TransDigm Non‐Deal Roadshow June 2023 Exhibit 99.1
FORWARD LOOKING STATEMENTS This presentation contains forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including information regarding our guidance for future periods. These forward‐looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events, many of which are outside of our control. Consequently, such forward looking statements should be regarded solely as our current plans, estimates and beliefs. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward‐looking statement. The Company does not undertake, and specifically declines, any obligation, to publicly release the results of any revisions to these forward‐looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. All forward –looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. These risks and uncertainties include but are not limited to: the impact that the COVID‐19 pandemic has on our business, results of operations, financial condition and liquidity; the sensitivity of our business to the number of flight hours that our customers’ planes spend aloft and our customers’ profitability, both of which are affected by general economic conditions; current and future geopolitical or other worldwide events; cyber‐security threats, natural disasters and climate change‐related events; our reliance on certain customers; the U.S. defense budget and risks associated with being a government supplier, including government audits and investigations; failure to maintain government or industry approvals; failure to complete or successfully integrate acquisitions; our indebtedness; potential environmental liabilities; liabilities arising in connection with litigation; climate‐related regulations; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with our international sales and operations; and other risk factors. Further information regarding the important factors that could cause actual results to differ materially from projected results can be found in TransDigm Group’s Annual Report on Form 10‐K for the fiscal year ended September 30, 2022 and other reports that TransDigm Group or its subsidiaries have filed with the Securities and Exchange Commission. You are cautioned not to place undue reliance on our forward‐looking statements. TransDigm Group Incorporated assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise. 1 SPECIAL NOTICE REGARDING PRO FORMA AND NON‐GAAP INFORMATION This presentation sets forth certain pro forma financial information. This pro forma financial information gives effect to certain recently completed acquisitions. Such pro forma information is based on certain assumptions and adjustments and does not purport to present TransDigm's actual results of operations or financial condition had the transactions reflected in such pro forma financial information occurred at the beginning of the relevant period, in the case of income statement information, or at the end of such period, in the case of balance sheet information, nor is it necessarily indicative of the results of operations that may be achieved in the future. This presentation also sets forth certain non‐GAAP financial measures. A presentation of the most directly comparable GAAP measures and a reconciliation to such measures are set forth in the appendix. Forward Looking Statements & Special Notice Regarding Pro Forma and Non‐GAAP Information
“Private Equity-Like Growth in Value with Liquidity of a Public Market” + 15% - 20% / Year on Average Our Objective 2
Unique & Consistent Business Strategy Private & Public 3 Proprietary Aerospace Products with Significant Aftermarket 3‐Part Value‐Based Operating Strategy Decentralized Organization/ Aligned with Shareholders Focused Disciplined Acquisition Strategy “Private Equity‐Like” Capital Structure & Culture TransDigm’s Consistent Goal – “Private Equity‐Like” Returns to Shareholders
