Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(Address of principal executive offices) | (Zip Code) |
☒ | 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. | ☐ |
Securities registered pursuant to Section 12(b) of the Act: | ||||
Title of each class: | Trading Symbol: | Name of each exchange on which registered: | ||
Page | |||
Part I | FINANCIAL INFORMATION | ||
Item 1 | Financial Statements | ||
Condensed Consolidated Balance Sheets – March 28, 2020 and September 30, 2019 | |||
Condensed Consolidated Statements of Income – Thirteen and Twenty-Six Week Periods Ended March 28, 2020 and March 30, 2019 | |||
Condensed Consolidated Statements of Comprehensive Income – Thirteen and Twenty-Six Week Periods Ended March 28, 2020 and March 30, 2019 | |||
Condensed Consolidated Statements of Changes in Stockholders’ Deficit – Thirteen and Twenty-Six Week Periods Ended March 28, 2020 and March 30, 2019 | |||
Condensed Consolidated Statements of Cash Flows – Twenty-Six Week Periods Ended March 28, 2020 and March 30, 2019 | |||
Notes to Condensed Consolidated Financial Statements | |||
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3 | Quantitative and Qualitative Disclosure About Market Risk | ||
Item 4 | Controls and Procedures | ||
Part II | OTHER INFORMATION | ||
Item 1 | Legal Proceedings | ||
Item 1A | Risk Factors | ||
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 6 | Exhibits | ||
SIGNATURES |
March 28, 2020 | September 30, 2019 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | $ | |||||
Trade accounts receivable—Net | |||||||
Inventories—Net | |||||||
Assets held-for-sale | |||||||
Prepaid expenses and other | |||||||
Total current assets | |||||||
PROPERTY, PLANT AND EQUIPMENT—NET | |||||||
GOODWILL | |||||||
OTHER INTANGIBLE ASSETS—NET | |||||||
DEFERRED INCOME TAXES | |||||||
OTHER | |||||||
TOTAL ASSETS | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
CURRENT LIABILITIES: | |||||||
Current portion of long-term debt | $ | $ | |||||
Short-term borrowings—trade receivable securitization facility | |||||||
Accounts payable | |||||||
Accrued liabilities | |||||||
Liabilities held-for-sale | |||||||
Total current liabilities | |||||||
LONG-TERM DEBT | |||||||
DEFERRED INCOME TAXES | |||||||
OTHER NON-CURRENT LIABILITIES | |||||||
Total liabilities | |||||||
TD GROUP STOCKHOLDERS’ DEFICIT: | |||||||
Common stock - $.01 par value; authorized 224,400,000 shares; issued 58,233,574 and 57,623,311 at March 28, 2020 and September 30, 2019, respectively | |||||||
Additional paid-in capital | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Treasury stock, at cost; 4,198,226 and 4,161,326 shares at March 28, 2020 and September 30, 2019, respectively | ( | ) | ( | ) | |||
Total TD Group stockholders’ deficit | ( | ) | ( | ) | |||
NONCONTROLLING INTERESTS | |||||||
Total stockholders' deficit | ( | ) | ( | ) | |||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ |
Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | ||||||||||||
NET SALES | $ | $ | $ | $ | |||||||||||
COST OF SALES | |||||||||||||||
GROSS PROFIT | |||||||||||||||
SELLING AND ADMINISTRATIVE EXPENSES | |||||||||||||||
AMORTIZATION OF INTANGIBLE ASSETS | |||||||||||||||
INCOME FROM OPERATIONS | |||||||||||||||
INTEREST EXPENSE - NET | |||||||||||||||
REFINANCING COSTS | |||||||||||||||
OTHER INCOME | ( | ) | |||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | |||||||||||||||
INCOME TAX PROVISION | |||||||||||||||
INCOME FROM CONTINUING OPERATIONS | |||||||||||||||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | ( | ) | |||||||||||||
NET INCOME | |||||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ( | ) | |||||||||||||
NET INCOME ATTRIBUTABLE TO TD GROUP | $ | $ | $ | $ | |||||||||||
NET INCOME APPLICABLE TO TD GROUP COMMON STOCKHOLDERS | $ | $ | $ | $ | |||||||||||
Earnings per share attributable to TD Group common stockholders: | |||||||||||||||
Earnings per share from continuing operations - basic and diluted | $ | $ | $ | $ | |||||||||||
(Loss) Earnings per share from discontinued operations - basic and diluted | ( | ) | |||||||||||||
Earnings per share | $ | $ | $ | $ | |||||||||||
Cash dividends declared per common share | $ | $ | $ | $ | |||||||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic and diluted |
Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Less: Net income attributable to noncontrolling interests | ( | ) | |||||||||||||
Net income attributable to TD Group | $ | $ | $ | $ | |||||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||
Foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Unrealized loss on derivatives | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Pensions and other postretirement benefits | |||||||||||||||
Other comprehensive loss, net of tax, attributable to TD Group | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | $ | $ | $ | $ |
TD Group Stockholders | |||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | ||||||||||||||||||||||||||||||
Number of Shares | Par Value | Accumulated Deficit | Number of Shares | Value | Non-controlling Interests | Total | |||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||
Cumulative effect of ASC 606 and ASU 2016-16, adopted October 1, 2018 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Exercise of employee stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||||||
Unrealized (loss) gain on derivatives, net of tax | — | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||||||
BALANCE, DECEMBER 29, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
Noncontrolling interests assumed related to acquisitions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Exercise of employee stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||
Common stock issued | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||||||
Unrealized (loss) gain on derivatives, net of tax | — | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||||||
BALANCE, MARCH 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ( | ) |
TD Group Stockholders | |||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | ||||||||||||||||||||||||||||||
Number of Shares | Par Value | Accumulated Deficit | Number of Shares | Value | Non-controlling Interests | Total | |||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
Noncontrolling interests attributable to divestiture | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
Special dividends and vested dividend equivalents declared | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Exercise of employee stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||
Net income attributable to TD Group | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Unrealized (loss) gain on derivatives, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Pensions and other postretirement benefits adjustments, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
BALANCE, DECEMBER 28, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
Accrued unvested dividend equivalents and other | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Compensation expense recognized for employee stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Exercise of employee stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||
Treasury stock purchased | — | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||||
Net income attributable to TD Group | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||||||
Unrealized (loss) gain on derivatives, net of tax | — | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||||||||
BALANCE, MARCH 28, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | ( | ) |
Twenty-Six Week Periods Ended | |||||||
March 28, 2020 | March 30, 2019 | ||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | $ | |||||
Net income from discontinued operations | ( | ) | ( | ) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | |||||||
Amortization of intangible assets | |||||||
Amortization of debt issuance costs, original issue discount and premium | |||||||
Amortization of inventory step-up | |||||||
Amortization of loss contract reserves | ( | ) | ( | ) | |||
Refinancing costs | |||||||
Non-cash equity compensation | |||||||
Deferred income taxes | ( | ) | ( | ) | |||
Changes in assets/liabilities, net of effects from acquisitions of businesses: | |||||||
Trade accounts receivable | ( | ) | |||||
Inventories | ( | ) | ( | ) | |||
Income taxes receivable/payable | ( | ) | |||||
Other assets | ( | ) | ( | ) | |||
Accounts payable | ( | ) | |||||
Accrued interest | |||||||
Accrued and other liabilities | ( | ) | ( | ) | |||
Net cash provided by operating activities | |||||||
INVESTING ACTIVITIES: | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Payments made in connection with acquisitions, net of cash acquired | ( | ) | |||||
Proceeds in connection with the sale of discontinued operations, net | |||||||
Net cash provided by (used in) investing activities | ( | ) | |||||
FINANCING ACTIVITIES: | |||||||
Proceeds from exercise of stock options | |||||||
Dividends and dividend equivalent payments | ( | ) | ( | ) | |||
Treasury stock purchased | ( | ) | |||||
Proceeds from revolving credit facility | |||||||
Repayments on term loans | ( | ) | ( | ) | |||
Cash tender and redemption of senior subordinated notes due 2020 | ( | ) | |||||
Redemption of senior subordinated notes due 2022, net | ( | ) | |||||
Proceeds from 5.50% senior subordinated notes due 2027, net | |||||||
Proceeds from senior subordinated notes, net | |||||||
Proceeds from senior secured notes due 2026, net | |||||||
Financing fees and other, net | ( | ) | ( | ) | |||
Net cash (used in) provided by financing activities | ( | ) | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | |||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | |||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | |||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | |||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid during the period for interest | $ | $ | |||||
Cash paid during the period for income taxes, net of refunds | $ | $ |
Assets acquired: | |||
Trade accounts receivable | $ | ||
Inventories | |||
Prepaid expenses and other | |||
Property, plant, and equipment | |||
Other intangible assets | |||
Goodwill | |||
Other | |||
Total assets acquired | |||
Liabilities assumed: | |||
Accounts payable | |||
Accrued liabilities | |||
Other non-current liabilities | |||
Total liabilities assumed | |||
Net assets acquired | $ |
March 28, 2020 | September 30, 2019 | Change | |||||||||
Contract assets, current (1) | $ | $ | $ | ( | ) | ||||||
Contract assets, non-current (2) | ( | ) | |||||||||
Total contract assets | ( | ) | |||||||||
Contract liabilities, current (3) | |||||||||||
Contract liabilities, non-current (4) | |||||||||||
Total contract liabilities | |||||||||||
Net contract assets | $ | $ | $ | ( | ) |
(1) | Included in prepaid expenses and other on the condensed consolidated balance sheets. |
(2) | Included in other non-current assets on the condensed consolidated balance sheets. |
(3) | Included in accrued liabilities on the condensed consolidated balance sheets. |
(4) | Included in other non-current liabilities on the condensed consolidated balance sheets. |
Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | ||||||||||||
Numerator for earnings per share: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Less: Net income attributable to noncontrolling interests | ( | ) | |||||||||||||
Net income from continuing operations attributable to TD Group | |||||||||||||||
Less: Special dividends declared or paid on participating securities | ( | ) | ( | ) | |||||||||||
(Loss) income from discontinued operations, net of tax | ( | ) | |||||||||||||
Net income applicable to TD Group common stockholders - basic and diluted | $ | $ | $ | $ | |||||||||||
Denominator for basic and diluted earnings per share under the two-class method: | |||||||||||||||
Weighted-average common shares outstanding | |||||||||||||||
Vested options deemed participating securities | |||||||||||||||
Total shares for basic and diluted earnings per share | |||||||||||||||
Earnings per share from continuing operations - basic and diluted | $ | $ | $ | $ | |||||||||||
(Loss) Earnings per share from discontinued operations - basic and diluted | ( | ) | |||||||||||||
Earnings per share | $ | $ | $ | $ |
March 28, 2020 | September 30, 2019 | ||||||
Raw materials and purchased component parts | $ | $ | |||||
Work-in-progress | |||||||
Finished goods | |||||||
Total | |||||||
Reserves for excess and obsolete inventory | ( | ) | ( | ) | |||
Inventories - Net | $ | $ |
March 28, 2020 | September 30, 2019 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
Trademarks and trade names | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Technology | |||||||||||||||||||||||
Order backlog | |||||||||||||||||||||||
Customer relationships | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Power & Control | Airframe | Non- aviation | Total | ||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | |||||||||||
Purchase price allocation adjustments | ( | ) | ( | ) | |||||||||||
Currency translation adjustments | ( | ) | ( | ) | |||||||||||
Balance at March 28, 2020 | $ | $ | $ | $ |
March 28, 2020 | |||||||||||||||
Gross Amount | Debt Issuance Costs | Original Issue Discount or Premium | Net Amount | ||||||||||||
Short-term borrowings—trade receivable securitization facility | $ | $ | $ | $ | |||||||||||
Term loans | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
Revolving credit facility | |||||||||||||||
6.50% senior subordinated notes due 2024 (2024 Notes) | ( | ) | |||||||||||||
6.50% senior subordinated notes due 2025 (2025 Notes) | ( | ) | |||||||||||||
6.375% senior subordinated notes due 2026 (6.375% 2026 Notes) | ( | ) | |||||||||||||
6.875% senior subordinated notes due 2026 (6.875% 2026 Notes) | ( | ) | ( | ) | |||||||||||
6.25% secured notes due 2026 (2026 Secured Notes) | ( | ) | |||||||||||||
7.50% senior subordinated notes due 2027 (7.50% 2027 Notes) | ( | ) | |||||||||||||
5.50% senior subordinated notes due 2027 (5.50% 2027 Notes | ( | ) | |||||||||||||
Government refundable advances | |||||||||||||||
Finance lease obligations | |||||||||||||||
( | ) | ( | ) | ||||||||||||
Less current portion | ( | ) | |||||||||||||
Long-term debt | $ | $ | ( | ) | $ | ( | ) | $ |
September 30, 2019 | |||||||||||||||
Gross Amount | Debt Issuance Costs | Original Issue Discount or Premium | Net Amount | ||||||||||||
Short-term borrowings—trade receivable securitization facility | $ | $ | $ | $ | |||||||||||
Term loans | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
6.00% 2022 Notes | ( | ) | |||||||||||||
6.50% 2024 Notes | ( | ) | |||||||||||||
6.50% 2025 Notes | ( | ) | |||||||||||||
6.375% 2026 Notes | ( | ) | |||||||||||||
6.875% 2026 Notes | ( | ) | ( | ) | |||||||||||
6.25% 2026 Secured Notes | ( | ) | |||||||||||||
7.50% 2027 Notes | ( | ) | |||||||||||||
Government refundable advances | |||||||||||||||
Finance lease obligations | |||||||||||||||
( | ) | ( | ) | ||||||||||||
Less current portion | ( | ) | |||||||||||||
Long-term debt | $ | $ | ( | ) | $ | ( | ) | $ |
March 28, 2020 | September 30, 2019 | |||||||||||||||||
Level | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||
Assets: | ||||||||||||||||||
Cash and cash equivalents | 1 | $ | $ | $ | $ | |||||||||||||
Interest rate cap agreements (1) | 2 | |||||||||||||||||
Liabilities: | ||||||||||||||||||
Interest rate swap agreements (3) | 2 | |||||||||||||||||
Interest rate swap agreements (4) | 2 | |||||||||||||||||
