《通用动力(GENERAL DYNAMICS)2023年第一季度财报 (英文版)(63页).pdf》由会员分享,可在线阅读,更多相关《通用动力(GENERAL DYNAMICS)2023年第一季度财报 (英文版)(63页).pdf(63页珍藏版)》请在三个皮匠报告上搜索。
1、UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended April 2,2023OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT O
2、F 1934For the transition period from _ to _Commission File Number 1-3671 GENERAL DYNAMICS CORPORATION(Exact name of registrant as specified in its charter)Delaware13-1673581State or other jurisdiction of incorporation or organizationI.R.S.Employer Identification No.11011 Sunset Hills RoadReston,Virg
3、inia20190Address of principal executive officesZip code(703)876-3000Registrants telephone number,including area codeSecurities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon StockGDNew York Stock ExchangeIndicate by
4、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 12months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requiremen
5、ts for the past 90 days.Yes 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
6、 was required to submit such files).Yes 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 growthcompany.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller re
7、porting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer 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 exten
8、ded transition period for complying with any new or revised financialaccounting 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 274,335,601 shares of the registrant
9、s common stock,$1 par value per share,were outstanding on April 2,2023.INDEXPART I-FINANCIAL INFORMATIONPAGEItem 1-Unaudited Consolidated Financial StatementsConsolidated Statement of Earnings3Consolidated Statement of Comprehensive Income4Consolidated Balance Sheet5Consolidated Statement of Cash Fl
10、ows6Consolidated Statement of Shareholders Equity7Notes to Unaudited Consolidated Financial Statements8Item 2-Managements Discussion and Analysis of Financial Condition and Results of Operations25Item 3-Quantitative and Qualitative Disclosures About Market Risk38Item 4-Controls and Procedures38FORWA
11、RD-LOOKING STATEMENTS39PART II-OTHER INFORMATION40Item 1-Legal Proceedings40Item 1A-Risk Factors40Item 2-Unregistered Sales of Equity Securities and Use of Proceeds40Item 6-Exhibits41SIGNATURES42 2PART I FINANCIAL INFORMATIONITEM 1.UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED STATEMENT OF
12、 EARNINGS(UNAUDITED)Three Months Ended(Dollars in millions,except per-share amounts)April 2,2023April 3,2022Revenue:Products$5,513$5,209 Services4,368 4,183 9,881 9,392 Operating costs and expenses:Products(4,641)(4,312)Services(3,716)(3,546)General and administrative(G&A)(586)(626)(8,943)(8,484)Ope
13、rating earnings938 908 Other,net33 39 Interest,net(91)(98)Earnings before income tax880 849 Provision for income tax,net(150)(119)Net earnings$730$730 Earnings per shareBasic$2.66$2.63 Diluted$2.64$2.61 The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of the
14、se financial statements.3CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(UNAUDITED)Three Months Ended(Dollars in millions)April 2,2023April 3,2022Net earnings$730$730 Changes in unrealized cash flow hedges(7)(54)Foreign currency translation adjustments91 62 Changes in retirement plans funded status17
15、3 42 Other comprehensive income,pretax257 50(Provision)benefit for income tax,net(35)5 Other comprehensive income,net of tax222 55 Comprehensive income$952$785 The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.4CONSOLIDATED BALAN
16、CE SHEET(Unaudited)(Dollars in millions)April 2,2023December 31,2022ASSETSCurrent assets:Cash and equivalents$2,038$1,242 Accounts receivable2,936 3,008 Unbilled receivables8,148 8,795 Inventories7,006 6,322 Other current assets1,460 1,696 Total current assets21,588 21,063 Noncurrent assets:Property
17、,plant and equipment,net5,867 5,900 Intangible assets,net1,776 1,824 Goodwill20,386 20,334 Other assets2,479 2,464 Total noncurrent assets30,508 30,522 Total assets$52,096$51,585 LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Short-term debt and current portion of long-term debt$1,257$1,253
18、Accounts payable3,248 3,398 Customer advances and deposits7,717 7,436 Other current liabilities3,262 3,254 Total current liabilities15,484 15,341 Noncurrent liabilities:Long-term debt9,245 9,243 Other liabilities8,280 8,433 Commitments and contingencies(see Note J)Total noncurrent liabilities17,525
19、17,676 Shareholders equity:Common stock482 482 Surplus3,562 3,556 Retained earnings37,769 37,403 Treasury stock(20,796)(20,721)Accumulated other comprehensive loss(1,930)(2,152)Total shareholders equity19,087 18,568 Total liabilities and shareholders equity$52,096$51,585 The accompanying Notes to Un
20、audited Consolidated Financial Statements are an integral part of these financial statements.5CONSOLIDATED STATEMENT OF CASH FLOWS(UNAUDITED)Three Months Ended(Dollars in millions)April 2,2023April 3,2022Cash flows from operating activities continuing operations:Net earnings$730$730 Adjustments to r
21、econcile net earnings to net cash from operating activities:Depreciation of property,plant and equipment149 139 Amortization of intangible and finance lease right-of-use assets77 74 Equity-based compensation expense38 96 Deferred income tax benefit(91)(106)(Increase)decrease in assets,net of effects
22、 of business acquisitions:Accounts receivable72 26 Unbilled receivables653 617 Inventories(628)(234)Increase(decrease)in liabilities,net of effects of business acquisitions:Accounts payable(150)23 Customer advances and deposits553 675 Other,net59(72)Net cash provided by operating activities1,462 1,9
23、68 Cash flows from investing activities:Capital expenditures(161)(141)Other,net(29)(6)Net cash used by investing activities(190)(147)Cash flows from financing activities:Dividends paid(345)(330)Purchases of common stock(90)(294)Other,net(40)107 Net cash used by financing activities(475)(517)Net cash
24、 used by discontinued operations(1)Net increase in cash and equivalents796 1,304 Cash and equivalents at beginning of period1,242 1,603 Cash and equivalents at end of period$2,038$2,907 Supplemental cash flow information:Income tax payments,net$(58)$(15)Interest payments$(18)$(93)The accompanying No
25、tes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.6CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY(UNAUDITED)Three Months Ended Common StockRetainedTreasuryAccumulatedOther ComprehensiveTotalShareholders(Dollars in millions)ParSurplusEarningsStockLos
26、sEquityDecember 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 April 2,2023$482$3,562$37,769$(20,796)$(1,930)$19,087 December 31,2021$482$3,278$35,420$(19,