Company Overview 4 FY 2023 Guidance Mid‐Point (2) Revenue 6,455$ EBITDA as Defined (1) 3,260$ EBITDA as Defined Margin 51% ($ in millions) Financial Snapshot (1) EBITDA as Defined is a non‐GAAP financial measure. For a historical reconciliation of EBITDA as Defined to Income from Continuing Operations, please see the appendix. (2) Revenue and EBITDA As Defined information under FY23 Guidance Mid‐point reflects the mid‐point of the range for the fiscal year ending 9/30/23 that was issued on 5/9/23. The Company only updates guidance quarterly and this presentation does not confirm or update guidance now. (3) Enterprise value calculated as of 5/18/23 equals equity value (shares outstanding as of 4/1/23 multiplied by the TDG closing stock price on 5/18/23 plus pro forma total net debt (total debt less cash)). For a reconciliation of the pro forma total net debt, please see the pro forma capital structure reconciliation on slide 40 of this presentation. Formed Public 1993 2006 Enterprise Value (3) ≈ $67 Billion
Diverse Products, Platforms and Markets 5
EBITDA as Defined and Margin (1)Revenue Consistent Record of Growth and Margin Expansion ($ in millions) $48 $52 $57 $63 $78 $111$131$151$201$249$293$301$374$435 $593 $714$762$828 $1,206 $1,700 $1,924 $2,373 $2,707 $3,171 $3,504 $3,811 $5,223 $5,103 $4,798 $5,429 $6,455 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22 20 23 E ($ in millions) $10 $10 $13 $17 $25 $44 $51 $54 $72 $98$124$139$164$194 $275 $333 $375$412 $590 $809 $900 $1,073 $1,234 $1,495 $1,711 $1,877 $2,419 $2,278 $2,189 $2,646 $3,260 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22 20 23 E 6 % of Revenue 20% 19% 23% 27% 32% 40% 39% 36% 36% 39% 42% 46% 44% 45% 46% 47% 49% 50% 49% 48% 47% 45% 46% 47% 49% 49% 46% 45% 46% 49% 51% (1) EBITDA as Defined is a non‐GAAP financial measure. For a historical reconciliation of EBITDA as Defined to Income from Continuing Operations, please see the appendix. (2) Revenue and EBITDA As Defined information for FY23 reflects the mid‐point of the guidance range for the fiscal year ending 9/30/23 that was issued on 5/9/23. The Company only updates guidance quarterly and this presentation does not confirm or update guidance now. (2) (2)
Strong Focus on High‐Margin Aftermarket 7 EBITDAAs Defined (2)FY 22 Pro Forma Revenues (1) Commercial OEM 27% Commercial Aftermarket 31% Defense 42% Aftermarket OEM Aftermarket: ≈ 55% OEM: ≈ 45% (1) Pro forma revenue is for the fiscal year ended 9/30/2022. Excludes impact of the Calspan Corporation acquisition completed May 2023. Includes full year impact of the DART Aerospace acquisition completed May 2022. Please see the Special Notice Regarding Pro Forma and Non‐GAAP Information. (2) EBITDA As Defined is the primary measurement used by management to review and assess the operating performance of each segment is EBITDA As Defined.
Note: Based on management estimates of pro forma TransDigm sales for FY2022. Please see the Special Notice Regarding Pro Forma and Non‐GAAP Information. 8 Proprietary Revenue Proprietary ~90% Non‐proprietary ~10% Results in strong market positions and a stable, recurring revenue stream Significant Proprietary Revenue Base
TransDigm – Expanding Global Footprint 9 49 Operating Units; 114 Manufacturing Locations
TDG Organization Kevin Stein CEO Mike Lisman Co‐COO Joel Reiss Co‐COO Jes Warren General Counsel & CCO Sarah Wynne CFO Structure Scalable With Future Growth EVP 6‐7 Op Units EVP 6‐7 Op Units EVP 6‐7 Op Units EVP 6‐7 Op Units EVP 6‐7 Op Units EVP 6‐7 Op Units EVP 6‐7 Op Units EVP 6‐7 Op Units 10
Consistent Operating Model
12 Proven Operating Strategy Profitable New Business Productivity and Cost Improvements Value Based Pricing 3 Value Drivers VALUE PRICE
Corporate Control Local Autonomy Economy of Scale Mgmt Resources Value Generation Strategy Structure Execution Motivation Central Control Local Autonomy Emp- loyees Owners CORPORATE OPERATING UNIT Organizational Philosophy 13
Organizational Philosophy Structure Small Operating Units Focus on Products and Customers Few Management Layers Business Unit Discipline Execution Significant Local Autonomy Local Decisions Front Line Value Generation Motivation Think Like Owner Create Value Lower Cash Comp & Higher Equity Price Productivity New Business VALUE CREATION 14
Unique Compensation Concept – “Think/act like an owner” Low ` High Cash Compensation 100% Performance Vesting TDG Ownership Low ` High Equity Based Compensation Very High Shareholder Alignment 15
Customer Value Proposition Highest Value to Customers Provide Reliable, Well Engineered Products & Deliver Them On‐Time 16
