Welcome to TransDigm's Fiscal 2023 third quarter earnings conference call. Presenting on the call this morning are TransDigm's President and Chief Executive Officer, Kevin Stein, Co-Chief Operating Officer, Joel Reiss, and Chief Financial Officer, Sarah Wynne. Also present for the call today is our Co-Chief Operating Officer, Mike Lisman. Please visit our website at transdigm.com to obtain a supplemental slide deck and call replay information. Before we begin, the company would like to remind you that statements made during this call, which are not historical in fact, are forward-looking statements. For further information about important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, please refer to the company's latest filings with the SEC, available through the Investors section of our website or at sec.gov. The company would also like to advise you that during the course of the call, we will be referring to EBITDA, specifically EBITDA As Defined, adjusted net income, and adjusted earnings per share, all of which are non-GAAP financial measures. Please see the tables and related footnotes in the earnings release for a presentation of the most directly comparable GAAP measures and applicable reconciliation. I will now turn the call over to Kevin. Good morning. Thanks for calling in today. First, I'll start off with the usual quick overview of our strategy, a few comments about the quarter, and discuss our fiscal 2023 outlook. Then Joel and Sarah will give additional color on the quarter. As we previously announced on May 26, we made three significant organizational changes this quarter. Jorge Valladares will retire at the end of TransDigm's 2023 fiscal year. Jorge has served as TransDigm's COO for the past four years. His prior roles include Co-COO, Executive Vice President, and President of three TransDigm operating units. Jorge will aid in the transition of his role to the new Co-COOs, Mike Lisman and Joel Reiss, until his retirement date. Jorge also joined TransDigm Board of Directors as of May 26. Jorge has been with the company more than 25 years and has been an integral part of the long-term value creation of TransDigm and a key player in the cultural preservation of the company. Jorge has done a truly outstanding job, and we sincerely thank him for his dedication. We are happy to have Jorge continue contributing to the growth of TransDigm as a member of the company's board. Mike Lisman and Joel Reiss have assumed the roles of Co-COOs. Mike served as TransDigm's CFO for the past five years. Prior to becoming CFO, he worked at our Aero Fluid Products operating unit and on the M&A team at TransDigm. Joel is a long-time employee of TransDigm, having joined the company in 2000. He was an Executive Vice President for the last eight years. Prior to that, Joel served as President at two different TransDigm operating units, Hartwell and Skurka Aerospace. Before becoming a President, Joel was the Director of Operations at our Adams Rite operating unit. Sarah Wynne has assumed the role of CFO after having served as TransDigm's Chief Accounting Officer for the past five years. Sarah has been with the company for 20 years, and before becoming TransDigm's Chief Accounting Officer, she was a Group Controller overseeing the financial reporting of several operating units. Prior to that, Sarah was the Controller at our Aero Fluid Products operating unit and held various accounting positions in the TransDigm corporate office. Mike, Joel, and Sarah bring a unique mix of experience in a broad range of aerospace businesses to their new roles. They are all experienced TransDigm executives with proven track records. We are very excited to promote internally developed, long-tenured employees to each of these roles to perpetuate TransDigm's unique culture. I'm confident that they will continue to create the kind of value that has been the long-term hallmark of TransDigm. Now, moving on to the business of today. To reiterate, we believe we are unique in the industry in both the consistency of our strategy in good times and bad, as well as our steady focus on intrinsic shareholder value creation through all phases of the aerospace cycle. To summarize, here are some of the reasons why we believe this. About 90% of our net sales are generated by unique proprietary products. Most of our EBITDA comes from aftermarket revenues, which generally have significantly higher margins and, over any extended period, have typically provided relative stability in the downturns. We follow a consistent long-term strategy, specifically: First, we own and operate proprietary aerospace businesses with significant aftermarket content. Second, we utilize a simple, well-proven, value-based operating methodology. Third, we have a decentralized organizational structure and unique compensation system closely aligned with shareholders. Fourth, we acquire businesses that fit this strategy and where we see a clear path to PE-like returns. Lastly, our capital structure and allocations are a key part of our value creation methodology. Our shareholders private equity-like returns with the liquidity of a public market. To do this, we stay focused on both the details of value creation as well as careful allocation of our capital. As you saw from our earnings release, we had a solid quarter. Our Q3 total revenue was strong, and we had a robust EBITDA As Defined margin for the quarter. Additionally, we once again raised our guidance for the year. We continue to see recovery in the commercial aerospace market, and trends are still favorable as demand for travel remains high. Global domestic air traffic continues to lead the recovery and has surpassed pre-pandemic levels. International travel is also making progress in catching up to domestic travel. However, total air travel demand remains slightly below pre-COVID levels. There is still progress to be made for the industry, and our results continue to be