To summarize some of the reasons why we believe this, and you can look at Page 4 of the slides, 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 are the sole source provider. About 60% 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 have provided relative stability in the downturns.Because of our uniquely high EBITDA margins, typically about 50% of revenues and relatively low capital expenditure requirements, typically less than 2% of revenue, TransDigm's year in, year out generated very strong free cash flow. We pay close attention to our capital structure and view it as another means to create shareholder value. As you know, we have in the past and continue to be willing to lever up when we either see good opportunities or view our leverage as sub-optimum for value creation. We typically begin to delever pretty quickly.
TransDigm Group Incorporated's CEO Discusses Q2 2012 Results - Earnings Call Transcript
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