TransDigm Group (TDG) 10-K risk factor changes: FY2021 vs FY2020

In fiscal year [removed: 2020,] [added: 2021,] no customer individually accounted for 10% or more of the Company’s net sales; however, our top ten customers for fiscal year [removed: 2020] [added: 2021] accounted for approximately [removed: 44%] [added: 42%] of our net sales.

In fiscal year [removed: 2018, two customers] [added: 2020, no customer] individually accounted for [removed: approximately 11% and] 10% [added: or more] of the Company’s net sales.

A material reduction in purchasing by one of our larger customers for any reason, including but not limited to [added: the COVID-19 pandemic, general] economic [added: or aerospace] downturn, decreased production, strike or resourcing, could have a material adverse effect on results of operations, financial position and cash flows.

The successful integration of new businesses, with the most significant recent acquisition being the [removed: Esterline] [added: Cobham Aero Connectivity (“CAC”)] acquisition in [removed: March 2019,] [added: the second quarter of fiscal 2021,] depends on our ability to manage these new businesses and cut excess costs.

As of September 30, [removed: 2020,] [added: 2021,] our total indebtedness, excluding approximately [removed: $39.4] [added: $31] million of letters of credit outstanding, was approximately [removed: $20.0] [added: $20] billion, which was [removed: 124.8%] [added: 117.1%] of our total book capitalization.

As of September 30, [removed: 2020,] [added: 2021,] we had approximately [removed: $520.6] [added: $529] million of unused commitments under our revolving [removed: loan] [added: credit] facility.

- require us to dedicate a substantial portion of our cash [removed: flow] [added: flows] from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital requirements, capital expenditures, acquisitions, research and development efforts and other general corporate requirements;

All of our debt under the senior secured credit facility, which includes $7.4 billion in term loans and a revolving [removed: loan] [added: credit] facility of $760 million, bears interest at variable rates primarily based on the London interbank offered rate (“LIBOR”) for deposits of U.S. dollars.

In order to mitigate the interest rate risk of these variable rate borrowings, we [removed: are] entered into interest rate swap and cap agreements that covers a significant portion of the existing variable rate debt.

For information about our interest rate swap and cap agreements, [removed: see] [added: refer to] Note 21, “Derivatives and Hedging Instruments,” in the notes to the consolidated financial statements included herein.

We are dependent on our [added: executive officers,] senior management team and highly trained employees and any work [removed: stoppage or] [added: stoppage,] difficulty hiring similar [removed: employees] [added: employees, or ineffective succession planning] could adversely affect our business.

The Company’s Board of Directors continually monitors this risk and we believe that the [removed: Board of Director’s] [added: Company’s] succession plan, together with our straightforward strategy, clear value drivers, decentralized nature and the quality of managers running our operating units helps to mitigate this risk.

Our sales to manufacturers of large commercial aircraft, such as [removed: The Boeing Company, Airbus S.A.S,] [added: Boeing, Airbus,] and related OEM suppliers, as well as manufacturers of business jets have historically experienced periodic downturns.

The COVID-19 pandemic has [removed: also] disrupted the global supply chain to a certain [removed: extent.][added: extent and availability of raw materials, particularly electronic parts.]

A number of risks inherent in international operations could have a material adverse effect on our results of operations, including global health crises, [added: Brexit,] currency fluctuations, difficulties in staffing and managing [removed: multi-national] [added: multinational] operations, general economic and political uncertainties and potential for social unrest in countries in which we operate, limitations on our ability to enforce legal rights and remedies, restrictions on the repatriation of funds, change in trade policies, tariff regulation, difficulties in obtaining export and import licenses and the risk of government financed competition.

Companies engaged in supplying defense-related equipment and services to U.S. Government agencies, whether through direct contracts with the U.S. [removed: government] [added: Government] or [removed: a] as a subcontractor to customers contracting with the U.S. [removed: government,] [added: Government,] are subject to business risks specific to the defense industry.

In addition, our defense-related business [removed: is] [added: has been] the subject of an ongoing Congressional inquiry by the House Oversight [removed: Committee.][added: Committee and release of the current OIG audit report may prompt further Congressional inquiries.]

Pricing reviews and government audits, including the audit underway, and the Congressional [removed: inquiry] [added: inquiries] are costly and time consuming for our management and could distract from our ability to effectively manage the business.

Identifiable intangible assets, which primarily include trademarks, trade names, customer relationships, and technology, were approximately [removed: $2.6] [added: $2.8] billion at September 30, [removed: 2020,] [added: 2021,] representing approximately 14% of our total assets.

Goodwill recognized in accounting for the mergers and acquisitions was approximately [removed: $7.9] [added: $8.6] billion at September 30, [removed: 2020,] [added: 2021,] representing approximately [removed: 43%] [added: 44%] of our total assets.

We may be subject to risks relating to changes in [removed: its] [added: our] tax rates or exposure to additional income tax liabilities.

Notwithstanding special cash dividends, of which the most recent declaration by the Company’s Board of Directors occurred on December 20, 2019 in the amount of $32.50 per outstanding share of common stock and [removed: and] cash dividend equivalent payments on options granted under its equity compensation plans, we do not anticipate declaring regular quarterly or annual cash dividends on our common stock or any other equity security in the foreseeable future.

[removed: Because this situation is ongoing and] [added: Longer-term,] because the duration [removed: and severity] of the [removed: outbreak are] [added: pandemic is] unclear, it is difficult to forecast [removed: the] [added: a precise] impact on the Company’s future results.

Furthermore, in light of [removed: our reduction] [added: enacted and any additional reductions] in [added: our] workforce [removed: to align operations with customer demand] [added: as a result of declines in our business] caused by the COVID-19 pandemic, we cannot assure that we will be able to rehire our [removed: entire] workforce [removed: once] [added: as] our business [removed: has recovered.][added: continues to recover.]

Global health crises such as the [removed: current] COVID-19 [removed: pandemic, with the breadth of its impact worldwide,] [added: pandemic] could also cause significant volatility in the market price.

The COVID-19 pandemic is continuing to cause an adverse impact on our employees, operations, supply chain and distribution system and the long-term impact to our business remains unknown.

This is due to the numerous uncertainties that have risen from the pandemic, including the severity of the disease, the duration of the outbreak, the likelihood of resurgences of the outbreak, including due to the emergence and spread of variants, actions that may be taken by governmental authorities in response to the disease, the timing, distribution, efficacy and public acceptance of vaccines, and unintended consequences of the foregoing.

The commercial aerospace industry, in particular, has been significantly disrupted, both domestically and internationally, by the pandemic.

The pandemic has resulted in governments around the world implementing 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.

As a result, demand for travel declined at a rapid pace beginning in the second half of fiscal 2020 and has remained depressed compared to pre-pandemic levels.

However, commercial air travel has increasingly shown signs of recovery in recent quarters with increasing air traffic, primarily in certain domestic markets.

The recovery in international commercial air travel has been slower with international travel only slightly recovered from COVID-19 pandemic lows.

The exact pace and timing of the commercial air travel recovery remains uncertain and is expected to continue to be uneven depending on factors such as trends in the number of COVID-19 infections (e.g., impact of new variants of COVID-19 resurfacing), the timing, distribution, efficacy, and public acceptance of vaccines and easing of quarantines and travel restrictions, among other factors.

We currently expect COVID-19 to continue to cause an adverse impact on our net sales, net income and EBITDA as Defined compared to pre-pandemic levels into

fiscal 2022.

Our ability to continue to manufacture products is highly dependent on our ability to maintain the safety and health of our factory employees.

The ability of our employees to work has been, and may again be significantly impacted by individuals contracting or being exposed to COVID-19.

While we are following the requirements of governmental authorities and taking preventative and protective measures to prioritize the safety of our employees, these measures are not always successful and we have been required to temporarily close facilities or take other measures.

We believe the COVID-19 pandemic has had, and may in the future again have, a material and adverse impact on our consolidated financial position, results of operations and cash flows.

In addition, the impact of the COVID-19 pandemic and any future public health crises that arise could exacerbate the other risks we face.

Our business focuses almost exclusively on the aerospace and defense industry.

During a prolonged period of significant market disruption in the aerospace and defense industry, such as the adverse impact that the COVID-19 pandemic has had and is expected to continue to have on the commercial aerospace market, our business may be disproportionately impacted compared to peer companies that are more diversified in the industries they serve.

In which case, a more diversified company may be able to recover more quickly from significant market disruptions such as the COVID-19 pandemic.

On October 6, 2021, the Company repaid $200 million of the revolving credit facility drawn, increasing the borrowings available under the revolving commitments to $729 million.

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.

As of September 30, 2021, approximately 86% of our total debt was fixed rate debt.

In 2017, the United Kingdom’s Financial Conduct Authority announced that after 2021 it would no longer compel banks to submit the rates required to calculate LIBOR and other interbank offered rates, which have been widely used as reference rates for various securities and financial contracts, including loans, debt and derivatives.

However, for U.S dollar LIBOR, the relevant date has been deferred to at least June 30, 2023 for certain tenors, at which time the LIBOR administrator has indicated that it intends to cease publication of U.S. dollar LIBOR.

Despite this deferral, the LIBOR administrator has advised that no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021.

These actions indicate that the continuation of U.S. dollar LIBOR on the current basis cannot and will not be guaranteed after June 30, 2023.

Moreover, it is possible that U.S. dollar LIBOR will be discontinued or modified prior to June 30, 2023.

In February 2020, in connection with Amendment No. 7 to the Credit Agreement, we amended our Credit Agreement to include a provision for the determination of an alternative reference interest rate.

The discontinuation of LIBOR will also require our derivative agreements to be amended.

Once the alternative interest rate has replaced LIBOR, our future interest expense could be impacted.

If we are unable to effectively provide for the succession of key personnel, senior management and our executive officers, including our President, Chief Executive Officer and Director, our business, results of operations, cash flows and financial condition may be adversely affected.

In recent years, we have been experiencing decreased sales across the commercial OEM sector driven primarily by the decrease in production by Boeing and Airbus related to reduced demand in the commercial aerospace industry from the COVID-19 pandemic, and also in Boeing’s case, the 737 MAX’s grounding and subsequent production slowdown, and airlines deferring or cancelling orders.

The COVID-19 pandemic has continued to disrupt the global supply chain.

We currently are experiencing supply shortages and inflationary pressures for certain components and raw materials that are important to our manufacturing process, particularly electronic parts.

Expected growth in the global economy may exacerbate these pressures on us and our suppliers, and we expect these supply chain challenges and cost impacts to continue for the foreseeable future.

Because we strive to limit the volume of raw materials and component parts on hand, our business could be adversely affected if we were unable to obtain these raw materials and components from our suppliers in the quantities we require or on favorable terms.

Although we believe in most cases that we could identify alternative suppliers, or alternative raw materials or component parts, the lengthy and expensive FAA and OEM certification processes associated with aerospace products could prevent efficient replacement of a supplier, raw material or component part.

Climate-related regulations designed to address climate change may result in additional compliance costs.

Our operations and the products we sell are currently subject to rules limiting emissions and to other climate-related regulations in certain jurisdictions where we operate.

The increased prevalence of global climate change concerns may result in new regulations that may negatively impact us, our suppliers and customers.

We are continuing to evaluate short-, medium- and long-term risks related to climate change.

We incurred approximately $3.1 billion in net new incremental borrowings during fiscal 2020 both for general corporate purposes and as a precautionary response to macroeconomic conditions caused by the COVID-19 pandemic.

In addition, on July 27, 2017, the Financial Conduct Authority (“FCA”) in the United Kingdom (“U.K.”) announced that it would phase out LIBOR as a benchmark by the end of calendar year 2021.

As a result, in February 2020, we amended our senior secured credit facility to incorporate an alternative reference rate effective upon the cessation date of LIBOR.

We will also take the necessary steps to amend our interest rate swap and cap agreements.

The expected cessation of LIBOR may require us to amend certain other agreements and although the Secured Overnight Financing Rate (“SOFR”) is expected to be the alternative rate that replaces LIBOR, we cannot predict what margin adjustments and related terms would be negotiated with our counterparties.

As a result, our interest expense could increase.

A loss of senior management and key personnel, or failure to attract qualified new talent could prevent us from capitalizing on business opportunities, and our operating results and/or market value could be adversely affected.

In particular, commercial and business jet market channel sales have been negatively impacted by the ongoing COVID-19 pandemic.

A number of our manufacturing facilities are located in the greater Los Angeles area, an area known for earthquakes and fires, and are thus vulnerable to damage.

In addition, a number of our manufacturing facilities are located along the Eastern seaboard area susceptible to hurricanes.

In June 2016, the U.K. held a referendum in which voters approved an exit from the European Union (“E.U.”) commonly referred to as “Brexit.” The U.K. subsequently withdrew from the European Union on January 31, 2020, subject to a transition period that is set to end on December 31, 2020.

Although it is unknown what the terms of the U.K.'s relationship with the E.U. will be, it is possible that there will be greater restrictions on imports and exports between the U.K. and E.U. countries and increased regulatory complexities.

These changes could cause disruptions to and create uncertainty surrounding our business and the business of existing and future customers and suppliers as well as have an impact on our employees based in Europe, which could adversely impact our business.

The actual effects of Brexit will depend on any agreements the U.K. makes to retain access to E.U. markets either during a transitional period or more permanently.

Volatility in the equity markets or interest rates could substantially increase our pension costs and required pension contributions.

The Company sponsors qualified defined benefit pension plans.

Certain qualified defined benefit pension plans are funded with trust assets invested in a diversified portfolio of debt and equity securities and other investments.

Among other factors, changes in interest rates, investment returns and the market value of plan assets can (i) affect the level of plan funding; (ii) cause volatility in the net periodic pension cost; and (iii) increase our future contribution requirements.

