 400 Aerospace & Defense Index
100.00

 
100.89
 
133.13

 
163.10

 
262.80

 
286.46

Purchases of Equity Securities by the Issuer or Affiliated Purchaser
On November 8, 2017, our Board of Directors, authorized a stock repurchase program permitting repurchases of our outstanding shares not to exceed $650 million in the aggregate, subject to any restrictions specified in the Credit Agreement and/or Indentures governing the existing Notes as described within the Liquidity and Capital Resources section of Item 7. “Management’s Discussion

19

Table of Contents

and Analysis of Financial Conditions and Results of Operations.” No repurchases were made under the program during the fiscal years ended September 30, 2019 and 2018. As of September 30, 2019, $650 million in repurchases are allowable under the program subject to any restrictions specified in the Credit Agreement and/or Indentures governing the existing Notes.
During the fiscal year ended September 30, 2018, the Company received 2,119 shares as forfeitures in lieu of payment for withholding taxes on the vesting of restricted stock. The deemed gross cost of the shares was approximately $0.6 million at a weighted-average price per share $274.62. No restricted stock units remained outstanding as of September 30, 2018.
ITEM 6.    SELECTED FINANCIAL DATA
The following table sets forth selected historical consolidated financial and other data of TD Group for the fiscal years ended September 30, 2015 to 2019, which have been derived from TD Group’s audited consolidated financial statements.
Separate historical financial information of TransDigm Inc. is not presented since the 6.00% Senior Subordinated Notes issued in June 2014 (the “2022 Notes”), the 6.50% Senior Subordinated Notes issued June 2014 (the “2024 Notes”), the 6.50% Senior Subordinated Notes issued May 2015 (the “2025 Notes”), the 6.375% Senior Subordinated Notes issued June 2016 (the “6.375% 2026 Notes”), the 6.25% Senior Secured Notes issued in January 2019 (the “2026 Secured Notes”) and the 7.50% Senior Subordinated Notes issued February 2019 (the “2027 Notes”) (also together with the 2022 Notes, the 2024 Notes, the 2025 Notes, the 6.375% 2026 Notes, the 2026 Secured Notes and the 2027 Notes, the “Notes”) are fully and unconditionally guaranteed on a senior subordinated basis by TD Group, TransDigm UK and all of TransDigm Inc.’s Domestic Restricted Subsidiaries and because TD Group has no significant operations or assets separate from its investment in TransDigm Inc.
Separate financial information of TransDigm UK Holdings plc (“TransDigm UK”) is not presented because TransDigm UK’s 6.875% Senior Subordinated Notes issued in May 2018 (the “6.875% 2026 Notes”) are fully and unconditionally guaranteed on a senior subordinated basis by TD Group, TransDigm Inc., and all of TransDigm Inc.’s Domestic Restricted Subsidiaries.
Acquisitions of businesses and product lines completed by TD Group during the last five fiscal years are as follows:
Date
Acquisition
March 26, 2015
Telair Cargo Group (comprised of Telair International GmbH (“Telair Int’l”), Telair US LLC and Nordisk Aviation Products)
March 31, 2015
Franke Aquarotter GmbH (“Adams Rite Aerospace GmbH”)
May 14, 2015
Pexco LLC (“Pexco Aerospace”)
August 19, 2015
PneuDraulics, Inc. (“PneuDraulics”)
January 4, 2016
Breeze-Eastern Corporation (“Breeze-Eastern”)
June 23, 2016
Data Device Corporation (“DDC”)
September 23, 2016
Young & Franklin Inc. / Tactair Fluid Controls Inc. (“Y&F/Tactair”)
February 22, 2017
Schroth Safety Products Group (“Schroth”)
May 5, 2017, May 31, 2017 and June 1, 2017
North Hills Signal Processing Corp, Cablecraft Motion Controls LLC and Preece Incorporated (together, the “Third Quarter 2017 Acquisitions”)
March 15, 2018
Kirkhill Elastomers (“Kirkhill”)
April 24, 2018 et al.
Extant Components Group Holdings, Inc. (together with related subsequent product line acquisitions, “Extant”)
July 13, 2018
Skandia Inc. (“Skandia”)
March 14, 2019
Esterline Technologies Corporation (“Esterline”)
All of the acquisitions were accounted for using the acquisition method. The results of operations of the acquired businesses and product lines are included in TD Group’s consolidated financial statements from the effective date of each acquisition.
On July 21, 2019, TransDigm entered into a binding offer (the “Put Agreement”) with Eaton Corporation plc (“Eaton”) for the the acquisition by Eaton of the shares of Souriau SAS, Souriau USA Inc. and Sunbank Family of Companies LLC (collectively, “Souriau-Sunbank”). Pursuant to the terms of the Put Agreement, after completion of the consultation process with the Business’ French works council, TransDigm had the right to require Eaton to enter into a securities purchase agreement (the “Purchase Agreement”) providing for the purchase by Eaton from TransDigm of the shares of Souriau-Sunbank. The Purchase Agreement was entered into by the parties on October 28, 2019. Pursuant to the terms of the Purchase Agreement, Eaton will purchase the shares of the Souriau-Sunbank for a cash purchase price of approximately $920 million.
The transaction is subject to execution and delivery of the Purchase Agreement and other definitive agreements, the satisfaction or waiver of customary closing conditions and receipt of required regulatory approvals, all of which have been received other than

