Good day, and thank you for standing by. Welcome to the fourth quarter 2024 TransDigm Group Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I will now like to hand the conference over to speaker today, Jaimie Stemen, Director of Investor Relations. Please go ahead. Thank you, and welcome to TransDigm's fiscal 2024 fourth quarter earnings conference call. Presenting on the call this morning are TransDigm's President and Chief Executive Officer, Kevin Stein, Co-Chief Operating Officer, Mike Lisman, and Chief Financial Officer, Sarah Wynne. Also present for the call today is our Co-Chief Operating Officer, Joel Reiss. 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 statement, please refer to the company's latest filings with the SEC available through the investor 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 reconciliations. 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, then discuss our fiscal 2025 outlook. Then Mike and Sarah will give additional color on the quarter. To reiterate, we believe we are unique in the industry in both the consistency of our strategy in both 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, we first 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 organization structure and unique compensation system closely aligned with shareholders. Fourth, we acquire businesses that fit this strategy where we see a clear path to PE-like returns. And lastly, our capital structure and allocations are a key part of our value creation methodology. Our long-standing goal is to give 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 closed out the year with another good quarter. We had solid operating performance in Q4 with both total revenue and EBITDA As Defined margin coming in strong. For the full year, fiscal 2024 revenue came in above the high end of our most recently published guidance, and our fiscal 2024 EBITDA As Defined margin surpassed the guidance. Commercial aerospace market trends remain favorable in the industry. The commercial aftermarket has normalized as global air traffic continues to surpass pre-pandemic levels and demand for travel persists. In the commercial OEM market, there is still much progress to be made for OEM rates, and our results continue to be adversely affected in comparison to pre-pandemic productions. Airline demand for new aircraft remains high, and the OEMs are working to increase aircraft production. However, OEM aircraft production rates remain well below pre-pandemic levels as the struggles in the OEM supply chain persist, and the lingering effects of the recently resolved machinist strike at Boeing likely push the OEM recovery further to the right. In our business, during the quarter, we saw healthy growth in our revenues for all three of our major market channels: commercial OEM, commercial aftermarket, and defense. Our EBITDA As Defined margin was 52.6% in the quarter. Contributing to this strong Q4 margin is the continued strength in our commercial aftermarket, along with diligent focus on our operating strategy, which is allowing margin performance to expand across all segments. Additionally, we had strong operating cash flow generation in Q4 of over $570 million and ended the quarter with almost $6.3 billion of cash. We expect to steadily generate significant additional cash through 2025. Next, an update on our capital allocation activities and priorities. During fiscal 2024, we're pleased to have allocated approximately $6.5 billion of capital in the aggregate across M&A and return of capital to our shareholders. Specifically, these activities included the acquisition of the SEI Industries, CPI Electron Device Business, Raptor Scientific, among others, and a special dividend of $75 per share. This dividend of $75 is our largest to date. As you know, we are continuously assessing our capital allocation options, and we are very pleased to return this capital to our shareholders. Regarding the current M&A activities and pipeline, we continue to actively look for M&A opportunities that fit our model. As we look out over the time horizon, we continue to see an expanding pipeline of potential M&A targets, as we demonstrated this year, and we do not see this environment slowing in the near term. As usual, the potential targets are mostly in the small and mid-size range. I cannot predict or 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 businesses, 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 difficult to predict. As always, we continue to closely monitor the capital markets and remain opportunistic. As mentioned earlier, we exited fiscal 2024 with a sizable cash balance of almost $6.3 billion. Pro forma for the special dividend paid in October, we still have a sizable cash balance of around $2 billion. Our capital allocation actions still leave us with significant liquidity and financial flexibility to meet any likely range of capital requirements or other opportunities in the readily foreseeable future. Moving to our outlook for fiscal 2025, the guidance assumes no additional acquisitions or divestitures and is based on current expectations for continued performance in our primary commercial end markets throughout fiscal 2025. Our initial guidance for fiscal 2025 is as follows and can also be found on slide seven in the presentation. The midpoint of our fiscal 2025 revenue guidance is $8.85 billion, or up approximately 11%. As a reminder, and consistent