Now with that behind me, I'd like to review our consistent strategy, our current sense of the status in the aerospace market, as it applies to us and a few miscellaneous items.
To reiterate, we believe our business model is unique in the industry, both in its consistency, and in 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, and that these are highlighted on page 4 of the slides. About 90% of the net sales are generated by proprietary products and around three quarters of our net sales come from products, for which we are the sole source provider. About 60% of our revenue, and a much higher percentage of EBITDA comes from aftermarket sales. Aftermarket revenues have starkly produced a higher gross margin, and have provided relative stability in the cyclical downturns.
Because of our uniquely high EBITDA margins, typically in the range of 50% of revenue, and relatively low capital expenditure requirements, typically less than 2% of the revenue, TransDigm has year in, year out, generated strong free cash flow. We pay close attention to our capital structure, and we 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 suboptimum for value creation.We typically begin to deleverage pretty quickly. Based on the credit markets, our near term cash needs, and potential near term acquisition candidates, we address our liquidity and capital structure regularly. We have a well proven value based operating strategy, focused around what we refer to as our three value drivers; new business development, continual cost improvement and value based pricing. We stick to these concepts as the core of our operating management methodologies. This consistent approach has worked for us through up and down markets, and allowed us to continuously improve and increase the intrinsic value of our businesses, while steadily investing in new business and platform positions.
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