gd-20240331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[☑] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

[☐] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 1-3671

GENERAL DYNAMICS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

13-1673581

State or other jurisdiction of incorporation or organization

I.R.S. Employer Identification No.

11011 Sunset Hills Road

Reston,

Virginia

20190

Address of principal executive offices

Zip code

(703) 876-3000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	GD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No ___

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ü No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ü Accelerated filer ___ Non-accelerated filer ___

Smaller reporting company___☐ Emerging growth company___☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes___☐ No ü

274,364,084 shares of the registrant’s common stock, $1 par value per share, were outstanding on March 31, 2024.

INDEX



PART I -	FINANCIAL INFORMATION	PAGE
Item 1 -	Unaudited Consolidated Financial Statements
	Consolidated Statement of Earnings	3

	Consolidated Statement of Comprehensive Income	4
	Consolidated Balance Sheet	5
	Consolidated Statement of Cash Flows	6
	Consolidated Statement of Shareholders ’ Equity	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4 -	Controls and Procedures	38
	FORWARD-LOOKING STATEMENTS	38
PART II -	OTHER INFORMATION	40
Item 1 -	Legal Proceedings	40
Item 1A -	Risk Factors	40
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 5 -	Other Information	40
Item 6 -	Exhibits	41
	SIGNATURES	42

PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)


	Three Months Ended
(Dollars in millions, except per-share amounts)	March 31, 2024		April 2, 2023
Revenue:
Products	$	6,134	$	5,513
Services	4,597		4,368
	10,731		9,881
Operating costs and expenses:
Products	(5,189)		(4,641)
Services	(3,879)		(3,716)
General and administrative (G&A)	(627)		(586)
	(9,695)		(8,943)
Operating earnings	1,036		938
Other, net	14		33
Interest, net	(82)		(91)
Earnings before income tax	968		880
Provision for income tax, net	(169)		(150)
Net earnings	$	799	$	730

Earnings per share
Basic	$	2.92	$	2.66
Diluted	$	2.88	$	2.64

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended
(Dollars in millions)	March 31, 2024		April 2, 2023
Net earnings	$	799	$	730
Changes in unrealized cash flow hedges	(42)		(7)

Foreign currency translation adjustments	(298)		91
Changes in retirement plans’ funded status	40		173
Other comprehensive (loss) income, pretax	(300)		257
Benefit (provision) for income tax, net	3		(35)
Other comprehensive (loss) income, net of tax	(297)		222
Comprehensive income	$	502	$	952

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

CONSOLIDATED BALANCE SHEET


	(Unaudited)
(Dollars in millions)	March 31, 2024		December 31, 2023

ASSETS
Current assets:
Cash and equivalents	$	1,036	$	1,913
Accounts receivable	3,119		3,004
Unbilled receivables	8,523		7,997
Inventories	9,589		8,578
Other current assets	1,929		2,123
Total current assets	24,196		23,615
Noncurrent assets:
Property, plant and equipment, net	6,192		6,198
Intangible assets, net	1,594		1,656
Goodwill	20,458		20,586
Other assets	2,806		2,755
Total noncurrent assets	31,050		31,195
Total assets	$	55,246	$	54,810

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	507	$	507
Accounts payable	3,203		3,095
Customer advances and deposits	9,969		9,564
Other current liabilities	3,111		3,266
Total current liabilities	16,790		16,432
Noncurrent liabilities:
Long-term debt	8,752		8,754
Other liabilities	8,294		8,325
Commitments and contingencies (see Note J)
Total noncurrent liabilities	17,046		17,079
Shareholders’ equity:
Common stock	482		482
Surplus	3,820		3,760
Retained earnings	39,678		39,270
Treasury stock	(21,114)		(21,054)
Accumulated other comprehensive loss	(1,456)		(1,159)
Total shareholders’ equity	21,410		21,299
Total liabilities and shareholders’ equity	$	55,246	$	54,810

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	Three Months Ended
(Dollars in millions)	March 31, 2024		April 2, 2023
Cash flows from operating activities – continuing operations:
Net earnings	$	799	$	730
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation of property, plant and equipment	152		149
Amortization of intangible and finance lease right-of-use assets	59		77
Equity-based compensation expense	34		38
Deferred income tax benefit	(39)		(91)
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable	(115)		72
Unbilled receivables	(519)		653
Inventories	(1,011)		(628)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable	100		(150)
Customer advances and deposits	384		553



Other, net	(122)		59
Net cash (used) provided by operating activities	(278)		1,462
Cash flows from investing activities:
Capital expenditures	(159)		(161)

Other, net	(23)		(29)
Net cash used by investing activities	(182)		(190)
Cash flows from financing activities:

Dividends paid	(361)		(345)
Purchases of common stock	(105)		(90)






Other, net	50		(40)
Net cash used by financing activities	(416)		(475)
Net cash used by discontinued operations	(1)		(1)
Net (decrease) increase in cash and equivalents	(877)		796
Cash and equivalents at beginning of period	1,913		1,242
Cash and equivalents at end of period	$	1,036	$	2,038
Supplemental cash flow information:
Income tax payments, net	$	(33)	$	(58)
Interest payments	$	(26)	$	(18)

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)


	Three Months Ended
	Common Stock				Retained		Treasury		Accumulated Other Comprehensive		Total Shareholders’
(Dollars in millions)	Par		Surplus		Earnings		Stock		Loss		Equity
December 31, 2023	$	482	$	3,760	$	39,270	$	(21,054)	$	(1,159)	$	21,299

Net earnings	—		—		799		—		—		799
Cash dividends declared	—		—		(391)		—		—		(391)
Equity-based awards	—		60		—		45		—		105
Shares purchased	—		—		—		(105)		—		(105)
Other comprehensive loss	—		—		—		—		(297)		(297)
March 31, 2024	$	482	$	3,820	$	39,678	$	(21,114)	$	(1,456)	$	21,410

December 31, 2022	$	482	$	3,556	$	37,403	$	(20,721)	$	(2,152)	$	18,568

Net earnings	—		—		730		—		—		730
Cash dividends declared	—		—		(364)		—		—		(364)
Equity-based awards	—		6		—		15		—		21
Shares purchased	—		—		—		(90)		—		(90)
Other comprehensive income	—		—		—		—		222		222

SEC Form 10-Q filed by General Dynamics Corporation