General Dynamics Reports Second-Quarter 2025 Financial Results
- Revenue
$13 billion , up 8.9% from year-ago quarter - Diluted EPS
$3.74 , up 14.7% from year-ago quarter -
$1.6 billion cash from operating activities, 158% of net earnings - Very strong order activity in
Marine and Aerospace segments
"During the first half of the year, each of our four segments achieved growth in revenue and earnings, with margins on a companywide basis expanding 50 basis points over the same period last year," said
Cash and Capital Deployment
Net cash provided by operating activities in the quarter totaled
Orders and Backlog
Consolidated book-to-bill ratio, defined as orders divided by revenue, was 2.2-to-1 for the quarter. Book-to-bill was 2.4-to-1 for the defense segments and 1.3-to-1 for the aerospace segment. On a companywide basis, orders totaled
About
Headquartered in
WEBCAST INFORMATION:
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
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EXHIBIT A |
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Three Months Ended |
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Variance |
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|
|
|
|
|
$ |
|
|
% |
|
|
Revenue |
$ 13,041 |
|
$ 11,976 |
|
$ 1,065 |
|
|
8.9 % |
|
|
Operating costs and expenses |
(11,736) |
|
(10,820) |
|
(916) |
|
|
|
|
|
Operating earnings |
1,305 |
|
1,156 |
|
149 |
|
|
12.9 % |
|
|
Other, net |
15 |
|
18 |
|
(3) |
|
|
|
|
|
Interest, net |
(88) |
|
(84) |
|
(4) |
|
|
|
|
|
Earnings before income tax |
1,232 |
|
1,090 |
|
142 |
|
|
13.0 % |
|
|
Provision for income tax, net |
(218) |
|
(185) |
|
(33) |
|
|
|
|
|
Net earnings |
$ 1,014 |
|
$ 905 |
|
$ 109 |
|
|
12.0 % |
|
|
Earnings per share—basic |
$ 3.78 |
|
$ 3.30 |
|
$ 0.48 |
|
|
14.5 % |
|
|
Basic weighted average shares outstanding |
268.1 |
|
274.1 |
|
|
|
|
|
|
|
Earnings per share—diluted |
$ 3.74 |
|
$ 3.26 |
|
$ 0.48 |
|
|
14.7 % |
|
|
Diluted weighted average shares outstanding |
270.9 |
|
277.7 |
|
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EXHIBIT B |
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Six Months Ended |
|
Variance |
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|||||
|
|
|
|
|
|
$ |
|
|
% |
|
|
Revenue |
$ 25,264 |
|
$ 22,707 |
|
$ 2,557 |
|
|
11.3 % |
|
|
Operating costs and expenses |
(22,691) |
|
(20,515) |
|
(2,176) |
|
|
|
|
|
Operating earnings |
2,573 |
|
2,192 |
|
381 |
|
|
17.4 % |
|
|
Other, net |
36 |
|
32 |
|
4 |
|
|
|
|
|
Interest, net |
(177) |
|
(166) |
|
(11) |
|
|
|
|
|
Earnings before income tax |
2,432 |
|
2,058 |
|
374 |
|
|
18.2 % |
|
|
Provision for income tax, net |
(424) |
|
(354) |
|
(70) |
|
|
|
|
|
Net earnings |
$ 2,008 |
|
$ 1,704 |
|
$ 304 |
|
|
17.8 % |
|
|
Earnings per share—basic |
$ 7.48 |
|
$ 6.22 |
|
$ 1.26 |
|
|
20.3 % |
|
|
Basic weighted average shares outstanding |
268.6 |
|
273.8 |
|
|
|
|
|
|
|
Earnings per share—diluted |
$ 7.40 |
|
$ 6.14 |
|
$ 1.26 |
|
|
20.5 % |
|
|
Diluted weighted average shares outstanding |
271.3 |
|
277.4 |
|
|
|
|
|
|