adversely affected in comparison to pre-pandemic levels. In our business, during the quarter, we saw a healthy growth in our revenues and bookings for all three of our major market channels, commercial OEM, commercial aftermarket, and defense. Revenues also sequentially improved in all three of these market channels. EBITDA's defined margin improved to 52.5% in the quarter. Contributing to this strong margin is the continued recovery in our commercial aftermarket revenues, along with diligent focus on our operating strategy. Additionally, we had good operating cash flow generation in Q3 of over $400 million and ended the quarter with close to $3.1 billion of cash. We expect to continue generating additional cash in our final quarter of Fiscal 2023. Next, an update on our capital allocation activities and priorities. Regarding the current M&A pipeline, we continue to actively look for M&A opportunities that fit our model. As we look out over the next 12 to 18 months, as usual, the potential targets are mostly in the small and midsize comment on possible closings, but we remain confident that there is a long runway for acquisitions that fit our portfolio. The capital allocation priorities at TransDigm are unchanged. Our first priority is to reinvest in our business, second, do accretive, disciplined M&A, and third, return capital to our shareholders via share buybacks or dividends. A fourth option, paying down debt, seems unlikely at this time, though we do still take this into consideration. We are continually evaluating all of our capital allocation options, but both M&A and capital markets are always difficult to predict. We continue to maintain significant liquidity and financial flexibility to meet any likely range of capital requirements or other opportunities in the readily foreseeable future. Sarah will provide further commentary on our capital allocation during her prepared remarks. Moving to our outlook for Fiscal 2023. As noted in our earnings release, we are increasing our full Fiscal Year 2023 sales and EBITDA As Defined guidance to reflect our strong third quarter results and our current expectations for the remainder of the year. At the midpoint, sales guidance was raised $100 million, and EBITDA As Defined guidance was raised $105 million. The guidance assumes the continued recovery in our primary commercial end markets throughout the remainder of Fiscal 2023, and no additional acquisitions or divestitures. Our current year guidance is as follows, and can also be found on slide 6 in the presentation. The midpoint of our revenue guidance is now $6.555 billion, or up approximately 21% versus Fiscal 2022. In regards to the market channel growth rate assumptions that this revenue guidance is based on, for the commercial aftermarket and defense market, we are updating the full year growth rate assumptions as a result of our strong third quarter results and current expectations for the remainder of the fiscal year. We now expect commercial aftermarket revenue growth for Fiscal 2023 to be in the low 30% range, which is an increase from our previous guidance range of 25%-30%. The commercial aftermarket has been progressing well in our Fiscal 2023, and we plan for that to continue through Q4 and beyond. However, we aim to be conservative with this guidance as the commercial aftermarket is harder to predict, with many orders being book and ship, and the advanced bookings only going out a few months or so into the future. For defense, we now expect revenue growth in the mid-to-high single-digit percentage range. This is an increase from our previous guidance of low-to-mid single-digit percentage range. Commercial OEM revenue guidance is still based on our previously issued market channel growth rate assumptions. We are not updating the full year market channel growth rate for commercial OEM, as underlying market fundamentals have not meaningfully changed. We continue to expect commercial OEM revenue growth in the 20%-25% range. The midpoint of our EBITDA As Defined guidance is now $3.3365 billion, or up approximately 27%, with an expected margin of around 51.3%. This guidance includes about 50 basis points of margin dilution from the Dart Aerospace acquisition, and about 50 basis points of margin dilution from the recent Calspan acquisition. The pro forma margin dilution from Calspan, meaning if we had owned Calspan for all of our Fiscal 2023, is just over 100 basis points. The midpoint of our adjusted EPS is increasing primarily due to the higher EBITDA As Defined guidance, and are now anticipated to be $25.15, or up approximately 47%. Sarah will discuss in more detail shortly, some other Fiscal 2023 financial assumptions and updates. We believe we are well-positioned for the last quarter of our Fiscal 2023. We will continue to closely watch how the aerospace and capital markets continue to develop and react accordingly. Let me conclude by stating that I am very pleased with the company's performance this quarter and throughout this recovery of the commercial aerospace industry. We remain focused on our value drivers, cost structure, and operational excellence. Now let me hand it over to Joel to review our recent performance and a few other items. Thanks, Kevin. Good morning, everyone. I'll start with our typical review of results by key market category. For the balance of the call, I'll provide commentary on a pro forma basis compared to the prior year period in 2022. That is, assuming we own the same mix of businesses in both periods. The May 2023 acquisition of Calspan Corporation is excluded from this market discussion. In the commercial market, which typically makes up close to 65% of our revenue, we will split our discussion into OEM and aftermarket. Our total commercial OEM revenue increased approximately 25% in Q3 compared with the prior year period. Sequentially, total commercial OEM revenues grew by about 4% compared to Q2. Bookings in the