Good day, ladies and gentlemen, and welcome to the First Quarter 2014 TransDigm Group Incorporated Earnings Conference Call. My name is Regina, and I'll be your conference operator for today. [Operator Instructions] As a reminder, today's event is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Liza Sabol, Investor Relations. Please go ahead.

Good morning, and welcome to TransDigm Fiscal 2014 First Quarter Earnings Conference Call. With me on the call this morning are TransDigm's Chairman and Chief Executive Officer, Nick Howley; President and Chief Operating Officer, Ray Laubenthal; and our Executive Vice President and Chief Financial Officer, Greg Rufus. 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. These filings are 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 a reconciliation of EBITDA and EBITDA as defined, adjusted net income and adjusted earnings per share to those measures. Let me now turn the call over to Nick.

Well, good morning, and thanks again for calling in to hear about our company. Today, I'll start off with some comments about our consistent strategy, then an update on the commercial aftermarket and also on the Boeing Partnering for Success program. I'll then give an overview of the financial performance and market summary for -- in Q1 2014 and an update on the full year guidance. Just to restate, we believe our business model is unique in the industry, both in its consistency and its ability to sustain and create intrinsic shareholder value through all phases of the aerospace cycle. To summarize some of the reasons why we believe this, about 90% of our net sales are generated by proprietary products and around 3/4 of our net sales come from products for which we believe we are the sole source provider. Excluding the small non-aviation business, about 54% of our revenue and a much higher percent of our EBITDA comes from aftermarket sales. Aftermarket revenues have historically produced a higher gross margin and provided relative stability in the aerospace cycles. Based on our uniquely high EBITDA margins and relatively low capital expenditure requirements, TransDigm has, year in and year out, generated strong free cash flow. We have a well-proven value-based operating strategy focused around what we refer to as our 3 value drivers: new business development, continual cost improvement and value-based pricing. We also maintain a decentralized organization structure with operating unit executives who think, act and are paid like owners. We stick to these concepts as the core of our operating management methods. This consistent approach has worked for us through up and down markets while allowing us to steadily invest in new businesses and new platform positions. We have also been successful in regularly acquiring and integrating businesses.…

Thanks, Nick. As Nick mentioned, in total, our first quarter was better than our expectations. However, we continue to tightly manage our cost structure and work our value drivers to create shareholder value. Let me explain our 2014 first quarter operational value creation a little bit more detail. Right before their holiday shutdown, we completed the acquisition of Airborne Systems Incorporated. The value-creation transition of this business has started, and we are presently working through various productivity projects and structuring the business into our product lines with their associated value-creation metrics. The 3 businesses we acquired last summer are also progressing well. At Arkwin, we have completed the first stage of our productivity restructuring, organized the business into product lines, focused the engineering and installed a proven Sales and Marketing Director and a Controller, who both had come from our existing operations. The Arkwin margins are moving up nicely, and we expect them to eventually reach the average TransDigm EBITDA margins. At our Whippany Actuation business, the transition activity has been more complex as we work through the systematic decoupling from GE. However, progress today is at or above expectations. As with Arkwin, we have completed the first phase of productivity restructuring, organized the teams and the product lines, focused the engineering and installed our value-creation metrics. To expedite the value creation and integration process, we added some proven TransDigm managers to the acquisition. Shortly after we acquired Whippany Actuation, we appointed Jack Stiffler as the President. Jack previously was the President of our MarathonNorco unit. Jack then immediately installed a new Director of Sales and Marketing who also came from one of our existing units. The Whippany margins are also moving up, albeit at a slower rate due to their existing contracts, the nature of some of their government…

Thanks, Ray. As disclosed in this morning's press release and just discussed by Nick, our first quarter sales were $529 million and 23% greater than the prior year. Our organic sales were 9% higher than last year, and the growth in commercial OEM, commercial aftermarket and defense were all positive. Our first quarter gross margin was $284 million, an increase of 19% over the prior year. The reported gross profit margin of 53.7% was 1.7 margin points less than the prior year. The dilutive operational impact from acquisitions was a little over 2 margin points. Excluding all acquisition activity, our gross profit margins in the remaining businesses versus the prior year quarter improved approximately 0.5 margin point. Selling and administrative expenses were 10.8% of sales for the current quarter compared to 12.8% for the prior year. The 2 percentage point decrease was primarily due to lower SG&A spending as a percent of sales relative to our sales growth and lower noncash stock comp expense versus the prior year Q1. If you recall, we accelerated this expense in quarter 3 last year, which had the impact of lowering this year's expense. Interest expense was $81 million, an increase of approximately $18 million versus the prior year quarter. This is a result of an increase in the weighted average total debt to $5.7 billion in the current quarter versus $4.2 billion in the prior year. The higher average debt year-over-year was primarily due to the amount borrowed to distribute $1.8 billion of special dividends last year. Our weighted average cash interest rate has decreased to 5.4% compared to 5.6% in the prior year due to the lower interest rates on the new debt. Our effective tax rate was 33.6% in the current quarter compared to 32.6% in the prior year. We still…

