General Dynamics Corporation【GD】株式ニュース

China's Rare Earth Grip on the U.S. Military Is About to BreakMarch 2, 2026 9:58 AM
PR Newswire (Canada)

OilPrice.com Market CommentaryNEW YORK, March 2, 2026 /CNW/ -- In a typical Chinese rare earth processing plant, 200 workers move through a maze of massive chemical tanks, risking life and limb to produce the materials that power everything from fighter jets and missile components to cellphones. Hundreds of these facilities operate across China, and they give Beijing overwhelming control over the single most critical choke point in the modern industrial economy. Companies mentioned in this release include: REalloys Inc. (ALOY), Lockheed Martin Corporation (NYSE: LMT), RTX Corporation (NYSE: RTX), The Boeing Company (NYSE: BA), Northrop Grumman Corporation (NYSE: NOC), General Dynamics Corporation (NYSE: GD).But now, in Saskatchewan, Canada, a hi-tech plant of engineers and chemists is beginning to break that monopoly.The facility is built around an AI enabled operating system that minimizes waste, reduces exposure to hazardous materials, and creates a cleaner, more secure processing chain.And one company has locked in exclusive rights to the vast majority of what that plant produces. That company is REalloys (ALOY).It operates in the part of the rare earth supply chain that barely exists outside China - the step where strategic independence is actually won or lost.As President Trump pointed out, it isn't rare earths that are critical to national security, it's the "rare processing" industry.Digging minerals out of the ground is relatively easy. Turning them into finished metals and alloys for fighter jets, drones, missile guidance systems, and advanced radar is something else entirely. That's where Western supply chains break down, and where REalloys is fighting to make a difference.The company operates its own metallization facility in Euclid, Ohio, built on nearly a decade of R&D with the U.S. Department of Energy and Department of Defense. It also holds an exclusive offtake agreement with the Saskatchewan Research Council (SRC), the government-backed group behind the AI-powered processing plant.Here's how the chain works: SRC refines rare earth feedstock sourced from allied nations across four continents. REalloys takes delivery in Ohio, converts those metals into defense-grade alloys and magnets, and has confirmed contracts with the U.S. defense industrial base.Every critical step happens on North American soil - with no Chinese chemicals, no Chinese technology, and no Chinese capital.As REalloys' Head of R&D, Andy Sherman, puts it: "Concentrates are commodities. Materials are commitments."The Pentagon doesn't buy rocks. It buys finished, defense-qualified materials.And that's exactly what this supply chain delivers.How China Accidentally Created Its Biggest CompetitionWhen REalloys (ALOY) processing partner began developing its first commercial rare earth separation facility, China controlled the overwhelming majority of global export technology. Following China's 2020 export control law, access to that technology became restricted.So the team ultimately designed and built its own separation, control and automation systems domestically – establishing independent Western rare earth processing capability.What they ended up with was an alternative to Chinese technology with better output and without the supply chain risk. As a result, the facility has automated the most labor-intensive step of rare earth processing, separating up to 17 chemically similar elements into the specific rare earths you need.In a Chinese plant, this process requires over 200 workers managing chemical tanks and adjusting valves manually. The Saskatchewan facility was able to reduce this by approximately 80 workers and an AI that receives thousands of data points every second and can make the necessary adjustments that no human team could coordinate.The plant was deliberately built at about 25-30% the capacity of a full-scale Chinese commercial facility, essentially a demonstration plant to prove the technology. At a fraction of the size, however, it already has the capability to produce much higher purity metals and higher output than Chinese plants.Commercial