27、619)$(1,920)$17,641 Net earnings 730 730 Cash dividends declared (350)(350)Equity-based awards 156 74 230 Shares purchased (292)(292)Other comprehensive income 55 55 April 3,2022$482$3,434$35,800$(19,837)$(1,865)$18,014 The accompanying Notes to Unaudited Consolidated Financial Statements are an int
28、egral part of these financial statements.7NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS(Dollars in millions,except share and per-share amounts or unless otherwise noted)A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESGeneral Dynamics is a global aerospace and defense company that offers a broad p
29、ortfolio of products and services in businessaviation;ship construction and repair;land combat vehicles,weapons systems and munitions;and technology products and services.The following is a discussion of certain significant accounting policies,and further discussion is contained in other notes to th
30、esefinancial statements.Basis of Consolidation and Classification.The unaudited Consolidated Financial Statements include the accounts of GeneralDynamics Corporation and our wholly owned and majority-owned subsidiaries.We eliminate all intercompany balances andtransactions in the unaudited Consolida
31、ted Financial Statements.Consistent with industry practice,we classify assets and liabilities related to long-term contracts as current,even though some ofthese amounts may not be realized within one year.Interim Financial Statements.The unaudited Consolidated Financial Statements have been prepared
32、 pursuant to the rules andregulations of the Securities and Exchange Commission(SEC).These rules and regulations permit some of the information andfootnote disclosures included in financial statements prepared in accordance with U.S.generally accepted accounting principles(GAAP)to be condensed or om
33、itted.Our fiscal quarters are typically 13 weeks in length.Because our fiscal year ends on December 31,the number of days in ourfirst and fourth quarters varies slightly from year to year.Operating results for the three-month period ended April 2,2023,are notnecessarily indicative of the results tha
34、t may be expected for the year ending December 31,2023.The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for afair presentation of our results of operations and financial condition for the three-month periods ended April 2,2023,an
35、d April 3,2022.These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statementsand notes thereto included in our Annual Report on Form 10-K for the year ended December 31,2022.Property,Plant and Equipment,Net.Property,plant and equipment(PP&E
36、)is carried at historical cost,net of accumulateddepreciation.Net PP&E consisted of the following:April 2,2023December 31,2022PP&E$12,394$12,292 Accumulated depreciation(6,527)(6,392)PP&E,net$5,867$5,900 8Accounting Standards Updates.There are accounting standards that have been issued by the Financ
37、ial Accounting StandardsBoard(FASB)but are not yet effective.These standards are not expected to have a material impact on our results of operations,financial condition or cash flows.B.REVENUEPerformance Obligations.A performance obligation is a promise in a contract to transfer a distinct good or s
38、ervice to the customer,and is the unit of account for revenue.A contracts transaction price is allocated to each distinct performance obligation within thatcontract and recognized as revenue when,or as,the performance obligation is satisfied.The majority of our contracts have a singleperformance obl
39、igation as the promise to transfer the individual goods or services is not separately identifiable from other promisesin the contracts and is,therefore,not distinct.Some of our contracts have multiple performance obligations,most commonly due tothe contract covering multiple phases of the product li
40、fe cycle(development,production,maintenance and support).For contractswith multiple performance obligations,we allocate the contracts transaction price to each performance obligation using our bestestimate of the standalone selling price of each distinct good or service in the contract.The primary m
41、ethod used to estimatestandalone selling price is the expected cost plus a margin approach,under which we forecast our expected costs of satisfying aperformance obligation and then add an appropriate margin for that distinct good or service.Contract modifications are routine in the performance of ou
42、r contracts.Contracts are often modified to account for changes incontract specifications or requirements.In most instances,contract modifications are for goods or services that are not distinct and,therefore,are accounted for as part of the existing contract.Our performance obligations are satisfie
43、d over time as work progresses or at a point in time.Revenue from products and servicestransferred to customers over time accounted for 81%and 80%of our revenue for the three-month periods ended April 2,2023,andApril 3,2022,respectively.Substantially all of our revenue in the defense segments is rec
44、ognized over time because control istransferred continuously to our customers.Typically,revenue is recognized over time using costs incurred to date relative to totalestimated costs at completion to measure progress toward satisfying our performance obligations.Incurred costs represent workperformed
45、,which corresponds with,and thereby best depicts,the transfer of control to the customer.Contract costs include labor,material,overhead and,when appropriate,G&A expenses.Revenue from goods and services transferred to customers at a point in time accounted for 19%and 20%of our revenue for thethree-mo
46、nth periods ended April 2,2023,and April 3,2022,respectively.Most of our revenue recognized at a point in time is for themanufacture of business jet aircraft in our Aerospace segment.Revenue on these contracts is recognized when the customer obtainscontrol of the asset,which is generally upon delive
47、ry and acceptance by the customer of the fully outfitted aircraft.On April 2,2023,we had$89.8 billion of remaining performance obligations,which we also refer to as total backlog.We expectto recognize approximately 58%of our remaining performance obligations as revenue by year-end 2024,an additional
48、 26%by year-end 2026 and the balance thereafter.Contract Estimates.The majority of our revenue is derived from long-term contracts and programs that can span several years.Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and co
49、sts.For long-term contracts,we estimate the profit9on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize thatprofit over the life of the contract.Contract estimates are based on various assumptions to project the outcome of future
