Joseph Adams: Sure. So yes, we’ve had a very good progress on the parts that are in the works and a very good dialogue. So we haven’t seen anything significant on that front. But recognizing that the FAA does have a lot on its plate, probably never more — more than ever in history, and they now have an administrator. So that’s a good thing, and they’ve added people. So we see it moving ahead, but it is inherently very difficult to be precise about when you expect things to actually be resolved.
Giuliano Bologna: Got it. That’s very helpful. And then one more on a topic that kind of came up earlier, but there’s obviously a lot of tightening in MRO capacity across the industry. And I’m curious how you think about that impacting your business and how long that could — that trend could continue?
Joseph Adams: Yes, it’s good for us because our pitch to airlines is we can save you time and save you money on maintenance events. And the longer the time you’d have to spend by sending an engine into an MRO, the more savings we provide. So — and I think the GTF issue, there’s some — basically, every GTF engine is going to have to go through a shop visit in the next couple of years on an accelerated basis. So that’s going to push out what was potentially available capacity is going to be used up by the GTF. So the market is definitely very — getting tight and going to get tighter, and that’s very good for us because we’re essentially just pre-building modules to supply people in a short period of time and have them avoid or skip the agony of a shop visit.
Operator: [Operator Instructions]. Our next question comes from the line of Hillary Cacanando with Deutsche Bank.
Hillary Cacanando: Congratulations on the great quarter. Just a quick question on the 2024 guidance. I was wondering if you can also provide how many modules you’re expecting to sell? If you kind of — maybe you could give us some guidance on that as well? And then on the USM side, could you tell us like how much of the EBITDA was attributed to USM for the third quarter? And then for 2024, if you could talk about like how many engines you expect to part out during the year from the USM?
Joseph Adams: Okay. I’ll take two, and I’ll give one to Angela. I think we expect to part out — I think this year, we’re parting out of roughly 40 engines and next year, we’re expecting it to go to 50. And we essentially make approximately $1 million per engine from that activity. On the number of modules next year that we’re — our assumption is in the neighborhood of 200 modules for next year. But there’s a wide range on that and there’s different mix. So I wouldn’t — that’s not terribly precise. But that’s sort of order of magnitude where we are. What was this year — what would we think this year will be, a 100?
Eun Nam: Yes. 100.
Unidentified Company Representative: 130.
Joseph Adams: 130 this year. So that’s sort of the order of magnitude of growth on that. And then USM, Angela?
Eun Nam: USM for fourth quarter?
Joseph Adams: Q3.
Eun Nam: Q3. It’s about 25% of our aerospace EBITDA from USM.
Joseph Adams: No, for the third quarter of this year.
Eun Nam: Third quarter of this year. Yes, 25% of our EBITDA.
Joseph Adams: Okay, 25%. So roughly $10 million this quarter.
Hillary Cacanando: Okay. Got it. That’s really helpful. And then I just have 1 more follow-up question. So it looks like you sold fewer engines in the third quarter, 8 engines versus 17 engines last quarter and just given the strong environment, just strong demand for engines, I was just wondering why you sold fewer than last quarter? Was that deliberate or just timing?
Joseph Adams: We have been selling mostly the non-CFM56 or non-V2500 engines. So those engine sales, we’ve been signing up in the last few quarters have been a lot of Pratt 4000s, CF6-80s, RB211s, which we now own fewer and fewer of those. So that’s why I think engine sales — we’re not interested in selling a lot of our CFM56 or V2500 assets today because we think they’re still going up in value. And we would expect to hold those rather than monetize it. We could actually monetize them today at a very nice gain, but that would probably be short-lived. I mean they’re going to go up in value. So we’re — and that’s one of the reasons why we’ve stepped down gain on sale for next year as we’ve repositioned our fleet to more CFM56 and increasingly now V2500. And we have fewer assets that we’re looking to sell, and we also think they’re all going up in value.
Hillary Cacanando: Okay. So your strategy is more towards just leasing the engines rather than selling the CSM, right? You would rather lease them, rather than sell?
Joseph Adams: Yes. On that basis, yes. We’re also still — we’re effectively selling modules. So we’re selling engines for engine shop visits and then rebuilding them. So — but just outright selling an engine, we don’t see that as a big activity.
Operator: [Operator Instructions]. Our next question comes from the line of Brian Mckenna with JMP Securities.
Brian Mckenna: So it will be great just to get an update on where you are in the process around insurance claims related to the Russia and Ukraine war? And then is there any updated timeline around selling the ships portfolio? And can you just remind us how much liquidity both of these situations could bring in?
Joseph Adams: Yes. I think a good number for the combined proceeds that we would expect to — I think it’s reasonable to get from both of those would be around $300 million. And I would break that out roughly half and half. So on the insurance side, it’s now turned into a negotiation with the airlines who wrongfully took our assets, but they’re using Russian money like Aeroflot has done a couple of occasions already. We have 3 separate negotiations that are advancing to settle. So that would avoid the lengthy litigation that is the fallback strategy. So we’re hoping we can resolve 1 or 2 of those possibly fairly soon and the other one by, say, the middle of next year. On the ship side, we also have 2 assets, both of which are being marketed.
The macro for that industry is really good. People are not building any new ships and there’s very strong demand. So I would also expect that we could monetize those ships, possibly the smaller one fairly soon, but by the middle of next year would be a reasonable target on that as well.
Brian Mckenna: Helpful. And then just switching gears a little bit. So it’s been a few quarters since you acquired QuickTurn. So can you just give us an update on how this acquisition is going so far and then where you are in the integration process? And then just more broadly on M&A. In this environment, are you seeing any uptick in strategic opportunities that could accelerate the strategy or the growth of the company longer term?
Joseph Adams: Yes. So QuickTurn is doing great. We have streamlined the activity focused mostly on engine tests and very light hospital shop visits and module swaps, which was the big driver of why we really were interested in that facility. We did over 20 engine tests in September and what’s our estimate for October?
