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SEGMENTS | 9 Months Ended
--- | ---
Jun. 29, 2024
Segment Reporting [Abstract] |
SEGMENTS | SEGMENTS The Company’s businesses are organized and managed in three reporting segments: Power & Control, Airframe and Non-aviation. The Power & Control segment includes operations that primarily develop, produce and market systems and components that predominately provide power to or control power of the aircraft utilizing electronic, fluid, power and mechanical motion control technologies. Major product offerings include mechanical/electromechanical 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, databus and power controls, advanced sensor products, switches and relay panels, high performance hoists, winches and lifting devices, cargo loading, handling, delivery systems and electronic components used in the generation, amplification, transmission and reception of microwave signals. Primary customers of this segment are engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies and repair depots. Products are sold in the original equipment and aftermarket market channels. The Airframe segment includes operations that primarily develop, produce and market systems and components that are used in non-power airframe applications utilizing airframe and cabin structure technologies. Major product offerings include engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, specialized and advanced cockpit displays, 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, parachutes and specialized flight, wind tunnel and jet engine testing services and equipment. Primary customers of this segment are airframe manufacturers and cabin system suppliers and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies and repair depots. Products are sold in the original equipment and aftermarket market channels. The Non-aviation segment includes operations that primarily develop, produce and market products for non-aviation markets. Major product offerings include seat belts and safety restraints for ground transportation applications, mechanical/electromechanical actuators and controls for space applications, hydraulic/electromechanical actuators and fuel valves for land-based gas turbines, and refueling systems for heavy equipment used in mining, construction and other industries and turbine controls for the energy and oil and gas markets. Primary customers of this segment are off-road vehicle suppliers and subsystem suppliers, child restraint system suppliers, satellite and space system suppliers, manufacturers of heavy equipment used in mining, construction and other industries and turbine original equipment manufacturers, gas pipeline builders and electric utilities. The primary measurement used by management to review and assess the operating performance of each segment is EBITDA As Defined. The Company defines EBITDA As Defined as earnings before interest, taxes, depreciation and amortization plus certain non-operating items recorded as corporate expenses including non-cash compensation charges incurred in connection with the Company’s stock incentive or deferred compensation plans, foreign currency gains and losses, acquisition-integration costs, acquisition transaction-related expenses, and refinancing costs. Acquisition transaction-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 for acquisitions 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. EBITDA As Defined is not a measurement of financial performance under U.S. GAAP. Although the Company uses EBITDA As Defined to assess the performance of its business and for various other purposes, the use of this non-GAAP financial measure as an analytical tool has limitations, and it should not be considered in isolation or as a substitute for analysis of the Company’s results of operations as reported in accordance with U.S. GAAP. The Company’s segments are reported on the same basis used internally for evaluating performance and for allocating resources. The accounting policies for each segment are the same as those described in the summary of significant accounting policies in the Company’s consolidated financial statements. Intersegment sales and transfers are recorded at values based on market prices, which creates intercompany profit on intersegment sales or transfers that is eliminated in consolidation. Intersegment sales were immaterial for the periods presented below. Corporate consists of our corporate offices. Corporate expenses consist primarily of compensation, benefits, professional services and other administrative costs incurred by the corporate offices. Corporate assets consist primarily of cash and cash equivalents. Corporate expenses and assets reconcile reportable segment data to the consolidated totals. An immaterial amount of corporate expenses is allocated to the operating segments. The following table presents net sales by reportable segment (in millions):
| Thirteen Week Periods Ended |  | Thirty-Nine Week Periods Ended
| June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
Net sales to external customers |  |  |  |  |  |  |
Power & Control |  |  |  |  |  |  |
Commercial and non-aerospace OEM | $ | 229 |  |  | $ | 180 |  |  | $ | 608 |  |  | $ | 499 |
Commercial and non-aerospace aftermarket | 317 |  |  | 270 |  |  | 903 |  |  | 787 |
Defense | 477 |  |  | 411 |  |  | 1,310 |  |  | 1,116 |
Total Power & Control | 1,023 |  |  | 861 |  |  | 2,821 |  |  | 2,402 |
Airframe |  |  |  |  |  |  |
Commercial and non-aerospace OEM | 323 |  |  | 254 |  |  | 901 |  |  | 682 |
Commercial and non-aerospace aftermarket | 348 |  |  | 308 |  |  | 1,010 |  |  | 815 |
Defense | 303 |  |  | 273 |  |  | 884 |  |  | 707 |
Total Airframe | 974 |  |  | 835 |  |  | 2,795 |  |  | 2,204 |
Total Non-aviation | 49 |  |  | 48 |  |  | 138 |  |  | 127 |
Net Sales | $ | 2,046 |  |  | $ | 1,744 |  |  | $ | 5,754 |  |  | $ | 4,733 |
The following table reconciles EBITDA As Defined by segment to consolidated income from operations before income taxes (in millions):
| Thirteen Week Periods Ended |  | Thirty-Nine Week Periods Ended
| June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
EBITDA As Defined |  |  |  |  |  |  |
Power & Control | $ | 587 |  |  | $ | 487 |  |  | $ | 1,615 |  |  | $ | 1,341 |
Airframe | 503 |  |  | 417 |  |  | 1,443 |  |  | 1,101 |
Non-aviation | 22 |  |  | 21 |  |  | 59 |  |  | 52 |
Total segment EBITDA As Defined | 1,112 |  |  | 925 |  |  | 3,117 |  |  | 2,494 |
Less: Unallocated corporate EBITDA As Defined | 21 |  |  | 10 |  |  | 94 |  |  | 62 |
Total Company EBITDA As Defined | 1,091 |  |  | 915 |  |  | 3,023 |  |  | 2,432 |
Depreciation and amortization expense | 77 |  |  | 70 |  |  | 219 |  |  | 199 |
Interest expense-net | 316 |  |  | 291 |  |  | 943 |  |  | 872 |
Acquisition transaction-related expenses and adjustments | 27 |  |  | 6 |  |  | 43 |  |  | 12 |
Non-cash stock and deferred compensation expense | 47 |  |  | 53 |  |  | 158 |  |  | 131 |
Refinancing costs | 30 |  |  | 32 |  |  | 59 |  |  | 41 |
Other, net | (8) |  |  | (6) |  |  | (9) |  |  | 11 |
Income from operations before income taxes | $ | 602 |  |  | $ | 469 |  |  | $ | 1,610 |  |  | $ | 1,166 |
The following table presents total assets by segment (in millions):
| June 29, 2024 |  | September 30, 2023
Total assets |  |  |
Power & Control | $ | 9,090 |  |  | $ | 7,315 |
Airframe | 9,344 |  |  | 8,972 |
Non-aviation | 233 |  |  | 234 |
Corporate | 3,161 |  |  | 3,449 |
| $ | 21,828 |  |  | $ | 19,970 |

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- Definition The entire disclosure for reporting segments including data and tables. 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