50、 events that often span several years.Theseassumptions include labor productivity and availability;the complexity of the work to be performed;the cost and availability ofmaterials;the performance of subcontractors;and the availability and timing of funding from the customer.The nature of our contrac
51、ts gives rise to several types of variable consideration,including claims,award fees and incentive fees.We include in our contract estimates additional revenue for contract modifications or claims against the customer when we believewe have an enforceable right to the modification or claim,the amoun
52、t can be estimated reliably and its realization is probable.Inevaluating these criteria,we consider the contractual/legal basis for the claim,the cause of any additional costs incurred,thereasonableness of those costs and the objective evidence available to support the claim.We include award fees or
53、 incentive fees inthe estimated transaction price when there is a basis to reasonably estimate the amount of the fee.These estimates are based onhistorical award experience,anticipated performance and our best judgment at the time.As a significant change in one or more of these estimates could affec
54、t the profitability of our contracts,we review and update ourcontract-related estimates regularly.We recognize adjustments in estimated profit on contracts under the cumulative catch-upmethod.Under this method,the impact of the adjustment on profit recorded to date on a contract is recognized in the
55、 period theadjustment is identified.Revenue and profit in future periods of contract performance are recognized using the adjusted estimate.Ifat any time the estimate of contract profitability indicates an anticipated loss on the contract,we recognize the total loss in the periodit is identified.The
56、 impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expensesor revenue.The aggregate impact of adjustments in contract estimates increased our revenue,operating earnings and diluted earningsper share as follows:Three Months EndedApril
57、 2,2023April 3,2022Revenue$94$107 Operating earnings77 105 Diluted earnings per share$0.22$0.30 While no adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three-monthperiods ended April 2,2023,or April 3,2022,our Marine Systems segments first-quar
58、ter 2023 results were affected negatively bysupply chain impacts to the Virginia-class submarine schedule.10Revenue by Category.Our portfolio of products and services consists of approximately 10,000 active contracts.The followingseries of tables presents our revenue disaggregated by several categor
59、ies.Revenue by major products and services was as follows:Three Months EndedApril 2,2023April 3,2022Aircraft manufacturing$1,151$1,262 Aircraft services741 641 Total Aerospace1,892 1,903 Nuclear-powered submarines2,037 1,762 Surface ships681 593 Repair and other services274 296 Total Marine Systems2
60、,992 2,651 Military vehicles1,147 1,095 Weapons systems,armament and munitions438 416 Engineering and other services171 164 Total Combat Systems1,756 1,675 Information technology(IT)services2,169 2,140 C5ISR*solutions1,072 1,023 Total Technologies3,241 3,163 Total revenue$9,881$9,392*Command,control
61、,communications,computers,cyber,intelligence,surveillance and reconnaissanceRevenue by contract type was as follows:Three Months Ended April 2,2023AerospaceMarine SystemsCombat SystemsTechnologiesTotalRevenueFixed-price$1,632$1,565$1,528$1,453$6,178 Cost-reimbursement 1,427 209 1,327 2,963 Time-and-
62、materials260 19 461 740 Total revenue$1,892$2,992$1,756$3,241$9,881 Three Months Ended April 3,2022Fixed-price$1,673$1,601$1,465$1,338$6,077 Cost-reimbursement 1,050 197 1,328 2,575 Time-and-materials230 13 497 740 Total revenue$1,903$2,651$1,675$3,163$9,392 Our segments operate under fixed-price,co
63、st-reimbursement and time-and-materials contracts.Our production contracts areprimarily fixed-price.Under these contracts,we agree to perform a specific scope of work for a fixed amount.Contracts for research,engineering,repair and maintenance,and other services are typically cost-reimbursement or t
64、ime-and-materials.Under cost-reimbursement contracts,the customer reimburses contract costs incurred and pays a fixed,incentive or award-based fee.Theamount for an incentive or award fee is determined by our ability to achieve targets set in the contract,such as cost,quality,scheduleand performance.
65、Under time-and-materials contracts,the customer pays a fixed hourly rate for direct labor and generally reimbursesus for the cost of materials.11Each of these contract types presents advantages and disadvantages.Typically,we assume more risk with fixed-price contracts.However,these types of contract
66、s offer additional profits when we complete the work for less than originally estimated.Cost-reimbursement contracts generally subject us to lower risk.Accordingly,the associated base fees are usually lower than fees earnedon fixed-price contracts.Under time-and-materials contracts,our profit may va
67、ry if actual labor-hour rates vary significantly fromthe negotiated rates.Also,because these contracts may provide little or no fee for managing material costs,the content mix canimpact profitability.Revenue by customer was as follows:Three Months Ended April 2,2023AerospaceMarine SystemsCombat Syst
68、emsTechnologiesTotalRevenueU.S.government:Department of Defense(DoD)$141$2,949$934$1,873$5,897 Non-DoD 1 2 1,192 1,195 Foreign military sales(FMS)18 41 133 9 201 Total U.S.government159 2,991 1,069 3,074 7,293 U.S.commercial1,198 51 54 1,303 Non-U.S.government108 1 619 100 828 Non-U.S.commercial427
69、17 13 457 Total revenue$1,892$2,992$1,756$3,241$9,881 Three Months Ended April 3,2022U.S.government:DoD$80$2,605$855$1,751$5,291 Non-DoD 1 2 1,243 1,246 FMS33 44 69 10 156 Total U.S.government113 2,650 926 3,004 6,693 U.S.commercial1,110 45 50 1,205 Non-U.S.government120 1 685 102 908 Non-U.S.commer
70、cial560 19 7 586 Total revenue$1,903$2,651$1,675$3,163$9,392 Contract Balances.The timing of revenue recognition,billings and cash collections results in billed accounts receivable,unbilled receivables(contract assets),and customer advances and deposits(contract liabilities)on the Consolidated Balan
71、ce Sheet.In our defense segments,amounts are billed as work progresses in accordance with agreed-upon contractual terms,either at periodicintervals(e.g.,biweekly or monthly)or upon achievement of contractual milestones.Generally,billing occurs subsequent to revenuerecognition,resulting in contract a
72、ssets.However,we sometimes receive advances or deposits from our customers,particularly onour international contracts,before revenue is recognized,resulting in contract liabilities.These assets and liabilities are reported onthe Consolidated Balance Sheet on a contract-by-contract basis at the end o
