TransDigm Group INC
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Nov 10, 2026
TDG$1,225.54+0.5%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-09-30; filed 2025-11-12.
0001260221-25-000081
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2026-09-30; filed 2026-11-10.
0001260221-26-000077
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 140 previous paragraphs and 144 current paragraphs.
67 unchanged; 58 reworded; 17 added; 13 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Our commercial aftermarket sales are primarily a function of air travel demand. Commercial aftermarket sales increased in fiscal 2026 compared to fiscal 2025 primarily due to overall demand, which resulted in higher flight hours and utilization of passenger and freight aircraft, despite the softening in industry capacity and RPKs arising from the conflict in the Middle East. Sales also benefited from customers completing deferred maintenance work. We are monitoring the ongoing conflict in the Middle East and the adverse effects on global energy supplies and prices, global supply chains and commercial air travel. To date, we have not seen a significant change in commercial aftermarket order activity relative to the levels prior to the start of the conflict, as demand remains strong. We continue to monitor the evolving macroeconomic environment. However, at this time we do not expect the conflict or its related effects to result in a material adverse effect on our business, financial condition and results of operations.
Current report
Selling and administrative expenses during the fiscal year ended September 30, 2026 increased as a percentage of net sales. This was primarily due to the fiscal 2026 acquisitions and additional costs incurred to support the higher net sales growth.
Current report
EBITDA As Defined from acquisitions for the Power & Control and Airframe segments contributed approximately $195 million in aggregate to the increase in EBITDA As Defined. EBITDA As Defined from acquisitions represents EBITDA As Defined from acquired businesses for the period up to one year from the respective acquisition date.
Current report
•On February 13, 2026, the Company issued $2,000 million of new debt, consisting of $1,200 million in aggregate principal amount of senior subordinated notes due 2034 at an issue price of 100% that bear interest at 6.125% (the “$1,200 million 6.125% 2034 Notes”) and $800 million of Tranche N term loans (the “Initial Tranche N term loans”) that bear interest at Term SOFR plus 2.50%.
Current report
The net proceeds from the February 13, 2026 new debt issuances were used, along with cash on hand, to fund the purchase price of the acquisition of Jet Parts Engineering (“JPE”) and Victor Sierra Aviation Holdings (“VSA”) and for related transaction fees and expenses.
Current report
•On April 17, 2026, the Company issued $1,500 million of new debt, consisting of (1) $500 million in additional 6.125% senior subordinated notes due 2034 at an issue price of 100.375% (the “Additional 6.125% 2034 Notes”), which resulted in a premium of approximately $2 million, and (2) $1,000 million of additional Tranche N term loans (the “Additional Tranche N term loans”) bearing interest at Term SOFR plus 2.50% (collectively, the Additional Tranche N term loans and the Initial Tranche N term loans are referred to herein as the “Tranche N term loans”). The Additional 6.125% 2034 Notes and the $1,200 million 6.125% 2034 Notes, are together referred to as the “6.125% 2034 Notes,” and the Additional Tranche N term loans and the Initial Tranche N term loans are together referred to as the “Tranche N term loans.”
Current report
The net proceeds from the April 17, 2026 new debt were intended to be used, along with cash on hand, to fund the purchase price of the proposed acquisition of Stellant Systems, Inc., common stock repurchases and for general corporate purposes. Notwithstanding the July 13, 2026 announcement that the Company withdrew from its proposed acquisition of Stellant Systems, Inc., there was no special mandatory redemption of the April 17, 2026 debt issuances and they remain outstanding. The Company had previously entered into a definitive agreement to acquire all the outstanding stock of Stellant Systems, Inc. on December 30, 2025.
Current report
•On September 14, 2026, the Company announced a cash tender offer for any and all of its outstanding $2,100 million aggregate principal amount of 6.750% Senior Secured Notes due 2028 (the “2028 Secured Notes”). On September 29, 2026, the Company purchased approximately $1,831 million aggregate principal amount of the 2028 Secured Notes that had been validly tendered before the early tender deadline of September 25, 2026. Holders received total consideration of $1,008.00 (plus accrued and unpaid interest) per $1,000 principal amount. The total consideration included an early tender premium of $30.00 per $1,000 principal amount. The Company paid a premium in excess of par of approximately $15 million, which is expensed as refinancing costs. Approximately $269 million aggregate principal amount of the 2028 Secured Notes remained outstanding as of September 30, 2026. Subsequent to September 30, 2026, approximately $2 million aggregate principal amount of the 2028 Secured Notes were validly tendered and repurchased by the Company prior to the expiration of the tender offer on October 13, 2026.
Current report
•On September 28, 2026, the Company issued $3,000 million of new debt, consisting of senior secured notes due 2035 at an issue price of 100% that bear interest at 6.750% (the “2035 Secured Notes”). The net proceeds from the 2035 Secured Notes were used to repurchase the tendered 2028 Secured Notes (as further described above) and for general corporate purposes.