20

Table of Contents

the French foreign investment approval. The parties expect to complete the transaction during the first quarter of fiscal 2020. Therefore, Souriau-Sunbank is classified as held-for-sale as of September 30, 2019. The results of operations of Souriau-Sunbank are presented in discontinued operations in the accompanying consolidated financial statements for all periods presented since the date acquired. Further disclosure related to Souriau-Sunbank’s discontinued operations is included within Note 23, “Discontinued Operations,” to the consolidated financial statements.
On September 20, 2019, TransDigm completed the divestiture of its Esterline Interface Technology (“EIT”) group of businesses to an affiliate of KPS Capital Partners, LP for approximately $190 million. EIT was acquired by TransDigm as part of its acquisition of Esterline Technologies Corporation in March 2019. The results of operations of EIT are presented in discontinued operations in the accompanying consolidated financial statements for all periods presented since the date acquired. Further disclosure related to EIT’s discontinued operations is included within Note 23, “Discontinued Operations,” to the consolidated financial statements.
In connection with the settlement of a Department of Justice investigation into the competitive effects of the acquisition, during the fourth quarter of 2017, the Company committed to dispose of the Schroth business. Therefore, Schroth was classified as held-for-sale beginning in the fourth quarter of fiscal 2017. On January 26, 2018, the Company completed the sale of Schroth in a management buyout to a private equity fund and certain members of Schroth management for approximately $61.4 million, which included a working capital adjustment of $0.3 million that was paid in July 2018. Further disclosure related to Schroth’s discontinued operations is included within Note 23, “Discontinued Operations,” to the consolidated financial statements.
The information presented below should be read together with Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included elsewhere herein.

21

Table of Contents

 
Fiscal Years Ended September 30,
 
2019
 
2018
 
2017
 
2016
 
2015
 
(in thousands, except per share amounts )
Statement of Income Data:
 
 
 
 
 
 
 
 
 
Net sales
$
5,223,203

 
$
3,811,126

 
$
3,504,286

 
$
3,171,411

 
$
2,707,115

Gross profit(1)
2,809,271

 
2,177,510

 
1,984,627

 
1,728,063

 
1,449,845

Selling and administrative expenses
747,773

 
449,676

 
412,555

 
383,319

 
324,097

Amortization of intangible assets
134,952

 
72,454

 
89,226

 
77,445

 
54,219

Income from operations(1)
1,926,546

 
1,655,380

 
1,482,846

 
1,267,299

 
1,071,529

Interest expense—net
859,753

 
663,008

 
602,589

 
483,850

 
418,785

Refinancing costs
3,013

 
6,396

 
39,807

 
15,794

 
18,393

Other expense (income)(2)
915

 
419

 
3,020

 
(461
)
 
(2,473
)
Income from continuing operations before income taxes
1,062,865

 
985,557

 
837,430

 
768,116

 
636,824

Income tax provision(3)
221,986

 
24,021

 
208,889

 
181,702

 
189,612

Income from continuing operations including noncontrolling interests
840,879

 
961,536

 
628,541

 
586,414

 
447,212

Income (loss) from discontinued operations, net of tax(4)
50,432

 
(4,474
)
 