73、f each reporting period.In our Aerospace segment,wegenerally receive deposits from customers upon contract execution and upon achievement of contractual milestones.These depositsare liquidated when revenue is recognized.Changes in the contract asset and liability balances during the three-month peri
74、od endedApril 2,2023,were not materially impacted by any other factors.12Revenue recognized for the three-month periods ended April 2,2023,and April 3,2022,that was included in the contractliability balance at the beginning of each year was$1.7 billion.This revenue represented primarily the sale of
75、business jet aircraft.C.EARNINGS PER SHAREWe compute basic earnings per share(EPS)using net earnings for the period and the weighted average number of common sharesoutstanding during the period.Basic weighted average shares outstanding have decreased in 2023 and 2022 due to sharerepurchases.See Note
76、 K for further discussion of our share repurchases.Diluted EPS incorporates the additional shares issuableupon the assumed exercise of stock options and the release of restricted stock and restricted stock units(RSUs).Basic and diluted weighted average shares outstanding were as follows(in thousands
77、):Three Months EndedApril 2,2023April 3,2022Basic weighted average shares outstanding274,004 277,074 Dilutive effect of stock options and restricted stock/RSUs*2,642 2,863 Diluted weighted average shares outstanding276,646 279,937*Excludes outstanding options to purchase shares of common stock that
78、had exercise prices in excess of the average market price of our common stock during the period and,therefore,the effect ofincluding these options would be antidilutive.These options totaled 2,131 and 2,086 for the three-month periods ended April 2,2023,and April 3,2022,respectively.D.INCOME TAXESNe
79、t Deferred Tax Liability.Our deferred tax assets and liabilities are included in other noncurrent assets and liabilities on theConsolidated Balance Sheet.Our net deferred tax liability consisted of the following:April 2,2023December 31,2022Deferred tax asset$37$39 Deferred tax liability(629)(685)Net
80、 deferred tax liability$(592)$(646)Tax Uncertainties.We participate in the Internal Revenue Service(IRS)Compliance Assurance Process(CAP),a real-time auditof our consolidated federal corporate income tax return.The IRS has examined our consolidated federal income tax returns through2021.For all peri
81、ods open to examination by tax authorities,we periodically assess our liabilities and contingencies based on the latestavailable information.Where we believe there is more than a 50%chance that our tax position will not be sustained,we record ourbest estimate of the resulting tax liability,including
82、 interest,in the Consolidated Financial Statements.We include any interest orpenalties incurred in connection with income taxes as part of income tax expense.Based on all known facts and circumstances and applicable tax law,we believe the total amount of any unrecognized tax benefitson April 2,2023,
83、was not material to our results of operations,financial condition or cash flows.In addition,there are no taxpositions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months,producing,individually or in the aggregate,a material effect on
84、 our results of operations,financial condition or cash flows.13E.UNBILLED RECEIVABLESUnbilled receivables represent revenue recognized on long-term contracts(contract costs and estimated profits)less associatedadvances and progress billings.These amounts will be billed in accordance with the agreed-
85、upon contractual terms.Unbilledreceivables consisted of the following:April 2,2023December 31,2022Unbilled revenue$38,913$39,482 Advances and progress billings(30,765)(30,687)Net unbilled receivables$8,148$8,795 On April 2,2023,and December 31,2022,net unbilled receivables included$1.4 billion and$1
86、.7 billion,respectively,associatedwith a large international tracked vehicle contract in our Combat Systems segment.The contract,signed in 2010,had beenexperiencing an unbilled receivable build-up since 2021.Based on ongoing discussions with the customer and continued successfulprogram activity,the
87、customer resumed payments on the contract in the first quarter of 2023.F.INVENTORIESThe majority of our inventories are for business jet aircraft.Our inventories are stated at the lower of cost or net realizable value.Work in process represents largely labor,material and overhead costs associated wi
88、th aircraft in the manufacturing process and isbased primarily on the estimated average unit cost in a production lot.Substantially all of our raw materials are valued on either theaverage cost or the first-in,first-out method.We record pre-owned aircraft acquired in connection with the sale of new
89、aircraft at thelower of the trade-in value or the estimated net realizable value.Inventories consisted of the following:April 2,2023December 31,2022Work in process$4,734$4,182 Raw materials2,214 2,072 Finished goods20 17 Pre-owned aircraft38 51 Total inventories$7,006$6,322 The increase in total inv
90、entories during the three-month period ended April 2,2023,was due primarily to the ramp-up inproduction of new Gulfstream aircraft models,including the G700 in anticipation of its certification from the U.S.Federal AviationAdministration in the summer of 2023,as well as increased production of in-se
91、rvice aircraft reflecting strong customer demand.Customer deposits associated with firm orders for these aircraft,which are reflected in customer advances and deposits and othernoncurrent liabilities on the Consolidated Balance Sheet,have correspondingly increased.14G.GOODWILL AND INTANGIBLE ASSETSG
92、oodwill.The changes in the carrying amount of goodwill by reporting unit were as follows:AerospaceMarine SystemsCombat SystemsTechnologiesTotalGoodwillDecember 31,2022(a)$3,019$297$2,766$14,252$20,334 Acquisitions(b)8 8 Other(c)30 11 3 44 April 2,2023(a)$3,049$297$2,777$14,263$20,386(a)Goodwill in t
93、he Technologies reporting unit was net of$1.8 billion of accumulated impairment losses.(b)Included adjustments during the purchase price allocation period.(c)Consisted primarily of adjustments for foreign currency translation.Intangible Assets.Intangible assets consisted of the following:Gross Carry
94、ingAmount(a)AccumulatedAmortizationNet CarryingAmountGross CarryingAmount(a)AccumulatedAmortizationNet CarryingAmountApril 2,2023December 31,2022Contract and program intangibleassets(b)$3,249$(1,735)$1,514$3,247$(1,688)$1,559 Trade names and trademarks503(256)247 496(248)248 Technology and software6
