— Revenue of $11.7 billion, up 10.4% from year-ago quarter
— Operating earnings of $1.2 billion, up 11.7% from year-ago quarter
— Diluted EPS of $3.35, up 10.2% from year-ago quarter
— Operating margin of 10.1%, a 10-basis-point expansion from year-ago quarter
General Dynamics (NYSE: GD) today reported third-quarter 2024 revenue of $11.7 billion, up 10.4% from the third quarter of 2023. Operating earnings of $1.2 billion were up 11.7% from the year-ago quarter. Diluted earnings per share (EPS) were $3.35, up 10.2% from the year-ago quarter. Operating margin for the quarter was 10.1%, a 10-basis-point expansion from the year-ago quarter.
“The company continues to see strong growth and steady improvement in operating performance,” said Phebe Novakovic, chairman and chief executive officer. “Demand across the portfolio also remains strong in the current environment.”
Gulfstream delivered 28 aircraft in the quarter, of which 24 were large-cabin aircraft, including four G700s. This compares with 27 aircraft delivered in the year-ago quarter, of which 22 were large cabin.
Cash and Capital Deployment Net cash provided by operating activities in the quarter was $1.4 billion, or 152% of net earnings. During the quarter, the company paid $390 million in dividends, invested $201 million in capital expenditures, and used $44 million to repurchase shares, ending the quarter with $2.1 billion in cash and equivalents on hand.
Orders and Backlog The consolidated book-to-bill ratio, defined as orders divided by revenue, was 1.1-to-1 for the quarter. Company-wide backlog was $92.6 billion. Estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $45 billion. Total estimated contract value, the sum of all backlog components, was $137.6 billion.
In the Aerospace segment, orders in the quarter totaled $2.4 billion. The segment ended the quarter with backlog of $19.8 billion.
In the defense segments, orders in the quarter totaled $10.5 billion, with particular strength in the Combat Systems and Technologies segments. Significant awards in the defense segments included $885 million for various munitions and ordnance, with maximum potential value of $1.7 billion; $465 million, with maximum potential value of $1.7 billion, for two U.S. Army contracts for production of 155mm artillery projectile metal parts; $780 million, with maximum potential contract value of more than $6.7 billion including options, for the construction of additional John Lewis-class (T-AO-205) fleet replenishment oilers; $1.5 billion for long-lead materials for Block VI Virginia-class submarines; $840 million, with maximum potential value of $1 billion, for several key contracts for classified customers; and $605 million for multiple awards from the U.S. Space Development Agency to develop and integrate ground systems for the low-Earth orbit satellite network. A detailed list of significant awards is provided in Exhibit I.
About General Dynamics Headquartered in Reston, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services. General Dynamics employs more than 100,000 people worldwide and generated $42.3 billion in revenue in 2023. More information is available at www.gd.com.
WEBCAST INFORMATION: General Dynamics will webcast its third-quarter 2024 financial results conference call at 9 a.m. EDT on Wednesday, October 23, 2024. The webcast will be a listen-only audio event available at www.gd.com.An on-demand replay of the webcast will be available by telephone two hours after the end of the call through October 30, 2024, at 800-770-2030 (international: +1 609-800-9909), conference ID 4299949. Charts furnished to investors and securities analysts in connection with General Dynamics’ announcement of its financial results are available at www.gd.com.
This press release contains forward-looking statements (FLS), including statements about the company’s future operational and financial performance, which are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “forecasts,” “scheduled,” “outlook,” “estimates,” “should” and variations of these words and similar expressions are intended to identify FLS. In making FLS, we rely on assumptions and analyses based on our experience and perception of historical trends; current conditions and expected future developments; and other factors, estimates and judgments we consider reasonable and appropriate based on information available to us at the time. FLS are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. FLS are not guarantees of future performance and involve factors, risks and uncertainties that are difficult to predict. Actual future results and trends may differ materially from what is forecast in the FLS. All FLS speak only as of the date they were made. We do not undertake any obligation to update or publicly release revisions to FLS to reflect events, circumstances or changes in expectations after the date of this press release. Additional information regarding these factors is contained in the company’s filings with the SEC, and these factors may be revised or supplemented in future SEC filings. In addition, this press release contains some financial measures not prepared in accordance with U.S. generally accepted accounting principles (GAAP). While we believe these non-GAAP metrics provide useful information for investors, there are limitations associated with their use, and our calculations of these metrics may not be comparable to similarly titled measures of other companies. Non-GAAP metrics should not be considered in isolation from, or as a substitute for, GAAP measures. Reconciliations to comparable GAAP measures and other information relating to our non-GAAP measures are included in other filings with the SEC, which are available at investorrelations.gd.com.