TDG Operating System: A Detailed Process Investment Highly Engineered Products Require Resourcing ≈ 8‐10% of total cost spent on Engineering/R&D Organization Decentralized Execution Business Unit Team Concept Succession Planning Execution Relentless Drive to Create Value 17
President VP Sales & Marketing Business Unit Manager Business Unit Manager Business Unit Manager VP Operations VP Engineering VP Finance Operating Unit Organization Business Unit Team Business Unit Team Business Unit Team Business Unit Value Focus Business Unit Teams Co‐Located Detail Value Focused New Business Development Pricing and Contracting Productivity 18
Business Unit Value Creation Grouping of Related Products Integrated Cross Functional Team Business Unit Manager Drives Performance Business Unit Teams Profitable New Business Productivity and Cost Improvement Value‐based Pricing Value Driver Focus Standardized Business Metrics Across Operating Units Quarterly Reviews and Mid‐Year Reviews Ownership of Results Accountability 19
Business Unit Structure – Driving Value Creation Consistent Value Generation Value Creation Focus Clear Metrics Detailed Accountability 20
Commercial Aerospace & Defense Market Updates
14% Fuel 30% Labor & Benefits 23% Other 33% Global Maintenance $101B TransDigm’s Addressed Market for Commercial Aftermarket Global Airline Operating Expenses 2022 Total = $737B Source: IATA / AeroDynamic Advisory Analysis / TDG Addressed market refers to the material market where TDG currently has content on by aircraft model and part type Global Maintenance Spend 2022 Total = $101B 47% Others 53% TDG Addressed $47B TDG Addressed Market 2022 Total = $47B 3% Others 97% TDG Air Transport Aftermarket ≈ $1.2B TransDigm’s Addressed Market for Air Transport Aftermarket is $47B of Which We Hold a ≈ 3% Market Share 22
< $3 million Sales per year ≈ 85% to 90% TransDigm’s Diverse Commercial Aftermarket Revenue Base Total FY 2022 Commercial Aftermarket Worldwide Revenue by Annual Sales $ Per Part American Airlines United Airlines Delta Airlines Lufthansa IAG AF-KLM Ryanair Emirates Southwest Turkish Airlines Qatar Airways Air Canada Singapore Airlines China Southern LATAM Air ≈ 50% Worldwide RPM’s(1) Top 15 Airlines 23 > $3 million Sales per year ≈ 10% to 15% High SKU Count being Sold Across a Diverse Customer Base (1) Source: AeroDynamic Advisory
No Significant PMA Threat – At or Below Market Exposure Levels PMA Market Penetration 3rd Party PMA ≈ 1½% to 2½% 3rd Party PMA Less than 2% Total INDUSTRY Commercial Aftermarket $ Total TDG Commercial Aftermarket $ 24
Surplus Parts Minimal TDG Impact Source: Management Analysis 7 to 10% Surplus Below 4% Surplus Surplus Sales Market Penetration TDG Below Market %Industry 25 No Significant Surplus Market Threat – Though Continue to Monitor TDG Parts Tend to be Consumables, Below $10K Average Sale Price and Away from the Engine – These are Not Typical Surplus Parts Targets
Strong Positions on Diverse and Growing Platforms Note: Based on Management estimates of total revenue for 2022. Top 5 Commercial Platforms ≈ 17% Sales A320 B737 B747 B757/767 B777 Top 5 Defense Platforms ≈ 8% Sales Blackhawk C130 F35 F16 A400M TOP PLATFORMS 26
Prior Platforms A220Prior Platforms A350Prior Platforms B787 Major New Business Content: Commercial Aircraft “New Designs” 27 B787 A350 A220 Strong “New Design” $ / Shipset Growth Over Prior Platforms – “Same Store Basis” Representative Products: • Composite Components • Clamps & Fasteners • Audio System/Software • CPA/Module for Utility Control Systems • Interior Thermo Plastics • Nacelle & Other Latches • Numerous Others Representative Products: • Onboard Cargo System • Cockpit Security System • Cabin/APU Electrical System Interconnect • Decorative Laminates • Engine sensors & GSP Indicators • Numerous Others Representative Products: • Air System Valving • Composite Components • Switches & Controls • Nacelle & Other Latches • Decorative Laminates • Numerous Others + Over 35% + Over 45% + ≈ 2X 27 Modest Content Changes for Non “New Design” Commercial Aircraft (i.e., B777X, B737Max, A320neo); A Modest Design Change Typically Equates to a Modest Content Change Given the Majority of the Aircraft is Carryover Design.