95、5(50)15 64(48)16 Other intangible assets64(64)64(63)1 Total intangible assets$3,881$(2,105)$1,776$3,871$(2,047)$1,824(a)Changes in gross carrying amounts consisted primarily of foreign currency translation.(b)Consisted of acquired backlog and probable follow-on work and associated customer relations
96、hips.Amortization expense is included in operating costs and expenses in the Consolidated Statement of Earnings.Amortizationexpense for intangible assets was$53 and$50 for the three-month periods ended April 2,2023,and April 3,2022,respectively.15H.DEBTDebt consisted of the following:April 2,2023Dec
97、ember 31,2022Fixed-rate notes due:Interest rate:May 20233.375%$750$750 August 20231.875%500 500 November 20242.375%500 500 April 20253.250%750 750 May 20253.500%750 750 June 20261.150%500 500 August 20262.125%500 500 April 20273.500%750 750 November 20272.625%500 500 May 20283.750%1,000 1,000 April
98、20303.625%1,000 1,000 June 20312.250%500 500 April 20404.250%750 750 June 20412.850%500 500 November 20423.600%500 500 April 20504.250%750 750 OtherVarious91 90 Total debt principal10,591 10,590 Less unamortized debt issuance costs and discounts89 94 Total debt10,502 10,496 Less current portion1,257
99、 1,253 Long-term debt$9,245$9,243 On April 2,2023,we had no commercial paper outstanding,but we maintain the ability to access the commercial paper market inthe future.Separately,we have a$4 billion committed bank credit facility for general corporate purposes and working capital needsand to support
100、 our commercial paper issuances.This credit facility expires in March 2027.We may renew or replace this creditfacility in whole or in part at or prior to its expiration date.We also have an effective shelf registration on file with the SEC thatallows us to access the debt markets.Our financing arran
101、gements contain a number of customary covenants and restrictions.We were in compliance with allcovenants and restrictions on April 2,2023.16I.OTHER LIABILITIESA summary of significant other liabilities by balance sheet caption follows:April 2,2023December 31,2022Salaries and wages$909$1,116 Dividend
102、s payable363 347 Lease liabilities275 288 Workers compensation228 215 Retirement benefits102 38 Other1,385 1,250 Total other current liabilities$3,262$3,254 Customer deposits on commercial contracts$2,447$2,175 Retirement benefits2,273 2,453 Lease liabilities1,321 1,330 Other2,239 2,475 Total other
103、liabilities$8,280$8,433 J.COMMITMENTS AND CONTINGENCIESLitigationIn 2015,Electric Boat Corporation,a subsidiary of General Dynamics Corporation,received a civil investigative demand from theU.S.Department of Justice regarding an investigation of potential False Claims Act violations relating to alle
104、ged failures of ElectricBoats quality system with respect to allegedly non-conforming parts purchased from a supplier.In 2016,Electric Boat was madeaware that it is a defendant in a lawsuit related to this matter which had been filed under seal in U.S.district court.Also in 2016,theSuspending and De
105、barring Official for the U.S.Department of the Navy issued a show cause letter to Electric Boat requesting thatElectric Boat respond to the officials concerns regarding Electric Boats oversight and management with respect to its qualityassurance systems for subcontractors and suppliers.Electric Boat
106、 responded to the show cause letter and engaged in discussions withthe U.S.government.In the third quarter of 2019,the Department of Justice declined to intervene in the qui tam action,noting that its investigationcontinues,and the court unsealed the relators complaint.In the fourth quarter of 2020,
107、the relator filed a second amended complaint.In the third quarter of 2021,the court dismissed the relators complaint with prejudice.The relator appealed the dismissal of thecomplaint to the United States Court of Appeals.In the fourth quarter of 2022,the Court of Appeals heard oral arguments on thea
108、ppeal,and thereafter took the case under submission.Given the current status of these matters,we are unable to express a viewregarding the ultimate outcome or,if the outcome is adverse,to estimate an amount or range of reasonably possible loss.Dependingon the outcome of these matters,there could be
109、a material impact on our results of operations,financial condition and cash flows.Additionally,various other claims and legal proceedings incidental to the normal course of business are pending or threatenedagainst us.These other matters relate to such issues as government investigations and claims,
110、the protection of the environment,asbestos-related claims and employee-related matters.The nature of litigation is such that we cannot predict the outcome of theseother matters.However,based on information currently available,we believe any potential liabilities in these17other proceedings,individua
111、lly or in the aggregate,will not have a material impact on our results of operations,financial conditionor cash flows.EnvironmentalWe are subject to and affected by a variety of federal,state,local and foreign environmental laws and regulations.We are directly orindirectly involved in environmental
112、investigations or remediation at some of our current and former facilities and third-party sitesthat we do not own but where we have been designated a potentially responsible party(PRP)by the U.S.Environmental ProtectionAgency or a state environmental agency.Based on historical experience,we expect
113、that a significant percentage of the totalremediation and compliance costs associated with these facilities will continue to be allowable contract costs and,therefore,recoverable under U.S.government contracts.As required,we provide financial assurance for certain sites undergoing or subject to inve
114、stigation or remediation.We accrueenvironmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated.Whereapplicable,we seek insurance recovery for costs related to environmental liabilities.We do not record insurance recoveries beforecollection is
115、considered probable.Based on all known facts and analyses,we do not believe that our liability at any individual site,orin the aggregate,arising from such environmental conditions will be material to our results of operations,financial condition or cashflows.We also do not believe that the range of
116、reasonably possible additional loss beyond what has been recorded would be materialto our results of operations,financial condition or cash flows.OtherGovernment Contracts.As a government contractor,we are subject to U.S.government audits and investigations relating to ouroperations,including claims
117、 for fines,penalties,and compensatory and treble damages.We believe the outcome of such ongoinggovernment audits and investigations will not have a material impact on our results of operations,financial condition or cash flows.In the performance of our contracts,we routinely request contract modific
