General Dynamics Reports Third-Quarter 2025 Financial Results
- Revenue
$12.9 billion , up 10.6% from year-ago quarter - Diluted EPS
$3.88 , up 15.8% from year-ago quarter -
$2.1 billion cash from operating activities, 199% of net earnings - Very strong order activity in all four segments
RESTON, Va.,
"Each of our four segments grew earnings and backlog in the quarter, reflecting solid execution coupled with growing demand," said Phebe Novakovic, chairman and chief executive officer. "The Aerospace segment in particular performed impressively, growing revenue 30.3% and expanding margins by 100 basis points from the same period a year ago, with order activity for business jets remaining very strong."
Cash and Capital Deployment
Net cash provided by operating activities in the quarter totaled
Orders and Backlog
Orders totaled
Total estimated contract value, the sum of all backlog components, was
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 CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS |
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Three Months Ended |
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Variance |
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|
|
|
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$ |
|
|
% |
|
|
|
Revenue |
$ 12,907 |
|
$ 11,671 |
|
$ 1,236 |
|
|
|
10.6 % |
|
|
Operating costs and expenses |
(11,576) |
|
(10,490) |
|
(1,086) |
|
|
|
|
|
|
Operating earnings |
1,331 |
|
1,181 |
|
150 |
|
|
|
12.7 % |
|
|
Other, net |
15 |
|
15 |
|
— |
|
|
|
|
|
|
Interest, net |
(74) |
|
(82) |
|
8 |
|
|
|
|
|
|
Earnings before income tax |
1,272 |
|
1,114 |
|
158 |
|
|
|
14.2 % |
|
|
Provision for income tax, net |
(213) |
|
(184) |
|
(29) |
|
|
|
|
|
|
Net earnings |
$ 1,059 |
|
$ 930 |
|
$ 129 |
|
|
|
13.9 % |
|
|
Earnings per share—basic |
$ 3.93 |
|
$ 3.39 |
|
$ 0.54 |
|
|
|
15.9 % |
|
|
Basic weighted average shares outstanding |
269.2 |
|
274.4 |
|
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|
|
|
|
|
|
Earnings per share—diluted |
$ 3.88 |
|
$ 3.35 |
|
$ 0.53 |
|
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|
15.8 % |
|
|
Diluted weighted average shares outstanding |
272.6 |
|
277.9 |
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EXHIBIT B CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS |
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|||||||||
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Nine Months Ended |
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Variance |
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|
$ |
|
|
% |
|
|
|
Revenue |
$ 38,171 |
|
$ 34,378 |
|
$ 3,793 |
|
|
|
11.0 % |
|
|
Operating costs and expenses |
(34,267) |
|
(31,005) |
|
(3,262) |
|
|
|
|
|
|
Operating earnings |
3,904 |
|
3,373 |
|
531 |
|
|
|
15.7 % |
|
|
Other, net |
51 |
|
47 |
|
4 |
|
|
|
|
|
|
Interest, net |
(251) |
|
(248) |
|
(3) |
|
|
|
|
|
|
Earnings before income tax |
3,704 |
|
3,172 |
|
532 |
|
|
|
16.8 % |
|
|
Provision for income tax, net |
(637) |
|
(538) |
|
(99) |
|
|
|
|
|
|
Net earnings |
$ 3,067 |
|
$ 2,634 |
|
$ 433 |
|
|
|
16.4 % |
|
|
Earnings per share—basic |
$ 11.41 |
|
$ 9.61 |
|
$ 1.80 |
|
|
|
18.7 % |
|
|
Basic weighted average shares outstanding |
268.8 |
|
274.0 |
|
|
|
|
|
|
|
|
Earnings per share—diluted |