Foreign currency forward exchange contracts and other (3) | 2 | |||||||||||||||||
Short-term borrowings - trade receivable securitization facility (5) | 1 | |||||||||||||||||
Long-term debt, including current portion: | ||||||||||||||||||
Term loans (5) | 2 | |||||||||||||||||
Revolving credit facility (5) | 2 | |||||||||||||||||
6.00% 2022 Notes (5) | 1 | |||||||||||||||||
6.50% 2024 Notes (5) | 1 | |||||||||||||||||
6.50% 2025 Notes (5) | 1 | |||||||||||||||||
6.375% 2026 Notes (5) | 1 | |||||||||||||||||
6.875% 2026 Notes (5) | 1 | |||||||||||||||||
6.25% 2026 Notes (5) | 1 | |||||||||||||||||
7.50% 2027 Notes (5) | 1 | |||||||||||||||||
5.50% 2027 Notes (5) | 1 | |||||||||||||||||
Government Refundable Advances | 2 | |||||||||||||||||
Finance Lease Obligations | 2 |
(1) | Included in other non-current assets on the condensed consolidated balance sheets. |
(2) | Included in prepaid expenses and other on the condensed consolidated balance sheets. |
(3) | Included in accrued liabilities on the condensed consolidated balance sheets. |
(4) | Included in other non-current liabilities on the condensed consolidated balance sheets. |
(5) | The carrying amount of the debt instrument is presented net of debt issuance costs, premium and discount. Refer to Note 9, "Debt," for gross carrying amounts. |
Aggregate Notional Amount (in millions) | Start Date | End Date | Related Term Loans | Conversion of Related Variable Rate Debt to Fixed Rate of: |
$ | 3/31/2016 | 6/30/2020 | Tranche E | 5.05% (2.8% plus the 2.25% margin percentage) |
$ | 6/29/2018 | 3/31/2025 | Tranche E | 5.25% (3.0% plus the 2.25% margin percentage) |
$ | 6/30/2020 | 6/30/2022 | Tranche E | 4.75% (2.5% plus the 2.25% margin percentage) |
$ | 6/30/2022 | 3/31/2025 | Tranche E | 5.35% (3.1% plus the 2.25% margin percentage) |
$ | 6/28/2019 | 12/9/2025 | Tranche F | 4.05% (1.8% plus the 2.25% margin percentage) |
$ | 6/30/2021 | 12/9/2025 | Tranche F | 5.25% (3.0% plus the 2.25% margin percentage) |
$ | 12/30/2016 | 12/31/2021 | Tranche G | 4.15% (1.9% plus the 2.25% margin percentage) |
$ | 9/30/2017 | 9/30/2022 | Tranche G | 4.15% (1.9% plus the 2.25% margin percentage) |
$ | 12/31/2021 | 6/28/2024 | Tranche G | 5.35% (3.1% plus the 2.25% margin percentage) |
$ | 9/30/2022 | 6/28/2024 | Tranche G | 5.25% (3.0% plus the 2.25% margin percentage) |
Aggregate Notional Amount (in millions) | Start Date | End Date | Related Term Loans | Offsets Variable Rate Debt Attributable to Fluctuations Above: |
$ | 9/30/2015 | 6/30/2020 | Tranche E | Three month LIBO rate of 2.5% |
$ | 6/30/2020 | 6/30/2022 | Tranche E | Three month LIBO rate of 2.5% |
$ | 6/30/2016 | 6/30/2021 | Tranche F | Three month LIBO rate of 2.0% |
$ | 12/30/2016 | 12/31/2021 | Tranche G | Three month LIBO rate of 2.5% |
March 28, 2020 | September 30, 2019 | |||||||||||||||
Asset | Liability | Asset | Liability | |||||||||||||
Interest rate cap agreements | $ | $ | $ | $ | ||||||||||||
Interest rate swap agreements (1) | ( | ) | ( | ) | ||||||||||||
Net derivatives as classified in the balance sheet (2) | $ | $ | ( | ) | $ | $ | ( | ) |
(1) | The increase in the interest rate swap liability is primarily attributable to a downward trend in the LIBO rate during the second quarter of fiscal 2020. |
(2) | Refer to Note 11, "Fair Value Measurements," for the condensed consolidated balance sheet classification of our interest rate swap and cap agreements. |
Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | ||||||||||||
Net sales to external customers | |||||||||||||||
Power & Control | |||||||||||||||
Commercial OEM | $ | $ | $ | $ | |||||||||||
Commercial Aftermarket | |||||||||||||||
Defense | |||||||||||||||
Total Power & Control | |||||||||||||||
Airframe | |||||||||||||||
Commercial OEM | |||||||||||||||
Commercial Aftermarket | |||||||||||||||
Defense | |||||||||||||||
Total Airframe | |||||||||||||||
Total Non-aviation | |||||||||||||||
$ | $ | $ | $ |
Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | ||||||||||||
EBITDA As Defined | |||||||||||||||
Power & Control | $ | $ | $ | $ | |||||||||||
Airframe | |||||||||||||||
Non-aviation | |||||||||||||||
Total segment EBITDA As Defined | |||||||||||||||
Less: Unallocated corporate expenses | |||||||||||||||
Total Company EBITDA As Defined | |||||||||||||||
Depreciation and amortization expense | |||||||||||||||
Interest expense - net | |||||||||||||||
Acquisition-related costs | |||||||||||||||
Stock compensation expense | |||||||||||||||
Refinancing costs | |||||||||||||||
Other, net | ( | ) | |||||||||||||
Income from continuing operations before income taxes | $ | $ | $ | $ |
March 28, 2020 | September 30, 2019 | ||||||
Total assets | |||||||
Power & Control | $ | $ | |||||
Airframe | |||||||
Non-aviation | |||||||
Corporate | |||||||
Assets of discontinued operations | |||||||
$ | $ |
Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | ||||||||||||||||||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | ||||||||||||||||||||||||||||
U.S. Pension Plans | Non-U.S. Pension Plans | U.S. Pension Plans | Non-U.S. Pension Plans | U.S. Pension Plans | Non-U.S. Pension Plans | U.S. Pension Plans | Non-U.S. Pension Plans | ||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Amortization of prior service cost | |||||||||||||||||||||||||||||||
Amortization of actuarial loss | |||||||||||||||||||||||||||||||
Amortization of transition obligation | |||||||||||||||||||||||||||||||
Net periodic pension cost | $ | $ | $ | $ | $ | $ | $ | $ |
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges (1) | Defined benefit pension plan activity (2) | Currency translation adjustment | Total | ||||||||||||
Balance at September 30, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Current-period other comprehensive (loss) income | ( | ) | ( | ) | ( | ) | |||||||||
Balance at March 28, 2020 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(1) |
(2) |
Amount reclassified | ||||||||
Twenty-Six Week Periods Ended | ||||||||
Description of reclassifications out of accumulated other comprehensive (loss) income | March 28, 2020 | March 30, 2019 | ||||||
Amortization from redesignated interest rate swap and cap agreements (1) | $ | $ | ||||||
Losses from settlement of foreign currency forward exchange contracts (2) | ||||||||
Deferred tax benefit on reclassifications out of accumulated other comprehensive (loss) income | ( | ) | ||||||
Losses reclassified into earnings, net of tax | $ | $ |
(1) | This component of accumulated other comprehensive (loss) income is included in interest expense (see Note 12, “Derivatives and Hedging Activities,” for additional information). |
(2) | This component of accumulated other comprehensive (loss) income is included in net sales (see Note 12, “Derivatives and Hedging Activities,” for additional information). |
Classification | Thirteen Week Period Ended March 28, 2020 | Twenty-Six Week Period Ended March 28, 2020 | |||||||
Operating lease cost | Cost of Sales or Selling and Administrative Expenses | $ | $ | ||||||
Finance lease cost | |||||||||
Amortization of leased assets | Cost of Sales | ||||||||
Interest on lease liabilities | Interest Expense - Net | ||||||||
Total lease cost | $ | $ |
March 28, 2020 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash outflows from operating leases | $ | |||
Operating cash outflows from finance leases | ||||
Financing cash outflows from finance leases | ||||
Lease assets obtained in exchange for new lease obligations: | ||||
Operating leases | $ |
Classification | March 28, 2020 | ||||
Operating Leases | |||||
Operating lease right-of-use assets | Other Assets | $ | |||
Current operating lease liabilities | Accrued Liabilities | ||||
Long-term operating lease liabilities | Other Non-current Liabilities | ||||
Total operating lease liabilities | $ | ||||
Finance Leases | |||||
Finance lease right-of-use assets, net | Property, Plant and Equipment—Net | $ | |||
Current finance lease liabilities | Accrued Liabilities | ||||
Long-term finance lease liabilities | Other Non-current Liabilities | ||||
Total finance lease liabilities | $ |
Weighted-average remaining lease term | |
Operating leases | |
Finance leases | |
Weighted-average discount rate | |
Operating leases | |
Finance leases |
Operating Leases | Finance Leases | ||||||
2020 | $ | $ | |||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
2024 | |||||||
Thereafter | |||||||
Total future minimum lease payments | |||||||
Less: imputed interest | |||||||
Present value of lease liabilities reported | $ | $ |
Operating Leases | ||||
2020 | $ | |||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Thereafter | ||||
Total lease commitments | $ |
Assets and Liabilities of Discontinued Operations Held-for-Sale | Fiscal Year Ended September 30, 2019 | |||
Cash and cash equivalents | $ | |||
Trade accounts receivable—Net | ||||
Inventories—Net | ||||
Prepaid expenses and other | ||||
Property, plant and equipment—Net | ||||
Goodwill | ||||
Other intangibles—Net | ||||
Other | ||||
Total assets of discontinued operations | $ | |||
Accounts payable | $ | |||
Accrued liabilities | ||||
Long-term debt | ||||
Deferred income taxes | ||||
Other | ||||
Total liabilities of discontinued operations | $ |
Thirteen Week Period Ended | Twenty-Six Week Period Ended | |||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | |||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||
Income from discontinued operations before income taxes | ||||||||||||||||
Income tax expense | ||||||||||||||||
(Loss) Income from discontinued operations, net of tax | ( | ) | ||||||||||||||
(Loss) Gain from sale of discontinued operations, net of tax | ( | ) | ||||||||||||||
(Loss) Income from discontinued operations, net of tax | $ | ( | ) | $ | $ | $ |
TransDigm Group | TransDigm Inc. | TransDigm UK | Subsidiary Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total Consolidated | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
Trade accounts receivable - Net | |||||||||||||||||||||||||||
Inventories - Net | ( | ) | |||||||||||||||||||||||||
Prepaid expenses and other | |||||||||||||||||||||||||||
Total current assets | ( | ) | |||||||||||||||||||||||||
INVESTMENT IN SUBSIDIARIES AND INTERCOMPANY BALANCES | ( | ) | ( | ) | |||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT - NET | |||||||||||||||||||||||||||
GOODWILL | |||||||||||||||||||||||||||
OTHER INTANGIBLE ASSETS - NET | |||||||||||||||||||||||||||
DEFERRED INCOME TAXES | |||||||||||||||||||||||||||
OTHER | |||||||||||||||||||||||||||
TOTAL ASSETS | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |||||||||||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||||||||||
Current portion of long-term debt | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Short-term borrowings - trade receivable securitization facility | |||||||||||||||||||||||||||
Accounts payable | |||||||||||||||||||||||||||
Accrued liabilities | |||||||||||||||||||||||||||
Total current liabilities | |||||||||||||||||||||||||||
LONG-TERM DEBT | |||||||||||||||||||||||||||
DEFERRED INCOME TAXES | |||||||||||||||||||||||||||
OTHER NON-CURRENT LIABILITIES | |||||||||||||||||||||||||||
Total liabilities | |||||||||||||||||||||||||||
TD GROUP STOCKHOLDERS' (DEFICIT) EQUITY | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
NONCONTROLLING INTERESTS | |||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ |
TransDigm Group | TransDigm Inc. | TransDigm UK | Subsidiary Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total Consolidated | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
Trade accounts receivable - Net | |||||||||||||||||||||||||||
Inventories - Net | ( | ) | |||||||||||||||||||||||||
Assets held-for-sale | |||||||||||||||||||||||||||
Prepaid expenses and other | |||||||||||||||||||||||||||
Total current assets | ( | ) | |||||||||||||||||||||||||
INVESTMENT IN SUBSIDIARIES AND INTERCOMPANY BALANCES | ( | ) | ( | ) | |||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT - NET | |||||||||||||||||||||||||||
GOODWILL | |||||||||||||||||||||||||||
OTHER INTANGIBLE ASSETS - NET | |||||||||||||||||||||||||||
OTHER | |||||||||||||||||||||||||||
TOTAL ASSETS | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |||||||||||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||||||||||
Current portion of long-term debt | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Short-term borrowings - trade receivable securitization facility | |||||||||||||||||||||||||||
Accounts payable | |||||||||||||||||||||||||||
Accrued liabilities | |||||||||||||||||||||||||||
Liabilities held-for-sale | |||||||||||||||||||||||||||
Total current liabilities | |||||||||||||||||||||||||||
LONG-TERM DEBT | |||||||||||||||||||||||||||
DEFERRED INCOME TAXES | |||||||||||||||||||||||||||
OTHER NON-CURRENT LIABILITIES | |||||||||||||||||||||||||||
Total liabilities | |||||||||||||||||||||||||||
TD GROUP STOCKHOLDERS' (DEFICIT) EQUITY | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
NONCONTROLLING INTERESTS | |||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ |
TransDigm Group | TransDigm Inc. | TransDigm UK | Subsidiary Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total Consolidated | |||||||||||||||||||||
NET SALES | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
COST OF SALES | ( | ) | |||||||||||||||||||||||||
GROSS PROFIT | |||||||||||||||||||||||||||
SELLING AND ADMINISTRATIVE EXPENSES | |||||||||||||||||||||||||||
AMORTIZATION OF INTANGIBLE ASSETS | |||||||||||||||||||||||||||
INCOME (LOSS) FROM OPERATIONS | ( | ) | |||||||||||||||||||||||||
INTEREST EXPENSE (INCOME)—NET | ( | ) | |||||||||||||||||||||||||
REFINANCING COSTS | |||||||||||||||||||||||||||
OTHER (INCOME) EXPENSE | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
EQUITY IN INCOME OF SUBSIDIARIES | ( | ) | ( | ) | |||||||||||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | ( | ) | |||||||||||||||||||||||||
INCOME TAX PROVISION | |||||||||||||||||||||||||||
INCOME FROM CONTINUING OPERATIONS | ( | ) | |||||||||||||||||||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX | ( | ) | |||||||||||||||||||||||||
NET INCOME | ( | ) | |||||||||||||||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | ( | ) | ( | ) | |||||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO TD GROUP | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | $ | $ | $ | $ | $ | $ | ( | ) | $ |
TransDigm Group | TransDigm Inc. | TransDigm UK | Subsidiary Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total Consolidated | |||||||||||||||||||||
NET SALES | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
COST OF SALES | ( | ) | |||||||||||||||||||||||||
GROSS PROFIT | |||||||||||||||||||||||||||
SELLING AND ADMINISTRATIVE EXPENSES | |||||||||||||||||||||||||||
AMORTIZATION OF INTANGIBLE ASSETS | |||||||||||||||||||||||||||
(LOSS) INCOME FROM OPERATIONS | ( | ) | |||||||||||||||||||||||||
INTEREST EXPENSE (INCOME)—NET | ( | ) | ( | ) | |||||||||||||||||||||||
REFINANCING COSTS | |||||||||||||||||||||||||||
EQUITY IN INCOME OF SUBSIDIARIES | ( | ) | ( | ) | |||||||||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | ( | ) | ( | ) | |||||||||||||||||||||||
INCOME TAX (BENEFIT) PROVISION | ( | ) | |||||||||||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | ( | ) | ( | ) | |||||||||||||||||||||||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | |||||||||||||||||||||||||||
NET INCOME | ( | ) | ( | ) | |||||||||||||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | |||||||||||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO TD GROUP | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TD GROUP | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
