General Dynamics Reports First-Quarter 2025 Financial Results

Revenue of $12.2 billion, up 13.9% from year-ago quarter Diluted EPS of $3.66, up 27.1% from year-ago quarter 70 basis-point margin expansion from year-ago quarter Aerospace earnings up 69.4% with 210-basis-point margin expansion over year-ago quarter , /PRNewswire/ -- General Dynamics (NYSE: GD) today reported first-quarter 2025 operating earnings of $1.3 billion, or $3.66 per diluted share (EPS), on revenue of $12.2 billion. Compared with the year-ago quarter, operating earnings increased 22.4%, diluted EPS increased 27.1%, and revenue increased 13.9%. Operating margin of 10.4% was a 70-basis-point expansion from the year-ago quarter. EXHIBIT F-1 EXHIBIT F-2 Each of the four segments saw increases in revenue and operating earnings over the year-ago quarter, with notable increases in Aerospace, where revenue was up 45.2%, operating earnings up 69.4%, and margins expanded 210 basis points to 14.3%. "We continue to see steady growth and improvement in operating performance across the defense portfolio," said Phebe Novakovic, chairman and chief executive officer "The Aerospace segment saw a significant increase in profitability, reflecting the manufacturing efficiencies associated with reaching higher levels of production on our new aircraft models." Cash and Capital DeploymentNet cash used by operating activities in the quarter was $148 million due to growth of working capital. During the quarter, the company paid $383 million in dividends, invested $142 million in capital expenditures, and used $600 million to repurchase shares. The company ended the quarter with $9.6 billion in total debt and $1.2 billion in cash and equivalents on hand.On March 5, the General Dynamics board declared a regular quarterly dividend of $1.50 per share, a 5.6% increase over last year's dividend and the 28th consecutive annual increase.Orders and BacklogOn a company-wide basis, orders in the quarter totaled $10.2 billion, and backlog at the end of the quarter was $88.7 billion. Estimated potential contract value, representing management's estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $52.7 billion. Total estimated contract value, the sum of all backlog components, was $141.3 billion.About General DynamicsHeadquartered 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 110,000 people worldwide and generated $47.7 billion in revenue in 2024. More information is available at www.gd.com. WEBCAST INFORMATION: General Dynamics will webcast its first-quarter 2025 financial results conference call at 9 a.m. EDT on Wednesday, April 23, 2025. The webcast will be a listen-only audio event available at www.gd.com. An on-demand replay of the webcast will be available by telephone two hours after the end of the call through April 30, 2025, at 800-770-2030 (international: +1 609-800-9909), conference ID 4299949. Charts furnished to investors and securities analysts in connection with General Dynamics' announcement of its financial results are available at www.gd.com.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 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 CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS Three Months Ended Variance March 30, 2025 March 31, 2024 $ % Revenue $ 12,223 $ 10,731 $ 1,492 13.9 % Operating costs and expenses (10,955) (9,695) (1,260) Operating earnings 1,268 1,036 232 22.4 % Other, net 21 14 7 Interest, net (89) (82) (7) Earnings before income tax 1,200 968 232 24.0 % Provision for income tax, net (206) (169) (37) Net earnings $ 994 $ 799 $ 195 24.4 % Earnings per share—basic $ 3.69 $ 2.92 $ 0.77 26.4 % Basic weighted average shares outstanding 269.0 273.5 Earnings per share—diluted $ 3.66 $ 2.88 $ 0.78 27.1 % Diluted weighted average shares outstanding 271.7 277.0 EXHIBIT B REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS Three Months Ended Variance March 30, 2025 March 31, 2024 $ % Revenue: Aerospace $ 3,026 $ 2,084 $ 942 45.2 % Marine Systems 3,589 3,331 258 7.7 % Combat Systems 2,176 2,102 74 3.5 % Technologies 3,432 3,214 218 6.8 % Total $ 12,223 $ 10,731 $ 1,492 13.9 % Operating earnings: Aerospace $ 432 $ 255 $ 177 69.4 % Marine Systems 250 232 18 7.8 % Combat Systems 291 282 9 3.2 % Technologies 328 295 33 11.2 % Corporate (33) (28) (5) (17.9) % Total $ 1,268 $ 1,036 $ 232 22.4 % Operating margin: Aerospace 14.3 % 12.2 % Marine Systems 7.0 % 7.0 % Combat Systems 13.4 % 13.4 % Technologies 9.6 % 9.2 % Total 10.4 % 9.7 % EXHIBIT C CONSOLIDATED BALANCE SHEET DOLLARS IN MILLIONS (Unaudited) March 30, 2025 December 31, 2024 ASSETS Current assets: Cash and equivalents $ 1,242 $ 1,697 Accounts receivable 3,294 2,977 Unbilled receivables 9,139 8,248 Inventories 9,816 9,724 Other current assets 1,626 1,740 