General Dynamics (NYSE: GD) outlines 2025 results across aerospace and defense
Filing Impact
Filing Sentiment
Form Type
10-K
Rhea-AI Filing Summary
General Dynamics describes its 2025 performance as a diversified aerospace and defense company with four segments: Aerospace, Marine Systems, Combat Systems and Technologies. Aerospace generated $13.1B of revenue, Marine Systems $16.7B, Combat Systems $9.2B and Technologies $13.5B, reflecting strong demand for business jets, submarines and defense electronics.
About 68% of revenue came from the U.S. government, 15% from U.S. commercial customers and 17% from non‑U.S. customers. The company highlights major long‑term programs such as Columbia- and Virginia‑class submarines, Abrams and Stryker vehicles, munitions expansion, and growing IT and C5ISR work, while noting supply‑chain, workforce and budget risks. It reports 270.4 million shares outstanding and continued share repurchases in 2025.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[☑ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31 , 2025
OR
[☐ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 1-3671
(Exact name of registrant as specified in its charter)
| State or other jurisdiction of incorporation or organization | I.R.S. Employer Identification No. | ||||||||||||||||
| Address of principal executive offices | Zip code | ||||||||||||||||
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Securities registered pursuant to Section 12(g) of the Act:
| None | ||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes _ü_ No ___
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ___ No _ü_
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _ü_ No ___
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes _ü_ No ___
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ___
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. _ü_☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ___
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ___☐ No _ü_☑
The aggregate market value of the voting common equity held by non-affiliates of the registrant was $69,581,612,877 as of June 29, 2025 (based on the closing price of the shares on the New York Stock Exchange).
DOCUMENTS INCORPORATED BY REFERENCE:
INDEX
| PART I | PAGE | |||||||
| Item 1. | Business | 3 | ||||||
| Item 1A. | Risk Factors | 21 | ||||||
| Item 1B. | Unresolved Staff Comments | 27 | ||||||
| Item 1C. | Cybersecurity | 27 | ||||||
| Item 2. | Properties | 28 | ||||||
| Item 3. | Legal Proceedings | 28 | ||||||
| Item 4. | Mine Safety Disclosures | 29 | ||||||
Information About our Executive Officers | 29 | |||||||
| PART II | ||||||||
| Item 5. | Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 30 | ||||||
| Item 6. | [Reserved] | 32 | ||||||
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 33 | ||||||
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 51 | ||||||
| Item 8. | Financial Statements and Supplementary Data | 52 | ||||||
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 98 | ||||||
| Item 9A. | Controls and Procedures | 98 | ||||||
| Item 9B. | Other Information | 100 | ||||||
| Item 9C. | Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | 100 | ||||||
| PART III | ||||||||
| Item 10. | Directors, Executive Officers and Corporate Governance | 100 | ||||||
| Item 11. | Executive Compensation | 100 | ||||||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 101 | ||||||
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 101 | ||||||
| Item 14. | Principal Accountant Fees and Services | 101 | ||||||
| PART IV | ||||||||
| Item 15. | Exhibits and Financial Statement Schedules | 101 | ||||||
| Item 16. | Form 10-K Summary | 107 | ||||||
Signatures | 108 | |||||||
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PART I
ITEM 1. BUSINESS
(Dollars in millions, unless otherwise noted)
BUSINESS OVERVIEW
General Dynamics is a global aerospace and defense company that specializes in high-end design, engineering and manufacturing to deliver state-of-the-art solutions to our customers. We offer 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. Our leadership positions in attractive business aviation and defense markets enable us to deliver superior and enduring capabilities to our customers and returns to our shareholders.
Our company consists of 10 business units, which are organized into four operating segments: Aerospace, Marine Systems, Combat Systems and Technologies. We refer to the latter three collectively as our defense segments. To ensure market focus, customer intimacy, agility and operating expertise, each business unit is responsible for the development and execution of its strategy and operating results. This structure allows for a lean corporate function, which sets the overall strategy and governance for the company and is responsible for allocating and deploying capital.
Our business units seek to deliver superior operating results by building industry-leading franchises. To achieve this goal, we invest in advanced technologies, focus on execution, pursue a culture of continuous improvement, and strive to be the low-cost, high-quality provider in each of our markets. The result is long-term value creation measured by delivering on our commitments to our customers coupled with strong earnings and cash flow and an attractive return on capital.
Over the past decade, we have invested to create, renew or expand our portfolio of products and services across our businesses. This includes product development investments in Aerospace to bring to market an all-new lineup of business jet aircraft, capital investments in Marine Systems to support significant growth in U.S. Navy ship and submarine construction over the next two decades, development of next-generation platforms and technologies to meet customers’ emerging requirements in Combat Systems, and both organic development and strategic acquisitions to ensure we can provide a complete spectrum of solutions for our Technologies customers. We expect to realize an attractive return from these investments in each of our segments, and we will continue to ensure our capital deployment delivers long-term growth and enduring value to our shareholders and our customers.
Following is additional information on each of our operating segments. For a supplemental discussion of segment performance and backlog, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7.
AEROSPACE
Our Aerospace segment is recognized as a leading producer of business jets and the standard bearer in new technology aircraft, aircraft repair, customer support and custom completion services. The segment consists of our Gulfstream and Jet Aviation business units. We have earned our reputation through:
•superior aircraft design, manufacturing excellence, quality, performance, safety and reliability;
•technologically advanced flight deck and cabin systems; and
•industry-leading customer support.
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We believe the key to long-term value creation in the business jet industry is steady development and release of new aircraft models and technologies and in customer service capabilities. Since acquiring Gulfstream more than 25 years ago, we have made significant investments in research and development (R&D), state-of-the-art manufacturing facilities, and our global maintenance and support network.
We are committed to continual investment in R&D to create new aircraft that consistently broaden customer offerings while raising the bar for safety and performance. The result is the unprecedented development of an all-new lineup of the most technologically advanced business jet aircraft in the world. The Gulfstream family of aircraft offers industry-leading cabin, cockpit and safety technologies and the longest ranges at the fastest speeds in their respective classes.
The following represents Gulfstream’s current product line, along with the maximum range, maximum speed, cabin length (excluding baggage), and total number of city-pair speed records held for each aircraft:
Gulfstream’s in-service aircraft hold more than 350 city-pair speed records, more than any other business jet manufacturer, including the National Aeronautic Association’s polar and westbound around-the-world speed records.
The most recent addition to the in-service Gulfstream fleet is the ultra-long-range, ultra-large-cabin G800, which entered service in 2025 following U.S. Federal Aviation Administration (FAA) certification in April 2025. The G800 is Gulfstream’s longest-range aircraft, offering an 8,200-nautical-
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mile range at Mach 0.85. It replaces the G650 and G650ER, which currently operate in 55 countries with more than 595 aircraft of this family in service. The G800 features Gulfstream’s Symmetry Flight Deck—the industry’s most technologically advanced flight deck—industry-leading high-speed efficiency, and enhanced safety capabilities.
The ultra-long-range, ultra-large-cabin G700 entered service in 2024. It combines Gulfstream’s most spacious cabin with the advanced Symmetry Flight Deck, and the superior high-speed performance of all-new engines to deliver best-in-class capabilities.
The G500 and G600 entered service in 2018 and 2019, respectively. These clean-sheet aircraft replaced the G450 and G550 models, whose combined family has an installed base of more than 1,650 aircraft around the world. Our investment in the development of these aircraft included a new wing, new avionics, new fuselage and new ergonomically designed larger interiors, as well as systems and technologies to improve the manufacturing process and quality of the aircraft. As a result, the G500 and G600 are best in class in terms of speed, fuel efficiency, cabin volume, emissions, range and flight controls.
Gulfstream is currently developing the large-cabin G400 from a clean-sheet design developed in concert with the G500 and G600, expanding commonality across the Gulfstream family. The G400 will join a market segment in which Gulfstream has not participated for several decades, and completes a nearly two-decade effort to develop an all-new family of Gulfstream aircraft.
In the second half of 2025, we announced the all new, super midsize G300 as the latest aircraft to join our next-generation fleet. The aircraft will replace the G280 and feature signature Gulfstream Panoramic Windows as well as an all-new Harmony Flight Deck, which includes next-generation avionics to enhance safety and operational efficiency.
Our disciplined and consistent approach to new product development has allowed us to repeatedly introduce first-to-market capabilities that set industry standards for safety, performance, quality, speed and comfort. Product enhancement and development efforts include initiatives in advanced avionics, composites, flight-control and vision systems, acoustics, and cabin technologies.
Gulfstream designs, develops and manufactures aircraft in Savannah, Georgia, including all large-cabin models. The midsize aircraft are assembled by a non-U.S. partner. All models are outfitted in Gulfstream’s and Jet Aviation’s facilities. As Gulfstream’s aircraft portfolio and customer base have grown and become increasingly global in reach over the years, we have invested in our facilities and operations around the world. At our Savannah campus, we added new purpose-built manufacturing facilities, increased aircraft service capacity, opened a customer-support distribution center and expanded our R&D capabilities.
We offer comprehensive support for the more than 3,000 Gulfstream aircraft in service around the world and operate an extensive network of service centers. We continue to invest in maintenance, repair and overhaul (MRO) facilities, technologies to enhance service, and inventory to accommodate fleet growth. We also operate a 24/7 year-round customer support center and offer on-call Gulfstream aircraft technicians ready to deploy around the world for customer service requirements under our Field and Airborne Support Team (FAST) rapid-response unit.
In addition to expanding the reach of Gulfstream’s aircraft maintenance network outside the United States, Jet Aviation provides a comprehensive suite of innovative aircraft services for aircraft owners and operators around the world. Jet Aviation manages over 300 business aircraft globally on behalf of individuals and corporate owners. We operate a leading global fixed-base operator (FBO) network of
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approximately 30 facilities on four continents and support all aircraft types with a full range of maintenance services, including 24/7 global aircraft-on-ground support. We also operate one of the world’s largest custom completion and refurbishment centers for both narrow- and wide-body aircraft and perform modifications, upgrades and lifecycle sustainment support for various government fleets. We continue to grow our global footprint through acquisitions, expansions and significant renovations in strategic business aviation markets most frequented by these customers. In 2025, Jet Aviation acquired an FBO at Paris - Le Bourget Airport, the busiest business aviation airport in Europe. This acquisition expands our global FBO network and our capabilities to meet customer needs. We also launched initial operations at our new FBO at Miami Opa Locka Executive Airport in Florida. The facility is expected to be fully operational in mid-2026.
The following map displays the broad reach of our combined Gulfstream and Jet Aviation services network, including authorized service centers:
The Aerospace segment places a priority on sustainability throughout its manufacturing and service operations, producing aircraft that maximize fuel efficiency while offering customers options to reduce or eliminate their carbon footprints. Gulfstream and Jet Aviation have been at the forefront of the industry by adopting and expanding the availability of sustainable aviation fuel (SAF), which achieves as much as an 80% reduction in carbon dioxide emissions per gallon over its lifecycle compared to petroleum-based jet fuel. Gulfstream also offers operators the ability to achieve carbon-neutral travel by facilitating the purchase of carbon-offset credits. In addition to actively expanding the availability of SAF at its FBO locations, Jet Aviation allows customers to purchase SAF at locations where it is not available through a book-and-claim system. Since 2019, Jet Aviation has uploaded more than 12 million gallons of blended SAF to its customers.
Revenue for the Aerospace segment was 25% of our consolidated revenue in 2025, 24% in 2024 and 20% in 2023. Revenue by major products and services was as follows:
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| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Aircraft manufacturing | $ | 9,413 | $ | 7,811 | $ | 5,710 | |||||||||||
| Aircraft services | 3,697 | 3,438 | 2,911 | ||||||||||||||
| Total Aerospace | $ | 13,110 | $ | 11,249 | $ | 8,621 | |||||||||||
MARINE SYSTEMS
Our Marine Systems segment is the leading designer and builder of nuclear-powered submarines and a leader in surface combatant and auxiliary ship design and construction for the U.S. Navy. We also provide maintenance, modernization and lifecycle support services for Navy ships and maintain the most sophisticated marine engineering expertise in the world to support future capabilities. Our ability to design, build and maintain our nation’s most technologically sophisticated warships is a critical element of the U.S. defense industrial base. In addition to Navy ships, we have designed and built ocean-going Jones Act ships for commercial customers. Marine Systems consists of three business units — Electric Boat, Bath Iron Works and NASSCO.
In support of our Navy customer’s significant increase in demand for submarines and surface ships, we have made substantial investments to expand our facilities, grow and train our workforce, and expand our supply chain. The resulting increase in capacity and capabilities will support the significant demand expected in our shipbuilding business, particularly submarines, over the next two decades.
Electric Boat is the prime contractor and lead shipyard on all Navy nuclear-powered submarine programs. The business is responsible for all aspects of design and engineering and leads the construction of both Columbia-class ballistic-missile submarines and Virginia-class attack submarines.
The Columbia-class ballistic-missile submarine is a 12-boat program considered one of the nation’s top acquisition priorities. Accordingly, the program has received the highest possible rating from the government’s Defense Priorities and Allocations System. These submarines will provide strategic deterrent capabilities for decades, with the first boat expected to deliver in 2028 to begin replacement of the current Ohio-class ballistic-missile submarine fleet as it reaches the end of its service life. Construction is scheduled to span two decades, and the value of the Navy’s program of record is in excess of $125 billion.
The Navy procures Virginia-class submarines in multi-boat blocks. Along with an industry partner, we are currently working on Blocks IV and V in the program, with 14 Virginia-class submarines in our backlog scheduled for delivery through 2034. Ten of the boats in Block V will include the Virginia Payload Module, an 84-foot Electric Boat-designed-and-built hull section that adds four additional payload tubes, more than tripling the strike capacity of these submarines and providing unique capabilities to support special missions.
We have invested significant capital over the past several years in expanded and modernized facilities at Electric Boat to support the growth in submarine construction and are working with our Navy customer on additional capacity to meet the increased demand for submarines. Consistent with our commitment to invest capital is our commitment to developing our Electric Boat workforce. We expect the Electric Boat workforce to continue to grow to enable sustained production of one Columbia-class submarine plus up to two Virginia-class submarines per year as the submarine industrial base expands to support that pace. Along with strong contributions from the states of Connecticut and Rhode Island, we invest in the training and tools necessary for our skilled employees to deliver these next-generation submarines to the Navy. We continue to develop and work with our growing network of approximately 3,000 suppliers to support the growth related to concurrent production of the two submarine programs.
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Bath Iron Works (BIW) is one of two companies that builds the Arleigh Burke-class (DDG-51) guided-missile destroyer. The DDG-51 class of destroyer is a critical component of the Navy’s surface combatant fleet and represents the longest-running shipbuilding program in Navy history with the first ship procured in 1985. The DDG-51 class has maintained relevance with a series of upgrades and enhanced capabilities up to the current “Flight III” configuration. In 2025, we were competitively awarded construction of an additional DDG-51 destroyer (DDG-148), bringing our total backlog to 11 ships with scheduled deliveries through 2032. BIW is also a part of the core team working with the Navy to design the surface combatant of the future.
BIW also manages modernization and lifecycle support for both Arleigh Burke-class and Zumwalt-class (DDG-1000) destroyers. Within these programs, BIW provides engineering and logistics solutions to upgrade earlier versions of the DDG-51 to Flight III configuration, and to add Conventional Prompt Strike hypersonic missile strike capability to the DDG-1000.
NASSCO specializes in Navy auxiliary and support ships and is currently building the Expeditionary Sea Base (ESB), which serves as an afloat forward-staging base for U.S. Marines and special operations forces, and the John Lewis-class (T-AO-205) fleet replenishment oiler. Work on the final ESB in backlog will complete in 2026, while the seven T-AO-205 ships currently in backlog have deliveries planned into 2030. In 2025, NASSCO received an award for the eleventh and twelfth T-AO-205 ships. In addition to these projects, NASSCO has been awarded a contract to provide a preliminary design for the Navy’s Submarine Tender replacement program (AS(X)). Over the last two decades, NASSCO has partnered with a leading South Korean ship design and equipment procurement company, DSEC Co., Ltd, (DSEC), to design and build many large ocean-going commercial vessels including tankers and cargo ships to support U.S. Jones Act customers based on proven DSEC designs. In 2025, NASSCO, along with DSEC, signed a tri-party memorandum of agreement with Samsung Heavy Industries, one of the world’s leading shipbuilders, to explore future commercial and government opportunities.
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On December 31, 2025, backlog for our major ship construction programs and the scheduled final delivery date of ships currently in backlog were as follows:
In addition to design and construction activities, our Marine Systems segment provides comprehensive post-delivery services to modernize and extend the service life of these and other Navy ships. NASSCO conducts full-service maintenance and surface-ship repair operations in Navy fleet concentration areas in San Diego, California; Norfolk, Virginia; Bremerton, Washington; and Mayport, Florida. Electric Boat provides submarine maintenance and modernization services in a variety of U.S. locations, and Bath Iron Works provides lifecycle support services for Navy surface ships in U.S. and overseas ports. In support of allied navies, we offer program management, planning, engineering and design support for submarine construction programs.
Revenue for the Marine Systems segment was 32% of our consolidated revenue in 2025, 30% in 2024 and 29% in 2023. Revenue by major products and services was as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Nuclear-powered submarines | $ | 12,608 | $ | 10,392 | $ | 8,631 | |||||||||||
| Surface ships | 2,932 | 2,819 | 2,698 | ||||||||||||||
| Repair and other services | 1,183 | 1,132 | 1,132 | ||||||||||||||
| Total Marine Systems | $ | 16,723 | $ | 14,343 | $ | 12,461 | |||||||||||
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COMBAT SYSTEMS
Our Combat Systems segment is a premier manufacturer and integrator of land combat solutions worldwide, including wheeled and tracked combat vehicles, weapon systems, energetics and munitions. The segment consists of three business units — Land Systems, European Land Systems (ELS), and Ordnance and Tactical Systems (OTS).
Combat Systems creates long-term value through operational excellence — high-quality, on-schedule and on-budget performance — combined with investments in innovative technologies that modernize existing platforms and develop next-generation capabilities to meet our customers’ rapidly evolving requirements. We maintain our market-leading position by focusing on innovation, affordability and speed to market to deliver increased survivability, mobility and lethality on the battlefield. Our large installed base of wheeled and tracked vehicles around the world and expertise gained from research, engineering and production programs position us well for modernization programs, support and sustainment services, and future development programs.
Across our portfolio we are investing in innovative new technologies to modernize legacy platforms and introduce all-new capabilities to ensure the ground forces of the United States and its allies maintain their superiority on the battlefield of the future. This includes partnering with commercial technology companies, developing future platforms with digital open-architecture frameworks, and modernizing our manufacturing capabilities to enable rapid, agile upgrading of systems to address emerging threats.
Land Systems is the sole-source producer of two foundational products central to the U.S. Army’s warfighting capabilities — the Abrams main battle tank and Stryker wheeled combat vehicle. Both platforms are core components of the multi-domain, joint war fight in practice today and envisioned on the battlefield of the future.
We continue to maximize the capability, effectiveness and lethality of the Abrams tank. We are currently working with the Army to develop the next generation M1E3 Abrams tank to significantly overmatch current and potential threats on the modern battlefield. The demand by NATO members and other allies and partners for procurement and upgrades of Abrams tanks remains strong, reflected by a growing installed base in Europe, the Middle East, North Africa and Indo-Pacific theaters of operation.
The Stryker is an eight-wheeled, medium-weight combat vehicle that combines lethality, mobility and survivability. Our most recently delivered innovations to this highly versatile platform include enhanced survivability, increased power, improved cross-country mobility and an advanced digital, in-vehicle network. With Stryker’s enabling capabilities, we continue to explore disruptive technologies with the Army for new uses of the vehicle. These include an air defense mission package, as found on the Sergeant Stout, a state-of-the-art electronic warfare suite, a high-energy laser, a high-power microwave and several Army command post options.
Our work on new ground combat vehicles is ongoing with two additional transformational vehicles in development. The XM30 program is a mechanized infantry combat vehicle program for the Army that will replace the M2 Bradley Infantry Fighting Vehicle. This optionally manned platform maneuvers soldiers to a point of positional advantage in close combat and delivers decisive lethality during combined arms engagements. The program is currently a Middle Tier Acquisition Rapid Prototyping with eight initial prototypes being delivered in 2026.
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The Advanced Reconnaissance Vehicle (ARV) for the U.S. Marine Corps will provide sensors, communications systems and lethality options to overmatch threats that have historically been addressed by more heavily armored systems. The initial program includes three prototype variants: the Command, Control, Communications and Computers/Unmanned Aircraft Systems (C4/UAS), the ARV-30 with a 30mm auto cannon, and a Logistics variant. Three additional variants are planned over the program life. This program is expected to move to the engineering and manufacturing development phase in 2026 and reflects the evolution of the Marine Corps light armored vehicle (LAV) platform.
Combat Systems provides similar capabilities for U.S. allies and partners through export opportunities and through our longstanding operations in several countries around the world, including Canada, the United Kingdom, Spain, Switzerland, Austria, Germany and Romania. As a result, we have a market-leading position in LAVs with more than 12,000 of the high-mobility, versatile Pandur, Piranha and other LAVs in service worldwide.
Land Systems is producing 515 new LAVs for the Canadian army in nine variants, including ambulances, command posts, maintenance and recovery vehicles, and troop-carrying vehicles, as well as upgrading Canada’s existing fleet. Land Systems is also producing the British Army’s Ajax armored fighting vehicle, a next-generation, medium-weight tracked combat vehicle, the first fully digitized ground combat vehicle in the U.K. Armed Forces. With 589 vehicles comprising six variants, including a reconnaissance vehicle, an armored personnel carrier and various support platforms, the Ajax family of vehicles offers advanced electronic architecture and proven technology for a balance of survivability, lethality and mobility, along with high reliability for a vehicle in its weight class.
ELS is producing and upgrading Piranha vehicles, a premier 8x8 armored combat vehicle, around the world. We are currently providing the Piranha 5 family of vehicles for several countries, including Germany, Romania, Spain and Denmark. The Piranha family of vehicles is expanding through the addition of new versions including the Piranha 6x6 and Piranha 10x10. ELS is producing Luchs 2 reconnaissance vehicles for Germany based on the Piranha 6x6 platform and the Heavy Mission Carrier (HMC) self-propelled howitzer based on the 10x10 variant for Switzerland.
Additionally, we provide mobile bridge systems with payloads ranging from 100 kilograms to 100 tons to customers worldwide. We offer the ASCOD, a highly versatile tracked combat vehicle with multiple versions, including the Spanish Pizarro, Austrian Ulan and Latvian ASCOD Hunter. ELS also offers Duro and Eagle tactical vehicles in a range of options and weight classes and is currently producing these vehicles for Germany, Switzerland and Luxembourg, while providing a full range of product support for the German and Swiss Armed Forces.
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On December 31, 2025, the installed base for our major vehicle programs, as well as the quantity and scheduled final delivery date of vehicles and vehicle upgrades in backlog were as follows:
Complementing our military-vehicle portfolio, OTS is a leading provider of capabilities across munitions, weapon systems, artillery, and energetics, with over 25 locations across the United States and Canada. Backed by decades of technical expertise and operational excellence, our broad footprint enables us to deliver capabilities at scale with efficiency and reliability. The breadth and depth of our portfolio allow us to support air, land, and sea domains with solutions that enhance lethality, readiness, and operational advantage for U.S. and allied forces.
We hold a global leadership position in large-caliber tank ammunition, medium-caliber ammunition, and high-speed Gatling guns, providing combat-proven performance and precision firepower. As an artillery systems integrator, OTS produces mission-critical components, including projectiles, artillery propelling charges, and next-generation artillery. We deliver world-class propellants for both direct- and indirect-fire munitions, and as the global leader in extruded propellant manufacturing and the world’s largest producer of the trusted Ball Powder propellant, we power a wide array of U.S. and allied military platforms. As a major component supplier for both tactical and strategic missile platforms, OTS offers concept-to-hardware capability to enhance precision lethality. We design, develop, and manufacture advanced subsystems including control actuators, high-performance warheads, rocket motor cases, solid rocket motors, and launch pod containers, ensuring superior performance across missile platforms.