TransDigm Group | TransDigm Inc. | TransDigm UK | Subsidiary Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total Consolidated | |||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||||||||||
Capital expenditures | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Proceeds in connection with sale of discontinued operations, net | |||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | ( | ) | ( | ) | |||||||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||||||||||
Intercompany activities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Proceeds from exercise of stock options | |||||||||||||||||||||||||||
Dividends and dividend equivalent payments | ( | ) | ( | ) | |||||||||||||||||||||||
Treasury stock purchased | ( | ) | ( | ) | |||||||||||||||||||||||
Proceeds from revolving credit facility | |||||||||||||||||||||||||||
Repayments on term loans | ( | ) | ( | ) | |||||||||||||||||||||||
Redemption of senior subordinated notes due 2022, net | ( | ) | ( | ) | |||||||||||||||||||||||
Proceeds from 5.50% senior subordinated notes due 2027, net | |||||||||||||||||||||||||||
Financing fees and other, net | ( | ) | ( | ) | |||||||||||||||||||||||
Net cash provided by (used in) financing activities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | |||||||||||||||||||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ) | |||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | ( | ) | |||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | $ | $ | ( | ) | $ | $ | $ |
TransDigm Group | TransDigm Inc. | TransDigm UK | Subsidiary Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total Consolidated | |||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||||||||||
Capital expenditures | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Payments made in connection with acquisitions, net of cash acquired | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||||||||||
Intercompany activities | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Proceeds from exercise of stock options | |||||||||||||||||||||||||||
Dividends and dividend equivalent payments | ( | ) | ( | ) | |||||||||||||||||||||||
Repayment on term loans | ( | ) | ( | ) | |||||||||||||||||||||||
Cash tender and redemption of senior subordinated notes due 2020 | ( | ) | ( | ) | |||||||||||||||||||||||
Proceeds from senior subordinated notes, net | |||||||||||||||||||||||||||
Proceeds from senior secured notes due 2026, net | |||||||||||||||||||||||||||
Financing fees and other, net | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Net cash provided by (used in) financing activities | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | |||||||||||||||||||||||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | |||||||||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | ( | ) | |||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | $ | $ | ( | ) | $ | $ | $ |
Thirteen Week Periods Ended | |||||||||||||
March 28, 2020 | % of Sales | March 30, 2019 | % of Sales | ||||||||||
Net sales | $ | 1,443 | 100.0 | % | $ | 1,168 | 100.0 | % | |||||
Cost of sales | 625 | 43.3 | % | 518 | 44.3 | % | |||||||
Selling and administrative expenses | 180 | 12.5 | % | 160 | 13.7 | % | |||||||
Amortization of intangible assets | 46 | 3.2 | % | 22 | 1.9 | % | |||||||
Income from operations | 592 | 41.0 | % | 468 | 40.1 | % | |||||||
Interest expense, net | 252 | 17.5 | % | 202 | 17.3 | % | |||||||
Refinancing costs | 3 | 0.2 | % | 3 | 0.3 | % | |||||||
Income tax provision | 14 | 1.0 | % | 63 | 5.4 | % | |||||||
Income from continuing operations | 323 | 22.4 | % | 200 | 17.1 | % | |||||||
Less: Net income attributable to noncontrolling interests | — | — | % | — | — | % | |||||||
Income from continuing operations attributable to TD Group | 323 | 22.4 | % | 200 | 17.1 | % | |||||||
(Loss) Income from discontinued operations, net of tax | (4 | ) | (0.3 | )% | 2 | 0.2 | % | ||||||
Net income attributable to TD Group | $ | 319 | 22.1 | % | $ | 202 | 17.3 | % |
Twenty-Six Week Periods Ended | |||||||||||||
March 28, 2020 | % of Sales | March 30, 2019 | % of Sales | ||||||||||
Net sales | $ | 2,908 | 100.0 | % | $ | 2,161 | 100.0 | % | |||||
Cost of sales | 1,288 | 44.3 | % | 947 | 43.8 | % | |||||||
Selling and administrative expenses | 381 | 13.1 | % | 282 | 13.0 | % | |||||||
Amortization of intangible assets | 86 | 3.0 | % | 42 | 1.9 | % | |||||||
Income from operations | 1,153 | 39.6 | % | 890 | 41.2 | % | |||||||
Interest expense, net | 501 | 17.2 | % | 374 | 17.3 | % | |||||||
Refinancing costs | 26 | 0.9 | % | 3 | 0.1 | % | |||||||
Other income | (3 | ) | (0.1 | )% | — | — | % | ||||||
Income tax provision | 73 | 2.5 | % | 117 | 5.4 | % | |||||||
Income from continuing operations | 556 | 19.1 | % | 396 | 18.3 | % | |||||||
Less: Net income attributable to noncontrolling interests | (1 | ) | — | % | — | — | % | ||||||
Income from continuing operations attributable to TD Group | 555 | 19.1 | % | 396 | 18.3 | % | |||||||
Income from discontinued operations, net of tax | 68 | 2.3 | % | 2 | 0.1 | % | |||||||
Net income attributable to TD Group | $ | 623 | 21.4 | % | $ | 398 | 18.4 | % |
• | Net Sales. Net organic sales and acquisition sales and the related dollar and percentage changes for the thirteen week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Thirteen Week Periods Ended | % Change Total Sales | |||||||||||||
March 28, 2020 | March 30, 2019 | Change | ||||||||||||
Organic sales | $ | 1,128 | $ | 1,072 | $ | 56 | 4.8 | % | ||||||
Acquisition sales | 315 | 96 | 219 | 18.8 | % | |||||||||
$ | 1,443 | $ | 1,168 | $ | 275 | 23.5 | % |
• | Cost of Sales and Gross Profit. Cost of sales increased by $107 million, or 20.7%, to $625 million for the thirteen week period ended March 28, 2020 compared to $518 million for the thirteen week period ended March 30, 2019. Cost of sales and the related percentage of total sales for the thirteen week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Thirteen Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | Change | % Change | |||||||||||
Cost of sales - excluding costs below | $ | 646 | $ | 502 | $ | 144 | 28.7 | % | ||||||
% of total sales | 44.8 | % | 43.0 | % | ||||||||||
Acquisition integration costs | 2 | 1 | 1 | 100.0 | % | |||||||||
% of total sales | 0.1 | % | 0.1 | % | ||||||||||
Stock compensation expense | 1 | 2 | (1 | ) | (50.0 | )% | ||||||||
% of total sales | 0.1 | % | 0.2 | % | ||||||||||
Inventory acquisition accounting adjustments | — | 16 | (16 | ) | (100.0 | )% | ||||||||
% of total sales | — | % | 1.4 | % | ||||||||||
Loss contract amortization | (11 | ) | (2 | ) | (9 | ) | (450.0 | )% | ||||||
% of total sales | (0.8 | )% | (0.2 | )% | ||||||||||
Foreign currency gain | (13 | ) | (1 | ) | (12 | ) | (1,200.0 | )% | ||||||
% of total sales | (0.9 | )% | (0.1 | )% | ||||||||||
Total cost of sales | $ | 625 | $ | 518 | $ | 107 | 20.7 | % | ||||||
% of total sales | 43.3 | % | 44.3 | % | ||||||||||
Gross profit | $ | 818 | $ | 650 | $ | 168 | 25.8 | % | ||||||
Gross profit percentage | 56.7 | % | 55.7 | % |
• | Selling and Administrative Expenses. Selling and administrative expenses increased by $20 million to $180 million, or 12.5% of sales, for the thirteen week period ended March 28, 2020 from $160 million, or 13.7% of sales, for the thirteen week period ended March 30, 2019. Selling and administrative expenses and the related percentage of total sales for the thirteen week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Thirteen Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | Change | % Change | |||||||||||
Selling and administrative expenses - excluding costs below | $ | 163 | $ | 121 | $ | 42 | 34.7 | % | ||||||
% of total sales | 11.3 | % | 10.4 | % | ||||||||||
Stock compensation expense | 10 | 18 | (8 | ) | (44.4 | )% | ||||||||
% of total sales | 0.7 | % | 1.5 | % | ||||||||||
Acquisition-related expenses | 7 | 21 | (14 | ) | (66.7 | )% | ||||||||
% of total sales | 0.5 | % | 1.8 | % | ||||||||||
Total selling and administrative expenses | $ | 180 | $ | 160 | $ | 20 | 12.5 | % | ||||||
% of total sales | 12.5 | % | 13.7 | % |
• | Amortization of Intangible Assets. Amortization of intangible assets was $46 million for the thirteen week period ended March 28, 2020 compared to $22 million in the thirteen week period ended March 30, 2019. The increase in amortization expense of $24 million was due to the amortization expense on the definite-lived intangible assets recorded in connection with the fiscal 2019 acquisition of Esterline. |
• | Refinancing Costs. Refinancing costs of $3 million were recorded for the thirteen week period ended March 28, 2020 and primarily related to certain fees incurred to refinance its term loans in February 2020. |
• | Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs, original issue discount and premium and revolving credit facility fees; slightly offset by interest income. Interest expense-net increased $50 million, or 24.8%, to $252 million for the thirteen week period ended March 28, 2020 from $202 million for the comparable thirteen week period last year. The net increase in interest expense-net was primarily due to an increase in the weighted average level of outstanding borrowings, which was approximately $18.5 billion for the thirteen week period ended March 28, 2020 and approximately $15.3 billion for the thirteen week period ended March 30, 2019. The increase in weighted average level of borrowings was primarily due to the activity in the first and second quarter of fiscal 2020 consisting of the issuance of $2.65 billion in 5.50% 2027 Notes and the $200 million draw on the revolving credit facility. The increases in new debt described above were slightly offset by the redemption of $1.15 billion in 6.00% 2022 Notes in the first quarter of fiscal 2020. The weighted average interest rate for cash interest payments on total borrowings outstanding for the thirteen week period ended March 28, 2020 was 5.31%. |
• | Income Taxes. Income tax expense as a percentage of income before income taxes was approximately 4.2% for the thirteen week period ended March 28, 2020 compared to 24.2% for the thirteen week period ended March 30, 2019. On March 27, 2020, President Trump signed into law the CARES Act in response to the COVID-19 pandemic. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, and modifications to the net interest deduction limitations. The most significant impact of the CARES Act for the Company is an increase of the IRC 163(j) Interest Disallowance Limitations from 30% to 50% of adjusted taxable income which will allow the Company to deduct additional interest for fiscal years 2020 (retroactive to October 1, 2019 for the Company) and 2021. The Company's lower effective tax rate for the thirteen week period ended March 28, 2020 was primarily due to a discrete benefit recognized for excess tax benefits for share-based payments, in addition to the modification of the interest expense limitation under IRC Section 163(j) enacted as part of the CARES Act. The Company’s effective tax rate for the thirteen week period ended March 28, 2020 was lower than the Federal statutory rate of 21% primarily due to a discrete benefit recognized for excess tax benefits for share-based payments, partially offset by foreign earnings taxed at rates higher than the U.S. statutory rate. |
• | (Loss) Income from Discontinued Operations. Discontinued operations for the thirteen week period ended March 28, 2020 includes an immaterial adjustment of $4 million on the gain recognized from the sale of Souriau-Sunbank. Discontinued operations for the thirteen week period ended March 30, 2019 include the results of the operations of the Souriau-Sunbank Connection Technologies business and the Esterline Interface Technology ("EIT") group of businesses. Both businesses were acquired by TransDigm as part of its acquisition of Esterline in March 2019. On December 20, 2019, TransDigm completed the divestiture of Souriau-Sunbank to Eaton Corporation plc (“Eaton”) for approximately $920 million. On September 20, 2019, TransDigm completed the divestiture of EIT to an affiliate of KPS Capital Partners, LP for approximately $190 million. |
• | Net Income Attributable to TD Group. Net income attributable to TD Group increased $117 million, or 57.9%, to $319 million for the thirteen week period ended March 28, 2020 compared to net income attributable to TD Group of $202 million for the thirteen week period ended March 30, 2019, primarily as a result of the factors referred to above. |
• | Earnings per Share. Basic and diluted earnings per share was $5.56 for the thirteen week period ended March 28, 2020 and $3.60 per share for the thirteen week period ended March 30, 2019. Basic and diluted earnings (loss) per share from continuing operations and discontinued operations was $5.63 and $(0.07), respectively, for the thirteen week period ended March 28, 2020. Basic and diluted earnings per share from continuing operations and discontinued operations was $3.56 and $0.04, respectively, for the thirteen week period ended March 30, 2019. |
• | Segment Net Sales. Net sales by segment for the thirteen week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Thirteen Week Periods Ended | ||||||||||||||||||||
March 28, 2020 | % of Sales | March 30, 2019 | % of Sales | Change | % Change | |||||||||||||||
Power & Control | $ | 747 | 51.8 | % | $ | 631 | 54.0 | % | $ | 116 | 18.4 | % | ||||||||
Airframe | 655 | 45.4 | % | 499 | 42.7 | % | 156 | 31.3 | % | |||||||||||
Non-aviation | 41 | 2.8 | % | 38 | 3.3 | % | 3 | 7.9 | % | |||||||||||
$ | 1,443 | 100.0 | % | $ | 1,168 | 100.0 | % | $ | 275 | 23.5 | % |
• | EBITDA As Defined. EBITDA As Defined by segment for the thirteen week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Thirteen Week Periods Ended | ||||||||||||||||||||
March 28, 2020 | % of Segment Sales | March 30, 2019 | % of Segment Sales | Change | % Change | |||||||||||||||
Power & Control | $ | 381 | 55.2 | % | $ | 329 | 56.3 | % | $ | 52 | 15.8 | % | ||||||||
Airframe | 296 | 42.8 | % | 243 | 41.6 | % | 53 | 21.8 | % | |||||||||||
Non-aviation | 14 | 2.0 | % | 12 | 2.1 | % | 2 | 16.7 | % | |||||||||||
$ | 691 | 100.0 | % | $ | 584 | 100.0 | % | $ | 107 | 18.3 | % |
• | Net Sales. Net organic sales and acquisition sales and the related dollar and percentage changes for the twenty-six week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Twenty-Six Week Periods Ended | % Change Total Sales | |||||||||||||
March 28, 2020 | March 30, 2019 | Change | ||||||||||||
Organic sales | $ | 2,209 | $ | 2,065 | $ | 144 | 6.7 | % | ||||||
Acquisition sales | 699 | 96 | 603 | 27.9 | % | |||||||||
$ | 2,908 | $ | 2,161 | $ | 747 | 34.6 | % |
• | Cost of Sales and Gross Profit. Cost of sales increased by $341 million, or 36.0%, to $1,288 million for the twenty-six week period ended March 28, 2020 compared to $947 million for the twenty-six week period ended March 30, 2019. Cost of sales and the related percentage of total sales for the twenty-six week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | Change | % Change | |||||||||||
Cost of sales - excluding costs below | $ | 1,305 | $ | 928 | $ | 377 | 40.6 | % | ||||||
% of total sales | 44.9 | % | 42.9 | % | ||||||||||
Stock compensation expense | 4 | 4 | — | — | % | |||||||||
% of total sales | 0.1 | % | 0.2 | % | ||||||||||
Acquisition integration costs | 3 | 3 | — | — | % | |||||||||
% of total sales | 0.1 | % | 0.1 | % | ||||||||||
Foreign currency loss (gain) | 1 | (3 | ) | 4 | 133.3 | % | ||||||||