production is expected to start in early 2027, once the plant reaches full production REalloys (ALOY) expects to receive approximately 460 tonnes of defense-grade rare earth metals per year. That material becomes the permanent magnets inside the next generation of Western defense systems like fighter jets, missiles, and drones.Why This Matters Right NowMost people have heard that China dominates the rare earths market, about 90% of the world's rare earths are processed there. What they haven't thought through is what that actually means when the supply gets cut off.Japan figured this out decades ago and built strategic stockpiles covering two to three years of national consumption. The United States, however, has stockpiled nothing. Neither has Europe.We've been running on just-in-time supply from a country that issues rare earth export licenses on a monthly basis. If Beijing is happy with you this month, you get your allocation. If they're not, they cut it.When China briefly restricted exports last year, a Ford plant was forced to shut down almost immediately. When Trump threatened 100% tariffs, China's response was simple: no more processed rare earths. Trump backed off very quickly.Now consider the effects on the military side. In 2024, Ukraine produced 1.2 million combat drones, every single magnet in every one of them was manufactured in China. An F-35 carries 435 kilos of rare earths. A next-gen U.S. destroyer needs 4.5 tons. A nuclear submarine needs 1.5 tons.Without a secure supply of these materials, none of those systems get built, which means China effectively holds a kill switch over Western defense production.The Pentagon knows it, too. That's why new procurement rules taking effect January 1, 2027, will ban Chinese-sourced rare earths from the entire U.S. defense supply chain, from the mine all the way through to the finished product. That means every defense contractor in the country will need a qualified, non-Chinese source. REalloys is positioning to be that source."1% Reliance on China Is 100% Reliance on China"There's a reality in the rare earth industry that most companies haven't seemed to fully consider: 1% reliance on China is 100% reliance on China. If any single input in your supply chain comes from Beijing, your entire operation is one phone call away from shutting down. REalloys' (ALOY) supply chain has no Chinese inputs at any stage, processing technology, furnaces, chemicals, AI systems, or consumables. All of it is sourced outside China.Most of the competition can't say the same. You can mine rare earths in the U.S., build your own processing plant, and still be one supply disruption away from a shutdown. That's because critical parts like graphite anodes need replacing several times a week, and right now they only come from China. Starting from zero, it would realistically take five to seven years to build what REalloys already has.What Makes This Opportunity DifferentREalloys has exclusive rights to defense-grade rare earth metals through the Saskatchewan facility, including the heavy rare earths, Dysprosium and Terbium, that dramatically increase a magnet's performance. Light rare earths go into washing machines and consumer EVs. Heavy rare earths, on the other hand, go into F-35 fighter jet engines and missile guidance systems. REalloys plays the scarcer, more strategically critical end of the market, at a fraction of the valuation.Their Ohio facility converts those metals into finished alloys and magnets, and scaled production is expected to scale up to 18,000 tonnes per year of heavy rare earth permanent magnets. At that level, REalloys expects to become the largest producer of refined Dysprosium and Terbium outside of China.Washington has taken notice as well. REalloys has secured a $200 million letter of intent from the U.S. EXIM Bank. And the board reads less like a commodities company and more like a national security briefing, including a former Vice Chief of Staff of the U.S. Army, the President of GM Defense, an executive formerly from top defense companies like Raytheon and Boeing, the former Premier of Saskatchewan, and the President of Palantir Canada.The Pentagon's deadline is now months away, while competitors are still 5 to 7 