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To meet growing demand, OTS across multiple locations is expanding production capacity and capabilities, including artillery-projectile and propelling-charge load, assemble and pack lines; extruded propellant production; increased Ball Powder propellant capacity; and continued advancement in solid rocket motor production. These initiatives will strengthen supply chain resiliency and support the full lifecycle of critical defense systems.
Revenue for the Combat Systems segment was 17% of our consolidated revenue in 2025, 19% in 2024 and 20% in 2023. Revenue by major products and services was as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Military vehicles | $ | 4,970 | $ | 5,101 | $ | 5,036 | |||||||||||
| Weapon systems and munitions | 3,104 | 2,932 | 2,442 | ||||||||||||||
| Engineering and other services | 1,172 | 964 | 790 | ||||||||||||||
| Total Combat Systems | $ | 9,246 | $ | 8,997 | $ | 8,268 | |||||||||||
TECHNOLOGIES
Our Technologies segment provides a full spectrum of services, technologies and products to a wide range of military, intelligence, federal civilian and state customers. The segment is organized into two business units — Information Technology (GDIT) and Mission Systems — with a diverse portfolio that includes:
•technology solutions and mission-support services and solutions;
•mobile communication, computers, command-and-control and cyber (C5) mission systems; and
•intelligence, surveillance and reconnaissance (ISR) solutions.
Over the past decade, the U.S. Department of War (DoW), the intelligence community and federal civilian agencies have increasingly prioritized technology solutions to drive operational efficiencies, advance security and accelerate mission-decision making in real time. Expanded geopolitical and cyber threats and the demand for advanced warfighter connectivity have accelerated these trends, adding urgency to required technology investments. The result is an increase in federal information technology (IT) modernization and technology spending in recent years and a shift to the rapid development of solutions to meet the ever-changing information-systems and mission-support needs of these customers.
GDIT and Mission Systems share a common defense, intelligence and federal civilian customer base and, when appropriate, go to market together. We make strategic investments in new and emerging technologies and partner with commercial companies to bring solutions to our customers that combine leading-edge technologies with an intimate knowledge of customers’ mission needs. The segment’s highly skilled workforce comprises approximately 40,000 employees, including technologists, engineers, mission experts and cleared personnel critical to solving the toughest security and technology challenges facing the United States and its allies.
GDIT provides technology solutions and expertise that underpin our national security systems, modernize government operations, and secure networks, data and information from sophisticated cyber attacks. Operating thousands of complex digital modernization programs across the federal government, GDIT’s expansive portfolio includes cloud services, cybersecurity, network modernization, artificial intelligence/machine learning (AI/ML), application development, high-performance computing, and 5G and advanced communications. At the center of these efforts is GDIT’s development of secure, tailorable and scalable digital solutions, known as our Digital Accelerators. These Digital Accelerators are at the forefront of technological trends and are designed to accelerate customers’ adoption and
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integration of advanced technologies to meet unique mission needs. With technology evolving at an unprecedented pace, GDIT operates a national network of technology innovation labs that enable rapid development, testing and fielding of prototypes alongside commercial technology partners.
Mission Systems is a defense electronics manufacturer and integrator for Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance and Reconnaissance (C5ISR) applications in all domains. Our products and solutions are built into platforms and integrated systems critical to our national security. The business’s portfolio includes both prime contract programs with government customers as well as subcontract positions with large platform providers to develop and integrate technologies to make their systems smarter and more secure.
The Technologies segment leverages its scale, partnerships and deep knowledge of its customers’ missions and challenges to bring innovation to those customers across a portfolio of thousands of contracts. While no individual contract is material to the segment’s results, the following highlights provide a sampling of the capabilities this business delivers.
In the defense market, GDIT is modernizing the U.S. Central Command’s (CENTCOM) enterprise IT infrastructure. CENTCOM’s area of responsibility covers 21 nations in Northeast Africa, Central and South Asia and the Middle East. We are utilizing AI/ML technologies to improve decision making, transition CENTCOM to a new cloud environment, and enhance the efficiency and effectiveness of its networks. GDIT is also leveraging its zero trust capabilities to bolster CENTCOM’s cyber defenses and protect against future cyber threats.
In the federal civilian market, GDIT is operating and modernizing the Healthcare Integrated General Ledger Accounting System (HIGLAS) for the Centers for Medicare and Medicaid Services (CMS). HIGLAS is a single, integrated accounting system that standardizes and centralizes federal financial accounting for all of CMS’s programs. The HIGLAS system processes approximately 4.5 million Medicare transactions daily and over $1.7 trillion in annual payments. In modernizing the HIGLAS system, GDIT is leveraging its AI/ML capabilities to analyze trends and patterns to determine potential anomalies in the data and detect fraud, waste and abuse.
Under the User Facing and Data Center Services (UDS) contract for the National Geospatial-Intelligence Agency (NGA), GDIT is providing hybrid cloud services, and innovative IT design, engineering, implementation and operations support services. We supported NGA in the development of their new headquarters in St. Louis, Missouri, which opened in late 2025, and are committed to supporting the St. Louis area as a strategic hub for the geospatial intelligence community through our innovation center, community partnerships and talent pipeline programs.
Mission Systems develops and manufactures high-assurance encryption products that are widely deployed to protect national security systems, data and networks against persistent threats. These Type 1 National Security Agency (NSA)-certified products and capabilities provide needed protection for classified voice, video and data in-transit or at-rest in all domains. Capabilities range from enterprise systems to embedded applications required for terrestrial, airborne or space environments.
We are working with our U.S. Army customer to adapt elements of advanced resilient radio frequency (RF) to address battlefield realities such as jamming, spoofing, cyberattacks and lack of ground connectivity. Given our deep product innovation experience, we were selected to build the Next Generation Survival radio for the U.S. Joint Forces. For the Canadian Army, we provide the Land Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) system.
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Mission Systems continues to advance our nation’s position in the space domain. The U.S. Space Development Agency (SDA) selected Mission Systems to establish the ground operations and integration segment for Tranches 1 and 2 of the National Defense Space Architecture by building ground entry points and operations centers, as well as providing network operations and systems integration services for the SDA’s proliferated Low Earth Orbit satellites. In addition, we provide critical subsystems for data processing and security of space assets across multiple space vehicle platforms.
In the maritime domain, we have a more than 60-year legacy of providing critical systems to the Navy’s submarine programs. These include advanced fire-control and weapon-launch systems; tactical control systems; specialized hardware and software solutions for acoustics, cybersecurity and torpedo guidance; and other core capabilities that are essential for submarine modernization for U.S. and allied forces.
Mission Systems also continues to invest in autonomous capabilities both undersea and in the air. Our Unmanned Undersea Vehicle (UUV) Manufacturing and Assembly Center of Excellence provides manufacturing, assembly, integration and testing capabilities for Mission Systems’ Bluefin Robotics UUVs, as well as the Hammerhead and MEDUSA programs for the Navy. In addition, we support a variety of manned aircraft and unmanned aerial vehicle (UAV) platforms with mission-critical processing and security subsystems on both modern combat and ISR aircraft as well as emerging capabilities like the Collaborative Combat Aircraft.
Revenue for the Technologies segment was 26% of our consolidated revenue in 2025, 27% in 2024 and 31% in 2023. Revenue by major products and services was as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| IT services | $ | 9,057 | $ | 8,761 | $ | 8,459 | |||||||||||
| C5ISR solutions | 4,414 | 4,366 | 4,463 | ||||||||||||||
| Total Technologies | $ | 13,471 | $ | 13,127 | $ | 12,922 | |||||||||||
CUSTOMERS
In 2025, 68% of our consolidated revenue was from the U.S. government, 15% was from U.S. commercial customers, 8% was from non-U.S. government customers and the remaining 9% was from non-U.S. commercial customers.
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U.S. GOVERNMENT
Our primary customer is the DoW. We also contract with other U.S. government customers, including the intelligence community and other departments and agencies. Our revenue from the U.S. government was as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| DoW | $ | 29,788 | $ | 27,191 | $ | 24,720 | |||||||||||
| Non-DoW | 4,954 | 4,810 | 4,711 | ||||||||||||||
| Foreign military sales (FMS)* | 1,015 | 1,063 | 896 | ||||||||||||||
| Total U.S. government | $ | 35,757 | $ | 33,064 | $ | 30,327 | |||||||||||
| % of total revenue | 68 | % | 69 | % | 72 | % | |||||||||||
*In addition to our direct non-U.S. sales, we sell to non-U.S. governments through the FMS program. Under the FMS program, we contract with and are paid by the U.S. government, and the U.S. government assumes the risk of collection from the non-U.S. government customer.
Our U.S. government revenue is derived from fixed-price, cost-reimbursement and time-and-materials contracts. Our production contracts are primarily fixed-price. Under these contracts, we agree to perform a specific scope of work for a fixed amount. Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials. Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee. The amount for an incentive or award fee is determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance. Under time-and-materials contracts, the customer pays a fixed hourly rate for direct labor and generally reimburses us for the cost of materials.
Of our U.S. government revenue, fixed-price contracts accounted for 51% in 2025, 51% in 2024 and 53% in 2023; cost-reimbursement contracts accounted for 44% in 2025, 43% in 2024 and 41% in 2023; and time-and-materials contracts accounted for 5% in 2025, and 6% in 2024 and 2023.
For information on the advantages and disadvantages of each of these contract types, see Note B to the Consolidated Financial Statements in Item 8.
U.S. COMMERCIAL
Our U.S. commercial revenue was $7.6 billion in 2025, $6.7 billion in 2024 and $5.8 billion in 2023, which represented 15% of our consolidated revenue in 2025, and 14% in 2024 and 2023. The majority of this revenue was for business jet aircraft and related services where our customer base consists of individuals and public and privately held companies across a wide range of industries.
NON-U.S.
Our revenue from non-U.S. government and commercial customers was $9.2 billion in 2025, $8 billion in 2024 and $6.1 billion in 2023, which represented 17% of our consolidated revenue in 2025, 17% in 2024 and 14% in 2023.
We conduct business with customers around the world. Our non-U.S. defense subsidiaries maintain long-term relationships with their customers and have established themselves as principal regional suppliers and employers, providing a broad portfolio of products and services.
Our non-U.S. commercial revenue consists primarily of business jet aircraft exports and worldwide aircraft services. While the installed base of aircraft is concentrated in North America, orders from
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customers outside North America represent a significant portion of our aircraft business with approximately 38% of the Aerospace segment’s aircraft backlog on December 31, 2025.
COMPETITION
Several factors determine our ability to compete successfully in the defense and business aviation markets. While customers’ evaluation criteria vary, the principal competitive elements include:
•the technical excellence, reliability, safety and cost competitiveness of our products and services;
•our ability to innovate and develop new products and technologies that improve mission performance and adapt to dynamic threats;
•successful program execution and on-time delivery of complex, integrated systems;
•our global footprint and accessibility to customers;
•the reputation and customer confidence derived from past performance; and
•the successful management of customer relationships.
DEFENSE MARKET COMPETITION
The U.S. government contracts with numerous domestic and non-U.S. companies for products and services. We compete against other contractors as well as smaller companies that specialize in a particular technology or capability. Outside the United States, we compete with global defense contractors’ exports and the offerings of local, private and state-owned defense manufacturers. Our Marine Systems segment has one primary competitor with which it also partners on the Virginia-class submarine program, and to which it subcontracts on the Columbia-class submarine program. For commercial and repair work, the Marine Systems segment competes with several additional U.S. shipyards. Our Combat Systems segment competes with a large number of U.S. and non-U.S. businesses. Our Technologies segment competes with many companies, from large government contracting and commercial technology companies to small niche competitors with specialized technologies or expertise. The operating cycle of many of our major programs can result in sustained periods of program continuity when we perform successfully.
We are involved in teaming and subcontracting relationships with some of our competitors. Competitions for major defense and other government contracting programs often require companies to form teams to bring together a spectrum of capabilities to meet the customer’s requirements. Opportunities associated with these programs include roles overseeing and coordinating the efforts of all participants on a team, or as a provider of a specific component or subsystem.
BUSINESS JET AIRCRAFT MARKET COMPETITION
The Aerospace segment has several competitors for each of its Gulfstream products. Key competitive factors include aircraft safety, reliability and performance; comfort and in-flight productivity; service quality, global footprint and responsiveness; technological and new-product innovation; and price. We believe that Gulfstream competes effectively in all of these areas.
The Aerospace segment competes worldwide in the business jet aircraft services market primarily on the basis of quality, price and timeliness. While competition for each type of service varies somewhat, the segment faces a number of competitors of varying sizes for each of its offerings.
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INTELLECTUAL PROPERTY
We develop specific technology, manufacturing processes and systems-integration intellectual property. In addition to owning a large portfolio of proprietary intellectual property, we license some intellectual property rights to and from others. The U.S. government holds licenses to many of our patents developed in the performance of U.S. government contracts, and it may use or authorize others to use the inventions covered by these patents. Although these intellectual property rights are important to the operation of our business, no existing patent, license or other intellectual property right is of such importance that its loss or termination would have a material impact on our business.
HUMAN CAPITAL MANAGEMENT
Our company is a global community of approximately 117,000 employees dedicated to our Ethos of transparency, trust, honesty and alignment. These four core values drive how we operate our business; govern how we interact with each other, our customers, partners and suppliers; guide the way that we treat our workforce; and determine how we connect with our communities. Our commitment to ethical business practices is outlined in our Standards of Business Ethics and Conduct, which states our expectation that all employees conduct business in accordance with our Ethos, applicable laws and our policies. Each employee is asked to acknowledge receipt, understanding of and compliance with our standards.
Due to the highly specialized nature of our business, we must hire and train skilled and qualified people to design and build the products and perform the services required by our customers. This includes upskilling employees to advance within the workplace. The health, welfare and safety of our employees is paramount throughout our workplaces. This effort starts with treating all employees with dignity and respect and providing them with fair, market-based, competitive and equitable compensation. We recognize and reward the performance of our employees in line with our pay-for-performance philosophy and provide a comprehensive suite of benefit options that aim to enable our employees and their dependents to live healthy and productive lives.
Across our businesses, we take measures to prevent workplace hazards, encourage healthy and safe behaviors and enforce a culture of continuous improvement to ensure that our processes help reduce safety incidents and illnesses and comply with applicable health and safety laws.
We recognize that our success as a company depends on our ability to attract, develop and retain qualified people. General Dynamics works hard to promote an environment where employees feel respected and empowered to contribute effectively. We are dedicated to workplaces that foster and support a principled, fair and productive environment. We stand for basic universal human rights, including that employment must be voluntary. We track, measure and analyze our workforce trends to establish accountability for putting people first across our businesses and at every level of our company.
Our values motivate us to promote strong workplace practices with opportunities for development and training. Our training and development efforts focus on ensuring that our people are appropriately trained on critical job skills as well as on leadership behaviors that are consistent with our Ethos. We conduct rigorous succession planning exercises to ensure that key positions have the appropriate level of bench strength to provide for future key positions and leadership transitions. We listen to our people to assess areas of concern and levels of engagement.
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2025 WORKFORCE STATISTICS
•Approximately 84% of our employees are based in the United States, of which roughly 69% are white, 31% are people of color, 20% are veterans of the U.S. Armed Forces and 9% have self-reported having a disability. The remaining 16% of our workforce is based internationally in over 65 countries with the primary concentrations being in North America and Europe. Approximately 23% of our workforce is represented by collective bargaining agreements.
•Our global workforce is 77% male and 23% female, and our senior leadership teams across the business are represented by 76% males and 24% females. During 2025, we hired more than 18,700 individuals.
RAW MATERIALS AND SUPPLIERS
We depend on suppliers and subcontractors for raw materials, components and subsystems. Our U.S. government customer is a supplier for some of our programs. These supply networks can experience price fluctuations and capacity constraints, which can put pressure on our costs. Effective management and oversight of suppliers and subcontractors is an important element of our successful performance. If our sources of supply are disrupted, particularly in instances where we rely on only one or two sources of supply, or in the event that international conflicts result in the disruption of manufacturing or trade relations for some supply components, our ability to meet our customer commitments could be adversely impacted. We attempt to mitigate risks with our suppliers by entering into long-term agreements and leveraging company-wide agreements to achieve economies of scale and by negotiating flexible pricing terms in our customer contracts.
REGULATORY MATTERS
U.S. GOVERNMENT CONTRACTS
U.S. government contracts are subject to procurement laws and regulations. The Federal Acquisition Regulation (FAR) and the Cost Accounting Standards (CAS) govern the majority of our contracts. The FAR mandates uniform policies and procedures for U.S. government acquisitions and purchased services. Also, individual agencies can have acquisition regulations that provide implementing language for the FAR or that supplement the FAR. For example, the DoW implements the FAR through the Defense Federal Acquisition Regulation Supplement (DFARS). For all federal government entities, the FAR regulates the phases of any product or service acquisition, including:
•acquisition planning;
•competition requirements;
•contractor qualifications;
•protection of source selection and supplier information; and
•acquisition procedures.
In addition, the FAR addresses the allowability of our costs, while the CAS addresses the allocation of those costs to contracts. The FAR and CAS subject us to audits and other government reviews covering issues such as cost, performance, internal controls and accounting practices relating to our contracts.
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NON-U.S. REGULATORY
Our non-U.S. operations are subject to the applicable government regulations and procurement policies and practices, as well as U.S. policies and regulations. We are also subject to regulations governing investments, exchange controls, repatriation of earnings and import-export control.
BUSINESS JET AIRCRAFT
The Aerospace segment is subject to FAA regulation in the United States and other similar aviation regulatory authorities internationally, including the Civil Aviation Administration of Israel (CAAI), the European Aviation Safety Agency (EASA) and the Civil Aviation Administration of China (CAAC). For an aircraft to be manufactured and sold, the model must receive a type certificate from the appropriate aviation authority, and each aircraft must receive a certificate of airworthiness. Aircraft outfitting and completions also require approval by the appropriate aviation authority, which is often accomplished through a supplemental type certificate. Aviation authorities can require changes to a specific aircraft or model type before granting approval. Maintenance facilities and charter operations must be licensed by aviation authorities as well.
ENVIRONMENTAL
We are subject to a variety of federal, state, local and foreign environmental laws and regulations. These laws and regulations cover the discharge, treatment, storage, disposal, investigation and remediation of materials, substances and wastes identified in the laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and at third-party sites that we do not own but where we have been designated a potentially responsible party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. As a PRP, we are potentially liable to the government or third parties for the cost of remediating contamination. In cases where we have been designated a PRP, we generally seek to mitigate these environmental liabilities through available insurance coverage and by pursuing appropriate cost-recovery actions. In the unlikely event that we are required to fully fund the remediation of a site, the current statutory framework would allow us to pursue contributions from other PRPs. We regularly assess our compliance status and management of environmental matters.
Operating and maintenance costs associated with environmental compliance and management of contaminated sites are a normal, recurring part of our operations. Historically, these costs have not been material. In addition, we could be affected by future laws or regulations imposed in response to concerns over climate change, the timing and effect of which are difficult to assess.
Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in product designs or facilities and could increase environmental compliance expenditures, including increased energy and raw materials costs. Environmental costs are often recoverable under our contracts with the U.S. government. Based on information currently available and current U.S. government policies relating to cost recovery, we do not expect continued compliance with environmental regulations, including costs associated with changes in environmental and climate change laws or regulations, to have a material impact on our results of operations, financial condition or cash flows. For additional information relating to the impact of environmental matters, see Note M to the Consolidated Financial Statements in Item 8.
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AVAILABLE INFORMATION
We file reports and other information with the Securities and Exchange Commission (SEC) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act). These reports and information include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements. Free copies of these items, and any amendments to those items filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are made available on our website (gd.com) as soon as practicable after we electronically file such items with, or furnish them to, the SEC. The SEC maintains a website (sec.gov) that contains reports, proxy and information statements, and other information.
In addition to the information contained in this Form 10-K, information about the company can be found on our website and our Investor Relations website (investorrelations.gd.com). Our Investor Relations website contains a significant amount of information about the company, including financial information, our corporate governance principles and practices, and other information for investors. We encourage investors to visit our website, as we frequently update and post new information about our company, and it is possible that this information could be deemed material information.
References to our website and the SEC’s website in this Form 10-K do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or available through, the websites. The information should not be considered a part of this Form 10-K, unless otherwise expressly incorporated by reference.
ITEM 1A. RISK FACTORS
An investment in our common stock or debt securities is subject to risks and uncertainties. Investors should consider the following factors, in addition to the other information contained in this annual report on Form 10-K, before deciding whether to purchase our securities.
Investment risks can be market-wide as well as unique to a specific industry or company. The market risks faced by an investor in our securities are similar to the uncertainties faced by investors in a broad range of industries. There are some risks that apply more specifically to our business.
Our revenue is concentrated with the U.S. government. This customer relationship involves some specific risks. In addition, our sales to non-U.S. customers expose us to different financial and legal risks. Despite the varying nature of our government and commercial operations and the markets they serve, each segment shares some common risks, such as the ongoing development of high-technology products and the price, availability and quality of commodities and subsystems.
Risks Relating to Our Business and Industry
The U.S. government provides a significant portion of our revenue. Approximately 70% of our consolidated revenue was from the U.S. government. Levels of U.S. defense spending may be impacted by numerous factors, such as the domestic political environment, changes in national and international priorities, and threats to national security. Competing demands for federal funds can pressure various areas of spending. Decreases in U.S. government defense and other spending or changes in spending allocation or priorities could result in one or more of our programs being reduced, delayed or terminated, which could impact our financial performance.
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For additional information relating to U.S. government budget and funding matters, see the Business Environment section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7.
U.S. government contracts are not always fully funded at inception, and any funding is subject to disruption or delay. Our U.S. government revenue is funded by agency budgets that operate on an October-to-September fiscal year. Early each calendar year, the President of the United States presents to the Congress the budget for the upcoming fiscal year. This budget proposes funding levels for every federal agency and is typically the result of months of policy and program reviews throughout the executive branch. For the remainder of the year, the Appropriations and Authorization Committees of the Congress typically review the president’s budget proposals and establish the funding levels for the upcoming fiscal year. Once these levels are enacted into law, the Executive Office of the President administers the funds to the agencies.
There are two primary risks associated with the U.S. government budget cycle. First, the annual process may be delayed or disrupted. If the annual budget is not approved by the beginning of the government fiscal year, portions of the U.S. government can shut down or operate under a continuing resolution that maintains spending at prior-year levels, which can impact funding for our programs and timing of new awards. Second, the Congress typically appropriates funds on a fiscal-year basis, even though contract performance may extend over many years. Future revenue under existing multi-year contracts is conditioned on the continuing availability of congressional appropriations. Changes in appropriations in subsequent years may impact the funding available for these programs. Delays or changes in funding can impact the timing of available funds or lead to changes in program content.
Government contracts are subject to termination rights by the customer. U.S. government contracts generally permit the government to terminate a contract, in whole or in part, for convenience. If a contract is terminated for convenience, a contractor usually is entitled to receive payments for its allowable costs incurred and the proportionate share of fees or earnings for the work performed. The government may also terminate a contract for default in the event of a breach by the contractor. If a contract is terminated for default, the government in most cases pays only for the work it has accepted. Many foreign contracts have similar termination rights by customers. The termination of multiple or large programs could have a material adverse effect on our future revenue and earnings.