% of total sales | — | % | (0.1 | )% | ||||||||||
Inventory acquisition accounting adjustments | — | 20 | (20 | ) | (100.0 | )% | ||||||||
% of total sales | — | % | 0.9 | % | ||||||||||
Loss contract amortization | (25 | ) | (5 | ) | (20 | ) | (400.0 | )% | ||||||
% of total sales | (0.9 | )% | (0.2 | )% | ||||||||||
Total cost of sales | $ | 1,288 | $ | 947 | $ | 341 | 36.0 | % | ||||||
% of total sales | 44.3 | % | 43.8 | % | ||||||||||
Gross profit | $ | 1,620 | $ | 1,214 | $ | 406 | 33.4 | % | ||||||
Gross profit percentage | 55.7 | % | 56.2 | % |
• | Selling and Administrative Expenses. Selling and administrative expenses increased by $99 million to $381 million, or 13.1% of sales, for the twenty-six week period ended March 28, 2020 from $282 million, or 13.1% of sales, for the twenty-six week period ended March 30, 2019. Selling and administrative expenses and the related percentage of total sales for the twenty-six week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | Change | % Change | |||||||||||
Selling and administrative expenses - excluding costs below | $ | 335 | $ | 221 | $ | 114 | 51.6 | % | ||||||
% of total sales | 11.5 | % | 10.2 | % | ||||||||||
Stock compensation expense | 33 | 34 | (1 | ) | (2.9 | )% | ||||||||
% of total sales | 1.1 | % | 1.6 | % | ||||||||||
Acquisition-related expenses | 13 | 27 | (14 | ) | (51.9 | )% | ||||||||
% of total sales | 0.4 | % | 1.2 | % | ||||||||||
Total selling and administrative expenses | $ | 381 | $ | 282 | $ | 99 | 35.1 | % | ||||||
% of total sales | 13.1 | % | 13.1 | % |
• | Amortization of Intangible Assets. Amortization of intangible assets was $86 million for the twenty-six week period ended March 28, 2020 compared to $42 million in the twenty-six week period ended March 30, 2019. The increase in amortization expense of $44 million was due to the amortization expense on the definite-lived intangible assets recorded in connection with the fiscal 2019 acquisition of Esterline. |
• | Refinancing Costs. Refinancing costs of $26 million were recorded for the twenty-six week period ended March 28, 2020 and primarily related to the fees incurred on the redemption of the 2022 Notes that occurred in the first quarter of fiscal 2020 and certain fees incurred to refinance the term loans in the second quarter of fiscal 2020. |
• | Other Income. Other income of $3 million was recorded for the twenty-six week period ended March 28, 2020 and primarily related to the non-service related components of net periodic benefit costs on the Company's defined benefit pension plans. |
• | Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs, original issue discount and premium and revolving credit facility fees slightly offset by interest income. Interest expense-net increased $127 million, or 34.0%, to $501 million for the twenty-six week period ended March 28, 2020 from $374 million for the comparable twenty-six week period last year. The net increase in interest expense-net was primarily due to an increase in the weighted average level of outstanding borrowings, which was approximately $18.2 billion for the twenty-six week period ended March 28, 2020 and approximately $14.1 billion for the twenty-six week period ended March 30, 2019. The increase in weighted average level of borrowings was primarily due to the activity in the second quarter of fiscal 2019 consisting of the issuance of $4.0 billion in 6.25% 2026 Secured Notes and the issuance of $550 million in 7.50% 2027 Notes and the activity in the first and second quarters of fiscal 2020 consisting of the issuance of $2.65 billion in 5.50% 2027 Notes and the $200 million draw on the revolving credit facility. The increases in new debt described above were slightly offset by the redemptions of $550 million in 5.50% 2020 Notes and $1.15 billion in 6.00% 2022 Notes. The weighted average interest rate for cash interest payments on total borrowings outstanding for the twenty-six week period ended March 28, 2020 was 5.20%. |
• | Income Taxes. Income tax expense as a percentage of income before income taxes was approximately 11.6% for the twenty-six week period ended March 28, 2020 compared to 22.9% for the twenty-six week period ended March 30, 2019. On March 27, 2020, President Trump signed into law the CARES Act in response to the COVID-19 pandemic. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, and modifications to the net interest deduction limitations. The most significant impact of the CARES Act for the Company is an increase of the IRC 163(j) Interest Disallowance Limitations from 30% to 50% of adjusted taxable income which will allow the Company to deduct additional interest for fiscal years 2020 and 2021. The Company's lower effective tax rate for the twenty-six week period ended March 28, 2020 was primarily due to a discrete benefit recognized for excess tax benefits for share-based payments, in addition to the modification of the interest expense limitation under IRC Section 163(j) enacted as part of the CARES Act. The Company’s effective tax rate for the period ended March 28, 2020 was lower than the Federal statutory rate of 21% primarily due to a discrete benefit recognized for excess tax benefits for share-based payments, partially offset by foreign earnings taxed at rates higher than the U.S. statutory rate. |
• | Income from Discontinued Operations. Discontinued operations for the twenty-six week period ended March 28, 2020 include the results of the operations of Souriau-Sunbank. Discontinued operations for the twenty-six week period ended March 30, 2019 include the results of the operations of Souriau-Sunbank and the Esterline Interface Technology ("EIT") group of businesses. Both businesses were acquired by TransDigm as part of its acquisition of Esterline in March 2019. On December 20, 2019, TransDigm completed the divestiture of Souriau-Sunbank to Eaton for approximately $920 million. On September 20, 2019, TransDigm completed the divestiture of EIT to an affiliate of KPS Capital Partners, LP for approximately $190 million. |
• | Net Income Attributable to TD Group. Net income attributable to TD Group increased $225 million, or 56.5%, to $623 million for the twenty-six week period ended March 28, 2020 compared to net income attributable to TD Group of $398 million for the twenty-six week period ended March 30, 2019, primarily as a result of the factors referred to above. |
• | Earnings per Share. Basic and diluted earnings per share was $7.63 for the twenty-six week period ended March 28, 2020 and $6.65 per share for the twenty-six week period ended March 30, 2019. Basic and diluted earnings per share from continuing operations and discontinued operations was $6.45 and $1.18, respectively, for the twenty-six week period ended March 28, 2020. Basic and diluted earnings per share from continuing operations and discontinued operations was $6.61 and $0.04, respectively, for the twenty-six week period ended March 30, 2019. Net income attributable to TD Group for the twenty-six week period ended March 28, 2020 of $623 million was decreased by dividend equivalent payments paid of $185 million, or $3.22 per share, resulting in net income available to common shareholders of $438 million, or $7.63 per share. Net income for the twenty-six week period ended March 30, 2019 of $398 million was decreased by dividend equivalent payments of $24 million, or $0.43 per share, resulting in net income available to common shareholders of $374 million, or $6.65 per share. |
• | Segment Net Sales. Net sales by segment for the twenty-six week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Twenty-Six Week Periods Ended | ||||||||||||||||||||
March 28, 2020 | % of Sales | March 30, 2019 | % of Sales | Change | % Change | |||||||||||||||
Power & Control | $ | 1,499 | 51.5 | % | $ | 1,192 | 55.2 | % | $ | 307 | 25.8 | % | ||||||||
Airframe | 1,329 | 45.7 | % | 898 | 41.5 | % | 431 | 48.0 | % | |||||||||||
Non-aviation | 80 | 2.8 | % | 71 | 3.3 | % | 9 | 12.7 | % | |||||||||||
$ | 2,908 | 100.0 | % | $ | 2,161 | 100.0 | % | $ | 747 | 34.6 | % |
• | EBITDA As Defined. EBITDA As Defined by segment for the twenty-six week periods ended March 28, 2020 and March 30, 2019 were as follows (amounts in millions): |
Twenty-Six Week Periods Ended | ||||||||||||||||||||
March 28, 2020 | % of Segment Sales | March 30, 2019 | % of Segment Sales | Change | % Change | |||||||||||||||
Power & Control | $ | 766 | 54.9 | % | $ | 628 | 58.0 | % | $ | 138 | 22.0 | % | ||||||||
Airframe | 602 | 43.2 | % | 434 | 40.0 | % | 168 | 38.7 | % | |||||||||||
Non-aviation | 26 | 1.9 | % | 22 | 2.0 | % | 4 | 18.2 | % | |||||||||||
$ | 1,394 | 100.0 | % | $ | 1,084 | 100.0 | % | $ | 310 | 28.6 | % |
As of March 28, 2020 | ||||
Cash and cash equivalents | $ | 2,668 | ||
Availability on revolving credit facility | 518 | |||
Liquidity (1) | $ | 3,186 |
(1) | Excludes approximately $1,500 million in cash received from the April 2020 secured notes offerings. |
Term Loans Facility | Aggregate Principal | Maturity Date | Interest Rate | |||
Tranche E | $2,216 million | May 30, 2025 | LIBO rate + 2.25% | |||
Tranche F | $3,515 million | December 9, 2025 | LIBO rate + 2.25% | |||
Tranche G | $1,774 million | August 22, 2024 | LIBO rate + 2.25% |
Description | Aggregate Principal | Maturity Date | Interest Rate | |||
2024 Notes | $1,200 million | July 15, 2024 | 6.50% | |||
2025 Notes | $750 million | May 15, 2025 | 6.50% | |||
2026 Secured Notes | $4,000 million | March 15, 2026 | 6.250% | |||
6.875% 2026 Notes | $500 million | May 15, 2026 | 6.875% | |||
6.375% 2026 Notes | $950 million | June 15, 2026 | 6.375% | |||
7.50% 2027 Notes | $550 million | March 15, 2027 | 7.50% | |||
5.50% 2027 Notes | $2,650 million | November 15, 2027 | 5.50% |
• | neither EBITDA nor EBITDA As Defined reflects the significant interest expense, or the cash requirements, necessary to service interest payments on our indebtedness; |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor EBITDA As Defined reflects any cash requirements for such replacements; |
• | the omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA and EBITDA As Defined; |
• | neither EBITDA nor EBITDA As Defined includes the payment of taxes, which is a necessary element of our operations; and |
• | EBITDA As Defined excludes the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions. |
Thirteen Week Periods Ended | Twenty-Six Week Periods Ended | ||||||||||||||
March 28, 2020 | March 30, 2019 | March 28, 2020 | March 30, 2019 | ||||||||||||
Income from continuing operations | $ | 323 | $ | 200 | $ | 556 | $ | 396 | |||||||
Adjustments: | |||||||||||||||
Depreciation and amortization expense | 72 | 39 | 141 | 74 | |||||||||||
Interest expense, net | 252 | 202 | 501 | 374 | |||||||||||
Income tax provision | 14 | 63 | 73 | 117 | |||||||||||
EBITDA | 661 | 504 | 1,271 | 961 | |||||||||||
Adjustments: | |||||||||||||||
Inventory acquisition accounting adjustments (1) | — | 16 | — | 20 | |||||||||||
Acquisition integration costs (2) | 9 | 5 | 15 | 7 | |||||||||||
Acquisition transaction-related expenses (3) | — | 17 | 1 | 22 | |||||||||||
Non-cash stock compensation expense (4) | 11 | 21 | 37 | 38 | |||||||||||
Refinancing costs (5) | 3 | 3 | 26 | 3 | |||||||||||
Other, net (6) | (9 | ) | — | 6 | 2 | ||||||||||
EBITDA As Defined | $ | 675 | $ | 566 | $ | 1,356 | $ | 1,053 |
(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 gain or loss, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation, and gain or loss on sale of fixed assets. |
Twenty-Six Week Periods Ended | |||||||
March 28, 2020 | March 30, 2019 | ||||||
Net cash provided by operating activities | $ | 594 | $ | 453 | |||
Adjustments: | |||||||
Changes in assets and liabilities, net of effects from acquisitions of businesses | 173 | 64 | |||||
Interest expense, net (1) | 485 | 361 | |||||
Income tax provision - current | 82 | 124 | |||||
Non-cash stock compensation expense (2) | (37 | ) | (38 | ) | |||
Refinancing costs (3) | (26 | ) | (3 | ) | |||
EBITDA | 1,271 | 961 | |||||
Adjustments: | |||||||
Inventory acquisition accounting adjustments (4) | — | 20 | |||||
Acquisition integration costs (5) | 15 | 7 | |||||
Acquisition transaction-related expenses (6) | 1 | 22 | |||||
Non-cash stock compensation expense (2) | 37 | 38 | |||||
Refinancing costs (3) | 26 | 3 | |||||
Other, net (7) | 6 | 2 | |||||
EBITDA As Defined | $ | 1,356 | $ | 1,053 |
(1) | Represents interest expense excluding the amortization of debt issuance costs and premium and discount on debt. |
(2) | Represents the compensation expense recognized by TD Group under our stock incentive plans. |
(3) | Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements. |
(4) | Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold. |
(5) | Represents costs incurred to integrate acquired businesses and product lines into TD Group’s operations, facility relocation costs and other acquisition-related costs. |
(6) | 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. |
(7) | Primarily represents foreign currency transaction gain or loss, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation, and gain or loss on sale of fixed assets. |
Exhibit No. | Description | |
101.INS | Inline XBRL Instance Document: The XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |
104 | Cover Page Interactive Data File: the cover page XBRL tags are embedded within the Inline XBRL document and are contained within Exhibit 101. |
SIGNATURE | TITLE | DATE | ||
/s/ Kevin Stein | President, Chief Executive Officer and Director (Principal Executive Officer) | May 5, 2020 | ||
Kevin Stein | ||||
/s/ Michael Lisman | Chief Financial Officer (Principal Financial Officer) | May 5, 2020 | ||
Michael Lisman |
1. | I have reviewed this quarterly report on Form 10-Q of TransDigm Group Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors: |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Kevin Stein |
Name: Kevin Stein |
Title: President, Chief Executive Officer and Director |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of TransDigm Group Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors: |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Michael Lisman |
Name: Michael Lisman |
Title: Chief Financial Officer |
(Principal Financial Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents in all material respects, the financial condition of the Company as of the dates indicated and results of operations of the Company for the periods indicated. |
/s/ Kevin Stein |
Name: Kevin Stein |
Title: President, Chief Executive Officer and Director |
(Principal Executive Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents in all material respects, the financial condition of the Company as of the dates indicated and results of operations of the Company for the periods indicated. |
/s/ Michael Lisman |
Name: Michael Lisman |
Title: Chief Financial Officer |
(Principal Financial Officer) |