Total current assets 25,117 24,386 Noncurrent assets: Property, plant and equipment, net 6,461 6,467 Intangible assets, net 1,462 1,520 Goodwill 20,623 20,556 Other assets 2,917 2,951 Total noncurrent assets 31,463 31,494 Total assets $ 56,580 $ 55,880 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 2,349 $ 1,502 Accounts payable 3,357 3,344 Customer advances and deposits 9,770 9,491 Other current liabilities 3,284 3,487 Total current liabilities 18,760 17,824 Noncurrent liabilities: Long-term debt 7,260 7,260 Other liabilities 8,335 8,733 Total noncurrent liabilities 15,595 15,993 Shareholders' equity: Common stock 482 482 Surplus 4,064 4,062 Retained earnings 42,082 41,487 Treasury stock (23,034) (22,450) Accumulated other comprehensive loss (1,369) (1,518) Total shareholders' equity 22,225 22,063 Total liabilities and shareholders' equity $ 56,580 $ 55,880 EXHIBIT D CONSOLIDATED STATEMENT OF CASH FLOWS - (UNAUDITED) DOLLARS IN MILLIONS Three Months Ended March 30, 2025 March 31, 2024 Cash flows from operating activities—continuing operations: Net earnings $ 994 $ 799 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation of property, plant and equipment 162 152 Amortization of intangible and finance lease right-of-use assets 61 59 Equity-based compensation expense 34 34 Deferred income tax benefit (59) (39) (Increase) decrease in assets, net of effects of business acquisitions: Accounts receivable (317) (115) Unbilled receivables (879) (519) Inventories (92) (1,011) Increase (decrease) in liabilities, net of effects of business acquisitions: Accounts payable 13 100 Customer advances and deposits 13 384 Other, net (78) (122) Net cash used by operating activities (148) (278) Cash flows from investing activities: Capital expenditures (142) (159) Other, net 12 (23) Net cash used by investing activities (130) (182) Cash flows from financing activities: Proceeds from commercial paper, net 1,590 — Repayment of fixed-rate notes (750) — Dividends paid (383) (361) Purchases of common stock (600) (105) Other, net (32) 50 Net cash used by financing activities (175) (416) Net cash used by discontinued operations (2) (1) Net decrease in cash and equivalents (455) (877) Cash and equivalents at beginning of period 1,697 1,913 Cash and equivalents at end of period $ 1,242 $ 1,036 EXHIBIT E ADDITIONAL FINANCIAL INFORMATION - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS Other Financial Information: March 30, 2025 December 31, 2024 Debt-to-equity (a) 43.2 % 39.7 % Book value per share (b) $ 82.81 $ 81.61 Shares outstanding 268,396,163 270,340,502 First Quarter 2025 2024 Income tax payments, net $ 34 $ 33 Company-sponsored research and development (c) $ 101 $ 137 Return on sales (d) 8.1 % 7.4 % Non-GAAP Financial Measures: First Quarter 2025 2024 Free cash flow: Net cash used by operating activities $ (148) $ (278) Capital expenditures (142) (159) Free cash flow (e) $ (290) $ (437) March 30, 2025 December 31, 2024 Net debt: Total debt $ 9,609 $ 8,762 Less cash and equivalents 1,242 1,697 Net debt (f) $ 8,367 $ 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 asan important indicator of liquidity and financial position. EXHIBIT F BACKLOG - (UNAUDITED) DOLLARS IN MILLIONS Funded Unfunded Total Backlog Estimated Potential Contract Value* Total Estimated Contract Value First Quarter 2025: Aerospace $ 18,171 $ 828 $ 18,999 $ 1,090 $ 20,089 Marine Systems 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 Fourth Quarter 2024: Aerospace $ 18,895 $ 798 $ 19,693 $ 1,132 $ 20,825 Marine Systems 30,530 9,288 39,818 9,560 49,378 Combat Systems 16,142 838 16,980 8,647 25,627 Technologies 9,577 4,529 14,106 34,029 48,135 Total $ 75,144 $ 15,453 $ 90,597 $ 53,368 $ 143,965 First Quarter 2024: Aerospace $ 19,564 $ 981 $ 20,545 $ 305 $ 20,850 Marine Systems 29,711 14,415 44,126 3,749 47,875 Combat Systems 14,923 686 15,609 7,002 22,611 Technologies 8,976 4,478 13,454 29,206 42,660 Total $ 73,174 $ 20,560 $ 93,734 $ 40,262 $ 133,996 * 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 F-1 BACKLOG - (UNAUDITED) DOLLARS IN MILLIONS EXHIBIT F-2 BACKLOG BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS EXHIBIT G AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED) DOLLARS IN MILLIONS First Quarter 2025 2024 Gulfstream Aircraft Deliveries (units): Large-cabin aircraft 30 21 Mid-cabin aircraft 6 3 Total 36 24 Aerospace Book-to-Bill: Orders* $ 2,361 $ 2,426 Revenue 3,026 2,084 Book-to-Bill Ratio 0.8x 1.2x * Does not include customer defaults, liquidated damages, cancellations, foreign exchange fluctuations and other backlog adjustments. 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General Dynamics Reports First-Quarter 2025 Financial Results

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