e $履行義務是合同中向客戶轉移獨立商品或服務的承諾，也是營業收入的計量單位。合同的交易價格分配給合同中的每個獨立履行義務，並在滿足履行義務時或之時確認爲營業收入。我們的大部分合同只有一個履行義務，因爲轉移獨立商品或服務的承諾與合同中其他承諾無法單獨辨認，因此不屬於獨立的履行義務。我們的一些合同具有多個履行義務，主要是因爲合同涵蓋產品生命週期的多個階段（開發、生產、維護和壓力位支持）。對於具有多個履行義務的合同，我們使用各個合同的獨立商品或服務的預期單獨銷售價格的最佳估計，將合同的交易價格分配給每個履行義務。用於估計獨立銷售價格的主要方法是期望成本加盈利率法，根據該方法，我們預測滿足履行義務的預期成本，然後爲該獨立商品或服務添加適當的利潤率。
飛機交易。 關於合同積壓訂單中的新飛機，一些Gulfstream客戶持有交易飛機的期權，作爲他們新飛機交易的部分考慮因素。這些交易承諾通常結構化爲在一般日期確定交易飛機的公平市場價值。 45 or fewer days preceding delivery of the new aircraft to the customer. 在那時，客戶被要求要麼行使該選項，要麼讓其過期。其他交易方面的承諾被設計爲保證預定交易價值。這些承諾在市場條件不利變化的情況下存在更多風險。無論哪種情況，如果新飛機交付時的預先設定的交易價格超過公平市場價值，將被視爲新飛機銷售交易中營業收入的減少。截至2024年9月29日，從承諾日期起的公平市場價值估計變化不重要。
Overall, the Combat Systems segment’s operating margin increased 120 basis points in the third quarter and 40 basis points in the first nine months of 2024 driven by favorable contract mix and strong operating performance.
2024 Outlook
We expect the Combat Systems segment’s 2024 revenue to be approximately $8.7 billion with operating margin of approximately 14.4%.
33
TECHNOLOGIES
Three Months Ended
September 29, 2024
October 1, 2023
Variance
Revenue
$
3,378
$
3,313
$
65
2.0
%
Operating earnings
326
315
11
3.5
%
Operating margin
9.7
%
9.5
%
Nine Months Ended
September 29, 2024
October 1, 2023
Variance
Revenue
$
9,887
$
9,770
$
117
1.2
%
Operating earnings
941
897
44
4.9
%
Operating margin
9.5
%
9.2
%
Operating Results
The increase in the Technologies segment’s revenue in the third quarter and first nine months of 2024 consisted of the following:
Third Quarter
Nine Months
Information technology (IT) services
$
71
$
111
C5ISR* solutions
(6)
6
Total increase
$
65
$
117
*Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance
The Technologies segment’s revenue was up in the third quarter and first nine months of 2024 due to higher volume of IT services, including the ramp-up of new programs. Overall, the Technologies segment’s operating margin increased 20 basis points in the third quarter and 30 basis points in the first nine months of 2024 due to strong operating performance.
2024 Outlook
We expect the Technologies segment’s 2024 revenue to be approximately $13 billion with operating margin of approximately 9.5%.
CORPORATE
Corporate operating costs totaled $33 in the third quarter and $102 in the first nine months of 2024 compared with $37 in the third quarter and $126 in the first nine months of 2023 and consisted primarily of equity-based compensation expense. Corporate operating costs are expected to be approximately $140 in 2024.
34
OTHER INFORMATION
PRODUCT REVENUE AND OPERATING COSTS
Three Months Ended
September 29, 2024
October 1, 2023
Variance
Revenue
$
6,767
$
6,163
$
604
9.8
%
Operating costs
(5,760)
(5,148)
(612)
11.9
%
Nine Months Ended
September 29, 2024
October 1, 2023
Variance
Revenue
$
20,061
$
17,473
$
2,588
14.8
%
Operating costs
(17,074)
(14,704)
(2,370)
16.1
%
The increase in product revenue in the third quarter and first nine months of 2024 consisted of the following:
Third Quarter
Nine Months
Aircraft manufacturing
$
315
$
1,299
Ship construction
470
959
Weapons systems and munitions
(63)
429
Other, net
(118)
(99)
Total increase
$
604
$
2,588
Aircraft manufacturing revenue increased in the third quarter and first nine months of 2024 due to additional aircraft deliveries. Ship construction revenue increased due primarily to higher volume on the Columbia-class and Virginia-class submarine programs. Weapons systems and munitions revenue increased in the first nine months of 2024 due to heightened demand for artillery products. The primary drivers of the increase in product operating costs were the changes in volume on the programs described above.