SUPPLEMENTAL GUARANTOR INFORMATION |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL GUARANTOR INFORMATION | SUPPLEMENTAL GUARANTOR INFORMATION TransDigm Inc.’s 2024 Notes, 2025 Notes, 6.375% 2026 Notes, 2026 Secured Notes, 7.50% 2027 Notes and 5.50% 2027 Notes are jointly and severally guaranteed, on a senior subordinated basis, by TD Group, TransDigm UK Holdings plc ("TransDigm UK") and TransDigm Inc.’s Domestic Restricted Subsidiaries, as defined in the applicable Indentures. TransDigm UK's 6.875% 2026 Notes are jointly and severally guaranteed, on a senior subordinated basis, by TD Group, TransDigm Inc. and TransDigm Inc.'s Domestic Restricted Subsidiaries as defined in the applicable indenture. The following supplemental condensed consolidating financial information presents, in separate columns, the balance sheets of the Company as of March 28, 2020 and September 30, 2019 and its statements of income and comprehensive income and cash flows for the twenty-six week periods ended March 28, 2020 and March 30, 2019 for (i) TransDigm Group on a parent only basis with its investment in subsidiaries recorded under the equity method, (ii) TransDigm Inc. including its directly owned operations and non-operating entities, excluding TransDigm UK, (iii) TransDigm UK (iv) the Subsidiary Guarantors (other than TransDigm UK) on a combined basis, (v) Non-Guarantor Subsidiaries and (vi) the Company on a consolidated basis. Separate financial statements of TransDigm Inc. are not presented because TransDigm Inc.’s 2024 Notes, 2025 Notes, 6.375% 2026 Notes, 2026 Secured Notes, 7.50% 2027 Notes and 5.50% 2027 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 statements of TransDigm UK are not presented because TransDigm UK's 6.875% 2026 Notes, issued in May 2018, are fully and unconditionally guaranteed on a senior subordinated basis by TD Group, TransDigm Inc. and all of TransDigm Inc.'s Domestic Restricted Subsidiaries. TRANSDIGM GROUP INCORPORATED CONDENSED CONSOLIDATING BALANCE SHEET AS OF MARCH 28, 2020 (Amounts in millions)
TRANSDIGM GROUP INCORPORATED CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2019 (Amounts in millions)
TRANSDIGM GROUP INCORPORATED CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME FOR THE TWENTY-SIX WEEK PERIOD ENDED MARCH 28, 2020 (Amounts in millions)
TRANSDIGM GROUP INCORPORATED CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME FOR THE TWENTY-SIX WEEK PERIOD ENDED MARCH 30, 2019 (Amounts in millions)
TRANSDIGM GROUP INCORPORATED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE TWENTY-SIX WEEK PERIOD ENDED MARCH 28, 2020 (Amounts in millions)
TRANSDIGM GROUP INCORPORATED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE TWENTY-SIX WEEK PERIOD ENDED MARCH 30, 2019 (Amounts in millions)
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ACCUMULATED OTHER COMPREHENSIVE LOSS |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The following table presents the components of accumulated other comprehensive (loss) income, net of taxes, for the twenty-six week period ended March 28, 2020 (in millions):
A summary of reclassifications out of accumulated other comprehensive (loss) income for the twenty-six week periods ended March 28, 2020 and March 30, 2019 is provided below (in millions):
(2) This component of accumulated other comprehensive (loss) income is included in net sales (see Note 12, “Derivatives and Hedging Activities,” for additional information).
|
SEGMENTS - Total Assets by Segment (Details) - USD ($) $ in Millions |
Mar. 28, 2020 |
Sep. 30, 2019 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 16,635 | $ 16,255 |
Operating Segments | Power & Control | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 7,114 | 7,037 |
Operating Segments | Airframe | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 6,738 | 6,672 |
Operating Segments | Non- aviation | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 259 | 262 |
Corporate, Non-Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 2,524 | 1,322 |
Discontinued Operations, Held-for-sale [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 0 | $ 962 |
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Amounts Recognized in Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Mar. 28, 2020 |
Mar. 30, 2019 |
Mar. 28, 2020 |
Mar. 30, 2019 |
|||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Deferred tax benefit on reclassifications out of accumulated other comprehensive (loss) income | $ (14,000) | $ (63,000) | $ (73,000) | $ (117,000) | ||||
Losses reclassified into earnings, net of tax | $ 319,000 | $ 202,000 | 624,000 | 398,000 | ||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges (1) | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Amortization from redesignated interest rate swap and cap agreements (1) | [1] | 2,000 | 1,000 | |||||
Losses from settlement of foreign currency forward contracts | [2] | 0 | 1,000 | |||||
Deferred tax benefit on reclassifications out of accumulated other comprehensive (loss) income | 0 | (1,000) | ||||||
Losses reclassified into earnings, net of tax | $ 2,000 | $ 1,000 | ||||||
|
DESCRIPTION OF THE BUSINESS - Narratives (Details) |
Mar. 28, 2020 |
---|---|
Accounting Policies [Abstract] | |
Percentage of ownership in subsidiary | 100.00% |
REVENUE (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 29, 2018
USD ($)
| |
Cumulative Effect on Retained Earnings, Net of Tax | $ 3 |
Accounting Standards Update 2014-09 | Accumulated Deficit | |
Cumulative Effect on Retained Earnings, Net of Tax | $ 3 |
UNAUDITED INTERIM FINANCIAL INFORMATION |
6 Months Ended |
---|---|
Mar. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
UNAUDITED INTERIM FINANCIAL INFOMRATION | UNAUDITED INTERIM FINANCIAL INFORMATION The financial information included herein is unaudited; however, the information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations and cash flows for the interim periods presented. These financial statements and notes should be read in conjunction with the financial statements and related notes for the year ended September 30, 2019 included in TD Group’s Form 10-K filed on November 19, 2019. As disclosed therein, the Company’s annual consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States (“US GAAP”). The September 30, 2019 condensed consolidated balance sheet was derived from TD Group’s audited financial statements. The results of operations for the twenty-six week period ended March 28, 2020 are not necessarily indicative of the results to be expected for the full year. Historical information has been retrospectively adjusted to reflect the classification of discontinued operations. Discontinued operations are further described in Note 3, "Acquisitions and Divestitures," and Note 18, "Discontinued Operations."
|
Cover Page Cover Page - shares |
6 Months Ended | |
---|---|---|
Mar. 28, 2020 |
Apr. 27, 2020 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 28, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-32833 | |
Entity Registrant Name | TransDigm Group Incorporated | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-2101738 | |
Entity Address, Address Line One | 1301 East 9th Street, | |
Entity Address, Address Line Two | Suite 3000, | |
Entity Address, City or Town | Cleveland, | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 44114 | |
City Area Code | 216 | |
Local Phone Number | 706-2960 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | TDG | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 54,072,319 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001260221 | |
Document Fiscal Year Focus | 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 28, 2020 |
Dec. 28, 2019 |
Mar. 30, 2019 |
Dec. 29, 2018 |
Mar. 28, 2020 |
Mar. 30, 2019 |
|
Net income | $ 319 | $ 202 | $ 624 | $ 398 | ||
Less: Net income attributable to noncontrolling interests | 0 | 0 | (1) | 0 | ||
NET INCOME ATTRIBUTABLE TO TD GROUP | 319 | $ 304 | 202 | $ 196 | 623 | 398 |
Other comprehensive (loss) income, net of tax: | ||||||
Foreign currency translation | (106) | 98 | (13) | (11) | (8) | (24) |
Unrealized loss on derivatives | (145) | 23 | (63) | $ (74) | (122) | (137) |
Pensions and other postretirement benefits | 0 | $ 6 | 0 | 6 | 0 | |
Other comprehensive loss, net of tax, attributable to TD Group | (251) | (76) | (124) | (161) | ||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | $ 68 | $ 126 | $ 499 | $ 237 |
SUPPLEMENTAL GUARANTOR INFORMATION - Supplemental Condensed Consolidating Cash Flow Statement (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Mar. 28, 2020 |
Mar. 30, 2019 |
|
Condensed Cash Flow Statements, Captions [Line Items] | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ 594 | $ 453 |
Capital expenditures | (50) | (44) |
Payments made in connection with acquisitions, net of cash acquired | 0 | (3,569) |
Proceeds in connection with the sale of discontinued operations, net | 904 | 0 |
Net cash provided by (used in) investing activities | 854 | (3,613) |
Intercompany activities | 0 | 0 |
Proceeds from exercise of stock options | 69 | 47 |
Dividends and dividend equivalent payments | (1,928) | (24) |
Repayments of Long-term Debt | (19) | (38) |
Payments for Repurchase of Common Stock | (19) | 0 |
Proceeds from Lines of Credit | 200 | 0 |
Financing fees and other, net | (8) | (2) |
Net cash provided by (used in) financing activities | (248) | 3,915 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 1 | 1 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,201 | 756 |
Cash and Cash Equivalents, Period Increase (Decrease) | 756 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | (1,467) | (2,073) |
CASH AND CASH EQUIVALENTS, END OF PERIOD | (2,668) | (2,829) |
Repayments of Other Long-term Debt | (1,168) | 0 |
Redemption of senior subordinated notes due 2022, net | 0 | (550) |
Proceeds from Issuance of Senior Long-term Debt | 0 | 3,937 |
Proceeds from Issuance of Long-term Debt | 2,625 | 0 |
Proceeds from 5.50% senior subordinated notes due 2027, net | 0 | 545 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 1 | 9 |
Capital expenditures | 0 | 0 |
Payments made in connection with acquisitions, net of cash acquired | 0 | |
Proceeds in connection with the sale of discontinued operations, net | 0 | |
Net cash provided by (used in) investing activities | 0 | 0 |
Intercompany activities | (1) | (9) |
Proceeds from exercise of stock options | 0 | 0 |
Dividends and dividend equivalent payments | 0 | 0 |
Repayments of Long-term Debt | 0 | 0 |
Payments for Repurchase of Common Stock | 0 | |
Proceeds from Lines of Credit | 0 | |
Financing fees and other, net | 0 | 0 |
Net cash provided by (used in) financing activities | (1) | (9) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 0 | |
Cash and Cash Equivalents, Period Increase (Decrease) | 0 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 0 | 0 |
Repayments of Other Long-term Debt | 0 | |
Redemption of senior subordinated notes due 2022, net | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Proceeds from Issuance of Long-term Debt | 0 | |
Proceeds from 5.50% senior subordinated notes due 2027, net | 0 | |
TransDigm Group | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 0 | 0 |
Capital expenditures | 0 | 0 |
Payments made in connection with acquisitions, net of cash acquired | 0 | |
Proceeds in connection with the sale of discontinued operations, net | 0 | |
Net cash provided by (used in) investing activities | 0 | 0 |
Intercompany activities | 1,899 | (23) |
Proceeds from exercise of stock options | 69 | 47 |
Dividends and dividend equivalent payments | (1,928) | (24) |
Repayments of Long-term Debt | 0 | 0 |
Payments for Repurchase of Common Stock | (19) | |
Proceeds from Lines of Credit | 0 | |
Financing fees and other, net | 0 | 0 |
Net cash provided by (used in) financing activities | 21 | 0 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 21 | |
Cash and Cash Equivalents, Period Increase (Decrease) | 0 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | (21) | 0 |
Repayments of Other Long-term Debt | 0 | |
Redemption of senior subordinated notes due 2022, net | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Proceeds from Issuance of Long-term Debt | 0 | |
Proceeds from 5.50% senior subordinated notes due 2027, net | 0 | |
TransDigm Inc. | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (348) | (64) |
Capital expenditures | (2) | (2) |
Payments made in connection with acquisitions, net of cash acquired | (3,538) | |
Proceeds in connection with the sale of discontinued operations, net | 904 | |
Net cash provided by (used in) investing activities | 902 | (3,540) |
Intercompany activities | (1,031) | (701) |
Proceeds from exercise of stock options | 0 | 0 |
Dividends and dividend equivalent payments | 0 | 0 |
Repayments of Long-term Debt | (19) | (38) |
Payments for Repurchase of Common Stock | 0 | |
Proceeds from Lines of Credit | 200 | |
Financing fees and other, net | (8) | 2 |
Net cash provided by (used in) financing activities | 599 | 3,195 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,153 | |
Cash and Cash Equivalents, Period Increase (Decrease) | (409) | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | (1,092) | (1,821) |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 2,245 | (1,412) |
Repayments of Other Long-term Debt | (1,168) | |
Redemption of senior subordinated notes due 2022, net | (550) | |
Proceeds from Issuance of Senior Long-term Debt | 3,937 | |
Proceeds from Issuance of Long-term Debt | 2,625 | |
Proceeds from 5.50% senior subordinated notes due 2027, net | 545 | |
TransDigm UK [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 1 | 4 |
Capital expenditures | 0 | 0 |
Payments made in connection with acquisitions, net of cash acquired | 0 | |
Proceeds in connection with the sale of discontinued operations, net | 0 | |
Net cash provided by (used in) investing activities | 0 | 0 |
Intercompany activities | 0 | (4) |
Proceeds from exercise of stock options | 0 | 0 |
Dividends and dividend equivalent payments | 0 | 0 |
Repayments of Long-term Debt | 0 | 0 |
Payments for Repurchase of Common Stock | 0 | |
Proceeds from Lines of Credit | 0 | |
Financing fees and other, net | 0 | 0 |
Net cash provided by (used in) financing activities | 0 | (4) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1 | |
Cash and Cash Equivalents, Period Increase (Decrease) | 0 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | (1) | 0 |
Repayments of Other Long-term Debt | 0 | |
Redemption of senior subordinated notes due 2022, net | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Proceeds from Issuance of Long-term Debt | 0 | |
Proceeds from 5.50% senior subordinated notes due 2027, net | 0 | |
Subsidiary Guarantors | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 668 | 469 |
Capital expenditures | (37) | (36) |
Payments made in connection with acquisitions, net of cash acquired | (31) | |
Proceeds in connection with the sale of discontinued operations, net | 0 | |
Net cash provided by (used in) investing activities | (37) | (67) |
Intercompany activities | (634) | (407) |
Proceeds from exercise of stock options | 0 | 0 |
Dividends and dividend equivalent payments | 0 | 0 |
Repayments of Long-term Debt | 0 | 0 |
Payments for Repurchase of Common Stock | 0 | |
Proceeds from Lines of Credit | 0 | |
Financing fees and other, net | 0 | (2) |
Net cash provided by (used in) financing activities | (634) | (409) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (3) | |
Cash and Cash Equivalents, Period Increase (Decrease) | (7) | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 12 | 2 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 15 | 9 |
Repayments of Other Long-term Debt | 0 | |
Redemption of senior subordinated notes due 2022, net | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Proceeds from Issuance of Long-term Debt | 0 | |
Proceeds from 5.50% senior subordinated notes due 2027, net | 0 | |
Non- Guarantor Subsidiaries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 272 | 35 |
Capital expenditures | (11) | (6) |
Payments made in connection with acquisitions, net of cash acquired | 0 | |
Proceeds in connection with the sale of discontinued operations, net | 0 | |