with past years with roughly 10% less working days than the subsequent quarters, fiscal 2025 Q1 revenues, EBITDA, and EBITDA margins are anticipated to be lower than the other three quarters of 2025. This revenue guidance is based on the following market channel growth rate assumptions. We expect commercial OEM revenue growth in the mid-single-digit percentage range, which is highly dependent on the evolution of the production rates in the commercial OEM environment. Commercial aftermarket revenue growth in the high single-digit to low double-digit percentage range, and defense revenue growth in the high single-digit percentage range. The midpoint of fiscal 2025 EBITDA As Defined guidance is $4.685 billion, or up approximately 12%, with an expected margin of around 52.9%. This guidance includes about an additional 70 basis points of margin dilution from recent acquisitions. We anticipate EBITDA margins will move up throughout the year, with Q1 being the lowest and sequentially lower than Q4 of our fiscal 2024. The midpoint of adjusted EPS is anticipated to be $36.32, or up approximately 7%. Sarah will discuss in more detail shortly the factors impacting EPS, along with some other fiscal 2025 financial assumptions and updates. We believe we are well-positioned as we enter fiscal 2025. As usual, we 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 year. We remain focused on our value drivers, cost structure, and operational excellence. We look forward to fiscal 2025 and expect that our consistent strategy will continue to provide the value you have come to expect from us. Now, let me hand it over to Mike Lisman, our TransDigm Group Co-COO, to review our recent performance and a few other items. Good morning. I'll start with our typical review of results by key market category. For the remainder of the call, I'll provide commentary on a pro forma basis compared to the prior year period in 2023, that is, assuming we own the same mix of businesses in both periods. The market discussion includes the recent acquisitions of SEI Industries, the CPI Electron Device Business, and Raptor Scientific in both periods. 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 13% Q4 and 20% for full fiscal year 2024 compared with the prior year periods. Sequentially, total commercial OEM revenues contracted by 4% Q4. Bookings in the quarter were solid and without too much negative impact from the Boeing strike, as this hit only the last 17 days of the quarter. We are happy to see that Boeing and the IAM have reached an agreement, but the OEM supplier landscape is now once again in a difficult position. Prior to the strike, the challenges seen across the aerospace OEM supply sector these last few years were continuing to ease, but that recovery remains somewhat fragile. The near eight-week production line shutdown will likely exacerbate the situation. Time will tell how this plays out. Specific to TransDigm, since we ship to both Boeing as well as sub-tiers on the affected platforms, the impact across our businesses is uneven and varied. The commercial OEM guidance we're giving today contains what we believe is an appropriate level of risk around the MAX, 767, and 777 production build rates for the 2025 fiscal year. As most of you know, we are quite diversified across all commercial and defense platforms, with the majority of our revenue, and even more so EBITDA, derived from the aftermarket. Accurately predicting OEM build rates for 2025 as we sit here today is a difficult task. Now that an agreement has been reached, we expect the ramp-up back to the previously targeted monthly production rates to be significantly delayed. On the backside of prior strikes, most recently 2008, production rates have taken close to one year to recover to the pre-strike monthly rates. This means a lower OEM production environment in our fiscal 2025 than we expected one quarter ago on our last earnings call. To prepare for this, during recent weeks, we proactively initiated cost reduction initiatives across our operating units to right-size our structure for this lower 2025 OEM production environment. These cost reduction initiatives span furloughs, headcount reductions, timeline accelerations of productivity projects, and a range of other actions aimed at reducing expenses. Now moving on to our commercial aftermarket business discussion. Total commercial aftermarket revenue increased by approximately 8% in Q4 and 12% for full fiscal year 2024 compared with the prior year periods. Sequentially, total commercial aftermarket revenues were roughly flat in Q4. With regards to our commercial aftermarket rate of growth, the 8% year-over-year increase we saw this quarter was a bit lighter than we previously expected. As we've said many times before, commercial aftermarket can be lumpy, so we always focus on 12-month trends, not quarterly trends. Our commercial aftermarket is made up of four sub-markets: passenger, interior, freight, and business jet. This quarter, growth seen across the four sub-markets was still varied, but not quite as disconnected as in the first three quarters of this year. All four sub-markets increased versus Q4 of last year. Business jet was a bit stronger and freight weaker than the total commercial aftermarket 8% growth rate. In the fourth quarter, the passenger sub-market performed in line with the overall commercial aftermarket rate of growth. Q4 point of sales data