Thank you, Greg. Operator, we are now ready to open the lines.

[Operator Instructions] And your first question today comes from the line of Noah Poponak with Goldman Sachs.

Nick, on M&A and the M&A pipeline, you provided some comments on sort of what you could do right now given where the balance sheet is, but you didn't really talk about the health of the pipeline as you see it today, which you normally do. Is that something you're willing to share with us right now?

Yes. No, I thought I -- you may find it unfulfilling, but I thought I said about the same thing I always did, that our pipeline is pretty active, where we remain working with -- I think I've said that there's a little more normal than we normal -- than we have been seeing in the commercial trends mix. The sizes and the stock are about what we usually see.

When we see Airborne, which is essentially all military, should there be any part of us that interprets that to mean it's now proving more difficult to find reasonably priced aerospace, primarily commercial assets, that have the characteristics you're looking for, or is this more specific to what you saw in Airborne?

It's more specific what we saw in Airborne. We are not -- as we've always said, we're looking for proprietary aerospace kind of products with a reasonable amount of aftermarket. And if they meet our sort of P/E kind of return, we're an interested buyer. We're not biased necessarily against defense, though I must say I don't -- I wouldn't want to move this -- we wouldn't want this to be a 50-50 defense business. But if the price is right and it has the right characteristics, we're interested in it. All things being equal, we'd probably pick a commercial business. But you deal with them as they come up, and this looks like a good, accretive transaction to us.

So it doesn't sound like you're really finding it more difficult in any meaningful way to find good, reasonably priced, primarily, aerospace assets compared to 12 months ago or 18 months ago or any time.

Yes, I don't think so. You can always argue what reasonably priced means. But I would say, the prices haven't changed substantively as best I can tell. The hardest issue is always finding things that meet our -- our criteria is pretty tight. We want it to be proprietary. We want to double [ph] our sole-source stuff. That's always the issue is this sorting through them to get the ones that really meet our criteria.

Okay. And then just a follow-up on the base defense business where you commented that the shrink there is aftermarket, not original equipment. And I think you mentioned within that, it's fighter and cargo. Is it possible, even if rough order of magnitude, to quantify how much of your defense aftermarket business is fighter versus cargo versus helicopter? Because we've seen a number of other companies have pretty significant weakness in their defense aftermarket business, attributing it to helicopter. We've heard investors speculate that they would think that's something that would eventually impact TransDigm. It doesn't sound like that's happening, at least, yet. So if we could understand that mix a little better, I think that would be helpful.

Okay. Noah, this is Ray. Well, first off, the government ordering patterns and so forth, and we've said this in the past, can be quite lumpy. So it's tough to take a comparison from one period to the next and start drawing general conclusions. We just happen to see that the aftermarket was a little stronger than the OEM. That doesn't mean the OEM was way down. We're kind of spread about 1/3-1/3-1/3 on our platforms, about 1/3 of our applications are on the helicopters, about 1/3 in the kind of fixed lean fighter area and about 1/3 in the cargo aircraft. Helicopters were strong for us in prior years, a little bit more so, not like they were as strong in the most recent period. We don't think that's any big trend, but that's just how they kind of were lumpy this time around.

Your next question is from the line of Myles Walton with Deutsche Bank.

So the first one I have for you -- I guess -- so just maybe to follow up on the military question for a second. Was there a big difference in domestic versus international in terms of the strength of growth? I know that there was a larger international booking you had last year. I don't know if that's helping in some of the near-term sales numbers.