quarter were robust compared to the same prior year period and significantly outpaced sales. We are encouraged by the increasing commercial OEM production rates and airline demand for new aircraft. OEM supply chain and labor challenges still persist, but appear to be making steady progress. While risks remain towards achieving the ramp-up across the broader aerospace sector, we are cautiously optimistic that our operating units are well-positioned to support the higher production targets. Now, moving on to our commercial aftermarket business discussion. Total commercial aftermarket revenue increased by approximately 32% in Q3 when compared with the prior-year period. Growth in commercial aftermarket revenue was primarily driven by the continued strength in our passenger sub-market, which is our largest sub-market, although all of our commercial aftermarket sub-markets were up significantly compared to prior-year Q3. Sequentially, total commercial aftermarket revenues increased by approximately 2%. Commercial aftermarket bookings for this quarter were strong compared to the same prior-year period. Turning to broader market dynamics, global revenue passenger miles still remain lower than pre-pandemic levels, but growth in air traffic over the past few months has continued to signal steady recovery momentum. IATA recently commented they see a better demand outlook for 2023 air travel than they previously forecast, and now expect total 2023 revenue passenger miles to reach 88% of 2019 levels. IATA also expects a return to 2019 air traffic levels in 2024. The recovery in domestic travel further progressed over the past few months and has surpassed pre-pandemic levels. In the most recently reported IATA traffic data for June, global domestic air traffic was up 5% compared to pre-pandemic levels. Domestic air travel in China continues to improve and was up 15% in June compared to pre-pandemic levels. This is a significant improvement from China being down 55% only six months ago in December. US domestic air travel for June came in just slightly above pre-pandemic traffic, but year to date surpasses pre-pandemic levels by about 2%. International traffic has made strides over the past few months and is catching up to the domestic recovery. A quarter ago, at the end of March, internationally, travel globally was depressed about 18% compared to pre-pandemic levels, but in the most recently reported IATA traffic data for June, international travel was only down about 12%. International traffic in North America is 2% above pre-pandemic levels, and Europe is within 10%. Asia-Pacific international travel was still down about 29%, but should hopefully continue to improve as the China reopening progresses. Global air cargo volumes in the most recent June IATA data continued to be lower year-over-year. Compared to pre-pandemic levels, but the contraction versus these prior year periods has moderated a bit. Going forward, improvements in inflation in major economies could potentially provide a tailwind to air cargo demand. However, with the continued growth in passenger flying, especially the wide-body recovery, there is more belly hole space available for cargo transport. It's too early to determine where our air cargo trend stabilizes, but we will continue to watch this closely. Business jet utilization is below the pre-pandemic highs in 2021 and continues to temper. Business jet activity does remain above pre-pandemic levels, but time will tell how this normalizes over the upcoming months. Shifting to our defense market, which traditionally is at or below 35% of our total revenue. The defense market revenue, which includes both OEM and aftermarket revenues, grew by approximately 17% in Q3 when compared with the prior year period. Sequentially, total revenues grew by approximately 14%. Defense bookings are also up significantly this quarter compared to the same prior year period. This quarter, we began to see improvements in the U.S. government defense spend outlays, which is reflected in our defense revenue performance this quarter. We are hopeful we will continue to see steady improvement, but as we have said many times before, defense sales and bookings can be lumpy. As Kevin mentioned earlier, we now expect our defense market revenue growth for this year to be in the mid to high single-digit% range. Next, I will provide a quick update on our recent acquisition of Calspan Corporation. As discussed on our last earnings call, we completed the Calspan acquisition this past May for $725 million in cash. Calspan has established positions across a diverse range of aftermarket-focused aerospace and defense development and testing services, including a state-of-the-art transonic wind tunnel that it utilizes to perform testing for both the commercial and defense end markets. Calspan's unique service offerings exhibit the earning stability and growth potential that are consistent with our aerospace component center businesses. The Calspan acquisition integration is progressing well under the leadership of Executive Vice President, Paula Wheeler. We have now owned Calspan for three months, and we are pleased with the acquisition thus far. Before concluding, I'd like to review one additional executive change that occurred during Q3. We recently promoted Kevin McHenry to the executive vice president role. Kevin has worked for TransDigm for over 20 years and was most recently the president of our Skurka Aerospace operating unit for five years. Prior to that, Kevin was the director of sales at our Hartwell Corporation and our Adams Rite Aerospace operating units, and also served as president of Adams Rite Aerospace. We continually work to improve our bench strength of promotable talent, and we are happy to have Kevin as our newest executive vice president. This promotion gives us the resources we need to oversee our business units following my promotion to Co-COO. Lastly, I'd like to