GE Aerospace (GE.US) Q3 Earnings Call: High Oil Prices Have Not Yet Reversed the Resilience of Aviation Demand, Flight Volume Expected to Continue Growing Next Year

GE Aerospace (GE.US) released its Q3 2026 earnings report before the U.S. market opened on Tuesday. The company's revenue and adjusted earnings per share both beat market expectations, and it once again raised its full-year profit and free cash flow guidance, indicating that demand for aircraft engine spare parts and maintenance services remains strong despite industry concerns triggered by rising aviation fuel prices. Following the earnings release, the company's stock rose nearly 3% in pre-market trading before turning negative, down about 1% as of publication. The earnings report showed that GE Aerospace's Q3 revenue grew 16% year-over-year to $14.12 billion; adjusted revenue was $13.29 billion, above the LSEG IBES consensus of $12.87 billion, up about 18% year-over-year. Adjusted earnings per share were $2.25, significantly above the expected $2.01, up about 36% year-over-year. On a GAAP basis, earnings per share from continuing operations were $2.32; net profit was $2.8 billion, up 12% year-over-year; operating profit was $3 billion. The order side continued to provide visibility. Orders for the quarter were $19 billion, with a commercial services order backlog exceeding $170 billion. By segment, Commercial Engines and Services (CES) orders were $15.3 billion for the quarter, up 58% year-over-year. CES revenue was $10.34 billion, up 21% year-over-year; Defense and Propulsion Technologies (DPT) revenue was $3.47 billion, up 7% year-over-year. The company said this backlog directly supports management's view on services revenue and expects the commercial services business to achieve low-double-digit growth in 2027; by comparison, CES business revenue is expected to grow "low-twenties percent" this year. The core highlight of this earnings report is the second upward revision of full-year guidance. Adjusted EPS guidance was raised from $7.65$7.85 in Q2 to $8.00$8.10, with the midpoint of $8.05 $0.20 above the upper end of the prior range; the market consensus was $7.92, and the new guidance midpoint is about 1.6% above consensus. Free cash flow guidance was simultaneously raised from $8.9$9.2 billion to $9.1$9.4 billion, versus market expectations of about $9.12 billion. The company also raised its free cash flow and operating profit forecasts; adjusted revenue growth guidance was maintained at about 19%20%. The following is the full transcript of the General Motors Company earnings call (translated with the assistance of AI tools): I. Executive Remarks H. Culp: Chairman and Chief Executive Officer We delivered strong results in the third quarter. Even in a volatile environment, demand remained robust across all businesses. Q3 orders grew 49% year-over-year, with Commercial Engines and Services (CES) up 58%. Commercial services remained strong, with Q3 orders up 23% and up 30% year-to-date. Combined with a backlog of more than $170 billion, we are well positioned to close out 2026 and expect low-double-digit growth in the services business in 2027. We made history at the Farnborough Airshow, announcing commitments for more than 1,800 engines, including the largest LEAP agreement ever with IndiGomore than 1,000 LEAP-1A engines for its A320neo fleet. Just last week, we announced an agreement with Turkish Airlines for more than 300 LEAP-1B engines for its 737 MAX fleet, along with a long-term services agreement covering its entire fleet of more than 600 LEAP-1B engines. Total company revenue grew 18% in the quarter, with CES up 21% and Defense and Propulsion Technologies (DPT) up 7%. Operating profit grew 30%, with margin of 22.5%, up 220 basis points year-over-year. Earnings per share (EPS) grew 36%, and free cash flow exceeded $2 billion. These results reflect the effect of the FLIGHT DECK operating system in driving continued output growth: year-to-date commercial services revenue and total engine deliveries both grew more than 20%. We continue to focus investment on meeting customer demand, recently announcing the acquisition of Guangdong Yangshan United Precision Manufacturing (CPP) to expand critical castings capacity. At the same time, we are advancing current and future technologies with more than $3 billion in annual R&D investment. This quarter's results build on progress in the first half: year-to-date orders up 49%, revenue up 23%, EPS up 28%, and free cash flow conversion of 105%. Given the strong results, combined with our expectations for the fourth quarter, we have raised our 2026 guidance. Here, I want to thank all GE Aerospace employees and supplier partners for their efforts in serving customers. FLIGHT DECK and Operational Progress FLIGHT DECK is at the core of how we drive safety, quality, delivery, and costalways in that order of priority. We are making substantive progress, with year-to-date commercial services revenue up 26% and total engine deliveries up 21%. With the LEAP installed base expected to more than double between 2025 and 2030, the team is focused on increasing LEAP fan assembly capacity. Using