years behind. REalloys (ALOY) expects to be the only company with a fully operational, non-Chinese, mine-to-magnet supply chain when it arrives, powered by six people and an AI that outperforms plants with 80 workers on the floor.Despite what most believe, the rare earth story was never about who has the raw material in the ground. It's about who can turn the raw material into something the Pentagon can actually use, and right now, that answer seems to be REalloys.Here are other companies in the defense sector that people should be watching closely over the coming months:Lockheed Martin Corporation (NYSE: LMT) remains the backbone of the U.S. defense industrial base, anchored by its leadership in advanced combat aircraft, missile systems, and integrated air and missile defense. The company's F-35 Lightning II program continues to serve as the single largest weapons system program in the world, supplying not only the U.S. military but also a growing list of allied nations.Beyond fighter jets, Lockheed is deeply embedded in missile defense architecture through systems such as THAAD and PAC-3 interceptors, both of which have seen rising demand amid renewed Middle East and Indo-Pacific tensions.RTX Corporation (NYSE: RTX), formed from the merger of Raytheon and United Technologies, has evolved into one of the most diversified defense and aerospace platforms globally. Its portfolio spans missile defense systems, advanced radars, aircraft engines, avionics, and cybersecurity solutions, giving it exposure across air, land, sea, and space domains.Raytheon's Patriot missile system remains one of the most widely deployed air defense platforms worldwide and has seen renewed demand amid heightened missile threats. RTX has also benefited from increased orders for interceptors and replenishment contracts, particularly as governments seek to strengthen layered defense systems.The company has recently focused on stabilizing margins following supply chain disruptions and cost overruns that impacted certain aerospace programs. With backlog levels remaining robust, RTX's revenue visibility remains strong, supported by long-term government contracts and allied defense procurement.While The Boeing Company (NYSE: BA) is widely known for commercial aviation, its defense, space, and security division remains a cornerstone of U.S. military procurement. The company manufactures the P-8 Poseidon maritime patrol aircraft, the KC-46 aerial refueling tanker, Apache helicopters, and various satellite and space systems critical to U.S. defense infrastructure.As geopolitical tensions elevate demand for surveillance, refueling capacity, and integrated aerospace systems, Boeing's defense division provides an important stabilizing component to the broader company profile. While commercial aviation cycles remain volatile, Boeing's defense segment ensures long-duration contract visibility and sustained Pentagon exposure.Northrop Grumman Corporation (NYSE: NOC) occupies a critical role in high-end aerospace and strategic systems. The company is the prime contractor for the B-21 Raider stealth bomber, one of the most strategically significant modernization programs in the U.S. Air Force's history. That program alone provides decades of potential production and sustainment revenue.Northrop also leads in unmanned aerial systems, missile defense integration, and space-based sensor technologies. Its exposure to next-generation aerospace and advanced stealth platforms places it at the center of U.S. long-term deterrence strategy.General Dynamics Corporation (NYSE: GD) combines shipbuilding, combat vehicles, aerospace, and IT systems under one diversified umbrella. The company's Electric Boat division produces Virginia-class submarines and Columbia-class ballistic missile submarines — programs that anchor U.S. naval deterrence.Recent submarine contracts extend production visibility well into the next decade, while geopolitical tensions continue to emphasize naval force projection and undersea capability. GD's land systems division.By. Tom KoolIMPORTANT NOTICE AND DISCLAIMER FORWARD LOOKING STATEMENTS
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Original: China's Rare Earth Grip on the U.S. Military Is About to Break