Government contractors operate in a highly regulated environment and are subject to audit by the U.S. government. Numerous U.S. government agencies routinely audit and review government contractors. These agencies review a contractor’s performance under its contracts and compliance with applicable laws, regulations and standards. The U.S. government also reviews the adequacy of, and compliance with, internal control systems and policies, including the contractor’s purchasing, property, estimating, material, earned value management and accounting systems. In some cases, audits may result in delayed payments or contractor costs not being reimbursed or subject to repayment. If an audit or investigation were to result in allegations against a contractor of improper or illegal activities, civil or criminal penalties and administrative sanctions could result, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government. In addition, reputational harm could result if allegations of impropriety were made. In some cases, audits may result in disputes with the respective government agency that can result in negotiated settlements, arbitration or litigation. Moreover, new laws, regulations, executive orders or standards, or changes to existing ones, can increase our legal, reputation or operational risk, performance and compliance costs and reduce our revenue and earnings.
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Our Aerospace segment is subject to changing customer demand for business aircraft. The business jet market is driven by the demand for business-aviation products and services by corporate, individual and government customers in the United States and around the world. Customer demand can be affected by a number of factors, including changes in general economic conditions, the availability and cost of credit, pricing pressures and trends in capital goods markets. An adverse change in customer demand for our business-aviation products and services could materially affect our future revenue and earnings. In addition, if customers default on existing contracts and the contracts are not replaced, the segment’s anticipated revenue and profitability could be reduced materially.
Earnings and margin depend on our ability to perform on our contracts. When agreeing to contractual terms, our management team makes assumptions and projections about future conditions and events. The accounting for our contracts requires assumptions and estimates about these conditions and events. These projections and estimates assess, among other things:
•the productivity and availability of labor;
•the complexity of the work to be performed;
•the cost and availability of materials and components; and
•schedule requirements.
If there is a significant change in one or more of these circumstances, estimates or assumptions, or if the risks under our contracts are not managed adequately, the profitability of contracts could be adversely affected. This could affect earnings and margin materially.
Revenue, earnings and margin depend in part on supplier performance. We rely on other companies and our government customers to provide materials, components and subsystems for our products. Suppliers, including subcontractors, sometimes perform some of the services that we provide to our customers. We depend on these suppliers and government entities to meet our contractual obligations in full compliance with customer requirements and applicable law. Misconduct by suppliers, such as a failure to comply with procurement regulations or engaging in unauthorized activities, may harm our future revenue, earnings and margin.
We sometimes rely on only one or two sources of supply, and any disruption in our supply chain could have an adverse effect on our ability to meet our customer commitments and could adversely affect our business, results of operations and financial condition. For example, some of our operating segments rely on the supply of semiconductors for the manufacture of our products, and any inability of or delay by our suppliers to meet our order demands (including due to the suppliers’ competing commercial priorities, any military conflict resulting in a disruption of manufacturing or trade relations, or any other business disruption) could delay or disrupt our ability to procure semiconductors. Our ability to perform our obligations to our customers, and our future revenue, earnings and margin, may be materially adversely affected if (1) any one or more of our suppliers is unable to or otherwise fails to, provide the agreed-upon materials or perform the agreed-upon services in a timely and cost-effective manner, or engages in misconduct or other improper activities or (2) we are unable to otherwise obtain necessary materials, components, subsystems or services in a timely and cost-effective manner.
Our success depends in part on our ability to develop new products and technologies and maintain a qualified workforce to meet the needs of our customers. Many of the products and services we provide involve sophisticated technologies and engineering, with related complex manufacturing and system-integration processes. Our customers’ requirements change and evolve regularly. Accordingly, our performance depends in part on our ability to continue to develop, manufacture and provide innovative products and services and bring those offerings to market quickly at
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cost-effective prices. Many of our new products must meet extensive and time-consuming regulatory requirements that are often outside our control and may result in unanticipated delays. Additionally, due to the highly specialized nature of our business, we must hire and retain the skilled and qualified personnel necessary to perform the services required by our customers and to develop and manufacture our products. To the extent that the demand for skilled personnel exceeds supply, we could experience higher labor, recruiting or training costs in order to attract and retain such employees. If we were unable to develop new products that meet customers’ changing needs and satisfy regulatory requirements in a timely manner or successfully attract and retain qualified personnel, our future revenue and earnings may be materially adversely affected.
Risks Relating to Our International Operations
Operations outside the United States are subject to various risks that may be associated with doing business in foreign countries. In some countries there is increased chance for economic, legal or political instability, and procurement procedures may be less robust or mature, which may complicate the contracting process. Our non-U.S. operations may be sensitive to and impacted by (1) changes in a foreign government’s national policies and priorities, political leadership and budgets, which may be influenced by changes in threat environments, geopolitical uncertainties, volatility in economic conditions and other economic and political factors including inflationary pressures; (2) changes in U.S., foreign, and international laws, regulations, and policies; (3) energy, natural resource and other commodity shortages; and (4) global trade disputes and supply chain disruptions. For example, the ongoing conflict between Russia and Ukraine has resulted in the imposition of numerous economic and trade sanctions, export controls, and other restrictions targeting Russia and Belarus, and the Russian government has implemented counter-sanctions and export controls targeting the U.S. and various foreign countries in which we operate. These actions have caused some economic disruptions around the world and have exacerbated global supply chain challenges. Changes and developments in any of these matters or factors may occur suddenly and could impact funding for programs or delay purchasing decisions or customer payments.
Non-U.S. transactions can involve increased risks arising from foreign exchange rate variability, which could, among other things, negatively impact sales and the translation of our international revenue from local currencies into U.S. dollars, and differing legal systems. Our non-U.S. operations are subject to U.S. and foreign laws and regulations, including laws and regulations relating to import-export controls, technology transfers, the Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws, and the International Traffic in Arms Regulations (ITAR). An unfavorable event or trend in any one or more of these factors or a failure to comply with U.S. or foreign laws could result in administrative, civil or criminal liabilities, including suspension or debarment from government contracts or suspension of our export privileges, and could materially adversely affect revenue and earnings.
In addition, some non-U.S. government customers require contractors to enter into letters of credit, performance or surety bonds, bank guarantees and other similar financial arrangements. We may also be required to agree to specific in-country purchases, manufacturing agreements or financial support arrangements, known as offsets, that require us to satisfy investment or other commitments or face penalties. Offset requirements may extend over several years and could require us to team with local companies to fulfill these commitments. If we do not satisfy these financial or offset requirements, our future revenue and earnings may be materially adversely affected.
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Risks Relating to Our Acquisitions and Similar Investment Activities
We have made and expect to continue to make investments, including acquisitions and joint ventures, that involve risks and uncertainties. When evaluating potential acquisitions and joint ventures, we make judgments regarding the value of business opportunities, technologies and other assets, and the risks and costs of potential liabilities based on information available to us at the time of the transaction. Whether we realize the anticipated benefits from these transactions depends on multiple factors, including our integration of the businesses involved; the performance of the underlying products, capabilities, or technologies; market conditions following the acquisition; and acquired liabilities, including some that may not have been identified prior to the acquisition. These factors could materially adversely affect our financial results.
Changes in business conditions may cause goodwill and other intangible assets to become impaired. Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired in a business combination. Goodwill is not amortized and remains on our balance sheet indefinitely unless there is an impairment or a sale of a portion of the business. We review goodwill for impairment annually at each of our reporting units or when circumstances indicate that the likelihood of an impairment is greater than 50%. Such circumstances include a significant adverse change in the business climate for one of our reporting units or a decision to dispose of a reporting unit or a significant portion of a reporting unit. We face some uncertainty in our business environment due to a variety of challenges, including the risk factors discussed in this section. We may experience unforeseen circumstances that adversely affect the value of our goodwill or intangible assets. Future write-offs of goodwill or other intangible assets as a result of an impairment in the business could materially adversely affect our results of operations and financial condition.
Other Business and Operational Risks
Our business could be negatively impacted by cybersecurity events and other disruptions. We face various cybersecurity threats, including threats to our IT infrastructure and attempts to gain unauthorized access to our proprietary or classified information, denial-of-service attacks, as well as threats to the physical security of our facilities and employees, and threats from terrorist acts. We also design and manage IT systems and products for various customers. We generally face the same security threats for these systems and products as for our own internal systems. In addition, we face cybersecurity threats from entities and persons that may seek to target us through our customers, suppliers and other third parties with whom we do business. Many of these cybersecurity threats are increasingly sophisticated and constantly evolving. Accordingly, we maintain information security staff, policies and procedures for managing risk to our information systems, and we review and update our policies, procedures and practices in light of evolving threats. We conduct employee training on cybersecurity to mitigate persistent and continuously evolving cybersecurity threats, and we report cybersecurity events or losses of customer data to affected customers and applicable regulatory authorities. However, there can be no assurance that any such actions, including the timeliness of our efforts to review, update or implement policies, procedures and practices in light of evolving threats, or the safeguards put in place by our customers, suppliers and other parties on which we rely, will be sufficient to detect, prevent and mitigate cybersecurity breaches or disruptions, or the unauthorized release of sensitive information or corruption of data.
We have experienced cybersecurity events and disruptions such as viruses and attacks targeting our IT systems. Such prior events have not had a material impact on our financial condition, results of operations or liquidity. However, future threats could have a materially adverse impact on our company by, among other things, causing harm to our business, financial condition, results of operations or
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reputation; disrupting our operations; exposing us to potential liability, regulatory actions and loss of business; and challenging our eligibility for future work on sensitive or classified systems for government customers. Due to the evolving nature of these security threats, the potential impact of any future incident cannot be predicted. Our insurance coverage may not be adequate to cover all the costs related to cybersecurity attacks or disruptions resulting from such events.
Our business may continue to be negatively impacted by the coronavirus (COVID-19) pandemic and could be negatively impacted by other pandemics and outbreaks. The COVID-19 pandemic has had, and could continue to have, a negative effect on our business, results of operations and financial condition. Other outbreaks of contagious diseases, including new variants of COVID-19, or other adverse public health developments in countries where we operate or our customers are located, could similarly adversely affect our business. This includes disruptions or restrictions on our employees’ ability to work effectively, temporary closures of our facilities and the facilities of our customers, and the imposition of quarantine and travel restrictions that have and may in the future negatively affect demand for our products and services and result in supply-chain disruptions. Any such effects could materially adversely affect our ability to perform on our contracts. Any cost increases that result from these effects may not be fully recoverable on our contracts or adequately covered by insurance.
Global climate change could negatively affect our business. Increased public awareness and concern regarding global climate change may result in state, federal or international requirements to reduce or mitigate global warming, such as the imposition of carbon pricing mechanisms, stricter limits on greenhouse gas emissions, or other business restrictions or compliance requirements regarding reducing or mitigating global climate change. If environmental or climate-change laws or regulations are adopted or changed that directly or indirectly impose significant new costs, operational restrictions or compliance requirements on our business, products, customers or suppliers, they could increase our costs, require additional capital expenditures, reduce our margins and adversely affect our business, results of operations and financial condition.
Further, while we continuously evaluate and seek opportunities to improve our climate-related measures, there can be no assurance that changes in customer demand patterns and competition, as well as potential reputational risks, related to climate change will not adversely affect our business, results of operations and financial condition.
FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K contains forward-looking statements that 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 forward-looking statements. Examples include projections of revenue, earnings, operating margin, segment performance, cash flows, contract awards, aircraft production, deliveries and backlog. In making these statements, we rely on assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe our estimates and judgments are reasonable based on information available to us at the time. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors, including the risk factors discussed in this Form 10-K.
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All forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to General Dynamics or any person acting on our behalf are qualified by the cautionary statements in this section. We do not undertake any obligation to update or publicly release revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report. These factors may be revised or supplemented in future filings with the SEC.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
We face various cybersecurity threats. The purpose of our cybersecurity program is to assess, identify, manage and mitigate cybersecurity risk while supporting the achievement of our business objectives.
Our companywide cybersecurity policy sets the framework for our approach to cybersecurity. Each business unit and our corporate headquarters designates individuals with appropriate qualifications and experience to be responsible for addressing cybersecurity matters, including assessing, identifying and managing risks from cybersecurity threats, with a direct reporting line to senior management. Our policies and procedures are also designed to oversee and identify material cybersecurity risks related to third-party vendors and service providers.
Our companywide Cyber Council , comprised of information technology and cybersecurity executives from our business units, shares information and cybersecurity practices throughout the company, recommends policy and procedure updates and tracks emerging trends. The chair of the Cyber Council reports directly to the company’s chief executive officer.
See Item 1A—Risk Factors above for additional discussion of various risks related to cybersecurity that are reasonably likely to have a material impact on our company, including our business strategy, results of operations or financial condition.
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ITEM 2. PROPERTIES
We operate in a number of offices, manufacturing plants, laboratories, warehouses and other facilities in the United States and abroad. We believe our facilities are adequate for our present needs and, given planned improvements and construction, expect them to remain adequate for the foreseeable future.
On December 31, 2025, our segments had material operations at the following locations:
•Aerospace – Mesa and Scottsdale, Arizona; Van Nuys, California; West Palm Beach, Florida; Brunswick and Savannah, Georgia; Cahokia, Illinois; Westfield, Massachusetts; Teterboro, New Jersey; New York, New York; Tulsa, Oklahoma; Dallas and Fort Worth, Texas; Appleton, Wisconsin; Sydney, Australia; Mexicali, Mexico; Singapore; Basel, Switzerland; Farnborough, United Kingdom.
•Marine Systems – San Diego, California; Groton, New London and Waterford, Connecticut; Jacksonville, Florida; Bath and Brunswick, Maine; Middletown and North Kingstown, Rhode Island; Norfolk and Portsmouth, Virginia; Bremerton, Washington; Mexicali, Mexico.
•Combat Systems – Anniston, Alabama; East Camden, Arkansas; Healdsburg, California; Crawfordsville, St. Petersburg and Tallahassee, Florida; Marion, Illinois; Saco, Maine; Sterling Heights, Michigan; Lincoln, Nebraska; Lima, Ohio; Eynon, Scranton and Wilkes-Barre, Pennsylvania; Mesquite, Texas; Joint Base Lewis-McChord, Washington; Vienna, Austria; Le Gardeur, London and Valleyfield, Canada; Kaiserslautern and Neubrandenburg, Germany; Madrid, Sevilla and Trubia, Spain; Bürglen, Kreuzlingen and Tägerwilen, Switzerland; Merthyr Tydfil, United Kingdom.
•Technologies – Daleville, Alabama; Scottsdale, Arizona; Orlando, Florida; Bossier City, Louisiana; Annapolis Junction, Maryland; Dedham, Pittsfield and Taunton, Massachusetts; Bloomington, Minnesota; Albany, New York; Greensboro, North Carolina; Chesapeake and Marion, Virginia; multiple locations in Northern Virginia; Ottawa, Canada; Oakdale and St. Leonards, United Kingdom.
A summary of floor space by segment on December 31, 2025, follows:
| (Square feet in millions) | Company-owned Facilities | Leased Facilities | Government-owned Facilities | Total | |||||||||||||||||||
| Aerospace | 7.2 | 10.1 | 0.5 | 17.8 | |||||||||||||||||||
| Marine Systems | 10.1 | 5.4 | — | 15.5 | |||||||||||||||||||
| Combat Systems | 6.2 | 6.5 | 4.9 | 17.6 | |||||||||||||||||||
| Technologies | 2.3 | 7.2 | 0.9 | 10.4 | |||||||||||||||||||
| Total square feet | 25.8 | 29.2 | 6.3 | 61.3 | |||||||||||||||||||
ITEM 3. LEGAL PROCEEDINGS
For information relating to legal proceedings, see Note M to the Consolidated Financial Statements in Item 8.
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ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
All of our executive officers are appointed annually. None of our executive officers were selected pursuant to any arrangement or understanding between the officer and any other person. Set forth below is information regarding our executive officers as of January 30, 2026 (references are to positions with General Dynamics Corporation, unless otherwise noted):
| Name, Position and Office | Age | ||||
| Jason W. Aiken – Executive Vice President, Combat Systems and Mission Systems since June 2025; Executive Vice President, Technologies, February 2024 - June 2025; Executive Vice President, Technologies and Chief Financial Officer, January 2023 - February 2024; Senior Vice President and Chief Financial Officer, January 2014 - December 2022; Vice President of the company and Chief Financial Officer of Gulfstream Aerospace Corporation, September 2011 - December 2013; Vice President and Controller, April 2010 - August 2011; Staff Vice President, Accounting, July 2006 - March 2010 | 53 | ||||
| Shane A. Berg – Senior Vice President, Human Resources and Administration since February 2024; Senior Vice President, Planning and Development, January 2022 - February 2024; Executive Vice President of Princeton Theological Seminary, 2016 - January 2022 | 54 | ||||
| Christopher J. Brady – Vice President of the company and President of General Dynamics Mission Systems since January 2019; Vice President, Engineering of General Dynamics Mission Systems, January 2015 - December 2018; Vice President, Engineering of General Dynamics C4 Systems, May 2013 - December 2014; Vice President, Assured Communications Systems of General Dynamics C4 Systems, August 2004 - May 2013 | 63 | ||||
| Mark L. Burns – Executive Vice President of the company since June 2025; President of Gulfstream Aerospace Corporation since July 2015; Vice President of the company, February 2014 - June 2025; President, Product Support of Gulfstream Aerospace Corporation, June 2008 - June 2015 | 66 | ||||
| Danny Deep – President of the company since December 2025; Executive Vice President, Global Operations, June 2025 - December 2025; Executive Vice President, Combat Systems, April 2024 - June 2025; Vice President of the company and President of General Dynamics Land Systems, April 2020 - April 2024; Chief Operating Officer of General Dynamics Land Systems, September 2018 - April 2020; Vice President of General Dynamics Land Systems – Canada, January 2011 - September 2018 | 56 | ||||
| Gregory S. Gallopoulos – Senior Vice President, General Counsel and Secretary since January 2010; Vice President and Deputy General Counsel, July 2008 - January 2010; Managing Partner of Jenner & Block LLP, January 2005 - June 2008 | 66 | ||||
| M. Amy Gilliland – Executive Vice President since June 2025; President of General Dynamics Information Technology since September 2017; Senior Vice President of the company, April 2015 - June 2025; Deputy for Operations of General Dynamics Information Technology, April 2017 - September 2017; Senior Vice President, Human Resources and Administration, April 2015 - March 2017; Vice President, Human Resources, February 2014 - March 2015; Staff Vice President, Strategic Planning, January 2013 - February 2014; Staff Vice President, Investor Relations, June 2008 - January 2013 | 51 | ||||
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| Kimberly A. Kuryea – Senior Vice President and Chief Financial Officer since February 2024; Senior Vice President, Human Resources and Administration, April 2017 - April 2024; Vice President and Controller, September 2011 - March 2017; Chief Financial Officer of General Dynamics Advanced Information Systems, November 2007 - August 2011; Staff Vice President, Internal Audit, March 2004 - October 2007 | 58 | ||||
| William A. Moss – Vice President and Controller since April 2017; Staff Vice President, Internal Audit, May 2015 - March 2017; Staff Vice President, Accounting, August 2010 - May 2015 | 62 | ||||
| Phebe N. Novakovic – Chairman and Chief Executive Officer since January 2013; President and Chief Operating Officer, May 2012 - December 2012; Executive Vice President, Marine Systems, May 2010 - May 2012; Senior Vice President, Planning and Development, July 2005 - May 2010; Vice President, Strategic Planning, October 2002 - July 2005 | 68 | ||||
| David Paddock – Vice President of the company and President of General Dynamics Land Systems since April 2024; Vice President of the company and President of Jet Aviation, July 2019 - April 2024; Senior Vice President, Regional Operations USA of Jet Aviation, January 2015 - July 2019 | 58 | ||||
| Mark Rayha – Vice President of the company and President of Electric Boat Corporation since December 2024; Senior Vice President and Chief Operating Officer of Electric Boat Corporation, September 2023 - December 2024; Vice President and Chief Financial Officer of Electric Boat Corporation, July 2021 - September 2023; Vice President, Finance of Electric Boat Corporation, January 2020 - July 2021; Vice President and Chief Financial Officer of General Dynamics Mission Systems, January 2015 - January 2020 | 59 | ||||
| Robert E. Smith – Executive Vice President, Marine Systems, since July 2019; Vice President of the company and President of Jet Aviation, January 2014 - July 2019; Vice President and Chief Financial Officer of Jet Aviation, July 2012 - January 2014 | 58 | ||||
PART II
ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on the New York Stock Exchange under the trading symbol “GD.”
On December 31, 2025, there were approximately 8,000 holders of record of our common stock.
For information regarding securities authorized for issuance under our equity compensation plans, see Note R to the Consolidated Financial Statements contained in Item 8.
We did not make any unregistered sales of equity securities in 2025.
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The following table provides information about our fourth-quarter purchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:
Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Number of Shares That May Yet Be Purchased Under the Program | |||||||||||||||||||||||||
| Period | Total Number of Shares | Average Price per Share* | ||||||||||||||||||||||||
| Shares Purchased Pursuant to Share Buyback Program | ||||||||||||||||||||||||||
| 9/29/25-10/26/25 | — | $ | — | — | 6,861,844 | |||||||||||||||||||||
| 10/27/25-11/23/25 | — | — | — | 6,861,844 | ||||||||||||||||||||||
| 11/24/25-12/31/25 | 110,533 | 337.30 | 110,533 | 6,751,311 | ||||||||||||||||||||||
| Shares Delivered or Withheld Pursuant to Restricted Stock Vesting** | ||||||||||||||||||||||||||
| 9/29/25-10/26/25 | — | — | ||||||||||||||||||||||||
| 10/27/25-11/23/25 | — | — | ||||||||||||||||||||||||
| 11/24/25-12/31/25 | 1,217 | 336.19 | ||||||||||||||||||||||||
| 111,750 | 337.29 | |||||||||||||||||||||||||
*Average price per share excludes excise tax.
** Represents shares withheld by, or delivered to, us pursuant to provisions in agreements with recipients of restricted stock granted under our equity compensation plans that allow us to withhold, or the recipient to deliver to us, the number of shares with a fair value equal to the statutory tax withholding due upon vesting of the restricted shares.
On December 31, 2025, 6.8 million shares remained authorized by the Board for repurchase. For additional information relating to our purchases of common stock during the past three years, see Note N to the Consolidated Financial Statements in Item 8.
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The following performance graph compares the cumulative total return to shareholders on our common stock, assuming reinvestment of dividends, with similar returns for the Standard & Poor’s 500 Index and the Standard & Poor’s Aerospace & Defense Index, both of which include General Dynamics.
Cumulative Total Return
Based on Investments of $100 Beginning December 31, 2020
(Assumes Reinvestment of Dividends)
(in per-share amounts)
ITEM 6. [RESERVED]
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in millions, except per-share amounts or unless otherwise noted)
For an overview of our operating segments, including a discussion of our major products and services, see the Business discussion contained in Item 1. The following discussion of our financial condition and results of operations for 2025 compared with 2024 should be read in conjunction with our Consolidated Financial Statements included in Item 8, while a discussion of 2024 compared with 2023 can be found in Item 7 of our annual report on Form 10-K for the year ended December 31, 2024.
BUSINESS ENVIRONMENT
As a global aerospace and defense company, we compete in domestic and international markets, serving both government and commercial customers. Our financial performance is significantly influenced by U.S. government spending levels, administration priorities and the overall economy.
In the federal market, defense spending has been at elevated levels, and the administration has publicly stated support for further increases in fiscal year (FY) 2027. This is reflected in the significant demand in U.S. Navy shipbuilding, particularly submarines. We have invested in our facilities and workforce to increase production capacity to meet this demand, and expect to continue to do so. The increased demand has placed great pressure on the shipbuilding supply chain, which was already impacted by significant demographic issues coming out of the global pandemic. Together with the Navy customer, we have been working to stabilize and grow the supply chain to meet this heightened demand.