Current report
•On April 7, 2026, the Company completed the acquisition of approximately 95% of the outstanding stock of JPE and approximately 96% of the outstanding stock of VSA for approximately $2,142 million in cash, net of cash acquired. The definitive agreement to acquire JPE and VSA was entered into on January 13, 2026. The acquisition was financed using cash on hand and the net proceeds from the debt offerings completed in February 2026 (as further described above).
Current report
•On September 28, 2026, the Company completed the acquisition of approximately 99% of the outstanding stock of Prince & Izant (“P&I”) for approximately $1,058 million in cash, net of cash acquired. The definitive agreement to acquire P&I was entered into on July 27, 2026. The acquisition was financed using cash on hand.
Current report
•During fiscal 2026, the Company completed several acquisitions consisting of substantially all of the assets and technical data rights of certain product lines or all the outstanding stock of certain businesses (collectively, referred to herein as the “Other Acquisitions”), each meeting the definition of a business, for a total aggregate purchase price of $434 million in cash. These acquisitions represent bolt-ons to existing TransDigm operating units. Each of the acquisitions was financed using cash on hand.
Current report
On September 21, 2026, the Company announced that its operating unit, Extant Aerospace, entered into a definitive agreement to acquire certain assets comprising a portfolio of commercial rotorcraft, land systems and business jet products, including a manufacturing facility located in California, for approximately $240 million in cash. The acquisition is expected to close during fiscal 2027, subject to standard regulatory approvals and the satisfaction of customary closing conditions.
Current report
Senior Secured Term Loans Facilities
Current report
TransDigm Inc. is the issuer of the Subordinated Notes and the Secured Notes. The notes are fully and unconditionally guaranteed, on a joint and several basis, as described below.
Current report
The Subordinated Notes are unsecured obligations of TransDigm Inc. They are subordinated in right of payment to all of TransDigm Inc.’s existing and future senior indebtedness, including the Secured Notes and borrowings under the senior secured credit facilities. They rank equally in right of payment with all of TransDigm Inc.’s existing and future senior subordinated indebtedness, and rank senior in right of payment to all of TransDigm Inc.’s future indebtedness that is expressly subordinated to the Subordinated Notes.
Current report
The Secured Notes are senior secured obligations of TransDigm Inc. They rank equally in right of payment with all of TransDigm Inc.’s existing and future senior indebtedness, including indebtedness under the senior secured credit facilities, and rank senior in right of payment to all of TransDigm Inc.’s existing and future indebtedness that is expressly subordinated to the Secured Notes, including the Subordinated Notes.
Removed paragraphs (13)
Previous report
In fiscal 2025, demand for air travel remained strong both domestically and internationally. Commercial aftermarket sales increased in fiscal 2025 compared to fiscal 2024 primarily due to the overall demand for air travel resulting in higher flight hours and utilization of passenger and freight aircraft as global air traffic continues to surpass pre-pandemic levels. In recent months, international air traffic growth has been outpacing domestic growth. Passenger load factors remain strong and have reached record levels in recent months in certain markets.
Previous report
At various points in 2025, the U.S. Government announced new or higher tariffs on goods imported into the U.S. from numerous countries resulting in multiple countries countering with reciprocal tariffs and other actions in response. Negotiations between the U.S. and other countries regarding the tariffs are ongoing and their status continues to evolve. TransDigm is primarily a domestic manufacturer. Because of this, tariffs did not have a significant impact on our fiscal 2025 operating results and we do not expect the tariffs to have a significant impact on our fiscal 2026 operating results. However, we continue to monitor the developments on tariffs and other changes in trade policy for its potential impact on the economic environment and on our business and operating results.
Previous report
Results of Operations
Previous report
Foreign exchange rates continue to fluctuate; the loss is primarily attributable to the continued weakening of the U.S. dollar. Loss contract amortization fluctuates primarily based on the rate of actual to forecasted shipments of the products covered under the onerous contract.
Previous report
The decrease in non-cash stock and deferred compensation expense is primarily attributable to the appreciation of the stock price at a higher rate in fiscal 2024 compared to fiscal 2025, as the stock price is a key input used to determine the Black-Scholes fair value for the non-cash stock compensation expense, and lower deferred compensation expense.
Previous report
•On May 20, 2025, the Company completed the issuance of $2,650 million in 6.375% senior subordinated notes due 2033 (the “6.375% 2033 Notes”), which the net proceeds of approximately $2,615 million, along with existing cash on hand, were used to redeem all of its outstanding $2,650 million in 5.500% senior subordinated notes due 2027 (the “5.500% 2027 Notes”). The redemption occurred on June 20, 2025.