wrap up by stating how pleased I am by our operational performance in this third quarter of Fiscal 2023. We remain focused on our value drivers and meeting increased customer demand for our products. With that, I would like to turn it over to our Chief Financial Officer, Sarah Wynne. Thanks, Joel. Good morning, everyone. I'm going to provide an overview on a few financial matters for the quarter and expectations for the full fiscal year. First, on organic growth and liquidity. In the third quarter, our organic growth rate was 20.7%, driven by the continued rebound in our commercial OEM and aftermarket end markets. On cash and liquidity, free cash flow, which we traditionally define as EBITDA less cash interest payments, CapEx, and cash taxes, was roughly $540 million for the quarter. For the full fiscal year, we continue to expect to generate free cash flow in excess of the $1.4 billion target previously provided. Below that free cash flow line, we saw net working capital consume approximately $180 million of cash during the quarter, as we continued to build both accounts receivable and inventory to support the ongoing and continuing sales ramp-up on both the OEM and aftermarket sides of the business. The OEM does tend to be slightly more intensive from a net working capital standpoint. We ended the quarter with approximately $3.1 billion of cash on the balance sheet, and our net debt to EBITDA ratio was 5.3x, down from the 5.6x at the end of last quarter. On a net debt to EBITDA basis, this puts us below the five-year pre-COVID average level of 6x. Additionally, our cash interest coverage ratio, such as EBITDA to interest expenses, at 3x, which is right in line with where we've historically operated pre-COVID and been comfortable operating the business. As always, we continue to watch the higher interest rate environment and the current state of the debt markets closely. As a reminder, we did a fair bit of refinancing in the first half of the year, pushing out over $8 billion of our nearest term maturities, due in 2025 out to 2028. We expect to continue both proactively and prudently managing our debt maturity stacks, which for us, means pushing out any near-term maturities well in advance of the final maturity date. Our nearest term maturity is now 2026. Over 75% of our total $20 billion gross debt balance is fixed or hedged through our Fiscal 2026. This is achieved through a combination of fixed rate notes, interest rate caps, swaps, and collars. This provides us adequate cushion against any rising rates, at least in the immediate term. As we sit here today, from an overall cash liquidity and balance sheet standpoint, we think we remain in a good position, with adequate flexibility to pursue M&A or return cash to our shareholders via dividends or share repurchases. Regarding capital allocation, it is likely we make a decision by the end of the calendar year based on current market conditions. We have a sizable cash balance of close to $3.1 billion. Consistent with history, when we have a significant amount of cash available, we aim to get the cash back to our shareholders in one form or another. All three capital allocation options, significant acquisitions, share buybacks, and dividends, remain on the table. With that, I'll turn it back to the operator to kick off the Q&A. Thank you. We will now conduct the question-and-answer session. As a reminder, to please ask a question, you'll press star one, one on your telephone and wait for your name to be announced. To withdraw your question, you'll press star one, one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of David Strauss of Barclays. Go ahead. Thanks. Good morning. Good morning. Good morning. Kevin, I don't know if it was for everyone or just me, your, your comments around the M&A pipeline cut out, at least for me. Would you mind repeating kind of where, where you are from, from a pipeline standpoint? I think, I think you had some interest in the, in the Raytheon property and, and maybe what happened there. Well, we can't comment, as you know, the process. We can't comment on, on deals due to NDAs that you put in place. Whether we were interested or not, we don't comment. The M&A pipeline, though, is, I said, I'll reread my words. We continue to actively look for M&A opportunities that fit our model. As we look out over the next 12 to 18 months, we continue to have slightly stronger than typical pipeline of potential targets. As usual, we can't comment, yada, yada. It's, it's similar to what I said last quarter. We are seeing a pretty interesting time right now. A lot of properties that we have been closely following for a long time are becoming available and, you know, difficult to predict which, if any, of them will close. Again, we are extremely disciplined in our M&A approach. Okay, thanks. A quick follow-up. In prior quarters, your, your comments, you know, your comment on the slide around bookings was that, you know, bookings were outpacing shipments, and this quarter you just went to a, you know, things are strong. What do we read anything into that? I mean, relative to kind of the, the bookings rate, maybe on a, on a sequential basis, both for the aftermarket and the new equipment side. Well, I think across the business, we built backlog. Book-to-bill for the company was still positive. It is true that, you know, some things can be lumpy. We saw strength in OEM and defense. Aftermarket was a little bit, the rate of change of expansion of the order book slowed a little bit. Still have a positive book-to-build there for the year. All right. Thanks very much. Thank you. Our next question comes from the line of Kristine Liwag from Morgan Stanley. Go ahead, Kristine. Hey, good morning, guys. How are you doing? Good morning. Good morning. Good morning. You know, with the strong growth in aftermarket, we're hearing that MRO facilities are fully booked this year, and slots are even difficult