Home > News > Press Release Details View All News January 24, 2024 RESTON, Va., Jan. 24, 2024 /PRNewswire/ -- General Dynamics (NYSE: GD) today reported quarterly net earnings of $1 billion, or $3.64 diluted earnings per share (EPS). Revenue of $11.7 billion was up 7.5% over the year-ago quarter. For the full year, net earnings were $3.3 billion, or $12.02 per diluted share. Full-year revenue was $42.3 billion, a 7.3% increase from 2022. "We had a solid fourth quarter, capping off a year that saw growth in all four segments and continued strong cash flow," said Phebe N. Novakovic, chairman and chief executive officer. "Our Aerospace segment in particular saw solid execution and continued demand in the quarter and is well positioned for a surge in deliveries upon FAA certification of the G700." Cash Net cash provided by operating activities in the quarter totaled $1.2 billion, or 119% of net earnings. For the year, net cash provided by operating activities totaled a record-high $4.7 billion, or 142% of net earnings. During the year, the company reduced debt by $1.2 billion, invested $904 million in capital expenditures, paid $1.4 billion in dividends, and used $434 million to repurchase shares, ending 2023 with $1.9 billion in cash and equivalents on hand. Backlog Orders remained strong across the company with a consolidated book-to-bill ratio, defined as orders divided by revenue, of 0.8- to-1 for the quarter and 1.1-to-1 for the year. Backlog of $93.6 billion was the highest year-end backlog in the company's history. In addition to backlog, estimated potential contract value, representing management's estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $38.3 billion at year end. Total estimated contract value, the sum of all backlog components, was $132 billion at the end of the year. In the Aerospace segment, orders in the quarter totaled $3.2 billion, growing backlog to $20.5 billion, up 4.8% from the year-ago quarter. Aerospace book-to-bill was 1.2-to-1 for the quarter and the year. In the three defense segments, significant awards in the quarter included an IDIQ contract with maximum potential value of $2.5 billion from the Indian Health Service to modernize its electronic health record system; an IDIQ contract with maximum potential value of $975 million to provide mission command training and technical support services to the U.S. Army; $395 million, with options having maximum potential value of $840 million, for maintenance and modernization of two U.S. Navy Arleigh Burke-class (DDG-51) guided-missile destroyers; a contract with maximum potential value of $420 million to provide ongoing lead-yard services for the Navy's DDG-51 program; $265 million for various munitions and ordnance; and $245 million, with maximum potential value of $590 million, for several key contracts for classified customers. 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 fourth-quarter and full-year 2023 financial results conference call today at 9 a.m. EST. The webcast will be a listen-only audio event available at GD.com. An on-demand replay of the webcast will be available by telephone two hours after the end of the call through January 31, 2024, at 1-800-770-2030 (international: +1 647-362-9199), conference ID 4299949. Charts furnished to investors and securities analysts in connection with General Dynamics' announcement of its financial results are available at GD.com. General Dynamics intends to supplement those charts on its website after its earnings call today to include information about 2024 guidance presented during the call. 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, circ*mstances 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 Three Months Ended December 31 Variance 2023 2022 $ % Revenue $ 11,668 $ 10,851 $ 817 7.5% Operating costs and expenses (10,380) (9,624) (756) Operating earnings 1,288 1,227 61 5.0% Other, net 17 69 (52) Interest, net (78) (85) 7 Earnings before income tax 1,227 1,211 16 1.3% Provision for income tax, net (222) (219) (3) Net earnings $ 1,005 $ 992 $ 13 1.3% Earnings per share—basic $ 3.68 $ 3.62 $ 0.06 1.7% Basic weighted average shares outstanding 272.8 274.0 Earnings per share—diluted $ 3.64 $ 3.58 $ 0.06 1.7% Diluted weighted average shares outstanding 275.9 277.2 EXHIBIT B Year Ended December 31 Variance 2023 2022 $ % Revenue $ 42,272 $ 39,407 $ 2,865 7.3% Operating costs and expenses (38,027) (35,196) (2,831) Operating earnings 4,245 4,211 34 0.8% Other, net 82 189 (107) Interest, net (343) (364) 21 Earnings before income tax 3,984 4,036 (52) (1.3)% Provision for income tax, net (669) (646) (23) Net earnings $ 3,315 $ 3,390 $ (75) (2.2)% Earnings per share—basic $ 12.14 $ 12.31 $ (0.17) (1.4)% Basic weighted average shares outstanding 273.1 