118、ations that require additional funding from thecustomer.Most often,these requests are due to customer-directed changes in the scope of work.While we are entitled to recovery ofthese costs under our contracts,the administrative process with our customer may be protracted.Based on the circumstances,we
119、periodically file requests for equitable adjustment(REAs)that are sometimes converted into claims.In some cases,these requestsare disputed by our customer.We believe our outstanding modifications,REAs and other claims will be resolved without materialimpact to our results of operations,financial con
120、dition or cash flows.Letters of Credit and Guarantees.In the ordinary course of business,we have entered into letters of credit,bank guarantees,surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately$1.4 billion onApril 2,2023.In addition
121、,from time to time and in the ordinary course of business,we contractually guarantee the payment orperformance of our subsidiaries arising under certain contracts.Aircraft Trade-ins.In connection with orders for new aircraft in contract backlog,some Gulfstream customers hold options totrade in aircr
122、aft as partial consideration in their new-aircraft transaction.These trade-in commitments are generally structured toestablish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft tothe customer.At that time,the customer is requir
123、ed to either exercise the option or allow its expiration.Other trade-in commitmentsare structured to guarantee a predetermined trade-in value.These commitments present more risk in the event of an adverse changein market conditions.In either case,any excess of the preestablished trade-in18price abov
124、e the fair market value at the time the new aircraft is delivered is treated as a reduction of revenue in the new-aircraft salestransaction.As of April 2,2023,the estimated change in fair market values from the date of the commitments was not material.Product Warranties.We provide warranties to our
125、customers associated with certain product sales.We record estimatedwarranty costs in the period in which the related products are delivered.The warranty liability recorded at each balance sheet date isbased generally on the number of months of warranty coverage remaining for the products delivered a
126、nd the average historicalmonthly warranty payments.Warranty obligations incurred in connection with long-term production contracts are accounted forwithin the contract estimates at completion.Our other warranty obligations,primarily for business jet aircraft,are included in othercurrent and noncurre
127、nt liabilities on the Consolidated Balance Sheet.The changes in the carrying amount of warranty liabilities for the three-month periods ended April 2,2023,and April 3,2022,were as follows:Three Months EndedApril 2,2023April 3,2022Beginning balance$603$641 Warranty expense16 21 Payments(23)(33)Adjust
128、ments4 Ending balance$600$629 K.SHAREHOLDERS EQUITYShare Repurchases.Our board of directors(Board),from time to time,authorizes management to repurchase outstanding shares ofour common stock on the open market.In the three-month period ended April 2,2023,we repurchased 0.4 million of our outstanding
129、shares for$90.On April 2,2023,6.3 million shares remained authorized by our Board for repurchase,representing 2.3%of our totalshares outstanding.We repurchased 1.3 million shares for$292 in the three-month period ended April 3,2022.Dividends per Share.Our Board declared dividends per share of$1.32 a
130、nd$1.26 for the three-month periods ended April 2,2023,and April 3,2022,respectively.We paid cash dividends of$345 and$330 for the three-month periods ended April 2,2023,and April 3,2022,respectively.19Accumulated Other Comprehensive Loss.The changes,pretax and net of tax,in each component of accumu
131、lated othercomprehensive loss(AOCL)consisted of the following:Changes in UnrealizedCash Flow HedgesForeign CurrencyTranslationAdjustmentsChanges in RetirementPlans Funded StatusAOCLDecember 31,2022$4$260$(2,416)$(2,152)Other comprehensive income,pretax(7)91 173 257 Provision for income tax,net1 (36)
132、(35)Other comprehensive income,net of tax(6)91 137 222 April 2,2023$(2)$351$(2,279)$(1,930)December 31,2021$144$538$(2,602)$(1,920)Other comprehensive income,pretax(54)62 42 50 Benefit for income tax,net14 (9)5 Other comprehensive income,net of tax(40)62 33 55 April 3,2022$104$600$(2,569)$(1,865)Amo
133、unts reclassified out of AOCL related primarily to changes in our retirement plans funded status and included pretaxrecognized net actuarial losses and amortization of prior service credit.See Note O for these amounts,which are included in our netperiodic pension and other post-retirement benefit co
134、st(credit).L.SEGMENT INFORMATIONWe have four operating segments:Aerospace,Marine Systems,Combat Systems and Technologies.We organize our segments inaccordance with the nature of products and services offered.We measure each segments profitability based on operating earnings.As a result,we do not all
135、ocate net interest,other income and expense items,and income taxes to our segments.Summary financial information for each of our segments follows:Revenue(a)Operating EarningsThree Months EndedApril 2,2023April 3,2022April 2,2023April 3,2022Aerospace$1,892$1,903$229$243 Marine Systems2,992 2,651 211
136、211 Combat Systems1,756 1,675 245 227 Technologies3,241 3,163 299 298 Corporate(b)(46)(71)Total$9,881$9,392$938$908(a)See Note B for additional revenue information by segment.(b)Corporate operating costs consisted primarily of equity-based compensation expense.20M.FAIR VALUEFair value is defined as
137、the price that would be received to sell an asset or paid to transfer a liability in the principal or mostadvantageous market in an orderly transaction between marketplace participants.Various valuation approaches can be used todetermine fair value,each requiring different valuation inputs.The follo
138、wing hierarchy classifies the inputs used to determine fairvalue into three levels:Level 1 quoted prices in active markets for identical assets or liabilities.Level 2 inputs,other than quoted prices,observable by a marketplace participant either directly or indirectly.Level 3 unobservable inputs sig
139、nificant to the fair value measurement.We did not have any significant non-financial assets or liabilities measured at fair value on April 2,2023,or December 31,2022.Our financial instruments include cash and equivalents,accounts receivable and payable,marketable securities held in trust andother in