to come by by next year or even the year after that. Can you provide any color in terms of how much of your aftermarket parts are linked to heavy maintenance versus the normal wear and tear? And does the limited MRO shop availability essentially limit the volume of parts you could sell to the aftermarket? How, how should we think about that dynamic? Yeah, I don't think we have the specific data around the MRO and, and what the implications are. I think we continue to see the commercial aftermarket growth in all of our submarkets. I think we continue to see the positive momentum as revenue passenger miles continue to move up. Year to date, we're now down to just 10% below pre-pandemic levels and continue to expect to see trends continue as long as the people continue to fly. Great, thanks. One, if I could just do another follow-up. You know, what we're hearing from the supply chain is that in commercial OE terms, there have been improving pricing for new airplane parts in the OE side. Does that mean that when OE volume starts coming back for you guys, could, could you also get some of that pricing benefit? Could that alleviate some of the mixed headwinds you could experience should the ramp materialize sooner than expected? I think, you know, we don't usually comment on, on margins and increases across the board. It is fair to say that our, you know, as we always state, our aftermarket is more profitable. You know, our, our goal in, in pricing is to pass along inflation. We have seen a very inflationary environment. That's probably all we can comment on, on that. You know, we definitely make more money in the aftermarket. Great. Thanks, guys. Thank you. Our next question comes from the line of Miles Walton. Hold on one second. Of Wolfe Research. Go ahead, Miles. Thanks so much. Kevin, the margins in the quarter were particularly strong, given what I would think would have been a little bit more adverse mix with Calspan folding in, aftermarket as a percent of sales is actually lower sequentially. Can you comment on, you know, the dynamics that would help do that in the quarter sequentially? Also, I guess, why they're going to go down 100 basis points sequentially into 4Q? Well, I hope we, forecast conservatively as we look at the future. That's, a conservative look at what might happen. Given that aftermarket is such a significant driver for, the business and that some of it isn't booked yet for the quarter, it makes it, prudent for us to be a little more conservative as we forecast the quarter. We'll see how it plays out. I'll tell you on the margins line, it's a, you know, a pleasant, outcome that we continue to see the progress in cost reductions across the business. Even selective new business programs have been, successful for us. There were, were not any significant one-time accounting adjustments or anything in these numbers, so this was real performance of the business. Got it. Thanks. Just a quick follow-up. As you go into next year, given EBITDA is higher, your net interest expense is coming lower, the tax rate, I know, kicked up, because of the EBITDA rule of interest deductibility. Is the tax rate now going to kick back down, a couple hundred basis points? Thanks. I think we'll give guidance. That's really a question for Sarah, but we'll give guidance on 2024 next quarter when we get into it, and we'll have a, you know, a detailed look at the interest and tax rates and all the pieces. If you can hold your question until then, is that fair, Sarah? Yep, that's right. We're still, yeah, haven't gone through the planning process yet. Okay, thanks again. Thank you. Our next question comes from the line of Ken Herbert from RBC Capital Markets. Please go ahead. Yeah, hey, good morning. Kevin. Morning. Maybe, maybe just to stick on the aftermarket. You know, I think you've raised guidance for aftermarket growth each quarter this year. You're gonna likely end the year at sort of 2x the initial guidance in terms of the growth. I'm just wondering if there's anything in particular you could call out as you've gone through Fiscal 2023 that's been a particular source of upside that was maybe unexpected, or where you think, you know, that significant sort of outperformance relative to the initial expectations, where, where's it really come from? I think China was the big player. When we initially had our look at the business, that was the unclear point that we didn't see in our planning. I think a lot of what we're seeing today for upside and the revisions favorably have been due to that expanding market. Really, the a better recovery than I think any of us anticipated when we initially planned the year. Is there, is there any concern that you've seen, you know, some of the elevated activity, any of the sales in the aftermarket pulled into 2023 that could be a potential headwind in 2024? Just how do you think about sort of the, the, the booking strength and the initial outlook into 2024 relative to the 2023 strength? Joel? Obviously, you know, we're not going to provide any guidance towards 2024. Look, our order book continues to evolve. Flight activity continues to increase. You just said the traffic in Asia Pacific has increased significantly, but, you know, even there, it's still about 20% below 2019 levels. Global air traffic is still below the pre-pandemic level. I think we're all realistic that the rate of change has to slow at some point as you get closer and closer back to the pre-pandemic levels. I don't think we see anything else beyond that changing. Great. Thank you. Thank you. Our next question comes from the line of Robert Stallard from Vertical Research Group. Please go ahead. Thanks so much. Good morning. Morning. Good morning. Kevin, first of all, on the M&A pipeline, as you said, your comments sound pretty similar to what you said three months ago, that things are looking quite interesting out there. I'm pretty worried that everyone else is