A significant decrease in investment returns or the market value of plan assets or a significant decrease in interest rates could increase our net periodic pension costs and adversely affect our results of operations.

A significant increase in our contribution requirements with respect to our qualified defined benefit pension plans could have an adverse impact on our cash flows.

The global outbreak of COVID-19 is currently impacting countries, communities, supply chains, and markets.

The COVID-19 pandemic has adversely impacted our commercial OEM and commercial aftermarket sales and will continue to do so for an indeterminate length of time.

The impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot predict the extent to which our business, results of operations, financial condition or cash flows will ultimately be impacted.

However, we currently expect COVID-19 to have a significant adverse impact on our sales, net income and EBITDA as Defined continuing at least into fiscal 2021 under the assumption that the COVID-19 outbreak will adversely affect our non-defense customers and their demand for our products and services for at least the near term.

The COVID-19 pandemic has also disrupted our operations.

The outbreak of COVID-19 has heightened the risk that a significant portion of our workforce will suffer illness or otherwise be unable to work.

Certain of our facilities have experienced temporary disruptions as a result of the COVID-19 pandemic, and we cannot predict whether our facilities will experience more significant disruptions in the future.

Furthermore, our acquisition strategy, which is a key element of our overall business strategy, may be impacted by our efforts to maintain the Company’s liquidity position in response to the COVID-19 pandemic.

Finally, future public health crises are possible and could involve some or all of the risks described above.

*The following discussion of our financial condition and results of operations should be read together with [removed: “Selected Financial Data” and] TD Group’s consolidated financial statements and the related notes included elsewhere in this report.

For fiscal year [removed: 2020,] [added: 2021,] we generated net sales of [removed: $5,103] [added: $4,798] million, gross profit of [removed: $2,647] [added: $2,513] million or [removed: 51.9%] [added: 52.4%] of [added: net] sales, and net income attributable to TD Group of [removed: $699] [added: $680] million.

[removed: While the COVID-19 pandemic has significantly impacted] [added: Historically and as] our [removed: operations in] [added: business continues to recover from] the [removed: short-term,] [added: pandemic,] we believe we have achieved steady, long-term growth in sales and improvements in operating performance since our formation in 1993 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 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 [removed: long term.][added: long-term.]

The integration of certain acquisitions into our existing businesses combined with implementing our proven operating strategy has historically resulted in improvements [removed: of] [added: in] the financial performance of the acquired business.

As of the date of this report, we have successfully acquired approximately [removed: 85] [added: 86] businesses and product lines since our formation in 1993.

Acquisitions and divestitures during the most recent three fiscal years are [removed: more fully] described in Note 2, “Acquisitions and Divestitures,” in the notes to the consolidated financial statements included herein.

[removed: The] [added: We currently expect] COVID-19 [removed: pandemic caused a significant] [added: to continue to cause an] adverse impact on our [added: net] sales, net income and EBITDA as Defined [removed: for fiscal 2020 and is expected to continue] [added: compared] to [removed: do so] [added: pre-pandemic levels] into fiscal [removed: 2021.][added: 2022.]

[removed: Longer term,] [added: Longer-term,] because the duration of the pandemic is unclear, it is difficult to forecast a precise impact on the Company’s future results.

For the fiscal year ended September 30, [removed: 2020,] [added: 2021,] COVID-19 restructuring costs incurred were approximately [removed: $46] [added: $36] million, of which [removed: $37] [added: $26] million was recorded in cost of sales and [removed: $9] [added: $10] million was recorded in selling and administrative expenses.

Additionally, the Company incurred approximately [removed: $5] [added: $4] million in incremental costs related to the pandemic that are not expected to recur once the pandemic has subsided and are clearly separable from normal operations (e.g., additional cleaning and disinfecting of facilities by contractors above and beyond normal requirements, personal protective [removed: equipment, etc.).][added: equipment).]

As of September 30, [removed: 2020,] [added: 2021,] the restructuring accrual associated with the costs incurred in response to the COVID-19 pandemic was approximately [removed: $13] [added: $19] million.

[removed: The] [added: In fiscal 2022, the] Company [removed: expects to] [added: may] incur [removed: and pay] additional restructuring [added: and incremental] costs [removed: during fiscal 2021] related to the COVID-19 pandemic though at a reduced level in comparison to fiscal [added: 2021 and] 2020.

Critical Accounting [removed: Policies][added: Policies and Estimates]

Revenue [removed: Recognition:] [added: Recognition –] Revenue is recognized from the sale of products when control transfers to the customer, which is demonstrated by our right to payment, a transfer of title, a transfer of the risk and rewards of ownership, or the customer acceptance, but most frequently upon shipment where the customer obtains physical possession of the goods.

[removed: Inventories:] [added: Inventories –] Inventories are stated at the lower of cost or net realizable value.

[removed: Although management believes that the Company’s estimates of excess and obsolete inventory are reasonable,] [added: However,] actual results may differ materially from the estimates and additional provisions may be required in the future.

In [removed: addition, in] accordance with industry practice, all inventories are classified as current assets as all inventories are available and necessary to support current sales, even though a portion of the inventories may not be sold within one year.

Goodwill and Other Intangible [removed: Assets:] [added: Assets –] In accordance with ASC 805, “Business Combinations,” the Company uses the acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition.

Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, revenue growth [removed: rates,] [added: rates and EBITDA margins,] discount rates, customer attrition rates, royalty rates, asset lives and market multiples, among other items.

U.S. GAAP requires that the annual, and any interim, [added: goodwill] impairment assessment be performed at the reporting unit level.

The key assumptions used in the discounted cash flow valuation model for impairment testing includes discount rates, [added: revenue] growth [removed: rates,] [added: rates and EBITDA margins,] cash flow projections and terminal value rates.

Given the [added: continued] adverse global economic and market conditions attributable to the COVID-19 pandemic, particularly as it pertains to the commercial [removed: sector of the] aerospace [removed: and defense industry,] [added: sector,] the Company [removed: determined that an interim] [added: continues to monitor for any indicators of] impairment [removed: evaluation] of goodwill and indefinite-lived intangible [removed: assets was necessary as of March 28, 2020 for certain reporting units in which it was concluded a potential impairment existed.][added: assets.]

The Company [added: also] utilized a third party valuation firm to assist in the determination of the WACC.

The Company had [removed: 49] [added: 46] reporting units with goodwill [added: and 43 reporting units with indefinite-lived intangible assets] as of the first day of the fourth quarter of fiscal [removed: 2020,] [added: 2021,] the date of the annual impairment test.

Based on its initial qualitative assessment over each of the reporting units, the Company identified [removed: 19] [added: 16] reporting units to test for impairment using [removed: Step 1 of the] [added: a] quantitative [removed: test.][added: test for both goodwill and indefinite-lived intangible assets.]

The estimated fair value of each of these reporting units was in excess of its respective carrying value, and therefore, no [removed: goodwill] impairment was [removed: recorded.][added: recorded on goodwill or indefinite-lived intangible assets.]

Stock-Based [removed: Compensation:] [added: Compensation –] The cost of the Company’s stock-based compensation is recorded in accordance with ASC 718, “Stock Compensation.” The Company uses a Black-Scholes pricing model to estimate the grant-date fair value of the stock options awarded.

If determined to be a modification, the Black-Scholes pricing model is updated as of the date of the modification resulting in a cumulative [removed: catch up] [added: catch-up] to expense.

Income [removed: Taxes:] [added: Taxes –] The Company estimates income taxes in each jurisdiction in which it operates.

| | | | Fiscal Years Ended September 30, | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Net sales | | | $ | [removed: 5,103 | | | | | 100.0 | | % | | | | $ | 5,223] [added: 4,798] | | | | | 100.0 | | % | | | | $ | [removed: 3,811] [added: 5,103] | | | | | 100.0 | | % |

| Cost of sales | | | [removed: 2,456 | | | | | | 48.1 | | % | | | | 2,414] [added: 2,285] | | | | | | [removed: 46.2] [added: 47.6] | | % | | | | [removed: 1,634] [added: 2,456] | | | | | | [removed: 42.9] [added: 48.1] | | % |

| Selling and administrative expenses | | | [removed: 727 | | | | | | 14.2 | | % | | | | 748] [added: 685] | | | | | | 14.3 | | % | | | | [removed: 450] [added: 727] | | | | | | [removed: 11.8] [added: 14.2] | | % |

| Amortization of intangible assets | | | [removed: 169 | | | | | | 3.3 | | % | | | | 135] [added: 137] | | | | | | [removed: 2.6] [added: 2.9] | | % | | | | [removed: 72] [added: 169] | | | | | | [removed: 1.9] [added: 3.3] | | % |

| Income from operations | | | [removed: 1,751 | | | | | | 34.3 | | % | | | | 1,926] [added: 1,691] | | | | | | [removed: 36.9] [added: 35.2] | | % | | | | [removed: 1,655] [added: 1,751] | | | | | | [removed: 43.4] [added: 34.3] | | % |

| Interest [removed: expense—net | | | 1,029 | | | | | | 20.2 | | % |] [added: expense, net] | | | [removed: 859] [added: 1,059] | | | | | | [removed: 16.4] [added: 22.1] | | % | | | | [removed: 663] [added: 1,029] | | | | | | [removed: 17.4] [added: 20.2] | | % |

| Refinancing costs | | | [removed: 28 | | | | | | 0.5 | | % | | | | 3] [added: 37] | | | | | | [removed: 0.1] [added: 0.8] | | % | | | | [removed: 6] [added: 28] | | | | | | [removed: 0.2] [added: 0.5] | | % |

| Other [removed: (income) expense | | | (46) | | | | | | (0.9) | | % |] [added: income] | | | [removed: 1] [added: (51)] | | | | | | [removed: —] [added: (1.1)] | | % | | | | [removed: —] [added: (46)] | | | | | | [removed: —] [added: (0.9)] | | % |

| Income tax provision | | | [removed: 87 | | | | | | 1.7 | | % | | | | 222] [added: 34] | | | | | | [removed: 4.3] [added: 0.7] | | % | | | | [removed: 24] [added: 87] | | | | | | [removed: 0.6] [added: 1.7] | | % |

In the case of larger acquisitions that consists of multiple business units (such as the Esterline acquisition), we may pursue opportunities to divest certain acquired business units that are not in line with our long-term acquisition strategy.

The COVID-19 pandemic is continuing to cause an adverse impact on our employees, operations, supply chain and distribution system and the long-term impact to our business remains unknown.

This is due to the numerous uncertainties that have risen from the pandemic, including the severity of the disease, the duration of the outbreak, the likelihood of resurgences of the outbreak, including due to the emergence and spread of variants, actions that may be taken by governmental authorities in response to the disease, the continued efficacy and public acceptance of vaccines, and unintended consequences of the foregoing.

The commercial aerospace industry, in particular, has been significantly disrupted, both domestically and internationally, by the pandemic.

The pandemic has resulted in governments around the world implementing 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.

As a result, demand for travel declined at a rapid pace beginning in the second half of fiscal 2020 and has remained depressed compared to pre-pandemic levels.

However, commercial air travel has increasingly shown signs of recovery in recent months with increasing air traffic, primarily in certain domestic markets.

The recovery in international commercial air travel has been slower with international travel only slightly recovered from COVID-19 pandemic lows.

The exact pace and timing of the commercial air travel recovery remains uncertain and is expected to continue to be uneven depending on factors such as trends in the number of COVID-19 infections (e.g., impact of new variants of COVID-19 resurfacing), the continued efficacy and public acceptance of vaccines and easing of quarantines and travel restrictions, among other factors.

| Gain on sale of businesses, net | | | (69) | | | | | | (1.4) | | % | | | | — | | | | | | — | | % |

| Income from continuing operations attributable to TD Group | | | 680 | | | | | | 14.2 | | % | | | | 652 | | | | | | 12.8 | | % |

| Net income applicable to TD Group common stockholders | | | $ | 607 | | (1) | | | 12.7 | | % | | | | $ | 514 | | (1) | | | 10.1 | | % |

| Earnings per share: | | | | | | | | | | | | | | | | | | | | | | | |

| Earnings per share from continuing operations—basic and diluted | | | $ | 10.41 | | (2) | | | | | | | | | $ | 8.14 | | (2) | | | | | |

| Earnings per share from discontinued operations—basic and diluted | | | — | | | (2) | | | | | | | | | 0.82 | | | (2) | | | | | |

| Earnings per share | | | $ | 10.41 | | | | | | | | | | | $ | 8.96 | | | | | | | |

| Cash dividends paid per common share | | | $ | — | | | | | | | | | | | $ | 32.50 | | | | | | | |

| Weighted-average shares outstanding—basic and diluted | | | 58.4 | | | | | | | | | | | | 57.3 | | | | | | | | |

| Other Data: | | | | | | | | | | | | | | | | | | | | | | | |

| EBITDA | | | $ | 2,027 | | (3) | | | | | | | | | $ | 2,052 | | (3) | | | | | |

| EBITDA As Defined | | | $ | 2,189 | | (3) | | | 45.6 | | % | | | | $ | 2,278 | | (3) | | | 44.6 | | % |

(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 equivalent payments of $73 million and $185 million for the fiscal years ended September 30, 2021 and 2020.

(2)Earnings per share from continuing operations is calculated by dividing net income applicable to TD Group common stockholders, excluding income from discontinued operations, net of tax, by the basic and diluted weighted average common shares outstanding.

Earnings per share from discontinued operations is calculated by dividing income from discontinued operations, net of tax, by the basic and diluted weighted average common shares outstanding.