That one is -- I think as I've said, Myles, in the lead-in, that, that was about $7 million in the quarter, would consist about the same as it was in the fourth quarter of last year. That order is almost finished. I want to say it was a $17 million or $18 million order and that we shipped about $15 million of it. But even if you strip that out of both periods, the run rate from this first quarter was higher than the average run rate for last year. And I talk about the average run rate because the first quarter was very low last year. So that's a meaningful comp, at least for us. We sort of look at the average run rate just because -- otherwise the increases is a little distorted. But clearly better than we hoped, than we thought it may be, and we feel decent about the next quarter.

Good. And then, Greg, on the SG&A leverage, keeping in control on the cost growth lower than the sales growth, do you have a kind of thought on the target range for SG&A as a percent of sales or how much more leverage you can get out of constrained cost there?

Well, this quarter is a good quarter. We're still planning on our total SG&A for the year to be about 11.5%.

Okay. And that's inclusive of the -- that's not an adjusted basis. That's inclusive of the comp?

Yes.

Your next question is from the line of Robert Spingarn with Credit Suisse. Robert Spingarn - Crédit Suisse AG, Research Division: Nick, you talked about the lower margins at Airborne. And maybe I got to factor in more when I look at incremental in the guidance, between the added sales and the added EBIT -- EBITDA as defined, but it -- I think by my math, it's about a 25% EBITDA as defined margin for the contribution of Airborne this year. And that would seem to be a bit of a departure. Is this a one-off? Is it the nature of this military business and the parachute business, or is -- might we see some more deals at lower margins?

So you'll do the math. Robert Spingarn - Crédit Suisse AG, Research Division: I used the midpoint, and I know there might be other puts and takes in there.

You're not miles off. And I'll give you the pieces, right, so you could figure it out. The -- well, it's not unusual that we bring businesses in substantially below our average. I mean, bringing the businesses in 25% EBITDA is not unusual at all for us. I would expect that's more the rule than the exception, have a business come in like that. However, I will say the nature of this business is such it's not going to pipe [ph] this long [ph] . Who knows where the future could bring, but I think it's unlikely this business gets up to 50% EBITDA. Robert Spingarn - Crédit Suisse AG, Research Division: Okay. I guess maybe the way to ask you this, is this the before or is this the after margin or something in the middle?

Well, I hope to hell it's the before. I'll be very sad if it comes down from here, Rob. Robert Spingarn - Crédit Suisse AG, Research Division: Yes, yes. We all hope not. On -- I don't want to ask you specifically about -- any more about the deal you did with Boeing, because you said you won't talk about it. But one thing I think we're struggling for is, just abstractly, in these deals, everybody says it's a win-win for everybody. But the presumption is that somebody has to give a little more than the other. Can you just talk, from an abstract perspective, of how the horse-trading works on these things?

Rob, I just can't. We have -- this is a -- it's very sensitive to Boeing, and somewhat to us, that we maintain a confidentiality agreement with how this -- and we -- we were very clear with them what we would and wouldn't say. And I really just can't go beyond it, other than to say, as we said, this is not going to have a -- we don't see this having a material impact on our financial statements or our performance. And obviously, we thought it was worthwhile deal to make or we wouldn't make it. Robert Spingarn - Crédit Suisse AG, Research Division: Okay, fair enough. You were clear you weren't going to go there, so I just wanted to try.

Maybe if you ask it weekly, I might miss the question. Robert Spingarn - Crédit Suisse AG, Research Division: That's good wreck [ph] . I'll remember that next time. On -- I'll try this one. On the aftermarket, we've gotten some sense that aircraft, that used aircraft are being extended a little bit more than before. Aircraft coming off-lease are being re-leased, maybe having a little bit easier time getting remarketed than even 6 months ago. Does this explain any of the strength you're seeing? Do you get a sense in talking to your customers that the mix of the fleet is not shifting quite as quickly to new as we thought, not because the new aircraft aren't delivering, but because the old ones aren't retiring as quickly?

Rob, I also heard that anecdotally. But I honestly can't tell you that I can give you any good numbers or I have any numbers to give me any particular comfort in that. But I have heard that anecdotally also.

Your next question is from the line of David Strauss with UBS.

Just following up on that question on the aftermarket. Off of the levels that you saw in Q1, what kind of sequential growth do you need to kind of hit your high single-digit target for the year?

We didn't really give quarterly guidance. So we didn't...

Yes. I'm just talking maybe if you take Q4, what...

We haven't given that, Myles, by quarter, and I don't want to speculate on it now. But you could figure it out pretty well, right?