saying the same thing, and this is starting to bid some of these asset prices up too high. You know, in fullness of time, I don't think you can overpay for good assets that meet our criteria, so I'm not worried about more competition. If businesses meet our criteria, we will, you know, rise to meet the challenge. Okay. Then, secondly, on the aftermarket price, I thought it was quite interesting that they appeared to have pulled forward their profit increase by another two months this year. Is this something some of your businesses are doing, or are you still on a fairly standard sort of 12-month outlook increase? Could you repeat your question? You broke up a bit, and I couldn't hear some of the details. Yeah, sorry, Kevin. I was highlighting that CFM had pulled forward their spare part price increase by another two months, and I was wondering if it's something that TransDigm businesses are doing, or are you sticking to your usual 12-month catalog price increases? I think, we do regular catalog price increases, but in a high inflationary environment, dynamic pricing becomes more of the norm. I don't think our businesses necessarily are augured into, you know, only once a year. It really depends on the inflationary inputs that they're seeing. Okay, that's great. Thank you. Thank you. Our next question comes through the line of Robert Spingarn from Melius Research. Please go ahead. Hey, good morning. Morning. Good morning. Kevin, on margins, just as OE mix increases, assuming that OE growth overtakes aftermarket growth at some point here, can you mitigate the headwind to margins from that, just from productivity and pricing, perhaps on the other side, in aftermarket? I think there will be challenges to doing that, but that would certainly be one of our aspirational goals as we go forward, to continue to drive cost improvements and improvements in general to our business, to drive that. It will be difficult, as we have very strong aftermarket growth, but we're seeing the OEM growth somewhat muted, as they are slower to ramp up, meaning there's more pressure in the aftermarket. I think that we continue to enjoy this for a while into the future. Maybe not the wild recovery we've seen over the last two years, but still, I think that the market conditions, really in all of our market segments, set up very favorably for us, even in the aftermarket in the future. Okay, thanks so much. Thank you. One second for the next question. Our next question comes from Peter Arment from Baird. Please go ahead. Yeah, thanks. Good morning, everyone. Kevin, hey, maybe if you could just give a, a broader comment on the body side of things. We're really starting to see kind of an uptick, really, across the board. I know last, last quarter, you made some comments that your interiors business has been recovering nicely. Just any, any further color there would be helpful. Thanks. Yeah. T his is Joel. I'd say on the interior side, I think we're seeing a similar trend as we are in the overall commercial aftermarket, a good increase year-over-year and continuing the positive trend we've seen for several quarters now. To date, it's primarily being driven by the repair side, but we're seeing a nice recovery. Obviously, as they continue to utilize the existing fleet, it'll be beneficial for us in the future for modifications and refurbishments. Appreciate that color, Joel. Then just as a follow-up quickly, Kevin, I know last quarter there was a comment that made about aftermarket volumes still being 10%-15% light. Is that still how you see kind of the year shaking out, or is that starting to improve? Thanks. Well, I think it improves, every quarter, but I still see 10+% opportunity. You know, RPMs are still 12% below takeoff and landings in certain regions, still below where they were pre-pandemic. I still see opportunity and suppressed demand, which I have every belief will return. Appreciate it. Thanks, Kevin. Yeah. Thank you. Our next question comes from the line of Jason Gursky of Citigroup. Please go ahead. Hey, good morning, everybody. Morning. Yeah, I can't believe I'll be the first to congratulate everybody on their respective promotions and retirements. Congrats to all. Thank you for doing that. Um It's always good to hear. Yeah. Sometimes we're just a machine that keeps moving, and people forget that part. No, I appreciate all the hard work for sure, that goes into achieving that level of success. Just a quick question for you related to the situation at Pratt with the GTF. They're talking about bringing in, I don't know, 130-140 engines here in the near term, and then 1,200 over the next year or so. I'm just kind of curious what you're hearing from some of your customers about how they're going to deal with that. Do you think there's an opportunity for more planes to kind of come out of the desert here? Do you think that there will be more expansive work that gets done when some of these engines and perhaps aircraft get grounded that might accelerate some work for you all that would've maybe come later if the engines had come in under normal course? I'm just trying to get a sense of how this GTF engine, engine issue might impact TransDigm. Yeah, I think I'll kick that one to Joel, for comment. He's very close to the customers and businesses. Yeah, I don't think we think it has any significant change. Engines coming in sooner means one set of components get replaced earlier because they're gonna do maintenance on the engine. Then there's another set of components that you really want to have them flying, and the starts and stops are what their takeoffs and landings, is what makes the big difference. I think we're, we're not hearing anything that makes a significant change of what we're, we're seeing today. Okay, great. I'll leave it with one. Thanks, guys. Thanks. Thank you. Our next question comes from a line of Noah Poponak of Goldman Sachs. Go ahead, Noah. Hey, good