FLIGHT DECK, the team reconfigured the production line layout and established standard work at each station, more than doubling capacity. To improve the readiness rate of the U.S. Navy's F/A-18, we partnered with a key supplier to shorten repair time for critical F414 components. By improving parts flow, we doubled output. These initiatives demonstrate the power of collaborative problem-solving and breaking bottlenecks, helping drive another quarter of double-digit year-over-year growth in key supplier material input in Q3. This quarter marked the 10th consecutive quarter of sequential growth in material input, driving LEAP engine deliveries up 26% year-to-date. FLIGHT DECK's benefits are further accelerated by AI. At Celma, our largest MRO facility, the team developed an AI tool that automatically captures the technical records required for each CFM56 shop visit, reducing record processing time by about 25%. Initiatives like these drove another quarterly record in internal shop visit output across our network, with turnaround time shortened by more than a week since the end of 2025, including two weeks for LEAP. Combined with other efforts, since early summer, aircraft grounded due to LEAP engine issues have fallen to near zero. While there is still work to do to meet customer expectations, we are making substantive progress. Investment and Next-Generation Programs Given that aircraft manufacturers' order books are full through the end of the decade, combined with strong aftermarket and defense growth, we continue to invest to ensure timely delivery. The acquisition of long-time supplier CPP is a major investment to expand critical castings capacity for the entire aviation industry. Beyond improving delivery, the CPP acquisition also allows us to accelerate the introduction of new engine technologies that improve cooling and enhance the durability and efficiency of the current fleet and future programs. We are making substantive progress on next-generation programs while enhancing capabilities through partnerships with disruptive innovators. This summer, the team completed the world's first high-altitude hybrid-electric propulsion flight in collaboration with BETA Technologies. We thank BETA for the collaboration, which demonstrated the feasibility of hybrid-electric propulsion for commercial aviation through NASA's Electrified Powertrain Flight Demonstration project. The GEK800 (now officially designated F143), developed with Kratos, was designated as the second Beijing Dynamic Power for the Joint Air-to-Surface Standoff Missile (JASSM), transitioning from development to a U.S. Air Force-funded program. Our XA102 adaptive cycle engine was selected by the U.S. Air Force to advance to the next phase of the NGAP program, moving into hardware procurement and subcomponent testing. The U.S. Navy's recently announced F/A-XX program is another example of the government advancing a major sixth-generation fighter program, ensuring U.S. air superiority building on last year's F-47 news. We are excited about the Edison Works team's progress on advanced engines, which positions us well to support the U.S. government's efforts to modernize the military. In summary, we remain focused on what matters most to customers and are positioning GE Aerospace for long-term growth. Rahul Ghai: Senior Vice President and Chief Financial Officer GE Aerospace delivered another strong quarter, with double-digit growth in orders, revenue, profit, and EPS. Orders grew 49%, with CES up 58% and DPT up 18%. Revenue grew 18%, with CES up 21% (the sixth consecutive quarter of at least 20% growth) and DPT up 7%. Operating profit was $3 billion, up 30%, with margin expanding 220 basis points to 22.5%, driven by services volume, productivity, and price, partially offset by inflation. EPS was $2.25, up 36%, driven by operating profit growth and share count reduction. Free cash flow was $2 billion. Working capital was an outflow due to receivables growth from services invoicing timing and higher receivable balances from aircraft manufacturers. Net contract assets and liabilities were an inflow in the quarter, driven by strong utilization invoicing. Results build on the first half: year-to-date orders up 49%, revenue up 23%, operating profit up $1.5 billion (22%). Free cash flow grew 13% to $6.7 billion, driven by higher earnings and a significant narrowing of inventory growth, with conversion of 105%. Looking further at the 36% EPS growth in the quarter: higher operating profit contributed $0.55, or more than 90% of the improvement. Both segments grew profit, and corporate costs declined by about $160 million due to timing and cost management actions, partially offset by a slight increase in internal eliminations. The remainder of EPS growth came from share count reduction from previously announced capital allocation actions, with the tax rate essentially flat at around 15%. CES Segment Q3 orders grew 58%, with services orders up 23% year-over-year and up nearly $300 million sequentially. Spare parts orders grew faster than total services, including continued strength in CFM56. Equipment orders more than tripled. Revenue grew 