Net cash provided by (used in) investing activities | (11) | (6) |
Intercompany activities | (233) | 1,144 |
Proceeds from exercise of stock options | 0 | 0 |
Dividends and dividend equivalent payments | 0 | 0 |
Repayments of Long-term Debt | 0 | 0 |
Payments for Repurchase of Common Stock | 0 | |
Proceeds from Lines of Credit | 0 | |
Financing fees and other, net | 0 | (2) |
Net cash provided by (used in) financing activities | (233) | 1,142 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 1 | 1 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 29 | |
Cash and Cash Equivalents, Period Increase (Decrease) | 1,172 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | (387) | (254) |
CASH AND CASH EQUIVALENTS, END OF PERIOD | (416) | (1,426) |
Repayments of Other Long-term Debt | 0 | |
Redemption of senior subordinated notes due 2022, net | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Proceeds from Issuance of Long-term Debt | $ 0 | |
Proceeds from 5.50% senior subordinated notes due 2027, net | $ 0 |
SUBSEQUENT EVENTS Subsequent Events (Details) |
6 Months Ended |
---|---|
Mar. 28, 2020 | |
Subsequent Event [Line Items] | |
Labor, COVID-19 related RIF | 15.00% |
LEASES Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions |
Mar. 28, 2020 |
Oct. 01, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating Lease, Weighted Average Remaining Lease Term | 6 years 2 months 12 days | |
Operating Lease, Right-of-Use Asset | $ 102 | $ 99 |
Operating Lease, Liability, Current | 21 | |
Operating Lease, Liability, Noncurrent | 86 | |
Operating Lease, Liability | 107 | $ 105 |
Finance Lease, Right-of-Use Asset | 71 | |
Finance Lease, Liability, Current | 2 | |
Finance Lease, Liability, Noncurrent | 56 | |
Finance Lease, Liability | $ 58 | |
Finance Lease, Weighted Average Remaining Lease Term | 16 years 9 months 18 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 6.20% | |
Finance Lease, Weighted Average Discount Rate, Percent | 7.20% |
DISCONTINUED OPERATIONS Schedule of Discontinued Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 28, 2020 |
Mar. 30, 2019 |
Mar. 28, 2020 |
Mar. 30, 2019 |
Sep. 30, 2019 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Revenues | $ 1,443 | $ 1,168 | $ 2,908 | $ 2,161 | |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (4) | 2 | 68 | 2 | |
Disposal Group, Including Discontinued Operation, Assets, Current | 0 | 0 | $ 962 | ||
Disposal Group, Including Discontinued Operation, Liabilities, Current | 0 | 0 | 157 | ||
Souriau Sunbank [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) from discontinued operations before gain or loss on disposal net of tax | 8 | ||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 60 | ||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | (4) | 68 | 1 | ||
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | 29 | ||||
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | 67 | ||||
Disposal Group, Including Discontinued Operation, Inventory | 88 | ||||
Disposal Group, Including Discontinued Operation, Prepaid and Other Assets | 2 | ||||
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment | 101 | ||||
Disposal Group, Including Discontinued Operation, Goodwill | 480 | ||||
Disposal Group, Including Discontinued Operation, Intangible Assets | 194 | ||||
Disposal Group, Including Discontinued Operation, Other Assets | 1 | ||||
Disposal Group, Including Discontinued Operation, Assets, Current | 962 | ||||
Disposal Group, Including Discontinued Operation, Accounts Payable | 33 | ||||
Disposal Group, Including Discontinued Operation, Accrued Liabilities | 55 | ||||
Disposal Group, including discontinued operations, Long-term Debt | 6 | ||||
Disposal Group, Including Discontinued Operation, Deferred Tax Liabilities | 42 | ||||
Disposal Group, Including Discontinued Operation, Other Liabilities | 21 | ||||
Disposal Group, Including Discontinued Operation, Liabilities, Current | $ 157 | ||||
Souriau Sunbank and EIT [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Revenues | 0 | 28 | 79 | 28 | |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 0 | 3 | 13 | 3 | |
Discontinued Operation, Tax Effect of Discontinued Operation | 1 | 1 | 5 | 1 | |
Income (loss) from discontinued operations before gain or loss on disposal net of tax | (1) | 2 | 8 | 2 | |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | (3) | 0 | 60 | 0 | |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ (4) | $ 2 | $ 68 | $ 2 |
INCOME TAXES - Narratives (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 28, 2020 |
Mar. 30, 2019 |
Mar. 28, 2020 |
Mar. 30, 2019 |
Sep. 30, 2019 |
|
Effective income tax rate | 4.20% | 24.20% | 11.60% | 22.90% | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||||
Unrecognized tax benefits | $ 40.9 | $ 40.9 | $ 36.5 | ||
Tax rate effect | 36.2 | 36.2 | $ 31.4 | ||
Reduction in tax position in next 12 months | $ 1.5 | $ 1.5 | |||
Minimum [Member] | |||||
Income Tax, Interest Disallowance Limitation | 30.00% | ||||
Maximum [Member] | |||||
Income Tax, Interest Disallowance Limitation | 50.00% |
INTANGIBLE ASSETS - Summary of changes in carrying value of Goodwill (Details) $ in Millions |
6 Months Ended |
---|---|
Mar. 28, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 7,820 |
Purchase price allocation adjustments | 36 |
Currency translation adjustment | (10) |
Balance at end of period | 7,846 |
Power & Control | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 4,121 |
Purchase price allocation adjustments | (14) |
Currency translation adjustment | 4 |
Balance at end of period | 4,111 |
Airframe | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 3,598 |
Purchase price allocation adjustments | 51 |
Currency translation adjustment | (14) |
Balance at end of period | 3,635 |
Non- aviation | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 101 |
Purchase price allocation adjustments | (1) |
Currency translation adjustment | 0 |
Balance at end of period | $ 100 |
INTANGIBLE ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 28, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Intangible Assets by Major Class [Table Text Block] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Subject to Amortization | Other intangible assets - net in the condensed consolidated balance sheets consist of the following (in millions):
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Summary of Changes in Carrying Value of Goodwill | The following is a summary of changes in the carrying value of goodwill by segment from September 30, 2019 through March 28, 2020 (in millions):
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SEGMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 28, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales by Reportable Segments | The following table presents net sales by reportable segment (in millions):
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EBITDA Defined by Segment to Consolidated Income Before Taxes | The following table reconciles EBITDA As Defined by segment to consolidated income from continuing operations before income taxes (in millions):
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Total Assets by Segment | The following table presents total assets by segment (in millions):
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INVENTORIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 28, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost or net realizable value. Cost of inventories is generally determined by the average cost and the first-in, first-out (FIFO) methods and includes material, labor and overhead related to the manufacturing process. Inventories consist of the following (in millions):
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ACQUISITIONS AND DIVESTITURES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 28, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS AND DIVESTITURES During the fiscal year ended September 30, 2019, the Company completed the acquisitions of Esterline Technologies Corporation ("Esterline") and substantially all of the assets and technical data rights of the Stormscope product line from L3Harris Technologies, Inc. ("Stormscope") and NavCom Defense Electronics ("NavCom"). The Company accounted for the acquisitions using the acquisition method and included the results of operations of the acquisitions in its condensed consolidated financial statements from the effective date of each acquisition. The acquisitions strengthen and expand the Company’s position to design, produce and supply highly engineered proprietary aerospace components in niche markets with significant aftermarket content and provide opportunities to create value through the application of our three core value-driven operating strategies (obtaining profitable new business, improving our cost structure, and providing highly engineered value-added products to customers). The purchase price paid for each acquisition reflects the current earnings before interest, taxes, depreciation and amortization (EBITDA) and cash flows, as well as the future EBITDA and cash flows expected to be generated by the business, which are driven in most cases by the recurring aftermarket consumption over the life of a particular aircraft, estimated to be approximately 25 to 30 years. Acquisitions Esterline – On March 14, 2019, TransDigm completed the acquisition of all the outstanding stock of Esterline for $122.50 per share in cash, plus the payoff 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 the outstanding senior notes due 2023 (herein the "2023 Notes"). The 2023 Notes were redeemed on April 15, 2019. Esterline, through its subsidiaries, was 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. TransDigm evaluated the strategic fit and description of each Esterline reporting unit to determine the appropriate business segment for the reporting unit. Each Esterline reporting unit is included in one of TransDigm's segments: Power and Control, Airframe, or Non-aviation. Refer to Note 13, "Segments," for additional information about the Company's segments. The total purchase price of Esterline was allocated to the underlying assets acquired and liabilities assumed based upon the respective fair value at the date of acquisition. To the extent the purchase price exceeded the fair value of the net identifiable tangible and intangible assets acquired, such excess was allocated to goodwill. Allocations are based on the acquisition method of accounting and third-party valuation appraisals. Except where otherwise noted in the notes to the condensed consolidated financial statements, changes in balances and activity where comparable periods are presented in the condensed consolidated financial statements were generally driven by the Esterline acquisition. The allocation of the fair value of the assets acquired and liabilities assumed in the Esterline acquisition as of the acquisition date of March 14, 2019 is summarized in the table below (in millions).
Of the approximately $2.3 billion of goodwill recognized for the acquisition, approximately $25.6 million is deductible for tax purposes. Also, of the approximately $1.3 billion of other intangible assets recognized for the acquisition, approximately $48.9 million is deductible for tax purposes. In connection with the Esterline acquisition, we acquired existing long-term contracts with customers that were incurring gross margin losses as of the date of acquisition. Based on our review of these contracts, we concluded that the terms of certain of these loss-making contracts were unfavorable when compared to market terms as of the acquisition date. As a result, we recognized loss contract reserves as of the acquisition date of $267.9 million based on the present value of the difference between the contractual cash flows of the existing long-term contracts and the estimated cash flows had the contracts been executed at market terms as of the acquisition date. These adjustments apply only to contracts generating a margin as of the date of acquisition. As of September 30, 2019, we reclassified $9.3 million in loss contract reserves to liabilities held-for-sale, as it pertained to Souriau-Sunbank. Significant assumptions used to determine the fair value of the loss contract reserves using the discounted cash flow model include discount rates, forecasted quantities of products to be sold under the long-term contracts and market prices for respective products. While the Company conservatively selected values for these assumptions, they are forward looking and could be affected by future economic and market conditions. The loss contract reserves are amortized and recorded as an offset to cost of sales over the life of the contracts as actual sales occur under the long-term contracts. Approximately $19.8 million was amortized and recorded as an offset to cost of sales in the condensed consolidated statement of income for the twenty-six week period ended March 28, 2020. Total loss contract reserves related to the Esterline acquisition are $211.1 million and $231.8 million at March 28, 2020 and September 30, 2019, respectively, of which $64.3 million and $60.0 million is classified in accrued liabilities and $146.8 million and $171.8 million is classified in other non-current liabilities in the condensed consolidated balance sheets at March 28, 2020 and September 30, 2019, respectively. Extant Acquisitions – On August 30, 2019, the Company's Extant subsidiary completed the acquisition of substantially all of the assets and technical data rights of the Stormscope product line from L3Harris Technologies, Inc. for approximately $20 million in cash. Stormscope is a lightning detection system for the general aviation and business jet markets. Stormscope is included as a product line of Extant, which is included in TransDigm's Power and Control segment. The Company expects that approximately $11.1 million of goodwill recognized for the acquisition and approximately $7.5 million of other intangible assets recognized for the acquisition will be deductible for tax purposes over 15 years. On October 1, 2018, the Company's Extant subsidiary completed the acquisition of substantially all of the assets and technical data rights from the Corona, California operations of NavCom for approximately $27 million in cash. NavCom develops, manufactures, and supports high-reliability, mission-critical electronics, avionics and sub-assemblies. NavCom is included as a product line of Extant, which is included in TransDigm's Power and Control segment. Approximately $9.0 million of goodwill recognized for the acquisition is deductible for tax purposes over 15 years. Pro forma net sales and results of operations for the Extant acquisitions had they occurred at the beginning of the applicable twenty-six week periods ended March 28, 2020 and March 30, 2019 are not material and, accordingly, are not provided. Divestitures Souriau-Sunbank – On December 20, 2019, TransDigm completed the divestiture of the Souriau-Sunbank Connection Technologies business (“Souriau-Sunbank”) with Eaton Corporation plc (“Eaton”) for approximately $920 million. Souriau-Sunbank was acquired by TransDigm as part of its acquisition of Esterline in March 2019. Esterline Interface Technology Group – 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, which included a working capital settlement of $0.7 million that was paid in February 2020. EIT was acquired by TransDigm as part of its acquisition of Esterline in March 2019. Refer to Note 18, "Discontinued Operations," for further information on the Company's divestitures.