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EXHIBIT C |
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|
Three Months Ended |
|
Variance |
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|||||
|
|
|
|
|
|
$ |
|
|
% |
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ 3,062 |
|
$ 2,940 |
|
$ 122 |
|
|
4.1 % |
|
|
|
4,220 |
|
3,453 |
|
767 |
|
|
22.2 % |
|
|
Combat Systems |
2,283 |
|
2,288 |
|
(5) |
|
|
(0.2) % |
|
|
Technologies |
3,476 |
|
3,295 |
|
181 |
|
|
5.5 % |
|
|
Total |
$ 13,041 |
|
$ 11,976 |
|
$ 1,065 |
|
|
8.9 % |
|
|
Operating earnings: |
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ 403 |
|
$ 319 |
|
$ 84 |
|
|
26.3 % |
|
|
|
291 |
|
245 |
|
46 |
|
|
18.8 % |
|
|
Combat Systems |
324 |
|
313 |
|
11 |
|
|
3.5 % |
|
|
Technologies |
332 |
|
320 |
|
12 |
|
|
3.8 % |
|
|
Corporate |
(45) |
|
(41) |
|
(4) |
|
|
(9.8) % |
|
|
Total |
$ 1,305 |
|
$ 1,156 |
|
$ 149 |
|
|
12.9 % |
|
|
Operating margin: |
|
|
|
|
|
|
|
|
|
|
Aerospace |
13.2 % |
|
10.9 % |
|
|
|
|
|
|
|
|
6.9 % |
|
7.1 % |
|
|
|
|
|
|
|
Combat Systems |
14.2 % |
|
13.7 % |
|
|
|
|
|
|
|
Technologies |
9.6 % |
|
9.7 % |
|
|
|
|
|
|
|
Total |
10.0 % |
|
9.7 % |
|
|
|
|
|
|
|
EXHIBIT D |
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|
Six Months Ended |
|
Variance |
|
|||||
|
|
|
|
|
|
$ |
|
|
% |
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ 6,088 |
|
$ 5,024 |
|
$ 1,064 |
|
|
21.2 % |
|
|
|
7,809 |
|
6,784 |
|
1,025 |
|
|
15.1 % |
|
|
Combat Systems |
4,459 |
|
4,390 |
|
69 |
|
|
1.6 % |
|
|
Technologies |
6,908 |
|
6,509 |
|
399 |
|
|
6.1 % |
|
|
Total |
$ 25,264 |
|
$ 22,707 |
|
$ 2,557 |
|
|
11.3 % |
|
|
Operating earnings: |
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ 835 |
|
$ 574 |
|
$ 261 |
|
|
45.5 % |
|
|
|
541 |
|
477 |
|
64 |
|
|
13.4 % |
|
|
Combat Systems |
615 |
|
595 |
|
20 |
|
|
3.4 % |
|
|
Technologies |
660 |
|
615 |
|
45 |
|
|
7.3 % |
|
|
Corporate |
(78) |
|
(69) |
|
(9) |
|
|
(13.0) % |
|
|
Total |
$ 2,573 |
|
$ 2,192 |
|
$ 381 |
|
|
17.4 % |
|
|
Operating margin: |
|
|
|
|
|
|
|
|
|
|
Aerospace |
13.7 % |
|
11.4 % |
|
|
|
|
|
|
|
|
6.9 % |
|
7.0 % |
|
|
|
|
|
|
|
Combat Systems |
13.8 % |
|
13.6 % |
|
|
|
|
|
|
|
Technologies |
9.6 % |
|
9.4 % |
|
|
|
|
|
|
|
Total |
10.2 % |
|
9.7 % |
|
|
|
|
|
|
|
EXHIBIT E |
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|||
|
|
(Unaudited) |
|
|
|
|
|
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|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and equivalents |
$ 1,523 |
|
$ 1,697 |
|
Accounts receivable |
3,613 |
|
2,977 |
|
Unbilled receivables |
8,412 |
|
8,248 |
|
Inventories |
9,889 |
|
9,724 |
|
Other current assets |
1,629 |
|
1,740 |
|
Total current assets |
25,066 |
|
24,386 |
|
Noncurrent assets: |
|
|
|
|
Property, plant and equipment, net |
6,556 |
|
6,467 |
|
Intangible assets, net |
1,437 |
|
1,520 |
|
|
20,876 |
|
20,556 |
|
Other assets |
2,953 |
|
2,951 |
|
Total noncurrent assets |
31,822 |
|
31,494 |
|
Total assets |
$ 56,888 |
|
$ 55,880 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term debt and current portion of long-term debt |