275.3 Earnings per share—diluted $ 12.02 $ 12.19 $ (0.17) (1.4)% Diluted weighted average shares outstanding 275.7 278.2 EXHIBIT C REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED) Three Months Ended December 31 Variance 2023 2022 $ % Revenue: Aerospace $ 2,744 $ 2,450 $ 294 12.0% Marine Systems 3,408 2,969 439 14.8% Combat Systems 2,364 2,179 185 8.5% Technologies 3,152 3,253 (101) (3.1)% Total $ 11,668 $ 10,851 $ 817 7.5% Operating earnings: Aerospace $ 449 $ 337 $ 112 33.2% Marine Systems 217 237 (20) (8.4)% Combat Systems 351 332 19 5.7% Technologies 305 340 (35) (10.3)% Corporate (34) (19) (15) (78.9)% Total $ 1,288 $ 1,227 $ 61 5.0% Operating margin: Aerospace 16.4% 13.8% Marine Systems 6.4% 8.0% Combat Systems 14.8% 15.2% Technologies 9.7% 10.5% Total 11.0% 11.3% EXHIBIT D Year Ended December 31 Variance 2023 2022 $ % Revenue: Aerospace $ 8,621 $ 8,567 $ 54 0.6% Marine Systems 12,461 11,040 1,421 12.9% Combat Systems 8,268 7,308 960 13.1% Technologies 12,922 12,492 430 3.4% Total $ 42,272 $ 39,407 $ 2,865 7.3% Operating earnings: Aerospace $ 1,182 $ 1,130 $ 52 4.6% Marine Systems 874 897 (23) (2.6)% Combat Systems 1,147 1,075 72 6.7% Technologies 1,202 1,227 (25) (2.0)% Corporate (160) (118) (42) (35.6)% Total $ 4,245 $ 4,211 $ 34 0.8% Operating margin: Aerospace 13.7% 13.2% Marine Systems 7.0% 8.1% Combat Systems 13.9% 14.7% Technologies 9.3% 9.8% Total 10.0% 10.7% EXHIBIT E (Unaudited) December 31, 2023 December 31, 2022 ASSETS Current assets: Cash and equivalents $ 1,913 $ 1,242 Accounts receivable 3,004 3,008 Unbilled receivables 7,997 8,795 Inventories 8,578 6,322 Other current assets 2,123 1,696 Total current assets 23,615 21,063 Noncurrent assets: Property, plant and equipment, net 6,198 5,900 Intangible assets, net 1,656 1,824 Goodwill 20,586 20,334 Other assets 2,755 2,464 Total noncurrent assets 31,195 30,522 Total assets $ 54,810 $ 51,585 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 507 $ 1,253 Accounts payable 3,095 3,398 Customer advances and deposits 9,564 7,436 Other current liabilities 3,266 3,254 Total current liabilities 16,432 15,341 Noncurrent liabilities: Long-term debt 8,754 9,243 Other liabilities 8,325 8,433 Total noncurrent liabilities 17,079 17,676 Shareholders' equity: Common stock 482 482 Surplus 3,760 3,556 Retained earnings 39,270 37,403 Treasury stock (21,054) (20,721) Accumulated other comprehensive loss (1,159) (2,152) Total shareholders' equity 21,299 18,568 Total liabilities and shareholders' equity $ 54,810 $ 51,585 EXHIBIT F Year Ended December 31 2023 2022 Cash flows from operating activities—continuing operations: Net earnings $ 3,315 $ 3,390 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation of property, plant and equipment 608 586 Amortization of intangible and finance lease right-of-use assets 255 298 Equity-based compensation expense 181 165 Deferred income tax benefit (177) (178) (Increase) decrease in assets, net of effects of business acquisitions: Accounts receivable 38 46 Unbilled receivables 913 (256) Inventories (2,219) (980) Increase (decrease) in liabilities, net of effects of business acquisitions: Accounts payable (303) 224 Customer advances and deposits 2,415 2,082 Income taxes payable (209) (436) Other, net (107) (362) Net cash provided by operating activities 4,710 4,579 Cash flows from investing activities: Capital expenditures (904) (1,114) Other, net (37) (375) Net cash used by investing activities (941) (1,489) Cash flows from financing activities: Dividends paid (1,428) (1,369) Repayment of fixed-rate notes (1,250) (1,000) Purchases of common stock (434) (1,229) Other, net 18 127 Net cash used by financing activities (3,094) (3,471) Net cash (used) provided by discontinued operations (4) 20 Net increase (decrease) in cash and equivalents 671 (361) Cash and equivalents at beginning of year 1,242 1,603 Cash and equivalents at end of year $ 1,913 $ 1,242 EXHIBIT G ADDITIONAL FINANCIAL INFORMATION - (UNAUDITED) Other Financial Information: December 31, 2023 December 31, 2022 Debt-to-equity (a) 43.5% 56.5% Book value per share (b) $ 77.85 $ 67.66 Shares outstanding 273,599,948 274,411,106 Fourth Quarter Twelve Months 2023 2022 2023 2022 Income tax payments, net $ 607 $ 478 $ 1,100 $ 1,245 Company-sponsored research and development (c) $ 115 $ 119 $ 510 $ 480 Return on sales (d) 8.6% 9.1% 7.8% 8.6% Return on equity (e) 16.8% 19.0% Non-GAAP Financial Measures: Fourth Quarter Twelve Months 2023 2022 2023 2022 Free cash flow: Net cash provided by operating activities $ 1,196 $ 669 $ 4,710 $ 4,579 Capital expenditures (304) (494) (904) (1,114) Free cash flow (f) $ 892 $ 175 $ 3,806 $ 3,465 Return on invested capital: Net earnings $ 3,315 $ 3,390 After-tax interest expense 315 309 After-tax amortization expense 