General Dynamics Reports Fourth-Quarter and Full-Year 2025 Financial ResultsJanuary 28, 2026 12:00 PM
PR Newswire (US)

Fourth-quarter net earnings of $1.1 billion, diluted EPS of $4.17, on $14.4 billion in revenueFull-year net earnings of $4.2 billion, diluted EPS of $15.45, on $52.6 billion in revenue$1.6 billion cash provided by operating activities in the quarter, 137% of net earnings$1.2 billion in capital expenditures for the year, up 27% from 2024Book-to-bill of 1.6x in the quarter and 1.5x for the full year, ending the year with $118 billion in backlogRESTON, Va., Jan. 28, 2026 /PRNewswire/ -- General Dynamics (NYSE: GD) today reported quarterly net earnings of $1.1 billion on revenue of $14.4 billion. Diluted earnings per share (EPS) was $4.17.For the full year, net earnings were $4.2 billion, up 11.3% from 2024, on revenue of $52.6 billion, up 10.1% from 2024. Diluted EPS for the full year was $15.45, up 13.4% from 2024."We had a solid fourth quarter, capping off a year that saw growth in revenue and earnings in all four segments coupled with an impressive 30% growth in company-wide backlog," said Phebe N. Novakovic, chairman and chief executive officer. "As we focus on execution of programs for our customers, we are also preparing aggressively for future growth, investing nearly $1.2 billion in capital expenditures in 2025 – with even more investments planned in the year ahead."Cash
Cash provided by operating activities in the quarter totaled $1.6 billion, or 137% of net earnings. For the year, cash provided by operating activities increased by $1 billion over 2024 to $5.1 billion, or 122% of net earnings.During the year, the company invested $1.2 billion in capital expenditures, made tax payments of $568 million, reduced total debt by $749 million and paid dividends of $1.6 billion, ending 2025 with $2.3 billion in cash and equivalents on hand.Orders and Backlog
Demand remained strong across the company, with orders of $22.4 billion during the quarter. Consolidated book-to-bill ratio, defined as orders divided by revenue, was 1.6-to-1 for the quarter and 1.5-to-1 for the year, with full-year book-to-bill exceeding 1-to-1 in each of the four segments. The company ended the year with backlog of $118 billion and estimated potential contract value, representing management's estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, of $60.9 billion. Total estimated contract value, the sum of all backlog components, was $179 billion at year end, up 24% from a year earlier.About General Dynamics
Headquartered in Reston, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapon systems and munitions; and technology products and services. General Dynamics employs more than 110,000 people worldwide and generated $52.6 billion in revenue in 2025. More information is available at www.gd.com.WEBCAST INFORMATION: General Dynamics will webcast its fourth-quarter and full-year 2025 financial results conference call today at 9 a.m. EST. The webcast will be a listen-only audio event available at GD.com. An on-demand replay of the webcast will be available by telephone two hours after the end of the call through February 4, 2026, at 800-770-2030 (international +1 647-362-9199), conference ID 4299949. Charts furnished to investors and securities analysts in connection with the announcement of financial results are available at GD.com. General Dynamics intends to supplement those charts on its website after its earnings call today to include information about 2026 guidance presented during the call.This press release contains forward-looking statements (FLS), including statements about the company's future operational and financial performance, which are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "forecasts," "scheduled," "outlook," "estimates," "should" and variations of these words and similar expressions are intended to identify FLS. In making FLS, we rely on assumptions and analyses based on our experience and perception of historical trends; current conditions and expected future developments; and other factors, estimates and judgments we consider reasonable and appropriate based on information available to us at the time. FLS are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. FLS are not guarantees of future performance and involve factors, risks and uncertainties that are difficult to predict. Actual future results and trends may differ materially from what is forecast in the FLS. All FLS speak only as of the date they were made. We do not undertake any obligation to update or publicly release revisions to FLS to reflect events, circumstances or changes in expectations after the date of this press release. Additional information regarding these factors is contained in the company's filings with the SEC, and these factors may be revised or supplemented in future SEC filings. In addition, this press release contains some financial measures not prepared in accordance with U.S. generally accepted accounting principles (GAAP). While we believe these non-GAAP metrics provide useful information for investors, there are limitations associated with their use, and our calculations of these metrics may not be comparable to similarly titled measures of other companies. Non-GAAP metrics should not be considered in isolation from, or as a substitute for, GAAP measures. Reconciliations to comparable GAAP measures and other information relating to our non-GAAP measures are included in other filings with the SEC, which are available at investorrelations.gd.com. EXHIBIT A
CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

Three Months Ended December 31
Variance
2025
2024
$
% Revenue $ 14,379
$      13,338
$     1,041

7.8 % Operating costs and expenses (12,927)
(11,915)
(1,012)

Operating earnings 1,452
1,423
29

2.0 % Other, net 10
21
(11)

Interest, net (63)
(76)
13

Earnings before income tax 1,399
1,368
31

2.3 % Provision for income tax, net (256)
(220)
(36)

Net earnings $ 1,143
$ 1,148
$ (5)

(0.4) % Earnings per share—basic $4.23
$4.20
$ 0.03

0.7 % Basic weighted average shares outstanding 269.9
273.4

Earnings per share—diluted $4.17
$4.15
$ 0.02

0.5 % Diluted weighted average shares outstanding 273.9
276.9

EXHIBIT BCONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

Year Ended December 31
Variance
2025
2024
$
% Revenue $      52,550
$      47,716
$     4,834

10.1 % Operating costs and expenses (47,194)
(42,920)
(4,274)

Operating earnings 5,356
4,796
560

11.7 % Other, net 61
68
(7)