$ 1,204 |
|
$ 1,502 |
|
Accounts payable |
3,078 |
|
3,344 |
|
Customer advances and deposits |
10,678 |
|
9,491 |
|
Other current liabilities |
3,419 |
|
3,487 |
|
Total current liabilities |
18,379 |
|
17,824 |
|
Noncurrent liabilities: |
|
|
|
|
Long-term debt |
7,508 |
|
7,260 |
|
Other liabilities |
7,421 |
|
8,733 |
|
Total noncurrent liabilities |
14,929 |
|
15,993 |
|
Shareholders' equity: |
|
|
|
|
Common stock |
482 |
|
482 |
|
Surplus |
4,173 |
|
4,062 |
|
Retained earnings |
42,695 |
|
41,487 |
|
|
(22,975) |
|
(22,450) |
|
Accumulated other comprehensive loss |
(795) |
|
(1,518) |
|
Total shareholders' equity |
23,580 |
|
22,063 |
|
Total liabilities and shareholders' equity |
$ 56,888 |
|
$ 55,880 |
|
EXHIBIT F |
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|||
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|
Six Months Ended |
||
|
|
|
|
|
|
Cash flows from operating activities—continuing operations: |
|
|
|
|
Net earnings |
$ 2,008 |
|
$ 1,704 |
|
Adjustments to reconcile net earnings to net cash from operating activities: |
|
|
|
|
Depreciation of property, plant and equipment |
325 |
|
311 |
|
Amortization of intangible and finance lease right-of-use assets |
121 |
|
117 |
|
Equity-based compensation expense |
89 |
|
87 |
|
Deferred income tax benefit |
(98) |
|
(90) |
|
(Increase) decrease in assets, net of effects of business acquisitions: |
|
|
|
|
Accounts receivable |
(612) |
|
(158) |
|
Unbilled receivables |
(200) |
|
(601) |
|
Inventories |
(207) |
|
(1,152) |
|
Increase (decrease) in liabilities, net of effects of business acquisitions: |
|
|
|
|
Accounts payable |
(261) |
|
(125) |
|
Customer advances and deposits |
106 |
|
169 |
|
Other, net |
179 |
|
274 |
|
Net cash provided by operating activities |
1,450 |
|
536 |
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
(340) |
|
(360) |
|
Other, net |
124 |
|
53 |
|
Net cash used by investing activities |
(216) |
|
(307) |
|
Cash flows from financing activities: |
|
|
|
|
Repayment of fixed-rate notes |
(1,500) |
|
— |
|
Proceeds from fixed-rate notes |
747 |
|
— |
|
Proceeds from commercial paper, net |
696 |
|
— |
|
Dividends paid |
(785) |
|
(750) |
|
Purchases of common stock |
(600) |
|
(139) |
|
Other, net |
39 |
|
111 |
|
Net cash used by financing activities |
(1,403) |
|
(778) |
|
Net cash used by discontinued operations |
(5) |
|
(2) |
|
Net decrease in cash and equivalents |
(174) |
|
(551) |
|
Cash and equivalents at beginning of period |
1,697 |
|
1,913 |
|
Cash and equivalents at end of period |
$ 1,523 |
|
$ 1,362 |
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EXHIBIT G |
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Other Financial Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt-to-equity (a) |
36.9 % |
|
39.7 % |
|
|
|
|
|
Book value per share (b) |
$ 87.66 |
|
$ 81.61 |
|
|
|
|
|
Shares outstanding |
268,993,342 |
|
270,340,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
Six Months |
||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Income tax (payments) refunds, net |