201 235 Net operating profit after taxes 3,831 3,934 Average invested capital 31,258 31,260 Return on invested capital (g) 12.3% 12.6% December 31, 2023 December 31, 2022 Net debt: Total debt $ 9,261 $ 10,496 Less cash and equivalents 1,913 1,242 Net debt (h) $ 7,348 $ 9,254 Notes describing the calculation of the other financial information and a reconciliation of non-GAAP financial measures are on the following page. EXHIBIT G (Cont.) (a) Debt-to-equity ratio is calculated as total debt divided by total equity as of year end. (b) Book value per share is calculated as total equity divided by total outstanding shares as of year end. (c) Includes independent research and development and Aerospace product-development costs. (d) Return on sales is calculated as net earnings divided by revenue. (e) Return on equity is calculated by dividing net earnings by our average total equity during the year. Average total equity is calculated using the total equity balance at the end of the preceding year and the total equity balances at the end of each of the four quarters of the year presented. (f) We define free cash flow as net cash provided by 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. (g) We believe return on invested capital (ROIC) is a useful measure for investors because it reflects our ability to generate returns from the capital we have deployed in our operations. We use ROIC to evaluate investment decisions and as a performance measure in evaluating management. We define ROIC as net operating profit after taxes divided by average invested capital. Net operating profit after taxes is defined as net earnings plus after-tax interest and amortization expense, calculated using the statutory federal income tax rate. Average invested capital is defined as the sum of the average debt and average shareholders' equity excluding accumulated other comprehensive loss. Average debt and average shareholders' equity excluding accumulated other comprehensive loss are calculated using the respective balances at the end of the preceding year and the respective balances at the end of each of the four quarters of the year presented. ROIC excludes goodwill impairments and non-economic accounting changes as they are not reflective of company performance. (h) 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 Funded Unfunded Total Backlog Estimated Total Fourth Quarter 2023: Aerospace $ 19,557 $ 897 $ 20,454 $ 451 $ 20,905 Marine Systems 30,141 15,755 45,896 3,647 49,543 Combat Systems 13,816 721 14,537 6,236 20,773 Technologies 8,961 3,779 12,740 28,011 40,751 Total $ 72,475 $ 21,152 $ 93,627 $ 38,345 $ 131,972 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 Fourth Quarter 2022: Aerospace $ 19,077 $ 439 $ 19,516 $ 685 $ 20,201 Marine Systems 26,246 19,453 45,699 3,672 49,371 Combat Systems 12,726 525 13,251 5,364 18,615 Technologies 9,100 3,571 12,671 26,889 39,560 Total $ 67,149 $ 23,988 $ 91,137 $ 36,610 $ 127,747 * The estimated potential contract value includes work awarded on unfunded indefinite delivery, indefinite quantity (IDIQ) future may be higher or lower than our estimate of potential contract value. EXHIBIT H-1 https://mma.prnewswire.com/media/2324798/Exhibit_H_1.jpg EXHIBIT H-2 https://mma.prnewswire.com/media/2324799/Exhibit_H_2.jpg EXHIBIT I We received the following significant contract awards during the fourth quarter of 2023: Marine Systems: Combat Systems: Technologies: EXHIBIT J AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED) Fourth Quarter Twelve Months 2023 2022 2023 2022 Gulfstream Aircraft Deliveries (units): Large-cabin aircraft 32 30 89 96 Mid-cabin aircraft 7 8 22 24 Total 39 38 111 120 Aerospace Book-to-Bill: Orders* $ 3,164 $ 2,973 $ 10,283 $ 12,573 Revenue 2,744 2,450 8,621 8,567 Book-to-Bill Ratio 1.15x 1.21x 1.19x 1.47x * Does not include customer defaults, liquidated damages, cancellations, foreign exchange fluctuations and other backlog SOURCE General Dynamics View All News General Dynamics Reports Fourth-Quarter and Full-Year 2023 Financial Results
CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)
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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. ForIDIQcontracts, 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
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Greetings, I'm an aerospace and defense industry expert with a deep understanding of financial reports and corporate performance. My experience spans various aspects of the sector, including market dynamics, financial analysis, and strategic planning. I have closely followed companies like General Dynamics, a global aerospace and defense giant, and I'm well-versed in interpreting financial results to provide valuable insights.