from our distribution partners increased well into the double digits, approaching 20% versus Q4 of last year. For the full year, our passenger sub-market remained the strongest of the group and was up nicely, exceeding our original expectations. In particular, within our passenger segment, operating units with higher engine content posted very solid growth, in excess of those with non-engine content, and again above our expectations for the year. Staying on the full-year theme, freight, biz jet, and interior all underperformed versus our original expectations. Finally, bookings nicely exceeded sales for the full year. These factors give us confidence we will achieve the commercial aftermarket growth rate guidance which Kevin provided for fiscal 2025. With regard to how commercial aftermarket revenue is likely to progress throughout fiscal 2025, two quick notes. First, Q1 is expected to be the lowest quarter of the year on a sales dollar basis, owing to the 10% fewer working days. Second, Q1 of fiscal 2025 will also likely be the lowest quarter on a percentage growth basis, owing to some recent softness on bookings and timing that dictates what falls into the quarter from a shipment standpoint. Now turning to broader market dynamics and referencing the most recent IATA traffic data for September. Global revenue passenger miles have continued to surpass pre-pandemic levels since February 2024. September 2024 air traffic was about 4% above pre-pandemic. IATA currently expects traffic to reach 104% of 2019 levels in 2024 and surpass prior year traffic by 12%. Domestic travel continues to surpass pre-pandemic levels. In the most recently reported traffic data for September, local domestic air traffic was up 9% compared to 2019. Domestic air travel growth has been driven significantly by outsized growth in China, where air travel was up 16% in September compared to pre-pandemic. Shifting over to the US, domestic air travel for September was up 8% versus 2019 levels. International traffic has generally hovered slightly above or below pre-pandemic levels for the past few months, but is up nicely from where it was one year ago. In the most recently reported data for September, international traffic was about 2% above pre-pandemic levels, and this has improved from being 93% of 2019 levels one year ago. In summary, for the commercial aftermarket, as we head into 2025, things continue to shape up nicely. As we stated on prior earnings calls, now that passenger traffic has returned to pre-pandemic levels, and with it our volume, which is now running slightly ahead of 2019 levels, the commercial aftermarket rate of growth would moderate a bit. And you see this in our guidance for 2025. With regard to the sub-markets in 2025, we expect continued growth in our passenger and interior sub-markets driven by the positive trends in passenger traffic, aided slightly by older aircraft continuing to fly for longer. Business jet is likely to continue to bounce around but should return to growth over the full year. Freight will start to lap easier comps in our fiscal 2025, so we expect stronger performance there and a return to positive growth trends. As you know, on a quarterly basis, commercial aftermarket can be lumpy, so we are sure that the path to the growth expectations I mentioned will be uneven over the course of the coming year. Now 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 16% Q4 and 19% for the full fiscal year 2024 compared with the prior year periods. Q4 defense revenue growth was well-distributed across our businesses and customer base. Additionally, we saw similar rates of growth in both the OEM and aftermarket components of our total defense market, with OEM running slightly ahead of aftermarket. Defense bookings for the full year significantly surpassed the prior year and support the 2025 guidance for high single-digit revenue growth. Additionally, we saw growth in U.S. government defense spend outlays during Q4. As you know, defense sales and bookings can be lumpy, and forecasting them with precision on a quarterly basis is difficult. They can get bigger or smaller in size and pull left or push right on timing. Similar to my commercial aftermarket commentary, the defense growth rates could also be uneven over the individual quarters of 2025. Lastly, I'd like to finish by recognizing the strong efforts and accomplishments of our 51 operating unit teams during fiscal 2024. It was a good year, and we're pleased with the operating performance they delivered for our shareholders. As we enter into our new fiscal year, our management teams remain committed to our consistent operating strategy, servicing the strong demand for our products. And should our 2025 growth expectations prove too conservative, with demand for our products coming in stronger than we've outlined here today, the operating unit teams will be ready to step up and meet the higher demand. With that, I would like to turn it over to our CFO, Sarah Wynne. Thanks, Mike, and good morning, everyone. I'm going to review a few additional financial matters for fiscal 2024 and then also our expectations for fiscal 2025. First, a few additional fiscal 2024 data points on organic growth, taxes, and liquidity. In the fourth quarter, our organic growth rate was 12.2%, and all market channels contributed to this growth, as Kevin and Mike have just discussed. On taxes, our GAAP and adjusted tax rates