21%, with services up 17% and internal shop visit revenue up 12%. Higher volume and heavier widebody workscope were partially offset by customer and product mix, with LEAP volume up more than 40%. Spare parts grew more than 20%, driven by improved material availability, LEAP external channel growth, and price. CFM56 workscope remained stable. Despite strong revenue growth, spare parts arrears increased sequentially, reflecting strong underlying demand. Equipment revenue grew 38%, with engine deliveries up 8%, including LEAP up 5%, the fifth consecutive quarter of at least 500 LEAP engines delivered. Widebody engine deliveries grew more than 50%, with GEnx shipments nearly doubling. GE9X engines delivered in the quarter will be recognized after mid-seal certification. Profit was $2.9 billion, up 21%, with margin of 27.9%. Year-to-date, CES orders grew 54%, services grew 30%, revenue grew 27% (services up 26%), supporting operating profit growth of $1.4 billion and engine deliveries up 25%. DPT Segment Orders grew 18%. In the quarter, we secured a $2.9 billion five-year contract to provide continued support for F414 engines for the U.S. Navy's F/A-18 and EA-18G fleets. Defense book-to-bill was 1.0x for the quarter and 1.5x year-to-date. Total DPT backlog exceeds $30 billion, up more than $5 billion since the start of the year. Revenue grew 7%, with Defense and Systems revenue up 5% and engine deliveries up 4%; Propulsion and Additive Technologies grew 10%, driven by Avio Aero and Unison. Profit grew 8%, with margin expanding 20 basis points to 13.7%. Year-to-date, DPT achieved order growth of 33%, revenue growth of 13%, and profit of $1.3 billion (up 14%). Full-Year Guidance Raised Across the Board Given strong year-to-date performance and visibility entering the fourth quarter, we are raising company guidance across the board: Revenue: expected to grow 19% to 20% (previously high-teens). CES: expected to grow in the low-20s range (previously about 20%). Commercial services is at the high end of the prior outlook, with revenue up about $5.5 billion year-over-year, and the midpoint raised by about $400 million; commercial equipment is expected to grow in the low-20s range (previously about 20%). DPT: maintaining low-double-digit growth. Operating profit: expected $10.9 billion to $11.0 billion, with the midpoint raised by $300 million. Of this, CES is expected at $10.5 billion to $10.6 billion, with the midpoint raised by $250 million (about $100 million from a smaller GE9X impact in the second half, and the remaining $150 million from the flow-through of higher services growth). DPT profit: maintaining $1.6 billion to $1.7 billion. Corporate costs and eliminations trending toward the low end of the $1.2 billion to $1.3 billion range. EPS: raised to the $8.00 to $8.10 range, with the midpoint raised by $0.30, reflecting higher profit combined with a lower full-year tax rate of about 16% (previously below 16.5%). Free cash flow: raised to $9.1 billion to $9.4 billion, with the midpoint raised by $200 million, reflecting higher earnings and full-year conversion above 100%. We continue to deliver engines with upgraded mid-seals to Boeing Company, working toward FAA certification by the end of 2026; however, given the certification timing, we assume reduced deliveries during the year. Fourth-quarter internal shop visits are 100% booked, with additional engines waiting to enter, and we enter the quarter with more than 95% spare parts backlog. Overall, we will close out another outstanding fiscal 2026 with about $1.9 billion in profit growth and $1.6 billion in free cash flow growth. Given commercial installed base growth of low-to-mid single digits annually, combined with workscope tailwinds, price, and backlog, we expect low-double-digit growth in commercial services in 2027. Culp We are encouraged by momentum across the company, which validates the strength of the leadership team and our leading positions in commercial and defense. Behind the results are sustainable competitive advantages: we have the industry's largest fleet (80,000 engines and growing) and more than 2.3 billion flight hours, and operating at scale over decades-long lifecycles keeps us close to customers and supports continued growth in the services business. Our field experience drives continuous improvement in time on wing and cost of ownershipthe outcomes customers value most. Across narrowbody, widebody, regional, and defense platforms, we offer products with the best under-wing performance, supported by deep technical expertise and a growing services network. To reinforce our leadership position, we invest more than $3 billion annually in R&D and more than $1 billion in capital expenditures to develop next-generation technologies with better durability and performance. Using FLIGHT DECK, we are translating strategy into results. Taken together, we are confident in the road ahead and well positioned to deliver superior value. II. Q&A Session Bernstein analyst Douglas Harned: Oil Prices and Aviation Environment This was indeed a strong quarter for the services business, with significant backlog across CES platforms. But