StandardAero, Inc. Jefferies Global Industrials Conference 2026

Oh, yeah. We're in a great phase. Number one, coming out of the IPO, we significantly delevered, right? And now we're enjoying the fruits of that deleverage and the enormous cash flows coming in. The most satisfying part of being a part of our business in the aerospace industry is the cash flow that we're generating, and you're going to see our liquidity position continue to improve, billions of dollars of cash flow available to us that we will deploy. We've talked a lot, Sheila, about our five capital deployment areas, organic growth. Just this month, we opened the expanded CF34 facility in Winnipeg, increased our capacity by a third, and that's already full. So a great example of capital deployment in organic area.

In terms of license expansions we did in Q2, the $180 million investment for expanded licenses, that's returning $25 million a year at a minimum in a couple of years, and it'll peak up to about $30 million. So a fantastic return on capital there, where we're getting access to new licenses and new repairs that we haven't had access to before. Of course, M&A, we acquired Unified Turbines, a great bolt-on to the CRS business, new repairs that we didn't have before that we were able to acquire, and that fits right into the CRS platforms that they already serve, but now new repairs on existing platforms. And remember, the great part about that is that we are reducing turnaround times for our customers by repairing parts instead of having to wait for new ones.

And then, of course, stock repurchases through the first half, $100 million of share repurchases. We will continue that and are very proud to do it. So I think during the next second half of the decade, you're going to see additional capital deployment from StandardAero. That's- Sheila, I will just add on there.

When you think about StandardAero, we used to operate at 7x leverage in the private equity world. We IPO'd at 4x, and now 2 years later, we are down to about 2.5x. That ties to what Dan was talking about, the amount of deleveraging that has occurred. We are a 115-year-old company. You do not last that long if you do not generate cash. Through cycle, we are 100% free cash flow converter of GAAP net income. We have just gone through a heavy growth investment phase with LEAP over the last 3 years with CFM56 Dallas doubling our footprint there. HTF7000, we are the exclusive heavy overhaul provider on that engine, which is the new engine for super mid-cabin, which is, think of the fractionals. These are huge fleets. We have also done CF34, the expansion that we just completed.

All of these growth platforms that are setting us up for double-digit earnings growth and free cash flow growth over not just a few years, but for decades, that is starting to unwind. We are coming down the learning curve on LEAP. That is a 3- to 5-year learning curve that started really in 2025. As that comes down, the learning curve is not just about turning the engines faster and getting better margins, it is also about getting more efficient on the working capital. These are all things that are going to generate tremendous amount of free cash flow as we go forward in the next few years. The last 2 years was deleveraging.

The next few years is going to be a lot of fun because there is going to be a lot of opportunities for us to put things to work, and we have the natural growth drivers already built in.

Yeah, we talked about this before, and it's a great question. We're not a components business. We're a long cycle business. The MRO events that we are servicing today were built on flight hours over the last five years, beginning in 2022. That demand profile isn't day-to-day. It's built up over many periods, and we've not seen a single shop visit impacted this year as a result of disruption in the market. Again, long cycle business. Matter of fact, 2027, Sheila, is baked. On the commercial side of the business, it's booked out. Of course, we were always going to maintain some flexibility for transactional business in our capacity. But for the long-term agreements and the demands into 2027 and into 2028, that is very clear. As you recall, almost 80% of our business is already under long-term agreement.

The transactional side of the house we maintain for flexibility, but 2027 is solid, high visibility into demand all the way into 2028 on the commercial platforms.

I think that's a misunderstanding that people don't understand about engine MRO, is that it's not long cycle 15 and 20 years like OEM. It's not short cycle like aerospace components. It's driven by five years of previous flight cycles. You'd have to be like a terminator and travel back in time and destroy demand in 2022 or 2023 to affect us this year or next year, or even into early 2025 at this point.

That's a new one, terminator.

I saved that for you.