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2941 Fairview Park Drive, Suite 100 | ||
Falls Church, VA 22042-4513 | News | |
www.generaldynamics.com |
• | Revenue up 20% year-over-year to $9.1 billion |
• | Earnings from continuing operations up 13.1% to $864 million |
• | Diluted EPS from continuing operations up 14.7% year-over-year to $2.89 |
Three Months Ended | Variance | |||||||||||||
September 30, 2018 | October 1, 2017* | $ | % | |||||||||||
Revenue | $ | 9,094 | $ | 7,580 | $ | 1,514 | 20.0 | % | ||||||
Operating costs and expenses | (7,959 | ) | (6,517 | ) | (1,442 | ) | ||||||||
Operating earnings | 1,135 | 1,063 | 72 | 6.8 | % | |||||||||
Interest, net | (114 | ) | (27 | ) | (87 | ) | ||||||||
Other, net | 2 | (9 | ) | 11 | ||||||||||
Earnings from continuing operations before income tax | 1,023 | 1,027 | (4 | ) | (0.4 | )% | ||||||||
Provision for income tax, net | (159 | ) | (263 | ) | 104 | |||||||||
Earnings from continuing operations | 864 | 764 | 100 | 13.1 | % | |||||||||
Discontinued operations, net of tax | (13 | ) | — | (13 | ) | |||||||||
Net earnings | $ | 851 | $ | 764 | $ | 87 | 11.4 | % | ||||||
Earnings per share—basic | ||||||||||||||
Continuing operations | $ | 2.92 | $ | 2.56 | $ | 0.36 | 14.1 | % | ||||||
Discontinued operations | (0.04 | ) | — | (0.04 | ) | |||||||||
Net earnings | $ | 2.88 | $ | 2.56 | $ | 0.32 | 12.5 | % | ||||||
Basic weighted average shares outstanding | 295.3 | 298.1 | ||||||||||||
Earnings per share—diluted | ||||||||||||||
Continuing operations | $ | 2.89 | $ | 2.52 | $ | 0.37 | 14.7 | % | ||||||
Discontinued operations | (0.04 | ) | — | (0.04 | ) | |||||||||
Net earnings | $ | 2.85 | $ | 2.52 | $ | 0.33 | 13.1 | % | ||||||
Diluted weighted average shares outstanding | 299.1 | 303.8 |
* | Prior-period information has been restated for the adoption of Accounting Standards Update (ASU) 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which we adopted on January 1, 2018. |
Nine Months Ended | Variance | |||||||||||||
September 30, 2018 (a) | October 1, 2017 (b) | $ | % | |||||||||||
Revenue | $ | 25,815 | $ | 22,696 | $ | 3,119 | 13.7 | % | ||||||
Operating costs and expenses | (22,584 | ) | (19,520 | ) | (3,064 | ) | ||||||||
Operating earnings | 3,231 | 3,176 | 55 | 1.7 | % | |||||||||
Interest, net | (244 | ) | (76 | ) | (168 | ) | ||||||||
Other, net | (34 | ) | (31 | ) | (3 | ) | ||||||||
Earnings from continuing operations before income tax | 2,953 | 3,069 | (116 | ) | (3.8 | )% | ||||||||
Provision for income tax, net | (504 | ) | (793 | ) | 289 | |||||||||
Earnings from continuing operations | 2,449 | 2,276 | 173 | 7.6 | % | |||||||||
Discontinued operations, net of tax | (13 | ) | — | (13 | ) | |||||||||
Net earnings | $ | 2,436 | $ | 2,276 | $ | 160 | 7.0 | % | ||||||
Earnings per share—basic | ||||||||||||||
Continuing operations | $ | 8.27 | $ | 7.59 | $ | 0.68 | 9.0 | % | ||||||
Discontinued operations | (0.04 | ) | — | (0.04 | ) | |||||||||
Net earnings | $ | 8.23 | $ | 7.59 | $ | 0.64 | 8.4 | % | ||||||
Basic weighted average shares outstanding | 296.0 | 299.9 | ||||||||||||
Earnings per share—diluted | ||||||||||||||
Continuing operations | $ | 8.16 | $ | 7.45 | $ | 0.71 | 9.5 | % | ||||||
Discontinued operations | (0.04 | ) | — | (0.04 | ) | |||||||||
Net earnings | $ | 8.12 | $ | 7.45 | $ | 0.67 | 9.0 | % | ||||||
Diluted weighted average shares outstanding | 300.1 | 305.5 |