Brent oil is at $111 today, GE90 shop visits are fully booked, it's hard to get parts and engines, and CFM56 utilization has declined slightly. Given rising oil prices and airline profitability, how do you view growth planning for this segment over the next few years? Despite strong results, the environment seems challenging. Culp: Looking around the current environment, it is undoubtedly volatile. We've seen this over the past six months, and there are many questions externally. But we have close relationships with airlines, see how they are responding, and help where we canfor example, ensuring aircraft in the fleet can fly. That's exactly why we're pleased that LEAP aircraft on ground (AOG) counts have fallen to near zero since early summer. We continue to work on durability and cost of ownership, not only improving deliveries but also shortening turnaround times. At a time when customers are dealing with fuel pressure, there is a lot we can do operationally to support them. We saw this with Delta Air Lines, Inc. last Friday. We do see flight volume growth, schedules may be trimmed somewhat, but Q3 grew 1%, with widebodies particularly strong, and we expect flight volume to continue growing in 2027. From a services perspective, that's what really drives this business. Q3 orders grew 23%, with spare parts growing more. As a window into how airlines are preparing for the coming months and beyond the pressure, our shop queue has grown 20% since the start of the year, engine removal rates remain stable, and aircraft on ground and retirements declined sequentially last quarter. Therefore, we are confident in achieving low-to-mid single-digit installed base growth, with LEAP and GEnx roughly doubling over the next five years. Combined with workscope expansion from an aging fleet, pricing opportunities, and airlines preparing for beyond the pressure, we are well positioned. That's behind the raised 2026 guidance and our view on 2027. This doesn't mean we aren't mindful of those headline pressureswe may see some pressure ahead. But from a GE Aerospace perspective looking at 2027, it is driven primarily by backlog, cycles airlines have already flown, and how we support them, plus new engine and new aircraft deliveries on the OEM side. Overall, there are many positives for GE Aerospace. Deutsche Bank Aktiengesellschaft analyst Scott Deuschle: Widebody Shop Visits Could you describe widebody internal shop visit revenue growth in the quarter? Are there specific factors limiting further widebody growth? Rahul Ghai: Overall demand for widebody shop visits remains very strong. Looking at GE90 and GEnx, we see only single-digit retirement rates for the full year, the fleet is performing well, and flight volume is growing strongly, which translates into strong shop visit demand. In addition, widebody workscope continues to expand, especially as GE90 transitions from first to second shop visits (70% of the GE90 fleet has not yet undergone a second shop visit), and GEnx is transitioning from quick-turn to first shop visits. Given widebody fleet dynamics (very low retirement rates, rising queue, expanding workscope), widebody performance was very good overall this quarter. On total shop visits, widebody mix growth was partially offset by customer mix, skewing slightly toward more long-term service agreements rather than time-and-material contracts; LEAP grew 40% year-over-year, but being early in its lifecycle, it affected overall shop visit revenue growth. Widebody itself was very strong. Wolfe Research analyst Myles Walton: Services Orders and Arrears I had expected CES services orders might decline sequentially given rising arrears and the macro backdrop, but clearly that didn't happen. Should we expect arrears to play a role? In the low-double-digit growth expectation for 2027, do you see arrears declining, or do you assume they remain at current levels? Rahul Ghai: CES orders were very strong in the quarter, with orders up 23% year-over-year and up 30% year-to-date, with spare parts growing faster than total. Order growth actually accelerated from 22% in Q2 to 23% in Q3, and grew sequentially as well. We enter Q4 with about 95% of revenue in backlog, having hovered in that range all year, which gives us confidence to raise full-year services revenue guidance, with most of the roughly $500 million full-year increment coming from incremental spare parts sales. Internal shop visit revenue remains in the mid-20s. But total spare parts backlog rose and arrears increased slightlydespite continued improvement in material availability, both backlog and arrears grew this quarter due to strong demand. Culp: Speaking of services backlog, the vast majority is long-term service agreements, with spare parts being only a portion, and spare parts is where arrears fluctuate more frequently. Operationally, we want to focus on reducing arrears and would rather build backlog to ensure we meet customer lead times. We've made a lot of progress on the supply chain, which is behind our expectations for 2027. Hopefully we can continue to build backlog while reducing arrears, because that better aligns with customer expectations. Jefferies