finished the year within their expected ranges. Our fiscal 2024 GAAP tax rate was 22.6%, and the adjusted rate was 24%. On cash and liquidity, free cash flow, which we traditionally define as EBITDA less cash interest payments, CapEx, and cash taxes, was roughly $2.3 billion for the year. Below that free cash flow line, working capital consumed approximately $200 million, and the final working capital ended the year roughly in line with historical levels as a percentage of sales. As Kevin mentioned, we ended the year with approximately $6.3 billion of cash on the balance sheet, or around $2 billion when pro forma for the $75 dividend that paid out on October 18th. At year-end, our net debt-to-EBITDA ratio was 4.4 times, down from the 4.6 at the end of last quarter. Pro forma for the $75 share dividend, our net debt-to-EBITDA ratio is 5.4 times. While we don't target a specific amount of cash that we like to have on hand, we have sufficient capital available through both cash on hand as well as incremental debt capacity to support all potential M&A in the pipeline. Over the course of fiscal 2024, we did a fair bit of financing. We raised $5 billion of capital, $2 billion to fund the acquisition of CPI announced earlier in the year, and $3 billion in support of the $4.3 billion return of cash to our shareholders in the form of the $75 dividend. We continue to be comfortable operating in the 5-7 net debt-to-EBITDA ratio range. Our go-forward strategy of capital deployment has not changed, and we continue to seek the best opportunities for providing value to our shareholders through our leverage strategy. In addition, we refinance various tranches of our debt stack. Our capital allocation strategy is always to both proactively and prudently manage our debt maturity stacks. Our nearest term maturity is November 2027, which gives us plenty of protection, at least in the short term. In addition, approximately 75% of our $25 billion gross debt balance is fixed through fiscal 2027. This is achieved through a combination of fixed-rate notes, interest rate caps, swaps, and collars. Next, on the fiscal 2025 expectations, I'm going to give some more details on the financial assumptions around interest, expense, taxes, and share count. Special note that all of my comments and data here include the payment of the $75 dividend in fiscal 2025. Net interest expense is expected to be about $1.54 billion in fiscal 2025, and this equates to a weighted average interest rate of approximately 6.1%. This estimate assumes an average SOFR rate of 4.4% for the full year. On taxes, our fiscal 2025 GAAP, cash, and adjusted tax rates are all anticipated to be in the range of 22%-24%. On the share count, we expect our weighted average shares outstanding to be 58.4 million shares in fiscal 2025. With regard to liquidity and leverage for fiscal 2025, as we would traditionally define our free cash flow from operations at TransDigm, which again, if EBITDA is defined as cash interest payments, CapEx, and cash taxes, we estimate this metric to be around $2.3 billion. After paying out some 75% dividend and assuming no additional acquisitions or capital market transactions, we would end the year with around $4 billion of cash on the balance sheet, which would imply a net debt-to-EBITDA ratio close to four times at the end of fiscal 2025, and as a reminder, there's been no change in our approach to how we think about capital allocation or leverage, with our typical target in the five to seven net debt ratio range. We will continue to watch this ratio along with the cash interest coverage ratio of EBITDA to interest expense as we actively pursue options of maximizing value to our shareholders through our capital allocation strategy, so on a final note on that, we think we remain in good position with adequate flexibility to pursue M&A or return cash to our shareholders via buybacks or additional dividends during the course of fiscal 2025. With that, I'll turn it back to the operators to kick off the Q&A. Thank you. And as a reminder, to ask a question, you can press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from Sheila Kahyaoglu from Jefferies. Your line is open. Good morning, guys and everyone. Thank you for the time. So maybe, Kevin, folks are picking on the commercial aftermarket number. When we think about 8% organic growth in the quarter, it's pretty good, but even acceleration baked into fiscal 2025. I know you mentioned you want to look at 12 months in terms of the performance. Can you maybe talk about the growth in each of your four markets that you expect next year, how you're thinking about passenger performance? What was it in fiscal 2024, and how does it perform in 2025, and why interiors accelerates in 2025? Sure. Sheila and Mike, I will take that one. First, we feel good about the guidance we're giving this morning as we sit here. As you guys know, we've covered this for a while. This is a bottoms-up-based approach, op unit by op unit, as part of our annual plan process, where the assumptions that feed into the commercial aftermarket growth are based on dialogue with specific customers by our 51 op unit teams. This is the same approach we've used going back a while. We feel good about it. It's produced good results, accurate results for us in the past with regard to what's coming in the next 12 months. So we feel good about the guidance as we look at the high single-digit