We have also been investing in the development of the next generation of combat vehicles and artillery. While the U.S. Army is reviewing its funding priorities and begins transitioning to next-generation combat vehicles, we expect short-term production volumes to be down slightly. Demand for our munitions products has been high and is expected to remain at an elevated level given ongoing conflicts and regional threats.
The administration began taking steps in 2025 to address federal spending and reduce the size of the government. These actions resulted in federal government staff reductions, contract modifications and terminations, and award delays. We experienced some impact from these actions which were largely limited to our IT services business. Our IT services business was also somewhat impacted by the government shutdown at the start of the current fiscal year. We expect some limited ongoing impact from these actions.
We entered 2026 with the government operating under a continuing resolution that expires on January 30. Our outlook for the year assumes that the FY26 budget is approved without significant delay or another prolonged shutdown.
Internationally, as a result of ongoing regional conflicts and the overall threat environment, we have seen increased demand, particularly in Europe, for our Combat Systems military products and services. This provides opportunities for our European businesses present in local markets as well as exports from our North American businesses. To meet this expected demand, there will be increased pressure on the supply chain and our hiring of skilled workers.
In our principal commercial market, Aerospace is experiencing strong demand for business jets. Our ability to produce new aircraft is dependent on our supply chain, and while performance has improved
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and the overall supply chain has stabilized, we have experienced some challenges in terms of delay including at our Israel-based supplier of mid-cabin airframes caused by the conflict with Hamas.
Our Aerospace business has been impacted by inflationary pressures and the administration’s implementation of tariffs. To date, the tariffs have not had a material impact on our results but did reduce the Aerospace operating margins by 30 basis points in 2025. The duration and extent of the tariffs continue to evolve. The ongoing sanctions on Russia have also restricted access to a segment of the market.
Overall, we believe our investments in a new family of Gulfstream aircraft will continue to fuel demand. The most recent addition is the G800, which entered service in 2025. In addition, we expect the growing installed base of aircraft will continue to lead to increased demand for global aircraft services.
RESULTS OF OPERATIONS
INTRODUCTION
The following paragraphs explain how we recognize revenue and operating costs in our operating segments and the terminology we use to describe our operating results.
In the Aerospace segment, we record revenue on contracts for new aircraft when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft. Revenue associated with the segment’s services businesses is recognized as work progresses or upon delivery of services. Fluctuations in revenue from period to period result from the number and mix of new aircraft deliveries, and the level and type of aircraft services performed during the period.
The majority of the Aerospace segment’s operating costs relates to new aircraft production on firm orders and consists of labor, material, subcontractor and overhead costs. The costs are accumulated in production lots, recorded in inventory and recognized as operating costs at aircraft delivery based on the estimated average unit cost in a production lot. While changes in the estimated average unit cost for a production lot impact the level of operating costs, the amount of operating costs reported in a given period is based largely on the number and type of aircraft delivered. Operating costs in the Aerospace segment’s services businesses are recognized generally as incurred.
For new aircraft, operating earnings and margin are a function of the prices of our aircraft, our operational efficiency in manufacturing and outfitting the aircraft, and the mix of ultra-large-cabin, large-cabin and mid-cabin aircraft deliveries. Aircraft mix can also refer to the stage of program maturity for our aircraft models. A new aircraft model typically has lower margins in its initial production lots, and then margins generally increase as we realize efficiencies in the production process. Additional factors affecting the segment’s earnings and margin include the volume, mix and profitability of services work performed, the market for pre-owned aircraft, and the level of general and administrative (G&A) and net research and development (R&D) costs incurred by the segment.
In the defense segments, revenue on long-term government contracts is recognized generally over time as the work progresses, either as products are produced or as services are rendered. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses.
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Variances in costs recognized from period to period reflect primarily increases and decreases in production or activity levels on individual contracts. Because costs are used as a measure of progress, year-over-year variances in costs result in corresponding variances in revenue, which we generally refer to as volume.
Operating earnings and margin in the defense segments are driven by changes in volume, performance or contract mix. Performance refers to changes in profitability based on adjustments to estimates at completion on individual contracts. These adjustments result from increases or decreases to the estimated value of the contract, the estimated costs to complete the contract or both. Therefore, changes in costs incurred in the period compared with prior periods do not necessarily impact profitability. It is only when total estimated costs at completion on a given contract change without a corresponding change in the contract value (or vice versa) that the profitability of that contract may be impacted. Contract mix refers to changes in the volume of higher- versus lower-margin work. Higher or lower margins can result from a number of factors, including contract type (e.g., fixed-price/cost-reimbursable) and type of work (e.g., development/production). Contract mix can also refer to the stage of program maturity for our long-term production contracts. New long-term production contracts typically have lower margins initially, and then margins generally increase as we achieve learning curve improvements or realize other cost reductions.
CONSOLIDATED OVERVIEW
2025 IN REVIEW
•Strong operating performance:
◦Revenue of $52.6 billion, an increase of 10.1% from 2024
◦Operating earnings of $5.4 billion, an increase of 11.7% from 2024, with sequential growth throughout the year
◦Diluted earnings per share of $15.45, up 13.4% from 2024
◦Cash provided by operating activities of $5.1 billion, or 122% of net earnings
•Backlog of $118 billion, an increase of 30% from 2024, supports our long-term growth expectations:
◦Strong Gulfstream aircraft order activity, including orders across all aircraft models
◦Several significant contract awards received in our defense segments, including $20.1 billion of combined awards from the U.S. Navy for the Virginia-class and Columbia-class submarine programs and $9.2 billion of combined awards for wheeled and tracked vehicles for international customers
| Year Ended December 31 | 2025 | 2024 | Variance | ||||||||||||||||||||
| Revenue | $ | 52,550 | $ | 47,716 | $ | 4,834 | 10.1 | % | |||||||||||||||
| Operating costs and expenses | (47,194) | (42,920) | (4,274) | 10.0 | % | ||||||||||||||||||
| Operating earnings | 5,356 | 4,796 | 560 | 11.7 | % | ||||||||||||||||||
| Operating margin | 10.2 | % | 10.1 | % | |||||||||||||||||||
Our consolidated revenue increased in 2025 driven by growth across all segments, including double-digit percentage growth in our Aerospace and Marine Systems segments. Operating margin increased 10 basis points.
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REVIEW OF OPERATING SEGMENTS
Following is a discussion of operating results and outlook for each of our operating segments. For the Aerospace segment, results are analyzed by specific types of products and services, consistent with how the segment is managed. For the defense segments, the discussion is based on markets and the lines of products and services offered with a supplemental discussion of specific contracts and programs when significant to the results. Additional information regarding our segments can be found in Note O to the Consolidated Financial Statements in Item 8.
AEROSPACE
| Year Ended December 31 | 2025 | 2024 | Variance | ||||||||||||||||||||
| Revenue | $ | 13,110 | $ | 11,249 | $ | 1,861 | 16.5 | % | |||||||||||||||
| Operating earnings | 1,746 | 1,464 | 282 | 19.3 | % | ||||||||||||||||||
| Operating margin | 13.3 | % | 13.0 | % | |||||||||||||||||||
| Gulfstream aircraft deliveries (in units) | 158 | 136 | 22 | 16.2 | % | ||||||||||||||||||
Operating Results
The increase in the Aerospace segment’s revenue in 2025 consisted of the following:
| Aircraft manufacturing | $ | 1,602 | |||
| Aircraft services | 259 | ||||
| Total increase | $ | 1,861 | |||
Aircraft manufacturing revenue increased in 2025 due to additional G700 deliveries. Initial deliveries of the new G800 largely offset the decrease in G650 revenue with its final deliveries in 2025. Aircraft services revenue was higher in 2025 due to increased customer demand for aircraft maintenance based on established maintenance cycles, a larger installed base and customer flight activity.
The increase in the segment’s operating earnings in 2025 consisted of the following:
| Aircraft manufacturing | $ | 222 | |||
| Aircraft services | (53) | ||||
| G&A/other expenses | 113 | ||||
| Total increase | $ | 282 | |||
Aircraft manufacturing operating earnings increased in 2025 due primarily to the increase in ultra-large-cabin aircraft deliveries. G&A/other expenses decreased in 2025 due primarily to reduced R&D expenditures after completion of the G800 certification process. In total, the Aerospace segment’s operating margin increased 30 basis points in 2025.
2026 Outlook
We expect the Aerospace segment’s 2026 revenue to increase to approximately $13.6 billion with operating margin of approximately 14%.
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MARINE SYSTEMS
| Year Ended December 31 | 2025 | 2024 | Variance | ||||||||||||||||||||
| Revenue | $ | 16,723 | $ | 14,343 | $ | 2,380 | 16.6 | % | |||||||||||||||
| Operating earnings | 1,177 | 935 | 242 | 25.9 | % | ||||||||||||||||||
| Operating margin | 7.0 | % | 6.5 | % | |||||||||||||||||||
Operating Results
The increase in the Marine Systems segment’s revenue in 2025 consisted of the following:
| U.S. Navy ship construction | $ | 2,213 | |||
| U.S. Navy ship engineering, repair and other services | 167 | ||||
| Total increase | $ | 2,380 | |||
Revenue from U.S. Navy ship construction was up in 2025 due primarily to increased volume on Virginia-class and Columbia-class submarine construction. The Marine Systems segment’s operating margin increased 50 basis points in 2025 as 2024 included the unfavorable impact of supplier cost growth.
2026 Outlook
We expect the Marine Systems segment’s 2026 revenue to increase to $17.3-$17.7 billion with operating margin of around 7.3%.
COMBAT SYSTEMS
| Year Ended December 31 | 2025 | 2024 | Variance | ||||||||||||||||||||
| Revenue | $ | 9,246 | $ | 8,997 | $ | 249 | 2.8 | % | |||||||||||||||
| Operating earnings | 1,331 | 1,276 | 55 | 4.3 | % | ||||||||||||||||||
| Operating margin | 14.4 | % | 14.2 | % | |||||||||||||||||||
Operating Results
The increase in the Combat Systems segment’s revenue in 2025 consisted of the following:
| Weapon systems and munitions | $ | 258 | |||
| International military vehicles | 194 | ||||
| U.S. military vehicles | (203) | ||||
| Total increase | $ | 249 | |||
Weapon systems and munitions revenue increased in 2025 due to increased propellant production and higher volume on missile subsystems programs. Revenue from international military vehicles was up in 2025 due to higher volume on several wheeled and tracked vehicle programs in Europe. Revenue from U.S. military vehicles decreased in 2025 due primarily to the termination of the M10 Booker program and lower volume on Stryker programs, partially offset by higher volume on the XM30 program. The Combat Systems segment’s operating margin increased 20 basis points compared with 2024 driven by favorable program mix.
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2026 Outlook
We expect the Combat Systems segment’s 2026 revenue to increase to approximately $9.6-$9.7 billion with operating margin of approximately 14.1%.
TECHNOLOGIES
| Year Ended December 31 | 2025 | 2024 | Variance | ||||||||||||||||||||
| Revenue | $ | 13,471 | $ | 13,127 | $ | 344 | 2.6 | % | |||||||||||||||
| Operating earnings | 1,277 | 1,260 | 17 | 1.3 | % | ||||||||||||||||||
| Operating margin | 9.5 | % | 9.6 | % | |||||||||||||||||||
Operating Results
The increase in the Technologies segment’s revenue in 2025 consisted of the following:
| Information technology (IT) services | $ | 296 | |||
| C5ISR* solutions | 48 | ||||
| Total increase | $ | 344 | |||
*Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance
The Technologies segment’s revenue increased in 2025 due primarily to demand for IT services. Overall, the segment’s margin decreased 10 basis points compared with 2024.
2026 Outlook
We expect the Technologies segment’s 2026 revenue to increase to approximately $13.8 billion with operating margin of approximately 9.2%.
CORPORATE
Corporate operating costs totaled $175 in 2025 and $139 in 2024 and consisted of equity-based compensation expense and other miscellaneous expenses. Corporate operating costs are expected to be approximately $160 in 2026.
OTHER INFORMATION
PRODUCT AND SERVICE REVENUE AND OPERATING COSTS
| Year Ended December 31 | 2025 | 2024 | Variance | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Products | $ | 33,021 | $ | 28,635 | $ | 4,386 | 15.3 | % | |||||||||||||||
| Services | 19,529 | 19,081 | 448 | 2.3 | % | ||||||||||||||||||
| Operating Costs: | |||||||||||||||||||||||
| Products | $ | (27,965) | $ | (24,332) | $ | (3,633) | 14.9 | % | |||||||||||||||
| Services | (16,634) | (16,020) | (614) | 3.8 | % | ||||||||||||||||||
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The increase in product revenue in 2025 consisted of the following:
| Ship construction | $ | 2,213 | |||
| Aircraft manufacturing | 1,602 | ||||
| Weapon systems and munitions | 258 | ||||
| International military vehicles | 194 | ||||
| Other, net | 119 | ||||
| Total increase | $ | 4,386 | |||
Ship construction revenue was up due primarily to higher volume on submarine programs. Aircraft manufacturing revenue increased due to additional aircraft deliveries. Weapon systems and munitions revenue increased due to increased propellant production and higher volume on missile subsystems programs. International military vehicles was up due primarily to demand for wheeled and tracked combat vehicle programs. The primary drivers of the increase in product operating costs were the changes in volume on the programs described above.
The increase in service revenue in 2025 consisted of the following:
| C5ISR solutions/IT services | $ | 368 | |||
| Aircraft services | 259 | ||||
| Other, net | (179) | ||||
| Total increase | $ | 448 | |||
The increase in service revenue is due to demand for IT services and aircraft maintenance work. The primary drivers of the increase in service operating costs were the changes in volume on the programs described above.
G&A EXPENSES
As a percentage of revenue, G&A expenses decreased to 4.9% in 2025 compared with 5.4% in 2024 due to growth in revenue. We expect G&A expenses as a percentage of revenue in 2026 to be generally consistent with 2025.
OTHER, NET
Net other income was $61 in 2025 and $68 in 2024 and represents primarily the non-service components of pension and other post-retirement benefits. In 2026, we expect net other income to be approximately $50.
INTEREST, NET
Net interest expense was $314 in 2025 and $324 in 2024. See Note K to the Consolidated Financial Statements in Item 8 for additional information regarding our debt obligations, including interest rates. We expect 2026 net interest expense to be approximately $340, which assumes that we refinance the notes maturing in 2026 at higher interest rates.
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PROVISION FOR INCOME TAX, NET
Our effective tax rate was 17.5% in 2025 and 16.7% in 2024. For further discussion, including a reconciliation of our effective tax rate from the statutory federal rate, see Note D to the Consolidated Financial Statements in Item 8. For 2026, we expect a full-year effective tax rate of approximately 17.5%.
BACKLOG AND ESTIMATED POTENTIAL CONTRACT VALUE
Our total backlog, including funded and unfunded portions, was $118 billion on December 31, 2025, compared to $90.6 billion at the end of 2024. Our total backlog is equal to our remaining performance obligations under contracts with customers as discussed in Note B to the Consolidated Financial Statements in Item 8. Our total estimated contract value, which combines total backlog with estimated potential contract value, was $178.9 billion on December 31, 2025.
The following table details the backlog and estimated potential contract value of each segment at the end of 2025 and 2024:
| Funded | Unfunded | Total Backlog | Estimated Potential Contract Value | Total Estimated Contract Value | |||||||||||||||||||||||||
| December 31, 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 | |||||||||||||||||||
| December 31, 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 | |||||||||||||||||||
For additional information about our major products and services in backlog see the Business discussion contained in Item 1.
AEROSPACE
Aerospace funded backlog represents primarily new aircraft orders for which we have definitive purchase contracts and deposits from customers. Unfunded backlog consists of agreements to provide future aircraft maintenance and support services. The Aerospace segment ended 2025 with backlog of $21.8 billion.
Orders in 2025 reflected strong demand across our portfolio of products and services, including orders for all models of Gulfstream aircraft. The segment’s book-to-bill ratio (orders divided by revenue) was 1.2-to-1 in 2025, even as revenue grew by more than 15% year over year.
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Beyond total backlog, estimated potential contract value represents primarily options and other agreements with existing customers to purchase new aircraft and long-term aircraft services agreements. On December 31, 2025, estimated potential contract value in the Aerospace segment was $1.1 billion.
Demand for Gulfstream aircraft remains strong across customer types and geographic regions, generating orders from public and privately held companies, individuals, and governments around the world. Geographically, U.S. customers represented 68% of Gulfstream’s orders in 2025 and 61% of Gulfstream’s backlog on December 31, 2025, demonstrating continued strong domestic demand.
The following represents Gulfstream aircraft (in units) in backlog by region on December 31, 2025:
DEFENSE SEGMENTS
The total backlog in our defense segments represents the estimated remaining sales value of work to be performed under firm contracts. The funded portion of total backlog includes items that have been authorized and appropriated by the Congress and funded by customers, as well as commitments by international customers that are approved and funded similarly by their governments. The unfunded portion of total backlog includes the amounts we believe are likely to be funded, but there is no guarantee that future budgets and appropriations will provide the same funding level currently anticipated for a given program.
Estimated potential contract value in our defense segments includes unexercised options associated with existing firm contracts and unfunded work on indefinite delivery, indefinite quantity (IDIQ) contracts. Contract options represent agreements to perform additional work under existing contracts at the election of the customer. 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. This amount is often less than the total IDIQ contract value, particularly when the contract has multiple awardees. The actual amount of funding received in the future may be higher or lower than our estimate of potential contract value.
Total backlog in our defense segments was $96.2 billion on December 31, 2025, compared with $70.9 billion at year-end 2024. In 2025, the total book-to-bill ratio in our defense segments was 1.6-to-1. Estimated potential contract value in our defense segments was $59.8 billion on December 31, 2025, up 14.4% compared with $52.2 billion at year-end 2024.
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MARINE SYSTEMS
The Marine Systems segment’s backlog consists of very long-term submarine and surface ship construction programs, as well as numerous engineering and repair contracts. The segment’s total estimated contract value was $64.2 billion on December 31, 2025, up 30% compared with $49.4 billion at year-end 2024. The increase was due primarily to $20.1 billion of combined submarine awards, a contract award for the construction of John Lewis-class (T-AO-205) fleet replenishment oilers and a contract award for the construction of an Arleigh Burke-class (DDG-51) guided-missile destroyer.
The following represents the Marine Systems segment’s total estimated contract value by major program on December 31, 2025:
COMBAT SYSTEMS
The Combat Systems segment’s backlog consists of a mix of U.S. and international combat vehicles, weapon systems and munitions programs. The vehicle programs are generally long-term franchise programs, while the weapon systems and munitions programs tend to be shorter-term in nature. The segment’s backlog was $27.2 billion on December 31, 2025, up 60.3% from $17 billion at year-end 2024. The segment’s estimated potential contract value was $14.7 billion on December 31, 2025, up 69.7% compared with $8.6 billion at year-end 2024. The increase in the Combat Systems segment’s backlog and estimated potential contract value was driven primarily by $9.2 billion of combined awards for wheeled and tracked vehicles for international customers, $3.3 billion for various munitions and ordnance, and $1 billion for next-generation Abrams main battle tanks.
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The following represents the Combat Systems segment’s total estimated contract value by market on December 31, 2025:
TECHNOLOGIES
The Technologies segment’s backlog consists of thousands of contracts and task orders across a mix of U.S. and non-U.S. government and commercial customers. These contracts can be shorter-cycle or span multiple years, but commonly include a smaller, initially funded order. Therefore, our estimated potential contract value of $33.3 billion is an important indicator of future orders and revenue. In 2025, approximately 85% of the segment’s orders were from additional work on IDIQ contracts or the exercise of options. The segment’s total estimated contract value was $49.9 billion on December 31, 2025, compared with $48.1 billion at year-end 2024. Several significant contract awards in the Technologies segment leverage the Digital Accelerator portfolio of solutions in cyber, AI, cloud services and digital modernization.
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The following represents the Technologies segment’s total estimated contract value by customer on December 31, 2025:
LIQUIDITY AND CAPITAL RESOURCES
We place a strong emphasis on cash flow generation, which is underpinned by an operating discipline focused on cost control and working capital management. This emphasis gives us the flexibility for prudent capital deployment, while allowing us to maintain an appropriate debt level, and preserves a strong balance sheet for future opportunities.
We evaluate a variety of capital deployment options based on current market conditions and our long-term outlook, and we believe agility is a key component of our capital deployment strategy as market conditions change over time. Our capital deployment priorities include investments in our business infrastructure, products and services to drive long-term growth, a predictable dividend, strategic acquisitions and opportunistic share repurchases primarily to address dilution.
We believe cash generated by operating activities, supplemented by commercial paper issuances, is sufficient to satisfy our short- and long-term liquidity needs. An additional potential source of capital is the issuance of long-term debt in capital market transactions.
We ended 2025 with a cash and equivalents balance of $2.3 billion compared with $1.7 billion at the end of 2024. The following is a discussion of our major operating, investing and financing activities in 2025 and 2024, as classified on the Consolidated Statement of Cash Flows in Item 8:
| Year Ended December 31 | 2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 5,120 | $ | 4,112 | |||||||
| Net cash used by investing activities | (1,284) | (953) | |||||||||
| Net cash used by financing activities | (3,190) | (3,369) | |||||||||
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OPERATING ACTIVITIES
Cash provided by operating activities was $5.1 billion in 2025 compared with $4.1 billion in 2024. The primary driver of cash flows in both years was net earnings. Cash flows in 2024 were affected negatively by growth in operating working capital, particularly driven by timing in our Aerospace and Combat Systems segments. Cash flows in 2025 were affected positively as operating working capital balances in our Aerospace and Combat Systems segments began to unwind.
INVESTING ACTIVITIES
Cash used by investing activities was $1.3 billion in 2025 and $953 in 2024. Our investing activities include cash paid for capital expenditures; business acquisitions; purchases, sales and maturities of marketable securities; and proceeds from asset sales.
Capital Expenditures. The primary use of cash for investing activities in both years was capital expenditures. Capital expenditures were up almost 30% to $1.2 billion in 2025 versus $916 in 2024. Capital expenditures include equipment and facility enhancements to support new and existing programs across our businesses.
FINANCING ACTIVITIES
Cash used by financing activities was $3.2 billion in 2025 and $3.4 billion in 2024. Financing activities include the use of cash for payment of dividends, settlement of finance lease liabilities, debt and commercial paper repayments, and some repurchase of common stock. Our financing activities also include proceeds received from debt and commercial paper issuances and employee stock option exercises.
Dividends. On March 5, 2025, our board of directors (Board) declared an increased quarterly dividend of $1.50 per share, the 28th consecutive annual increase. Previously, the Board had increased the quarterly dividend to $1.42 per share in March 2024. Cash dividends paid were $1.6 billion in 2025 and $1.5 billion in 2024.
Share Repurchases. With respect to share repurchases, we paid $637 in 2025 to cover dilution from stock vesting and exercises, and $1.5 billion in 2024. On December 31, 2025, 6.8 million shares remained of the amount authorized by our Board in 2024 for repurchase, representing 2.5% of our total shares outstanding.
Debt Issuances and Repayments. In March 2025, we repaid fixed-rate notes of $750 with cash on hand and commercial paper issuances. In May 2025, we issued $750 of fixed-rate notes. The proceeds were used to repay fixed-rate notes of $750 that matured in May 2025. Fixed-rate notes of $500 mature in June and August 2026. Our plan is to refinance these notes but we will continue to evaluate our approach as the maturity dates draw near. For additional information regarding our debt obligations, including scheduled debt maturities and interest rates, see Note K to the Consolidated Financial Statements in Item 8.
On December 31, 2025, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. In addition, we have a $5 billion committed bank credit facility for general corporate purposes and working capital needs and to support our commercial paper issuances. We also have an effective shelf registration on file with the Securities and Exchange Commission (SEC) that allows us to access the debt markets.
