Kevin Stein
President and Chief Executive Officer at TransDigm Group
Good morning from Cleveland and thanks for calling in today. First, I'll start off with the usual quick overview of our strategy, a few comments about the quarter and discussion of our fiscal 2022 outlook, then Jorge and Mike will give additional color on the quarter.
To reiterate, we are unique in the industry in both the consistency of our strategy in good times and bad as well as our steady focus on intrinsic shareholder value creation through all phases of the aerospace cycle. To summarize, here are some of the reasons why we believe this. About 90% of our net sales are generated by unique proprietary products. Most of our EBITDA comes from aftermarket revenues, which generally have significantly higher margins and over any extended period have typically provided relative stability in the downturns.
We follow a consistent long-term strategy, specifically. We own and operate proprietary aerospace businesses with significant aftermarket content. We utilize a simple well-proven value-based operating methodology. We have a decentralized organizational structure and unique compensation system closely aligned with shareholders. We acquire businesses that fit this strategy and where we see a clear path to PE-like returns.
Our capital structure and allocations are a key part of our value creation methodology. Our long-standing goal is to give our shareholders private equity-like returns with the liquidity of a public market. To do this, we stay focused on both the details of value creation as well as careful allocation of our capital. As you saw from our earnings release, we had another good quarter considering the market environment. We continue to see recovery in the commercial aerospace market and are encouraged by the trends in air traffic among other factors.
Our Q2 results show positive growth in comparison to the same period in 2021 as we are lapping the second fiscal quarter of '21 which was heavily impacted by the pandemic and then relative availability of vaccines. Although, our results have improved, they continue to be unfavorably affected in comparison to pre-pandemic levels as the demand for air travel remains depressed. However, the continued steady improvement in global air traffic is encouraging. There was a slight pullback in-flight traffic in January as a result of the Omicron variant after strong December holiday travel, but traffic has continued to progress forward since then. It further illustrates the pent-up demand for air travel and bodes well for the continued momentum of the commercial aerospace recovery throughout 2022.
To date, the recovery has remained primarily driven by domestic leisure travel though international travel is slowly improving as many governments across the world have softened or fully lifted travel restrictions. China continues to be a watchpoint as both international and domestic traffic in China is near COVID lows due to strict zero-COVID policies limiting travel.
In our business, we saw another quarter of sequential improvement in our total commercial aftermarket revenues and bookings, with both up approximately 10% over Q1 of fiscal 2022. I am very pleased that despite this challenging commercial environment, our EBITDA As defined margin was 47.7% in the quarter. Contributing to this strong margin is the continued recovery in our commercial aftermarket revenues as well as the careful management of our cost structure and focus on our operating strategy.
This was achieved despite the Omicron variant impacting travel in the beginning of Q2 and the sharp drop-off in China air traffic during the quarter. Additionally, we continued to generate cash in Q2. We had operating cash flow generation of almost $90 million and closed the quarter with a little over $4.2 billion of cash. We expect to steadily generate significant additional cash throughout the remainder of 2022.
Next, an update on our capital allocation activities and priorities. I am happy to report that during Q2, we opportunistically deployed $667 million of capital via our open market repurchases of our common stock. This equates to approximately 1 million of our shares at an average price of $637 per share. We view these repurchases like any other capital investment and expect this will meet or exceed our long-term return objectives. Mike will address this more later.
Also during the quarter, we agreed to acquire DART aerospace for approximately $360 million in cash. DART is a leading provider of highly engineered unique helicopter solutions that mainly service civilian aircraft. DART is expected to generate approximately $100 million in pro forma revenue for the calendar year ending December 31, 2022, and it fits well with our proprietary and aftermarket-focused value generation strategy.
The acquisition is currently expected to close during the second half of our fiscal 2022. Pro forma for the closing of the DART acquisition, we still expect to have a sizable cash balance of close to $4 billion. This assumes announced share repurchases and DART closing, which together allocates approximately $1 billion of capital for value-generating investments. We continue to evaluate our capital allocation options regarding additional acquisitions, share buybacks, and dividends. All three options remain on the table, each individually, but then also, potentially in some combination over the next nine months or so.
Any significant M&A, share buyback, and/or dividend activity will still leave the company with substantial liquidity and the financial flexibility to deal with any currently anticipated capital requirements or other opportunities in the readily foreseeable future. We continue to look at possible M&A opportunities and are always attentive to our capital allocation. Both the M&A and capital markets are always difficult to predict, but especially so in these times.
Regarding the current M&A pipeline, we are actively looking for M&A opportunities that fit our model. Acquisition opportunity activity continues to accelerate and is approaching pre-COVID levels. We have a decent pipeline of possibilities as usual mostly in the small and mid-size range. I cannot predict or comment on possible closings. We remain confident that there is a long runway for acquisitions that fit our portfolio.
Now moving to our outlook for 2022. We are still not in a position to provide full financial guidance as a result of the continued disruption in our primary commercial end markets. We continue to be encouraged by the recovery we have seen in our commercial OEM and aftermarket revenues and the strong bookings received for both thus far in fiscal 2022. At this time, we expect to reinitiate guidance on the November 2022 earnings call for our new fiscal year assuming prevailing conditions continue to evolve favorably.
We continue to expect COVID-19 to have an adverse impact on our financial results compared to pre-pandemic levels throughout the remainder of fiscal 2022 under the assumption that both our commercial OEM and aftermarket customer demand will remain depressed due to lower worldwide air travel. Although recent positive trends in commercial air traffic could impact us favorably.
With regard to internal planning, our teams are now resource planning for commercial aftermarket revenue to grow ahead of the 20% to 30% sizing range previously provided. We expect our commercial OEM revenue to grow significantly as well, but at a rate less than the commercial aftermarket rate of growth. As you know, we aim to be conservative.
As for the defense market, we still expect defense revenue growth in the low single-digit percent range for fiscal 2022 versus prior year despite the slow first half of the year. Jorge will provide more color on our defense end market. As you know this end market can often be quite lumpy on a quarterly basis. We now expect full-year fiscal 2022 EBITDA margin to be approaching 48% due to the rate of commercial aftermarket recovery. We anticipate EBITDA margins will continue to move up throughout the second half of our fiscal year. As a note, this margin guidance includes the unfavorable headwind of our Cobham acquisition of about one-half of a percent this year.
We believe we are well positioned for the second half of fiscal 2022. As usual, we'll closely watch the aerospace and capital markets and see how they develop and react accordingly. Mike will provide details on other fiscal 2022 financial assumptions and updates.
Let me conclude by stating that I'm pleased with the company's performance in this period of gradual recovery for the commercial aerospace industry and with our commitment to driving value for our stakeholders. We remain focused on executing our operating strategy and managing our cost structure as we continue on this path to a full recovery of the commercial aerospace industry. We look forward to the remainder of fiscal 2022 and the opportunity to continue to create value for our stakeholders through our consistent strategy.
Now, let me hand it over to Jorge to review our recent performance and a few other items.