(a) | 2018 results include the unfavorable impact of one-time charges of approximately $75 associated with costs to complete the acquisition of CSRA Inc. In the table above, approximately $45 of compensation-related costs was reported in operating costs and expenses, and approximately $30 of transaction costs was reported in other, net. |
(b) | Prior-period information has been restated for the adoption of ASU 2017-07, which we adopted on January 1, 2018. |
Three Months Ended | Variance | |||||||||||||
September 30, 2018 | October 1, 2017* | $ | % | |||||||||||
Revenue: | ||||||||||||||
Aerospace | $ | 2,031 | $ | 1,995 | $ | 36 | 1.8 | % | ||||||
Combat Systems | 1,523 | 1,500 | 23 | 1.5 | % | |||||||||
Information Technology | 2,307 | 1,068 | 1,239 | 116.0 | % | |||||||||
Mission Systems | 1,230 | 1,086 | 144 | 13.3 | % | |||||||||
Marine Systems | 2,003 | 1,931 | 72 | 3.7 | % | |||||||||
Total | $ | 9,094 | $ | 7,580 | $ | 1,514 | 20.0 | % | ||||||
Operating earnings: | ||||||||||||||
Aerospace | $ | 376 | $ | 381 | $ | (5 | ) | (1.3 | )% | |||||
Combat Systems | 241 | 247 | (6 | ) | (2.4 | )% | ||||||||
Information Technology | 157 | 101 | 56 | 55.4 | % | |||||||||
Mission Systems | 179 | 152 | 27 | 17.8 | % | |||||||||
Marine Systems | 169 | 179 | (10 | ) | (5.6 | )% | ||||||||
Corporate | 13 | 3 | 10 | 333.3 | % | |||||||||
Total | $ | 1,135 | $ | 1,063 | $ | 72 | 6.8 | % | ||||||
Operating margin: | ||||||||||||||
Aerospace | 18.5 | % | 19.1 | % | ||||||||||
Combat Systems | 15.8 | % | 16.5 | % | ||||||||||
Information Technology | 6.8 | % | 9.5 | % | ||||||||||
Mission Systems | 14.6 | % | 14.0 | % | ||||||||||
Marine Systems | 8.4 | % | 9.3 | % | ||||||||||
Total | 12.5 | % | 14.0 | % |
* | Prior-period information has been restated for the adoption of ASU 2017-07, which we adopted on January 1, 2018. |
Nine Months Ended | Variance | |||||||||||||
September 30, 2018 (a) | October 1, 2017 (b) | $ | % | |||||||||||
Revenue: | ||||||||||||||
Aerospace | $ | 5,751 | $ | 6,147 | $ | (396 | ) | (6.4 | )% | |||||
Combat Systems | 4,497 | 4,201 | 296 | 7.0 | % | |||||||||
Information Technology | 5,887 | 3,178 | 2,709 | 85.2 | % | |||||||||
Mission Systems | 3,475 | 3,226 | 249 | 7.7 | % | |||||||||
Marine Systems | 6,205 | 5,944 | 261 | 4.4 | % | |||||||||
Total | $ | 25,815 | $ | 22,696 | $ | 3,119 | 13.7 | % | ||||||
Operating earnings: | ||||||||||||||
Aerospace | $ | 1,108 | $ | 1,241 | $ | (133 | ) | (10.7 | )% | |||||
Combat Systems | 701 | 677 | 24 | 3.5 | % | |||||||||
Information Technology | 414 | 278 | 136 | 48.9 | % | |||||||||
Mission Systems | 478 | 451 | 27 | 6.0 | % | |||||||||
Marine Systems | 548 | 518 | 30 | 5.8 | % | |||||||||
Corporate | (18 | ) | 11 | (29 | ) | (263.6 | )% | |||||||
Total | $ | 3,231 | $ | 3,176 | $ | 55 | 1.7 | % | ||||||
Operating margin: | ||||||||||||||
Aerospace | 19.3 | % | 20.2 | % | ||||||||||
Combat Systems | 15.6 | % | 16.1 | % | ||||||||||
Information Technology | 7.0 | % | 8.7 | % | ||||||||||
Mission Systems | 13.8 | % | 14.0 | % | ||||||||||
Marine Systems | 8.8 | % | 8.7 | % | ||||||||||
Total | 12.5 | % | 14.0 | % |
(a) | 2018 results include the unfavorable impact of approximately $45 of compensation-related one-time charges associated with costs to complete the acquisition of CSRA Inc. This amount was reported as a reduction of Corporate operating earnings in the table above. |
(b) | Prior-period information has been restated for the adoption of ASU 2017-07, which we adopted on January 1, 2018. |
(Unaudited) | |||||||
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 1,010 | $ | 2,983 | |||
Accounts receivable | 3,736 | 3,617 | |||||
Unbilled receivables | 7,564 | 5,240 | |||||
Inventories | 6,247 | 5,303 | |||||