SERVICE REVENUE AND OPERATING COSTS
Three Months Ended
September 29, 2024
October 1, 2023
Variance
Revenue
$
4,904
$
4,408
$
496
11.3
%
Operating costs
(4,095)
(3,765)
(330)
8.8
%
Nine Months Ended
September 29, 2024
October 1, 2023
Variance
Revenue
$
14,317
$
13,131
$
1,186
9.0
%
Operating costs
(12,025)
(11,151)
(874)
7.8
%
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The increase in service revenue in the third quarter and first nine months of 2024 consisted of the following:
Third Quarter
Nine Months
Ship services
$
127
$
371
Aircraft services
135
330
C5ISR solutions/IT services
123
264
Other, net
111
221
Total increase
$
496
$
1,186
Ship services revenue increased in the third quarter and first nine months of 2024 due to higher volume on the Columbia-class submarine program. Aircraft services revenue was up due to additional maintenance work. C5ISR solutions and IT services revenue was up due to higher volume, including the ramp-up of new programs. The primary drivers of the increase in service operating costs were the changes in volume on the programs described above.
G&A EXPENSES
As a percentage of revenue, G&A expenses decreased to 5.5% in the first nine months of2024 compared with 5.9% in the first nine months of 2023. We expect G&A expenses as a percentage of revenue in 2024 to be generally consistent with 2023.
OTHER, NET
Net other income was $47 in the first nine months of 2024 compared with $65 in the first nine months of 2023, and represents primarily the non-service components of pension and other post-retirement benefits. In 2024, we expect net other income to be approximately $60.
INTEREST, NET
Net interest expense was $248 in the first nine months of 2024 compared with $265 in the prior-year period, reflecting the repayment of our scheduled debt maturities in 2023. See Note H to the unaudited Consolidated Financial Statements in Part I, Item 1, for additional information regarding our debt obligations, including interest rates. We expect 2024 net interest expense to be approximately $320.
PROVISION FOR INCOME TAX, NET
Our effective tax rate was 17.0% in the first nine months of 2024 compared with 16.2% in the prior-year period. For 2024, based on increased U.S. and foreign tax credits, tax benefits from equity-based compensation and other timing items, we anticipate a full-year effective tax rate of approximately 17.0%.
BACKLOG AND ESTIMATED POTENTIAL CONTRACT VALUE
Our total backlog, including funded and unfunded portions, was $92.6 billion at the end of the third quarter of 2024 compared with $91.3 billion at the end of the second quarter. Our total backlog is equal to our remaining performance obligations under contracts with customers as discussed in Note B to the unaudited Consolidated Financial Statements in Part I, Item 1. Our total estimated contract value, which combines total backlog with estimated potential contract value, was $137.6 billion on September 29, 2024.
36
The following table details the backlog and estimated potential contract value of each segment at the end of the third and second quarters of 2024:
Funded
Unfunded
Total Backlog
Estimated Potential Contract Value
Total Estimated Contract Value
September 29, 2024
Aerospace
$
18,859
$
937
$
19,796
$
254
$
20,050
Marine Systems
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
June 30, 2024
Aerospace
$
19,126
$
911
$
20,037
$
372
$
20,409
Marine Systems
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
AEROSPACE
Aerospace funded backlog represents primarily new aircraft orders for which we have definitive purchase contracts and deposits from customers. Unfunded backlog consists of agreements to provide future aircraft maintenance and support services. The Aerospace segment ended the third quarter of 2024 with backlog of $19.8 billion.