to low double-digit for commercial aftermarket total. As we head into next year, we obviously took a bit of headwind this year from freight and biz jet, which, as we mentioned in the comments, were a little bit weaker than we expected a year ago when we gave the guidance for FY24. We don't expect that to continue on a percentage basis as we head into FY25. We expect both to return to revenue growth. Passenger, which is our largest sub-market within the commercial aftermarket, should grow up nicely as well, together with the takeoffs and landings that are forecasted as we head into FY25. So all in all, things are shaping up well. Specific to interiors, that came in a little bit short of expectations in FY24. FY25, we'll see. We still have aspirations for growth there. I think we've seen a little bit of a slowdown in terms of the airlines being willing to take some aircraft out of service and do the work just because they need to be deployed out there and they can't be pulled in to do some of the interior refurbs, but we expect good growth in the interiors market as well in 2025. Mike, is there any way you could tell us what passenger was in 2024 and how you think about it in 2025? Does it stay the same or decelerate? Passenger was up nicely in 2024, close to 20%, 17%, 18%, sort of ballpark for the passenger segment. Obviously, the others were below that in terms of the sub-markets. It'll decelerate a bit heading into next year, just coming down with the takeoffs and landings, the increase for its prior year, but still be nicely positive. Great. Thank you. Thank you. One moment for our next question. Our next question will come from David Strauss from Barclays. Your line is open. Great. Thanks. Good morning. Morning. Morning. Just following up on that last set of questions, what are you assuming in your aftermarket forecast? I know you've got biz jet, freight, passenger, all that. What are you assuming just commercial airline, revenue passenger miles, or ASMs, flight hours, however you want to cut it? What are you assuming that grows at over the course of the next 12 months? When we build the forecast, it's done at the op unit level. So we don't issue a top-down edict to the op units and say, "Hey, guys, here's what RPM growth is going to be in the coming year, and now go do your forecast based on this." Again, it's a bottoms-up approach, customer by customer, part number, very detailed at the op unit levels. And again, that's produced for us a more accurate forecast going out the next 12 months. We took that same approach this year. So we don't give them a baked-in set of RPM assumptions behind it. Okay. Got it. And I wanted to dig in on the EBITDA margin forecast a little bit. So this past quarter, you did 52.6%, which included a fair amount of dilution from your recent acquisitions, not just a great mix on the aftermarket side. You talk about you typically target around 100- 150 basis points a year of margin improvement. And I would think, while you're not forecasting a ton of aftermarket growth, the mix looks a bit better with relatively weak OE next year. I would assume the underlying acquisition margins get a bit better. Why aren't you forecasting a bit more in the way of margin expansion next year? I think it has to do with acquisition dilution as we go into the new year. When you fold in about a full percentage point, maybe a little more of dilution, that gets us to our 100-150 basis points of expansion per year that we like to target. Okay. Yeah. I mean, I was just taking you had the hit from acquisitions in this quarter, and you were 52.6, and you're forecasting about 30 basis points of improvement off of that at the midpoint for next year. So that's kind of what I was getting at. Yeah. I agree. But most of the acquisitions close closer to the end of the year. So you've got a full year of impact of that dilution in our 2025 forecast or guide. Okay. All right. Thanks very much. Thank you. One moment for our next question. Our next question will come from the line of Gautam Khanna from TD Cowen. Your line is open. Hey. Good morning, guys. Morning. Morning. Wanted to ask about the status of that OEM contract renegotiation renewal, which, if I recall, the terms kind of expired on the old contract at the end of this calendar year. And given there was a strike and what have you, just wondering what happens. Does that just get pushed out? When would we expect to see final terms on the new contract? And is that baked into your forecast for the fiscal 2025? Thanks. A couple of things. Correct on the timing. We're actively working it on the negotiating front. We don't comment too much on active negotiations with our customers, but it is continuing to move along. And we have factored into the guidance some of the impact of those negotiations as it comes out in the coming months as they proceed and get to a final resolution. What happens if it's not done by December 31st? Do the old terms apply, or what happens? Boeing's an important customer. We continue to work with them actively to resolve this on a timeline in the near term. Terrific. Thanks, guys. One moment for our next question. Our next question will come from Ron Epstein from Bank of America. Your line is open. Hey. Yeah. Good morning, guys. Good morning. So M&A is an important part of the story, right? So with a new administration and maybe some changes, do you expect the M&A environment to