New Defense Platforms – New Designs – “Same Store Basis” JSF A400M KC46 (767) Representative Products: • Airframe Seals • Hydraulic Actuators/Valves • Engine Clamps • Grommets & Line Supports • Data Management Processing Boards/Software • Electric Motors • Elastomers • Numerous Others Representative Products: • Refueling Connectors • Main Deck Barrier Nets • Nacelle & Other Latches • Power Distribution Contactors & Relays • Ram Air Actuator • Numerous Others Prior Platforms JSF Prior Platforms A400M Prior Platforms KC46 (767) Representative Products: • Cargo Loading System • Composite Components • Winch/Retrieval System • Power Distribution Contactors & Relays • Main Barrier Nets • Engine Sensors • Control Panels & Displays • Numerous Others + ≈ 2X + Over 20 % + ≈ 2X $ / Shipset Growth Over Prior Platforms – “Same Store Basis” 28
Mergers & Acquisitions
Focused Acquisition Strategy Aerospace Products Proprietary Engineered Products Significant Aftermarket Content 30
1993 – 2006 2006 – 2010 2011 – 2014 Adel Aeroproducts Wiggins Controlex Marathon Adams Rite Aerospace Christie Champion Honeywell Lube Pump Fuelcom Norco Avionic Instruments Skurka Fluid Regulators Eaton Motors Talley Actuation Schneller Harco AmSafe Passenger Restraints AmSafe Commercial Products AmSafe Cargo Restraints & Specialty Devises Aero‐Instruments Beams Aerosonic Arkwin Whippany Actuation Airborne Systems – North America Airborne Systems – Europe Elektro‐Metall Export Sweeney Electra‐Motion CDA InterCorp. Avtech ADS/Transicoil Bruce CEF Unison/GE APC/GE Acme Woodward HRT Dukes Semco Hartwell Electromech Tyee TAC (7) Linread Valley‐Todeco AQS Privately Held NYSE (1) Divested in Q2 and Q3 of FY2011 (2) Divested in Q2 FY2018 (1) Telair International AAR Cargo Systems Nordisk Aviation Franke Aquarotter Pexco PneuDraulics Breeze‐Eastern DDC Young & Franklin (Tactair) Schroth (2) North Hills Cablecraft Aerospace Preece Kirkhill Extant Skandia M cKechnie Am Safe Telair (1) (1) 2019 – 20202015 – 2018 Advanced Input Systems(3) Armtec Auxitrol Weston Avista (5) CMC Electronics Darchem Gamesman(3) Hytek Korry Leach International Leach NA LRE Medical(3) Mason NMC Palomar Racal(6) Scioteq (7) Souriau Sunbank(4) TA Aeropsapce Treality SVS (7) Esterline TransDigm has acquired 88 businesses since 1993, including 73 since its IPO. Proven Record of Acquisition and Integration 2021 – 2023 Chelton Ltd. Canyon AeroConnect DART Aerospace Calspan Corporation (5) Divested in Q1 FY2021 (6) Divested in Q2 FY2021 Cobham Aero Connectivity 31(3) Divested in Q4 FY 2019 (4) Divested in Q1 FY 2020 (7) Divested in Q3 FY 2021
Active Acquisition Process Current Multiple(s): 12 – 15x EBITDA Post Acquisition: 50%+ multiple reduction FY2022 Results 32
Acquisition of Esterline 33 Acquisition Date: March 2019 Purchase Price: ≈ $4B Retained 12 Operating Units ≈ 25% of Esterline was Sold Post‐Acquisition Sold 8 Operating Units for ≈ $1.3B Primarily Non‐Aerospace Operating Units or Aerospace Operating Units that did not fit TDG Criteria EBITDA Margin Profile As of Acquisition Date: ≈ 15% EBITDA Margin Current: EBITDA Margins well into 30%’s