EXHIBIT A
CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Three Months Ended Variance
September 29, 2024 October 1, 2023 $ %
Revenue $ 11,671 $ 10,571 $ 1,100 10.4%
Operating costs and expenses (10,490) (9,514) (976)
Operating earnings 1,181 1,057 124 11.7%
Other, net 15 19 (4)
Interest, net (82) (85) 3
Earnings before income tax 1,114 991 123 12.4%
Provision for income tax, net (184) (155) (29)
Net earnings $ 930 $ 836 $ 94 11.2%
Earnings per share-basic $ 3.39 $ 3.07 $ 0.32 10.4%
Basic weighted average shares outstanding 274.4 272.6
Earnings per share-diluted $ 3.35 $ 3.04 $ 0.31 10.2%
Diluted weighted average shares outstanding 277.9 274.7
EXHIBIT B
CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Nine Months Ended Variance
September 29, 2024 October 1, 2023 $ %
Revenue $ 34,378 $ 30,604 $ 3,774 12.3%
Operating costs and expenses (31,005) (27,647) (3,358)
Operating earnings 3,373 2,957 416 14.1%
Other, net 47 65 (18)
Interest, net (248) (265) 17
Earnings before income tax 3,172 2,757 415 15.1%
Provision for income tax, net (538) (447) (91)
Net earnings $ 2,634 $ 2,310 $ 324 14.0%
Earnings per share-basic $ 9.61 $ 8.45 $ 1.16 13.7%
Basic weighted average shares outstanding 274.0 273.2
Earnings per share-diluted $ 9.49 $ 8.39 $ 1.10 13.1%
Diluted weighted average shares outstanding 277.5 275.4
EXHIBIT C
REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
Three Months Ended Variance
September 29, 2024 October 1, 2023 $ %
Revenue:
Aerospace $ 2,482 $ 2,032 $ 450 22.1%
Marine Systems 3,599 3,002 597 19.9%
Combat Systems 2,212 2,224 (12) (0.5)%
Technologies 3,378 3,313 65 2.0%
Total $ 11,671 $ 10,571 $ 1,100 10.4%
Operating earnings:
Aerospace $ 305 $ 268 $ 37 13.8%
Marine Systems 258 211 47 22.3%
Combat Systems 325 300 25 8.3%
Technologies 326 315 11 3.5%
Corporate (33) (37) 4 10.8%
Total $ 1,181 $ 1,057 $ 124 11.7%
Operating margin:
Aerospace 12.3% 13.2%
Marine Systems 7.2% 7.0%
Combat Systems 14.7% 13.5%
Technologies 9.7% 9.5%
Total 10.1% 10.0%
EXHIBIT D
REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
Nine Months Ended Variance
September 29, 2024 October 1, 2023 $ %
Revenue:
Aerospace $ 7,506 $ 5,877 $ 1,629 27.7%
Marine Systems 10,383 9,053 1,330 14.7%
Combat Systems 6,602 5,904 698 11.8%
Technologies 9,887 9,770 117 1.2%
Total $ 34,378 $ 30,604 $ 3,774 12.3%
Operating earnings:
Aerospace $ 879 $ 733 $ 146 19.9%
Marine Systems 735 657 78 11.9%
Combat Systems 920 796 124 15.6%
Technologies 941 897 44 4.9%
Corporate (102) (126) 24 19.0%
Total $ 3,373 $ 2,957 $ 416 14.1%
Operating margin:
Aerospace 11.7% 12.5%
Marine Systems 7.1% 7.3%
Combat Systems 13.9% 13.5%
Technologies 9.5% 9.2%
Total 9.8% 9.7%
EXHIBIT E
CONSOLIDATED BALANCE SHEET
DOLLARS IN MILLIONS
(Unaudited)
September 29, 2024 December 31, 2023
ASSETS
Current assets:
Cash and equivalents $ 2,101 $ 1,913
Accounts receivable 3,165 3,004
Unbilled receivables 8,852 7,997
Inventories 10,141 8,578
Other current assets 1,484 2,123
Total current assets 25,743 23,615
Noncurrent assets:
Property, plant and equipment, net 6,324 6,198
Intangible assets, net 1,583 1,656
Goodwill 20,757 20,586
Other assets 2,905 2,755
Total noncurrent assets 31,569 31,195
Total assets $ 57,312 $ 54,810
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt $ 2,005 $ 507
Accounts payable 3,290 3,095
Customer advances and deposits 10,925 9,564
Other current liabilities 3,337 3,266
Total current liabilities 19,557 16,432
Noncurrent liabilities:
Long-term debt 7,262 8,754
Other liabilities 7,520 8,325
Total noncurrent liabilities 14,782 17,079
Shareholders' equity:
Common stock 482 482
Surplus 3,997 3,760