$ (202) |
|
$ 81 |
|
$ (236) |
|
$ 48 |
|
Company-sponsored research and development (c) |
$ 119 |
|
$ 147 |
|
$ 220 |
|
$ 284 |
|
Return on sales (d) |
7.8 % |
|
7.6 % |
|
7.9 % |
|
7.5 % |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures: |
|
|
|
|
|
|
|
|
|
Second Quarter |
|
Six Months |
||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Free cash flow: |
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
$ 1,598 |
|
$ 814 |
|
$ 1,450 |
|
$ 536 |
|
Capital expenditures |
(198) |
|
(201) |
|
(340) |
|
(360) |
|
Free cash flow (e) |
$ 1,400 |
|
$ 613 |
|
$ 1,110 |
|
$ 176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt: |
|
|
|
|
|
|
|
|
Total debt |
$ 8,712 |
|
$ 8,762 |
|
|
|
|
|
Less cash and equivalents |
1,523 |
|
1,697 |
|
|
|
|
|
Net debt (f) |
$ 7,189 |
|
$ 7,065 |
|
|
|
|
|
|
|
|
(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. |
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EXHIBIT H |
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|
|
Funded |
|
Unfunded |
|
Total Backlog |
|
Estimated Potential Contract Value* |
|
Total Estimated Contract Value |
|
Second Quarter 2025: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ 18,676 |
|
$ 1,227 |
|
$ 19,903 |
|
$ 1,165 |
|
$ 21,068 |
|
|
|
39,298 |
|
13,674 |
|
52,972 |
|
14,708 |
|
67,680 |
|
Combat Systems |
|
15,961 |
|
616 |
|
16,577 |
|
9,592 |
|
26,169 |
|
Technologies |
|
9,945 |
|
4,285 |
|
14,230 |
|
32,011 |
|
46,241 |
|
Total |
|
$ 83,880 |
|
$ 19,802 |
|
$ 103,682 |
|
$ 57,476 |
|
$ 161,158 |
|
First Quarter 2025: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ 18,171 |
|
$ 828 |
|
$ 18,999 |
|
$ 1,090 |
|
$ 20,089 |
|
|
|
30,882 |
|
7,491 |
|
38,373 |
|
10,261 |
|
48,634 |
|
Combat Systems |
|
16,129 |
|
799 |
|
16,928 |
|
8,649 |
|
25,577 |
|
Technologies |
|
9,751 |
|
4,606 |
|
14,357 |
|
32,670 |
|
47,027 |
|
Total |
|
$ 74,933 |
|
$ 13,724 |
|
$ 88,657 |
|
$ 52,670 |
|
$ 141,327 |
|
Second Quarter 2024: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ 19,126 |
|
$ 911 |
|
$ 20,037 |
|
$ 372 |
|
$ 20,409 |
|
|
|
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 |
|
* |
The estimated potential contract value includes work awarded on unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised 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
|
|
EXHIBIT H-2 |
|
EXHIBIT I |
||||||||
|
|
||||||||
|
|
|
Second Quarter |
Six Months |
|||||
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Gulfstream Aircraft Deliveries (units): |
|
|
|
|
|
|
|
|
|
Large-cabin aircraft |
|
32 |
|
31 |
|
62 |
|
52 |
|
Mid-cabin aircraft |
|
6 |
|
6 |
|
12 |
|
9 |
|
Total |
|
38 |
|
37 |
|
74 |
|
61 |
|
|
|
|
|
|
|
|
|
|
|
Aerospace Book-to-Bill: |
|
|
|
|
|
|
|
|
|
Orders* |
|
$ 4,003 |
|
$ 2,673 |
|
$ 6,364 |
|
$ 5,099 |
|
Revenue |
|
3,062 |
|
2,940 |
|
6,088 |
|
5,024 |
|
Book-to- |
|
1.3x |
|
0.9x |
|
1.0x |
|
1.0x |
|
* |
Does not include customer defaults, liquidated damages, cancellations, foreign exchange fluctuations and other backlog adjustments. |
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