Interest, net (314)
(324)
10

Earnings before income tax 5,103
4,540
563

12.4 % Provision for income tax, net (893)
(758)
(135)

Net earnings $ 4,210
$ 3,782
$ 428

11.3 % Earnings per share—basic $ 15.65
$ 13.81
$ 1.84

13.3 % Basic weighted average shares outstanding 269.1
273.9

Earnings per share—diluted $ 15.45
$ 13.63
$ 1.82

13.4 % Diluted weighted average shares outstanding      272.4
277.5

EXHIBIT C
REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS

Three Months Ended December 31
Variance
2025
2024
$
% Revenue:

Aerospace $       3,788
$ 3,743
$      45

1.2 % Marine Systems 4,818
3,960
858

21.7 % Combat Systems 2,535
2,395
140

5.8 % Technologies 3,238
3,240
(2)

(0.1) % Total $ 14,379
$      13,338
$     1,041

7.8 % Operating earnings:

Aerospace $ 481
$       585
$ (104)

(17.8) % Marine Systems 345
200
145

72.5 % Combat Systems 381
356
25

7.0 % Technologies 290
319
(29)

(9.1) % Corporate (45)
(37)
(8)

(21.6) % Total $ 1,452
$ 1,423
$ 29

2.0 % Operating margin:

Aerospace 12.7 %
15.6 %

Marine Systems 7.2 %
5.1 %

Combat Systems 15.0 %
14.9 %

Technologies 9.0 %
9.8 %

Total 10.1 %
10.7 %

EXHIBIT D
REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS

Year Ended December 31
Variance
2025
2024
$
% Revenue:

Aerospace $      13,110
$      11,249
$ 1,861

16.5 % Marine Systems 16,723
14,343
2,380

16.6 % Combat Systems 9,246
8,997
249

2.8 % Technologies 13,471
13,127
344

2.6 % Total $      52,550
$      47,716
$ 4,834

10.1 % Operating earnings:

Aerospace $ 1,746
$ 1,464
$ 282

19.3 % Marine Systems 1,177
935
242

25.9 % Combat Systems 1,331
1,276
55

4.3 % Technologies 1,277
1,260
17

1.3 % Corporate (175)
(139)
(36)

(25.9) % Total $ 5,356
$ 4,796
$ 560

11.7 % Operating margin:

Aerospace 13.3 %
13.0 %

Marine Systems 7.0 %
6.5 %

Combat Systems 14.4 %
14.2 %

Technologies 9.5 %
9.6 %

Total 10.2 %
10.1 %

EXHIBIT E
CONSOLIDATED BALANCE SHEET
DOLLARS IN MILLIONS

(Unaudited)

December 31, 2025
December 31, 2024 ASSETS

Current assets:

Cash and equivalents $      2,333
$      1,697 Accounts receivable 2,406
2,977 Unbilled receivables 8,380
8,248 Inventories 9,232
9,724 Other current assets 1,897
1,740 Total current assets 24,248
24,386 Noncurrent assets:

Property, plant and equipment, net 7,525
6,467 Intangible assets, net 1,375
1,520 Goodwill 21,009
20,556 Other assets 3,092
2,951 Total noncurrent assets 33,001
31,494 Total assets $      57,249
$      55,880 LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term debt and current portion of long-term debt $ 1,006
$ 1,502 Accounts payable 2,678
3,344 Customer advances and deposits 9,824
9,491 Other current liabilities 3,288
3,487 Total current liabilities 16,796
17,824 Noncurrent liabilities:

Long-term debt 7,007
7,260 Other liabilities 7,824
8,733 Total noncurrent liabilities 14,831
15,993 Shareholders' equity:

Common stock 482
482 Surplus 4,403
4,062 Retained earnings 44,080
41,487 Treasury stock (22,860)
(22,450) Accumulated other comprehensive loss (483)
(1,518) Total shareholders' equity 25,622
22,063 Total liabilities and shareholders' equity $      57,249
$      55,880 EXHIBIT FCONSOLIDATED STATEMENT OF CASH FLOWS - (UNAUDITED)DOLLARS IN MILLIONS