$ 11.29 |
|
$ 9.49 |
|
$ 1.80 |
|
|
|
19.0 % |
|
|
Diluted weighted average shares outstanding |
271.8 |
|
277.5 |
|
|
|
|
|
|
|
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EXHIBIT C REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS |
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Three Months Ended |
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Variance |
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|
$ |
|
|
% |
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ 3,234 |
|
$ 2,482 |
|
$ 752 |
|
|
|
30.3 % |
|
|
|
4,096 |
|
3,599 |
|
497 |
|
|
|
13.8 % |
|
|
Combat Systems |
2,252 |
|
2,212 |
|
40 |
|
|
|
1.8 % |
|
|
Technologies |
3,325 |
|
3,378 |
|
(53) |
|
|
|
(1.6) % |
|
|
Total |
$ 12,907 |
|
$ 11,671 |
|
$ 1,236 |
|
|
|
10.6 % |
|
|
Operating earnings: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
|
$ 305 |
|
$ 125 |
|
|
|
41.0 % |
|
|
|
291 |
|
258 |
|
33 |
|
|
|
12.8 % |
|
|
Combat Systems |
335 |
|
325 |
|
10 |
|
|
|
3.1 % |
|
|
Technologies |
327 |
|
326 |
|
1 |
|
|
|
0.3 % |
|
|
Corporate |
(52) |
|
(33) |
|
(19) |
|
|
|
(57.6) % |
|
|
Total |
$ 1,331 |
|
$ 1,181 |
|
$ 150 |
|
|
|
12.7 % |
|
|
Operating margin: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
13.3 % |
|
12.3 % |
|
|
|
|
|
|
|
|
|
7.1 % |
|
7.2 % |
|
|
|
|
|
|
|
|
Combat Systems |
14.9 % |
|
14.7 % |
|
|
|
|
|
|
|
|
Technologies |
9.8 % |
|
9.7 % |
|
|
|
|
|
|
|
|
Total |
10.3 % |
|
10.1 % |
|
|
|
|
|
|
|
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EXHIBIT D REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS |
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Nine Months Ended |
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Variance |
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|
$ |
|
|
% |
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ 9,322 |
|
$ 7,506 |
|
$ 1,816 |
|
|
|
24.2 % |
|
|
|
11,905 |
|
10,383 |
|
1,522 |
|
|
|
14.7 % |
|
|
Combat Systems |
6,711 |
|
6,602 |
|
109 |
|
|
|
1.7 % |
|
|
Technologies |
10,233 |
|
9,887 |
|
346 |
|
|
|
3.5 % |
|
|
Total |
$ 38,171 |
|
$ 34,378 |
|
$ 3,793 |
|
|
|
11.0 % |
|
|
Operating earnings: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ 1,265 |
|
$ 879 |
|
$ 386 |
|
|
|
43.9 % |
|
|
|
832 |
|
735 |
|
97 |
|
|
|
13.2 % |
|
|
Combat Systems |
950 |
|
920 |
|
30 |
|
|
|
3.3 % |
|
|
Technologies |
987 |
|
941 |
|
46 |
|
|
|
4.9 % |
|
|
Corporate |
(130) |
|
(102) |
|
(28) |
|
|
|
(27.5) % |
|
|
Total |
$ 3,904 |
|
$ 3,373 |
|
$ 531 |
|
|
|
15.7 % |
|
|
Operating margin: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
13.6 % |
|
11.7 % |
|
|
|
|
|
|
|
|
|
7.0 % |
|
7.1 % |
|
|
|
|
|
|
|
|
Combat Systems |
14.2 % |
|
13.9 % |
|
|
|
|
|
|
|
|
Technologies |
9.6 % |
|
9.5 % |
|
|
|
|
|
|
|
|
Total |
10.2 % |
|
9.8 % |
|
|
|
|
|
|
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EXHIBIT E CONSOLIDATED BALANCE SHEET DOLLARS IN MILLIONS |
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(Unaudited) |
|
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ASSETS |
|
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Current assets: |
|
|
|
|
Cash and equivalents |
$ 2,520 |
|
$ 1,697 |
|
Accounts receivable |
3,303 |
|
2,977 |
|
Unbilled receivables |
8,641 |
|
8,248 |
|
Inventories |
9,813 |
|
9,724 |
|