change? I mean, would there be maybe bigger opportunities, different opportunities for you guys going forward with that change? Yeah. I don't really like to speculate on those things. It's somewhat outside of my control and understanding. So I'm not anticipating it'll get worse. We are very diligent in how we approach deals and disciplined in the way we analyze them. So we're not pushing any envelope here. We tend to be pretty conservative and disciplined, and I don't see that changing, and I don't see the administration impacting that. It didn't hurt us this last year. We came off of what really is a record year in terms of number of transactions and the like, only behind the year of the Esterline closing. So a phenomenal year, and I don't see that slowing. Got it. And then maybe another one along the same lines, if you can answer. Boeing has suggested that they're going to sell some stuff. Is there anything in that pile of stuff that might be attractive to you? Yeah. I don't like to speculate on public company assets and M&A. I'm aware, just like I think all of you are aware, that there are some larger assets that look possibly attractive, but we'll have to see. It's pretty early on in that. But beyond that, I can't comment. Got it. All right. Thank you. Thank you. One moment for our next question. Our next question will come from Robert Stallard from Vertical Research. Your line is open. Thanks so much. Good morning. Morning. Morning. Kevin, I think you mentioned that Q4 came in a little bit below some of your expectations on the aerospace aftermarket and also that bookings in the quarter hadn't perhaps been as strong as you thought. That's going to have an impact in Q1. I was wondering if you could elaborate on what might be the causes behind that. It's hard to say exactly, Rob. We've anecdotally heard a little bit about airlines pulling back on inventory and those kinds of things. We've not seen too much of it directly at our op units, but there could have been some of an impact there in Q4. With regard to the growth outlook as we head into next year, we look at the forecasted takeoffs and landings and the schedule. We feel good about the guidance as we sit here today. But as I mentioned in my comments, we did see just timing, a bit of booking softness in Q4 that will impact some of the quarterly phasing for next year, with Q1 potentially being the lowest on a percentage basis. But for the full year, I feel really good about getting the high single-digit to low double-digit commercial aftermarket guidance because it's just following the market. We look at what the market's doing, and we know our product positions, and we know we should generally follow that and perform well. Right. And then, Mike, this might be for you as well. On that aftermarket guide for 2025, I know you won't give a specific number, but have you assumed normal levels of TransDigm price increases in coming to that forecast? We always aim to slot price slightly ahead of inflation, and that's the same approach we're taking this year. Right. Okay. Thank you. Thank you. One moment for our next question. Our next question will come from Robert Spingarn from Melius Research. Your line is open. Hi. This is Scott Mikus for Rob Spingarn. Kevin, Mike, Sarah, if you end the year at four turns of net leverage to get back towards six turns by the end of the year, you'd need to deploy more than $7 billion of capital. Is that the right way to think about it? And is there any thoughts on what might be used for M&A versus share repos or special dividends over the next 12 months? I'll start on that, and then Sarah can finish it up. I think it is directionally the right way to look at it. We have plenty of dry powder for any of these M&A deals that we're looking at, including the larger things that were commented on earlier, if anything comes to pass. So I think we're in a great position. I give you the priorities of our capital, and that is we want to invest in our businesses first. You've seen that from us historically. And then, of course, we're looking for disciplined M&A is the second thing. And then third, we look at returning that to shareholders. We have plenty of available leverage capacity here to go after anything that we see coming along in the marketplace. Yes, and just to confirm, you tied into the math the same way we did, so yeah. All right. Thanks for taking the question. One moment for our next question. Our next question will come from the line of Miles Walton from Wolfe Research. Your line is open. Thanks. Good morning. I think you mentioned that the distribution and aftermarket channel had close to 20% growth in the fourth quarter, and I guess that implies a 3%-4% growth in your non-distribution channels. Have you ever had that kind of skew, and is distribution tending to be a lead, lag, or uncorrelated indicator? It's hard to say. I would generally say it's uncorrelated. These things sometimes get noisy on a quarterly basis, and the POS data can disconnect from what the total commercial aftermarket posts. I think, as everyone knows, what goes through distribution is about bounces around 20%-25% of our total commercial aftermarket. So it's a meaty chunk, but not north of 50% of it, and we look at it as generally probably a bit of a leading indicator because then once those sales happen from the distributors, they then need to replenish what's been sold out to the market. Okay. And