Actual Performance – Esterline 2019 Price Productivity New Biz & Market (Volume) 2024 2019 Price Productivity New Biz & Market (Volume) 2023 Fcst EBITDA hit Year 5 model target in only 1 year of ownership EBITDA continues to be well ahead of model (despite pandemic impact) Acquisition Model EBITDA Bridge Actual / FCST EBITDA Bridge 34
Acquisition of Cobham Aero Connectivity 35 Acquisition Date: January 2021 Purchase Price: ≈ $945M Split into Two Operating Units Post‐Acquisition Chelton Ltd (Marlow, UK) Canyon AeroConnect (Prescott, AZ) EBITDA Margin Profile As of Acquisition Date: ≈ 25% EBITDA Margin Current: EBITDA Margins Nearing 40% EBITDA One Year Ahead of Acquisition Model Products – Highly Engineered Antennas & Radios Defense 75% OEM 30% Aftermarket 70% Revenues Revenues Commercial 25%
ESG Initiatives 36
TransDigm ESG Highlights 37 Greenhouse Gas Emissions In March 2022, TransDigm Established Greenhouse Gas Emissions Reduction Goal of 50% Reduction in Scope 1 and Scope 2 Emissions by 2031 Diversity Initiatives BOD Diversity improved to 33% in 2023 versus 9% in 2017 Executive Diversity (includes Officers & EVPs) improved to 42% in 2023 versus 10% in 2017 Continued efforts at Operating Units to Recruit and Hire Diverse Candidates Implemented Unconscious Bias Training in 2022 for our Board of Directors and Management Community Outreach Doug Peacock Scholarship Program Focuses on providing scholarships to female and minority high school and college students Sponsorship of a New STEM Classroom at the Great Lakes Science Center Supporting the Manufacturing Advocacy and Growth Network (MAGNET) MAGNET creates pathways to careers in high‐tech manufacturing & helps small to mid‐size firms thrive in manufacturing TransDigm Stakeholder Report A full summary of our ESG initiatives can be found in our 2022 Stakeholder Report (see the TransDigm website)
38 TransDigm Greenhouse Gas Emissions TransDigm is actively investigating options for pursuing the implementation of additional energy efficiency projects at our operations, considering sourcing renewable energy and other solutions that would lower our emissions footprint and achieve our goal of 50% reduction in Scope 1 and Scope 2 greenhouse gas emissions by 2031 Scope 2 includes purchased electricityScope 1 includes natural gas and other fuel combustion 93,037 107,798 0 20,000 40,000 60,000 80,000 100,000 120,000 Total Greenhouse Gas Emissions (t CO2e) (Scope 1 & Scope 2) Base Year FY2019 FY2022 14% Decrease
Financial Topics 39
40 Capital Structure Pro Forma Capital Structure FY23 Weighted Average Interest Rate 6.0% ($ in millions) (1) Pro forma capital structure reflects the April 2023 repayment of the $1,100 billion of 8.0% Senior Secured Notes due 2025. Restricted cash at period ended April 1, 2023, represents the cash committed from the issuance of the $1,100 million in 6.75% Senior Secured Notes due August 15, 2028, to redeem the outstanding $1,100 million in 8.00% Senior Secured Notes due 2025. The notification of the redemption of the $1,100 million 8.00% Secured Notes due 2025 occurred on March 9, 2023, and the redemption occurred on April 10, 2023. (2) In