“The quarters are expected to each be positive and grow slightly with the fourth quarter still representing the largest, but much less of a climb as compared to 2025's plan.”

In context

“et to support our liquidity during the government shutdown. But ended the year with no commercial paper outstanding. Our cash balance as of year-end was $2.3 billion with a net debt position of $5.7 billion, down $1.4 billion from 2024. Moving on to our 2026 cash flow projections. We expect to return to our free cash flow conversion rate goal of 100% of net income. This is based on particularly strong operating cash flow, offsetting elevated levels of continued investment across our businesses. Capital expenditures are expected to increase over $900 million or 79% from 2025. Our capital expenditures will equal between 3.5-4% of sales as we continue to invest especially in our shipyards to accelerate production and meet future demand. The free cash flow for the year breaks down as follows. The quarters are expected to each be positive and grow slightly with the fourth quarter still representing the largest, but much less of a climb as compared to 2025's plan. We have $1 billion of notes coming due in 2026. Our plan assumes that these notes will be refinanced, but this is something that we will continue to evaluate as time approaches. Turning to interest. Our net interest expense in the fourth quarter was $63 million, bringing interest expense for the full year to $314 million. That compares to $76 million and $324 million in the respective 2024 periods. Under the assumption that we refinance the maturing notes, we expect interest expense to increase to approximately $340 million due to higher expected interest rates on the new debt. Wrapping up with income taxes. Our 2025 full-year effective tax rate ended up at 17.5%, consistent with our guidance. Looking ahead to 2026, we expect the tax rate to remain at a similar level. Additionally, our ca”