Yes. I'm not -- that's the reason I asked, because it doesn't seem to apply much in the way of any sort of sequential growth or not much sequential growth.

Yes. So we have to get there. If we said, 8% to 9% for the year, right, we'd have to -- if everything was linear, if you get 7.5% in the first quarter, we need to get whatever that comes to -- in the 10.5% in the fourth quarter.

Yes. But I'm just talking kind of sequential off the run rate where you are today.

Yes. We haven't given that, and we prefer to stay away. We don't care to give quarterly guidance on it. We did tell you -- we did give you some data on the bookings.

Yes, yes. I think Ray mentioned that -- or maybe it's Greg about the increase in guidance on the EBITDA side. There's about 25% of it from the base operations. Is that some of the upside? I assume it's not upside on some of the recent acquisitions. Where exactly is that coming from?

It's just the -- it's the underlying business, however you want to define it. We bumped up -- I want to say $32 million is not the number [indiscernible] , $32 million. We wanted to give you some sense how much of that was Airborne and how much was -- the margins were a little -- I feel a little better about the margins.

Okay. And I'll try another one on this Partnering for Success. Yes, I'll give it a shot. I mean, is it -- the agreement that you were able to reach with Boeing, does it change anything fundamentally about your business model in terms of the kind of upside you can get from the aftermarket once you're spec-ed into an aircraft. Thinking about new aircraft that are still to come and your position on that, does it change anything from that -- in that...

I just don't want to -- as I've said, we -- I do not see a material impact on our business. And so -- and we just -- we have a -- I'm just going to repeat myself now. We've been pretty clear with Boeing and Boeing with us that we'll say what we agreed to say and no more.

Okay, last one. Greg, what is the D&A assumption for the year? Does the amortization step down as we go through the year?

Well, boy, not with Airborne now, right? And, well, we haven't gone -- hold on. Our prior guidance -- where are we at? Is this your D&A and depreciation? Okay. D&A and amortization goes up about $6 million, and backlog was up about $6 million.

Off the prior guidance?

Off the prior guidance.

Your next question is from the line of John Godyn with Morgan Stanley.

Nick, in the prepared remarks, you mentioned sort of buybacks is one of the options. Of course, you haven't really used that in the past. I'm just curious, has the thinking evolved at all on buybacks versus special dividends?

I don't -- I think it is mostly, so far with us, been a question of magnitude. We have -- the magnitude of the givebacks to the shareholders have been very big. I know it -- the first thing was 20% of the share value. The ones we did last year were about 25%. Our thinking on those has been with such big numbers, we'd be better off to give the dividend and get it over with for surety of execution and the like. If the numbers were smaller, it wouldn't be so clear to us what made sense. I mean, we're not opposed to a buyback. It's just is a -- it's a very fact- and circumstance-specific thing.

Okay, that's helpful. And if I could ask a question about aftermarket. Certainly, the recent trends have been strong but the guidance for the full year looks good. But I was hoping that you could offer maybe some bigger-picture sort of commentary around it. As you read the tea leaves for different product lines, what you're hearing from customers and maybe your own top-down view, I mean, what can you tell us about the sustainability of this inflection in aftermarket that we're seeing? Does this have legs?

Well, as I told you, it feels to us, and our data seems to indicate and everybody else seems to indicate, that this market is now expanding and rising. We think it is. Now I would say, as I've said, a lot of times, these things aren't linear. They don't always go up in a straight line, and there could be bumps along the road. But it feels to us like this is a rising market that's got 2 legs to it.

Okay. And just last one on Partnering for Success, but just a clarification. I'm assuming your best estimate of that agreement is in the 2014 updated guidance. Is that true?

Yes, yes.

Is from the line of Robert Stallard with Royal Bank of Canada.

Nick, just a couple of quick ones on the aftermarket. First, I was wondering if you could tell us if aftermarket volumes are actually up in the quarter.

Up against what? Up against the -- or you mean to strip the price out?

Yes, if you stripped out the price. I think in prior quarters, you've said that -- you've talked about -- you haven't given us a number, but you said if it's up and down.

You mean what is it in unit sales because -- Rob, is that what you're after?

Actual units. That's a good way of putting it.

You mean if you stripped out the price. Yes, they're absolutely up. It's up. That rise is greater than the average price increase.

Okay. And then a second one. Last quarter, you talked about this whole issue of normalized growth, then some issues in the distribution chain. Has that all sorted itself out now?

