“The G800 comes out of the box at a higher lot 1 at a higher incremental margin than the 700 that didn't bear as much of the developmental costs. And it will to have margin expansion as we come down our learning curves and move from one lot to the next.”

In context

“ondering if you could elaborate on the G800 delivery cadence. You mentioned 13 in the second half. Do you have a sense for when the first one might deliver and what the SKU will be Q3 to Q4? And relatedly, you've given color on the lots and the G700 margins, if you will. Any sort of guidance you can give us on how to think about G800 profitability by lots over time? Phebe N. Novakovic: So the first G800 should deliver very soon. And I actually am not -- I don't really know the distribution of each by quarter, but we'll be pretty much on what we -- what I noted in my remarks. As you know, as we talked about before, the G700 lot 1 carried lower margins for all the developmental cost reasons. Lot 2 is better. Lot 3 is going to be better yet or is better yet, and I expect the same from lot 4. The G800 comes out of the box at a higher lot 1 at a higher incremental margin than the 700 that didn't bear as much of the developmental costs. And it will to have margin expansion as we come down our learning curves and move from one lot to the next. Operator: Your next question comes from the line of Seth Seifman with JPMorgan. Seth Michael Seifman: I wanted to ask, first of all, I thought it was helpful to have the breakdown of Aerospace and thinking about the different ingredients in margin. It seems like in services after a strong couple of years, things seem to have slowed down a little bit here in the first half. And so maybe if you could talk a little bit about kind of why that's happening. And while I realize that there's a lot of unpredictability around the different dynamics there in terms of the contributors and the mix, what's sort of a good algorithm for services going forward? Does it grow at kind of a pace with flight hours or I guess, or deliveries or kind of how to think about it and how it fits into the margin mix go”