140、vestments,short-and long-term debt,and derivative financial instruments.The carrying values of cash and equivalents andaccounts receivable and payable on the unaudited Consolidated Balance Sheet approximate their fair value.The following tablespresent the fair values of our other financial assets an
141、d liabilities on April 2,2023,and December 31,2022,and the basis fordetermining their fair values:21CarryingValueFairValueQuoted Prices inActive Markets forIdentical Assets(Level 1)Significant OtherObservableInputs(Level 2)SignificantUnobservableInputs(Level 3)Financial Assets(Liabilities)April 2,20
142、23Measured at fair value:Marketable securities held in trust:Cash and equivalents$12$12$4$8$Available-for-sale debt securities127 127 127 Commingled equity funds44 44 44 Commingled fixed-income funds5 5 5 Other investments17 17 17 Cash flow hedge assets93 93 93 Cash flow hedge liabilities(58)(58)(58
143、)Measured at amortized cost:Short-and long-term debt principal(10,591)(9,986)(9,986)December 31,2022Measured at fair value:Marketable securities held in trust:Cash and equivalents$7$7$7$Available-for-sale debt securities107 107 107 Commingled equity funds42 42 42 Commingled fixed-income funds6 6 6 O
144、ther investments17 17 17 Cash flow hedge assets109 109 109 Cash flow hedge liabilities(67)(67)(67)Measured at amortized cost:Short-and long-term debt principal(10,590)(9,773)(9,773)Our Level 1 assets include commingled equity and fixed-income funds that are valued using a unit price or net asset val
145、ue(NAV).These funds are actively traded and valued using quoted prices for identical securities from the market exchanges.The fairvalue of our Level 2 assets and liabilities,which consist primarily of fixed-income securities,cash flow hedges and our fixed-ratenotes,is determined under a market appro
146、ach using valuation models that incorporate observable inputs such as interest rates,bondyields and quoted prices for similar assets.Our Level 3 assets include direct private equity investments that are measured usinginputs unobservable to a marketplace participant.N.DERIVATIVE FINANCIAL INSTRUMENTS
147、 AND HEDGING ACTIVITIESWe are exposed to market risk,primarily from foreign currency exchange rates,commodity prices and investments.We may usederivative financial instruments to hedge some of these risks as described below.We do not use derivative financial instruments fortrading or speculative pur
148、poses.Foreign Currency Risk.Our foreign currency exchange rate risk relates to receipts from customers,payments to suppliers andintercompany transactions denominated in foreign currencies.To the extent possible,we include terms in our contracts that aredesigned to protect us from this risk.Otherwise
149、,we22enter into derivative financial instruments,principally foreign currency forward purchase and sale contracts,designed to offset andminimize our risk.The dollar-weighted two-year average maturity of these instruments generally matches the duration of theactivities that are at risk.Commodity Pric
150、e Risk.We are subject to commodity price risk,primarily on long-term,fixed-price contracts.To the extentpossible,we include terms in our contracts that are designed to protect us from these risks.Some of the protective terms included inour contracts are considered derivative financial instruments bu
151、t are not accounted for separately,because they are clearly andclosely related to the host contract.We have not entered into any material commodity hedging contracts but may do so ascircumstances warrant.We do not believe that changes in commodity prices will have a material impact on our results of
152、 operationsor cash flows.Investment Risk.Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and amaximum maturity of up to five years.On April 2,2023,and December 31,2022,we held$2 billion and$1.2 billion in cash andequivalents,respectively,but held
153、 no marketable securities other than those held in trust to meet some of our obligations underworkers compensation and non-qualified pension plans.On April 2,2023,and December 31,2022,we held marketable securities intrust of$188 and$162,respectively.These marketable securities are reflected at fair
154、value on the Consolidated Balance Sheet inother current and noncurrent assets.See Note M for additional details.Hedging Activities.We had notional forward exchange contracts outstanding of$5.6 billion and$6.9 billion on April 2,2023,and December 31,2022,respectively.These derivative financial instru
155、ments are cash flow hedges,and are reflected at fair value onthe Consolidated Balance Sheet in other current assets and liabilities.See Note M for additional details.Changes in fair value(gains and losses)related to derivative financial instruments that qualify as cash flow hedges are deferredin AOC
156、L until the underlying transaction is reflected in earnings.Alternatively,gains and losses on derivative financial instrumentsthat do not qualify for hedge accounting are recorded each period in earnings.All gains and losses from derivative financialinstruments recognized in the Consolidated Stateme
157、nt of Earnings are presented in the same line item as the underlying transaction,generally operating costs and expenses.Net gains and losses recognized in earnings on derivative financial instruments that do not qualify for hedge accounting were notmaterial to our results of operations for the three
158、-month periods ended April 2,2023,and April 3,2022.Net gains and lossesreclassified to earnings from AOCL related to qualified hedges were also not material to our results of operations for the three-monthperiods ended April 2,2023,and April 3,2022,and we do not expect the amount of these gains and
159、losses that will be reclassified toearnings during the next 12 months to be material.We had no material derivative financial instruments designated as fair value or net investment hedges on April 2,2023,andDecember 31,2022.Foreign Currency Financial Statement Translation.We translate foreign currenc
160、y balance sheets from our internationalbusinesses functional currency(generally the respective local currency)to U.S.dollars at the end-of-period exchange rates,andstatements of earnings at the average exchange rates for each period.The resulting foreign currency translation adjustments are acompone
161、nt of AOCL.We do not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operationsresults into U.S.dollars.The impact of translating our non-U.S.operations revenue and earnings into U.S.dollars was not materialto our results of operations for
162、 the23three-month periods ended April 2,2023,and April 3,2022.In addition,the effect of changes in foreign exchange rates on non-U.S.cash balances was not material for the three-month periods ended April 2,2023,and April 3,2022.O.RETIREMENT PLANSWe provide retirement benefits to eligible employees t