morning, everyone. Morning! Was the book to bill greater than 1.0 in all three end markets? For the quarter or year to date? I guess we don't really give that kind of granularity usually. It was up across the company. For aftermarket, it was slightly off, but year to date, still positive. Okay. Does that clear it up for you? Yeah, that clears it up. Yeah. Then on the defense side, I mean, can you spend another minute on what happened there? You, you referenced how outlays are trailing authorization, and that has started to catch up. What, what are you seeing and hearing from your customer there? You know, you'll have easy compares, and that outlay gap is pretty wide. Can these higher growth rates sustain for a period of time? Well, I think we're seeing steady improvement in the outlays. The outlays are still a little bit slow in terms of solicitations converting into orders compared to historical levels. As Kevin just mentioned, bookings were stronger than shipments, so I think we continue to anticipate some runway there. Yeah, I think in, really, in all three of our market segments, including commercial aftermarket, although maybe bookings slowed ever so slightly this quarter. Remember, bookings can be lumpy quarter to quarter. You know, all three of our commercial OEM, commercial aftermarket, and defense, all look favorable into the future. I can't stress that enough. Okay. Thanks, guys. Appreciate it. Yeah. Thank you. Our next question comes from the line of Ron Epstein from Bank of America. Please go ahead. Please go ahead, Ron. Ron's on mute. Oh, sorry about that. I was on mute. Yep, just trying to- There we go. Yeah. Yeah, hey. Just a quick one. A lot of stuff, good stuff's been asked. Kevin, what's your, your mood for a fixer-upper? I mean, as you, as you look at stuff out there, is, is kind of M&A, you want to do fixer-upper style or stuff that just kind of fits right in with the, you know, the, the TransDigm model? I guess, it's where, where do we see, the likelihood of, you know, upper quartile private equity-like returns? You know, we, we've always talked about the 20% IRR threshold for M&A activities. I'm not against fixer-uppers. Generally speaking, though, we acquire good businesses, we heavily invest in them, and we make them much better. A fixer-upper might fit that as you're listing, but, you know, we usually don't look for those per, per se. Everything must stand on its own and generate the return. Got it. I guess I'm open-ended. Got it. Then, I mean, I, I'm just trying to just get a sense. I think a lot of people are, what are you not interested in? I mean, do you, do you think you need to open the. Aperture? Look ahead? Yeah, I mean, do you think you got to look at- No, I don't think we need to... Sorry. We don't think we need to open the aperture per se. I think there's still plenty of activity in the aerospace world for accretive M&A. It's just important for us to stay disciplined. Historically, we do one, two deals a year. Some years you get a bunch more. It's important for us to stay very disciplined in our approach. We're still seeing a lot of activity in core M&A that fits our model. What we look for is that 20% IRR. We're still seeing those opportunities, quite a few of them right now. I, I think what's critical for us is to be disciplined in this process. If we continue to be disciplined, then we'll continue to find the, the great businesses that we look for. There's certainly a lot of interesting properties available as we look over the next 12 to 18 months, as I alluded to in my comments. Does that help you better understand what we're seeing? Yeah. Yeah. Yeah, I think it does. If, if I may, just one last quick one. Gross margins in the quarter were really quite good at 59%. Should we expect that to continue? you know, our goal is to always drive margins up. Our track record, I think, in that speaks for itself. Got it. All right. Thank you very much. Thank you. Our next question comes from the line of Seth Seifman of JP Morgan. Please go ahead. Hey, thanks very much, and, good morning. Morning. Just, morning. Just going back to the question of, of capital deployment. I think you said the, the majority of, of M&A opportunities, you know, kind of naturally are in the, the small and mid-size category. And so, you know, given the capacity that you'll have by, by year-end, unless something really significant shakes loose, you know, should investors be thinking about, you know, if, if there is something in that small and mid-size category that there is, you know, plenty of opportunity for, capital return as, as well? Yeah, I mean, our capital allocation priorities remain unchanged. We'll continue to evaluate our options over the course of the calendar year. We'll see how the market conditions look. Ultimately, you know, we operate a disciplined approach, and we'll continue to do so. Right. Okay, thank you. Just as a quick follow-up, I know maybe not the most, the part of the business that gets focused on most, but the biz jet and helicopter aftermarket, it's been up kind of 20% the past couple of quarters. You know, we generally think about aftermarket revenues kind of tracking flight hours plus some price. You know, business jet flight hours in the U.S., at least, have been pretty, pretty flat year to date. Is there something you'd point to that, that accounts for the continued strong growth there, given that it seems like, you know, the underlying end market just isn't really growing that much right now? I think some of it's the timing of bookings and, and shipments. The biz jet market expanded pretty significantly during the pandemic and has really only slowly reduced each quarter. It's something we'll continue to monitor, as I said in my opening remarks. Great. Thanks very much. Thank you. Our next question comes from the line of Michael Ciarmoli from Truist. Hey, good, good morning, guys. Thanks for taking the questions, and