Other current assets | 1,401 | 1,185 | |||||
Total current assets | 19,958 | 18,328 | |||||
Noncurrent assets: | |||||||
Property, plant and equipment, net | 4,244 | 3,517 | |||||
Intangible assets, net | 2,667 | 702 | |||||
Goodwill | 19,486 | 11,914 | |||||
Other assets | 608 | 585 | |||||
Total noncurrent assets | 27,005 | 16,718 | |||||
Total assets | $ | 46,963 | $ | 35,046 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt and current portion of long-term debt | $ | 1,678 | $ | 2 | |||
Accounts payable | 3,033 | 3,207 | |||||
Customer advances and deposits | 7,327 | 6,992 | |||||
Other current liabilities | 3,651 | 2,898 | |||||
Total current liabilities | 15,689 | 13,099 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 11,403 | 3,980 | |||||
Other liabilities | 7,116 | 6,532 | |||||
Total noncurrent liabilities | 18,519 | 10,512 | |||||
Shareholders’ equity: | |||||||
Common stock | 482 | 482 | |||||
Surplus | 2,914 | 2,872 | |||||
Retained earnings | 28,691 | 26,444 | |||||
Treasury stock | (15,971 | ) | (15,543 | ) | |||
Accumulated other comprehensive loss | (3,361 | ) | (2,820 | ) | |||
Total shareholders’ equity | 12,755 | 11,435 | |||||
Total liabilities and shareholders’ equity | $ | 46,963 | $ | 35,046 |
Nine Months Ended | |||||||
September 30, 2018 | October 1, 2017 | ||||||
Cash flows from operating activities—continuing operations: | |||||||
Net earnings | $ | 2,436 | $ | 2,276 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation of property, plant and equipment | 352 | 269 | |||||
Amortization of intangible assets | 190 | 57 | |||||
Equity-based compensation expense | 110 | 93 | |||||
Deferred income tax (benefit) provision | (66 | ) | 155 | ||||
Discontinued operations, net of tax | 13 | — | |||||
(Increase) decrease in assets, net of effects of business acquisitions: | |||||||
Accounts receivable | 472 | 26 | |||||
Unbilled receivables | (1,625 | ) | (1,361 | ) | |||
Inventories | (854 | ) | 57 | ||||
Increase (decrease) in liabilities, net of effects of business acquisitions: | |||||||
Accounts payable | (324 | ) | 167 | ||||
Customer advances and deposits | 112 | (296 | ) | ||||
Income taxes payable | 250 | 223 | |||||
Other, net | 15 | 216 | |||||
Net cash provided by operating activities | 1,081 | 1,882 | |||||
Cash flows from investing activities: | |||||||
Business acquisitions, net of cash acquired | (10,039 | ) | (364 | ) | |||
Capital expenditures | (447 | ) | (273 | ) | |||
Other, net | 169 | 52 | |||||
Net cash used by investing activities | (10,317 | ) | (585 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from fixed-rate notes | 6,461 | 985 | |||||
Proceeds from (repayments of) commercial paper, net | 1,668 | (2 | ) | ||||
Proceeds from floating-rate notes | 1,000 | — | |||||
Dividends paid | (801 | ) | (735 | ) | |||
Purchases of common stock | (533 | ) | (1,172 | ) | |||
Repayment of CSRA accounts receivable purchase agreement | (450 | ) | — | ||||
Other, net | (68 | ) | 43 | ||||
Net cash provided (used) by financing activities | 7,277 | (881 | ) | ||||
Net cash used by discontinued operations | (14 | ) | (28 | ) | |||
Net (decrease) increase in cash and equivalents | (1,973 | ) | 388 | ||||
Cash and equivalents at beginning of period | 2,983 | 2,334 | |||||
Cash and equivalents at end of period | $ | 1,010 | $ | 2,722 |
2018 | 2017 | |||||||||||||||
Third Quarter | Third Quarter | |||||||||||||||
Other Financial Information: | ||||||||||||||||
Debt-to-equity (a) | 102.6 | % | 42.2 | % | ||||||||||||
Debt-to-capital (b) | 50.6 | % | 29.7 | % | ||||||||||||