Retained earnings 40,730 39,270
Treasury stock (21,137) (21,054)
Accumulated other comprehensive loss (1,099) (1,159)
Total shareholders' equity 22,973 21,299
Total liabilities and shareholders' equity $ 57,312 $ 54,810
EXHIBIT F
CONSOLIDATED STATEMENT OF CASH FLOWS - (UNAUDITED)
DOLLARS IN MILLIONS
Nine Months Ended
September 29, 2024 October 1, 2023
Cash flows from operating activities-continuing operations:
Net earnings $ 2,634 $ 2,310
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation of property, plant and equipment 469 446
Amortization of intangible and finance lease right-of-use assets 177 195
Equity-based compensation expense 137 136
Deferred income tax benefit (107) (158)
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable (172) (89)
Unbilled receivables (874) 448
Inventories (1,612) (1,904)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable 193 (83)
Customer advances and deposits 628 2,171
Other, net 479 42
Net cash provided by operating activities 1,952 3,514
Cash flows from investing activities:
Capital expenditures (561) (600)
Other, net (27) (8)
Net cash used by investing activities (588) (608)
Cash flows from financing activities:
Dividends paid (1,140) (1,068)
Purchases of common stock (183) (434)
Repayment of fixed-rate notes - (1,250)
Other, net 150 (40)
Net cash used by financing activities (1,173) (2,792)
Net cash used by discontinued operations (3) (4)
Net increase in cash and equivalents 188 110
Cash and equivalents at beginning of period 1,913 1,242
Cash and equivalents at end of period $ 2,101 $ 1,352
EXHIBIT G
ADDITIONAL FINANCIAL INFORMATION - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Other Financial Information:
September 29, 2024 December 31, 2023
Debt-to-equity (a) 40.3% 43.5%
Book value per share (b) $ 83.55 $ 77.85
Shares outstanding 274,968,619 273,599,948
Third Quarter Nine Months
2024 2023 2024 2023
Income tax payments, net $ 173 $ 167 $ 125 $ 493
Company-sponsored research anddevelopment (c) $ 137 $ 140 $ 421 $ 395
Return on sales (d) 8.0% 7.9% 7.7% 7.5%
Non-GAAP Financial Measures:
Third Quarter Nine Months
2024 2023 2024 2023
Free cash flow:
Net cash provided by operatingactivities $ 1,416 $ 1,321 $ 1,952 $ 3,514
Capital expenditures (201) (227) (561) (600)
Free cash flow (e) $ 1,215 $ 1,094 $ 1,391 $ 2,914
September 29, 2024 December 31, 2023
Net debt:
Total debt $ 9,267 $ 9,261
Less cash and equivalents 2,101 1,913
Net debt (f) $ 7,166 $ 7,348
(a) Debt-to-equity ratio is calculated as total debt divided by total equity as of the end of the period.
(b) Book value per share is calculated as total equity divided by total outstanding shares as of the end of the period.
(c) Includes independent research and development and Aerospace product-development costs.
(d) Return on sales is calculated as net earnings divided by revenue.
(e) We define free cash flow as net cash from operating activities less capital expenditures. We believe free cash flow is a useful measure
for investors because it portrays our ability to generate cash from our businesses for purposes such as repaying debt, funding business
acquisitions, repurchasing our common stock and paying dividends. We use free cash flow to assess the quality of our earnings and as
a key performance measure in evaluating management.
(f) We define net debt as short- and long-term debt (total debt) less cash and equivalents. We believe net debt is a useful measure for
investors because it reflects the borrowings that support our operations and capital deployment strategy. We use net debt as an
important indicator of liquidity and financial position.