(3)Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information and limitations regarding these non-GAAP financial measures, including a reconciliation to the comparable GAAP financial measure.

| Organic sales | | | $ | 4,520 | | | | | $ | 4,900 | | | | | $ | (380) | | | | | (7.4) | | % |

| Acquisition and divestiture sales | | | 278 | | | | | | 203 | | | | | | 75 | | | | | | 1.4 | | % |

| Net sales | | | $ | 4,798 | | | | | $ | 5,103 | | | | | $ | (305) | | | | | (6.0) | | % |

Organic sales represent sales from existing businesses owned by the Company, excluding sales from acquisitions and divestitures.

Divestiture sales represent sales from businesses divested in fiscal 2021.

Acquisition and divestiture sales are excluded from organic sales due to the variability in the nature, timing and extent of acquisitions and divestitures and resulting variable impact on underlying trends.

Both commercial OEM and aftermarket sales increased in the second half of fiscal 2021 compared to the previous year’s comparable period.

The increase in defense sales and non-aerospace sales in fiscal 2021 is primarily driven by the OEM market.

The increase in acquisition and divestiture sales for the fiscal year ended September 30, 2021 is primarily attributable to the acquisition of Cobham Aero Connectivity (“CAC”) in the second quarter of fiscal 2021 and the divestitures of ScioTeq and TREALITY Simulation Visual Systems ("ScioTeq and TREALITY") and Technical Airborne Components (“TAC”), all of which were completed in the third quarter of fiscal 2021.

Refer to Note 2, “Acquisitions and Divestitures,” in the notes to the consolidated financial statements included herein for further information on the businesses acquired and divested by the Company in fiscal years 2020 and 2021.

| % of net sales | | | 47.5 | | % | | | | 47.3 | | % | | | | | | | | | | | | |

| COVID-19 pandemic restructuring costs | | | 26 | | | | | | 37 | | | | | | (11) | | | | | | (29.7) | | % |

| Foreign currency losses | | | 11 | | | | | | 22 | | | | | | (11) | | | | | | (50.0) | | % |

| % of net sales | | | 0.2 | | % | | | | 0.4 | | % | | | | | | | | | | | | |

| Acquisition integration costs | | | 4 | | | | | | 10 | | | | | | (6) | | | | | | (60.0) | | % |

As a result of the COVID-19 pandemic, many of our businesses have taken the opportunity to explore new business opportunities by working on developing highly engineered solutions for emerging needs arising from the pandemic.

Product solutions currently being explored include anti-viral or antimicrobial technology, air purification, and touchless technologies, among others.

This is under the assumption that the COVID-19 pandemic will continue to adversely impact customer demand for all market channels, with commercial OEM and commercial aftermarket being the most adversely impacted due to the pandemic's impact on air travel worldwide.

The defense market channel is also impacted to a lesser extent due to certain supply chain disruptions as well as the "stay at home" orders, quarantines, etc. impacting the government procurement workforce which has slowed production and/or orders.

Also, government funding reprioritization such as shifting funds to efforts to combat the impact of the pandemic provides for uncertainty.

The magnitude of the impact of COVID-19 remains unpredictable and we, therefore, continue to anticipate potential supply chain disruptions, employee absenteeism and short-term suspensions of manufacturing facilities, and additional health and safety costs related to the COVID-19 pandemic that could unfavorably impact our business.

Some of the actions implemented included: flexible work-from-home scheduling; alternate shift schedules; pre-shift temperature screenings, where allowed by law; social distancing; appropriate personal protective equipment; facility deep cleaning; and paid quarantine time for impacted employees.

Material actions to reduce costs included: (1) reducing its workforce to align operations with customer demand; (2) implementing unpaid furloughs and salary reductions; and (3) delaying non-essential capital projects and minimizing discretionary spending.

The Company continues to 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.

Historically, changes in estimates in the net realizable value of inventories have not been significant.

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 results of this test indicated the fair value exceeded carrying value for all reporting units tested.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2020 | | | | | | 2020 % of Sales | | | | | | 2019 | | | | | | 2019 % of Sales | | | | | | 2018 | | | | | | 2018 % of Sales | | |

| Net income | | | 700 | | | | | | 13.7 | | % | | | | 892 | | | | | | 17.1 | | % | | | | 957 | | | | | | 25.1 | | % |

| Organic sales | | | $ | 4,404 | | | | | $ | 5,127 | | | | | $ | (723) | | | | | (13.8) | | % |

| Acquisition sales | | | 699 | | | | | | 96 | | | | | | 603 | | | | | | 11.5 | | % |

| | | | $ | 5,103 | | | | | $ | 5,223 | | | | | $ | (120) | | | | | (2.3) | | % |

Commercial OEM sales were also adversely impacted by the 737 MAX production slowdown.

The increase in defense sales is primarily attributable to sales growth in the Power & Control segment ($59 million).

The acquisition sales in the table above were attributable to the sales recorded by the Esterline businesses.

| % of total sales | | | 47.3 | | % | | | | 45.1 | | % | | | | | | | | | | | | |

| Foreign currency loss (gain) | | | 22 | | | | | | (5) | | | | | | 27 | | | | | | 540.0 | | % |

| % of total sales | | | — | | % | | | | 1.5 | | % | | | | | | | | | | | | |

| % of total sales | | | 48.1 | | % | | | | 46.2 | | % | | | | | | | | | | | | |

| Gross profit | | | $ | 2,647 | | | | | $ | 2,809 | | | | | $ | (162) | | | | | (5.8) | | % |

The increase in the dollar amount of cost of sales during the fiscal year ended September 30, 2020 was primarily due to a full fiscal year of ownership of the Esterline businesses in fiscal 2020 (compared to approximately 6.5 months of ownership in fiscal 2019) in addition to the other factors summarized above.

The decrease in the gross profit percentage is primarily driven by the sales mix, specifically, lower commercial aftermarket sales, the dilutive effect a full year of Esterline sales have on the gross profit percentage (as integration activities associated with the three core value drivers continued into fiscal 2020), COVID-19 restructuring charges and foreign currency losses, partially offset by a reduction in inventory acquisition accounting adjustments.

| % of total sales | | | 0.4 | | % | | | | 1.5 | | % | | | | | | | | | | | | |

Partially offsetting the decrease in selling and administrative expenses is an increase in selling and administrative expenses as a result of a full fiscal year of ownership of the Esterline businesses in fiscal 2020 (compared to approximately 6.5 months of ownership in fiscal 2019).

The increase in amortization expense of $34 million was primarily due to the amortization expense on the definite-lived intangible assets recorded in connection with the fiscal 2019 acquisition of Esterline.

The increase in the 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 2026 Secured Notes and the issuance of $550 million in 7.50% 2027 Notes and the activity in fiscal 2020 consisting of the issuance of $2.65 billion in 5.50% 2027 Notes, $1.1 billion in 2025 Secured Notes, $400 million in 6.25% 2026 New Notes and a $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% Senior Subordinated Notes (the “2020 Notes”) in the second quarter of fiscal 2019 and $1.15 billion in 6.00% Senior Subordinated Notes (the “2022 Notes”) in the first quarter of fiscal 2020.

Refinancing costs of $3 million were recorded for the fiscal year ended September 30, 2019 and primarily related to the debt financing activities that occurred in the second quarter of fiscal 2019.

The Company’s lower effective tax rate for the fiscal year ended September 30, 2020 was primarily due to incrementally higher excess tax benefits related to stock-based compensation along with an increase of the IRC 163(j) interest disallowance limitations from 30% to 50% of adjusted taxable income as modified by the CARES Act.

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.

In February 2020, in connection with Amendment No. 7 to the Credit Agreement, we amended [removed: the] [added: our] Credit Agreement to include a provision for the determination of an alternative reference interest rate.

At September 30, [removed: 2020,] [added: 2021,] we had borrowings under our term loans of approximately [removed: $7,449] [added: $7,374] million that were subject to interest rate risk.

As of September 30, [removed: 2020,] [added: 2021,] approximately [removed: 84%] [added: 86%] of our [added: total] debt was fixed rate debt.

The effect of a hypothetical one percentage point increase in interest rates would increase the annual interest costs under our term loans by approximately $75 million based on the amount of outstanding borrowings at September 30, [removed: 2020.][added: 2021.]

The weighted average interest rate on the [removed: $7,449] [added: $7,374] million of borrowings under our term loans on September 30, [removed: 2020] [added: 2021] was [removed: 3.2%.][added: 3.4%.]

For information about the fair value of the aggregate principal amount of borrowings under our term loans and the fair value of the Notes, [removed: see] [added: refer to] Note 20, “Fair Value Measurements,” in the notes to the consolidated financial statements included herein.

A 10% change in foreign currency exchange rates would not have resulted in a material impact to net income for the fiscal [removed: years] [added: year] ended September 30, [removed: 2020, 2019 and 2018.][added: 2021.]

The information required by this Item is contained on pages [removed: F-1] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_100)[1](#if65be9a7604f45ad94b1b37bcb73f17d_100)] through [removed: F-48] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_220)[46](#if65be9a7604f45ad94b1b37bcb73f17d_220)] of this Report.

However, for U.S dollar LIBOR, the relevant date has been deferred to at least June 30, 2023 for certain tenors, at which time the LIBOR administrator has indicated that it intends to cease publication of U.S. dollar LIBOR.

Despite this deferral, the LIBOR administrator has advised that no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021.

These actions indicate that the continuation of U.S. LIBOR on the current basis cannot and will not be guaranteed after June 30, 2023.

Moreover, it is possible that U.S. LIBOR will be discontinued or modified prior to June 30, 2023.

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.

The foreign currency forward exchange contracts entered into by the Company are described in Note 21, “Derivatives and Hedging Activities,” in the notes to the consolidated financial statements included herein.

Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the SOFR.

TD Group, through its wholly-owned subsidiary, [removed: TransDigm,] [added: TransDigm] Inc., is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today.

We estimate that approximately 90% of our net sales for fiscal year [removed: 2020] [added: 2021] were generated by proprietary products.

For fiscal year [removed: 2020,] [added: 2021,] we estimate that we generated approximately 80% of our net sales from products in which we are the sole source provider.

We estimate that approximately [removed: 49%] [added: 50%] of our net sales in fiscal year [removed: 2020] [added: 2021] were generated from aftermarket [added: net] sales, the vast majority of which come from the commercial and military aftermarkets.

Historically, these aftermarket revenues have produced a higher gross [removed: margin] [added: profit] and [added: have] been more stable than [added: net] sales to original equipment manufacturers (“OEMs”).

Our major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, [removed: aircraft audio] [added: engineered audio, radio and antenna] systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems.

As a result, demand for travel declined at a rapid pace [added: beginning in the second half of fiscal 2020] and has remained [removed: depressed.][added: depressed compared to pre-pandemic levels.]

The commercial aerospace industry, in particular, has been significantly disrupted, both domestically and [removed: internationally.][added: internationally, by the pandemic.]

[removed: The] [added: However, the] impact of COVID-19 [added: on the commercial aerospace market] is fluid and continues to [removed: evolve, and the shape and speed of recovery for the commercial aerospace industry remains uncertain.][added: evolve.]

Since the early days of the [added: COVID-19] pandemic, we have been following guidance from the World Health Organization and the U.S. Center for Disease Control to protect employees and prevent the spread of the virus within all of our facilities globally.

[removed: As] [added: For example, as] a result of the COVID-19 pandemic, many of our businesses have taken the opportunity to explore new business opportunities by working on developing highly engineered solutions for emerging needs arising from the [removed: pandemic.][added: pandemic and providing product offerings that could help the industry recover.]

Product solutions currently [added: developed or] being explored include anti-viral or antimicrobial technology, air purification, and touchless technologies, among others.

Major product offerings include engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, specialized and advanced cockpit displays, [removed: aircraft audio] [added: engineered audio, radio and antenna] systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation, lighting and control technology and parachutes.

Major product offerings include [removed: headsets for high-noise, medium-noise, and dismounted applications,] seat belts and safety restraints for ground transportation applications, mechanical/electro-mechanical actuators and controls for space applications, hydraulic/electromechanical actuators and fuel valves for [removed: land based] [added: land-based] gas turbines, and refueling systems for heavy equipment used in mining, construction and other industries and turbine controls for the energy and oil and gas markets.

The Company defines EBITDA As Defined as earnings before interest, taxes, depreciation and amortization plus certain non-operating items recorded as corporate expenses including [removed: refinancing costs, acquisition-related costs, transaction-related costs, foreign currency gains and losses, and] non-cash compensation charges incurred in connection with the Company’s stock incentive [removed: plans.][added: plans, restructuring costs related to the Company's cost reduction measures in response to the COVID-19 pandemic, foreign currency gains and losses, acquisition-integration costs, acquisition and divestiture transaction-related expenses, and refinancing costs.]

[removed: Acquisition-related] [added: Acquisition and divestiture-related] costs represent accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold; costs incurred to integrate acquired businesses and product lines into the Company’s operations, facility relocation costs and other acquisition-related costs; transaction-related costs [added: for both acquisitions and divestitures] comprising deal fees; legal, financial and tax diligence expenses and valuation costs that are required to be expensed as incurred and other acquisition accounting adjustments.

For financial information about our segments, [removed: see] [added: refer to] Note 17, “Segments,” in the notes to the consolidated financial statements included herein.

Each business unit manager is expected to grow the sales and profitability of the products for which he or she is responsible and to achieve the targeted annual level of bookings, [added: net] sales, new business and profitability for such products.

[removed: Our major distributors are] Boeing Distribution [removed: Inc. (formerly known as Aviall, Inc.) and] [added: Services, Inc.,] Satair A/S (a subsidiary of Airbus [removed: S.A.S.).][added: S.A.S.) and Seal Dynamics (a subsidiary of HEICO Corporation), among others, are our major distributors.]