Yes. It is not a material impact or significant impact on this quarter. It's -- when we look down, there's kind of puts and takes where it was kind of all in one direction. Some of the other quarters now, whatever movement there is sort of all cancel each other out. So it looks to us like a pretty clean number.

Yes. And then just finally on your OEM guidance for the year. It's obviously a bit down from where you did in the first quarter. How do you think this is going to play out, because I'd imagine you have pretty good visibility on wherever Boeing and biz jet guys, want to take their volumes over the next 12 months.

I don't -- what did we say? It was 10.5% in the first quarter. It's going to add to roughly our -- what's our year? The same? Yes. So I wouldn't draw anything from that, other than it's just timing on when some things happen to ship. But if it looks like it -- if it start to look like it's a likely annual change, we'll update it next quarter. But we don't know anything other than some timing. I don't know anything about their shipment or production rates or inventory swings that would make me change something right now in the OEM world.

Your next question is from the line of Yair Reiner with Oppenheimer. Yair Reiner - Oppenheimer & Co. Inc., Research Division: So first question on the guidance. Based on the first quarter, it seems like you might have even raised it little bit more. I was just wondering to what extent that some of the macroeconomic perturbations here in the last week or 2 maybe stage [ph] your hand a bit. And if not for that, would have guidance been a bit higher perhaps?

Possibly. I would say the defense business is better than we expected. And as Ray said, probably the first half of the year is better than we expected. If that continues, that clearly could be an upside. The commercial aftermarket is a good quarter. It's just too soon for us to feel comfortable moving our yearly number up. I don't know if I could attribute that to one thing or another. Just that we don't have enough data yet. On the commercial -- on the OEM business, commercial OEM business, I don't -- I have no basis really at this point to change it, and we think it's all been just timing between the quarters. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Got it. And I guess related question. I don't think many of us would've expected that tapering would actually cost interest rates to come down a bit. But assuming that tapering ultimately gets interest rates heading in the opposite direction, to what extent do higher interest rates out in the market impact your capital allocation plans? In other words, if interest rates begin to go up, does that put a little bit more incentive on you guys to maybe pay back some of the debt over time?

Well, at some point, of course, it does. But I would say, in the range of likely movements in the next 3, 6, 9, 12 months and this is always risky to say that. There [ph] were likely movements in the capital market could be. But in the range of what I think is likely, it probably doesn't change our minds a lot. Our average interest is, Greg, I want to say 5.4%, about 5.4%? It's that -- let's say that average went -- which will be very hard to do if you look at our mix. But let's say it went to 6.5% or 7%, I doubt that changes our decision significantly, particularly when it's after tax money.

And in the short run, by the end of '14, we already have some contracts that will fix the variable. It will be closer to 70% fixed at the end of '14.

Yes, yes. As of the end of '14, for the next 4 or 5 years, 75% of the debt's fixed. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Yes. I was also thinking about the fact that if you know that down the line, you're going to have to refinance that debt at some point, would you want to take some exposure down even if your rates are fixed?

I don't -- I would just say I don't want to speculate. We are not working on that right now. We're forever getting people in, giving us pictures on restructuring it. We did a fair amount of restructuring last year. And at least, right now, that's not in our gun sight. Yair Reiner - Oppenheimer & Co. Inc., Research Division: Got it. And then just one modeling question. Can you just kind of walk through the bridge between the gap and pro forma EPS this year?

You know what? Rather than bore you to death, I think that's on Page 9, that slide that takes the EPS down and it shows the differences. When you look at our original guidance, dividend equivalent payment stays the same. Noncash stock comp's about the same, a little more. And the acquisition-related costs are up, reflecting Airborne, because there's some severance and reorganizational costs that'll be associated with that acquisition.

Your next question is from the line of Joe Nadol with JPMorgan. Joseph B. Nadol - JP Morgan Chase & Co, Research Division: Nick, I was wondering on the commercial aftermarket if you might be able to provide a little more color like you did with defense on what types of products or what types of platforms are doing better or worse, or is it really just random and spotty like you said in your comments?