Book value per share (c) | $ | 43.07 | $ | 38.73 | ||||||||||||
Income tax payments, net | $ | 150 | $ | 70 | ||||||||||||
Company-sponsored research and development (d) | $ | 126 | $ | 120 | ||||||||||||
Shares outstanding | 296,149,755 | 298,582,883 | ||||||||||||||
Non-GAAP Financial Measure: | ||||||||||||||||
2018 | 2017 | |||||||||||||||
Third Quarter | Nine Months | Third Quarter | Nine Months | |||||||||||||
Free cash flow from operations: | ||||||||||||||||
Net cash provided by operating activities | $ | 790 | $ | 1,081 | $ | 872 | $ | 1,882 | ||||||||
Capital expenditures | (168 | ) | (447 | ) | (120 | ) | (273 | ) | ||||||||
Free cash flow from operations (e) | $ | 622 | $ | 634 | $ | 752 | $ | 1,609 |
(a) | Debt-to-equity ratio is calculated as total debt divided by total equity as of the end of the period. |
(b) | Debt-to-capital ratio is calculated as total debt divided by the sum of total debt plus total equity as of the end of the period. |
(c) | Book value per share is calculated as total equity divided by total outstanding shares as of the end of the period. |
(d) | Includes independent research and development and Aerospace product-development costs. |
(e) | We believe free cash flow from operations is a useful measure for investors because it portrays our ability to generate cash from our businesses for purposes such as repaying maturing debt, funding business acquisitions, repurchasing our common stock and paying dividends. We use free cash flow from operations to assess the quality of our earnings and as a key performance measure in evaluating management. The most directly comparable GAAP measure to free cash flow from operations is net cash provided by operating activities. |
Funded | Unfunded | Total Backlog | Estimated Potential Contract Value* | Total Potential Contract Value | ||||||||||||||||
Third Quarter 2018: | ||||||||||||||||||||
Aerospace | $ | 11,696 | $ | 173 | $ | 11,869 | $ | 2,239 | $ | 14,108 | ||||||||||
Combat Systems | 15,865 | 395 | 16,260 | 3,857 | 20,117 | |||||||||||||||
Information Technology | 5,222 | 4,731 | 9,953 | 17,365 | 27,318 | |||||||||||||||
Mission Systems | 5,024 | 587 | 5,611 | 7,453 | 13,064 | |||||||||||||||
Marine Systems | 16,615 | 9,221 | 25,836 | 3,797 | 29,633 | |||||||||||||||
Total | $ | 54,422 | $ | 15,107 | $ | 69,529 | $ | 34,711 | $ | 104,240 | ||||||||||
Second Quarter 2018: | ||||||||||||||||||||
Aerospace | $ | 12,187 | $ | 157 | $ | 12,344 | $ | 2,282 | $ | 14,626 | ||||||||||
Combat Systems | 16,646 | 376 | 17,022 | 2,840 | 19,862 | |||||||||||||||
Information Technology | 4,633 | 4,576 | 9,209 | 18,931 | 28,140 | |||||||||||||||
Mission Systems | 4,636 | 645 | 5,281 | 4,287 | 9,568 | |||||||||||||||
Marine Systems | 17,310 | 5,124 | 22,434 | 4,333 | 26,767 | |||||||||||||||
Total | $ | 55,412 | $ | 10,878 | $ | 66,290 | $ | 32,673 | $ | 98,963 | ||||||||||
Third Quarter 2017: | ||||||||||||||||||||
Aerospace | $ | 11,729 | $ | 86 | $ | 11,815 | $ | 1,909 | $ | 13,724 | ||||||||||
Combat Systems | 17,060 | 494 | 17,554 | 4,607 | 22,161 | |||||||||||||||
Information Technology | 2,425 | 1,705 | 4,130 | 9,641 | 13,771 | |||||||||||||||
Mission Systems | 4,684 | 708 | 5,392 | 4,743 | 10,135 | |||||||||||||||
Marine Systems | 16,791 | 8,247 | 25,038 | 4,826 | 29,864 | |||||||||||||||
Total | $ | 52,689 | $ | 11,240 | $ | 63,929 | $ | 25,726 | $ | 89,655 |
Funded Backlog | Unfunded Backlog | Estimated Potential Contract Value | ||||||||||
• | $160 from the U.S. Army for munitions and ordnance, including Hydra-70 rockets. |