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FAIR VALUE MEASUREMENTS |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following summarizes the carrying amounts and fair values of financial instruments (in millions):
The Company values its financial instruments using an industry standard market approach, in which prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. No financial instruments were recognized using unobservable inputs. Interest rate swaps were measured at fair value using quoted market prices for the swap interest rate indexes over the term of the swap discounted to present value versus the fixed rate of the contract. The interest rate caps were measured at fair value using implied volatility rates of each individual caplet and the yield curve for the related periods. The Company’s derivative contracts consist of foreign currency exchange contracts and, from time to time, interest rate swap and cap agreements. These derivative contracts are over-the-counter, and their fair value is determined using modeling techniques that include market inputs such as interest rates, yield curves, and currency exchange rates. These contracts are categorized as Level 2 in the fair value hierarchy. The estimated fair value of the Company’s term loans was based on information provided by the agent under the Company’s senior secured credit facility. The estimated fair values of the Company’s notes were based upon quoted market prices. There has not been any impact to the fair value of derivative liabilities due to the Company's own credit risk. Similarly, there has not been any impact to the fair value of derivative assets based on the Company's evaluation of counterparties' credit risks. The fair value of cash and cash equivalents, trade accounts receivable-net and accounts payable approximated book value due to the short-term nature of these instruments at March 28, 2020 and September 30, 2019.
|
SUPPLEMENTAL GUARANTOR INFORMATION Narrative (Details) |
Mar. 28, 2020 |
---|---|
Condensed Financial Statements, Captions [Line Items] | |
Percentage of ownership in subsidiary | 100.00% |
LEASES Supplemental Cash Flow Information Related To Leases (Details) $ in Thousands |
6 Months Ended |
---|---|
Mar. 28, 2020
USD ($)
| |
Leases [Abstract] | |
Operating Lease, Payments | $ 14,000 |
Finance Lease, Principal Payments | 2,000 |
Finance Lease, Interest Payment on Liability | 1 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 15,000 |
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions |
Mar. 28, 2020
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Insurance deductible | $ 1 |
SUPPLEMENTAL GUARANTOR INFORMATION - Supplemental Condensed Consolidating Income Statement (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 28, 2020 |
Dec. 28, 2019 |
Mar. 30, 2019 |
Dec. 29, 2018 |
Mar. 28, 2020 |
Mar. 30, 2019 |
|
Condensed Income Statements, Captions [Line Items] | ||||||
Net Income | $ 319 | $ 202 | $ 624 | $ 398 | ||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | (1) | 0 | ||
NET SALES | 1,443 | 1,168 | 2,908 | 2,161 | ||
COST OF SALES | 625 | 518 | 1,288 | 947 | ||
GROSS PROFIT | 818 | 650 | 1,620 | 1,214 | ||
SELLING AND ADMINISTRATIVE EXPENSES | 180 | 160 | 381 | 282 | ||
AMORTIZATION OF INTANGIBLE ASSETS | 46 | 22 | 86 | 42 | ||
INCOME (LOSS) FROM OPERATIONS | 592 | 468 | 1,153 | 890 | ||
INTEREST EXPENSE - NET | 252 | 202 | 501 | 374 | ||
REFINANCING COSTS | 3 | 3 | 26 | 3 | ||
OTHER INCOME | 0 | 0 | (3) | 0 | ||
EQUITY IN INCOME OF SUBSIDIARIES | 0 | 0 | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 337 | 263 | 629 | 513 | ||
INCOME TAX PROVISION | 14 | 63 | 73 | 117 | ||
INCOME FROM CONTINUING OPERATIONS | 323 | 200 | 556 | 396 | ||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | (4) | 2 | 68 | 2 | ||
NET INCOME ATTRIBUTABLE TO TD GROUP | 319 | $ 304 | 202 | $ 196 | 623 | 398 |
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | (251) | (76) | (124) | (161) | ||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | 68 | $ 126 | 499 | 237 | ||
Eliminations | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net Income | (1,710) | |||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | ||||
NET SALES | (115) | (60) | ||||
COST OF SALES | (115) | (60) | ||||
GROSS PROFIT | 0 | 0 | ||||
SELLING AND ADMINISTRATIVE EXPENSES | 0 | 0 | ||||
AMORTIZATION OF INTANGIBLE ASSETS | 0 | 0 | ||||
INCOME (LOSS) FROM OPERATIONS | 0 | 0 | ||||
INTEREST EXPENSE - NET | 0 | 0 | ||||
REFINANCING COSTS | 0 | 0 | ||||
OTHER INCOME | 0 | |||||
EQUITY IN INCOME OF SUBSIDIARIES | 1,710 | 1,124 | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (1,710) | (1,124) | ||||
INCOME TAX PROVISION | 0 | 0 | ||||
INCOME FROM CONTINUING OPERATIONS | (1,710) | (1,124) | ||||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | 0 | 0 | ||||
NET INCOME ATTRIBUTABLE TO TD GROUP | (1,710) | (1,124) | ||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | 87 | 210 | ||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | (1,623) | (914) | ||||
TransDigm Group | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net Income | 623 | |||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | ||||
NET SALES | 0 | 0 | ||||
COST OF SALES | 0 | 0 | ||||
GROSS PROFIT | 0 | 0 | ||||
SELLING AND ADMINISTRATIVE EXPENSES | 0 | 0 | ||||
AMORTIZATION OF INTANGIBLE ASSETS | 0 | 0 | ||||
INCOME (LOSS) FROM OPERATIONS | 0 | 0 | ||||
INTEREST EXPENSE - NET | 0 | 0 | ||||
REFINANCING COSTS | 0 | 0 | ||||
OTHER INCOME | 0 | |||||
EQUITY IN INCOME OF SUBSIDIARIES | (623) | (398) | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 623 | 398 | ||||
INCOME TAX PROVISION | 0 | 0 | ||||
INCOME FROM CONTINUING OPERATIONS | $ 323 | 623 | 398 | |||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | 0 | 0 | ||||
NET INCOME ATTRIBUTABLE TO TD GROUP | 623 | 398 | ||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | (124) | (161) | ||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | 499 | 237 | ||||
TransDigm Inc. | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net Income | 623 | |||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | ||||
NET SALES | 84 | 88 | ||||
COST OF SALES | 46 | 66 | ||||
GROSS PROFIT | 38 | 22 | ||||
SELLING AND ADMINISTRATIVE EXPENSES | 91 | 101 | ||||
AMORTIZATION OF INTANGIBLE ASSETS | 0 | 2 | ||||
INCOME (LOSS) FROM OPERATIONS | (53) | (81) | ||||
INTEREST EXPENSE - NET | 504 | 378 | ||||
REFINANCING COSTS | 26 | 3 | ||||
OTHER INCOME | (5) | |||||
EQUITY IN INCOME OF SUBSIDIARIES | (1,087) | (726) | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 509 | 264 | ||||
INCOME TAX PROVISION | 0 | (134) | ||||
INCOME FROM CONTINUING OPERATIONS | 509 | 398 | ||||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | 114 | 0 | ||||
NET INCOME ATTRIBUTABLE TO TD GROUP | 623 | 398 | ||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | (122) | (123) | ||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | 501 | 275 | ||||
TransDigm UK [Member] | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net Income | 0 | |||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | ||||
NET SALES | 0 | 0 | ||||
COST OF SALES | 0 | 0 | ||||
GROSS PROFIT | 0 | 0 | ||||
SELLING AND ADMINISTRATIVE EXPENSES | 0 | 0 | ||||
AMORTIZATION OF INTANGIBLE ASSETS | 0 | 0 | ||||
INCOME (LOSS) FROM OPERATIONS | 0 | 0 | ||||
INTEREST EXPENSE - NET | 18 | 9 | ||||
REFINANCING COSTS | 0 | 0 | ||||
OTHER INCOME | (18) | |||||
EQUITY IN INCOME OF SUBSIDIARIES | 0 | 0 | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 0 | (9) | ||||
INCOME TAX PROVISION | 0 | 0 | ||||
INCOME FROM CONTINUING OPERATIONS | 0 | (9) | ||||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | 0 | 0 | ||||
NET INCOME ATTRIBUTABLE TO TD GROUP | 0 | (9) | ||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | 0 | 0 | ||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | 0 | (9) | ||||
Subsidiary Guarantors | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net Income | 1,007 | |||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 0 | 0 | ||||
NET SALES | 2,249 | 1,755 | ||||
COST OF SALES | 953 | 724 | ||||
GROSS PROFIT | 1,296 | 1,031 | ||||
SELLING AND ADMINISTRATIVE EXPENSES | 193 | 147 | ||||
AMORTIZATION OF INTANGIBLE ASSETS | 60 | 35 | ||||
INCOME (LOSS) FROM OPERATIONS | 1,043 | 849 | ||||
INTEREST EXPENSE - NET | (22) | (3) | ||||
REFINANCING COSTS | 0 | 0 | ||||
OTHER INCOME | 4 | |||||
EQUITY IN INCOME OF SUBSIDIARIES | 0 | 0 | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 1,061 | 852 | ||||
INCOME TAX PROVISION | 54 | 234 | ||||
INCOME FROM CONTINUING OPERATIONS | 1,007 | 618 | ||||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | 0 | 0 | ||||
NET INCOME ATTRIBUTABLE TO TD GROUP | 1,007 | 618 | ||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | 4 | 12 | ||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | 1,011 | 630 | ||||
Non- Guarantor Subsidiaries | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net Income | 81 | |||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (1) | 0 | ||||
NET SALES | 690 | 378 | ||||
COST OF SALES | 404 | 217 | ||||
GROSS PROFIT | 286 | 161 | ||||
SELLING AND ADMINISTRATIVE EXPENSES | 97 | 34 | ||||
AMORTIZATION OF INTANGIBLE ASSETS | 26 | 5 | ||||
INCOME (LOSS) FROM OPERATIONS | 163 | 122 | ||||
INTEREST EXPENSE - NET | 1 | (10) | ||||
REFINANCING COSTS | 0 | 0 | ||||
OTHER INCOME | 16 | |||||
EQUITY IN INCOME OF SUBSIDIARIES | 0 | 0 | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 146 | 132 | ||||
INCOME TAX PROVISION | 19 | 17 | ||||
INCOME FROM CONTINUING OPERATIONS | 127 | 115 | ||||
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | (46) | 2 | ||||
NET INCOME ATTRIBUTABLE TO TD GROUP | 80 | 117 | ||||
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | 31 | (99) | ||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | $ 111 | $ 18 |
FAIR VALUE MEASUREMENTS - Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Millions |
Mar. 28, 2020 |
Sep. 30, 2019 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Cash and cash equivalents | $ 2,668 | $ 1,467 | ||||||||
Short-term borrowings—trade receivable securitization facility | 350 | 350 | ||||||||
Long-term Debt | 18,212 | 16,549 | ||||||||
Other Noncurrent Assets | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Interest Rate Cash Flow Hedge Asset at Carrying Value | [1] | 0 | 1 | |||||||
Accrued Liabilities | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Foreign Currency Contract, Asset | [2] | 10 | 6 | |||||||
Interest rate swap agreements | [2] | 38 | 13 | |||||||
Other Noncurrent Liabilities | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Interest rate swap agreements | [3] | 329 | 202 | |||||||
Term loans | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 7,427 | 7,449 | |||||||
Government Refundable Advances [Member] | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | 27 | 39 | ||||||||
Long-term debt, including current portion, Fair Value | 27 | 39 | ||||||||
Capital Lease Obligations [Member] | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | 58 | 50 | ||||||||
Level 1 | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Cash and cash equivalents, Fair Value | 2,668 | 1,467 | ||||||||
Level 2 | Other Noncurrent Assets | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Interest rate cap agreements, Fair Value | [1] | 0 | 1 | |||||||
Level 2 | Accrued Liabilities | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Foreign Currency Contract, Asset | [2] | 10 | 6 | |||||||
Interest rate swap agreements, Fair Value | [2] | 38 | 13 | |||||||
Level 2 | Other Noncurrent Liabilities | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Interest rate swap agreements, Fair Value | [3] | 329 | 202 | |||||||
Level 2 | Term loans | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 6,158 | 7,478 | |||||||
Level 2 | Capital Lease Obligations [Member] | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | 58 | 50 | ||||||||
6.00% senior subordinated notes due 2022 (2022 Notes) | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 0 | 1,146 | |||||||
6.00% senior subordinated notes due 2022 (2022 Notes) | Level 1 | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 0 | 1,167 | |||||||
6.50% senior subordinated notes due 2024 (2024 Notes) | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 1,195 | 1,194 | |||||||
6.50% senior subordinated notes due 2024 (2024 Notes) | Level 1 | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 1,110 | 1,239 | |||||||
6.50% senior subordinated notes due 2025 (2025 Notes) | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 750 | 750 | |||||||
6.50% senior subordinated notes due 2025 (2025 Notes) | Level 1 | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 694 | 782 | |||||||
6.375% senior subordinated notes due 2026 (6.375% 2026 Notes) | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 944 | 943 | |||||||
6.375% senior subordinated notes due 2026 (6.375% 2026 Notes) | Level 1 | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 884 | 999 | |||||||
6.875% senior subordinated noted due 2026 [Member] | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 492 | 491 | |||||||
6.875% senior subordinated noted due 2026 [Member] | Level 1 | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 460 | 535 | |||||||
Senior Secured Notes $4B Due 2026 6.25% [Member] | Secured Debt [Member] | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 3,947 | 3,942 | |||||||
Senior Secured Notes $4B Due 2026 6.25% [Member] | Level 1 | Secured Debt [Member] | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 3,980 | 4,290 | |||||||
Senior Subordinated Notes $550M Due 2027 7.50% [Member] | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 545 | 545 | |||||||
Long-term debt, including current portion, Fair Value | [4] | 595 | ||||||||
Senior Subordinated Notes $550M Due 2027 7.50% [Member] | Level 1 | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 528 | ||||||||
Senior Subordinated Notes $2650M Due 2027 5.50% [Member] | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 2,627 | 0 | |||||||
Long-term debt, including current portion, Fair Value | [4] | 0 | ||||||||
Senior Subordinated Notes $2650M Due 2027 5.50% [Member] | Level 1 | Senior Subordinated Notes | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | 2,385 | ||||||||
Asset-backed Securities | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Short-term borrowings—trade receivable securitization facility | [4] | 350 | 350 | |||||||
Asset-backed Securities | Level 1 | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Short-term borrowings - trade receivable securitization facility, Fair Value | [4] | 350 | 350 | |||||||
Revolving Credit Facility [Member] | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term Debt | [4] | 200 | 0 | |||||||
Revolving Credit Facility [Member] | Level 2 | ||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||
Long-term debt, including current portion, Fair Value | [4] | $ 200 | $ 0 | |||||||
|
INTANGIBLE ASSETS - Narratives (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 28, 2020 |
Mar. 30, 2019 |
Mar. 28, 2020 |
Mar. 30, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Aggregate Amortization of Intangible Assets | $ 86 | $ 42 | ||
Amortization of intangible assets | $ 46 | $ 22 | 86 | $ 42 |
Estimated Amortization Expense, 2020 | 172 | 172 | ||
Estimated Amortization Expense, 2021 | 115 | 115 | ||
Estimated Amortization Expense, 2023 | 115 | 115 | ||
Estimated Amortization Expense, 2024 | 115 | 115 | ||
Estimated Amortization Expense, 2025 | $ 115 | $ 115 |
INVENTORIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 28, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consist of the following (in millions):
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DERIVATIVES AND HEDGING ACTIVITIES (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | he following table summarizes the Company's interest rate swap agreements:
The following table summarizes the Company's interest rate cap agreements:
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Schedule of Interest Rate Derivatives |
(2) Refer to Note 11, "Fair Value Measurements," for the condensed consolidated balance sheet classification of our interest rate swap and cap agreements.