(31,654
)
 

 

Net income including noncontrolling interests
891,311

 
957,062

 
596,887

 
586,414

 
447,212

Net income attributable to noncontrolling interests
(1,541
)
 

 

 

 

Net income attributable to TD Group
$
889,770

 
$
957,062

 
$
596,887

 
$
586,414

 
$
447,212

Net income applicable to TD Group common stock
$
778,749

 
$
900,914

 
$
437,630

 
$
583,414

 
$
443,847

Denominator for basic and diluted earnings per share under the two-class method:
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding
53,091

 
52,345

 
52,517

 
53,326

 
53,112

Vested options deemed participating securities
3,174

 
3,252

 
3,013

 
2,831

 
3,494

Total shares for basic and diluted earnings per share
56,265

 
55,597

 
55,530

 
56,157

 
56,606

Net earnings per share:
 
 
 
 
 
 
 
 
 
Net earnings per share from continuing operations—basic and diluted
$
12.94

 
$
16.28

 
$
8.45

 
$
10.39

 
$
7.84

Net earnings (loss) per share from discontinued operations—basic and diluted
0.90

 
(0.08
)
 
(0.57
)
 

 

Net earnings per share(5)
$
13.84

 
$
16.20

 
$
7.88

 
$
10.39

 
$
7.84

Cash dividends paid per common share
$
30.00

 
$

 
$
46.00

 
$

 
$


22

Table of Contents

 
As of September 30,
 
2019
 
2018
 
2017
 
2016
 
2015
 
(in thousands)
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,467,486

 
$
2,073,017

 
$
650,561

 
$
1,586,994

 
$
714,033

Working capital(6,7)
3,326,491

 
2,756,905

 
1,262,558

 
2,178,094

 
1,128,993

Total assets(6,7)
16,254,731

 
12,197,467

 
9,975,661

 
10,726,277

 
8,303,935

Total debt(7)
16,898,953

 
12,877,282

 
11,762,661

 
10,195,607

 
8,349,602

TD Group stockholders’ deficit
(2,894,905
)
 
(1,808,471
)
 
(2,951,204
)
 
(651,490
)
 
(1,038,306
)
 
(1) 
Gross profit and income from operations include the effect of charges relating to purchase accounting adjustments to inventory associated with the acquisition of various businesses and product lines for the fiscal years ended September 30, 2019, 2018, 2017, 2016 and 2015 of $76,927, $7,080, $20,621, $23,449, and $11,362, respectively.
(2) 
The prior period operating data has been adjusted as a result of Accounting Standards Update ("ASU") 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ("ASU 2017-07").
(3) 
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings from certain foreign subsidiaries that were previously deferred as well as other changes. Income tax expense as a percentage of income before income taxes was approximately 20.9% for the fiscal year ended September 30, 2019 compared to 2.4% for the fiscal year ended September 30, 2018.
(4) 
The fiscal 2019 results include the divestitures of Souriau-Sunbank (expected first quarter of fiscal 2020) and EIT (September 2019). The fiscal 2018 and 2017 results include the divestiture of Schroth (January 2018). Refer to Note 23, “Discontinued Operations,” to the consolidated financial statements for further information.
(5) 
Net earnings per share is calculated by dividing net income applicable to TD Group common stock by the basic and diluted weighted average common shares outstanding.
(6) 
In connection with adopting ASU 2015-17, “Balance Sheet Classification of Deferred Taxes,” for reporting periods ended after October 1, 2015, the Company reclassified $45,375 from current deferred income tax assets in our consolidated balance sheets as of September 2015, to non-current deferred income tax liabilities.
(7) 
In connection with adopting ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” for reporting periods ended after October 1, 2015, the Company reclassified $77,740 from debt issuance costs in our consolidated balance sheets as of September 2015, to the current portion of long-term and long-term-term debt.
Non-GAAP Financial Measures
We present below certain financial information based on our EBITDA and EBITDA As Defined. References to “EBITDA” mean earnings before interest, taxes, depreciation and amortization, and references to “EBITDA As Defined” mean EBITDA plus, as applicable for each relevant period, certain adjustments as set forth in the reconciliations of net income to EBITDA and EBITDA As Defined and the reconciliations of net cash provided by operating activities to EBITDA and EBITDA As Defined presented below.
Neither EBITDA nor EBITDA As Defined is a measurement of financial performance under accounting principles generally accepted in the United States of America (“GAAP”). We present EBITDA and EBITDA As Defined because we believe they are useful indicators for evaluating operating performance and liquidity.
Our management believes that EBITDA and EBITDA As Defined are useful as indicators of liquidity because securities analysts, investors, rating agencies and others use EBITDA to evaluate a company’s ability to incur and service debt. In addition, EBITDA As Defined is useful to investors because the revolving commitments under our senior secured credit facility requires compliance under certain circumstances, on a pro forma basis, with a financial covenant that measures the ratio of the amount of our secured indebtedness to the amount of our Consolidated EBITDA defined in the same manner as we define EBITDA As Defined herein.
In addition to the above, our management uses EBITDA As Defined to review and assess the performance of the management team in connection with employee incentive programs and to prepare its annual budget and financial projections. Moreover, our management uses EBITDA As Defined to evaluate acquisitions.