Other current assets |
1,575 |
|
1,740 |
|
Total current assets |
25,852 |
|
24,386 |
|
Noncurrent assets: |
|
|
|
|
Property, plant and equipment, net |
6,602 |
|
6,467 |
|
Intangible assets, net |
1,402 |
|
1,520 |
|
|
20,871 |
|
20,556 |
|
Other assets |
2,872 |
|
2,951 |
|
Total noncurrent assets |
31,747 |
|
31,494 |
|
Total assets |
$ 57,599 |
|
$ 55,880 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term debt and current portion of long-term debt |
$ 1,006 |
|
$ 1,502 |
|
Accounts payable |
3,459 |
|
3,344 |
|
Customer advances and deposits |
10,462 |
|
9,491 |
|
Other current liabilities |
3,537 |
|
3,487 |
|
Total current liabilities |
18,464 |
|
17,824 |
|
Noncurrent liabilities: |
|
|
|
|
Long-term debt |
7,008 |
|
7,260 |
|
Other liabilities |
7,693 |
|
8,733 |
|
Total noncurrent liabilities |
14,701 |
|
15,993 |
|
Shareholders' equity: |
|
|
|
|
Common stock |
482 |
|
482 |
|
Surplus |
4,323 |
|
4,062 |
|
Retained earnings |
43,345 |
|
41,487 |
|
|
(22,856) |
|
(22,450) |
|
Accumulated other comprehensive loss |
(860) |
|
(1,518) |
|
Total shareholders' equity |
24,434 |
|
22,063 |
|
Total liabilities and shareholders' equity |
$ 57,599 |
|
$ 55,880 |
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EXHIBIT F CONSOLIDATED STATEMENT OF CASH FLOWS - (UNAUDITED) DOLLARS IN MILLIONS |
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Nine Months Ended |
||
|
|
|
|
|
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Cash flows from operating activities—continuing operations: |
|
|
|
|
Net earnings |
$ 3,067 |
|
$ 2,634 |
|
Adjustments to reconcile net earnings to net cash from operating activities: |
|
|
|
|
Depreciation of property, plant and equipment |
490 |
|
469 |
|
Amortization of intangible and finance lease right-of-use assets |
182 |
|
177 |
|
Equity-based compensation expense |
146 |
|
137 |
|
Deferred income tax provision (benefit) |
151 |
|
(107) |
|
(Increase) decrease in assets, net of effects of business acquisitions: |
|
|
|
|
Accounts receivable |
(314) |
|
(172) |
|
Unbilled receivables |
(415) |
|
(874) |
|
Inventories |
(131) |
|
(1,612) |
|
Increase (decrease) in liabilities, net of effects of business acquisitions: |
|
|
|
|
Accounts payable |
119 |
|
193 |
|
Customer advances and deposits |
45 |
|
628 |
|
Other, net |
219 |
|
479 |
|
Net cash provided by operating activities |
3,559 |
|
1,952 |
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
(552) |
|
(561) |
|
Other, net |
130 |
|
(27) |
|
Net cash used by investing activities |
(422) |
|
(588) |
|
Cash flows from financing activities: |
|
|
|
|
Repayment of fixed-rate notes |
(1,500) |
|
— |
|
Proceeds from fixed-rate notes |
747 |
|
— |
|
Dividends paid |
(1,188) |
|
(1,140) |
|
Purchases of common stock |
(600) |
|
(183) |
|
Other, net |
235 |
|
150 |
|
Net cash used by financing activities |
(2,306) |
|
(1,173) |
|
Net cash used by discontinued operations |
(8) |
|
(3) |
|
Net increase in cash and equivalents |
823 |
|
188 |
|
Cash and equivalents at beginning of period |
1,697 |
|
1,913 |
|
Cash and equivalents at end of period |
$ 2,520 |
|
$ 2,101 |
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EXHIBIT G ADDITIONAL FINANCIAL INFORMATION - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS |
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Other Financial Information: |
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|
|
|
|
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|
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|
|
|
|
|
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Debt-to-equity (a) |
32.8 % |
|
39.7 % |
|
|
|
|
|
Book value per share (b) |
$ 90.46 |
|
$ 81.61 |
|
|
|
|
|
Shares outstanding |
270,120,442 |
|
270,340,502 |
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Third Quarter |
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Nine Months |
||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Income tax payments, net |
$ 27 |
|
$ 173 |
|
$ 263 |
|
$ 125 |
|
Company-sponsored research and development (c) |
$ 119 |
|
$ 137 |
|
$ 339 |
|
$ 421 |
|
Return on sales (d) |
8.2 % |
|
8.0 % |
|
8.0 % |
|
7.7 % |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures: |
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|
Third Quarter |
|
Nine Months |
||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Free cash flow: |
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
$ 2,109 |
|
$ 1,416 |
|
$ 3,559 |
|
$ 1,952 |
|
Capital expenditures |
(212) |
|
(201) |
|
(552) |
|
(561) |
|
Free cash flow (e) |
$ 1,897 |
|
$ 1,215 |
|
$ 3,007 |
|
$ 1,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt: |
|
|
|
|
|
|
|
|
Total debt |
$ 8,014 |
|
$ 8,762 |
|
|
|
|
|
Less cash and equivalents |
2,520 |
|
1,697 |
|
|
|
|
|
Net debt (f) |
$ 5,494 |
|
$ 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. |
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(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 Backlog |
|
Estimated Potential Contract Value* |
|
Total Estimated Contract Value |
|
Third Quarter 2025: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ 19,476 |
|
$ 1,131 |
|
$ 20,607 |
|
$ 1,147 |
|
$ 21,754 |
|
|
|
38,757 |
|
14,854 |
|
53,611 |
|
14,839 |
|
68,450 |
|
Combat Systems |
|
17,232 |
|
1,470 |
|
18,702 |
|
9,553 |
|
28,255 |
|
Technologies |
|
10,269 |
|
6,668 |
|
16,937 |
|
32,341 |
|
49,278 |
|
Total |
|
$ 85,734 |
|
$ 24,123 |
|
$ 109,857 |
|
$ 57,880 |
|
$ 167,737 |
|
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 |
|
Third Quarter 2024: |
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ 18,859 |
|
$ 937 |
|
$ 19,796 |
|
$ 254 |
|
$ 20,050 |
|
|
|
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 |
|
* |
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 AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED) DOLLARS IN MILLIONS |
||||||||
|
|
||||||||
|
|
|
Third Quarter |
Nine Months |
|||||
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
Gulfstream Aircraft Deliveries (units): |
|
|
|
|
|
|
|
|
|
Large-cabin aircraft |
|
33 |
|
24 |
|
95 |
|
76 |
|
Mid-cabin aircraft |
|
6 |
|
4 |
|
18 |
|
13 |
|
Total |
|
39 |
|
28 |
|
113 |
|
89 |
|
|
|
|
|
|
|
|
|
|
|
Aerospace Book-to-Bill: |
|
|
|
|
|
|
|
|
|
Orders* |
|
$ 4,053 |
|
$ 2,365 |
|
$ 10,417 |
|
$ 7,464 |
|
Revenue |
|
3,234 |
|
2,482 |
|
9,322 |
|
7,506 |
|
Book-to- |
|
1.3x |
|
1.0x |
|
1.1x |
|
1.0x |
|
|
||||||||
|
* Does not include customer defaults, liquidated damages, cancellations, foreign exchange fluctuations and other backlog adjustments. |
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