June 2023, the reference rate on the existing Revolver will automatically convert from LIBOR to Term SOFR. Actual Pro forma (1) 4/1/23 Adj. 4/1/23 Rate Cash $3,418 – $3,418 Restricted Cash (1) 1,100 (1,100) – Total Cash $4,518 $3,418 $810mm revolver (2) – – – L + 2.50% $350mm AR securitization facil ity 350 – 350 S + 1.30% First lien term loan H due 2027 1,719 – 1,719 S + 3.25% First lien term loan I due 2028 4,559 – 4,559 S + 3.25% Senior secured notes due 2025 (1) 1,100 (1,100) – 8.000% Senior secured notes due 2026 4,400 – 4,400 6.250% Senior secured notes due 2028 2,100 – 2,100 6.750% Total secured debt $14,228 $13,128 4.4x Total net secured debt $10,810 $9,710 3.3x Senior subordinated notes due 2026 950 – 950 6.375% Senior subordinated notes due 2026 500 – 500 6.875% Senior subordinated notes due 2027 550 – 550 7.500% Senior subordinated notes due 2027 2,650 – 2,650 5.500% Senior subordinated notes due 2029 1,200 – 1,200 4.625% Senior subordinated notes due 2029 750 – 750 4.875% Finance Lease Obligations (Gross) 195 – 195 Total debt $21,023 $19,923 6.7x Total net debt $17,605 $16,505 5.6x
41 Debt Maturity Profile $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2023 2024 2025 2026 2027 2028 2029 Secured Term Loans Secured Notes Sr Sub Notes Note: $350M AR Securitization renews annually in July Debt Maturity Profile ($MM)
Interest Rate Sensitivity 42 • Interest rates on TDG’s $20Bn of gross Debt is over 75% hedged/fixed rate through fiscal year 2026 • Achieved via a combination of interest rate caps, swaps and collars • Significantly reduces near-term exposure to any variable rate increases (1) FY Weighted Average Variable Rate % is the average LIBOR and Term SOFR for TDG's 2023 fiscal year based on current consensus and management forward estimates. (2) Interest expense shown includes $40M amortization of debt issuance costs and fees and approximately $85M of Interest income. (3) Current FY 23 Assumptions reflects the Net Interest Expense guidance for the fiscal year ending 9/30/23 that was issued on 5/9/23. The Company only updates guidance quarterly and this presentation does not confirm or update guidance now. $ in millions Current FY 23 Assumptions AVERAGE VARIABLE RATE % ~ 4.8% 6.0% 7.0% Interest Expense - Pre-Tax $1,185 $1,215 $1,235 Interest Rate - Pre-Tax 6.0% 6.1% 6.2% (1) (2) (3)
TransDigm Deleverage Profile 43 Net Debt / PF EBITDA as Defined (1) 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x 5.5x 6.0x 6.5x 7.0x 07/03FY03FY04FY05 4/06 FY06FY07FY08FY0910/09FY1012/10FY11 3/12 FY1212/123/13 6/13 FY13 3/14 FY14 3/15 FY15 3/16 7/16 PF16 3/17 7/17 PF17 3/30 6/30 FY18 3/31 PF19 3/31 FY20FY21FY22 3/23 Warburg Pincus Recap IPO Recap & Dividend McKechnie Acquisition AmSafe Acquisition Special Dividend Special Dividend Refi & Dividend Telair, Franke and Pexco DDC Acquisition & GCP Special dividend Special dividend Refinancing Esterline Acquisition Special Dividend COVID-19 Downturn Special Dividend (1) PF EBITDA as Defined is a non‐GAAP financial measure. For a historical reconciliation of PF EBITDA as Defined to Income from Continuing Operations, please see the appendix.