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NON-GAAP FINANCIAL MEASURES
We emphasize the efficient conversion of net earnings into cash and the deployment of that cash to maximize shareholder returns. As described below, we use free cash flow and return on invested capital (ROIC) to measure our performance in these areas. While we believe these metrics provide useful information, they are not defined operating measures under U.S. generally accepted accounting principles (GAAP), and there are limitations associated with their use. Our calculation of these metrics may not be completely comparable to similarly titled measures of other companies. As a result, the use of these metrics should not be considered in isolation from, or as a substitute for, GAAP measures.
Free Cash Flow. We define free cash flow as net cash provided by 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, paying dividends and repurchasing our common stock to cover dilution. We use free cash flow to assess the quality of our earnings and as a key performance measure in evaluating management. The following table reconciles free cash flow with net cash from operating activities, as classified on the Consolidated Statement of Cash Flows in Item 8:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Net cash provided by operating activities | $ | 5,120 | $ | 4,112 | $ | 4,710 | |||||||||||
| Capital expenditures | (1,161) | (916) | (904) | ||||||||||||||
| Free cash flow | $ | 3,959 | $ | 3,196 | $ | 3,806 | |||||||||||
| Cash flows as a percentage of net earnings: | |||||||||||||||||
| Net cash provided by operating activities | 122 | % | 109 | % | 142 | % | |||||||||||
| Free cash flow | 94 | % | 85 | % | 115 | % | |||||||||||
Return on Invested Capital. We believe 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.
ROIC is calculated as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Net earnings | $ | 4,210 | $ | 3,782 | $ | 3,315 | |||||||||||
| After-tax interest expense | 318 | 310 | 315 | ||||||||||||||
| After-tax amortization expense | 193 | 191 | 201 | ||||||||||||||
| Net operating profit after taxes | $ | 4,721 | $ | 4,283 | $ | 3,831 | |||||||||||
| Average invested capital | $ | 33,212 | $ | 32,451 | $ | 31,258 | |||||||||||
| Return on invested capital | 14.2 | % | 13.2 | % | 12.3 | % | |||||||||||
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CASH REQUIREMENTS
The following is a discussion of how we expect to meet the future cash requirements from known contractual and other obligations.
The majority of our revenue is derived from long-term contracts and programs that can span several years. We similarly enter into long-term agreements with suppliers and subcontractors for goods and services in support of these contracts and programs with payment terms that are generally aligned with the payment terms from our customers. In some instances, we receive advance payments or deposits from our customers, which help fund our purchase commitments and reduce collection risk.
Additionally, we have significant liabilities under our defined benefit retirement plans. As these liabilities are settled using plan assets, our future cash requirements associated with these liabilities are generally limited to the annual cash contributions to these plans required in accordance with Internal Revenue Service (IRS) regulations. See Note S to the Consolidated Financial Statements in Item 8 for additional information.
Other obligations, such as scheduled principal and interest payments on our fixed-rate notes, and scheduled payments in accordance with our lease agreements are expected to be satisfied using cash generated from operations or refinancing of principal payments. See Notes J and K to the Consolidated Financial Statements in Item 8 for additional information.
ADDITIONAL FINANCIAL INFORMATION
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on the Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. We employ judgment in making our estimates, but they are based on historical experience, currently available information and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. We believe our judgment is applied consistently and produces financial information that fairly depicts our results of operations for all periods presented.
In our opinion, the following policies are critical and require the use of significant judgment in their application:
Revenue. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue. A contract’s transaction price is allocated to each distinct performance obligation within that contract and recognized as revenue when, or as, the performance obligation is satisfied. Our performance obligations are satisfied over time as work progresses or at a point in time.
Substantially all of our revenue in the defense segments is recognized over time because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our
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performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.
Most of our revenue recognized at a point in time is for the manufacture of business jet aircraft in our Aerospace segment. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft.
The majority of our revenue is derived from long-term contracts and programs that can span several years. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. We estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. For discussion of our contract estimates, the assumptions used, and the impact of changes in estimates, see Note B to the Consolidated Financial Statements in Item 8.
Consistent with industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. These assets and liabilities are reported on the Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period.
Long-lived Assets and Goodwill. We review long-lived assets, including intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. We assess the recoverability of the carrying value of assets held for use based on a review of undiscounted projected cash flows. Impairment losses, where identified, are measured as the excess of the carrying value of the long-lived assets over the estimated fair value as determined by discounted cash flows.
Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired in a business combination. We review goodwill for impairment annually at each of our reporting units or when circumstances indicate that the likelihood of an impairment is greater than 50%. Such circumstances include a significant adverse change in the business climate for one of our reporting units or a decision to dispose of a reporting unit or a significant portion of a reporting unit. Our reporting units are consistent with our operating segments in Note O to the Consolidated Financial Statements in Item 8. We use both qualitative and quantitative approaches when testing goodwill for impairment. When determining the approach to be used, we consider the current facts and circumstances of each reporting unit as well as the excess of each reporting unit’s estimated fair value over its carrying value based on our most recent quantitative assessments. Our qualitative approach evaluates the business environment and various events impacting the reporting unit including, but not limited to, macroeconomic conditions, changes in the business environment and reporting unit-specific events. If, based on the qualitative assessment, we determine that it is more likely than not that the fair value of a reporting unit is greater than its carrying value, then a quantitative assessment is not necessary. However, if a quantitative assessment is determined to be necessary, we compare the fair value of a reporting unit to its carrying value and, if necessary, recognize an impairment loss for the amount by which the carrying value exceeds the reporting unit’s fair value.
Our estimate of a reporting unit’s fair value is based primarily on the discounted cash flows of the underlying operations and requires the use of judgment by management. The process requires numerous assumptions, including the timing of work embedded in our backlog, our performance and profitability under our contracts, our success in securing future business, the appropriate risk-adjusted interest rate
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used to discount the projected cash flows, and terminal-value growth rates applied to the final year of projected cash flows. Due to the variables inherent in our estimates of fair value, differences in assumptions may have a material effect on the result of our impairment analysis. To assess the reasonableness of our discounted cash flows, we compare the sum of our reporting units’ fair value to our market capitalization. Additionally, we evaluate the reasonableness of each reporting unit’s fair value by comparing the fair value to peer companies and recent relevant market transactions.
In the fourth quarter of 2025, we completed qualitative assessments of goodwill for each of our reporting units. Our Aerospace, Marine Systems and Combat Systems reporting units’ estimated fair values significantly exceeded their respective carrying values based on our most recent quantitative assessments, which were performed in the fourth quarter of 2018. Our Technologies reporting unit’s estimated fair value exceeded its carrying value by approximately 25% at the time of our last quantitative assessment in the fourth quarter of 2022. Our qualitative assessments this year did not present indicators of impairment.
Commitments and Contingencies. We are subject to litigation and other legal proceedings arising either from the normal course of business or under provisions relating to the protection of the environment. Estimating liabilities and costs associated with these matters requires the use of judgment. We record a liability associated with claims or pending or threatened litigation when it is probable a loss has been incurred and the amount is reasonably estimable. The ultimate resolution of our exposure related to these matters may change as further facts and circumstances become known.
Retirement Plans. Our pension and other post-retirement benefit costs and obligations depend on several assumptions and estimates, which are based on our best judgment, including consideration of current and future market conditions. For a discussion of our assumptions and any changes to these assumptions, as well as the impact of these changes, which is reported as an actuarial gain or loss in the reconciliation of the change in the benefit obligation, see Note S to the Consolidated Financial Statements in Item 8. The key assumption is the interest rates used to discount estimated future pension benefits. We base the discount rates on a current yield curve developed from a portfolio of high-quality, fixed-income investments with maturities consistent with the projected benefit payout period. The effect of a 25-basis-point increase or decrease in the discount rate assumption on the December 31, 2025, pension benefit obligation is ($260) or $271, respectively.
As described in Note S to the Consolidated Financial Statements in Item 8, our contractual arrangements with the U.S. government provide for the recovery of benefit costs for our government retirement plans. We have elected to defer recognition of the benefit costs until such costs can be allocated to contracts. Therefore, the impact of annual changes in financial reporting assumptions on the retirement benefit cost for these plans does not immediately affect our operating results.
GUARANTOR FINANCIAL INFORMATION
The outstanding notes described in Note K to the Consolidated Financial Statements in Item 8, issued by General Dynamics Corporation (the parent), are fully and unconditionally guaranteed on an unsecured, joint and several basis by several of the parent’s 100%-owned subsidiaries (the guarantors). The guarantee of each guarantor ranks equally in right of payment with all other existing and future senior unsecured indebtedness of such guarantor. A listing of the guarantors is included in an exhibit to this Form 10-K.
Because the parent is a holding company, its cash flow and ability to service its debt, including the outstanding notes, depends on the performance of its subsidiaries and the ability of those subsidiaries to
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distribute cash to the parent, whether by dividends, loans or otherwise. Holders of the outstanding notes have a direct claim only against the parent and the guarantors.
Under the relevant indenture, the guarantee of each guarantor is limited to the maximum amount that can be guaranteed without rendering the guarantee voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each indenture also provides that, in the event (1) of a merger, consolidation or sale or disposition of all or substantially all of the assets of a guarantor (other than a transaction with the parent or any of its subsidiaries) or (2) there occurs a transfer, sale or other disposition of the voting stock of a guarantor so that the guarantor is no longer a subsidiary of the parent, then the guarantor or the entity acquiring the assets (in the event of the sale or other disposition of all or substantially all of the assets of a guarantor) will be released and relieved of any obligations under the guarantee.
The following summarized financial information presents the parent and guarantors (collectively, the combined obligor group) on a combined basis. The summarized financial information of the combined obligor group excludes net investment in and earnings of subsidiaries related to interests held by the combined obligor group in subsidiaries that are not guarantors of the notes.
STATEMENT OF EARNINGS INFORMATION
| Year Ended December 31 | 2025 | ||||
| Revenue | $ | 20,716 | |||
| Operating costs and expenses, excluding G&A | (18,476) | ||||
| Net earnings | 839 | ||||
BALANCE SHEET INFORMATION
| December 31, 2025 | December 31, 2024 | ||||||||||
| Cash and equivalents | $ | 482 | $ | 474 | |||||||
| Other current assets | 5,405 | 5,187 | |||||||||
| Noncurrent assets | 5,403 | 4,841 | |||||||||
| Total assets | $ | 11,290 | $ | 10,502 | |||||||
| Short-term debt and current portion of long-term debt | $ | 1,003 | $ | 1,500 | |||||||
| Other current liabilities | 3,029 | 3,016 | |||||||||
| Long-term debt | 6,955 | 7,210 | |||||||||
| Other noncurrent liabilities | 2,835 | 3,170 | |||||||||
| Total liabilities | $ | 13,822 | $ | 14,896 | |||||||
The summarized balance sheet information presented above includes the funded status of the company’s primary qualified U.S. government pension plans as the parent has the ultimate obligation for the plans.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, primarily from foreign currency exchange rates, interest rates, commodity prices and investments.
Foreign Currency Risk. Our exchange-rate sensitivity relates primarily to changes in the Canadian dollar, euro and Swiss franc exchange rates. We had notional forward exchange contracts outstanding of $8.5 billion and $6.2 billion on December 31, 2025 and 2024, respectively. A 10% unfavorable rate movement in our portfolio of forward exchange contracts would have resulted in the following hypothetical, incremental pretax losses:
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Recognized | $ | (68) | $ | (36) | |||||||
| Unrecognized | (498) | (180) | |||||||||
These losses would be offset by corresponding gains in the remeasurement of the underlying transactions being hedged. We believe these foreign currency forward exchange contracts and the offsetting underlying commitments, when taken together, do not create material market risk.
Interest Rate Risk. On December 31, 2025, we had $8 billion principal amount of fixed-rate debt. Our fixed-rate debt obligations are not putable, and we do not trade these securities in the market. A 10% unfavorable interest rate movement would not have a material impact on the fair value of our fixed-rate debt.
Commodity Price and Investment Risk. See Note Q to the Consolidated Financial Statements in Item 8 for a discussion of commodity price and investment risk.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED STATEMENT OF EARNINGS
| Year Ended December 31 | |||||||||||||||||
| (Dollars in millions, except per-share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Products | $ | $ | $ | ||||||||||||||
| Services | |||||||||||||||||
| Operating costs and expenses: | |||||||||||||||||
| Products | ( | ( | ( | ||||||||||||||
| Services | ( | ( | ( | ||||||||||||||
| General and administrative (G&A) | ( | ( | ( | ||||||||||||||
| ( | ( | ( | |||||||||||||||
| Operating earnings | |||||||||||||||||
| Other, net | |||||||||||||||||
| Interest, net | ( | ( | ( | ||||||||||||||
| Earnings before income tax | |||||||||||||||||
| Provision for income tax, net | ( | ( | ( | ||||||||||||||
| Net earnings | $ | $ | $ | ||||||||||||||
| Earnings per share | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Year Ended December 31 | ||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Net earnings | $ | $ | $ | |||||||||||||||||
| Changes in unrealized cash flow hedges | ( | |||||||||||||||||||
| Foreign currency translation adjustments | ( | |||||||||||||||||||
| Changes in retirement plans’ funded status | ||||||||||||||||||||
| Other comprehensive income (loss), pretax | ( | |||||||||||||||||||
| Provision for income tax, net | ( | ( | ( | |||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | |||||||||||||||||||
| Comprehensive income | $ | $ | $ | |||||||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
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CONSOLIDATED BALANCE SHEET
| December 31 | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and equivalents | $ | $ | |||||||||
| Accounts receivable | |||||||||||
| Unbilled receivables | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Noncurrent assets: | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Other assets | |||||||||||
| Total noncurrent assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Short-term debt and current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Customer advances and deposits | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Noncurrent liabilities: | |||||||||||
| Long-term debt | |||||||||||
| Other liabilities | |||||||||||
| Commitments and contingencies (see Note M) | |||||||||||
| Total noncurrent liabilities | |||||||||||
| Shareholders’ equity: | |||||||||||
| Common stock | |||||||||||
| Surplus | |||||||||||
| Retained earnings | |||||||||||
| Treasury stock | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
54
CONSOLIDATED STATEMENT OF CASH FLOWS
| Year Ended December 31 | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash flows from operating activities – continuing operations: | |||||||||||||||||
| Net earnings | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net earnings to net cash from operating activities: | |||||||||||||||||
| Depreciation of property, plant and equipment | |||||||||||||||||
| Amortization of intangible and finance lease right-of-use assets | |||||||||||||||||
| Equity-based compensation expense | |||||||||||||||||
| Deferred income tax provision (benefit) | ( | ( | |||||||||||||||
| (Increase) decrease in assets, net of effects of business acquisitions: | |||||||||||||||||
| Accounts receivable | |||||||||||||||||
| Unbilled receivables | ( | ( | |||||||||||||||
| Inventories | ( | ( | |||||||||||||||
| Increase (decrease) in liabilities, net of effects of business acquisitions: | |||||||||||||||||
| Accounts payable | ( | ( | |||||||||||||||
| Customer advances and deposits | ( | ||||||||||||||||
| Other, net | ( | ( | |||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Capital expenditures | ( | ( | ( | ||||||||||||||
| Other, net | ( | ( | ( | ||||||||||||||
| Net cash used by investing activities | ( | ( | ( | ||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Dividends paid | ( | ( | ( | ||||||||||||||
| Repayment of fixed-rate notes | ( | ( | ( | ||||||||||||||
| Proceeds from fixed-rate notes | |||||||||||||||||
| Purchases of common stock | ( | ( | ( | ||||||||||||||
| Other, net | ( | ||||||||||||||||
| Net cash used by financing activities | ( | ( | ( | ||||||||||||||
| Net cash used by discontinued operations | ( | ( | ( | ||||||||||||||
| Net increase (decrease) in cash and equivalents | ( | ||||||||||||||||
| Cash and equivalents at beginning of year | |||||||||||||||||
| Cash and equivalents at end of year | $ | $ | $ | ||||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
55
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
| Common Stock | Retained | Treasury | Accumulated Other Comprehensive | Total Shareholders’ | |||||||||||||||||||||||||||||||
| (Dollars in millions) | Par | Surplus | Earnings | Stock | Loss | Equity | |||||||||||||||||||||||||||||
| December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
| Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
| Cash dividends declared | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Equity-based awards | — | — | — | ||||||||||||||||||||||||||||||||
| Shares purchased | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| December 31, 2023 | ( | ( | |||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
| Cash dividends declared | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Equity-based awards | — | — | — | ||||||||||||||||||||||||||||||||
| Shares purchased | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| December 31, 2024 | ( | ( | |||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
| Cash dividends declared | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Equity-based awards | — | — | — | ||||||||||||||||||||||||||||||||
| Shares purchased | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except share and per-share amounts or unless otherwise noted)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
The following is a discussion of certain significant accounting policies, and further discussion is contained in other notes to these financial statements.
Basis of Consolidation and Classification. The Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all intercompany balances and transactions in the Consolidated Financial Statements.
Consistent with industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year.
Research and Development Expenses. Company-sponsored research and development (R&D) expenses, including Aerospace product-development costs, were $486 in 2025, $565 in 2024 and $510 in 2023. The decrease in 2025 was due primarily to reduced R&D expenditures after completion of the G800 certification process. R&D expenses are included in operating costs and expenses in the Consolidated Statement of Earnings in the period in which they are incurred. Customer-sponsored R&D expenses are charged directly to the related contracts.
The Aerospace segment has cost-sharing arrangements with some of its suppliers that enhance the segment’s internal development capabilities and offset a portion of the financial cost associated with the segment’s product development efforts. These arrangements explicitly state that supplier contributions are for reimbursement of costs we incur in the development of new aircraft models and technologies, and we retain substantial rights in the products developed under these arrangements. We record amounts received from these cost-sharing arrangements as a reduction of R&D expenses. We have no obligation to refund any amounts received under the agreements regardless of the outcome of the development efforts. Under the typical terms of an agreement, payments received from suppliers for their share of the costs are based on milestones and are recognized as received. Our policy is to defer payments in excess of the costs we have incurred.
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Interest, Net. Net interest expense consisted of the following:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Interest expense | $ | $ | $ | ||||||||||||||
| Interest income | ( | ( | ( | ||||||||||||||
| Interest expense, net | $ | $ | $ | ||||||||||||||
See Note K for information regarding our debt obligations, including interest rates.
Acquisitions. In the last three years, we acquired two businesses in our Aerospace segment, two businesses in our Combat Systems segment and two businesses in our Technologies segment. The operating results of these acquisitions have been included in our reported results since their respective closing dates. The purchase prices of the acquisitions have been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill.
Long-lived Assets and Goodwill. We review long-lived assets, including intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. We assess the recoverability of the carrying value of assets held for use based on a review of undiscounted projected cash flows. Impairment losses, where identified, are measured as the excess of the carrying value of the long-lived assets over the estimated fair value as determined by discounted cash flows.
Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired in a business combination. We review goodwill for impairment annually at each of our reporting units or when circumstances indicate that the likelihood of an impairment is greater than 50%. Our reporting units are consistent with our operating segments in Note O. We use both qualitative and quantitative approaches when testing goodwill for impairment. When determining the approach to be used, we consider the current facts and circumstances of each reporting unit as well as the excess of each reporting unit’s estimated fair value over its carrying value based on our most recent quantitative assessments. Our qualitative approach evaluates the business environment and various events impacting the reporting unit including, but not limited to, macroeconomic conditions, changes in the business environment and reporting unit-specific events. If, based on the qualitative assessment, we determine that it is more likely than not that the fair value of a reporting unit is greater than its carrying value, then a quantitative assessment is not necessary. However, if a quantitative assessment is determined to be necessary, we compare the fair value of a reporting unit to its carrying value and, if necessary, recognize an impairment loss for the amount by which the carrying value exceeds the reporting unit’s fair value. Our estimate of a reporting unit’s fair value is based primarily on the discounted cash flows of the underlying operations.
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In the fourth quarter of 2025, we completed qualitative assessments of goodwill for each of our reporting units. Our Aerospace, Marine Systems and Combat Systems reporting units’ estimated fair values significantly exceeded their respective carrying values based on our most recent quantitative assessments, which were performed in the fourth quarter of 2018. Our Technologies reporting unit’s estimated fair value exceeded its carrying value by approximately 25% at the time of our last quantitative assessment in the fourth quarter of 2022. Our qualitative assessments this year did not present indicators of impairment.
For a summary of our goodwill by reporting unit, see Note H.
Recent Accounting Pronouncements. In 2025, we adopted Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures, using the prospective method of adoption. The ASU modifies our disclosure for income tax expense.
B. REVENUE
Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue. A contract’s transaction price is allocated to each distinct performance obligation within that contract and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product life cycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. We classify revenue as products or services based on the predominant attributes of the associated performance obligation.
Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in customer specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract.
Our performance obligations are satisfied over time as work progresses or at a point in time. Revenue from products and services transferred to customers over time accounted for 75 % of our revenue in 2025, 76 % in 2024 and 79 % in 2023. Substantially all of our revenue in the defense segments is recognized over time because control is transferred continuously to our customers. Typically, revenue
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is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses.
Revenue from goods and services transferred to customers at a point in time accounted for 25 % of our revenue in 2025, 24 % in 2024 and 21 % in 2023. Most of our revenue recognized at a point in time is for the manufacture of business jet aircraft in our Aerospace segment. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft.
On December 31, 2025, we had $118 billion of remaining performance obligations, which we refer to as total backlog. We expect to recognize approximately 35 % of our remaining performance obligations as revenue in 2026, an additional 35 % by the end of 2028 and the balance thereafter.
Contract Estimates. The majority of our revenue is derived from long-term contracts and programs that can span several years. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. We estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.
Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer.
The nature of our contracts gives rise to several types of variable consideration, including claims, award fees and incentive fees. We include in our contract estimates additional revenue for contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award fees or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best informed judgment at the time.
As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified.
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| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue | $ | $ | $ | ||||||||||||||
| Operating earnings | |||||||||||||||||
| Diluted earnings per share | $ | $ | $ | ||||||||||||||
While no adjustment on any one contract was material to the Consolidated Financial Statements in 2025, 2024 or 2023, our Marine Systems segment’s 2024 results were affected negatively by supplier quality issues and late supply chain deliveries causing cost growth and schedule delays on the Virginia-class submarine Block IV contract.
We have a large, long-term contract with an international customer for tracked vehicles in which our estimates for contract revenue include variable consideration. It is reasonably possible that the actual amount of variable consideration realized could be less than our estimate, which could have a material unfavorable impact on our results of operations.
Revenue by Category. Our portfolio of products and services consists of more than 8,000 active contracts. The following series of tables presents our revenue disaggregated by several categories.
Revenue by major products and services was as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Aircraft manufacturing | $ | $ | $ | ||||||||||||||
| Aircraft services | |||||||||||||||||
| Total Aerospace | |||||||||||||||||
| Nuclear-powered submarines | |||||||||||||||||
| Surface ships | |||||||||||||||||
| Repair and other services | |||||||||||||||||
| Total Marine Systems | |||||||||||||||||
| Military vehicles | |||||||||||||||||
| Weapon systems and munitions | |||||||||||||||||
| Engineering and other services | |||||||||||||||||
| Total Combat Systems | |||||||||||||||||
| Information technology (IT) services | |||||||||||||||||
| C5ISR* solutions | |||||||||||||||||
| Total Technologies | |||||||||||||||||
| Total revenue | $ | $ | $ | ||||||||||||||
*Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance
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Revenue by contract type was as follows:
Year Ended December 31, 2025 | Aerospace | Marine Systems | Combat Systems | Technologies | Total Revenue | ||||||||||||||||||||||||
| Fixed-price | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Cost-reimbursement | |||||||||||||||||||||||||||||
| Time-and-materials | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Year Ended December 31, 2024 | |||||||||||||||||||||||||||||
| Fixed-price | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Cost-reimbursement | |||||||||||||||||||||||||||||
| Time-and-materials | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Year Ended December 31, 2023 | |||||||||||||||||||||||||||||
| Fixed-price | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Cost-reimbursement | |||||||||||||||||||||||||||||
| Time-and-materials | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Our segments operate under fixed-price, cost-reimbursement and time-and-materials contracts. Our production contracts are primarily fixed-price. Under these contracts, we agree to perform a specific scope of work for a fixed amount. Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials. Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee. The amount for an incentive or award fee is determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance. Under time-and-materials contracts, the customer pays a fixed hourly rate for direct labor and generally reimburses us for the cost of materials.