Orders for new Gulfstream aircraft reflected strong demand, yielding a segment book-to-bill ratio (orders divided by revenue) of 1-to-1 for the first nine months of 2024, even as revenue grew by nearly 30% year over year.
Beyond total backlog, estimated potential contract value represents primarily options and other agreements with existing customers to purchase new aircraft and long-term aircraft services agreements. On September 29, 2024, estimated potential contract value in the Aerospace segment was $254.
DEFENSE SEGMENTS
The total backlog in our defense segments represents the estimated remaining sales value of work to be performed under firm contracts. The funded portion of total backlog includes items that have been authorized and appropriated by the U.S. Congress and funded by customers, as well as commitments by international customers that are approved and funded similarly by their governments. The unfunded portion of total backlog includes the amounts we believe are likely to be funded, but there is no guarantee that future budgets and appropriations will provide the same funding level currently anticipated for a given program.
Estimated potential contract value in our defense segments includes unexercised options associated with existing firm contracts and unfunded work on indefinite delivery, indefinite quantity (IDIQ) contracts. Contract options represent agreements to perform additional work under existing contracts at the election of the customer. We recognize options in backlog when the customer exercises the option
37
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. This amount is often less than the total IDIQ contract value, particularly when the contract has multiple awardees. The actual amount of funding received in the future may be higher or lower than our estimate of potential contract value.
Total backlog in our defense segments was $72.8 billion on September 29, 2024. In the third quarter of 2024, the Combat Systems and Technologies segments achieved book-to-bill ratios of 1.5-to-1 and 1.3-to-1, respectively. Overall, the total book-to-bill ratio in our defense segments was 1.1-to-1 in the third quarter of 2024. Estimated potential contract value in our defense segments was $44.7 billion on September 29, 2024. We received the following significant contract awards during the third quarter of 2024:
MARINE SYSTEMS
•$780 from the U.S. Navy for the construction of an additional John Lewis-class (T-AO-205) fleet replenishment oiler. The contract including options for an additional seven T-AO-205 oilers has a maximum potential value of more than $6.7 billion.
•$1.5 billion from the Navy for long-lead materials for Block VI Virginia-class submarines.
•$100 from the Navy to provide engineering, technical, design and planning yard support services for operational strategic and attack submarines.
•$85 from the Navy for maintenance and modernization on the USS Chung-Hoon, an Arleigh Burke-class (DDG-51) guided missile destroyer.
•$80 for advanced nuclear plant studies (ANPS) in support of the Columbia-class submarine program for the Navy.
COMBAT SYSTEMS
•$885 for various munitions and ordnance. These contracts have a maximum potential value of $1.7 billion.
•$465 for two contracts from the U.S. Army for the production of 155mm artillery projectile metal parts. These contracts have a maximum potential value of $1.7 billion.
•$395 from the Army for the production of 155mm propelling bag charges.
•$190 from the Army to produce Iron Fist Active Protection System kits.
•$180 from the Army to produce Stryker Sgt. Stout vehicles.
•$100 from the Army for long-lead materials to support the future retrofit of Stryker Sgt. Stout vehicles to a dual Stinger Vehicle Universal Launcher (SVUL) configuration.
TECHNOLOGIES
•$840 for several key contracts for classified customers. These contracts have a maximum potential value of $1 billion.
•$605 for multiple awards from the U.S. Space Development Agency to develop and integrate ground systems for the low-Earth orbit satellite network.
38
•$105 from the U.S. Defense Information Systems Agency (DISA) to continue operating and maintaining Pentagon and regional government-furnished network infrastructures. The contract including options has a maximum potential value of $300.
•$185 from the U.S. Department of State (DoS) to manage its global technical security supply chain.
•$135 to provide equipment and tools to the National Oceanic Atmospheric Administration (NOAA) to augment its High-Performance Computing Systems.
•$130 from the National Geospatial-Intelligence Agency (NGA) to provide hybrid cloud services and IT design, engineering, and operations and sustainment services.
•$120 from the DoS to provide overseas consular services to support visa application and issuance at U.S. embassies and consulates throughout the world under the Global Support Strategy (GSS) program.