Yes. When we say spotty -- I'd say spotty, but mostly up. But everything's not up. The -- I can't tie this to one platform or another. I can say, some of the discretionary things that weren't moving as well in last year started to move this quarter. We'll see whether that's a pattern or not. Joseph B. Nadol - JP Morgan Chase & Co, Research Division: Okay. And then just over on Airborne, understanding that we've already talked about the military versus commercial and the margins. But just stepping back, the product type seems very different than almost everything else that you have in your portfolio. I'm just looking at a page in your annual report right now and something you've had on your slides with all the different types of hardware. Most of it is bolted on to something that flies. This is kind of its own -- my understanding is its own kind of self-contained system. So when you think about pricing power and all the things that you guys typically go after, channel to markets, the competitive landscape, how would you characterize -- how do you get comfortable with something that's a little different in that respect?

No, we had to get through the -- to try to understand it, as best we could on any, and model it. We think there is our value drivers, which are new product development, cost reduction and pricing opportunity, we think they're sum of all here. The -- and -- the -- we -- so when we go through and do the math, even on a constant multiple, we see our private equity-like return on it, which we -- as I think you know how we do that. We define that as we roughly capitalize something about -- at our average, our long-term average, and assume the rest is equity. So we saw pretty good return, even in a constant multiple. And also, frankly, we are -- we bought it at a pretty good price. So I mean, it has a fair amount of the attributes that we like to see in the business. Joseph B. Nadol - JP Morgan Chase & Co, Research Division: When you think about your pricing power in the competitive landscape specifically -- I mean, maybe if you could just characterize the competition. Is this something you go out and you're able to raise the price every year?

Well, that's -- it's different in the different segments. But we see opportunity there or, frankly, we wouldn't have bought it. And I don't want to start speculating on where it might make sense and where it might not. But I would say the opportunities in the domestic market may not be as good as they are in foreign markets. But this is a business that is majority outside the U.S. and growing outside the U.S.

And your final question comes from the line of Michael Ciarmoli with Keybanc.

Nick, maybe just one more on Partnering for Success. Can we assume that any future acquisitions that you guys make are going to be incorporated into this sort of contract or is there any renegotiation that has to happen?

Michael, I think I have to say for Partnering Success, I think you've got about all you're going to get.

All right, fair enough. I figured you'd might. On -- then on the aftermarket, can you sort of -- as you look at the airlines, can you guys point to any sort of are there restocking trends? Are you seeing maybe the average dollars spent on shop visits ticking higher? Can you give us any kind of qualitative color as to maybe what you're seeing from the behavior of the airlines?

Well, I can say that if you guys were to look through with the distribution, we were having all kinds of inventory movement around. That seems to have settled down. So as I said, through the puts and takes sort of cancel each other out. We still have the situation with the GE business we acquired that we knew we're going to have to draw down inventory, but that's not material and it's offset by some other things. I can say we saw more activity in the discretionary products, which isn't a big part of our business. But what it is, we saw more activity this quarter than we had in the past, which would lead us to think that people must feel better. As far as average order size, I don't know that I can speak to that with any specificity. Though presumptively, it's a little higher.

Okay. Okay, that's helpful. And then last one. You guys mentioned a couple of times, just the EBITDA margins and you kind of went back and referenced the core TransDigm margins. Should we be thinking about, in aggregate, your EBITDA margins for that target coming down as you continue to make these acquisitions? I mean, Airborne is going to be a part of the business. You guys are acquisitive. I mean, structurally, should we think about your EBITDA margins coming down a couple of hundred basis points?

I don't want to -- I really don't want to speculate on that because it's very dependent on what we buy, the rate at which we buy them and the rate at which they can be improved. I mean, generally, if we slow down the acquisitions, when things slow down, the margins start to expand quicker. I think for the full year this year, if you strip out the 3 acquisitions last year and Airborne, I think the rest of the business, we think, will expand about 1.5 margin points. So maybe that gives you some sense.

You have additional question that is queued up from the line of Gautam Khanna with Cowen and Company.

Just wondering if there's any difference by geography you can speak to in the aftermarket, regionally.

We're seeing different trends in geographic. I don't know -- truthfully, I don't know enough to -- I don't know the answer to that for these past 90 days. I mean, I could - I would speculate that it's probably more movement in the Pacific Rim than Europe, but I don't know the number.

Okay. And just any change by channel distribution versus direct MRO?

No.

There are no further questions in queue at this time, so I'll turn the call back over to management for any closing remarks you'd like to make.

Thank you, everyone, for calling in this morning, and we plan to file our 10-Q sometime tomorrow. Thanks.

Ladies and gentlemen, thank you so much for your participation today. This will conclude the presentation, and you may now disconnect. Have a great day.