23

Table of Contents

Although we use EBITDA and EBITDA As Defined as measures to assess the performance of our business and for the other purposes set forth above, the use of these non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with GAAP. Some of these limitations are:
neither EBITDA nor EBITDA As Defined reflects the significant interest expense, or the cash requirements, necessary to service interest payments on our indebtedness;
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor EBITDA As Defined reflects any cash requirements for such replacements;
the omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA and EBITDA As Defined;
neither EBITDA nor EBITDA As Defined includes the payment of taxes, which is a necessary element of our operations; and
EBITDA As Defined excludes the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions.
Because of these limitations, EBITDA and EBITDA As Defined should not be considered as measures of discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA or EBITDA As Defined in isolation and specifically by using other GAAP measures, such as net income, net sales and operating profit, to measure our operating performance. Neither EBITDA nor EBITDA As Defined is a measurement of financial performance under GAAP, and neither should be considered as an alternative to net income or cash flow from operations determined in accordance with GAAP. Our calculation of EBITDA and EBITDA As Defined may not be comparable to the calculation of similarly titled measures reported by other companies.
 
Fiscal Years Ended September 30,
 
2019
 
2018
 
2017
 
2016
 
2015
 
(in thousands)
Other Financial Data:
 
 
 
 
 
 
 
 
 
Cash flows provided by (used in):
 
 
 
 
 
 
 
 
 
Operating activities
$
1,015,472

 
$
1,022,173

 
$
788,733

 
$
683,298

 
$
520,938

Investing activities
(3,888,980
)
 
(683,577
)
 
(287,003
)
 
(1,443,046
)
 
(1,679,149
)
Financing activities
2,271,353

 
1,085,600

 
(1,443,682
)
 
1,632,467

 
1,054,947

Depreciation and amortization
225,700

 
129,844

 
141,025

 
121,670

 
93,663

Capital expenditures
101,591

 
73,341

 
71,013

 
43,982

 
54,871

Ratio of earnings to fixed charges(1)
2.2x

 
2.5x

 
2.4x

 
2.6x

 
2.5x

Other Data:
 
 
 
 
 
 
 
 
 
EBITDA(2)
$
2,148,318

 
$
1,778,409

 
$
1,581,044

 
$
1,373,636

 
$
1,149,272

EBITDA As Defined(2)
$
2,418,801

 
$
1,876,558

 
$
1,710,563

 
$
1,495,196

 
$
1,233,654

 
(1) 
For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings from continuing operations before income taxes plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs, original issue discount and premium and the portion (approximately 33%) of rental expense that management believes is representative of the interest component of rental expense.
(2) 
EBITDA represents earnings from continuing operations before interest, taxes, depreciation and amortization. EBITDA As Defined represents EBITDA plus, as applicable for each relevant period, certain adjustments as set forth in the reconciliation of net income to EBITDA and EBITDA As Defined and the reconciliation of net cash provided by operating activities to EBITDA and EBITDA As Defined presented below. See “Non-GAAP Financial Measures” for additional information and limitations regarding these non-GAAP financial measures.