Year Ended December 31
2025
2024 Cash flows from operating activities—continuing operations:

      Net earnings $      4,210
$      3,782      Adjustments to reconcile net earnings to net cash from operating activities:

Depreciation of property, plant and equipment 680
644 Amortization of intangible and finance lease right-of-use assets 244
242 Equity-based compensation expense 196
183 Deferred income tax provision (benefit) 256
(86)      (Increase) decrease in assets, net of effects of business acquisitions:

     Accounts receivable 556
16      Unbilled receivables (146)
(261)      Inventories 450
(1,195)      Increase (decrease) in liabilities, net of effects of business acquisitions:

     Accounts payable (664)
247      Customer advances and deposits (4)
343      Other, net (658)
197 Net cash provided by operating activities 5,120
4,112 Cash flows from investing activities:

      Capital expenditures (1,161)
(916)      Other, net (123)
(37) Net cash used by investing activities (1,284)
(953) Cash flows from financing activities:

      Dividends paid (1,593)
(1,529)      Repayment of fixed-rate notes (1,500)
(500)      Proceeds from fixed-rate notes 747
—      Purchases of common stock (637)
(1,501)      Other, net (207)
161 Net cash used by financing activities (3,190)
(3,369) Net cash used by discontinued operations (10)
(6) Net increase (decrease) in cash and equivalents 636
(216) Cash and equivalents at beginning of year 1,697
1,913 Cash and equivalents at end of year $      2,333
$      1,697 EXHIBIT G
ADDITIONAL FINANCIAL INFORMATION - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Other Financial Information:

December 31, 2025
December 31, 2024

Debt-to-equity (a) 31.3 %
39.7 %

Book value per share (b) $      94.76
$      81.61

Shares outstanding 270,389,759
270,340,502

Fourth Quarter
Twelve Months
2025
2024
2025
2024 Income tax payments, net $ 305
$ 435
$ 568
$ 560 Company-sponsored research and development (c) $ 147
$ 144
$ 486
$ 565 Return on sales (d) 7.9 %
8.6 %
8.0 %
7.9 % Return on equity (e)

17.9 %
17.2 %

Non-GAAP Financial Measures:

Fourth Quarter
Twelve Months
2025
2024
2025
2024 Free cash flow:

Net cash provided by operating activities $      1,561
$      2,160
$       5,120
$       4,112 Capital expenditures (609)
(355)
(1,161)
(916)      Free cash flow (f) $ 952
$      1,805
$       3,959
$       3,196

Return on invested capital:

Net earnings

$       4,210
$       3,782      After-tax interest expense

318
310      After-tax amortization expense

193
191 Net operating profit after taxes

4,721
4,283 Average invested capital

33,212
32,451      Return on invested capital (g)

14.2 %
13.2 %

December 31, 2025
December 31, 2024

Net debt:

Total debt $      8,013
$      8,762

Less cash and equivalents 2,333
1,697

      Net debt (h) $      5,680
$      7,065

Notes describing the calculation of the other financial information and a reconciliation of non-GAAP financial measures are on the following page. EXHIBIT G (Cont.)
ADDITIONAL FINANCIAL INFORMATION - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
(a)Debt-to-equity ratio is calculated as total debt divided by total equity as of year end.(b)Book value per share is calculated as total equity divided by total outstanding shares as of year end.(c)Includes independent research and development and Aerospace product-development costs.(d)Return on sales is calculated as net earnings divided by revenue.(e)Return on equity is calculated by dividing net earnings by our average total equity during the year. Average total equity is calculated using the total equity balance at the end of the preceding year and the total equity balances at the end of each of the four quarters of the year presented.(f)We define free cash flow as net cash from operating activities less capital expenditures. We believe free cash flow is a useful measure for investors because it portrays our ability to generate cash from our businesses for purposes such as repaying debt, funding business acquisitions, repurchasing our common stock and paying dividends. We use free cash flow to assess the quality of our earnings and as a key performance measure in evaluating management.(g)We believe return on invested capital (ROIC) is a useful measure for investors because it reflects our ability to generate returns from the capital we have deployed in our operations. We use ROIC to evaluate investment decisions and as a performance measure in evaluating management. We define ROIC as net operating profit after taxes divided by average invested capital. Net operating profit after taxes is defined as net earnings plus after-tax interest and amortization expense, calculated using the statutory federal income tax rate. Average invested capital is defined as the sum of the average debt and average shareholders' equity excluding accumulated other comprehensive loss. Average debt and average shareholders' equity excluding accumulated other comprehensive loss are calculated using the respective balances at the end of the preceding year and the respective balances at the end of each of the four quarters of the year presented. ROIC excludes goodwill impairments and non-economic accounting changes as they are not reflective of company performance.(h)  We define net debt as short- and long-term debt (total debt) less cash and equivalents. We believe net debt is a useful measure for investors because it reflects the borrowings that support our operations and capital deployment strategy. We use net debt as an important indicator of liquidity and financial position. EXHIBIT H
BACKLOG - (UNAUDITED)
DOLLARS IN MILLIONS

