“we do expect the LEAP service margins to approach overall CES service margins by the time we get into the 2028 time frame.”

In context

“EAP, the services business is trending really nicely. We are expecting a further improvement this year on margins. Trends have been good for the first half of the year, and it is coming from a few things: increased volume that we are driving in our shops; the repairs that we are developing in our aftermarket business—this year, we expect the number of repairs that we develop on LEAP to double over what we developed last year, which helps reduce the cost of the shop visit; and the external channel is coming up nicely as well. We are now at about 15% of our shop visits for LEAP performed by third parties. That number was close to 10% just eighteen to twenty months back. So that part of the business is developing nicely. If you put all that together and think longer term to your second part, we do expect the LEAP service margins to approach overall CES service margins by the time we get into the 2028 time frame. Really pleased with the progress—for a business that was just kind of breakeven a few years ago, we have made a lot of progress in the last eighteen months. Operator: Our next question comes from Robert Stallard with Vertical Research. Robert Stallard: Thanks so much. Good morning. Just want to follow up on slide five and that spare parts delinquency chart you have in there. Is that continued march higher in delinquencies just due to continued demand exceeding supply—the supply chain strain? And how long do you think it will take to get that back down to a more reasonable number? H. Lawrence Culp: It is—despite the progress we have talked about a few times now this morning, not only with inputs but outputs—just a function of demand outstripping supply. We highlight delinquency simply to m”