General Dynamics Corporation

Good morning and welcome to the General Dynamics 4th Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Please note, this event is being recorded. I would now like to turn the conference over to Nicole Shelton, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the General Dynamics fourth quarter 2025 conference call. Any forward-looking statements made today represent our estimates regarding the company's outlook. These estimates are subject to some risks and uncertainties. Additional information regarding these factors is contained in the company's 10-K, 10-Q, and 8-K filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany this webcast, which are available on the investor relations page of our website, investorrelations.gd.com. On the call today are Phoebe Novakovic, Chairman and Chief Executive Officer, Danny Deeb, President, and Kim Correa, Chief Financial Officer. I will now turn the call over to Phoebe.

Thank you, Nicole. Good morning everyone and thanks for being with us. Earlier this morning we reported fourth quarter earnings of $4.17 per diluted share on revenue of $14,379,000,000 operating earnings of $1,452,000,000 and net earnings of $1,143,000,000. To briefly summarize on a quarter over quarter basis Revenue is up 7.8%, and operating earnings are up 2%. Net earnings and diluted earnings per share are relatively flat to the year-ago quarter, which you may recall was a terrific quarter. It included some significant one-time items, which drove unusually high margins, but more about that later. The sequential comparisons are quite attractive. Here, we beat the prior quarter's revenue by 11.4%. operating earnings by 9.1%, net earnings by 7.9%, and fully diluted EPS by 29 cents. Full year numbers are absolutely terrific. Revenue is up 10.1%, operating earnings are up 11.7%, net earnings are up 11.3%, and fully diluted EPS is up 13.4%. Both revenue and operating earnings were up for each of the segments led by marine systems and aerospace with revenue growth of 16.6% and 16.5% respectively. They also led the parade in operating earnings with marine systems up 25.9% and aerospace up 19.3% for the year. All of this follows terrific revenue and earnings growth in 2024 over 2023. It would appear that we beat analyst consensus for both the year and the quarter. So let's move on to the business units. First, aerospace. In aerospace for the year, we experienced continuing growth of both revenue and earnings, continuing strong demand for Gulfstream aircraft, overall strength in Gulfstream service business, and continued growth and performance improvement at Jet Aviation. In the quarter, aerospace had revenue of $3,788,000,000 and earnings of $481,000,000. This represents a 1.2% increase in revenue, but $104,000,000 decrease in operating earnings on a quarter-over-quarter basis. While the earning numbers are very good on a standalone basis, they do not compare favorably to a standout fourth quarter, in the prior year aided by a number of discrete positive items that were significant increments to earnings. However, the sequential numbers are very positive with a 17.1 percent increase in revenue coupled with an 11.9 percent increase in operating earnings. Importantly for the year, aerospace revenue of $13.1 billion is 16.5 percent greater than 2024. This is on top of a 30.5% growth in 2024 over 2023. Revenue growth was driven in large part by the delivery of 158 new aircraft, which is 22 more than the year ago. Earnings of $1.75 billion are up 19.3% over 2024. So let's talk a little about demand. It was a strong quarter boarding on exceptional. Aerospace had booked a bill of 1.3 times in the quarter, and Gulfstream alone had an aircraft booked a bill of 1.4 times, even as deliveries increased significantly in the quarter. Orders exceeded our internal plan. The delivery of the G700 and G800 and their performance in customer hands is driving increased demand for them, which we experienced in the quarter. we continue to see improved interest across all models in all sales jurisdictions. Interestingly, the overall number of prospects in all areas continues to increase. Let me turn the discussion over to Danny for his perspective on the quarter.