Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $297.4 million for Q3 2025, up 28% from $232 million in Q3 2024, and in line with Q2 2025 results [18][19] - Adjusted free cash flow for Q3 was $268 million, contributing to a year-to-date total of $638 million, with a target of $750 million for the full year [14][16] - The aerospace products segment generated $180.4 million in EBITDA, with a margin of 35%, reflecting a 77% year-over-year increase [9][19] Business Line Data and Key Metrics Changes - Aerospace products segment saw a significant increase in EBITDA, up 77% year-over-year, driven by strong global demand for pre-built engines [9][19] - The leasing segment posted approximately $134 million in adjusted EBITDA, with a pure leasing component of $122 million for Q3 [20][21] - The company refurbished 207 CFM56 modules in Q3, a 13% increase from the previous quarter, and is on track to produce 750 modules in 2025 [10][19] Market Data and Key Metrics Changes - The company is targeting a total portfolio size of approximately 375 aircraft, with full capital deployment anticipated by mid-2026 [6][7] - The company aims to achieve a 25% market share in the engine aftermarket maintenance sector in the coming years [10] Company Strategy and Development Direction - The company is pivoting to an asset-light model focused on aerospace products and strategic capital, with plans to launch additional SCI partnerships annually [15][16] - The acquisition of ATOPS for approximately $15 million is expected to enhance production capacity and operational efficiency [12][30] - The company is targeting growth in production to 1,000 CFM56 modules next year, a 33% increase compared to this year's production [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 estimates of $1.25 to $1.3 billion in business segment EBITDA, with significant growth expected in 2026 [16][17] - The company anticipates generating $1 billion in adjusted free cash flow in 2026, representing a 33% increase over the $750 million targeted for 2025 [17] Other Important Information - The company announced an increase in the quarterly dividend from $0.30 to $0.35 per share, marking its 42nd dividend as a public company [15] - The company is focused on enhancing margins and production capabilities through strategic acquisitions and partnerships [12][30] Q&A Session Summary Question: Financial implications of the upsizing of SCI - Management indicated that the upsizing will accelerate growth under SCI, potentially increasing its contribution to aerospace products volume from 20% to 25% [25][26] Question: Details on the ATOPS acquisition - The ATOPS acquisition is aimed at increasing production capacity ahead of needs, with a focus on synergy with existing facilities [28][30] Question: Availability of aircraft engine assets - Management noted that there is a significant supply of older aircraft being sold by lessors, which presents opportunities for acquisition [35][36] Question: Treatment of SCI in financials - The 19% equity portion of SCI will be reflected in the equity income line and will also generate servicing revenue [40][41] Question: Guidance for 2026 - Management expects growth in both volume and margins, driven by new and existing customer orders [68][70] Question: Management and performance fees for SCI - The asset management fee is market-based, typically around 1% or higher, with incentive compensation tied to performance [76][77] Question: Long-term partnerships and margin impact - Management anticipates continued growth in partnerships, with margins expected to improve to 40% next year [84][86]

Group 1 - The company has evolved from an aircraft and engine leasing business to include various segments such as MRO (Maintenance, Repair, and Overhaul), an engine module factory, and strategic capital initiatives with outside capital [2][3] - There is a misconception among investors regarding the company's identity and operations, indicating a need for clearer communication about its diverse business model [2] - The company has established a joint venture with Chromalloy, which adds another dimension to its operations through PMA (Parts Manufacturer Approval) [2][3] Group 2 - The discussion highlights the journey of the company in the aviation sector, emphasizing its unique position compared to larger competitors [1] - The company is building a differentiated business model within the aviation industry, focusing on various components rather than just market share [1] - The conversation aims to clarify the company's origin story and the rationale behind its expansion into different areas of the aviation market [3]