24

Table of Contents

The following table sets forth a reconciliation of net income to EBITDA and EBITDA As Defined:
 
Fiscal Years Ended September 30,
 
2019
 
2018
 
2017
 
2016
 
2015
 
(in thousands)
Income from continuing operations
$
840,879

 
$
961,536

 
$
628,541

 
$
586,414

 
$
447,212

Adjustments:
 
 
 
 
 
 
 
 
 
Depreciation and amortization expense
225,700

 
129,844

 
141,025

 
121,670

 
93,663

Interest expense, net
859,753

 
663,008

 
602,589

 
483,850

 
418,785

Income tax provision
221,986

 
24,021

 
208,889

 
181,702

 
189,612

EBITDA
2,148,318

 
1,778,409

 
1,581,044

 
1,373,636

 
1,149,272

Adjustments:
 
 
 
 
 
 
 
 
 
Inventory purchase accounting adjustments(1)
76,927

 
7,080

 
20,621

 
23,449

 
11,362

Acquisition integration costs(2)
61,443

 
17,484

 
6,341

 
18,539

 
12,554

Acquisition transaction-related expenses(3)
30,528

 
3,886

 
4,229

 
15,711

 
12,289

Stock compensation expense(4)
93,362

 
58,481

 
45,524

 
48,306

 
31,500

Refinancing costs(5)
3,013

 
6,396

 
39,807

 
15,794

 
18,393

Other, net(6)
5,210

 
4,822

 
12,997

 
(239
)
 
(1,716
)
EBITDA As Defined
$
2,418,801

 
$
1,876,558

 
$
1,710,563

 
$
1,495,196

 
$
1,233,654

 
(1) 
Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold.
(2) 
Represents costs incurred to integrate acquired businesses and product lines into TD Group’s operations, facility relocation costs and other acquisition-related costs.
(3) 
Represents transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses; and valuation costs that are required to be expensed as incurred.
(4) 
Represents the compensation expense recognized by TD Group under our stock incentive plans.
(5) 
Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements.
(6) 
Primarily represents foreign currency transaction gains or losses, payroll withholding taxes on dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation and gains or losses on the sale of fixed assets.

25

Table of Contents

The following table sets forth a reconciliation of net cash provided by operating activities to EBITDA and EBITDA As Defined:
 
Fiscal Years Ended September 30,
 
2019
 
2018
 
2017
 
2016
 
2015
 
(in thousands)
Net cash provided by operating activities
$
1,015,472

 
$
1,022,173

 
$
788,733

 
$
683,298

 
$
520,938

Adjustments:
 
 
 
 
 
 
 
 
 
Changes in assets and liabilities, net of effects from acquisitions of businesses
205,112

 
4,936

 
83,753

 
110,905

 
24,322

Interest expense, net(1)
831,719

 
640,880

 
581,483

 
467,639

 
402,988

Income tax provision—current(2)
209,212

 
175,661

 
215,385

 
175,894

 
188,952

Stock compensation expense(3)
(93,362
)
 
(58,481
)
 
(45,524
)
 
(48,306
)
 
(31,500
)
Excess tax benefit from exercise of stock options(2)

 

 

 

 
61,965

Refinancing costs(4)
(3,013
)
 
(6,396
)
 
(39,807
)
 
(15,794
)
 
(18,393
)
EBITDA from discontinued operations(9)
(16,822
)
 
(364
)
 
(2,979
)
 

 

EBITDA
2,148,318

 
1,778,409

 
1,581,044

 
1,373,636

 
1,149,272

Adjustments:
 
 
 
 
 
 
 
 
 
Inventory purchase accounting adjustments(5)
76,927

 
7,080

 
20,621

 
23,449

 
11,362

Acquisition integration costs(6)
61,443

 
17,484

 
6,341

 
18,539

 
12,554

Acquisition transaction-related expenses(7)
30,528

 
3,886

 
4,229

 
15,711

 
12,289

Stock compensation expense(3)
93,362

 
58,481

 
45,524

 
48,306

 
31,500

Refinancing costs(4)
3,013

 
6,396