Each of these contract types presents advantages and disadvantages. Typically, we assume more risk with fixed-price contracts. However, these types of contracts offer additional profits when we complete the work for less than originally estimated. Cost-reimbursement contracts generally subject us to lower risk. Accordingly, the associated base fees are usually lower than fees earned on fixed-price contracts. Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates. Also, because these contracts may provide little or no fee for managing material costs, the content mix can impact profitability.
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Revenue by customer was as follows:
Year Ended December 31, 2025 | Aerospace | Marine Systems | Combat Systems | Technologies | Total Revenue | ||||||||||||||||||||||||
| U.S. government: | |||||||||||||||||||||||||||||
| Department of War (DoW) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Non-DoW | |||||||||||||||||||||||||||||
| Foreign military sales (FMS) | |||||||||||||||||||||||||||||
| Total U.S. government | |||||||||||||||||||||||||||||
| U.S. commercial | |||||||||||||||||||||||||||||
| Non-U.S. government | |||||||||||||||||||||||||||||
| Non-U.S. commercial | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Year Ended December 31, 2024 | |||||||||||||||||||||||||||||
| U.S. government: | |||||||||||||||||||||||||||||
| DoW | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Non-DoW | |||||||||||||||||||||||||||||
| FMS | |||||||||||||||||||||||||||||
| Total U.S. government | |||||||||||||||||||||||||||||
| U.S. commercial | |||||||||||||||||||||||||||||
| Non-U.S. government | |||||||||||||||||||||||||||||
| Non-U.S. commercial | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Year Ended December 31, 2023 | |||||||||||||||||||||||||||||
| U.S. government: | |||||||||||||||||||||||||||||
| DoW | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Non-DoW | |||||||||||||||||||||||||||||
| FMS | |||||||||||||||||||||||||||||
| Total U.S. government | |||||||||||||||||||||||||||||
| U.S. commercial | |||||||||||||||||||||||||||||
| Non-U.S. government | |||||||||||||||||||||||||||||
| Non-U.S. commercial | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
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liability balances during the year ended December 31, 2025, were not materially impacted by any other factors.
Revenue recognized in 2025, 2024 and 2023 that was included in the contract liability balance at the beginning of each year was $8 billion, $5.8 billion and $4.2 billion, respectively. This revenue represented primarily the sale of business jet aircraft.
C. EARNINGS PER SHARE
Basic and diluted weighted average shares outstanding were as follows (in thousands):
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Basic weighted average shares outstanding | |||||||||||||||||
| Dilutive effect of stock options and restricted stock/RSUs* | |||||||||||||||||
| Diluted weighted average shares outstanding | |||||||||||||||||
*Excludes unvested stock options, and vested stock options that had exercise prices in excess of the average market price of our common stock during the year and, therefore, the effect of including these options would be antidilutive. These options totaled 922 in 2025, 1,033 in 2024 and 2,961 in 2023.
D. INCOME TAXES
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| U.S. federal | $ | $ | $ | ||||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Total current | |||||||||||||||||
| Deferred: | |||||||||||||||||
| U.S. federal | ( | ( | |||||||||||||||
| State | ( | ||||||||||||||||
| Foreign | ( | ( | |||||||||||||||
| Total deferred | ( | ( | |||||||||||||||
| Provision for income taxes, net: | |||||||||||||||||
| U.S. federal | |||||||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Provision for income taxes, net | $ | $ | $ | ||||||||||||||
| Net income tax payments | $ | $ | $ | ||||||||||||||
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The reported tax provision differs from the amounts paid because some income and expense items are recognized in different time periods for financial reporting than for income tax purposes. This includes the impact of the requirement, effective January 1, 2022, through December 31, 2024, to capitalize and amortize over five years certain R&D expenditures that were previously deductible immediately for tax purposes. Among other changes, the Budget Reconciliation Act of 2025 (Act) allows for the immediate deduction of domestic research and development expenditures beginning January 1, 2025, and permits the accelerated deduction of amounts capitalized under prior law. We otherwise do not expect the Act to have a material effect on our tax provision.
State and local income taxes allocable to U.S. government contracts are included in operating costs and expenses in the Consolidated Statement of Earnings and, therefore, are not included in the provision above.
The reconciliation from the statutory federal income tax rate to our effective income tax rate, applying ASU 2023-09 prospectively, follows:
| Year Ended December 31 | 2025 | |||||||||||||
| U.S. federal statutory income tax | $ | % | ||||||||||||
| Tax credits | ||||||||||||||
| Research and development tax credit | ( | ( | ||||||||||||
| Effects of cross-border tax laws | ||||||||||||||
| Foreign-derived intangible income | ( | ( | ||||||||||||
| State tax on commercial operations, net of federal benefits | ||||||||||||||
| Foreign tax effects | ||||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Other reconciling items | ||||||||||||||
| Equity-based compensation | ( | ( | ||||||||||||
| Other, net | ( | ( | ||||||||||||
| Effective income tax rate | $ | % | ||||||||||||
The reconciliation from the statutory federal income tax rate to our effective income tax rate, applying ASC 740 prior to the adoption of ASU 2023-09, follows:
| Year Ended December 31 | 2024 | 2023 | ||||||||||||
| U.S. federal statutory income tax rate | % | % | ||||||||||||
| Domestic tax credits | ( | ( | ||||||||||||
| Equity-based compensation | ( | ( | ||||||||||||
| Foreign-derived intangible income | ( | ( | ||||||||||||
| State tax on commercial operations, net of federal benefits | ||||||||||||||
| Global impact of international operations | ||||||||||||||
| Other, net | ( | |||||||||||||
| Effective income tax rate | % | % | ||||||||||||
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Cash paid for income taxes (net of refunds) consisted of the following:
| Year Ended December 31 | 2025 | |||||||
| Federal | $ | |||||||
| State | ||||||||
| Foreign | ||||||||
| Canada | ||||||||
| Saudi Arabia | ||||||||
| Other | ||||||||
| Total Foreign | ||||||||
| Cash paid for income taxes (net of refunds) | $ | |||||||
Earnings from continuing operations before taxes by foreign and domestic operations follows:
| Year Ended December 31 | 2025 | |||||||
| Domestic | $ | |||||||
| Foreign | ||||||||
| Total | $ | |||||||
Net Deferred Tax Liability. The tax effects of temporary differences between reported earnings and taxable income consisted of the following:
| December 31 | 2025 | 2024 | |||||||||
| Research and development expenditures | $ | $ | |||||||||
| Lease liabilities | |||||||||||
| Tax loss and credit carryforwards | |||||||||||
| Salaries and wages | |||||||||||
| Workers’ compensation | |||||||||||
| Retirement benefits | |||||||||||
| Other | |||||||||||
| Deferred assets | |||||||||||
| Valuation allowances | ( | ( | |||||||||
| Net deferred assets | $ | $ | |||||||||
| Intangible assets | $ | ( | $ | ( | |||||||
| Contract accounting methods | ( | ( | |||||||||
| Property, plant and equipment | ( | ( | |||||||||
| Lease right-of-use assets | ( | ( | |||||||||
| Capital Construction Fund qualified ships | ( | ( | |||||||||
| Other | ( | ( | |||||||||
| Deferred liabilities | $ | ( | $ | ( | |||||||
| Net deferred tax liability | $ | ( | $ | ( | |||||||
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Our deferred tax assets and liabilities are included in other noncurrent assets and liabilities on the Consolidated Balance Sheet. Our net deferred tax liability consisted of the following:
| December 31 | 2025 | 2024 | |||||||||
| Deferred tax asset | $ | $ | |||||||||
| Deferred tax liability | ( | ( | |||||||||
| Net deferred tax liability | $ | ( | $ | ( | |||||||
We believe it is more likely than not that we will generate sufficient taxable income in future periods to realize our deferred tax assets, subject to the valuation allowances recognized.
Our deferred tax balance associated with our retirement benefits includes a deferred tax asset of $359 on December 31, 2025, and $446 on December 31, 2024, related to the amounts recorded in accumulated other comprehensive loss (AOCL) to recognize the funded status of our retirement plans. For a reconciliation of the change in funded status of our defined benefit plans in 2025, see Note S.
One of our deferred tax liabilities results from our participation in the Capital Construction Fund (CCF), a program established by the U.S. government and administered by the Maritime Administration that supports the acquisition, construction, reconstruction or operation of U.S. flag merchant marine vessels. The program allows us to defer federal and state income taxes on earnings derived from eligible programs as long as the proceeds are deposited in the fund and withdrawals are used for qualified activities. We had U.S. government accounts receivable pledged (and thereby deposited) to the CCF of $348 and $333 on December 31, 2025 and 2024, respectively.
On December 31, 2025, we had net operating loss carryforwards of $663 , substantially all of which are associated with jurisdictions that have an indefinite carryforward period.
Tax Uncertainties. We participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), a real-time review of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2024. We are currently in a CAP phase (Bridge Plus) in which the IRS considers certain tax return information in advance to expedite their risk assessment and review of our return.
For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50% chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense.
Based on all known facts and circumstances and applicable tax law, we believe the total amount of any unrecognized tax benefits on December 31, 2025, was not material to our results of operations, financial condition or cash flows. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows.
The Organization for Economic Co-operation and Development has issued “Pillar Two” model rules introducing a new global minimum tax of 15% on a country-by-country basis, with certain aspects intended to be effective on January 1, 2024, and other aspects on January 1, 2025. Because we generally do not have material operations in jurisdictions with tax rates lower than the proposed Pillar Two
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minimum, any legislation enacted consistent with the Pillar Two model rules is not expected to have a material effect on our results of operations, financial condition or cash flows.
E. ACCOUNTS RECEIVABLE
| December 31 | 2025 | 2024 | |||||||||
| Non-U.S. government | $ | $ | |||||||||
| U.S. government | |||||||||||
| Commercial | |||||||||||
| Total accounts receivable | $ | $ | |||||||||
F. UNBILLED RECEIVABLES
| December 31 | 2025 | 2024 | |||||||||
| Unbilled revenue | $ | $ | |||||||||
| Advances and progress billings | ( | ( | |||||||||
| Net unbilled receivables | $ | $ | |||||||||
On December 31, 2025 and 2024, net unbilled receivables included $1.3 billion and $1.2 billion, respectively, associated with a large international tracked vehicle contract in our Combat Systems segment. We expect a significant decline in this balance over the next two years as contract deliveries, including vehicles, occur through early 2028. Other than the balance related to the tracked vehicle contract, we expect to bill substantially all of the remaining year-end 2025 net unbilled receivables balance during 2026, and the amount not expected to be billed in 2026 results primarily from the agreed-upon contractual billing terms.
G&A costs in unbilled revenue on December 31, 2025 and 2024, were $484 and $444 , respectively.
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G. INVENTORIES
Inventories consisted of the following:
| December 31 | 2025 | 2024 | |||||||||
| Work in process | $ | $ | |||||||||
| Raw materials | |||||||||||
| Finished goods | |||||||||||
| Pre-owned aircraft | |||||||||||
| Total inventories | $ | $ | |||||||||
H. GOODWILL AND INTANGIBLE ASSETS
Goodwill. The changes in the carrying amount of goodwill by reporting unit were as follows:
| Aerospace | Marine Systems | Combat Systems | Technologies | Total Goodwill | |||||||||||||||||||||||||
December 31, 2023 (a) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Acquisitions (b) | |||||||||||||||||||||||||||||
| Other (c) | ( | ( | ( | ( | |||||||||||||||||||||||||
December 31, 2024 (a) | |||||||||||||||||||||||||||||
| Acquisitions (b) | |||||||||||||||||||||||||||||
| Other (c) | |||||||||||||||||||||||||||||
December 31, 2025 (a) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(a)Goodwill in the Technologies reporting unit was net of $1.8
(b)Included adjustments during the purchase price allocation period.
(c)Consisted primarily of adjustments for foreign currency translation.
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Intangible Assets. Intangible assets consisted of the following:
| Gross Carrying Amount (a) | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount (a) | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
| December 31 | 2025 | 2024 | |||||||||||||||||||||
| Contract and program intangible assets (b) | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||
| Trade names and trademarks | ( | ( | |||||||||||||||||||||
| Technology and software | ( | ( | |||||||||||||||||||||
| Other intangible assets | ( | ( | |||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||
(a)Changes in gross carrying amounts consisted primarily of foreign currency translation and adjustments for divested intangible assets.
(b)Consisted of acquired backlog and probable follow-on work and associated customer relationships.
We did not recognize any impairments of our intangible assets during the last three years. The amortization lives (in years) of our intangible assets on December 31, 2025, were as follows:
| Intangible Asset | Range of Amortization Life | |||||||
| Contract and program intangible assets | ||||||||
| Trade names and trademarks | ||||||||
| Technology and software | ||||||||
| Other intangible assets | ||||||||
Amortization expense is included in operating costs and expenses in the Consolidated Statement of Earnings. Amortization expense for intangible assets was $174 in 2025, $180 in 2024 and $194 in 2023. We expect to record annual amortization expense over the next five years as follows:
| Year Ended December 31 | Amortization Expense | ||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
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I. PROPERTY, PLANT AND EQUIPMENT, NET
| December 31 | 2025 | 2024 | |||||||||
| Machinery and equipment | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Construction in process | |||||||||||
| Land and improvements | |||||||||||
| Total PP&E | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| PP&E, net | $ | $ | |||||||||
J. LEASES
We determine at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize an ROU asset and lease liability for leases with terms of 12 months or less. Some of our leases include options to extend the term of the lease for up to 40 years or to terminate the lease within one year . When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future payments.
Certain of our leases include variable payments, which may be calculated based on the Consumer Price Index (CPI) or similar indices at the lease commencement date. To the extent these variable payments are not considered fixed, we exclude such payments from the ROU asset and lease liability and expense as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions.
In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred.
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The components of lease costs were as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of ROU assets | $ | $ | $ | ||||||||||||||
| Interest on lease liabilities | |||||||||||||||||
| Operating lease cost | |||||||||||||||||
| Short-term lease cost | |||||||||||||||||
| Variable lease cost | |||||||||||||||||
| Sublease income | ( | ( | ( | ||||||||||||||
| Total lease costs, net | $ | $ | $ | ||||||||||||||
Additional information related to leases was as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | $ | $ | ||||||||||||||
| Operating cash flows from finance leases | |||||||||||||||||
| Financing cash flows from finance leases* | |||||||||||||||||
| ROU assets obtained in exchange for lease liabilities: | |||||||||||||||||
| Operating leases | |||||||||||||||||
| Finance leases* | ( | ||||||||||||||||
*In 2025, financing cash flows from finance leases included approximately $490 for the exercise of options to purchase the underlying assets. This transaction also impacted ROU assets obtained in exchange for lease liabilities.
Additional quantitative lease information was as follows:
| December 31 | 2025 | 2024 | |||||||||
| Weighted-average remaining lease term: | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted-average discount rate: | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
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The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on the Consolidated Balance Sheet on December 31, 2025:
| Year Ended December 31 | Operating Leases | Finance Leases | |||||||||
| 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
| Total future lease payments | |||||||||||
| Less imputed interest | |||||||||||
| Present value of future lease payments | |||||||||||
| Less current portion of lease liabilities | |||||||||||
| Long-term lease liabilities | $ | $ | |||||||||
| ROU assets | $ | $ | |||||||||
On December 31, 2024, operating and finance lease liabilities and the related ROU assets were as follows:
| Operating Leases | Finance Leases | ||||||||||
| Current portion of lease liabilities | $ | $ | |||||||||
| Long-term lease liabilities | |||||||||||
| ROU assets | |||||||||||
Lease liabilities are included on the Consolidated Balance Sheet in and , while ROU assets are included in .
On December 31, 2025, we had additional future payments on leases that had not yet commenced of $25 . These leases will commence in 2026 and have lease terms ranging from to 10 years.
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K. DEBT
Debt consisted of the following:
| December 31 | 2025 | 2024 | ||||||||||||
| Fixed-rate notes due: | Interest rate: | |||||||||||||
| April 2025 | $ | $ | ||||||||||||
| May 2025 | ||||||||||||||
| June 2026 | ||||||||||||||
| August 2026 | ||||||||||||||
| April 2027 | ||||||||||||||
| November 2027 | ||||||||||||||
| May 2028 | ||||||||||||||
| April 2030 | ||||||||||||||
| June 2031 | ||||||||||||||
| August 2035 | ||||||||||||||
| April 2040 | ||||||||||||||
| June 2041 | ||||||||||||||
| November 2042 | ||||||||||||||
| April 2050 | ||||||||||||||
| Other | Various | |||||||||||||
| Total debt principal | ||||||||||||||
| Less unamortized debt issuance costs and discounts | ||||||||||||||
| Total debt | ||||||||||||||
| Less current portion | ||||||||||||||
| Long-term debt | $ | $ | ||||||||||||
In March 2025, we repaid fixed-rate notes of $750 with cash on hand and commercial paper issuances. In May 2025, we issued $750 of fixed-rate notes that mature in August 2035. The proceeds were used to repay fixed-rate notes of $750 that matured in May 2025. Interest payments associated with our debt were $376 in 2025, $385 in 2024 and $378 in 2023.
The aggregate amounts of scheduled principal maturities of our debt are as follows:
| Year Ended December 31 | Debt Principal | ||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total debt principal | $ | ||||
On December 31, 2025, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. In addition, we have a $5 billion committed bank
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credit facility for general corporate purposes and working capital needs and to support our commercial paper issuances. These credit facilities include a $4 billion facility expiring March 2027 and a $1 billion 364 -day facility that we established in early April 2025. We may renew or replace this credit facility in whole or in part at or prior to its expiration date. We also have an effective shelf registration on file with the Securities and Exchange Commission (SEC) that allows us to access the debt markets.
Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants and restrictions on December 31, 2025.
L. OTHER LIABILITIES
A summary of significant other liabilities by balance sheet caption follows:
| December 31 | 2025 | 2024 | |||||||||
| Salaries and wages | $ | $ | |||||||||
| Dividends payable | |||||||||||
| Lease liabilities | |||||||||||
| Workers’ compensation | |||||||||||
| Other | |||||||||||
| Total other current liabilities | $ | $ | |||||||||
| Customer deposits on commercial contracts | $ | $ | |||||||||
| Lease liabilities | |||||||||||
| Retirement benefits | |||||||||||
| Other | |||||||||||
| Total other liabilities | $ | $ | |||||||||
M. COMMITMENTS AND CONTINGENCIES
Litigation
On October 6, 2023, a putative class action lawsuit was filed in the United States District Court for the Eastern District of Virginia against General Dynamics Corporation, certain of its subsidiaries and various other companies alleging that they conspired, in violation of the Sherman Act, not to solicit naval architects and marine engineers from each other. The named plaintiffs purport to represent a class of individuals consisting of all naval architects and marine engineers employed by the shipyard and consultancy defendants, their predecessors, their subsidiaries and/or their related entities in the United States at any time since January 1, 2000. The plaintiffs allege that the conspiracy suppressed compensation paid to the putative class members, and the plaintiffs seek trebled monetary damages, attorneys’ fees, injunctive and other equitable relief. On May 9, 2025, the U.S. Court of Appeals for the Fourth Circuit reversed an earlier decision of the District Court dismissing the plaintiffs’ complaint and remanded the case for further proceedings. On September 11, 2025, the defendants filed a petition for a writ of certiorari with the U.S. Supreme Court. Given the current status of this matter, we are unable to express a view regarding the ultimate outcome or, if the outcome is adverse, to estimate an amount or range of reasonably possible loss. Depending on the outcome of this matter, there could be a material impact on our results of operations, financial condition and cash flows.
Additionally, various other claims and legal proceedings incidental to the normal course of business are pending or threatened against us. These other matters relate to such issues as government
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investigations and claims, the protection of the environment, asbestos-related claims and employee-related matters. The nature of litigation is such that we cannot predict the outcome of these other matters. However, based on information currently available, we believe any potential liabilities in these other proceedings, individually or in the aggregate, will not have a material impact on our results of operations, financial condition or cash flows.
Environmental
We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a potentially responsible party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts.
As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows.
Other
Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows.
In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and other claims will be resolved without material impact to our results of operations, financial condition or cash flows.
Aircraft Trade-ins. In connection with orders for new aircraft in contract backlog, some Gulfstream customers hold options to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are generally structured to establish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft to the customer. At that time, the
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Labor Agreements. On December 31, 2025, approximately one-fifth of the employees of our subsidiaries were working under collectively bargained terms and conditions, including 64 collective agreements that we have negotiated directly with unions and works councils. A number of these agreements expire within any given year. Historically, we have been successful at renegotiating these labor agreements without any material disruption of operating activities. In 2026, we expect to negotiate the terms of 25 agreements covering approximately 9,300 employees. We do not expect the renegotiations will, either individually or in the aggregate, have a material impact on our results of operations, financial condition or cash flows.
Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheet.
The changes in the carrying amount of warranty liabilities for each of the past three years were as follows:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Beginning balance | $ | $ | $ | ||||||||||||||
| Warranty expense | |||||||||||||||||
| Payments | ( | ( | ( | ||||||||||||||
| Adjustments | ( | ||||||||||||||||
| Ending balance | $ | $ | $ | ||||||||||||||
N. SHAREHOLDERS’ EQUITY
Authorized Stock. Our authorized capital stock consists of 500 million shares of $1 per share par value common stock and 50 million shares of $1 per share par value preferred stock. The preferred stock is issuable in series, with the rights, preferences and limitations of each series to be determined by our board of directors (Board).
Shares Issued and Outstanding. On December 31, 2025, we had 481,880,634 shares of common stock issued and 270,389,759 shares of common stock outstanding, including unvested restricted stock of 406,995 shares. On December 31, 2024, we had 481,880,634 shares of common stock issued and 270,340,502 shares of common stock outstanding. No
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Share Repurchases. On December 4, 2024, the Board authorized management to repurchase up to 10 million additional shares of the company’s outstanding stock. In 2025, we repurchased 2.5 million of our outstanding shares for $637 to cover dilution. On December 31, 2025, 6.8 million shares remained authorized by our Board for repurchase, representing 2.5 % of our total shares outstanding. We repurchased 5.4 million shares for $1.5 billion in 2024 and 2 million shares for $434 in 2023.
Dividends per Share. Our Board declared dividends per share of $6.00 in 2025, $5.68 in 2024 and $5.28 in 2023. We paid cash dividends of $1.6 billion in 2025, $1.5 billion in 2024 and $1.4 billion in 2023.
Accumulated Other Comprehensive Loss. The changes, pretax and net of tax, in each component of AOCL consisted of the following:
| Changes in Unrealized Cash Flow Hedges | Foreign Currency Translation Adjustments | Changes in Retirement Plans’ Funded Status | AOCL | |||||||||||
| December 31, 2022 | $ | $ | $ | ( | $ | ( | ||||||||
| Other comprehensive income, pretax | ||||||||||||||
| Provision for income tax, net | ( | ( | ( | |||||||||||
| Other comprehensive income, net of tax | ||||||||||||||
| December 31, 2023 | ( | ( | ||||||||||||
| Other comprehensive loss, pretax | ( | ( | ( | |||||||||||
| Provision for income tax, net | ( | ( | ||||||||||||
| Other comprehensive loss, net of tax | ( | ( | ( | |||||||||||
| December 31, 2024 | ( | ( | ( | |||||||||||
| Other comprehensive income, pretax | ||||||||||||||
| Provision for income tax, net | ( | ( | ( | |||||||||||
| Other comprehensive income, net of tax | ||||||||||||||
| December 31, 2025 | $ | $ | $ | ( | $ | ( | ||||||||
Amounts reclassified out of AOCL related primarily to changes in our retirement plans’ funded status and included pretax recognized net actuarial losses and amortization of prior service credit. See Note S for these amounts, which are included in our net annual pension and other post-retirement benefit cost (credit).