Previous report
•On August 19, 2025, the Company completed $5,000 million in new debt issuances. The new debt was comprised of the following: (i) $500 million in aggregate principal amount of senior secured notes due 2034 in a private offering at an issue price of 100% that bear interest at a rate of 6.250% (the “2034 Secured Notes”); (ii) $2,000 million in aggregate principal amount of senior subordinated notes due 2034 at an issue price of 100% that bear interest at a rate of 6.750% (the “6.750% 2034 Notes”); and (iii) $2,500 million of Tranche M term loans that bear interest at a rate of Term SOFR plus 2.50%. Original issue discount of 0.25%, or approximately $6 million, was paid to the lenders of the Tranche M term loans. The proceeds from the August 19, 2025 new debt issuances were used, along with existing cash on hand, to fund a $90.00 special dividend declaration on each outstanding share of common stock and cash dividend equivalent payments on eligible vested options outstanding under its stock option plans further described below.
Previous report
•On September 17, 2025, the Company (i) repriced all of its $1,686 million in existing Tranche K term loans to bear interest at Term SOFR plus 2.25% compared to Term SOFR plus 2.75% applicable prior to the transaction; and (ii) amended and extended $1,857 million in existing Tranche I term loans maturing August 24, 2028 and converted such loans into new Tranche K term loans maturing March 22, 2030 (collectively, the “Tranche K term loans” referred to herein are comprised of the existing Tranche K term loans and new Tranche K term loans as described above).
Previous report
During fiscal 2025, the Company completed approximately $413 million in acquisitions of businesses, net of cash acquired, including the acquisition of Servotronics, Inc. (“Servotronics”) completed on July 1, 2025 via a tender offer for approximately $133 million in cash. All fiscal 2025 acquisitions were financed using existing cash on hand.
Previous report
Special Dividends
Previous report
On October 18, 2024, the Company paid a special cash dividend of $75.00 per outstanding share of common stock and cash dividend equivalent payments on eligible vested options outstanding under its stock option plans, which was authorized and declared in September 2024 (fiscal 2024). The total cash payment in October 2024 (fiscal 2025) of special dividend and dividend equivalents from this declaration, which was funded by a combination of (i) $3,000 million in new senior secured debt issued on September 19, 2024; and (ii) existing cash on hand, was approximately $4,216 million in special dividends and $132 million in cash dividend equivalent payments.
Previous report
On August 20, 2025, the Company's Board of Directors authorized and declared a special cash dividend of $90.00 per outstanding share of common stock and cash dividend equivalent payments on eligible vested options outstanding under its stock option plans. The total cash payment in September 2025 of special dividend and dividend equivalents from this declaration, which was funded by a combination of (i) $5,000 million in new senior secured and unsecured debt issued on August 19, 2025 (as noted above); and (ii) existing cash on hand, was approximately $5,073 million in special dividends and $159 million in cash dividend equivalent payments.
Previous report
Senior Secured Term Loans Facility
Reworded paragraphs (58)
Previous wording
We believe we are a leading global designer, producer and supplier of highly engineered proprietary aerospace components with significant aftermarket content. We seek to develop highly customized products to solve specific needs for aircraft operators and manufacturers. We attempt to differentiate ourselves based on engineering, service and manufacturing capabilities. We believe that our products have strong brand names within the industry and that we have a reputation for high quality, reliability and strong customer support. We believe we have achieved steady, long-term growth in sales and improvements in operating performance we believe that due to our competitive strengths and through execution of our value-driven operating strategy. More specifically, focusing our businesses on our value-driven operating strategy of obtaining profitable new business, carefully controlling the cost structure via productivity and cost improvements and pricing our highly engineered value-added products to fairly reflect the value we provide and the resources required to do so has historically resulted in improvements in gross profit and income from operations over the long-term.
Current wording
We believe we are a leading global designer, producer and supplier of highly engineered proprietary aerospace components with significant aftermarket content. We seek to develop highly customized products to solve specific needs for aircraft operators and manufacturers. We attempt to differentiate ourselves based on engineering, service and manufacturing capabilities. We believe that our products have strong brand names within the industry and that we have a reputation for high quality, reliability and strong customer support. We believe we have achieved steady, long-term growth in sales and improvements in operating performance due to our competitive strengths and through execution of our value-driven operating strategy. More specifically, focusing our businesses on our value-driven operating strategy of obtaining profitable new business, carefully controlling the cost structure via productivity and cost improvements and pricing our highly engineered value-added products to fairly reflect the value we provide and the resources required to do so has historically resulted in improvements in gross profit and income from operations over the long-term.
Previous wording
Our selective acquisition strategy has also been an important contribution to the growth of our business. We maintain a selective acquisition strategy, concentrating on proprietary commercial aerospace component businesses with significant aftermarket content where we see a clear path to value creation through the application of our three core value drivers. The integration of acquisitions into our existing businesses combined with implementing our proven operating strategy has historically resulted in improvements in the financial performance of the acquired businesses.
Current wording
We maintain a disciplined acquisition strategy focused on proprietary commercial aerospace component businesses with significant aftermarket content, where we see a clear path to create value and earn private equity-like returns by applying our three core value drivers. Integrating acquired businesses into our existing operations and applying our operating strategy has historically improved the financial performance of the acquired businesses.
Previous wording
For fiscal year 2025, we generated net sales of $8,831 million, gross profit of $5,311 million or 60.1% of net sales, and net income attributable to TD Group of $2,074 million.