congrats. Kevin, just maybe back to margins, and, you know, obviously, I think Rob brought up the OE ramping and the mix, but, you know, and you guys are always trying to execute and drive margins higher, but have EBITDA margins peaked? Then, I guess, as we think about OEM ramping, does your commentary around dynamic pricing apply to some of your OEM commercial OEM sales? Yeah, it doesn't. Commercial OEM tends to be longer, you know, more like a year or two, to, you know, address any inflationary pressures. Yeah, generally speaking, little different on the OEM side, but still you can find a way to pass along inflation, and that's, again, what we strive to do. What was the first part of your question? Just EBITDA margins. I mean, you know, record level in the quarter. Oh, have they peaked? That's right. No, they haven't peaked. you know, there's still room to grow and expand, and that's how we look at it. We're still looking for those opportunities, and I don't see any reason why there isn't room to continue to improve. That's our goal, is steady, consistent, disciplined improvement, M&A, capital allocation, to continue to allow the machine to operate. Got it. Helpful. I'll leave it at that. Thanks, guys. Thank you. Our next question comes from the line of Gautam Khanna of TD Cowen. Please go ahead. Hey, good morning, guys, and congrats to everyone. Good morning. Just changed roles. Good morning. Hey, I wanted to ask just quickly on whether you're seeing any discernible difference in demand patterns through your distribution channels versus direct, and, and just how shortening lead times, if, if they have, have impacted ordering patterns by customers. Is there less of a queuing effect, you know, because they don't have to place an order as far in advance? Is that something that might be impacting the bookings as well? Thanks. Yes, when we look at the point-of-sale information from our distribution partners, it matches pretty well with what we're seeing as we go direct to customers. I, I don't think we're seeing anything significant there. You know, when it comes to lead times, every operating unit sets their own unique set of lead times for products and customers. They're often not the same. You know, given that the recovery we've seen in the, in the aftermarket, we've invested in the, in the inventory to be able to support the customer base. I think that's helped out a little bit. No, no real significant change, at least from what I'm seeing, from the either the distribution point of sale or what we're seeing direct and no significant change due to lead time. Thanks. Then just a quick follow-up on Calspan, because it's a little bit of a different profile, more service-oriented. I'm just curious, have you -- any surprises, anything that we should think about that'll be different with respect to its integration or its margin potential over time relative to the hardware businesses? I don't think so. I think as Jorge said last quarter, you know, our view of value creation is a three-pronged approach. You know, we focus on value-based pricing of our products, managing our cost structure, and providing innovative solutions. We've only recently closed on it, but we're looking to leverage all three. We think it's a great business. It's been well run, and our goal is to optimize it, similar to what we've done in past acquisitions. We've got a, as I mentioned in my opening remarks, we've got a seasoned executive in Paula Wheeler, leading the integration, and I think we think it'll fit well into the TransDigm formula. Just last one, sorry. Is with respect to service-oriented businesses, is that something that you're also kind of seeing more of in your M&A pipeline? Is that stuff you're more interested in? No, I think we've always seen a few of them, just nothing as compelling as Calspan was to us. I mean, at the end of the day, we're looking for businesses that we can identify that upper quartile, private equity-like return, 20% plus. That's what we're looking for. You know, we believe today that Calspan will absolutely deliver that for us. Thanks a lot, guys. Appreciate it. Thank you. Our next question comes from the line of Sheila Kahyaoglu from Jefferies. Go ahead, Sheila. Thank you. Good morning, guys. Thank you for the time. Good quarter, and congrats to all the promotions. When you put up 34% aftermarket growth and 50% margins, you're gonna get two negatively biased questions, so bear with me here. Are you seeing any negative signs in the aftermarket, whether it's inflation cooling, cargo weakness, or low-cost carriers, are you seeing yield softness? I think, cargo and, maybe some business jets softening in, the aftermarket. Joel, do you have anything to add to that? No. I think the, you know, on the cargo side, the yields are down for them significantly. They've obviously increased the significant amount of belly capacity in the last several months as international travel has kicked up, and, you know, we have to see how that all shakes out. We think it has had some impact this quarter. We'll see how it shakes out going forward. Thank you for that. Just on EBITDA margins, 52%, I think the all-time high, they expanded 120 basis points sequentially, despite Calspan being, I think, 70 basis points dilutive, given 25% margin. Are we just wrong on Calspan margins, or what drove the margin expansion in the quarter? I think it was strong performance in Q3. The results, the market mix, and we didn't own Calspan for all of the quarter. I think that will impact us a little bit more as we go forward. It was just a strong all around quarter, good performance in the aftermarket and the OEM side of the house. Great. Thank you. Thank you. I am showing no further questions at this time. I would now like to turn the conference back to Jaimie Stieman for closing remarks. Thank you all for joining us today. This concludes the call. We appreciate your time, and have a good rest of your day.