We maintain approximately [removed: 105] [added: 100] manufacturing facilities.

Our engineering costs are recorded in cost of sales and in selling and administrative expenses [removed: in] [added: within] our consolidated statements of income.

Research and development costs are recorded in selling and administrative expenses [removed: in] [added: within] our consolidated statements of income.

The aggregate of engineering expense and research and development expense represents approximately 11% of our operating units’ aggregate costs, or approximately 6% of our consolidated net sales for fiscal year [removed: 2020.][added: 2021.]

Refer to Note 3, “Summary of Significant Accounting Policies,” in the notes to the consolidated financial statements included herein with respect to [added: the] total costs of research and development.

We predominantly serve customers in the commercial, regional, business jet and general aviation aftermarket, which accounted for approximately [removed: 26%] [added: 23%] of [added: our] net sales for fiscal year [removed: 2020;] [added: 2021;] the commercial aerospace OEM market, comprising large commercial transport manufacturers and regional and business jet manufacturers, which accounted for approximately [removed: 26%] [added: 20%] of [added: our] net sales for fiscal year [removed: 2020;] [added: 2021;] and the defense market, which accounted for approximately [removed: 43%] [added: 50%] of [added: our] net sales for fiscal year [removed: 2020.][added: 2021.]

Non-aerospace [added: net] sales comprised approximately [removed: 5%] [added: 7%] of our net sales for fiscal year [removed: 2020.][added: 2021.]

The significant adverse impact of the COVID-19 pandemic on the commercial aerospace market channels has led to the defense market comprising a greater percentage of our net sales in fiscal [added: years 2021 and] 2020 [removed: than typical.][added: compared to pre-pandemic historical levels.]

In [removed: our prior five] fiscal [removed: years, fiscal] [added: years] 2015 through [removed: fiscal] 2019, [added: representing the five fiscal years prior to the pandemic,] defense market [added: net] sales ranged from [removed: 29] [added: 29%] to 37% of [added: total] net sales.

[removed: When] [added: As] the commercial aerospace industry recovers from the disruption caused by the COVID-19 pandemic, we would expect defense market [added: net] sales to account for a percentage of [added: total] net sales that is relatively in line with our historical [removed: results] [added: levels] prior to the COVID-19 pandemic.

Our top ten customers for fiscal year [removed: 2020] [added: 2021] accounted for approximately [removed: 44%] [added: 42%] of our net sales.

None of our customers individually accounted for greater than 10% of our [added: net] sales for fiscal year [removed: 2020.][added: 2021.]

The commercial aerospace industry, in particular, has been significantly [removed: disrupted by the pandemic,] [added: disrupted,] both domestically and [removed: internationally.][added: internationally, by the pandemic.]

The commercial aerospace industry [removed: has] experienced a steep decline in RPMs [added: beginning] in [added: the second half of our fiscal] 2020 due to the pandemic’s impact on worldwide air travel [removed: demand.][added: demand and RPMs remained depressed in fiscal 2021 when compared to pre-pandemic levels.]

Also, as a result of the pandemic and decreased demand in commercial air travel, the commercial OEM sector has experienced reductions in commercial OEM production rates, including reductions at the two largest commercial OEMs, The Boeing Company [added: (“Boeing”)] and Airbus [removed: S.A.S, in addition to various airlines deferring or cancelling orders.][added: S.A.S. (“Airbus”).]

At times, declines in [added: net] sales in one channel have been offset by increased [added: net] sales in another channel.

However, due to differences between the profitability of our products sold to OEM and aftermarket customers, variation in product mix can cause variation in gross [removed: margin.][added: profit.]

There are also fluctuations in OEM and aftermarket ordering and delivery requests from quarter-to-quarter, as well as variations in product mix from quarter-to-quarter, that may cause positive or negative variations in gross profit [removed: margins] since commercial aftermarket [added: net] sales have historically produced a higher gross [removed: margin] [added: profit] than [added: net] sales to commercial OEMs.

[removed: The] [added: Although we remain cautiously optimistic that the global vaccination efforts will continue to progress and positively influence the markets we serve, the] magnitude of the impact of COVID-19 [removed: on our market channels, particularly commercial OEM and commercial aftermarket,] remains unpredictable and [removed: we, therefore,] [added: we] continue to anticipate potential supply chain disruptions, employee absenteeism and short-term suspensions of manufacturing facilities, and additional health and safety costs related to the COVID-19 pandemic that could unfavorably impact our business.

[removed: Longer term,] [added: Longer-term,] because [removed: the duration] of [removed: the pandemic is unclear,] [added: these factors,] it is difficult to forecast a precise impact on [removed: our] [added: the Company’s] future results.

As a result of the COVID-19 pandemic and the stringent measures implemented to help control the spread of the virus, demand for air travel declined at a rapid pace and has remained [removed: depressed.][added: depressed compared to pre-pandemic levels.]

Each of these product offerings is composed of many individual products that are typically customized to meet the needs of a particular aircraft platform or customer.

The COVID-19 pandemic has continued to cause a significant adverse impact on our net sales, net income and EBITDA As Defined when compared to pre-pandemic levels.

COVID-19 was first reported in December 2019 and, since being declared as a pandemic by the World Health Organization in March 2020, has dramatically impacted the global health and economic environment, including millions of confirmed cases, business slowdowns or shutdowns, government challenges and market volatility.

However, commercial air travel has increasingly shown signs of recovery in recent months with increasing air traffic, primarily in certain domestic markets.

The recovery in international commercial air travel has been slower with international travel only slightly recovered from COVID-19 pandemic lows.

The exact pace and timing of the commercial air travel recovery remains uncertain and is expected to continue to be uneven depending on factors such as trends in the number of COVID-19 infections (e.g., impact of new variants of COVID-19 resurfacing), the continued efficacy of vaccines (particularly against any newly-emerging variants of COVID-19) and easing of quarantines and travel restrictions, among other factors.

We currently expect COVID-19 to continue to cause an adverse impact on our net sales, net income and EBITDA as Defined compared to pre-pandemic levels into fiscal 2022.

Within the United States, our business has been designated as “essential,” which has allowed us to continue to serve our customers throughout the COVID-19 pandemic; nonetheless, the pandemic has disrupted our operations.

Our ability to continue to manufacture products is highly dependent on our ability to maintain the safety and health of our factory employees.

The ability of our employees to work has been, and may again, be significantly impacted by individuals contracting or being exposed to COVID-19.

While we are following the requirements of governmental authorities and taking preventative and protective measures to prioritize the safety of our employees, these measures are not always successful, and we have been required at times to temporarily close facilities or take other partial shutdown measures.

Furthermore, in light of enacted and any additional reductions in our workforce as a result of declines in our business caused by the COVID-19 pandemic, we cannot assure that we will be able to rehire our workforce as our business continues to recover.

Finally, though this appears to be lower risk at the present time, our acquisition strategy, which is a key element of our overall business strategy, may be impacted by our efforts to maintain the Company’s cash liquidity position in response to the COVID-19 pandemic depending on the duration of the pandemic and its impact on our cash flows.

COVID-19 restructuring costs represent actions taken by the Company to reduce its workforce to align with customer demand, as well as incremental costs related to the pandemic that are not expected to recur once the pandemic has subsided and are clearly separable from normal operations (e.g., additional cleaning and disinfecting of facilities by contractors above and beyond normal requirements, personal protective equipment).

Although the commercial aerospace industry has shown signs of recovery in recent months, with increasing commercial air travel demand and both Boeing and Airbus disclosing potential OEM production rate increases for calendar 2022, the impact of COVID-19 continues to be fluid and the shape and speed of the recovery for the commercial aerospace industry remains uncertain.

Although worldwide RPMs are still significantly lower than pre-pandemic levels, worldwide RPMs have been steadily recovering.

Commercial air travel has increasingly shown signs of recovery in recent months with increasing air traffic, primarily in certain domestic markets, and parked aircraft returning to service.

The pace of the international air travel traffic recovery has been slower and international RPMs have only slightly recovered from pandemic lows.

There is potential for improved international recovery moving forward as vaccinations increase worldwide and government-imposed travel restrictions are eased.

Current industry consensus indicates that worldwide RPMs will continue to recover in 2022.

We expect demand for our commercial OEM products to continue to be reduced in the short-term.

However, the commercial OEM market is showing initial signs of recovery with airlines returning to the commercial OEMs to take planes or place orders, along with Boeing and Airbus disclosing potential OEM production rate increases for calendar 2022.

Also, government funding reprioritization such as shifting funds to efforts to combat the impact of the pandemic provides for further unpredictability in the military spending outlook.

The defense aerospace market has been impacted by the COVID-19 pandemic to a lesser extent than the commercial aerospace market.

Uncertainty remains in the COVID-19 pandemic recovery, but we do not currently expect any significant unfavorable impact on our defense aerospace business related to the COVID-19 pandemic.

In fiscal years 2015 through 2019, representing the five fiscal years prior to the pandemic, defense market net sales ranged from 29% to 37% of total net sales.

As the commercial aerospace industry recovers from the disruption caused by the COVID-19 pandemic, we would expect defense market net sales to account for a percentage of total net sales that is relatively in line with our historical levels prior to the COVID-19 pandemic.

The COVID-19 pandemic has disrupted the global supply chain to a certain extent and availability of raw materials, particularly electronic parts.

Because we strive to limit the volume of raw materials and component parts on hand, our business could be adversely affected if we were unable to obtain these raw materials and components from our suppliers in the quantities we require or on favorable terms.

Although we believe in most cases that we could identify alternative suppliers, or alternative raw materials or component parts, the lengthy and expensive FAA and OEM certification processes associated with aerospace products could prevent efficient replacement of a supplier, raw material or component part.

The Company's products are manufactured, marketed and sold using a portfolio of patents, trademarks, licenses, and other forms of intellectual property, some of which expire in the future.

The Company develops and acquires new intellectual property on an ongoing basis.

Based on the broad scope of the Company’s product lines, management believes that the loss or expiration of any single intellectual property right would not have a material effect on our consolidated financial statements.

Compliance with federal, state, local and foreign environmental laws during fiscal 2021 had no material impact on our capital expenditures or results of operations.

Based upon consideration of currently available information, we believe liabilities for environmental matters will not have a material adverse impact on our consolidated financial statements, but we cannot assure that material environmental liabilities may not arise in the future.

For further information on environmental-related risks, including climate change, refer to Item 1A.

“Risk Factors.”

*Talent Development*

We consider our employees to be our most valuable asset.

The Company actively recruits for MDP candidates at colleges and universities across the U.S. to ensure we are reaching a large and diverse pool of candidates.

In December 2019, a novel strain of coronavirus ("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 exact timing and pace of the recovery is indeterminable as certain markets have reopened, some of which have since experienced a resurgence of COVID-19 cases, while others, particularly international markets, remain closed or are enforcing extended quarantines.

Governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the impact of COVID-19.

We took immediate and aggressive action to minimize the spread of COVID-19 in our workplaces and reduce costs.

Some of the actions implemented include: flexible work-from-home scheduling; alternate shift schedules; pre-shift temperature screenings, where allowed by law; social distancing; appropriate personal protective equipment; facility deep cleaning; and paid quarantine time for impacted employees.

Material actions to reduce costs included: (1) reducing our workforce to align operations with customer demand; (2) implementing unpaid furloughs and salary reductions; and (3) delaying non-essential capital projects and minimizing discretionary spending.

At the same time, we addressed the ongoing needs of our business to continue to serve our customers.

The COVID-19 pandemic has resulted in governments around the world implementing 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.

As a result, demand for travel declined at a rapid pace and remains depressed.

The exact timing and pace of the recovery is indeterminable as certain markets have reopened, some of which have experienced a resurgence of COVID-19 cases, while others, particularly international markets, remain closed or are enforcing extended quarantines.

The impact of COVID-19 is fluid and continues to evolve, and the shape and speed of the recovery for the commercial aerospace industry remains uncertain.

For example, as a result of the COVID-19 pandemic, many of our businesses have taken the opportunity to explore new business opportunities by working on developing highly engineered solutions for emerging needs arising from the pandemic.

Due to the COVID-19 pandemic, certain disruptions in the global supply chain occurred.

While none of these disruptions had a significant negative impact to our manufacturing processes, there were some minor shipment delays.

Backlog

As of September 30, 2020, the Company estimated its sales order backlog at $3,145 million compared to an estimated sales order backlog of $3,437 million as of September 30, 2019.

The decrease in backlog is attributable to the adverse impact that the COVID-19 pandemic has had on customer demand, particularly our commercial customers, domestically and internationally.

The uncertainty of the duration of the pandemic and its impact on the commercial aerospace industry is expected to continue to inhibit sales order backlog growth in the commercial OEM and commercial aftermarket channels into fiscal 2021.

Partially offsetting the decrease in commercial OEM and aftermarket sales backlog is an increase in total defense sales backlog.

The majority of the purchase orders outstanding as of September 30, 2020 are scheduled for delivery within the next twelve months.

Purchase orders may be subject to cancellation or deferral by the customer prior to shipment.

The level of unfilled purchase orders at any given date during the year will be materially affected by the timing of the Company’s receipt of purchase orders and the speed with which those orders are filled.

Accordingly, the Company’s backlog as of September 30, 2020 may not necessarily represent the actual amount of shipments or sales for any future period.

We consider our relationship with our employees generally to be satisfactory.

The plans are important because equity compensation, and specifically stock options, is a significant component of the Company’s private equity-based compensation strategy and value-based culture and the continued use of performance-based stock options will help retain the Company’s key employees and recruit new employees.

The Company has a history of providing, and intends to continue to provide, cash compensation to its top employees that is below the market median and cause the largest portion of their potential earnings to come from growth in the Company’s equity value.