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DERIVATIVES AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES The Company is exposed to, among other things, the impact of changes in foreign currency exchange rates and interest rates in the normal course of business. The Company’s risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes derivative financial instruments to offset a portion of these risks. The Company uses derivative financial instruments only to the extent necessary to hedge identified business risks and does not enter into such transactions for trading purposes. The Company generally does not require collateral or other security with counterparties to these financial instruments and is therefore subject to credit risk in the event of nonperformance; however, the Company monitors credit risk and currently does not anticipate nonperformance by other parties. These derivative financial instruments do not subject the Company to undue risk, as gains and losses on these instruments generally offset gains and losses on the underlying assets, liabilities, or anticipated transactions that are being hedged. The Company has agreements with each of its swap and cap counterparties that contain a provision whereby if the Company defaults on the credit facility the Company could also be declared in default on its swaps and caps, resulting in an acceleration of payment under the swaps and caps. All derivative financial instruments are recorded at fair value in the condensed consolidated balance sheets. For a derivative that has not been designated as an accounting hedge, the change in the fair value is recognized immediately through earnings. For a derivative that has been designated as an accounting hedge of an existing asset or liability (a fair value hedge), the change in the fair value of both the derivative and underlying asset or liability is recognized immediately through earnings. For a derivative designated as an accounting hedge of an anticipated transaction (a cash flow hedge), the change in the fair value is recorded on the condensed consolidated balance sheet in accumulated other comprehensive income to the extent the derivative is effective in mitigating the exposure related to the anticipated transaction. The change in the fair value related to the ineffective portion of the hedge, if any, is immediately recognized in earnings. The amount recorded within accumulated other comprehensive income is reclassified into earnings in the same period during which the underlying hedged transaction affects earnings. Interest Rate Swap and Cap Agreements – Interest rate swap and cap agreements are used to manage interest rate risk associated with floating-rate borrowings under our credit facility. The interest rate swap and cap agreements utilized by the Company effectively modify the Company’s exposure to interest rate risk by converting a portion of the Company’s floating-rate debt to a fixed rate basis through the expiration date of the interest rate swap and cap agreements, thereby reducing the impact of interest rate changes on future interest expense. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the term of the agreements without an exchange of the underlying principal amount. These derivative instruments qualify as effective cash flow hedges under US GAAP. For these cash flow hedges, the effective portion of the gain or loss from the financial instruments was initially reported as a component of accumulated other comprehensive income (loss) in stockholders’ deficit and subsequently reclassified into earnings in the same line as the hedged item in the same period or periods during which the hedged item affected earnings. As the interest rate swap and cap agreements are used to manage interest rate risk, any gains or losses from the derivative instruments that are reclassified into earnings are recognized in interest expense - net in the condensed consolidated statements of income. The following table summarizes the Company's interest rate swap agreements:
The following table summarizes the Company's interest rate cap agreements:
Certain derivative asset and liability balances are offset where master netting agreements provide for the legal right of setoff. For classification purposes, we record the net fair value of each type of derivative position that is expected to settle in less than one year with each counterparty as a net current asset or liability and each type of long-term position as a net non-current asset or liability. The amounts shown in the table below represent the gross amounts of recognized assets and liabilities, the amounts offset in the condensed consolidated balance sheet and the net amounts of assets and liabilities presented therein (in millions).
Based on the fair value amounts of the interest rate swap and cap agreements determined as of March 28, 2020, the estimated net amount of existing gains and losses and caplet amortization expected to be reclassified into interest expense within the next twelve months is approximately $39.4 million. Foreign Currency Forward Exchange Contracts – The Company transacts business in various foreign currencies, which subjects the Company’s cash flows and earnings to exposure related to changes in foreign currency exchange rates. These exposures arise primarily from purchases or sales of products and services from third parties. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates, and are used to offset changes in the fair value of certain assets or liabilities or forecasted cash flows resulting from transactions denominated in foreign currencies. At March 28, 2020, the Company had outstanding foreign currency forward exchange contracts principally to sell U.S. dollars with notional amounts of $145.9 million. These notional values consist primarily of contracts for the Canadian dollar and European euro and are stated in U.S. dollar equivalents at spot exchange rates at the respective dates. During the twenty-six week period ended March 28, 2020, the Company recognized gains on foreign currency forward exchange contracts designated as fair value hedges of $1.8 million in cost of sales in the condensed consolidated statement of income. During the twenty-six week period ended March 28, 2020, the gains the Company reclassified on foreign currency forward exchange contracts designated as cash flow hedges in the condensed consolidated income statement are immaterial. The gains (losses) were previously recorded as a component of accumulated other comprehensive income (loss) in stockholders' deficit. During the twenty-six week period ended March 28, 2020, the Company recorded a gain of $0.3 million on foreign currency forward exchange contracts that have not been designated as accounting hedges. These foreign currency exchange gains are included in selling and administrative expenses. There was an immaterial impact to the Company’s earnings related to the ineffective portion of any hedging instruments during the twenty-six week period ended March 28, 2020. In addition, there was an immaterial impact to the Company’s earnings when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge during the twenty-six week period ended March 28, 2020. Amounts related to foreign currency forward exchange contracts included in accumulated other comprehensive income (loss) in stockholders' deficit are reclassified into earnings when the hedged transaction settles. The Company expects to reclassify approximately $9.9 million of net losses into earnings over the next 12 months. The maximum duration of the Company’s foreign currency cash flow hedge contracts at March 28, 2020 is 12 months.
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INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS | INTANGIBLE ASSETS Other intangible assets - net in the condensed consolidated balance sheets consist of the following (in millions):
The aggregate amortization expense on identifiable intangible assets for the twenty-six week periods ended March 28, 2020 and March 30, 2019 was approximately $86 million and $42 million, respectively. The estimated amortization expense is $172 million for fiscal year 2020 and $115 million for each of the five succeeding fiscal years 2021 through 2025. The following is a summary of changes in the carrying value of goodwill by segment from September 30, 2019 through March 28, 2020 (in millions):
The purchase price allocation adjustments relate to opening balance sheet adjustments recorded by the sixteen reporting units acquired from Esterline. Interim Impairment Evaluation US GAAP requires that both indefinite-lived intangible assets and goodwill are tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not (i.e., a likelihood greater than 50%) that the intangible asset or the reporting unit is impaired. Therefore, during interim periods, ASC 350 requires companies to focus on those events and circumstances that affect significant inputs used to determine the fair value of the asset, asset group or reporting unit to determine whether an interim quantitative impairment test is required. Given the adverse global economic and market conditions attributable to the novel strain of coronavirus (“COVID-19”) pandemic, particularly as it pertains to the commercial sector of the aerospace and defense industry, the Company determined that an interim impairment evaluation of goodwill and indefinite-lived intangible assets was necessary as of March 28, 2020 for certain reporting units in which it was concluded a potential impairment existed. For the identified reporting units, a Step 1 impairment test was performed using an income approach based on management’s determination of the prospective financial information with consideration taken of the existing uncertainty in the global economy and aerospace and defense industry, particularly the commercial sector. Management also included projected declines and subsequent recovery in commercial OEM and aftermarket as a percentage of sales based on available industry data. The Company utilized a third party valuation firm to assist in the determination of the weighted average cost of capital. For each indefinite-lived intangible asset and reporting unit tested, the fair value sufficiently exceeded carrying value. As a result of the interim impairment testing performed as of March 28, 2020, no indefinite-lived intangible assets or goodwill was determined to be impaired.
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RECENT ACCOUNTING PRONOUNCEMENTS |
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Mar. 28, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02, “Leases (ASC 842),” which requires lessees to recognize a right-of-use asset and lease liability for all leases with a term of more than 12 months. ASU 2016-02 was effective for the Company on October 1, 2019, and required a modified retrospective application. In July 2018, the FASB issued ASU 2018-11, “Leases (ASC 842) Targeted Improvements,” which provided an additional transition method that allowed entities to initially apply the new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. The Company has completed the necessary changes to the consolidated financial statements and related disclosures, internal controls, financial policies and information systems. On October 1, 2019, the Company adopted ASC 842 and related amendments using the modified retrospective method. Results for reporting periods beginning after October 1, 2019, are presented under ASC 842, while prior period amounts continue to be reported under ASC 840, “Leases." The Company elected to apply the package of practical expedients permitted within the new standard, which among other things, allows the carry forward of historical lease classification of existing leases. Additionally, the adoption of the new standard resulted in the recording of lease assets and lease liabilities for operating leases of $99 million and $105 million, respectively, as of October 1, 2019. The effects of our transition to ASC 842 resulted in no cumulative adjustment to retained earnings in the period of adoption. The adoption of the standard did not have a material impact on our condensed consolidated statements of income or cash flows. Refer to Note 16, "Leases," for additional information. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13)," which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company for annual and interim periods beginning after October 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on our consolidated financial statements and disclosures. In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” to eliminate Step 2 from the goodwill impairment test in order to simplify the subsequent measurement of goodwill. The guidance is effective for the Company for fiscal years beginning after October 1, 2020, with early adoption permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements and disclosures. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740) - Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740. The amendments also improve consistent application of and simplify US GAAP for other areas of ASC 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for which financial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. The Company is currently evaluating the impact of adopting this standard on our consolidated financial statements and disclosures.
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SUBSEQUENT EVENTS |
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Mar. 28, 2020 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Response to COVID-19 In December 2019, COVID-19 surfaced in Wuhan, China, and has since spread to other countries, including the United States. In March 2020, the World Health Organization characterized COVID-19 as a pandemic. The pandemic has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments and other measures. In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the impacts of COVID-19. The airline industry, in particular, has been significantly disrupted, both domestically and internationally. Beginning in the third quarter of fiscal 2020, as part of the Company’s response to the impact of the COVID-19 pandemic on its business, the Company is taking cost reduction measures such as: (1) reducing its workforce by up to 15% to align operations with customer demand. These actions are in addition to the cost mitigation efforts implemented earlier this calendar year in response to the 737 MAX production rate changes; (2) implementing one to eight-week unpaid furloughs at many businesses over approximately the next six months in response to business specific situations; (3) TransDigm’s senior management team will substantially reduce their cash compensation for the balance of fiscal 2020; (4) members of TransDigm's Board of Directors will forgo their annual retainer fees; and, (5) the Company has reassessed capital expenditure projects planned and are prioritizing only those projects that are deemed essential in the near term. The Company continues to closely analyze its cost structure and may implement additional cost reduction measures as necessary due to the ongoing business challenges resulting from the COVID-19 pandemic.
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LEASES (Notes) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company leases certain manufacturing facilities, offices, land, equipment and vehicles. Such leases, some of which are noncancelable and, in many cases, include renewals, expire at various dates. Such options to renew are included in the lease term when it is reasonably certain that the option will be exercised. The Company’s lease agreements typically do not contain any significant residual value guarantees or restrictive covenants, and payments within certain lease agreements are adjusted periodically for changes in an index or rate. The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The discount rate implicit within our leases is generally not determinable and therefore we determine the discount rate based on our incremental borrowing rate. The incremental borrowing rate for our leases is determined based on the lease term and the currency in which lease payments are made. The length of a lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. Additionally, when accounting for leases, the Company combines payments for leased assets, related services and other components of a lease. The components of lease expense for the thirteen and twenty-six week periods ended March 28, 2020 are as follows (in millions):
Supplemental cash flow information related to leases for the twenty-six week period ended March 28, 2020 is as follows (in millions):
Supplemental balance sheet information related to leases is as follows (in millions):
As of March 28, 2020, the Company has the following remaining lease term and weighted average discount rates:
Maturities of lease liabilities at March 28, 2020 are as follows (in millions):
A summary of minimum rental commitments at March 28, 2020 under noncancelable operating leases, which expire at various dates and in most cases contain renewal options, for each of the next five years and thereafter in the aggregate, is as follows (in millions):
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LEASES Components of Lease Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
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Mar. 28, 2020 |
Mar. 28, 2020 |
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Leases [Abstract] | ||
Operating Lease, Cost | $ 7 | $ 14 |
Finance Lease, Right-of-Use Asset, Amortization | 1 | 1 |
Finance Lease, Interest Expense | 1 | 2 |
Lease, Cost | $ 9 | $ 17 |
RETIREMENT BENEFITS Tables (Details) - Pension Plan [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 28, 2020 |
Mar. 30, 2019 |
Mar. 28, 2020 |
Mar. 30, 2019 |
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UNITED STATES | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Service Cost | $ 2 | $ 1 | $ 4 | $ 2 |
Defined Benefit Plan, Interest Cost | 3 | 2 | 5 | 4 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | (5) | (3) | (9) | (5) |
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 0 | 0 | 1 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment | 0 | 0 | 0 | 0 |
Defined Benefit Plan, Amortization of Gain (Loss) | 0 | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 0 | 0 | 1 | 1 |
Foreign Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Service Cost | 1 | 1 | 2 | 2 |
Defined Benefit Plan, Interest Cost | 1 | 1 | 3 | 2 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | (1) | (1) | (4) | (3) |
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 0 | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment | 0 | 0 | 0 | 0 |
Defined Benefit Plan, Amortization of Gain (Loss) | 0 | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 1 | $ 1 | $ 1 | $ 1 |
SEGMENTS - Narratives (Details) |
6 Months Ended |
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Mar. 28, 2020
Segment
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Segment Reporting [Abstract] | |
Number of reporting segments | 3 |
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