Current wording
For fiscal year 2026, we generated net sales of $10,557 million, gross profit of $6,254 million or 59.2% of net sales, and net income attributable to TD Group of $2,107 million.
Previous wording
Our commercial transport OEM shipments and revenues generally run ahead of aircraft delivery schedules. Consistent with prior years, our fiscal 2025 shipments were a function of, among other things, the estimated 2025 and 2026 commercial aircraft production rates for Boeing and Airbus. Airline demand for new aircraft remains high and the OEMs are working to increase aircraft production. However, aircraft production rates remain well below pre-pandemic levels as the struggles in the OEM supply chain and labor challenges persist, along with geopolitical challenges, though progress continues to be made in the build rates. Airbus has also encountered difficulties in ramping up production. For fiscal 2025, the impact across TransDigm's operating units was uneven and varied, resulting in consolidated commercial OEM sales decreasing compared to fiscal 2024.
Current wording
Our commercial transport OEM shipments and sales generally run ahead of aircraft delivery schedules. Consistent with prior years, our fiscal 2026 shipments were a function of, among other things, the estimated 2026 and 2027 commercial aircraft production rates for Boeing and Airbus. Airline demand for new aircraft remains high and the OEMs, particularly Boeing and Airbus, continued to steadily increase aircraft production in recent quarters. Commercial OEM sales increased in fiscal 2026 compared to fiscal 2025 primarily due to the aircraft production increases by Boeing and Airbus.
Previous wording
Our defense business fluctuates from year-to-year, and is dependent, to a degree, on government budget constraints, the timing of orders, macro and micro dynamics with respect to the DOD procurement policy and the extent of global conflicts, such as the ongoing geopolitical conflicts. Likewise, delays in government spending outlays and government funding reprioritization can impact demand. For a variety of reasons, the military spending outlook is very uncertain, though recent DOD budgets have trended upwards due to recent geopolitical challenge and conflicts, and current military modernization efforts. Defense sales in fiscal 2025 increased compared to fiscal 2024 primarily due to continued U.S. Government defense spend outlays.
Current wording
Our defense sales fluctuate from year-to-year, and are dependent, to a degree, on government budget constraints, the timing of orders, macro and micro dynamics with respect to the DOW procurement policy and the extent of global conflicts. Likewise, delays in government spending outlays and government funding reprioritization can impact demand. For a variety of reasons, the military spending outlook is very uncertain, though recent DOW budgets have trended upwards due to recent geopolitical challenges and conflicts, and current military modernization efforts. Defense sales increased in fiscal 2026 compared to fiscal 2025 primarily due to continued growth in defense spending in both domestic and international markets.
Previous wording
(1)Net income applicable to TD Group common stockholders represents net income attributable to TD Group less special dividends declared or paid on participating securities, including dividend equivalents of $208 million and $233 million for the fiscal years ended September 30, 2025 and 2024, respectively.
Current wording
(1)Net income applicable to TD Group common stockholders represents net income attributable to TD Group less special dividends declared or paid on participating securities, including dividend equivalents of $59 million and $208 million for the fiscal years ended September 30, 2026 and 2025, respectively.
Previous wording
The increase in organic sales of $615 million for the fiscal year ended September 30, 2025 compared to the fiscal year ended September 30, 2024 is primarily related to increases in defense and commercial aftermarket.
Current wording
The increase in organic sales of approximately $1,000 million for the fiscal year ended September 30, 2026, compared with the fiscal year ended September 30, 2025, was due to increases in defense sales of approximately $400 million (10%), commercial aftermarket sales of approximately $350 million (13%) and commercial OEM sales of approximately $250 million (14%).
Previous wording
•Cost of Sales and Gross Profit. Cost of sales increased by $252 million or 7.7%, to $3,520 million for the fiscal year ended September 30, 2025 compared to $3,268 million for the fiscal year ended September 30, 2024. Cost of sales and the related percentage of net sales for the fiscal years ended September 30, 2025 and 2024 were as follows (amounts in millions):
Current wording
•Cost of Sales and Gross Profit. Cost of sales increased by $783 million or 22.2%, to $4,303 million for the fiscal year ended September 30, 2026 compared to $3,520 million for the fiscal year ended September 30, 2025. Cost of sales and the related percentage of net sales for the fiscal years ended September 30, 2026 and 2025 were as follows (amounts in millions):
Previous wording
Cost of sales during the fiscal year ended September 30, 2025 decreased as a percentage of net sales. This was primarily driven by the application of our three core value-driven operating strategy (obtaining profitable new business, continually improving our cost structure and providing highly engineered value-added products to customers) coupled with fixed overhead costs spread over higher production volume.
Current wording
Cost of sales during the fiscal year ended September 30, 2026 increased as a percentage of net sales. This was primarily due to the dilutive impact of the fiscal 2026 acquisitions on the gross margin. Offsetting the adverse impact the fiscal 2026 acquisitions had on gross profit was a favorable sales mix (particularly, higher commercial aftermarket sales as a percentage of net sales) and the application of our three core value drivers (obtaining profitable new business, continually improving our cost structure and providing highly engineered value-added products to customers) coupled with fixed overhead costs spread over a higher production volume.