Additionally, the plans give the Company more flexibility in granting awards to new employees joining the Company as a result of future acquisitions, which are an essential part of the Company’s growth.

The equity compensation plan is a good motivational incentive which also contributes to very de minimis voluntary turnover of participants in the plan.

The Company is involved in various claims and legal actions arising in the ordinary course of business.

SEC regulations require us to disclose certain information about environmental proceedings when a governmental authority is a party to the proceedings if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold.

Pursuant to such regulations, the Company uses a threshold of $1 million or more for purposes of determining whether disclosure of any such proceedings is required as we believe matters under this threshold are not material to the Company.

While the Company is currently involved in certain legal proceedings, it believes the results of these proceedings will not have a material adverse effect on its financial condition, results of operations, or cash flows.

Information with respect to our legal proceedings is contained in Note 15, “Commitments and Contingencies,” within the notes to the consolidated financial statements included herein.

None.

For the fiscal year ended September 30, [removed: 2020][added: 2021]

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of March 31, [removed: 2020,] [added: 2021,] based upon the last sale price of such voting and non-voting common stock on that date, was [removed: $17,842,940,279.][added: $32,940,645,808.]

The number of shares outstanding of TransDigm Group Incorporated’s common stock, par value $.01 per share, was [removed: 54,435,882] [added: 55,248,901] as of [removed: October 28, 2020.][added: November 3, 2021.]

Documents incorporated by reference: Certain sections of the registrant’s definitive Proxy Statement to be filed in connection with its [removed: 2021] [added: 2022] Annual Meeting of Shareholders [added: expected to be held in March 2022] are incorporated by reference into Part III of this Annual Report on Form 10-K.

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*This Annual Report on Form 10-K contains [removed: forward-looking statements] [added: both historical and “forward-looking statements”] within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 27A of the Securities Act of 1933, as amended.

They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties, including those described under “Risk Factors” in [removed: the] [added: this] Annual Report on Form 10-K.

Since our actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements, we cannot give any assurance that any of the events anticipated by these forward-looking statements will occur or, if any of them does occur, what impact they will have on our business, results of [removed: operations, financial condition] [added: operations] and [removed: cash flows.][added: financial condition.]

Important factors that could cause actual results to differ materially from the forward-looking statements made in this Annual Report on Form 10-K include but are not limited to: the impact that the COVID-19 pandemic has on [removed: the TransDigm Group Incorporated's] [added: our] business, results of operations, financial condition and liquidity; the sensitivity of [removed: TransDigm Group Incorporated's] [added: our] business to the number of flight hours that [removed: its] [added: our] customers’ planes spend aloft and [removed: its] [added: our] customers’ profitability, both of which are affected by general economic conditions; future geopolitical or other worldwide events; cyber-security [removed: threats and] [added: threats,] natural [removed: disasters; TransDigm Group Incorporated's] [added: disasters and climate change-related events; our] reliance on certain customers; the United States (“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 [removed: acquisitions, including TransDigm Group Incorporated's acquisition of Esterline Technologies Corporation (“Esterline”); TransDigm Group Incorporated's] [added: acquisitions; our] indebtedness; potential environmental liabilities; liabilities arising in connection with litigation; [added: climate-related regulations;] increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with [removed: TransDigm Group Incorporated's] [added: our] international sales and operations; and other [removed: risk] factors.

For example, “fiscal year [removed: 2020”] [added: 2021”] or “fiscal [removed: 2020”] [added: 2021”] means the period from October 1, [removed: 2019] [added: 2020] to September 30, [removed: 2020.][added: 2021.]

TransDigm’s principal owned properties (defined as greater than 20,000 square feet or related to a principal operation) as of September 30, [removed: 2020] [added: 2021] are as follows:

| Location | | | [added: | | |] Reporting Segment | | | [added: | | |] Square Footage | | |

| Brea, [removed: CA(1)] [added: CA (1)] | | | [added: | | |] Airframe | | | [added: | | |] 315,000 | | |

| Stillington, United Kingdom | | | [added: | | |] Airframe | | | [added: | | |] 274,800 | | |

| Montreal, Canada | | | [added: | | |] Airframe | | | [added: | | |] 271,700 | | |

| Miesbach, Germany | | | [added: | | |] Power & Control | | | [added: | | |] 242,000 | | |

| Liberty, [removed: SC(1)] [added: SC (1)] | | | [added: | | |] Power & Control | | | [added: | | |] 219,000 | | |

| Waco, TX | | | [added: | | |] Power & Control | | | [added: | | |] 218,800 | | |

| Ingolstadt, Germany | | | [added: | | |] Airframe | | | [added: | | |] 191,900 | | |

| Kent, [removed: OH(1)] [added: OH (1)] | | | [added: | | |] Airframe | | | [added: | | |] 185,000 | | |

| [removed: Liverpool, NY] [added: Lillington, NC] | | | [added: | | |] Power & Control | | | [removed: 176,800] | | | [added: 48,800 | | |]

| Bridport, United Kingdom | | | [added: | | |] Airframe | | | [added: | | |] 174,700 | | |

| Union Gap, [removed: WA(1)] [added: WA (1)] | | | [added: | | |] Airframe | | | [added: | | |] 142,000 | | |

| Coachella, [removed: CA(1)] [added: CA (1)] | | | [added: | | |] Power & Control | | | [added: | | |] 140,000 | | |

| Phoenix, AZ | | | [added: | | |] Airframe | | | [added: | | |] 138,700 | | |

| Paks, Hungary | | | [added: | | |] Airframe | | | [added: | | |] 137,800 | | |

| Los Angeles, CA | | | [added: | | |] Power & Control | | | [added: | | |] 131,000 | | |

| Bohemia, [removed: NY(1)] [added: NY (1)] | | | [added: | | |] Power & Control | | | [added: | | |] 124,000 | | |

| Buena Park, CA | | | [added: | | |] Power & Control | | | [added: | | |] 115,000 | | |

| Llangeinor, United Kingdom | | | [added: | | |] Airframe | | | [added: | | |] 110,000 | | |

| Bourges, France | | | [added: | | |] Power & Control | | | [added: | | |] 109,400 | | |

| Westbury, NY | | | [added: | | |] Power & Control | | | [added: | | |] 106,800 | | |

| Kent, [removed: WA(1)] [added: WA (1)] | | | [added: | | |] Airframe | | | [added: | | |] 100,000 | | |

| Painesville, OH | | | [added: | | |] Power & Control | | | [added: | | |] 94,200 | | |

| Valencia, [removed: CA(1)] [added: CA (1)] | | | [added: | | |] Airframe | | | [added: | | |] 88,400 | | |

| Letchworth, United Kingdom | | | [added: | | |] Airframe | | | [added: | | |] 88,200 | | |

| Placentia, CA | | | [added: | | |] Airframe | | | [added: | | |] 86,600 | | |

| Addison, [removed: IL(1)] [added: IL (1)] | | | [added: | | |] Power & Control | | | [added: | | |] 83,300 | | |

| Sarralbe, France | | | [added: | | |] Power & Control | | | [added: | | |] 77,900 | | |

| Niort, France | | | [removed: Airframe] | | | [added: Power & Control | | | | | |] 69,000 | | |

| Clearwater, FL | | | [added: | | |] Power & Control | | | [added: | | |] 64,200 | | |

| South Euclid, OH | | | [added: | | |] Power & Control | | | [added: | | |] 60,000 | | |

| Wichita, KS | | | [added: | | |] Power & Control | | | [added: | | |] 57,000 | | |

| Branford, CT | | | [added: | | |] Airframe | | | [added: | | |] 52,000 | | |

| [removed: Xenia, OH] [added: Pennsauken, NJ] | | | [added: | | |] Airframe | | | [removed: 51,000] | | | [added: 38,000 | | |]

| Avenel, NJ | | | [added: | | |] Power & Control | | | [added: | | |] 48,500 | | |

| Rancho Cucamonga, [removed: CA(1)] [added: CA (1)] | | | [added: | | |] Power & Control | | | [added: | | |] 47,000 | | |

| Pennsauken, NJ | | | [added: | | |] Airframe | | | [removed: 38,000] | | | [added: 20,500 | | |]

| Ryde, United Kingdom | | | [added: | | |] Power & Control | | | [added: | | |] 33,200 | | |

| Rancho Cucamonga, CA | | | [added: | | |] Airframe | | | [added: | | |] 32,700 | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Liverpool, NY | | | | | | Power & Control | | | | | | 197,100 | | |

| Prescott, AZ | | | | | | Airframe | | | | | | 62,400 | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Location | | | | | | Reporting Segment | | | | | | Square Footage | | |

| Marlow, United Kingdom | | | | | | Airframe | | | | | | 116,100 | | |

| Melbourne, FL | | | | | | Power & Control | | | | | | 107,000 | | |

| Joensuu, Finland | | | | | | Airframe | | | | | | 32,300 | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Kortrijk, Belgium | | | Airframe | | | 130,000 | | |

| Hampshire, United Kingdom | | | Non-aviation | | | 102,000 | | |

| Herstal, Belgium | | | Airframe | | | 73,700 | | |

| Kanata, Canada | | | Airframe | | | 82,900 | | |

| Tijuana, Mexico | | | Non-aviation | | | 49,300 | | |

| Lillington, NC | | | Power & Control | | | 48,800 | | |

| Tempe, AZ | | | Power & Control | | | 40,200 | | |

| Collegeville, PA | | | Airframe | | | 37,000 | | |

| Nogales, Mexico | | | Airframe | | | 27,000 | | |

| Toulouse, France | | | Airframe | | | 26,000 | | |

| Harrow, United Kingdom | | | Non-aviation | | | 24,500 | | |

| Duluth, GA | | | Airframe | | | 22,800 | | |

| Ravenna, OH | | | Airframe | | | 22,500 | | |

| Platteville, WI | | | Airframe | | | 21,200 | | |

| Pennsauken, NJ | | | Airframe | | | 20,500 | | |

As of October [removed: 16, 2020,] [added: 13, 2021,] there were [removed: 32] [added: 33] stockholders of record of our common stock and approximately [removed: 124,000] [added: 194,000] beneficial stockholders, which includes an estimated number of stockholders who have their shares held in their accounts by banks and brokers.

An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each of the indexes on September 30, [removed: 2015,] [added: 2016,] and its relative performance is tracked through September 30, [removed: 2020.][added: 2021.]

[removed: ][added: ]

*$100 invested on [removed: 9/30/15] [added: 9/30/16] in stock or index, including reinvestment of dividends.

Copyright [removed: 2020] [added: 2021] Standard & Poor’s, a division of S&P Global.

During [removed: March] [added: the fiscal year ended September 30,] 2020, the Company repurchased 36,900 shares of its common stock at a gross cost of $18.9 million at the weighted average cost of $512.67 under the [removed: $650 million stock] repurchase [removed: plan.][added: program.]

No repurchases were made under the program during the fiscal year ended September 30, [removed: 2019.][added: 2021.]

As of September 30, [removed: 2020, $631.1 million in] [added: 2021, the remaining amount of] repurchases [removed: are] allowable under the program [added: was $631.1 million] subject to any restrictions specified in the Credit Agreement [removed: and] [added: and/or] Indentures governing the existing Notes.

Dividends

No dividends were declared during fiscal 2021.

| | | | 9/30/16 | | | | | | 9/30/17 | | | | | | 9/30/18 | | | | | | 9/30/19 | | | | | | 9/30/20 | | | | | | 9/30/21 | | |

| TransDigm Group Inc. | | | 100.00 | | | | | | 104.73 | | | | | | 152.52 | | | | | | 225.70 | | | | | | 217.82 | | | | | | 286.34 | | |

| S&P 500 Index | | | 100.00 | | | | | | 118.61 | | | | | | 139.85 | | | | | | 145.80 | | | | | | 167.89 | | | | | | 218.27 | | |

| S&P Aerospace & Defense Select Index | | | 100.00 | | | | | | 139.21 | | | | | | 175.93 | | | | | | 191.20 | | | | | | 157.98 | | | | | | 218.45 | | |

Dividend Policy

During fiscal 2019, TD Group’s Board of Directors declared a special cash dividend of $30.00 (in August 2019) on each outstanding share of common stock and cash dividend equivalent payments under options granted under its equity compensation plans.

We do not anticipate declaring regular quarterly or annual cash dividends on our common stock in the near future.

Any declaration of special cash dividends on our common stock in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital requirements, financial condition, future prospects, contractual restrictions under the senior secured credit facility and Indentures, the availability of surplus under Delaware law and other factors deemed relevant by our Board of Directors.

TD Group is a holding company and conducts all of its operations through direct and indirect subsidiaries.

Unless TD Group receives dividends, distributions, advances, transfers of funds or other payments from our subsidiaries, TD Group will be unable to pay any dividends on our common stock in the future.

The ability of any subsidiaries to take any of the foregoing actions is limited by the terms of our senior secured credit facility and Indentures and may be limited by future debt or other agreements that we may enter into.

| | | | 9/30/15 | | | | | | 9/30/16 | | | | | | 9/30/17 | | | | | | 9/30/18 | | | | | | 9/30/19 | | | | | | 9/30/20 | | |

| TransDigm Group Inc. | | | 100.00 | | | | | | 136.11 | | | | | | 142.55 | | | | | | 207.60 | | | | | | 307.21 | | | | | | 296.48 | | |

| S&P 500 Index | | | 100.00 | | | | | | 115.43 | | | | | | 136.91 | | | | | | 161.43 | | | | | | 168.30 | | | | | | 193.80 | | |

| S&P Aerospace & Defense Select Index | | | 100.00 | | | | | | 119.68 | | | | | | 166.61 | | | | | | 210.56 | | | | | | 228.84 | | | | | | 189.07 | | |

\[Reserved\]

The following table sets forth selected historical consolidated financial and other data of TD Group for the fiscal years ended September 30, 2016 to 2020, which have been derived from TD Group’s audited consolidated financial statements.