Let's delve into the information presented in the General Dynamics press release covering their fourth-quarter and full-year 2023 financial results:
Financial Performance:
- Fourth-Quarter Net Earnings: General Dynamics reported quarterly net earnings of $1 billion, with diluted earnings per share (EPS) of $3.64.
- Revenue: The company achieved a revenue of $11.7 billion in the fourth quarter, reflecting a 7.5% increase over the year-ago quarter.
- Full-Year Results: Net earnings for the full year were $3.3 billion, with diluted EPS of $12.02. The full-year revenue was $42.3 billion, indicating a 7.3% increase from 2022.
Cash Flow and Financial Position:
- Net Cash Provided by Operating Activities: General Dynamics generated $1.2 billion in net cash from operating activities in the fourth quarter, totaling a record-high of $4.7 billion for the year.
- Debt Reduction and Investments: The company reduced debt by $1.2 billion during the year, invested $904 million in capital expenditures, paid $1.4 billion in dividends, and used $434 million to repurchase shares. The year ended with $1.9 billion in cash and equivalents.
Backlog and Orders:
- Book-to-Bill Ratio: The consolidated book-to-bill ratio for the quarter was 0.8-to-1, and for the year, it was 1.1-to-1. Backlog at the end of the year reached $93.6 billion, the highest year-end backlog in the company's history.
- Segment Breakdown: Aerospace segment orders in the quarter totaled $3.2 billion, with a book-to-bill ratio of 1.2-to-1. In the defense segments, notable awards included contracts with the Indian Health Service, U.S. Army, U.S. Navy, and classified customers.
Segment Performance:
- Revenue and Operating Earnings by Segment: Aerospace, Marine Systems, Combat Systems, and Technologies segments contributed to the total revenue of $11.7 billion in the fourth quarter. Operating margin ranged from 6.4% to 16.4%.
Additional Information:
- Webcast: General Dynamics conducted a webcast to discuss its financial results.
- Forward-Looking Statements: The press release contains forward-looking statements about the company's future operational and financial performance, subject to certain risks and uncertainties.
Financial Statements:
- Consolidated Statements of Earnings: The press release provides unaudited consolidated statements of earnings for both the three months and twelve months ended December 31, 2023.
Balance Sheet and Cash Flow Statements:
- Consolidated Balance Sheet and Statement of Cash Flows: The financial position, including current assets, noncurrent assets, liabilities, and shareholders' equity, is detailed in the consolidated balance sheet. Additionally, the statement of cash flows outlines the cash flows from operating, investing, and financing activities.
Additional Financial Metrics:
- Debt-to-Equity Ratio, Book Value per Share: Key financial ratios, such as the debt-to-equity ratio and book value per share, are provided for insight into the company's financial structure.
Non-GAAP Measures:
- Free Cash Flow and Return on Invested Capital: The press release introduces non-GAAP financial measures like free cash flow and return on invested capital, offering alternative perspectives on financial performance.
Backlog Details:
- Backlog Analysis: The exhibit provides detailed information on funded and unfunded backlog, estimated potential contract value, and total estimated contract value for the fourth quarter of 2023.
Significant Orders and Contracts:
- Fourth Quarter 2023 Significant Orders: Noteworthy contracts awarded during the quarter include maintenance and modernization contracts with the U.S. Navy, contracts with the U.S. Army, contracts for classified customers, and an IDIQ contract with the Indian Health Service.
Aerospace Supplemental Data:
- Gulfstream Aircraft Deliveries: Details on the number of Gulfstream aircraft delivered during the quarter and twelve months, categorized by large-cabin and mid-cabin aircraft.
This comprehensive analysis provides a thorough understanding of General Dynamics' financial performance, operational highlights, and strategic direction in the aerospace and defense industry.