O. SEGMENT INFORMATION
We have four
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Summary financial information for each of our segments follows:
| Revenue (a) | Other Segment Items (b) | Operating Earnings | |||||||||||||||||||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||
| Aerospace | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||
| Marine Systems | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Combat Systems | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Technologies | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Corporate (c) | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||
(a)See Note B for additional revenue information by segment.
(b)Other segment items consist of material and labor costs, depreciation and amortization, and other overhead and general and administrative expenses.
(c)Corporate operating costs consisted of equity-based compensation expense and other miscellaneous expenses.
The following is additional summary financial information for each of our segments:
| Capital Expenditures | Depreciation and Amortization* | Identifiable Assets | |||||||||||||||||||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||
| Aerospace | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| Marine Systems | |||||||||||||||||||||||||||||||||||
| Combat Systems | |||||||||||||||||||||||||||||||||||
| Technologies | |||||||||||||||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
* Depreciation and amortization by reportable segment is included within the other segment items expense caption.
Our revenue from our operations located outside the U.S. was $5.4 billion in 2025, $5 billion in 2024 and $4.3 billion in 2023, and associated earnings from continuing operations before income taxes were $904 in 2025, $732 in 2024 and $631 in 2023. The long-lived assets associated with these operations were less than 5% of our total long-lived assets for the past three years.
The following table presents our revenue by geographic area based on the location of our customers:
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| North America: | |||||||||||||||||
| United States | $ | $ | $ | ||||||||||||||
| Other | |||||||||||||||||
| Total North America | |||||||||||||||||
| Europe | |||||||||||||||||
| Asia/Pacific | |||||||||||||||||
| Africa/Middle East | |||||||||||||||||
| South America | |||||||||||||||||
| Total revenue | $ | $ | $ | ||||||||||||||
P. FAIR VALUE
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants.
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Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:
•Level 1 – quoted prices in active markets for identical assets or liabilities.
•Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly.
•Level 3 – unobservable inputs significant to the fair value measurement.
We did not have any significant non-financial assets or liabilities measured at fair value on December 31, 2025 or 2024.
| Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||||
| Financial Assets (Liabilities) | December 31, 2025 | ||||||||||||||||||||||||||||
| Measured at fair value: | |||||||||||||||||||||||||||||
| Marketable securities held in trust: | |||||||||||||||||||||||||||||
| Cash and equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Available-for-sale debt securities | |||||||||||||||||||||||||||||
| Commingled equity funds | |||||||||||||||||||||||||||||
| Commingled fixed-income funds | |||||||||||||||||||||||||||||
| Other investments | |||||||||||||||||||||||||||||
| Cash flow hedge assets | |||||||||||||||||||||||||||||
| Cash flow hedge liabilities | ( | ( | ( | ||||||||||||||||||||||||||
Measured at amortized cost: | |||||||||||||||||||||||||||||
| Short- and long-term debt principal | ( | ( | ( | ||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| Measured at fair value: | |||||||||||||||||||||||||||||
| Marketable securities held in trust: | |||||||||||||||||||||||||||||
| Cash and equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Available-for-sale debt securities | |||||||||||||||||||||||||||||
| Commingled equity funds | |||||||||||||||||||||||||||||
| Commingled fixed-income funds | |||||||||||||||||||||||||||||
| Other investments | |||||||||||||||||||||||||||||
| Cash flow hedge assets | |||||||||||||||||||||||||||||
| Cash flow hedge liabilities | ( | ( | ( | ||||||||||||||||||||||||||
Measured at amortized cost: | |||||||||||||||||||||||||||||
| Short- and long-term debt principal | ( | ( | ( | ||||||||||||||||||||||||||
Our Level 1 assets include commingled equity and fixed-income funds that are valued using a unit
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price or net asset value (NAV). These funds are actively traded and valued using quoted prices for identical securities from the market exchanges. The fair value of our Level 2 assets and liabilities, which consist primarily of fixed-income securities, cash flow hedges and our fixed-rate notes, is determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our Level 3 assets include direct private equity investments that are measured using inputs unobservable to a marketplace participant.
Q. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
We are exposed to market risk, primarily from foreign currency exchange rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivative financial instruments for trading or speculative purposes.
Foreign Currency Risk. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. To the extent possible, we include in our contracts terms that are designed to protect us from this risk. Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The dollar-weighted two-year average maturity of these instruments generally matches the duration of the activities that are at risk.
Commodity Price Risk. We are subject to commodity price risk, primarily on long-term, fixed-price contracts. To the extent possible, we include in our contracts terms that are designed to protect us from these risks. Some of the protective terms included in our contracts are considered derivative financial instruments but are not accounted for separately, because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in commodity prices will have a material impact on our results of operations or cash flows.
Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years . On December 31, 2025 and 2024, we held $2.3 billion and $1.7 billion in cash and equivalents, respectively, but held no material marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified pension plans. On December 31, 2025 and 2024, we held marketable securities in trust of $216 and $218 , respectively. These marketable securities are reflected at fair value on the Consolidated Balance Sheet in other current and noncurrent assets. See Note P for additional details.
Hedging Activities. We had notional forward exchange contracts outstanding of $8.5 billion and $6.2 billion on December 31, 2025 and 2024, respectively. These derivative financial instruments are cash flow hedges and are reflected at fair value on the Consolidated Balance Sheet in other current assets and liabilities. See Note P for additional details.
Changes in fair value (gains and losses) related to derivative financial instruments that qualify as cash flow hedges are deferred in AOCL until the underlying transaction is reflected in earnings. Alternatively, gains and losses on derivative financial instruments that do not qualify for hedge accounting are recorded each period in earnings. All gains and losses from derivative financial instruments recognized in the Consolidated Statement of Earnings are presented in the same line item as the underlying transaction, generally operating costs and expenses.
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Net gains and losses recognized in earnings on derivative financial instruments that do not qualify for hedge accounting were not material to our results of operations in any of the past three years. Net gains and losses reclassified to earnings from AOCL related to qualified hedges were also not material to our results of operations in any of the past three years, and we do not expect the amount of these gains and losses that will be reclassified to earnings during the next 12 months to be material.
We had no material derivative financial instruments designated as fair value or net investment hedges on December 31, 2025 and 2024.
Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses’ functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of AOCL.
The impact of translating our non-U.S. operations’ revenue and earnings into U.S. dollars was not material to our results of operations in any of the past three years. In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material in any of the past three years.
R. EQUITY COMPENSATION PLANS
Equity Compensation Overview. We have equity compensation plans for employees, as well as for non-employee members of our Board. The equity compensation plans seek to provide an effective means of attracting and retaining directors, officers and key employees, and to provide them with incentives to enhance our growth and profitability. Under the equity compensation plans, awards may be granted to officers, employees or non-employee directors in common stock, options to purchase common stock, restricted shares of common stock, participation units (including RSUs, stock appreciation rights and phantom stock units) or any combination of these.
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Stock options | $ | $ | $ | ||||||||||||||
| Restricted stock/RSUs | |||||||||||||||||
| Total equity-based compensation expense, net of tax | $ | $ | $ | ||||||||||||||
Stock Options. Stock options granted under our equity compensation plans are issued with an exercise price at the fair value of our common stock determined by the average of the high and low stock prices as listed on the New York Stock Exchange (NYSE) on the date of grant. Participants generally vest in stock options over three years – with 50 % of the options vesting after two years and the remaining 50 % vesting the following year – and expire 10 years after the grant date.
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| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Expected volatility | |||||||||||||||||
| Weighted average expected volatility | % | % | % | ||||||||||||||
| Expected term (in months) | |||||||||||||||||
| Risk-free interest rate | |||||||||||||||||
| Expected dividend yield | % | % | % | ||||||||||||||
We determine the above assumptions based on the following:
•Expected volatility is based on the historical volatility of our common stock
•Expected term is based on our historical experience
•Risk-free interest rate is the yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option at the grant date
•Expected dividend yield is based on our historical dividend yield
The resulting weighted average fair value per stock option granted (in dollars) was $62.18 in 2025, $60.55 in 2024 and $47.46 in 2023. Stock option expense reduced pretax operating earnings (and on a diluted per-share basis) by $77 ($0.22 ) in 2025, $75 ($0.21 ) in 2024 and $82 ($0.24 ) in 2023. On December 31, 2025, we had $37 of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 1.7 years.
A summary of stock option activity during 2025 follows:
| In Shares and Dollars | Shares Under Option | Weighted Average Exercise Price Per Share | |||||||||
| Outstanding on December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Exercised | ( | ||||||||||
| Forfeited/canceled | ( | ||||||||||
| Outstanding on December 31, 2025 | $ | ||||||||||
| Vested and expected to vest on December 31, 2025 | $ | ||||||||||
| Exercisable on December 31, 2025 | $ | ||||||||||
Summary information with respect to our stock options’ intrinsic value and remaining contractual term on December 31, 2025, follows:
| Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||
| Outstanding | $ | ||||||||||
| Vested and expected to vest | |||||||||||
| Exercisable | |||||||||||
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In the table above, intrinsic value is calculated as the excess, if any, of the market price of our stock on the last trading day of the year over the exercise price of the options. For stock options exercised, intrinsic value is calculated as the difference between the market price on the date of exercise and the exercise price. The total intrinsic value of stock options exercised was $280 in 2025, $249 in 2024 and $75 in 2023.
Restricted Stock/RSUs. Grants of restricted stock are awards of shares of common stock. RSUs represent obligations that have a value derived from or related to the value of our common stock, and are payable in cash or common stock. The fair value of restricted stock and RSUs equals the average of the high and low market prices of our common stock as listed on the NYSE on the date of grant.
Participants generally vest in restricted stock and RSUs, over a three-year restriction period after the grant date, during which recipients may not sell, transfer, pledge, assign or otherwise convey their restricted shares to another party. During this period, restricted stock recipients receive cash dividends on their restricted shares and are entitled to vote those shares, while RSU recipients receive dividend-equivalent units instead of cash dividends and are not entitled to vote their RSUs or dividend-equivalent units.
We grant RSUs with one or more performance measures (performance stock units or PSUs) determined by the compensation committee of the Board as described in our proxy statement. Depending on the company’s performance, the number of PSUs earned may be less than, equal to or greater than the original number of PSUs awarded subject to a payout range.
A summary of restricted stock and RSU activity during 2025 follows:
| In Shares and Dollars | Shares/ Share-Equivalent Units | Weighted Average Grant-Date Fair Value Per Share | |||||||||
| Nonvested at December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Nonvested at December 31, 2025 | $ | ||||||||||
The total fair value of vesting shares was $115 in 2025, $148 in 2024 and $96 in 2023.
S. RETIREMENT PLANS
We provide retirement benefits to eligible employees through a variety of plans:
•Defined contribution
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•Defined benefit
◦Pension (qualified and non-qualified)
◦Other post-retirement benefit
Substantially all of our plans use a December 31 measurement date, consistent with our fiscal year.
Defined Contribution Plans
Defined Benefit Plans
Plan Descriptions. We have trusteed, qualified pension plans covering eligible employees aligned with the markets in our business: U.S. government, non-U.S. government and commercial. Some of these plans require employees to make contributions to the plan. We also sponsor several non-qualified pension plans, which provide eligible executives with additional benefits, including excess benefits over limits imposed on qualified plans by federal tax law. The principal factors affecting the benefits earned by participants in our pension plans are employees’ years of service and compensation levels. Our primary U.S. pension plans, which comprise the majority of our unfunded obligation, were closed to new salaried participants on January 1, 2007, and were closed to new hourly participants in subsequent collective bargaining agreements over the next several years. Additionally, we have made several changes to these plans for certain participants that limit or cease the benefits that accrue for future service.
In addition to pension benefits, we maintain plans that provide post-retirement health care and life insurance coverage for certain employees and retirees. These benefits vary by employment status, age, service and salary level at retirement. The coverage provided and the extent to which the retirees share in the cost of the program vary throughout the company. The plans provide health care and life insurance benefits only to those employees who retire directly from our service and not to those who terminate service prior to eligibility for retirement.
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Benefit Payments. We expect the following benefits to be paid from our defined benefit plans over the next 10 years:
| Pension Benefits | Other Post-Retirement Benefits | ||||||||||
| 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| 2031-2035 | |||||||||||
Benefit Cost. Our annual benefit cost consists of five primary elements:
•The cost of benefits earned by employees for services rendered during the year
•An interest charge on our plan liabilities
•An expected return on our plan assets for the year
•Actuarial gains and losses, which result from changes in assumptions and differences between actual and expected return on assets and participant experience
•The cost or credit attributed to prior service resulting from changes we make to plan benefit terms
For qualified pension plans and other post-retirement benefit plans, actuarial gains and losses and prior service costs or credits are initially deferred in AOCL and then amortized on a straight-line basis over future years. For our qualified U.S. government pension plans, we amortize actuarial gains and losses over a custom amortization period based on the amount of pension costs allocable to our U.S. government contracts. For the remaining qualified pension plans and other post-retirement benefit plans, we amortize only the amount of actuarial gains and losses that exceeds 10% of the greater of plan assets or benefit obligations. This amount is amortized over the average remaining service period of plan participants who are active employees unless all or almost all of a plan’s participants are inactive or are not accruing additional benefits. In such cases, the amortization period is based on the average remaining life expectancy of the plan participants. To further reduce the volatility of our annual benefit cost, gains and losses resulting from the return on plan assets are included over five years in the determination of the amortizable amount of actuarial gains and losses. For non-qualified pension plans, we recognize actuarial gains and losses immediately.
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Net annual benefit cost (credit) consisted of the following:
| Pension Benefits | |||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Service cost | $ | $ | $ | ||||||||||||||
| Interest cost | |||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ||||||||||||||
| Net actuarial loss | |||||||||||||||||
| Prior service credit | ( | ( | ( | ||||||||||||||
| Settlement/curtailment/other | ( | ||||||||||||||||
| Net annual benefit cost | $ | $ | $ | ||||||||||||||
| Other Post-Retirement Benefits | |||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Service cost | $ | $ | $ | ||||||||||||||
| Interest cost | |||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ||||||||||||||
| Net actuarial gain | ( | ( | ( | ||||||||||||||
| Prior service cost | |||||||||||||||||
| Settlement/curtailment/other | ( | ||||||||||||||||
| Net annual benefit credit | $ | ( | $ | ( | $ | ( | |||||||||||
In October 2024, we purchased an irrevocable group annuity contract (referred to as a buy-out contract) for $673 using retirement plan assets held in trust to transfer the related outstanding qualified pension obligations to two insurance companies. As a result of the transaction, the insurance companies are now required to pay and administer the retirement benefits owed to approximately 16,000 U.S. retirees and beneficiaries, with no change to the amount, timing or form of the monthly retirement benefit payments. In connection with this transaction, we recognized a non-cash settlement charge of approximately $80 in our qualified U.S. government pension plans related to the GAAP acceleration of deferred actuarial losses included in AOCL for the plans.
Our contractual arrangements with the U.S. government provide for the recovery of pension and other post-retirement benefit costs related to employees working on government contracts, including settlement costs. The amount allocated to U.S. government contracts is determined in accordance with the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS), which may result in a timing difference with the amount determined under GAAP. We defer this difference on the Consolidated Balance Sheet. At this time, the amount allocated to contracts exceeds cumulative benefit costs, resulting in a deferred credit that is reported in other noncurrent liabilities. To the extent there is a non-service component of net annual benefit cost (credit) for our defined benefit plans, it is reported in other income (expense) in the Consolidated Statement of Earnings.
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| Pension Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Change in Benefit Obligation | |||||||||||||||||||||||
| Benefit obligation at beginning of year | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Service cost | ( | ( | ( | ( | |||||||||||||||||||
| Interest cost | ( | ( | ( | ( | |||||||||||||||||||
| Amendments | |||||||||||||||||||||||
| Actuarial gain (loss) | ( | ||||||||||||||||||||||
| Settlement/curtailment/other | ( | ( | |||||||||||||||||||||
| Benefits paid | |||||||||||||||||||||||
| Benefit obligation at end of year | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Change in Plan/Trust Assets | |||||||||||||||||||||||
| Fair value of assets at beginning of year | $ | $ | $ | $ | |||||||||||||||||||
| Actual return on plan assets | |||||||||||||||||||||||
| Employer contributions | |||||||||||||||||||||||
| Settlement/curtailment/other | ( | ||||||||||||||||||||||
| Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
| Fair value of assets at end of year | $ | $ | $ | $ | |||||||||||||||||||
| Funded status at end of year | $ | ( | $ | ( | $ | $ | |||||||||||||||||
Our pension benefit obligation was reduced during 2024 by the previously discussed buy-out contract and the actuarial gain created by the change in the weighted-average discount rate.
Amounts recognized on the Consolidated Balance Sheet consisted of the following:
| Pension Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||
| December 31 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Noncurrent assets | $ | $ | $ | $ | |||||||||||||||||||
| Current liabilities | ( | ( | ( | ( | |||||||||||||||||||
| Noncurrent liabilities | ( | ( | ( | ( | |||||||||||||||||||
| Net (liability) asset recognized | $ | ( | $ | ( | $ | $ | |||||||||||||||||
Amounts deferred in AOCL for our defined benefit plans consisted of the following:
| Pension Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||
| December 31 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net actuarial loss (gain) | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Prior service (credit) cost | ( | ( | |||||||||||||||||||||
| Total amount recognized in AOCL, pretax | $ | $ | $ | ( | $ | ( | |||||||||||||||||
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The following is a reconciliation of the change in AOCL for our defined benefit plans:
| Pension Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||
| Year Ended December 31 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net actuarial (gain) loss | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Prior service credit | ( | ( | |||||||||||||||||||||
| Amortization of: | |||||||||||||||||||||||
| Net actuarial (loss) gain from prior years | ( | ( | |||||||||||||||||||||
| Prior service credit (cost) | ( | ( | |||||||||||||||||||||
| Settlement/curtailment/other | ( | ( | |||||||||||||||||||||
| Change in AOCL, pretax | $ | ( | $ | ( | $ | $ | |||||||||||||||||
A pension plan’s funded status is the difference between the plan’s assets and its projected benefit obligation (PBO). The PBO is the present value of future benefits attributed to employee services rendered to date, including assumptions about future compensation levels. On December 31, 2025 and 2024, most of our pension plans had a PBO that exceeded the plans’ assets. Summary information for those plans follows:
| December 31 | 2025 | 2024 | |||||||||
| PBO | $ | ( | $ | ( | |||||||
| Fair value of plan assets | |||||||||||
A pension plan’s accumulated benefit obligation (ABO) is the present value of future benefits attributed to employee services rendered to date, excluding assumptions about future compensation levels. The ABO for all pension plans was $12.2 billion and $12.1 billion on December 31, 2025 and 2024, respectively. The ABO for all other post-retirement plans was $529 and $538 on December 31, 2025 and 2024, respectively. On December 31, 2025 and 2024, most of our defined benefit plans had an ABO that exceeded the plans’ assets.
Summary information for those plans follows:
| Pension Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||
| December 31 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| ABO | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Fair value of plan assets | |||||||||||||||||||||||
Assumptions. We calculate the plan assets and liabilities for a given year and the net annual benefit cost for the subsequent year using assumptions determined as of December 31 of the year in question.
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The following table summarizes the weighted average assumptions used to determine our benefit obligations:
| Assumptions on December 31 | 2025 | 2024 | |||||||||
| Pension Benefits | |||||||||||
| Benefit obligation discount rate | % | % | |||||||||
| Rate of increase in compensation levels | % | % | |||||||||
| Other Post-Retirement Benefits | |||||||||||
| Benefit obligation discount rate | % | % | |||||||||
| Health care cost trend rate: | |||||||||||
| Trend rate for next year | % | % | |||||||||
| Ultimate trend rate | % | % | |||||||||
| Year rate reaches ultimate trend rate | |||||||||||
The following table summarizes the weighted average assumptions used to determine our net annual benefit cost:
| Assumptions for Year Ended December 31 | 2025 | 2024 | 2023 | ||||||||||||||
| Pension Benefits | |||||||||||||||||
| Discount rates: | |||||||||||||||||
| Benefit obligation | % | % | % | ||||||||||||||
| Service cost | % | % | % | ||||||||||||||
| Interest cost | % | % | % | ||||||||||||||
| Expected long-term rate of return on assets | % | % | % | ||||||||||||||
| Rate of increase in compensation levels | % | % | % | ||||||||||||||
| Other Post-Retirement Benefits | |||||||||||||||||
| Discount rates: | |||||||||||||||||
| Benefit obligation | % | % | % | ||||||||||||||
| Service cost | % | % | % | ||||||||||||||
| Interest cost | % | % | % | ||||||||||||||
| Expected long-term rate of return on assets | % | % | % | ||||||||||||||
We base the discount rates on a current yield curve developed from a portfolio of high-quality, fixed-income investments with maturities consistent with the projected benefit payout period.
We determine the long-term rates of return on assets based on consideration of historical and forward-looking returns and the current and expected asset allocation. In 2025, we decreased the expected long-term rates of return on assets by 23 basis point for our pension plans and increased the expected long-term rates of return on assets by 31 basis points for our other post-retirement benefit plans, resulting from changes in our asset allocations.
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Assets. A committee of our Board is responsible for the strategic oversight of our defined benefit plan assets held in trust. Management develops investment policies and provides oversight of a third-party investment manager who reports to the committee on a regular basis. The outsourced third-party investment manager develops investment strategies and makes all day-to-day investment decisions related to defined benefit plan assets in accordance with our investment policy and target allocation percentages with the objective of generating future returns at or above our assumed long-term rates of return used to determine net annual benefit cost.
Our investment policy endeavors to strike the appropriate balance between asset growth and funded status protection. The objective of the policy is to generate asset returns that will increase the funded status of our plans while systematically reducing cost and deficit risk as funded status of the plans improve. Several of our U.S. pension plans are now utilizing a target asset allocation strategy that will automatically increase investments in liability-hedging assets (primarily commingled fixed-income funds) and decrease investments in return-seeking assets (primarily commingled equity funds) as the plans reach specific funded status targets. At the end of 2025, our target asset allocation ranges for plans that are less than fully funded were 40 %-60 % return-seeking assets and 40 %-60 % liability-hedging assets.
More than 90 % of our pension plan assets are held in a single trust for our primary qualified U.S. government and commercial pension plans. On December 31, 2025, the trust was invested largely in commingled funds comprised primarily of equity and fixed-income securities. The trust also invests in other asset classes consistent with our investment policy. Our investment policy allows the use of derivative instruments when appropriate to reduce anticipated asset volatility, to gain exposure to an asset class or to adjust the duration of fixed-income assets.
We hold assets in VEBA trusts for some of our other post-retirement benefit plans. On December 31, 2025, these trusts were invested largely in fixed-income securities and commingled funds comprised primarily of equity and fixed-income securities. Our asset allocation strategy for the VEBA trusts considers funded status, potential fluctuations in our other post-retirement benefit obligation, the taxable nature of certain VEBA trusts, tax deduction limits on contributions and the regulatory environment.