Separate historical financial information of TransDigm Inc. is not presented since the 6.50% Senior Subordinated Notes issued June 2014 (the “2024 Notes”), the 6.50% Senior Subordinated Notes issued May 2015 (the “2025 Notes”), the 8.00% Secured Notes issued April 2020 (the “2025 Secured Notes”), the 6.375% Senior Subordinated Notes issued June 2016 (the “6.375% 2026 Notes”), the 6.25% Senior Secured Notes issued April 2020 (the “6.25% 2026 New Notes”) and the 6.25% Senior Secured Notes issued January 2019 (collectively, with the 6.25% 2026 New Notes, referred to herein as the “2026 Secured Notes”), the 7.50% Senior Subordinated Notes issued February 2019 (the “7.50% 2027 Notes”) and the 5.50% Senior Subordinated Notes issued November 2019 (the “5.50% 2027 Notes”) are fully and unconditionally guaranteed on a senior subordinated or senior secured basis, as defined in the respective Indenture, by TD Group, TransDigm UK Holding plc (“TransDigm UK”) and all of TransDigm Inc.’s Domestic Restricted Subsidiaries and because TD Group has no significant operations or assets separate from its investment in TransDigm Inc.

Separate financial information of TransDigm UK is not presented because TransDigm UK’s 6.875% Senior Subordinated Notes issued in May 2018 (the “6.875% 2026 Notes”) are fully and unconditionally guaranteed on a senior subordinated basis by TD Group, TransDigm Inc., and all of TransDigm Inc.’s Domestic Restricted Subsidiaries.

Acquisitions of businesses completed by TD Group during the last five fiscal years are as follows:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Date | | | Acquisition | | |

| January 4, 2016 | | | Breeze-Eastern Corporation (“Breeze-Eastern”) | | |

| June 23, 2016 | | | Data Device Corporation (“DDC”) | | |

| September 23, 2016 | | | Young & Franklin Inc. / Tactair Fluid Controls Inc. (“Y&F/Tactair”) | | |

| February 22, 2017 | | | Schroth Safety Products Group (“Schroth”)(1) | | |

| May 5, 2017, May 31, 2017 and June 1, 2017 | | | North Hills Signal Processing Corp, Cablecraft Motion Controls LLC and Preece Incorporated (together, the “Third Quarter 2017 Acquisitions”) | | |

| March 15, 2018 | | | Kirkhill Elastomers (“Kirkhill”) | | |

| April 24, 2018 et al. | | | Extant Components Group Holdings, Inc. (together with related subsequent product line acquisitions, “Extant”) | | |

| July 13, 2018 | | | Skandia Inc. (“Skandia”) | | |

| March 14, 2019 | | | Esterline Technologies Corporation (“Esterline”)(2) | | |

(1)In connection with the settlement of a Department of Justice investigation into the competitive effects of the Schroth acquisition, the Company committed to dispose of the Schroth business during the fourth quarter of 2017.

On January 26, 2018, the Company completed the sale of Schroth in a management buyout to a private equity fund and certain members of Schroth management for approximately $61 million, which included a working capital adjustment of $0.3 million that was paid in July 2018.

(2) On September 20, 2019, TransDigm completed the divestiture of its Esterline Interface Technology (“EIT”) group of businesses to an affiliate of KPS Capital Partners, LP for approximately $190 million.

EIT was acquired by TransDigm as part of its acquisition of Esterline Technologies Corporation.

The results of operations of EIT are presented in discontinued operations in the accompanying consolidated financial statements for all periods presented since the date acquired.

Additionally, on December 20, 2019, TransDigm completed the divestiture of Souriau SAS, Souriau USA Inc. and Sunbank Family of Companies LLC (collectively, “Souriau-Sunbank”) to Eaton Corporation plc (“Eaton”) for approximately $920 million.

Souriau-Sunbank was classified as held-for-sale beginning September 30, 2019.

The results of operations of Souriau-Sunbank are presented in discontinued operations in the accompanying consolidated financial statements for all periods presented since the date acquired.

Further disclosure related to Schroth, EIT and Souriau-Sunbank’s discontinued operations is included within Note 23, “Discontinued Operations,” in the notes to the consolidated financial statements included herein.

All of the acquisitions were accounted for using the acquisition method.

The results of operations of the acquired businesses are included in TD Group’s consolidated financial statements from the effective date of each acquisition.

The information presented below should be read together with Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included elsewhere herein.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Fiscal Years Ended September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| | | | (in millions, except per share amounts ) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Statement of Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net sales | | | $ | 5,103 | | | | | $ | 5,223 | | | | | $ | 3,811 | | | | | $ | 3,504 | | | | | $ | 3,171 | |

| Gross profit(1) | | | 2,647 | | | | | | 2,809 | | | | | | 2,177 | | | | | | 1,985 | | | | | | 1,728 | | |

| Selling and administrative expenses | | | 727 | | | | | | 748 | | | | | | 450 | | | | | | 413 | | | | | | 383 | | |

| Amortization of intangible assets | | | 169 | | | | | | 135 | | | | | | 72 | | | | | | 89 | | | | | | 78 | | |

| Income from operations(1) | | | 1,751 | | | | | | 1,926 | | | | | | 1,655 | | | | | | 1,483 | | | | | | 1,267 | | |

As of September 30, [removed: 2020,] [added: 2021,] TD Group carried out an evaluation, under the supervision and with the participation of TD Group’s management, including its President, Chief Executive Officer and Director (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of TD Group’s disclosure controls and procedures.

Using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“COSO”) in Internal Control-Integrated Framework, TransDigm’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2020.][added: 2021.]

Based on our assessment, management concluded that the Company’s internal control over financial reporting was effective as of September 30, [removed: 2020.][added: 2021.]

The effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2020] [added: 2021] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included elsewhere in this Annual Report on Form 10-K and is incorporated herein by reference.

There have been no changes in the Company’s internal control over financial reporting that occurred during the fourth quarter of fiscal [removed: 2020] [added: 2021] that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

We have audited TransDigm Group Incorporated’s internal control over financial reporting as of September 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal [removed: Control— Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, TransDigm Group Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2020,] [added: 2021,] based on the COSO [removed: criteria.][added: criteria.]

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of September 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, changes in stockholders’ deficit and cash flows for each of the three years in the period ended September 30, [removed: 2020,] [added: 2021,] and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated November [removed: 12, 2020] [added: 16, 2021] expressed an unqualified opinion thereon.

During the fiscal quarter ended April 3, 2021, the Company completed the acquisition of CAC.

The Company is currently integrating the acquisition into its operations, compliance programs and internal control processes.

As permitted by SEC rules and regulations, the Company has excluded the acquisition from management's evaluation of internal controls over financial reporting as of September 30, 2021.

The Company’s total assets, net sales and income from continuing operations before income taxes for the fiscal year ended September 30, 2021 for the acquisition of CAC constituted approximately 6%, 3% and (1)%, respectively, of each of these key measures as reported in our consolidated financial statements.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Cobham Aero Connectivity (CAC), which is included in the 2021 consolidated financial statements of the Company and constituted 6% of total assets as of September 30, 2021 and 3% and (1%) of net sales and income from continuing operations before income taxes, respectively, for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of CAC.

November 16, 2021

In response to the COVID-19 pandemic, a number of employees began working remotely during the second half of fiscal 2020.

We are continually monitoring and assessing the changing business environment resulting from COVID-19 on our internal controls to minimize the impact on their design and operating effectiveness.

Management has taken measures to ensure that our disclosure controls and procedures and internal controls over financial reporting remained effective and were not materially affected during this period.

November 12, 2020

On November 16, 2021, the Company and Jorge Valladares, Chief Operating Officer, entered into an amendment to Mr. Valladares’ employment agreement.

The amendment (1) modified the severance provisions in the event of a termination without cause or for good reason or by reason of death or disability from providing for 90 day notice of termination and severance of one times annual salary and one times the greater of last year’s annual incentive or the current year target to no notice of termination and severance of 1.25 times annual salary and the greater of last year’s annual incentive or current year target, consistent with other officers of the Company; Mr. Valladares also would receive as severance 18 times the difference between the rate of health plan coverage on the date of termination and the COBRA rate of such coverage, but this provision was not changed; (2) eliminated Mr. Valladares’ opportunity to cure a default in the event of a potential termination for cause; and (3) added a requirement for Mr. Valladares to execute a release as a condition to receiving severance.

On November 15, 2021, the Company and Michael Lisman, Chief Financial Officer, and the Company and Sarah Wynne, Chief Accounting Officer, entered into respective amendments to Mr. Lisman’s and Ms. Wynne’s employment agreements.

The amendment modified the severance provisions in the event of a termination without cause or for good reason or by reason of death or disability from providing 15 times the difference between the rate of health plan coverage on the date of termination and the COBRA rate of such coverage to 18 times such difference, consistent with other officers of the Company.

Mr. Lisman and Ms. Wynne would also receive as severance 1.25 times annual salary and the greater of last year’s annual incentive or current year target, but those provisions were not changed.

None.

| Name | | | [added: | | |] Age | | | | | | Position | | |

| Kevin Stein | | | [removed: 54] | | | [added: 55] | | | [added: | | |] President, Chief Executive Officer and Director | | |

| Robert S. Henderson | | | [removed: 64] | | | [added: 65] | | | [added: | | |] Vice Chairman | | |

| Jorge L. Valladares III | | | [removed: 46] | | | [added: 47] | | | [added: | | |] Chief Operating Officer | | |

| Michael Lisman | | | [removed: 38] | | | [added: 39] | | | [added: | | |] Chief Financial Officer | | |

| Sarah Wynne | | | [removed: 46] | | | [added: 47] | | | [added: | | |] Chief Accounting Officer | | |

| Halle [removed: Terrion] [added: Martin] | | | [removed: 52] | | | [added: 53] | | | [added: | | |] General Counsel, Chief Compliance Officer & Secretary | | |

Prior to that, Mr. Stein served as President and Chief Operating Officer from January 2017 through March 2018 and Chief Operating Officer—Power [added: and Control] from October 2014 to December 2016.

Prior to that, Mr. Lisman served as Vice President—Mergers and Acquisitions from January 2018 through June 2018, Business Unit Manager for the Air & Fuel Valves business unit at Aero Fluid Products, a wholly-owned subsidiary of TransDigm Inc., from January 2017 to January 2018 and Director of Mergers and Acquisitions of [removed: the Company] [added: TransDigm] from November 2015 to January 2017.

Ms. [removed: Terrion] [added: Martin] was appointed General Counsel and Chief Compliance Officer in March 2012 and Secretary in May 2015.

Prior to that, Ms. [removed: Terrion] [added: Martin] was a partner at BakerHostetler LLP.

We have adopted a Code of Business Conduct and Ethics, which applies to all of our directors, officers, and employees and a Code of Ethics for Senior Financial Officers which includes additional ethical obligations for our senior financial management (which includes our [removed: executive chairman,] president and chief executive officer, [removed: vice chairman,] chief operating officer, chief financial officer, chief accounting officer, [removed: division presidents, controllers,] treasurer, [removed: and directors] [added: vice president] of [added: finance, director of] internal [removed: audit).][added: audit, general counsel, operating unit presidents and operating unit vice presidents of finance).]

The procedure by which stockholders may recommend nominees to our Board of Directors will be set forth under the caption [removed: “Other Information Regarding the Board of Directors”] [added: “Directors”] in our Proxy Statement, which is incorporated herein by reference.

The information regarding the audit committee of our Board of Directors and audit committee financial experts will be set forth under the caption [removed: “Other Information Regarding the Board of Directors”] [added: “Corporate Governance”] in our Proxy Statement, which is incorporated herein by reference.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| W. Nicholas Howley | | | 68 | | | | | | Executive Chairman of the Board of Directors | | |

| Bernt G. Iversen II | | | 63 | | | | | | Executive Vice President—Mergers & Acquisitions and Business Development | | |

Mr. Howley was appointed Executive Chairman of the Board of Directors of TD Group in April 2018.

Mr. Howley previously served as Chairman of the Board of Directors of TD Group from July 2003 to April 2018.

He served as Chief Executive Officer of TD Group from December 2005 to April 2018 and of TransDigm Inc. from December 2001 to March 2018.

Mr. Howley served as President of TD Group from July 2003 through December 2015, as Chief Operating Officer of TransDigm Inc. from December 1998 through December 2001 and as President of TransDigm Inc. from December 1998 through September 2005.

Mr. Iversen was appointed Executive Vice President—Mergers & Acquisitions and Business Development in May 2012.

Prior to that, Mr. Iversen served as Executive Vice President of TD Group from December 6, 2010 through May 2012 and as President of Champion Aerospace LLC, a wholly-owned subsidiary of TransDigm Inc., from June 2006 to December 2010.

The information required by this item will be set forth under the captions “Executive Compensation” and [removed: “Other Information Regarding the Board of Directors”] [added: “Director Compensation”] in our Proxy Statement, which is incorporated herein by reference.

| Plan category | | | [added: | | |] Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) | | | | | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | | | | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c) | | | | | |

(2)This amount represents [removed: 829, 2,235,680] [added: 1,548,605] and [removed: 3,613,857] [added: 4,202,923] shares subject to outstanding stock options under our [removed: 2003 stock option plan,] 2006 stock incentive plan and 2014 stock option plan, respectively.

No further grants may be made under our [removed: 2003 stock option plan and] 2006 stock incentive plan, although outstanding stock options continue in force in accordance with their terms.