Previous wording
•Selling and Administrative Expenses. Selling and administrative expenses decreased by $35 million to $945 million for the fiscal year ended September 30, 2025. The related percentage of net sales for the fiscal years ended September 30, 2025 and 2024 were as follows (amounts in millions):
Current wording
•Selling and Administrative Expenses. Selling and administrative expenses increased by $246 million to $1,191 million for the fiscal year ended September 30, 2026. The related percentage of net sales for the fiscal years ended September 30, 2026 and 2025 was as follows (amounts in millions):
Previous wording
•Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs, original issue discount, revolving credit facility fees, finance leases, interest income and the impact of interest rate swaps, caps and collars designated and qualifying as cash flow hedges. Interest expense-net increased $286 million, or 22.2%, to $1,572 million for the fiscal year ended September 30, 2025 from $1,286 million for the fiscal year ended September 30, 2024. The increase in interest expense-net was primarily due to an increase in outstanding borrowings (refer to Note 10, “Debt” in the notes to the consolidated financial statements for information on our debt) and a decrease in interest income. The weighted average interest rate for cash interest payments on total borrowings outstanding was 6.3% for the fiscal years ended September 30, 2025 and September 30, 2024.
Current wording
•Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs, original issue discount, premium, revolving credit facility fees, finance leases, interest income and the impact of interest rate swaps and collars designated and qualifying as cash flow hedges. Interest expense-net increased $436 million, or 27.7%, to $2,008 million for the fiscal year ended September 30, 2026 from $1,572 million for the comparable period in the prior fiscal year. The increase in interest expense-net was primarily due to an increase in outstanding borrowings and lower interest income. Refer to Note 10, “Debt,” in the notes to the consolidated financial statements included herein for information on our debt. The weighted average interest rate for cash interest payments on total borrowings outstanding was 6.2% and 6.3% for the fiscal years ended September 30, 2026 and September 30, 2025, respectively.
Previous wording
•Income Tax Provision. Income tax expense as a percentage of income before income taxes was approximately 21.1% for the fiscal year ended September 30, 2025 compared to 22.6% for the fiscal year ended September 30, 2024. Refer to Note 12, “Income Taxes”, in the notes to the consolidated financial statements included herein for additional information.
Current wording
•Income Tax Provision. Income tax expense as a percentage of income before income taxes was approximately 23.7% for the fiscal year ended September 30, 2026 compared to 21.1% for the fiscal year ended September 30, 2025. Refer to Note 12, “Income Taxes,” in the notes to the consolidated financial statements included herein for additional information.
Previous wording
•Earnings per Share. Basic and diluted earnings per share was $32.08 for the fiscal year ended September 30, 2025 and $25.62 for the fiscal year ended September 30, 2024. Net income attributable to TD Group for the fiscal year ended September 30, 2025 of $2,074 million was decreased by dividend equivalents of $208 million, or $3.58 per share, resulting in net income applicable to TD Group common stockholders of $1,866 million. Net income attributable to TD Group for the fiscal year ended September 30, 2024 of $1,714 million was decreased by dividend equivalents of $233 million, or $4.02 per share, resulting in net income applicable to TD Group common stockholders of $1,481 million.
Current wording
•Earnings per Share. Basic and diluted earnings per share was $35.51 for the fiscal year ended September 30, 2026 and $32.08 for the fiscal year ended September 30, 2025. Net income attributable to TD Group for the fiscal year ended September 30, 2026 of $2,107 million was decreased by dividend equivalent payments of $59 million, or $1.03 per share, resulting in net income applicable to TD Group common stockholders of $2,048 million. Net income attributable to TD Group for the fiscal year ended September 30, 2025 of $2,074 million was decreased by dividend equivalent payments of $208 million, or $3.58 per share, resulting in net income applicable to TD Group common stockholders of $1,866 million.
Previous wording
Net sales for the Power & Control segment increased $593 million primarily from increases in organic sales in defense, commercial aftermarket and commercial OEM.
Current wording
Net sales for the Power & Control segment increased $1,214 million primarily from increases in sales in all three market channels.
Previous wording
Net sales for the Airframe segment increased $303 million primarily from increases in organic sales in defense and commercial aftermarket.
Current wording
Net sales for the Airframe segment increased $491 million primarily from increases in sales in all three market channels.
Previous wording
EBITDA As Defined for the Power & Control and Airframe segments increased $344 million and $248 million, respectively, due to the increase in net sales described above, along with our application of our three core value-driven operating strategy.
Current wording
EBITDA As Defined for the Power & Control and Airframe segments increased $503 million and $289 million, respectively, due to the increase in net sales described above, along with our application of our three core value-driven operating strategy.