Our defined benefit plan assets are reported at fair value. See Note P for a discussion of the hierarchy for determining fair value. Our Level 1 assets include commingled equity and fixed-income funds that are valued using a unit price or NAV. These funds are actively traded and valued using quoted prices for identical securities from the market exchanges. Our Level 2 assets include fixed-income securities and commingled equity and fixed-income funds whose underlying investments are valued using observable marketplace inputs. The fair value of plan assets invested in fixed-income securities is generally determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our plan assets invested in Level 2 commingled funds are valued using a unit price or NAV obtained from the fund’s transfer agent or investment manager that is based on the underlying, observable investments of the fund. Our Level 3 assets consist of insurance deposit contracts, retirement annuity contracts, real estate funds, and corporate debt securities.
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The fair value of our pension plan assets by investment category and the corresponding level within the fair value hierarchy were as follows:
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Asset Category | December 31, 2025 | ||||||||||||||||||||||
| Cash and equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Commingled funds: | |||||||||||||||||||||||
| Equity funds | |||||||||||||||||||||||
| Fixed-income funds | |||||||||||||||||||||||
| Real estate funds | |||||||||||||||||||||||
| Other investments: | |||||||||||||||||||||||
| Insurance deposit contracts | |||||||||||||||||||||||
| Retirement annuity contracts | |||||||||||||||||||||||
| Total plan assets in fair value hierarchy | $ | $ | $ | $ | |||||||||||||||||||
| Plan assets measured using NAV as a practical expedient: | |||||||||||||||||||||||
| Real estate funds | |||||||||||||||||||||||
| Equity funds | |||||||||||||||||||||||
| Hedge funds | |||||||||||||||||||||||
| Total pension plan assets | $ | ||||||||||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Asset Category | December 31, 2024 | ||||||||||||||||||||||
| Cash and equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Commingled funds: | |||||||||||||||||||||||
| Equity funds | |||||||||||||||||||||||
| Fixed-income funds | |||||||||||||||||||||||
| Real estate funds | |||||||||||||||||||||||
| Other investments: | |||||||||||||||||||||||
| Insurance deposit contracts | |||||||||||||||||||||||
| Retirement annuity contracts | |||||||||||||||||||||||
| Total plan assets in fair value hierarchy | $ | $ | $ | $ | |||||||||||||||||||
| Plan assets measured using NAV as a practical expedient: | |||||||||||||||||||||||
| Real estate funds | |||||||||||||||||||||||
| Equity funds | |||||||||||||||||||||||
| Hedge funds | |||||||||||||||||||||||
| Total pension plan assets | $ | ||||||||||||||||||||||
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The fair value of our other post-retirement benefit plan assets by category and the corresponding level within the fair value hierarchy were as follows:
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Asset Category | December 31, 2025 | ||||||||||||||||||||||
| Cash and equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Commingled funds: | |||||||||||||||||||||||
| Equity funds | |||||||||||||||||||||||
| Fixed-income funds | |||||||||||||||||||||||
| Fixed-income securities | |||||||||||||||||||||||
| Total plan assets in fair value hierarchy | $ | $ | $ | $ | |||||||||||||||||||
| Plan assets measured using NAV as a practical expedient: | |||||||||||||||||||||||
| Real estate funds | |||||||||||||||||||||||
| Total other post-retirement benefit plan assets | $ | ||||||||||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | |||||||||||||||
| Asset Category (a) | December 31, 2024 | ||||||||||||||||
| Cash and equivalents | $ | $ | $ | ||||||||||||||
| Commingled funds: | |||||||||||||||||
| Equity funds | |||||||||||||||||
| Fixed-income funds | |||||||||||||||||
| Fixed-income securities | |||||||||||||||||
| Total plan assets in fair value hierarchy | $ | $ | $ | ||||||||||||||
| Plan assets measured using NAV as a practical expedient: | |||||||||||||||||
| Real estate funds | |||||||||||||||||
| Total other post-retirement benefit plan assets | $ | ||||||||||||||||
(a)We had no Level 3 investments on December 31, 2024.
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Changes in our Level 3 defined benefit plan assets during 2025 and 2024 were as follows:
| Insurance Deposits Contracts | Retirement Annuity Contracts | Real Estate Funds | Corporate Debt Securities | Total Level 3 Assets | ||||||||||||||||||||||
| December 31, 2023 | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Actual return on plan assets: | ||||||||||||||||||||||||||
| Unrealized (losses) gains , net | ( | ( | ( | |||||||||||||||||||||||
| Purchases, sales and settlements, net | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| Actual return on plan assets: | ||||||||||||||||||||||||||
| Unrealized gains, net | ||||||||||||||||||||||||||
| Realized losses, net | ( | ( | ||||||||||||||||||||||||
| Purchases, sales and settlements, net | ||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
General Dynamics Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying Consolidated Balance Sheet of General Dynamics Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related Consolidated Statements of Earnings, Comprehensive Income, Cash Flows, and Shareholders’ Equity for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated January 30, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Estimates used to recognize revenue for select long-term contracts
As discussed in Note B to the consolidated financial statements, accounting for long-term contracts involves estimating total contract revenue and costs. Revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying performance obligations.
For a select group of long-term contracts in the defense segments, we identified the assessment of certain assumptions that are an input into the amount of revenue recognized during the period as a critical audit matter. Examples of these assumptions are estimates of labor hours, the cost of materials for the work to be performed and the transaction price. The evaluation of one or more of the assumptions used to recognize revenue for the select group of long-term contracts required a high level of subjective auditor judgment due to the nature of the individual contracts and related contract performance risks. Specifically, changes to certain assumptions may have a significant impact on the revenue recorded during the period.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the assumptions used to recognize revenue for the select group of long-term contracts. This included contract-level controls over certain revenue and cost assumptions. For certain contracts, we compared the Company’s historical estimates of costs to actual costs incurred to assess the Company’s ability to estimate accurately. Based on the nature of the individual contract, we evaluated certain revenue and cost assumptions by:
–reading the underlying contract and any related amendments to obtain an understanding of the contractual requirements and related performance obligations
–assessing the enforceable rights and obligations of the underlying contractual terms when changes to price or scope, or both, are not yet agreed
–assessing costs incurred to date and the relative progress toward satisfying the performance obligation(s) of the contract
–assessing, if relevant, the estimated costs at completion by considering similar or predecessor contracts and programs
–inquiring of financial and operational personnel of the Company to identify factors that should be considered within the estimated costs at completion or indications of potential management bias
–inspecting correspondence, if any, between the Company and the customer regarding actual to date and expected performance
–analyzing the sufficiency of the Company’s assessment of contract performance risks included within the estimated costs at completion.
Discount rates used in pension benefit obligation
As discussed in Note S to the consolidated financial statements, the Company’s pension benefit obligation and the associated plan assets were $12.3 billion and $11.6 billion, respectively, on December 31, 2025. The weighted-average discount rate assumption used in estimating the pension benefit obligation as of December 31, 2025, of 5.16% was based on a current yield curve developed from a portfolio of high-quality, fixed-income investments with maturities consistent
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with the projected benefit payout period. The selected discount rates have a significant effect on the measurement of the pension benefit obligation.
We identified the evaluation of the discount rates for certain plans’ pension benefit obligations as a critical audit matter. This is due to the extent of specialized skills required to assess the discount rate assumption used to discount estimated future benefit payments. In addition, certain plans’ pension benefit obligations were sensitive to changes in this assumption.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the pension benefit obligation process. This included a control related to the determination of the discount rate assumption. We involved an actuarial professional with specialized skills and knowledge, who assisted in:
–evaluating the Company’s methodology used to develop the discount rates
–checking the accuracy of the discount rates using the cash flows and spot rates provided by the Company
–evaluating the Company’s determination of the discount rates by comparing changes in the discount rates from the prior year against changes in published indices using publicly available market data.
| /s/ KPMG LLP | ||||||||
We have served as the Company’s auditor since 2002.
McLean, Virginia
January 30, 2026
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act) as of December 31, 2025. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, on December 31, 2025, our disclosure controls and procedures were effective.
The certifications of the company’s Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Shareholders of General Dynamics Corporation:
The management of General Dynamics Corporation is responsible for establishing and maintaining adequate internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this evaluation, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on our evaluation we believe that, as of December 31, 2025, our internal control over financial reporting is effective based on those criteria.
KPMG LLP has issued an audit report on the effectiveness of our internal control over financial reporting. The KPMG report immediately follows this report.
| /s/ Phebe N. Novakovic | /s/ Kimberly A. Kuryea | ||||||||||
| Phebe N. Novakovic | Kimberly A. Kuryea | ||||||||||
| Chairman and Chief Executive Officer | Senior Vice President | ||||||||||
| and Chief Financial Officer | |||||||||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
General Dynamics Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited General Dynamics Corporation and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Consolidated Balance Sheet of the Company as of December 31, 2025 and 2024, the related Consolidated Statements of Earnings, Comprehensive Income, Cash Flows, and Shareholders’ Equity for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated January 30, 2026 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
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in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
| /s/ KPMG LLP | ||||||||
| McLean, Virginia | ||||||||
| January 30, 2026 | ||||||||
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During the quarter ended December 31, 2025, none of our directors or officers adopted terminated
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required to be set forth herein, except for the information included under Information About Our Executive Officers in Part I, will be included in the sections titled “Election of the Board of Directors of the Company,” “Governance of the Company – Our Ethos,” “Audit Committee Report” and, if included, “Other Information – Delinquent Section 16(a) Reports” in our definitive proxy statement for our 2026 annual shareholders meeting (the Proxy Statement), or elsewhere in the Proxy Statement, and that information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required to be set forth herein will be included in the sections titled “Governance of the Company – Director Compensation,” “Compensation Discussion and Analysis,” “Executive
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Compensation” and “Compensation Committee Report” in our Proxy Statement, or elsewhere in the Proxy Statement, and that information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required to be set forth herein will be included in the sections titled “Security Ownership of Management” and “Security Ownership of Certain Beneficial Owners” in our Proxy Statement, and that information is incorporated herein by reference.
The information required to be set forth herein with respect to securities authorized for issuance under our equity compensation plans will be included in the section titled “Equity Compensation Plan Information” in our Proxy Statement, and that information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required to be set forth herein will be included in the sections titled “Governance of the Company – Related Person Transactions Policy” and “Election of the Board of Directors of the Company – Director Independence” in our Proxy Statement, and that information is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP , McLean, VA , Auditor ID: 185 .
The information required to be set forth herein will be included in the section entitled “Advisory Vote on the Selection of Independent Auditors – Audit and Non-Audit Fees” in our Proxy Statement, and that information is incorporated herein by reference.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1. Consolidated Financial Statements
| Consolidated Statement of Earnings | ||
| Consolidated Statement of Comprehensive Income | ||
| Consolidated Balance Sheet | ||
| Consolidated Statement of Cash Flows | ||
| Consolidated Statement of Shareholders’ Equity | ||
| Notes to Consolidated Financial Statements (A to S) | ||
2. Index to Exhibits – General Dynamics Corporation
Commission File No. 1-3671
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Exhibits listed below, which have been filed with the Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and which were filed as noted below, are hereby incorporated by reference and made a part of this report with the same effect as if filed herewith.
| Exhibit Number | Description | ||||
| 3.1 | Restated Certificate of Incorporation of the company (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on October 7, 2004) | ||||
| 3.2 | Certificate of Amendment of Restated Certificate of Incorporation of the company dated as of May 8, 2023 (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended July 2, 2023, filed with the SEC on July 26, 2023) | ||||
| 3.3 | Amended and Restated Bylaws of General Dynamics Corporation (as amended effective August 7, 2024) (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on August 8, 2024) | ||||
| 4.1 | Indenture dated as of August 27, 2001, among the company, the Guarantors (as defined therein) and The Bank of New York, as Trustee (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 12, 2018) | ||||
| 4.2 | Seventh Supplemental Indenture dated as of November 6, 2012, among the company, the Guarantors (as defined therein) and The Bank of New York Mellon, as Trustee (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on November 6, 2012) | ||||
| 4.3 | Indenture dated as of March 24, 2015, among the company, the Guarantors (as defined therein) and The Bank of New York Mellon, as Trustee (incorporated herein by reference from the company’s registration statement on Form S-3, filed with the SEC on March 24, 2015) | ||||
| 4.4 | First Supplemental Indenture dated as of August 12, 2016, among the company, the Guarantors (as defined therein) and The Bank of New York Mellon, as Trustee (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on August 12, 2016) | ||||
| 4.5 | Second Supplemental Indenture dated as of September 14, 2017, among the company, the Guarantors (as defined therein) and The Bank of New York Mellon, as Trustee (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on September 14, 2017) | ||||
| 4.6 | Indenture dated as of March 22, 2018, among the company, the Guarantors (as defined therein) and The Bank of New York Mellon, as Trustee (incorporated herein by reference from the company’s registration statement on Form S-3, filed with the SEC on March 22, 2018) | ||||
| 4.7 | First Supplemental Indenture dated as of May 11, 2018, among the company, the Guarantors (as defined therein) and The Bank of New York Mellon, as Trustee (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on May 11, 2018) | ||||
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| 4.8 | Second Supplemental Indenture dated as of March 25, 2020, among General Dynamics Corporation, the Guarantors named therein and The Bank of New York Mellon, as Trustee (includes forms of 3.500% Notes due 2027, 3.625% Notes due 2030, 4.250% Notes due 2040 and 4.250% Notes due 2050) (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on March 25, 2020) | ||||
| 4.9 | Third Supplemental Indenture dated as of May 10, 2021, among General Dynamics Corporation, the Guarantors named therein and The Bank of New York Mellon, as Trustee (includes forms of 1.150% Notes due 2026, 2.250% Notes due 2031 and 2.850% Notes due 2041) (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on May 10, 2021) | ||||
| 4.10 | Description of General Dynamics Corporation’s Securities Registered Pursuant to Section 12 of the Exchange Act (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 7, 2023) | ||||
| 4.11 | Fourth Supplemental Indenture dated as of May 7, 2025, among General Dynamics Corporation, the Guarantors named therein and The Bank of New York Mellon, as Trustee (includes forms of 4.950% Notes due 2035) (incorporated herein by reference from the company's current report on Form 8-K, filed with the SEC on May 7, 2025) | ||||
| 10.1* | General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (incorporated herein by reference from the company’s registration statement on Form S-8 (No. 333-217656), filed with the SEC on May 4, 2017) | ||||
| 10.2* | Form of Non-Statutory Stock Option Agreement pursuant to the General Dynamics Corporation 2012 Equity Compensation Plan (for grants made March 4, 2015, through March 1, 2016, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 5, 2015, filed with the SEC on April 29, 2015) | ||||
| 10.3* | Form of Non-Statutory Stock Option Agreement pursuant to the General Dynamics Corporation 2012 Equity Compensation Plan (for grants beginning March 2, 2016, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 3, 2016, filed with the SEC on April 27, 2016) | ||||
| 10.4* | Form of Non-Statutory Stock Option Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants beginning May 3, 2017, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended July 2, 2017, filed with the SEC on July 26, 2017) | ||||
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| 10.5* | Form of Non-Statutory Stock Option Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to named executive officers beginning March 4, 2020, and including, as indicated therein, provisions for certain named executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended March 29, 2020, filed with the SEC on April 29, 2020) | ||||
| 10.6* | Form of Restricted Stock Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to named executive officers beginning March 4, 2020, and including, as indicated therein, provisions for certain named executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended March 29, 2020, filed with the SEC on April 29, 2020) | ||||
| 10.7* | Form of Performance Stock Unit Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to named executive officers beginning March 4, 2020, and including, as indicated therein, provisions for certain named executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended March 29, 2020, filed with the SEC on April 29, 2020) | ||||
| 10.8* | Form of Non-Statutory Stock Option Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 2, 2022, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 3, 2022, filed with the SEC on April 27, 2022) | ||||
| 10.9* | Form of Restricted Stock Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 2, 2022, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 3, 2022, filed with the SEC on April 27, 2022) | ||||
| 10.10* | Form of Performance Stock Unit Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 2, 2022, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 3, 2022, filed with the SEC on April 27, 2022) | ||||
| 10.11* | Form of Non-Statutory Stock Option Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 8, 2023, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 2, 2023, filed with the SEC on April 26, 2023) | ||||
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| 10.12* | Form of Restricted Stock Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 8, 2023, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 2, 2023, filed with the SEC on April 26, 2023) | ||||
| 10.13* | Form of Performance Stock Unit Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 8, 2023, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 2, 2023, filed with the SEC on April 26, 2023) | ||||
| 10.14* | Form of Non-Statutory Stock Option Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 6, 2024, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended March 31, 2024, filed with the SEC on April 24, 2024) | ||||
| 10.15* | Form of Restricted Stock Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 6, 2024, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended March 31, 2024, filed with the SEC on April 24, 2024) | ||||
| 10.16* | Form of Performance Stock Unit Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012 Equity Compensation Plan (for grants to executive officers beginning March 6, 2024, and including, as indicated therein, provisions for certain executive officers who are subject to the company’s Compensation Recoupment Policy) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended March 31, 2024, filed with the SEC on April 24, 2024) | ||||
| 10.17* | Consulting Agreement between Mark C. Roualet and General Dynamics Corporation, effective as of May 1, 2024 (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended June 30, 2024, filed with the SEC on July 24, 2024)## | ||||
| 10.18* | Extension to Consulting Agreement between Mark C. Roualet and General Dynamics Corporation, effective as of December 12, 2024**## | ||||
| 10.19* | General Dynamics Corporation Supplemental Savings Plan, amended and restated effective October 1, 2021 (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended October 3, 2021, filed with the SEC on October 27, 2021) | ||||
| 10.20* | Form of Severance Protection Agreement for executive officers (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 6, 2017) | ||||
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| 10.21* | General Dynamics Corporation Supplemental Retirement Plan, restated effective January 1, 2010 (incorporating amendments through March 31, 2011) (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended April 3, 2011, filed with the SEC on May 3, 2011) | ||||
| 10.22* | Amendment to the General Dynamics Corporation Supplemental Retirement Plan, effective January 5, 2015 (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 9, 2015) | ||||
| 10.23* | Amendment to the General Dynamics Corporation Supplemental Retirement Plan, effective January 1, 2016 (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 6, 2017) | ||||
| 10.24* | Amendment to the General Dynamics Corporation Supplemental Retirement Plan, effective January 1, 2019 (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 13, 2019) | ||||
| 10.25* | Amendment to the General Dynamics Corporation Supplemental Retirement Plan, effective December 20, 2019 (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 9, 2021) | ||||
| 19 | |||||
| 21 | Subsidiaries** | ||||
| 22 | Subsidiary Guarantors (incorporated herein by reference from the company’s quarterly report on Form 10-Q for the period ended June 29, 2025, filed with the SEC on July 23, 2025) | ||||
| 23 | Consent of Independent Registered Public Accounting Firm** | ||||
| 24 | Power of Attorney** | ||||
| 31.1 | Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** | ||||
| 31.2 | Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** | ||||
| 32.1 | Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | ||||
| 32.2 | Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | ||||
| 97 | General Dynamics Compensation Recoupment Policy, effective December 1, 2023 (incorporated herein by reference from the company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 8, 2024) | ||||
101.INS | Inline eXtensible Business Reporting Language (XBRL) Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document** | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document** | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document** | ||||
106
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document** | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document** | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) | ||||
* Indicates a management contract or compensatory plan or arrangement required to be filed pursuant to Item 15(b) of Form 10-K.
** Filed or furnished electronically herewith.
## Certain portions of this exhibit have been omitted by means of marking such portions with brackets and asterisks because the Registrant has determined that the information is not material and is the type that the Registrant treats as private or confidential. The Registrant agrees to provide on a supplemental basis an unredacted copy of this exhibit to the SEC or its staff upon its request.
In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of long-term debt of the company are not filed herewith. Pursuant to this regulation, we hereby agree to furnish a copy of any such instrument to the SEC upon request.
ITEM 16. FORM 10-K SUMMARY
None.
107
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GENERAL DYNAMICS CORPORATION | ||||||||
| by | /s/ William A. Moss | |||||||
| William A. Moss | ||||||||
| Vice President and Controller | ||||||||
Dated: January 30, 2026 | ||||||||
108
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on January 30, 2026, by the following persons on behalf of the registrant and in the capacities indicated.
| /s/ Phebe N. Novakovic | Chairman, Chief Executive Officer and Director | ||||
| Phebe N. Novakovic | (Principal Executive Officer) | ||||
| /s/ Kimberly A. Kuryea | Senior Vice President and Chief Financial Officer | ||||
| Kimberly A. Kuryea | (Principal Financial Officer) | ||||
| /s/ William A. Moss | Vice President and Controller | ||||
| William A. Moss | (Principal Accounting Officer) | ||||
| * | |||||
| Richard D. Clarke | Director | ||||
| * | |||||
| Rudy F. deLeon | Director | ||||
| * | |||||
| Cecil D. Haney | Director | ||||
| * | |||||
| Charles W. Hooper | Director | ||||
| * | |||||
| Mark M. Malcolm | Director | ||||
| * | |||||
| James N. Mattis | Director | ||||
| * | |||||
| C. Howard Nye | Director | ||||
| * | |||||
| Catherine B. Reynolds | Director | ||||
| * | |||||
Laura J. Schumacher | Director | ||||
| * | |||||
Robert K. Steel | Director | ||||
| * | |||||
John G. Stratton | Director | ||||
| * | |||||
Peter A. Wall | Director | ||||
* By Gregory S. Gallopoulos pursuant to a Power of Attorney executed by the directors listed above, which has been filed as an exhibit hereto and incorporated herein by reference thereto.
| /s/ Gregory S. Gallopoulos | |||||||||||
| Gregory S. Gallopoulos | |||||||||||
| Senior Vice President, General Counsel and Secretary | |||||||||||
109
FAQ
What are General Dynamics (GD) main business segments in 2025?
General Dynamics operates four segments: Aerospace, Marine Systems, Combat Systems and Technologies. These span business jets, shipbuilding, land combat vehicles, munitions, and IT and C5ISR services, giving the company a broad mix of defense and commercial exposure.
How much revenue did each General Dynamics (GD) segment generate in 2025?
In 2025, Aerospace revenue was $13.1 billion, Marine Systems $16.7 billion, Combat Systems $9.2 billion, and Technologies $13.5 billion. These figures show meaningful growth in shipbuilding, business jets, and defense technologies across the portfolio.
How dependent is General Dynamics (GD) on U.S. government spending?
General Dynamics remains highly dependent on U.S. government customers, which provided 68% of 2025 consolidated revenue. U.S. commercial customers contributed 15%, while non‑U.S. government and commercial clients together supplied the remaining 17% of overall revenue mix.
What major defense programs support General Dynamics (GD) Marine Systems segment?
Marine Systems is anchored by U.S. Navy programs, including Columbia‑class ballistic‑missile submarines and Virginia‑class attack submarines, plus Arleigh Burke‑class destroyers and auxiliary ships. These long‑duration contracts underpin substantial revenue visibility over the next two decades.
How is General Dynamics (GD) Aerospace segment performing in business jets?
The Aerospace segment reported $13.1 billion in 2025 revenue from Gulfstream aircraft manufacturing and services. It continues to refresh its fleet with models like the G800 and G700 and invests in global maintenance, completions and FBO networks through Jet Aviation.
What workforce and diversity statistics did General Dynamics (GD) report for 2025?
General Dynamics reported about 117,000 employees worldwide in 2025, roughly 84% based in the U.S. Its global workforce is 77% male and 23% female, with about 20% U.S. employees being military veterans and 9% self‑reporting a disability.
Did General Dynamics (GD) repurchase shares in 2025?
Yes. In the 2025 fourth quarter, General Dynamics repurchased 110,533 shares at an average price of $337.30. At year‑end, 6.8 million shares remained authorized for repurchase, and total common shares outstanding were 270,389,759.
General Dynamics Corp
NYSE:GD
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Jan 28, 2026
[8-K] GENERAL DYNAMICS CORP Reports Material Event
GD Stock Data
94.62B
268.57M
0.51%
86.43%
0.82%
Aerospace & Defense
Ship & Boat Building & Repairing
United States
RESTON