Funded
Unfunded
Total Backlog
Estimated Potential Contract Value*
Total Estimated Contract Value Fourth Quarter 2025:

Aerospace
$       20,804
$ 1,024
$ 21,828
$ 1,120
$ 22,948 Marine Systems
36,808
15,532
52,340
11,823
64,163 Combat Systems
26,064
1,154
27,218
14,670
41,888 Technologies
9,865
6,795
16,660
33,280
49,940 Total
$       93,541
$      24,505
$      118,046
$ 60,893
$       178,939 Third Quarter 2025:

Aerospace
$       19,476
$ 1,131
$ 20,607
$ 1,147
$ 21,754 Marine Systems
38,757
14,854
53,611
14,839
68,450 Combat Systems
17,232
1,470
18,702
9,553
28,255 Technologies
10,269
6,668
16,937
32,341
49,278 Total
$       85,734
$      24,123
$      109,857
$ 57,880
$       167,737 Fourth Quarter 2024:

Aerospace
$       18,895
$ 798
$ 19,693
$ 1,132
$ 20,825 Marine Systems
30,530
9,288
39,818
9,560
49,378 Combat Systems
16,142
838
16,980
8,647
25,627 Technologies
9,577
4,529
14,106
34,029
48,135 Total
$       75,144
$      15,453
$ 90,597
$ 53,368
$ 143,965
* The estimated potential contract value includes work awarded on unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options associated with existing firm contracts, including options and other agreements with existing customers to purchase new aircraft and aircraft services. We recognize options in backlog when the customer exercises the option and establishes a firm order. For IDIQ contracts, we evaluate the amount of funding we expect to receive and include this amount in our estimated potential contract value. The actual amount of funding received in the future may be higher or lower than our estimate of potential contract value. EXHIBIT H-1BACKLOG - (UNAUDITED)DOLLARS IN MILLIONShttps://mma.prnewswire.com/media/2870570/Exhibit_H1.jpgEXHIBIT H-2BACKLOG BY SEGMENT - (UNAUDITED)DOLLARS IN MILLIONS https://mma.prnewswire.com/media/2870571/Exhibit_H2.jpgEXHIBIT IAEROSPACE SUPPLEMENTAL DATA - (UNAUDITED)DOLLARS IN MILLIONS

Fourth Quarter
Twelve Months

2025
2024
2025
2024 Gulfstream Aircraft Deliveries (units):

Large-cabin aircraft
41
42
136
118 Mid-cabin aircraft
4
5
22
18 Total
45
47
158
136

Aerospace Book-to-Bill:

Orders*
$ 5,075
$ 3,814
$ 15,492
$ 11,278 Revenue
3,788
3,743
13,110
11,249 Book-to-Bill Ratio
1.3x
1.0x
1.2x
1.0x *      Does not include customer defaults, liquidated damages, cancellations, foreign exchange fluctuations and   other backlog adjustments.

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Original: General Dynamics Reports Fourth-Quarter and Full-Year 2025 Financial Results