Previous wording
Unallocated corporate EBITDA As Defined consists primarily of corporate expenses which includes compensation, benefits, professional services and other administrative costs incurred by our corporate offices.
Current wording
Unallocated corporate EBITDA As Defined consists primarily of corporate expenses which include compensation, benefits, professional services and other administrative costs incurred by our corporate offices.
Previous wording
For our results of operations for fiscal 2024 compared with fiscal 2023, refer to the discussion in Item 7. “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of Form 10-K for the fiscal year ended September 30, 2024, as filed with the Securities and Exchange Commission on November 7, 2024.
Current wording
For our results of operations for fiscal 2025 compared with fiscal 2024, refer to the discussion in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Form 10-K for the fiscal year ended September 30, 2025, as filed with the Securities and Exchange Commission on November 12, 2025.
Previous wording
We have historically maintained a capital structure comprising a mix of equity and debt financing. We vary our leverage both to optimize our equity return and to pursue acquisitions. We expect to meet our current debt obligations as they come due through internally generated funds from current levels of operations and/or through refinancing in the debt markets prior to the maturity dates of our debt.
Current wording
We historically have maintained a capital structure comprising a mix of equity and debt financing. We vary our leverage both to optimize our equity return and to pursue acquisitions. We expect to meet our current debt obligations as they come due through internally generated funds from current levels of operations and/or through refinancing in the debt markets prior to the maturity dates of our debt.
Previous wording
(1)Includes debt issuance costs and original issue discount. Refer to Note 10, “Debt,” in the notes to the consolidated financial statements included herein for additional information.
Current wording
(1)Includes debt issuance costs, original issue discount and premium. Refer to Note 10, “Debt,” in the notes to the consolidated financial statements included herein for additional information.
Previous wording
(1)For purposes of computing the ratio of earnings to fixed charges, earnings consist of income from continuing operations before income taxes plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs and original issue discount and the “interest component” of rental expense.
Current wording
(1)For purposes of computing the ratio of earnings to fixed charges, earnings consist of income from continuing operations before income taxes plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs, original issue discount and premium and the “interest component” of rental expense.
Previous wording
•On July 11, 2025, the Company amended its Securitization Facility to, among other things, (i) increase the borrowing capacity from $650 million to $725 million; and (ii) extend the maturity date to July 10, 2026 at an interest rate of Term SOFR plus 1.35% compared to an interest rate of Term SOFR plus 1.45% that applied prior to the amendment. Prior to the amendment, the Securitization Facility was fully drawn. As of September 30, 2025, the Securitization Facility was fully drawn as the remaining $75 million available was drawn in the fourth quarter of fiscal 2025.
Current wording
•On July 10, 2026, the Company amended its trade receivable securitization facility (the “Securitization Facility”) to, among other things, (i) increase the borrowing capacity from $725 million to $1,000 million; and (ii) extend the maturity date to July 9, 2027. The Company subsequently drew $150 million available under the Securitization Facility in the fourth quarter of fiscal 2026. As of September 30, 2026, the Company has drawn $875 million and has $125 million of available borrowing capacity under its Securitization Facility.
Previous wording
During fiscal 2025, the Company completed approximately $11,000 million in debt financing transactions, inclusive of new issuances and refinancing of existing debt. Below is further information on the significant debt financing transactions occurring in fiscal 2025:
Current wording
During fiscal 2026, the Company completed approximately $4,400 million in acquisitions of businesses, net of cash acquired. Below is further information on the acquisitions occurring in fiscal 2026:
Previous wording
On October 6, 2025, the Company completed the acquisition of all the outstanding stock of the Simmonds Precision Products, Inc. Business (“Simmonds”) of Goodrich Corporation from RTX Corporation for approximately $757 million in cash. The acquisition was financed using existing cash on hand. The definitive agreement to acquire Simmonds was previously signed on June 30, 2025.
Current wording
•On October 6, 2025, the Company completed the acquisition of all the outstanding stock of Simmonds for approximately $757 million in cash. The acquisition was financed using cash on hand.
Previous wording
In November 2025, the Board of Directors authorized an additional $5,000 million in share repurchases of common stock permissible under the Company’s existing stock repurchase program, subject to any restrictions specified in the Credit Agreement and indentures governing the existing Subordinated and Secured Notes.
Current wording
In November 2025, the Board authorized an additional $5.0 billion in share repurchases of common stock permissible under the Company’s existing stock repurchase program, subject to any restrictions specified in the Credit Agreement and indentures governing the existing Subordinated and Secured Notes. There is no expiration date for the existing stock repurchase program.
Previous wording
In October 2025, the Company repurchased 79,959 shares of common stock at an average price of $1,249.90 per share for a total amount of $100 million. Whether the Company undertakes additional share repurchases or other aforementioned activities will depend on prevailing market conditions, the Company's liquidity requirements, contractual restrictions and other factors.