LIQUIDITY AND CAPITAL RESOURCES
We place a strong emphasis on cash flow generation, which is underpinned by an operating discipline focused on cost control and working capital management. This emphasis gives us the flexibility for prudent capital deployment, while allowing us to step down debt over time, and preserves a strong balance sheet for future opportunities.
We evaluate a variety of capital deployment options based on current market conditions and our long-term outlook, and we believe agility is a key component of our capital deployment strategy as market conditions change over time. Our capital deployment priorities include investments in our products and services to drive long-term growth, a predictable dividend, strategic acquisitions and opportunistic share repurchases.
We believe cash generated by operating activities, supplemented by commercial paper issuances, is sufficient to satisfy our short- and long-term liquidity needs. An additional potential source of capital is the issuance of long-term debt in capital market transactions.
We ended the third quarter of 2024 with a cash and equivalents balance of $2.1 billion compared with $1.9 billion at the end of 2023. The following is a discussion of our major operating, investing and financing activities in the first nine months of 2024and2023, as classified on the Consolidated Statement of Cash Flows in Part I, Item 1:
Nine Months Ended
September 29, 2024
October 1, 2023
Net cash provided by operating activities
$
1,952
$
3,514
Net cash used by investing activities
(588)
(608)
Net cash used by financing activities
(1,173)
(2,792)
OPERATING ACTIVITIES
Cash provided by operating activities was $2 billion in the first nine months of 2024 compared with $3.5 billion in the same period in 2023. The primary driver of cash flows in both periods was net earnings. Cash flows in the first nine months of 2024 were affected negatively by growth in operating working capital, particularly driven by the ramp-up in production of new Gulfstream aircraft models in our Aerospace segment and timing in our Combat Systems segment. Cash flows in the first nine months of
39
2023 were affected positively by a decrease in unbilled receivables due to the receipt of progress payments on large international vehicle contracts in our Combat Systems segment and an increase in customer deposits driven by Gulfstream aircraft orders, offset partially by an increase in inventory due primarily to the ramp-up in production of new Gulfstream aircraft models.
INVESTING ACTIVITIES
Cash used by investing activities was $588 in the first nine months of 2024 compared with $608 in the same period in 2023. Our investing activities include cash paid for capital expenditures and business acquisitions; purchases, sales and maturities of marketable securities; and proceeds from asset sales. The primary use of cash for investing activities in both periods was capital expenditures. Capital expenditures were $561 in the first nine months of 2024 compared with $600 in the same period in 2023.
FINANCING ACTIVITIES
Cash used by financing activities was $1.2 billion in the first nine months of 2024 compared with $2.8 billion in the same period in 2023. Financing activities include the use of cash for repurchases of common stock, payment of dividends, and debt and commercial paper repayments. Our financing activities also include proceeds received from debt and commercial paper issuances and employee stock option exercises.
On March 6, 2024, our board of directors (Board) declared an increased quarterly dividend of $1.42 per share, the 27th consecutive annual increase. Previously, the Board had increased the quarterly dividend to $1.32 per share in March 2023. Cash dividends paid were $1.1 billion in the first nine months of 2024 and 2023.
We paid $183 and $434 in the first nine months of 2024 and 2023, respectively, to repurchase our outstanding shares. On September 29, 2024, 4 million shares remained authorized by our Board for repurchase, representing 1.5% of our total shares outstanding.
Fixed-rate notes of $500 mature in November 2024. We currently plan to repay these notes at maturity using cash on hand. For additional information regarding our debt obligations, including scheduled debt maturities and interest rates, see Note H to the unaudited Consolidated Financial Statements in Part I, Item 1.
On September 29, 2024, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. Separately, we have a $4 billion committed bank credit facility for general corporate purposes and working capital needs and to support our commercial paper issuances. We also have an effective shelf registration on file with the Securities and Exchange Commission (SEC) that allows us to access the debt markets.