No grants have been made under TD Group’s 2019 stock option plan as of September 30, [removed: 2020.][added: 2021.]

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Equity compensation plans approved by security holders (1) | | | | | | 5,751,528 | | | (2) | | | $ | 344.58 | | | | | 4,626,294 | | | (3) | | |

No further grants may be made under our 2003 stock incentive plan and no shares are subject to outstanding stock options under our 2003 stock incentive plan.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Equity compensation plans approved by security holders(1) | | | 5,850,366 | | | (2) | | | $ | 290.69 | | | | | 5,316,998 | | | (3) | | |

The information required by this item will be set forth under the captions entitled “Certain Relationships and Related Transactions,” [removed: “Compensation of Directors,”] [added: “Director Compensation,”] and “Independence of Directors” in our Proxy Statement, which is incorporated herein by reference.

The information required by this item will be set forth under the [removed: caption “Principal Accounting Fees] [added: captions “Audit Fees,” “Audit-Related Fees,” “Tax Fees,”] and [removed: Services”] [added: “All Other Fees,”] in our Proxy Statement, which is incorporated herein by reference.

| Report of Independent Registered Public Accounting Firm | | | [removed: F-[1](#i3f294937cd344ba19d2a164edc97691f_100)] [added: F-[1](#if65be9a7604f45ad94b1b37bcb73f17d_100)] | | |

| Consolidated Balance Sheets as of September 30, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] | | | [removed: F-[3](#i3f294937cd344ba19d2a164edc97691f_103)] [added: F-[3](#if65be9a7604f45ad94b1b37bcb73f17d_103)] | | |

| Consolidated Statements of Income for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[4](#i3f294937cd344ba19d2a164edc97691f_109)] [added: F-[4](#if65be9a7604f45ad94b1b37bcb73f17d_109)] | | |

| Consolidated Statements of Comprehensive Income for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[5](#i3f294937cd344ba19d2a164edc97691f_112)] [added: F-[5](#if65be9a7604f45ad94b1b37bcb73f17d_112)] | | |

| Consolidated Statements of Changes in Stockholders’ Deficit for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[6](#i3f294937cd344ba19d2a164edc97691f_115)] [added: F-[6](#if65be9a7604f45ad94b1b37bcb73f17d_115)] | | |

| Consolidated Statements of Cash Flows for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[7](#i3f294937cd344ba19d2a164edc97691f_118)] [added: F-[7](#if65be9a7604f45ad94b1b37bcb73f17d_118)] | | |

| Notes to Consolidated Financial Statements for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: pages F-8] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_121)[8](#if65be9a7604f45ad94b1b37bcb73f17d_121)] to [removed: F-47] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_211)[45](#if65be9a7604f45ad94b1b37bcb73f17d_211)] | | |

| Valuation and Qualifying Accounts for the Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[48](#i3f294937cd344ba19d2a164edc97691f_226)] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_220)[46](#if65be9a7604f45ad94b1b37bcb73f17d_220)] | | |

| [3.60](http://www.sec.gov/Archives/edgar/data/714124/000104746907005464/a2178691zex-3_54.htm) | | | | | | Articles of Amendment to Articles of Incorporation, filed May 20, 2003, of Avtech Corporation (now known as [removed: Avtech Tyee,] [added: AvtechTyee,] Inc.) | | | | | | [Incorporated by reference to TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed July 6, 2007 (File No. 333-144366)](http://www.sec.gov/Archives/edgar/data/714124/000104746907005464/a2178691zex-3_54.htm) | | |

| [3.120](http://www.sec.gov/Archives/edgar/data/7340/000119312517165970/d390520dex3130.htm) | | | | | | By-laws of Porta Systems Corp. (now known as North Hills Signal Processing Corp.) | | | | | | [Incorporated by reference to TransDigm [removed: Inc’s] [added: Inc.’s] and TransDigm Group Incorporated’s Form S-4, filed May 10, 2017 (File No. 333-217850)](http://www.sec.gov/Archives/edgar/data/7340/000119312517165970/d390520dex3130.htm) | | |

| [removed: [3.121](http://www.sec.gov/Archives/edgar/data/7340/000119312517165970/d390520dex3131.htm)] [added: [3.19](http://www.sec.gov/Archives/edgar/data/7340/000119312519215536/d780685dex3202.htm)[2](http://www.sec.gov/Archives/edgar/data/7340/000119312519215536/d780685dex3202.htm)] | | | | | | Certificate of Incorporation, as amended, of [removed: Porta Systems Overseas Corp.] [added: Esterline Sensors Services Americas, Inc.] (now known as [removed: North Hills Signal Processing Overseas Corp.)] [added: Auxitrol Weston USA, Inc.)] | | | | | | [Incorporated by reference to TransDigm [removed: Inc’s] [added: Inc.’s] and TransDigm Group Incorporated’s Form S-4, filed [removed: May 10, 2017] [added: August 7, 2019] (File No. [removed: 333-217850)](http://www.sec.gov/Archives/edgar/data/7340/000119312517165970/d390520dex3131.htm)] [added: 333-233103)](http://www.sec.gov/Archives/edgar/data/7340/000119312519215536/d780685dex3202.htm)] | | |

| [removed: [3.190](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3190.htm)] [added: [4.](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit419descriptiono.htm)[19](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit419descriptiono.htm)] | | | | | | [removed: Certificate of Formation, as amended,] [added: Description] of [removed: Esterline Georgia US LLC (now known as TREALITY SVS LLC)] [added: Securities] | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 10-K, filed November 19, 2019 (File No. [removed: 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3190.htm)] [added: 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit419descriptiono.htm)] | | |

| [removed: [3.191](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3191arllcagreem.htm)] [added: [3.](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3207.htm)[195](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3207.htm)] | | | | | | [removed: Amended and Restated] Limited Liability Company Agreement of [removed: TREALITY SVS] [added: Esterline Technologies SGIP] LLC | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form [removed: 10-K,] [added: 10-Q,] filed [removed: November 19,] [added: May 8,] 2019 (File No. [removed: 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3191arllcagreem.htm)] [added: 001-32833)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3207.htm)] | | |

| [removed: [3.192](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3192.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3226.htm)[18](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3226.htm)] | | | | | | [removed: Amended and Restated] Certificate of [removed: Formation, as amended,] [added: Incorporation] of [removed: Esterline Federal LLC (now known as ScioTeq LLC)] [added: TDG ESL Holdings Inc.] | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 10-K, filed November 19, 2019 (File No. [removed: 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3192.htm)] [added: 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3226.htm)] | | |

| [removed: [3.193](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3193arllcagreem.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3221.htm)[09](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3221.htm)] | | | | | | [removed: Amended and Restated] Limited Liability Company Agreement of [removed: ScioTeq] [added: 17111 Waterview Pkwy] LLC | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form [removed: 10-K,] [added: 10-Q,] filed [removed: November 19,] [added: May 8,] 2019 (File No. [removed: 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit3193arllcagreem.htm)] [added: 001-32833)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3221.htm)] | | |

| [removed: [3.194](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3200.htm)] [added: [3.19](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3200.htm)[0](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3200.htm)] | | | | | | Certificate of Incorporation, as amended, of Angus Electronics Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3200.htm) | | |

| [removed: [3.195](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3201.htm)] [added: [3.19](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3201.htm)[1](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3201.htm)] | | | | | | Amended and Restated Bylaws of Angus Electronics Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3201.htm) | | |

| [removed: [3.196](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3202.htm)] [added: [3.20](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3214.htm)[2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3214.htm)] | | | | | | Amended and Restated Articles of [removed: Incorporation] [added: Incorporation, as amended,] of [removed: Avista, Incorporated] [added: NMC Group, Inc.] | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3202.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3214.htm)] | | |

| [removed: [3.197](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3203.htm)] [added: [3.20](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3215.htm)[3](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3215.htm)] | | | | | | Amended and Restated Bylaws of [removed: Avista, Incorporated] [added: NMC Group, Inc.] | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3203.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3215.htm)] | | |

| [removed: [3.198](http://www.sec.gov/Archives/edgar/data/7340/000119312519215536/d780685dex3202.htm)] [added: [3.19](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3205.htm)[3](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3205.htm)] | | | | | | [removed: Certificate of Incorporation, as amended,] [added: Amended and Restated Bylaws] of Esterline Sensors Services Americas, Inc. (now known as Auxitrol Weston USA, Inc.) | | | | | | [Incorporated by reference to [added: Amendment No. 1 to] TransDigm [added: UK Holdings plc’s, TransDigm] Inc.’s and TransDigm Group Incorporated’s Form S-4, filed [removed: August 7,] [added: April 2,] 2019 (File No. [removed: 333-233103)](http://www.sec.gov/Archives/edgar/data/7340/000119312519215536/d780685dex3202.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3205.htm)] | | |

| [removed: [3.199](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3205.htm)] [added: [3.](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3211.htm)[199](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3211.htm)] | | | | | | Amended and Restated Bylaws of [removed: Esterline Sensors Services Americas, Inc. (now known as Auxitrol Weston USA, Inc.)] [added: Janco Corporation] | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3205.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3211.htm)] | | |

| [removed: [3.200](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3206.htm)] [added: [3.](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3206.htm)[194](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3206.htm)] | | | | | | Certificate of Formation of Esterline Technologies SGIP LLC | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3206.htm) | | |

| [removed: [3.201](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3207.htm)] [added: [3.227](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3227-limitedliabilityc.htm)] | | | | | | Limited Liability Company Agreement of [removed: Esterline Technologies SGIP] [added: Leach Mexico Holding] LLC | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form [removed: 10-Q,] [added: S-4,] filed [removed: May 8, 2019] [added: August 10, 2021] (File No. [removed: 001-32833)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3207.htm)] [added: 333-258676)](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3227-limitedliabilityc.htm)] | | |

| [removed: [3.202](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3208.htm)] [added: [3.](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3208.htm)[196](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3208.htm)] | | | | | | Certificate of Incorporation of Hytek Finishes Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3208.htm) | | |

| [removed: [3.203](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3209.htm)] [added: [3.](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3209.htm)[197](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3209.htm)] | | | | | | Amended and Restated Bylaws of Hytek Finishes Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3209.htm) | | |

| [removed: [3.204](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3210.htm)] [added: [3.](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3210.htm)[198](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3210.htm)] | | | | | | Restated Articles of Incorporation of Janco Corporation | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3210.htm) | | |

| [removed: [3.205](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3211.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3219.htm)[07](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3219.htm)] | | | | | | Amended and Restated Bylaws of [removed: Janco Corporation] [added: Palomar Products, Inc.] | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3211.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3219.htm)] | | |

| [removed: [3.206](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3212.htm)] [added: [3.20](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3212.htm)[0](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3212.htm)] | | | | | | Certificate of Incorporation, as amended, of Mason Electric Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3212.htm) | | |

| [removed: [3.207](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3213.htm)] [added: [3.20](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3213.htm)[1](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3213.htm)] | | | | | | Amended and Restated Bylaws of Mason Electric Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3213.htm) | | |

| [removed: [3.208](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3214.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3218.htm)[06](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3218.htm)] | | | | | | [removed: Amended and Restated Articles] [added: Certificate] of Incorporation, as amended, of [removed: NMC Group,] [added: Palomar Products,] Inc. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3214.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3218.htm)] | | |

| [removed: [3.209](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3215.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3223.htm)[1](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3223.htm)[1](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3223.htm)] | | | | | | Amended and Restated Bylaws of [removed: NMC Group, Inc.] [added: Korry Electronics Co.] | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3215.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3223.htm)] | | |

| [removed: [3.210](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3216.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3216.htm)[04](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3216.htm)] | | | | | | Certificate of Incorporation, as amended, of Norwich Aero Products, Inc. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3216.htm) | | |

| [removed: [3.211](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3217.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3217.htm)[05](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3217.htm)] | | | | | | Amended and Restated By-laws of Norwich Aero Products, Inc. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3217.htm) | | |

| [removed: [3.212](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3218.htm)] [added: [3.21](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3230.htm)[2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3230.htm)] | | | | | | Certificate of [removed: Incorporation, as amended,] [added: Incorporation] of [removed: Palomar Products, Inc.] [added: Armtec Defense Products Co.] | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3218.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3230.htm)] | | |

| [removed: [3.213](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3219.htm)] [added: [3.21](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3231.htm)[3](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3231.htm)] | | | | | | Amended and Restated Bylaws of [removed: Palomar Products, Inc.] [added: Armtec Defense Products Co.] | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3219.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3231.htm)] | | |

| [removed: [3.214](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3220.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3220.htm)[08](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3220.htm)] | | | | | | Certificate of Formation of 17111 Waterview Pkwy LLC | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3220.htm) | | |

| [removed: [3.215](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3221.htm)] [added: [10.](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000038/exhibit1012019stockopt.htm)[21](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000038/exhibit1012019stockopt.htm)] | | | | | | [removed: Limited Liability Company Agreement of 17111 Waterview Pkwy LLC] [added: TransDigm Group Incorporated 2019 Stock Option Plan*] | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form [removed: 10-Q,] [added: 8-K,] filed [removed: May 8,] [added: October 4,] 2019 (File No. [removed: 001-32833)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3221.htm)] [added: 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000038/exhibit1012019stockopt.htm)] | | |

| [removed: [3.216](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3222.htm)] [added: [3.21](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3222.htm)[0](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3222.htm)] | | | | | | Certificate of Incorporation of Korry Electronics Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3222.htm) | | |