($ in mi l l ions) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Income (loss) from continuing ops . ($5) $0 $1 $3 $14 ($17) $11 $14 $31 ($76) $14 $35 $25 $89 $133 Depreciation and amortization 7 7 7 6 7 6 7 9 13 10 18 17 16 24 25 Interest expense, net 5 5 5 3 3 23 28 32 37 43 75 80 77 92 93 Income tax provis ion (benefi t) (2) ‐ 2 5 13 (2) 8 9 17 (45) 6 23 16 53 74 Warrant put va lue adjustment 1 1 2 5 7 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Extraordinary i tem ‐ ‐ ‐ 2 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ EBITDA 6 13 17 24 44 10 54 64 98 (68) 113 155 134 258 325 Merger expense ‐ ‐ ‐ ‐ ‐ 40 ‐ ‐ ‐ 176 ‐ ‐ ‐ ‐ ‐ Refinancing costs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 49 ‐ ‐ Acquis i tion‐related costs 4 ‐ ‐ 1 ‐ 1 ‐ 8 ‐ 15 20 2 1 9 2 Non‐cash comp and def comp costs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1 6 7 1 6 6 One‐time specia l bonus ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6 ‐ ‐ Publ ic offering costs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3 2 ‐ EBITDA As Defined $10 $13 $17 $25 $44 $51 $54 $72 $98 $124 $139 $164 $194 $275 $333 APPENDIX: Reconciliation of EBITDA and EBITDA As Defined to Income from Continuing Operations 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Income from continuing ops. $163 $163 $152 $325 $303 $307 $447 $586 $629 $962 $841 $653 $681 $866 Depreciation and amortization 28 30 61 68 73 96 94 122 141 129 226 283 253 253 Interest expense, net 84 112 185 212 271 348 419 484 602 663 859 1,029 1,059 1,076 Income tax provis ion 88 88 77 163 146 142 189 182 209 24 222 87 34 261 EBITDA $363 $393 $475 $768 $793 $893 $1,149 $1,374 $1,581 $1,778 $2,148 $2,052 $2,027 $2,456 Refinancing costs ‐ ‐ 72 ‐ 30 132 18 16 40 6 3 28 37 1 Acquis i tion‐related costs/other 6 12 30 19 26 21 37 57 31 29 169 31 35 18 Non‐cash comp and deferred comp costs 6 7 13 22 49 26 32 48 46 59 93 93 129 184 COVID‐19 pandemic res tructuring costs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 54 40 0 Gain on sa le of bus inesses ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ (69) (7) Other ‐ ‐ ‐ ‐ 2 1 (2) ‐ 13 5 6 20 (10) (6) EBITDA As Defined $375 $412 $590 $809 $900 $1,073 $1,234 $1,495 $1,711 $1,877 $2,419 $2,278 $2,189 $2,646 Note: Please see the Special Notice Regarding Pro Forma and Non – GAAP Information. 44
FY 2023 Guidance Midpoint Income from continuing operations 1,166$ Adjustments: Depreciation and amortization expense 277 Interest expense - net 1,185 Income tax provision 388 EBITDA 3,016 Adjustments: Acquisition-related expenses and adjustments (1) 18 Non-cash stock and deferred compensation expense (2) 165 Refinancing costs (3) 36 Other, net (4) 25 Gross Adjustments to EBITDA 244 EBITDA As Defined $3,260 EBITDA As Defined, Margin (5) 50.5% APPENDIX: Reconciliation of Fiscal 2023 Outlook 45 ($ in millions) (1) Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when inventory was sold; costs incurred to Integrate acquired businesses and product lines into TD Group’s operations, facility relocation costs and other acquisition‐related costs; transaction‐related costs for both acquisitions and divestitures comprising deal fees, legal, financial and tax due diligence expenses, and valuation costs that are required to be expensed as incurred. (2) Represents the compensation expense related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements. (3) Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements. (4) Primarily represents foreign currency transaction (gains) or losses, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non‐service related pension costs and deferred compensation payments. (5) The EBITDA As Defined margin represents the amount of EBITDA As Defined as a percentage of net sales.