NON-GAAP FINANCIAL MEASURE - FREE CASH FLOW
We emphasize the efficient conversion of net earnings into cash and the deployment of that cash to maximize shareholder returns. As described below, we use free cash flow to measure our performance in these areas. While we believe this metric provides useful information, it is not a defined operating measure under U.S. generally accepted accounting principles (GAAP), and there are limitations associated with its use. Our calculation of this metric may not be completely comparable to similarly
40
titled measures of other companies due to potential differences in the method of calculation. As a result, the use of this metric should not be considered in isolation from, or as a substitute for, GAAP measures.
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. The following table reconciles free cash flow with net cash from operating activities, as classified on the Consolidated Statement of Cash Flows in Part I, Item 1:
Nine Months Ended
September 29, 2024
October 1, 2023
Net cash provided by operating activities
$
1,952
$
3,514
Capital expenditures
(561)
(600)
Free cash flow
$
1,391
$
2,914
Cash flows as a percentage of net earnings:
Net cash provided by operating activities
74
%
152
%
Free cash flow
53
%
126
%
ADDITIONAL FINANCIAL INFORMATION
ENVIRONMENTAL MATTERS AND OTHER CONTINGENCIES
For a discussion of environmental matters and other contingencies, see Note J to the unaudited Consolidated Financial Statements in Part I, Item 1. Except as otherwise noted in Note J, we do not expect our aggregate liability with respect to these matters to have a material impact on our results of operations, financial condition or cash flows.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on the unaudited Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. We employ judgment in making our estimates, but they are based on historical experience, currently available information and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. We believe our judgment is applied consistently and produces financial information that fairly depicts our results of operations for all periods presented.
Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. We review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. The aggregate impact of adjustments in
41
contract estimates decreased our operating earnings (and diluted earnings per share) by $12 ($0.03) for the three-month period ended September 29, 2024, and increased our operating earnings (and diluted earnings per share) by $101 ($0.29) for the nine-month period ended September 29, 2024, and $11 ($0.03) and $98 ($0.28) for the three- and nine-month periods ended October 1, 2023, respectively. No adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three- and nine-month periods ended September 29, 2024, or October 1, 2023.
Other critical accounting policies and estimates include long-lived assets and goodwill, commitments and contingencies, and retirement plans. For a full discussion of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the year ended December 31, 2023.
GUARANTOR FINANCIAL INFORMATION
The outstanding notes described in Note H to the unaudited Consolidated Financial Statements in Part I, Item 1, issued by General Dynamics Corporation (the parent), are fully and unconditionally guaranteed on an unsecured, joint and several basis by several of the parent’s 100%-owned subsidiaries (the guarantors). The guarantee of each guarantor ranks equally in right of payment with all other existing and future senior unsecured indebtedness of such guarantor. A listing of the guarantors is included in an exhibit to this Form 10-Q.
Because the parent is a holding company, its cash flow and ability to service its debt, including the outstanding notes, depends on the performance of its subsidiaries and the ability of those subsidiaries to distribute cash to the parent, whether by dividends, loans or otherwise. Holders of the outstanding notes have a direct claim only against the parent and the guarantors.
Under the relevant indenture, the guarantee of each guarantor is limited to the maximum amount that can be guaranteed without rendering the guarantee voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each indenture also provides that, in the event (1) of a merger, consolidation or sale or disposition of all or substantially all of the assets of a guarantor (other than a transaction with the parent or any of its subsidiaries) or (2) there occurs a transfer, sale or other disposition of the voting stock of a guarantor so that the guarantor is no longer a subsidiary of the parent, then the guarantor or the entity acquiring the assets (in the event of a sale or other disposition of all or substantially all of the assets of a guarantor) will be released and relieved of any obligations under the guarantee.
The following summarized financial information presents the parent and guarantors (collectively, the combined obligor group) on a combined basis. The summarized financial information of the combined obligor group excludes net investment in and earnings of subsidiaries related to interests held by the combined obligor group in subsidiaries that are not guarantors of the notes.