Current wording
In fiscal 2026, the Company repurchased, in aggregate, 2,316,439 shares of common stock at an average price of $1,187.21 per share for a total amount of $2,750 million. The repurchased shares of common stock are classified as treasury stock in the statement of changes in stockholders’ deficit. As of September 30, 2026, $3,038 million remained available for repurchase under the existing stock repurchase program. Whether the Company undertakes additional stock repurchases or other aforementioned activities will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors.
Previous wording
If the Company has excess cash, it generally prioritizes allocating the excess cash in the following manner: (1) capital spending at existing businesses, (2) acquisitions of businesses, (3) payment of a special dividend and/or repurchases of our common stock and (4) prepayment of indebtedness or repurchase of debt.
Current wording
If the Company has excess cash, it generally prioritizes allocating the excess cash in the following manner: (1) investing capital in existing businesses, (2) acquisitions of businesses, (3) payment of a special dividend and/or repurchases of our common stock and (4) prepayment of indebtedness or repurchase of debt.
Previous wording
The Company's objective is to maintain an allocation of at least 75% fixed rate and 25% variable rate debt thereby limiting its exposure to changes in near-term interest rates. Interest rate swaps, caps and collars used to hedge and offset, respectively, the variable interest rates on our term loans are further described in Note 18, “Derivatives and Hedging Activities,” in the notes to the consolidated financial statements included herein. As of September 30, 2025, approximately 75% of our gross debt was fixed rate.
Current wording
The Company’s objective is to maintain an allocation of at least 75% fixed rate and no more than 25% variable rate debt thereby limiting its exposure to changes in near-term interest rates. Interest rate swaps and collars used to hedge and offset, respectively, the variable interest rates on our term loans are further described in Note 18, “Derivatives and Hedging Activities,” in the notes to the consolidated financial statements included herein. As of September 30, 2026, approximately 75% of our gross debt was fixed rate.
Previous wording
We believe our significant cash liquidity will allow us to meet our anticipated funding requirements. We expect to meet our short-term cash liquidity requirements (including interest obligations and capital expenditures) through net cash from operating activities, cash on hand and, if needed, draws on the revolving credit facility. Long-term cash liquidity requirements consist primarily of obligations under our long-term debt agreements. There is no maturity on any tranche of term loans or notes until August 2028 (fiscal 2028).
Current wording
We believe our significant cash liquidity will allow us to meet our anticipated funding requirements. We expect to meet our short-term cash liquidity requirements (including interest obligations and capital expenditures) through net cash from operating activities, cash on hand and, if needed, draws on the revolving credit facility. Long-term cash liquidity requirements consist primarily of obligations under our long-term debt agreements. There is no maturity on any tranche of term loans or notes until August 2028 (fiscal 2028). The $875 million outstanding under the Securitization Facility matures on July 9, 2027.
Previous wording
The Company estimates its capital expenditures in fiscal year 2026 to be approximately 2.50% to 3.25% of net sales. The Company’s capital expenditures incurred from year-to-year are funded using existing cash on hand and are primarily for projects that are consistent with our three core value-driven operating strategy (obtaining profitable new business, continually improving our cost structure and providing highly engineered value-added products to customers) such as automation projects.
Current wording
The Company estimates its capital expenditures in fiscal year 2027 to be approximately 2.75% to 3.50% of net sales. The Company’s capital expenditures incurred from year-to-year are funded using existing cash on hand and are primarily for projects that are consistent with our three core value drivers (obtaining profitable new business, continually improving our cost structure and providing highly engineered value-added products to customers) such as automation projects.
Previous wording
In connection with the continued application of our three core value-driven operating strategy, we expect our efforts will continue to generate strong margins and provide sufficient cash provided by operating activities to meet our interest obligations and liquidity needs. We believe our cash provided by operating activities and available borrowing capacity will enable us to make strategic business acquisitions, pay dividends to our shareholders and make opportunistic investments in our own stock, subject to any restrictions in our existing Credit Agreement and market conditions.
Current wording
In connection with the continued application of our three core value-driven operating strategy, we expect our efforts will continue to generate strong margins and provide sufficient cash provided by operating activities to meet our interest obligations and liquidity needs. We believe our cash provided by operating activities and available borrowing capacity will enable us to make strategic business acquisitions, pay dividends to our stockholders and make opportunistic investments in our own stock, subject to any restrictions in our existing Credit Agreement and market conditions.
Previous wording
Operating Activities. The Company generated $2,038 million of net cash from operating activities during fiscal 2025 compared to $2,045 million during fiscal 2024.
Current wording
Operating Activities. The Company generated $2,187 million of net cash from operating activities during fiscal 2026 compared to $2,038 million during fiscal 2025.
Previous wording
The change in trade accounts receivable during fiscal 2025 was a use of cash of $212 million compared to a use of cash of $84 million in fiscal 2024. The increase is primarily attributable to increased revenue. The Company actively manages its accounts receivable, the related agings and collection efforts.
Current wording
The change in trade accounts receivable during fiscal 2026 was a use of cash of $258 million compared to a use of cash of $212 million in fiscal 2025. The increase is primarily attributable to increased revenue. The Company actively manages its accounts receivable, the related agings and collection efforts.