• | $85 from the U.S. Air Force for various rounds of medium-caliber ammunition. |
• | $55 to integrate a Mission Equipment Package onto Stryker vehicles to provide short range air defense capabilities. |
• | $30 from the U.S. Defense Logistics Agency to provide spare parts for Abrams main battle tanks. |
• | $30 to produce Patriot Advanced Capability-3 (PAC-3) guided-missile system motor cases. |
• | $330 from the U.S. Census Bureau to provide contact-center systems and operations support for the 2020 Census Questionnaire Assistance program. |
• | $210 from the Centers for Medicare & Medicaid Services for benefits recovery services, cloud hosting and IT support. |
• | $100 to provide logistics, sustainment and maintenance support services for the U.S. Army’s worldwide command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) systems. |
• | $95 from the U.S. Department of State to provide visa application and issuance support services to U.S. embassies and consulates worldwide. |
• | $95 from the U.S. Naval Air Warfare Center for design, development and support of shipboard and airborne platforms. |
• | $90 from the U.S. Federal Emergency Management Agency (FEMA) for contact-center operations and support services. |
• | $170 from the U.S. Navy for combat and seaframe control systems on Independence-variant Littoral Combat Ships (LCS). |
• | $150 for additional equipment to support the U.S. Army’s mobile communications network. |
• | $100 from the Army for computing and communications equipment under the Common Hardware Systems-4 (CHS-4) program. |
• | $75 from the Canadian Department of National Defence to modernize and provide in-service support for the underwater warfare sensor suite installed on Halifax-class frigates. |
• | $75 to rebuild and repair MK6 missile guidance systems and produce MK6 circuit card assemblies for the Navy. |
• | An IDIQ contract from the Army for computing and communications equipment under the Common Hardware Systems-5 (CHS-5) program. The program has a maximum potential value of $3.9 billion over five years. |
• | $3.9 billion from the U.S. Navy for the construction of four Arleigh Burke-class (DDG-51) guided-missile destroyers. |
• | $580 from the Navy for surface ship maintenance and modernization work. |
• | $480 from the Navy to continue design and development work in support of the Columbia-class submarine program. |
• | $55 from the Navy for the procurement and management of spare parts and equipment for the Zumwalt-class (DDG-1000) guided-missile destroyer program. |
Third Quarter | Nine Months | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Gulfstream Aircraft Deliveries (units): | ||||||||||||
Large-cabin aircraft | 21 | 21 | 58 | 67 | ||||||||
Mid-cabin aircraft | 6 | 9 | 21 | 23 | ||||||||
Total | 27 | 30 | 79 | 90 | ||||||||
Pre-owned Aircraft Deliveries (units): | 2 | 1 | 4 | 4 |
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Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were removed , added and changed by General Dynamics Corp.
General Dynamics Corp's Definitive Proxy Statement (Form DEF 14A) filed after their 2018 10-K Annual Report includes:
Material Contracts, Statements, Certifications & more
General Dynamics Corp provided additional information to their SEC Filing as exhibits
Ticker: GDEvents:
CIK: 40533
Form Type: 8-K Corporate News
Accession Number: 0000040533-18-000058
Submitted to the SEC: Wed Oct 24 2018 8:30:00 AM EST
Accepted by the SEC: Wed Oct 24 2018
Period: Wednesday, October 24, 2018
Industry: Ship And Boat Building And Repairing