then, Mike, I think you mentioned the expectation for prior strikes was taking a year to get back to production rates. And so just as you're looking to build up your guidance, does that mean you've assumed roughly flat Boeing output from you guys year on year with some price and then Airbus growth to get to the mid-single-digit growth? It's hard to say and comment on macro build rate assumptions like that because we build it up at the op unit level, and they do it based on their specific dialogue with the customer, and they know what their inventory is, so they can factor all of that in. When we give the OEM guidance, we aim to be conservative. And we do that, obviously, for reasons that I think you guys understand. And then if the demand should come in stronger than we anticipate, we can add in the resources we need to step up and hit the demand and keep Boeing and Airbus both happy and get the parts they need. But I think just given the fragile state of the supply chain, as we said in the commentary and where we stand and how messy prior strikes have been to clean up, I think we're probably a bit more conservative here than others, and hopefully, we're surprised to the upside as the year evolves. All right. Thank you. Thank you. One moment for our next question. Next question will come from Scott Deuschle from Deutsche Bank. Your line is open. Hey. Good morning. Joel, can you give us a sense for how TransDigm's commercial aftermarket revenue breaks down between airframe and then the engine? And I'm asking because you mentioned that engine is outpacing airframe from a growth perspective this year. So just curious to get some sense for how that aftermarket revenue bifurcates between those two channels. Thanks. As we look at it, we're generally about market-weighted in terms of the OEM and spare parts spend based on how we size up the market. No different. We don't really overweight more towards the engine or the airframe. But we did see across our businesses that are more engine-focused this quarter, Harco and Auxitrol doing engine sensors and a few other folks providing pumps in and around that vicinity of the aircraft. There were pockets of strength there that were significantly above those seen on the airframe side of the business. But we're about market-weighted. Okay. And would you expect engine to outpace airframe next year as well, just given the pent-up demand and existing backlog at the engine MRO shops? Thanks. Based on what we see across the MRO shops and just all the slots being filled, what you guys read about and write about, we'd probably expect something similar as we head into next year, just given the high demand there is around the engine side of MRO world right now. Thank you. Thank you. One moment for our next question. Our next question will come from Gavin Parsons from UBS. Your line is open. Thanks. Morning, guys. Morning. Just in terms of kind of broader supply chain health relative to the work stoppage in Seattle, I mean, have you guys acted as any buffer between kind of Boeing and your smaller tier suppliers to prevent the WIPs from going all the way to zero? Is there any aspect of that that might keep your own suppliers healthier? We always size up our supply landscape, and we never want to stress the mom-and-pop shops too much. We tell our op units to go out and obviously factor that stuff in. So I suspect some of that has potentially gone on, and we'll be ready to meet the demand, as we said in the commentary. If Airbus and Boeing, the build rates come in higher than we forecasted here today, I think our op units will be ready and prepared and have the inventory to step up and hit the targets. Okay. Great. And then on freight, it looks like dedicated freight flights returned to growth a couple of months ago. Do you have a sense for roughly how long that tends to take to translate into revenue resuming growth? It's hard to say. I think it's good to see that market stabilize, first of all, because it's been coming down from the COVID peaks as we've seen as the transition more towards back-to-belly cargo has continued. And hopefully, as we head into next year, we see things turn the corner and transition to positive growth. That's what we expect as we roll up the internal forecast here. It's hard to put a timeline on it, though. I suspect a couple of quarters, and then it turns. Got it. Thank you. One moment for our next question. Our next question will come from Ken Herbert from RBC Capital Markets. Your line is open. Yeah. Hi. Good morning. I wanted to ask Kevin or Mike on the defense side. You outperformed 2024 by over 10% relative to the initial guide, and I can appreciate some initial conservatism in that guide. But as you look at 2024 and then into this year, where did you really see the upside in defense? Was it sort of up-tempo activity in areas, or were there things that kicked in that you really didn't expect? And where do you maybe see potential upside as we think about 2025 on the defense market? We saw the strength pretty uniformly across all of our op units. A couple were a little bit stronger than others: Avtech, Chelton, Armtec, just based on specific work they're doing on the defense side of their businesses. But it was really pretty uniform across the landscape, across the range here at TransDigm in terms of the defense growth. As you guys know, the outlays have been positive now in that kind of 8%-12% ballpark