EXHIBIT H
BACKLOG - (UNAUDITED)
DOLLARS IN MILLIONS
Funded Unfunded Total Estimated Total
Backlog Potential Estimated
ContractValue* Contract Value
Third Quarter 2024:
Aerospace $ 18,859 $ 937 $ 19,796 $ 254 $ 20,050
Marine Systems 29,008 11,463 40,471 9,578 50,049
Combat Systems 17,289 682 17,971 8,016 25,987
Technologies 9,794 4,602 14,396 27,093 41,489
Total $ 74,950 $ 17,684 $ 92,634 $ 44,941 $ 137,575
Second Quarter 2024:
Aerospace $ 19,126 $ 911 $ 20,037 $ 372 $ 20,409
Marine Systems 29,912 11,436 41,348 3,983 45,331
Combat Systems 16,003 673 16,676 5,816 22,492
Technologies 9,365 3,875 13,240 28,283 41,523
Total $ 74,406 $ 16,895 $ 91,301 $ 38,454 $ 129,755
Third Quarter 2023:
Aerospace $ 19,654 $ 405 $ 20,059 $ 785 $ 20,844
Marine Systems 30,445 17,277 47,722 3,113 50,835
Combat Systems 14,375 719 15,094 6,098 21,192
Technologies 9,833 2,852 12,685 27,302 39,987
Total $ 74,307 $ 21,253 $ 95,560 $ 37,298 $ 132,858
* The estimated potential contract value includes work awarded on unfunded indefinite delivery, indefinite quantity (IDIQ) contracts andunexercised options associated with existing firm contracts, including options and other agreements with existing customers to purchase new aircraft and aircraft services. We recognize options in backlog when the customer exercises the option and establishes a firm order. For IDIQ contracts, we evaluate the amount of funding we expect to receive and include this amount in our estimated potential contract value. The actual amount of funding received in the future may be higher or lower than our estimate of potential contract value.
EXHIBIT H-1 BACKLOG - (UNAUDITED) DOLLARS IN MILLIONS
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EXHIBIT H-2 BACKLOG BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS
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EXHIBIT I THIRDQUARTER 2024 SIGNIFICANT ORDERS - (UNAUDITED) DOLLARS IN MILLIONS
We received the following significant contract awards during the third quarter of 2024:
Marine Systems:
— $780 from the U.S. Navy for the construction of an additional John Lewis-class (T-AO-205) fleet replenishment oiler. The contract including options for an additional seven T-AO-205 oilers has a maximum potential value of more than $6.7 billion.
— $1.5 billion from the Navy for long-lead materials for Block VI Virginia-class submarines.
— $100 from the Navy to provide engineering, technical, design and planning yard support services for operational strategic and attack submarines.
— $85 from the Navy for maintenance and modernization on the USS Chung-Hoon, an Arleigh Burke-class (DDG-51) guided missile destroyer.
— $80 for advanced nuclear plant studies (ANPS) in support of the Columbia-class submarine program for the Navy.
Combat Systems:
— $885 for various munitions and ordnance. These contracts have a maximum potential value of $1.7 billion.
— $465 for two contracts from the U.S. Army for the production of 155mm artillery projectile metal parts. These contracts have a maximum potential value of $1.7 billion.
— $395 from the Army for the production of 155mm propelling bag charges.
— $190 from the Army to produce Iron Fist Active Protection System kits.
— $180 from the Army to produce Stryker Sgt. Stout vehicles.
— $100 from the Army for long-lead materials to support the future retrofit of Stryker Sgt. Stout vehicles to a dual Stinger Vehicle Universal Launcher (SVUL) configuration.
Technologies:
— $840 for several key contracts for classified customers. These contracts have a maximum potential value of $1 billion.
— $605 for multiple awards from the U.S. Space Development Agency to develop and integrate ground systems for the low-Earth orbit satellite network.
— $105 from the U.S. Defense Information Systems Agency (DISA) to continue operating and maintaining Pentagon and regional government-furnished network infrastructures. The contract including options has a maximum potential value of $300.
— $185 from the U.S. Department of State (DoS) to manage its global technical security supply chain.
— $135 to provide equipment and tools to the National Oceanic Atmospheric Administration (NOAA) to augment its High-Performance Computing Systems.
— $130 from the National Geospatial-Intelligence Agency (NGA) to provide hybrid cloud services and information technology (IT) design, engineering, and operations and sustainment services.
— $120 from the DoS to provide overseas consular services to support visa application and issuance at U.S. embassies and consulates throughout the world under the Global Support Strategy (GSS) program.
EXHIBIT J
AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED)
DOLLARS IN MILLIONS
Third Quarter Nine Months
2024 2023 2024 2023
Gulfstream Aircraft Deliveries (units):
Large-cabin aircraft 24 22 76 57
Mid-cabin aircraft 4 5 13 15
Total 28 27 89 72
Aerospace Book-to-Bill:
Orders* $ 2,365 $ 2,916 $ 7,464 $ 7,119
Revenue 2,482 2,032 7,506 5,877
Book-to-Bill Ratio 1.0x 1.4x 1.0x 1.2x
* Does not include customer defaults, liquidated damages, cancellations, foreign exchange fluctuations and other backlog adjustments.
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