STATEMENT OF EARNINGS INFORMATION - COMBINED OBLIGOR GROUP
Nine Months Ended September 29, 2024
Year Ended December 31, 2023
Revenue
$
13,569
$
16,276
Operating costs and expenses, excluding G&A
(12,018)
(14,316)
Net earnings
615
773
42
BALANCE SHEET INFORMATION - COMBINED OBLIGOR GROUP
September 29, 2024
December 31, 2023
Cash and equivalents
$
1,111
$
986
Other current assets
4,709
5,012
Noncurrent assets
4,681
4,506
Total assets
$
10,501
$
10,504
Short-term debt and current portion of long-term debt
$
2,002
$
503
Other current liabilities
2,987
2,890
Long-term debt
7,207
8,700
Other noncurrent liabilities
3,154
3,281
Total liabilities
$
15,350
$
15,374
The summarized balance sheet information presented above includes the funded status of the company’s primary qualified U.S. government pension plans as the parent has the ultimate obligation for the plans.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes with respect to this item from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 4. CONTROLS AND PROCEDURES
Our management, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 29, 2024. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, on September 29, 2024, our disclosure controls and procedures were effective.
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 29, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The certifications of the company’s Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report.
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements, 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 forward-looking statements. Examples include projections of revenue, earnings, operating margin, segment performance, cash flows, contract awards, aircraft production, deliveries and backlog. In making these statements, we rely on assumptions and analyses based on our experience and perception of historical trends; current conditions
43
and expected future developments; and other factors, estimates and judgments we consider reasonable and appropriate based on information available to us at the time. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements 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 forward-looking statements due to a variety of factors, including the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023. These factors include, among others:
•general U.S. and international political and economic conditions;
•decreases in U.S. government defense spending or changing priorities within the defense budget;
•termination of government contracts due to unilateral government action;
•differences in anticipated and actual program performance, including the ability to perform within estimated costs, and performance issues with key suppliers;
•expected recovery on contract claims and requests for equitable adjustment;
•changing customer demand for business aircraft, including the effects of economic conditions on the business-aircraft market;
•changing prices for energy and raw materials;
•the negative impact of the COVID-19 pandemic, or other similar outbreaks;
•the status or outcome of legal and/or regulatory proceedings;
•potential effects of audits and reviews by government agencies of our government contract performance, compliance and internal control systems and policies;
•cybersecurity events and other disruptions;
•risks and uncertainties relating to our acquisitions and joint ventures; and
•potential for increased regulation related to global climate change.
All forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to General Dynamics or any person acting on our behalf are qualified by the cautionary statements in this section. We do not undertake any obligation to update or publicly release revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report. These factors may be revised or supplemented in future SEC filings.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information relating to legal proceedings, see Note J to the unaudited Consolidated Financial Statements in Part I, Item 1.
ITEM 1A. RISK FACTORS
There have been no material changes with respect to this item from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about our third-quarter purchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:
Period
Total Number of Shares
Average Price per Share
Total Number of Shares Purchased as Part of Publicly Announced Program
Maximum Number of Shares That May Yet Be Purchased Under the Program
Shares Purchased Pursuant to Share Buyback Program
7/1/24-7/28/24
17,300
$
288.77
17,300
4,159,557
7/29/24-8/25/24
132,533
287.31
132,533
4,027,024
8/26/24-9/29/24
1,892
290.00
1,892
4,025,132
Shares Delivered or Withheld Pursuant to Restricted Stock Vesting*
7/1/24-7/28/24
527
289.80
7/29/24-8/25/24
806
296.57
8/26/24-9/29/24
1,256
296.38
154,314
$
287.64
*Represents shares withheld by, or delivered to, us pursuant to provisions in agreements with recipients of restricted stock granted under our equity compensation plans that allow us to withhold, or the recipient to deliver to us, the number of shares with a fair value equal to the statutory tax withholding due upon vesting of the restricted shares.
We did not make any unregistered sales of equity securities in the third quarter of 2024.
ITEM 5. OTHER INFORMATION
During the quarter ended September 29, 2024, none of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined under Item 408 of Regulation S-K).
101.INS Inline eXtensible Business Reporting Language (XBRL) Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)
* Filed or furnished electronically herewith.
46
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