for many quarters in a row. So I think that kind of consistent growth on that front has probably aided us. And the threat landscape, I'm sure, has gone a bit of the way in terms of bringing those numbers forth and causing them to come about. As we head into next year, we have really good bookings this year in FY 2024 on the defense side of our business. So it gives us confidence that we're going to hit that high single-digit target for next year. I mean, can you just frame up now exiting 2024, the mix of defense between maybe getting in at a high level aftermarket versus OE? It's not very different from the commercial side of our business. It tends to bounce around roughly half and half, and the two parts grew somewhat closely this year. We saw both consistent growth on both the OEM and aftermarket sides. Not all that different and disconnected, but it's about half and half and bounces around a bit quarter by quarter and year by year. Perfect. Thanks, Mike. One moment for our next question. Our next question will come from Jason Gursky from Citi. Your line is open. Hey. Good morning, everybody. I just wanted to circle back on the channel sales and distribution and whether you could just kind of talk through what you're seeing from an inventory perspective and whether there has been any interesting movement in inventory here, maybe just the trends over the last three or four quarters and kind of what you expect going forward inventory in the channel? So a couple of things. We don't get great inventory data from the airlines. It's not for lack of trying, but you just don't get that kind of detail from them from our op units in terms of what they're holding in stock. So it's hard to say, and we've never gotten great intel on that front in terms of exactly what the airlines have. As it pertains to distribution, they're holding, as we sit here today, about where they should be in terms of months of on-hand supply. It might oscillate this way or that way a month or so at a time, but we're about where we should be. And we expect as we head into FY 2025, that'll continue. We always want to have the parts on hand and have our distributors have the parts on hand to supply to the end user as they need them. So we look forward to maintaining similar months on hand as we head into next year. Okay. Great. And then, Kevin, you mentioned in maybe your prepared remarks in some of the Q&A that you're going to remain disciplined on M&A. I'm wondering if you can't just maybe do a walkthrough history and talk about valuation multiples and where we are today relative to where we were maybe pre-pandemic 2018, 2019 timeframe. I'm just kind of curious if disciplined is a relative term. Are you remaining disciplined relative to what you've always done, or is it relative to what is currently going on in the market? It's disciplined in terms of what we target to acquire. We want businesses that are very high IP, hopefully more commercial or all commercial businesses. We've ticked these things off so many times of what we look for. That's what I mean about disciplined. Multiples are up. There's no doubt about it. We're having to pay more today than we did a few years ago. But that just goes into the math of the acquisition. We haven't changed our targets. We still look for 20% IRR on every deal that we model before we would pull the trigger on it. So that's what I mean about the discipline. Yeah, we're paying a little more, but if something matches your criteria and you model it, you can often not worry as much about the price you have to pay as long as the business, in a disciplined approach, meets our criteria. Great. Thank you. Thank you. One moment for our next question. Our next question will come from Peter Arment from Baird. Your line is open. Yeah. Thanks. Good morning, everyone. Nice results. Hey, just maybe a quick one on CapEx. It seems like the guide implies that that's going to be closer to 3% of sales. And maybe if you could just highlight some of the investments you're making because I think historically you've been closer to 2%. Just curious if there's any dynamics going on there. Sure. Yeah. We're increasing on the CapEx for guidance for next year. We've done a lot of M&A, and we want to continue to make sure that, one, our new operating units have got the infrastructure and productivity, but we have a lot of really good new productivity projects that we're heavily investing in. I can let Mike and Kevin elaborate on some of this, but some of the stuff, and we've talked about this, I think, on prior calls, where we're seeing projects that weren't necessarily available months ago or years ago, certainly at a price point that now are becoming available: cobots and robots. So spending more time and money to invest in that and help with our productivity are one of our value drivers. And to Sarah's point, you see that in some of the margin benefits too. That's what gets us the percentage margin point of movement plus a bit from there that Kevin mentioned is just good CapEx investments. That's the majority of the CapEx we spend is good productivity projects that help us on the cost structure side. Appreciate the color. Thanks. I'll leave it at one. Thanks. Thank you, and this concludes the question-and-answer session. I'll now like to turn it back over to Jaimie 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. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.