| [removed: [3.217](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3223.htm)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3233.htm)[15](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3233.htm)] | | | | | | Amended and Restated Bylaws of [removed: Korry Electronics] [added: Armtec Countermeasures] Co. | | | | | | [Incorporated by reference to Amendment No. 1 to TransDigm UK Holdings plc’s, TransDigm Inc.’s and TransDigm Group Incorporated’s Form S-4, filed April 2, 2019 (File No. [removed: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3223.htm)] [added: 333-228336)](http://www.sec.gov/Archives/edgar/data/7340/000119312519095764/d651555dex3233.htm)] | | |

| [3.121](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/ex3121.htm) | | | | | | Certificate of Formation, filed September 30, 2021, of North Hills Signal Processing Overseas LLC | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/ex3121.htm) | | |

| [3.122](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit3122tdg2021q410-k.htm) | | | | | | Limited Liability Company Agreement of North Hills Signal Processing Overseas LLC | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit3122tdg2021q410-k.htm) | | |

| [3.2](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3220-certificateofinco.htm)[20](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3220-certificateofinco.htm) | | | | | | Certificate of Incorporation of Chelton Avionics Holdings, Inc. | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form S-4, filed August 10, 2021 (File No. 333-258676)](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3220-certificateofinco.htm) | | |

| [3.226](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3226-certificateofform.htm) | | | | | | Certificate of Formation of Leach Mexico Holding LLC | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form S-4, filed August 10, 2021 (File No. 333-258676)](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3226-certificateofform.htm) | | |

| [3.228](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3228-certificateofinco.htm) | | | | | | Certificate of Incorporation, as amended, of NAT Seattle Inc. | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form S-4, filed August 10, 2021 (File No. 333-258676)](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3228-certificateofinco.htm) | | |

| [3.229](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3229-amendedandrestate.htm) | | | | | | Amended and Restated By-laws of NAT Seattle Inc. | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form S-4, filed August 10, 2021 (File No. 333-258676)](http://www.sec.gov/Archives/edgar/data/7340/000126022121000112/ex3229-amendedandrestate.htm) | | |

| [10.4](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit104tdg2021q410-k.htm) | | | | | | Amendment to Employment Agreement, dated November 15, 2021, between TransDigm Group Incorporated and Michael Lisman* | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit104tdg2021q410-k.htm) | | |

| [10.](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1011tdg2021q410-k.htm)[11](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1011tdg2021q410-k.htm) | | | | | | Employment Agreement, dated November 10, 2018, between TransDigm Group Incorporated and Sarah Wynne* | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1011tdg2021q410-k.htm) | | |

| [10.12](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1012tdg2021q410-k.htm) | | | | | | Amendment to Employment Agreement, dated November 15, 2021, between TransDigm Group Incorporated and Sarah Wynne* | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1012tdg2021q410-k.htm) | | |

| Exhibit No. | | | | | | Description | | | | | | Filed Herewith or Incorporated by Reference From | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit No. | | | | | | Description | | | | | | Filed Herewith or Incorporated by Reference From | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit No. | | | | | | Description | | | | | | Filed Herewith or Incorporated by Reference From | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit No. | | | | | | Description | | | | | | Filed Herewith or Incorporated by Reference From | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit No. | | | | | | Description | | | | | | Filed Herewith or Incorporated by Reference From | | |

| [10.](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1054tdg2021q410-k.htm)[54](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1054tdg2021q410-k.htm) | | | | | | Thirteenth Amendment to the Receivables Purchase Agreement dated as of July 26, 2021, among TransDigm Receivables LLC, TransDigm Inc., PNC Bank, National Association, as a Committed Purchaser, as Purchaser Agent for its Purchaser Group and as Administrator, and Fifth Third Bank, as a Committed Purchaser and as Purchaser Agent for its Purchaser Group | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit1054tdg2021q410-k.htm) | | |

| [22.1](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit221tdg2021q410-k.htm) | | | | | | Listing of Subsidiary Guarantors | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022121000134/exhibit221tdg2021q410-k.htm) | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| | | | Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish on a supplemental basis a copy of any omitted schedule or exhibit upon request by the Securities and Exchange Commission. | | | | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| /s/ Jane M. Cronin | | | | | | Director | | | | | | November 16, 2021 | | |

| Jane M. Cronin | | | | | | | | | | | | | | |

| | | | | | | Director | | | | | | November 16, 2021 | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| [3.122](http://www.sec.gov/Archives/edgar/data/7340/000119312517165970/d390520dex3132.htm) | | | | | | By-laws of Porta Systems Overseas Corp. (now known as North Hills Signal Processing Overseas Corp.) | | | | | | [Incorporated by reference to TransDigm Inc’s and TransDigm Group Incorporated’s Form S-4, filed May 10, 2017 (File No. 333-217850)](http://www.sec.gov/Archives/edgar/data/7340/000119312517165970/d390520dex3132.htm) | | |

| [10.22](http://www.sec.gov/Archives/edgar/data/1260221/000119312515026722/d834606dex103.htm) | | | | | | Form of Option Agreement for options granted in fiscal 2015* | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 10-Q, filed January 30, 2015 (File No. 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000119312515026722/d834606dex103.htm) | | |

| [10.23](http://www.sec.gov/Archives/edgar/data/1260221/000126022116000045/exhibit108tdg2016q1.htm) | | | | | | Form of Option Agreement for options granted in fiscal 2016* | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 10-Q, filed February 10, 2016 (File No. 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022116000045/exhibit108tdg2016q1.htm) | | |

| [10.25](http://www.sec.gov/Archives/edgar/data/1260221/000126022118000070/exhibit10312018formoptiona.htm) | | | | | | Form of Stock Option Agreement for options awarded in fiscal 2018* | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 10-K, filed November 9, 2018 (File No. 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022118000070/exhibit10312018formoptiona.htm) | | |

| [10.26](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit10262019formopt.htm) | | | | | | Form of Stock Option Agreement for options awarded in fiscal 2019* | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 10-K, filed November 19, 2019 (File No. 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000126022119000043/exhibit10262019formopt.htm) | | |

| [10.27](https://www.sec.gov/Archives/edgar/data/1260221/000126022120000099/exhibit10272020-09x301.htm) | | | | | | Form of Stock Option Agreement for options awarded in fiscal 2020* | | | | | | [Filed Herewith](https://www.sec.gov/Archives/edgar/data/1260221/000126022120000099/exhibit10272020-09x301.htm) | | |

| [10.2](http://www.sec.gov/Archives/edgar/data/1260221/000119312513316277/d578308dex103.htm)[8](http://www.sec.gov/Archives/edgar/data/1260221/000119312513316277/d578308dex103.htm) | | | | | | Fourth Amended and Restated TransDigm Group Incorporated 2003 Stock Option Plan Dividend Equivalent Plan* | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 8-K, filed August 2, 2013 (File No. 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000119312513316277/d578308dex103.htm) | | |

| [10.2](http://www.sec.gov/Archives/edgar/data/1260221/000119312513316277/d578308dex102.htm)[9](http://www.sec.gov/Archives/edgar/data/1260221/000119312513316277/d578308dex102.htm) | | | | | | Third Amended and Restated TransDigm Group Incorporated 2006 Stock Incentive Plan Dividend Equivalent Plan* | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 8-K, filed August 2, 2013 (File No. 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000119312513316277/d578308dex102.htm) | | |

| [10.](http://www.sec.gov/Archives/edgar/data/1260221/000119312514385017/d812394dex101.htm)[3](http://www.sec.gov/Archives/edgar/data/1260221/000119312514385017/d812394dex101.htm)[0](http://www.sec.gov/Archives/edgar/data/1260221/000119312514385017/d812394dex101.htm) | | | | | | TransDigm Group Incorporated 2014 Stock Option Plan Dividend Equivalent Plan* | | | | | | [Incorporated by reference to TransDigm Group Incorporated’s Form 8-K, filed October 28, 2014 (File No. 001-32833)](http://www.sec.gov/Archives/edgar/data/1260221/000119312514385017/d812394dex101.htm) | | |

| /s/ John Staer | | | | | | Director | | | | | | November 12, 2020 | | |

| Report of Independent Registered Public Accounting Firm | | | [removed: F-[1](#i3f294937cd344ba19d2a164edc97691f_100)] [added: F-[1](#if65be9a7604f45ad94b1b37bcb73f17d_100)] | | |

| Consolidated Balance Sheets as of September 30, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] | | | [removed: F-[3](#i3f294937cd344ba19d2a164edc97691f_103)] [added: F-[3](#if65be9a7604f45ad94b1b37bcb73f17d_103)] | | |

| Consolidated Statements of Income for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[4](#i3f294937cd344ba19d2a164edc97691f_109)] [added: F-[4](#if65be9a7604f45ad94b1b37bcb73f17d_109)] | | |

| Consolidated Statements of Comprehensive Income for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[5](#i3f294937cd344ba19d2a164edc97691f_112)] [added: F-[5](#if65be9a7604f45ad94b1b37bcb73f17d_112)] | | |

| Consolidated Statements of Changes in Stockholders’ Deficit for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[6](#i3f294937cd344ba19d2a164edc97691f_115)] [added: F-[6](#if65be9a7604f45ad94b1b37bcb73f17d_115)] | | |

| Consolidated Statements of Cash Flows for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[7](#i3f294937cd344ba19d2a164edc97691f_118)] [added: F-[7](#if65be9a7604f45ad94b1b37bcb73f17d_118)] | | |

| Notes to Consolidated Financial Statements for Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-8] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_121)[8](#if65be9a7604f45ad94b1b37bcb73f17d_121)] to [removed: F-47] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_211)[45](#if65be9a7604f45ad94b1b37bcb73f17d_211)] | | |

| Valuation and Qualifying Accounts for the Fiscal Years Ended September 30, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: F-[48](#i3f294937cd344ba19d2a164edc97691f_226)] [added: [F-](#if65be9a7604f45ad94b1b37bcb73f17d_220)[46](#if65be9a7604f45ad94b1b37bcb73f17d_220)] | | |

We have audited the accompanying consolidated balance sheets of TransDigm Group Incorporated [removed: (“the Company”)] [added: (the Company)] as of September 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, changes in stockholders’ [removed: deficit,] [added: deficit] and cash flows for each of the three years in the period ended September 30, [removed: 2020,] [added: 2021,] and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the [removed: consolidated] financial position of the Company at September 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the [removed: consolidated] results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of September 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal [removed: Control-Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November [removed: 12, 2020] [added: 16, 2021] expressed an unqualified opinion thereon.

Critical Audit [removed: Matter][added: Matters]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of [removed: the] critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

| *Description of the Matter* | | | | | | [removed: | | |] At September 30, [removed: 2020,] [added: 2021,] the [removed: Company’s] [added: Company had] goodwill [removed: balance was $7.9 billion.] [added: and indefinite-lived intangible assets of $8.6 billion and $983 million, respectively.] As discussed in Note [removed: 1] [added: 3] to the consolidated financial statements, [removed: the Company evaluates the carrying amount of] goodwill [added: and indefinite-lived intangible assets are tested] for impairment annually as of the first day of the fourth quarter or more frequently if indicators of impairment exist. The Company’s goodwill is initially assigned to its reporting units as of the acquisition date. [added: The Company’s indefinite-lived intangible assets consist of acquired trademarks and trade names.] Management performs an initial assessment of qualitative factors to determine whether it is more likely than not that the [removed: reporting unit’s] fair value [added: of a reporting unit or indefinite-lived intangible asset] is less than its carrying [removed: value.] [added: amount.] If management concludes the qualitative assessment is not sufficient to conclude on whether [added: it is more likely than not that] the fair value is less than the carrying [removed: value,] [added: amount,] a quantitative impairment test is performed. [added: Management performed a quantitative assessment on the goodwill and indefinite-lived intangible assets at 16 of its reporting units.] As part of the quantitative [removed: approach,] [added: assessment,] the Company determines the fair value of the reporting [removed: unit] [added: units and indefinite-lived intangible assets] through the use of a discounted cash flow valuation model. [removed: Given the adverse global economic and market conditions attributable to the 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 was necessary for certain reporting units in which it was concluded a potential impairment existed.] Auditing management’s [removed: goodwill] [added: quantitative] impairment assessment was complex and judgmental [added: for certain of the 16 reporting units and their indefinite-lived intangible assets] due to the significant estimation required to determine [removed: the] fair [removed: value of the reporting units derived using the quantitative approach.] [added: value.] In particular, the fair value [removed: estimate was] [added: estimates were] sensitive to significant assumptions, such as changes in the discount [removed: rate applied,] [added: rate,] revenue growth [removed: rates,] [added: rates] and EBITDA margins, which are affected by expectations about future market or economic conditions. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | [removed: | | |] We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s [removed: goodwill] impairment [removed: process. This included] [added: process, including] controls over management’s review of the valuation model and the significant assumptions underlying the fair value determination, as described above. To test the [removed: implied] fair [removed: value] [added: values] of the Company’s reporting [removed: units, we performed] [added: units and indefinite-lived intangible assets, our] audit procedures [removed: that] included, among others, assessing the use of the discounted cash flow valuation model and testing the significant assumptions [added: discussed above] and underlying data used by the [removed: Company.] [added: Company in its analyses for certain of the 16 reporting units and their indefinite-lived intangible assets evaluated using the quantitative assessment.] We utilized internal valuation specialists in assessing the fair value methodologies applied and evaluating the reasonableness of certain assumptions selected by [removed: management.] [added: management in the determination of the fair values of certain of the 16 reporting units and their indefinite-lived intangible assets.] We compared the significant assumptions used by management to current industry and economic trends, recent historical performance, and other relevant factors. We assessed the historical accuracy of management’s [removed: estimates,] [added: estimates] and [removed: we] performed sensitivity analyses of significant assumptions to evaluate the changes in [removed: the] fair [removed: value of the reporting units] [added: values] that would result from changes in the assumptions. | | |