Previous wording
The change in inventories during fiscal 2025 was a use of cash of $156 million compared to a use of cash of $104 million in fiscal 2024. The increase is due to an increase in raw materials to support the fiscal 2026 sales demand. The Company manages inventory levels in support of customer needs.
Current wording
The change in inventories during fiscal 2026 was a use of cash of $272 million compared to a use of cash of $146 million in fiscal 2025. The increase is due to an increase in raw materials to support fiscal 2027 sales demand. The Company manages inventory levels in support of customer needs.
Previous wording
The change in accounts payable during fiscal 2025 was a source of cash of $38 million compared to a use of cash of $11 million in fiscal 2024. The change is due to the timing of payments to suppliers.
Current wording
The change in accounts payable during fiscal 2026 was a source of cash of $73 million compared to a source of cash of $38 million in fiscal 2025. The change is due to the timing of payments to suppliers.
Previous wording
Net cash used in investing activities was $2,441 million during fiscal 2024, consisting of $2,347 million from the acquisitions of Raptor Scientific, the Electron Device Business of Communications & Power Industries (“CPI's Electron Device Business”) and other acquisitions of businesses completed during fiscal 2024 and capital expenditures of $165 million; partially offset by other investing transactions, net, of $71 million.
Current wording
Investing Activities. Net cash used in investing activities was $4,662 million during fiscal 2026, consisting of the acquisitions of Simmonds, JPE and VSA, P&I and other acquisitions of businesses aggregating to $4,389 million and capital expenditures of $274 million; partially offset by other investing transactions inflows of $1 million.
Previous wording
Investing Activities. Net cash used in investing activities was $595 million during fiscal 2025, consisting of $419 million from the acquisition of Servotronics and other acquisitions of businesses completed during fiscal 2025 and capital expenditures of $222 million; partially offset by other investing transactions, net, of $46 million.
Current wording
Net cash used in investing activities was $595 million during fiscal 2025, consisting of the acquisition of Servotronics, Inc. (“Servotronics”) and other acquisitions of businesses aggregating to $419 million and capital expenditures of $222 million; partially offset by other investing transactions inflows of $46 million.
Previous wording
Net cash provided by financing activities was $3,171 million during fiscal 2024. The source of cash was primarily attributable to the net proceeds of short-term and long-term debt, including fees, of $4,965 million plus proceeds from stock option exercises of $245 million; partially offset by special dividend and dividend equivalent payments of $2,038 million.
Current wording
Financing Activities. Net cash provided by financing activities was $1,954 million during fiscal 2026. The source of cash was primarily attributable to the net proceeds of short-term and long-term debt transactions, including fees and other financing costs, aggregating to $4,608 million plus proceeds from stock option exercises of $155 million; partially offset by repurchases of common stock of $2,750 million and dividend equivalent payments of $59 million.
Previous wording
Financing Activities. Net cash used in financing activities was $4,900 million during fiscal 2025. The use of cash was primarily attributable to special dividend and dividend equivalent payments of $9,629 million plus repurchases of common stock of $500 million; partially offset by the net proceeds of short-term and long-term debt, including fees, of $5,063 million plus proceeds from stock option exercises of $166 million.
Current wording
Net cash used in financing activities was $4,900 million during fiscal 2025. The use of cash was attributable to dividend and dividend equivalent payments of $9,629 million plus repurchases of common stock of $500 million; partially offset by the net proceeds of short-term and long-term debt transactions, including fees and other financing costs, aggregating to $5,063 million plus proceeds from stock option exercises of $166 million.
Previous wording
TransDigm has $11,124 million in fully drawn term loans under the Term Loans Facility as of September 30, 2025 and a $910 million revolving credit facility. The Term Loans Facility consists of four tranches of term loans (refer to Note 10, “Debt” in the notes to the consolidated financial statements for information on our term loans).
Current wording
TransDigm has $12,803 million in fully drawn term loans (the “Term Loans Facility”) as of September 30, 2026 and a $910 million revolving credit facility. The Term Loans Facility consists of five tranches of term loans with maturity dates ranging from March 22, 2030 to February 13, 2033, and requires quarterly aggregate principal payments of $32 million. Refer to Note 10, “Debt” in the notes to the consolidated financial statements included herein for information on our term loans.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Below is further information on the significant debt financing transactions occurring in fiscal 2026:
Current report — wording carried from elsewhere
The guarantees of the Subordinated Notes are subordinated in right of payment to all of the guarantors’ existing and future senior indebtedness, rank equally with all of their existing and future senior subordinated indebtedness, and rank senior to all of their future indebtedness that is expressly subordinated to the guarantees of the Subordinated Notes. The Subordinated Notes are structurally subordinated to all of the liabilities of TransDigm Inc.’s non-guarantor subsidiaries.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report — wording carried elsewhere
At various points in fiscal 2025, the Company repurchased, in aggregate, 401,036 shares of common stock at an average price of $1,246.71 per share for a total amount of $500 million.