Financial Group Inc. analyst Sheila Kahyaoglu: Widebody Equipment and GEnx It looks like you benefited from the timing change in GE9X mid-seal certification. Could you talk about the GEnx production ramp and 787 deliveries? Culp: Let me start with the 9X. We are the sole engine supplier for the 777X, with more than 1,300 engines in backlog. Airline feedback is that they love the aircraft and look forward to certification and delivery. Specifically on the mid-seal, we have been delivering engines with upgraded mid-seals to Boeing Company since August, which is strong evidence of our confidencewe have not only started production but also started deliveries, and are working toward certification, targeting year-end, subject of course to FAA approval. Rahul Ghai: GEnx deliveries more than doubled year-over-year and are up more than 60% year-to-date. We delivered more than 50 engines to Boeing Company this quarter, increasing month by month. There is more work to do to stabilize at the rate reached in September and support the supply chain Boeing Company needs going forward. As Boeing Company has said, we are not slowing deliveriesthe number of engines in Boeing Company's inventory has continued to grow in recent months, and engine deliveries have exceeded aircraft deliveries. We are confident in continuing to grow and helping Boeing Company achieve its target of 10 aircraft per month. JPMorgan analyst Seth Seifman: Relationship Between Orders and Sales How do you view the relationship between this year's order growth and next year's sales outlook? Can you help us understand the relationship between orders and sales, and how shop visits drive orders? The market is increasingly focused on order numbers these dayshow should we view them in assessing the outlook? Rahul Ghai: Looking at the sources of order growth, CFM56 spare parts sales contributed significantly this quarter. CFM56 retirement rates are below expectations at the start of the yearinitially 3% to 4%, later revised to 2% to 3%, and now expected at between 1.5 and 2 points. For next year's shop visits, based on cycles already flown, we still expect close to 2,400 rather than 2,300, at the high end of the range. Meanwhile, LEAP spare parts revenue continues to grow with utilization. Order trends are very strong, and typically these orders convert to revenue within 6 to 9 months, but conversion times have lengthened due to supply chain and overall OEM-side expectations. Looking at services growth and revenue growth, they are convergingservices orders up 30% year-to-date and revenue up 26% year-to-date. Looking to next year, it is the more than $170 billion backlog, most of the engines needed in the first half of next year already in the shop, and engine removals expected to grow more than 10% year-over-year in the first half that support our confidence in raising the 2027 outlook to low-double digits. Morgan Stanley analyst Kristine Liwag: Oil Prices and Customer Behavior For incremental engines beyond the backlog that will be removed in the future, are you seeing changes in customer behavior under high oil prices? Are they more price-sensitive, or is maximizing time on wing still the core decision driver? Culp: You have to look not only at backlog but also at in-process dynamics that aren't necessarily in reported backlog but reflect airline behavior. 2027 depends largely not only on backlog but also on cycles already flown. What we discussed earlier is not only strong spare parts orders but also the queue of engines waiting to enter the shop and engines being removedthese are quite stable, and even aircraft on ground and retirements declined sequentially in Q3. This reflects both supply chain constraints and airlines' posture of getting through the near term and preparing for beyond the pressure, which seems to be a lasting lesson from COVID. They want to be ready for a return to a more stable operating environment. Rahul Ghai: One point on workscope. On widebodies, given very few retirements, customers expect to fly these fleets for a long time, and workscope is actually expanding. On narrowbodies, take CFM56it is largely driven by life-limited parts that need replacement at this stage of their lifecycle, and given the lack of used material in the market, we don't see workscope changing. LEAP will continue to grow as the fleet maturesLEAP revenue per shop visit is about half that of CFM56 because it is early in its lifecycle. So overall for narrowbody and widebody, we expect workscope to expand next year. Citi analyst John Godyn: CFM56 Retirement Rates How do you view retirement rates going forward? Given everything you're seeing, could retirement rates rebound quickly from current levels? Culp: It's important to remember that CFM56 is still essentially a young fleet, with two-thirds of the fleet not yet having undergone a second shop visit. History shows that about 85% of recent business volume comes from engines less than 20 years old, and retirements tend to occur on aircraft and engines older than 20 years. We originally expected a retirement rate of about 2% this year; it is currently below that and may end up around there. Looking to 2027, we do think we will see retirement rates rise, and from a prudent modeling standpoint, at least we should assume that. Even so, we raised our CFM56 shop visit expectation to 2,400 in the summer, which again shows the strength of backlog and demandand that doesn't even factor in the effect of gas turbines for power generation. Rahul Ghai: On power generation, we are approaching it from two angles: first, seeing whether we can provide technology solutions for customers who want to enter that market; second, selling spare parts, because they need parts when refurbishing engines, and the market lacks used material, which creates another revenue stream. In short, the power generation business will be incremental to CFM56 revenue streams, which was not included when we gave 2028 guidance last summer. Wells Fargo & Company analyst David Strauss: 2027 Margins Looking ahead to 2027 CES margins, there are several moving factorscould you talk about the puts and takes? Culp: We will remain mindful of these puts and takes and, as always, provide more complete guidance for the new year at our January earnings. It's worth noting that in 2026 we will exceed our 2028 cash flow outlook, and this year we will also come close to achieving our 2028 profit outlookthe overall picture is clearly improving. Rahul Ghai: On the revenue side, services grow low-double digits for the full year, and DPT will be high-single digits next year. On the profit side, the focus is the flow-through of low-double-digit services growthstarting from a higher 2026 base, low-double digits means about $3.5 billion to $4 billion of revenue growth, and we expect services margins to be flat. Even though LEAP is growing and has not yet reached the overall CES services margin level, given the performance of other product lines, we expect to hold overall CES services margins next year. OEM (original equipment) will continue to grow, likely faster than services, and the 9X will ramp. There are two things on the 9X: the number of engines delivered to Boeing Company will grow; and unit cost is declining significantly from 2025 to 2026, with further declines in 2027. But after partially offsetting volume growth with cost declines, we expect the 9X loss to remain a year-over-year headwind of about $300 million in 2027. On DPT, we expect high-single-digit revenue growth and some margin expansion. Overall, strong profit growth is driven by services and DPT, partially offset by OEM. 2027 margins should be flat with 2026just as they were this year during the 9X ramp. By 2028 and beyond, as the 9X headwind fades and LEAP services margins reach the overall level, we should begin to see margin expansion. Goldman Sachs Group, Inc. analyst Noah Poponak: Quantifying LEAP and CFM56 Shop Visits Could you quantify LEAP and CFM56 shop visit growth in 2026 and 2027? Rahul Ghai: CFM56 is essentially flat, in the 2,300 to 2,400 range, and may grow slightly toward the high end in 2027. On LEAP, we don't quantify shop visit counts, but growth has been strong this yearabout 40% in the quarter and more than 50% in the first half. Consistent with our long-term guidance, LEAP shop visits should grow at roughly a 25% CAGR from now to 2030, so it may moderate from around 40% in Q3 to about 25% to 26% in 2027. UBS Group AG analyst Gavin Parsons: CPP Enhanced Cooling Technology I'd like to hear more detail on CPP's enhanced cooling technology, since the industry has been saying for years that engines run hotter and hotter. Culp: It is indeed still early. The primary reason for acquiring CPP is to have a platform that can continuously invest in capacity for itself and othersCPP is an excellent company in that regard. We have no intention of being a captive supplier only. Being able to work more closely with CPP to more tightly integrate development and manufacturing on these next-generation blades is an important part of GE Aerospace's value proposition. Importantly, this ultimately comes down to customer requirements for durability and efficiency, and what we are doing applies both to the current fleet and to next-generation programsnot just technology that will be deployed a decade from now. We have already run about 3,000 durability cycles in development, learning is progressing well, and there will be more information later on the magnitude of performance improvement and commercialization timing. And everything we've discussed, at least for the 2027 and longer-term outlook, does not yet include any potential time-on-wing benefits. We obviously need to complete the regulatory process, and we still expect approval next summer. Customer feedback has been good, and the team is responding positively. Six to seven weeks after the announcement, we are even more excited about the potential than when we formally announced it. III. Summary Culp: Our focus has always been clear: deliver for customers, improve time on wing, and reduce cost of ownership. Using FLIGHT DECK, we are translating these priorities into measurable results. We have more work to do, but we are confident in the road ahead and in creating long-term value for customers and shareholders.