163、hrough a variety of plans:Defined contributionDefined benefitPension(qualified and non-qualified)Other post-retirement benefitFor our defined benefit plans,net periodic benefit cost(credit)for the three-month periods ended April 2,2023,and April 3,2022,consisted of the following:Pension BenefitsOthe
164、r Post-retirement BenefitsThree Months EndedApril 2,2023April 3,2022April 2,2023April 3,2022Service cost$17$26$1$1 Interest cost163 100 7 5 Expected return on plan assets(207)(228)(8)(8)Net actuarial loss(gain)183 54(8)(4)Prior service(credit)cost(4)(5)1 Net periodic benefit cost(credit)$152$(53)$(7
165、)$(6)Our contractual arrangements with the U.S.government provide for the recovery of pension and other post-retirement benefitcosts related to employees working on government contracts.The amount allocated to U.S.government contracts is determined inaccordance with the Federal Acquisition Regulatio
166、n(FAR)and Cost Accounting Standards(CAS),which may result in a timingdifference with the amount determined under GAAP.We defer this difference on the Consolidated Balance Sheet.At this time,theamount allocated to contracts exceeds cumulative benefit costs,resulting in a deferred credit that is repor
167、ted in other noncurrentliabilities.To the extent there is a non-service component of net periodic benefit cost(credit)for our defined benefit plans,it isreported in other income(expense)in the Consolidated Statement of Earnings.24ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND R
168、ESULTS OF OPERATIONS(Dollars in millions,except per-share amounts or unless otherwise noted)BUSINESS OVERVIEWGeneral Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in businessaviation;ship construction and repair;land combat vehicles,weapons
169、 systems and munitions;and technology products and services.Our company is organized into four operating segments:Aerospace,Marine Systems,Combat Systems and Technologies.Werefer to the latter three collectively as our defense segments.Our primary customer is the U.S.government,including theDepartme
170、nt of Defense(DoD),the intelligence community and other U.S.government customers.We also have significant businesswith non-U.S.governments and a diverse base of corporate and individual buyers of business jet aircraft and related services.Thefollowing discussion should be read in conjunction with ou
171、r Annual Report on Form 10-K for the year ended December 31,2022,and with the unaudited Consolidated Financial Statements included in this Form 10-Q.BUSINESS ENVIRONMENTThe disruptions caused by the coronavirus(COVID-19)pandemic and the ongoing conflict in Ukraine continue to impact globaleconomies
172、and businesses.The impact primarily affecting our business is supply chain challenges,including inflationary pressures.In our Aerospace segment,supply chain challenges have paced our ability to ramp up production in response to strong customerdemand for our aircraft.Within our defense segments,the C
173、OVID-19 pandemic resulted in supply chain challenges,which wecontinue to experience,particularly in our Marine Systems(especially in the submarine supply chain)and Technologies segments.The Russia-Ukraine conflict has created additional demand for our products and services,particularly in our Combat
174、 Systemssegment,though the timing and extent of incremental contract activity resulting from that demand remains uncertain.Any longer-term impact of these global events on our business is currently unknown due to the uncertainty around their durationand broader impact.The Review of Operating Segment
175、s includes information on these global events for the affected segments.25RESULTS OF OPERATIONSINTRODUCTIONThe following paragraphs explain how we recognize revenue and operating costs in our operating segments and the terminology weuse to describe our operating results.In the Aerospace segment,we r
176、ecord revenue on contracts for new aircraft when the customer obtains control of the asset,whichis generally upon delivery and acceptance by the customer of the fully outfitted aircraft.Revenue associated with the segmentsservices businesses is recognized as work progresses or upon delivery of servi
177、ces.Fluctuations in revenue from period to periodresult from the number and mix of new aircraft deliveries,and the level and type of aircraft services performed during the period.The majority of the Aerospace segments operating costs relates to new aircraft production on firm orders and consists of
178、labor,material,subcontractor and overhead costs.The costs are accumulated in production lots,recorded in inventory and recognized asoperating costs at aircraft delivery based on the estimated average unit cost in a production lot.While changes in the estimatedaverage unit cost for a production lot i
179、mpact the level of operating costs,the amount of operating costs reported in a given period isbased largely on the number and type of aircraft delivered.Operating costs in the Aerospace segments services businesses arerecognized generally as incurred.For new aircraft,operating earnings and margin ar
180、e a function of the prices of our aircraft,our operational efficiency inmanufacturing and outfitting the aircraft,and the mix of ultra-large-cabin,large-cabin and mid-cabin aircraft deliveries.Aircraft mixcan also refer to the stage of program maturity for our aircraft models.A new aircraft model ty
181、pically has lower margins in its initialproduction lots,and then margins generally increase as we realize efficiencies in the production process.Additional factors affectingthe segments earnings and margin include the volume,mix and profitability of services work performed,the market for pre-ownedai
182、rcraft,and the level of general and administrative(G&A)and net research and development(R&D)costs incurred by the segment.In the defense segments,revenue on long-term government contracts is recognized generally over time as the work progresses,either as products are produced or as services are rend
183、ered.Typically,revenue is recognized over time using costs incurred to daterelative to total estimated costs at completion to measure progress toward satisfying our performance obligations.Incurred costsrepresent work performed,which corresponds with,and thereby best depicts,the transfer of control
184、to the customer.Contract costsinclude labor,material,overhead and,when appropriate,G&A expenses.Variances in costs recognized from period to period reflectprimarily increases and decreases in production or activity levels on individual contracts.Because costs are used as a measure ofprogress,year-ov
185、er-year variances in costs result in corresponding variances in revenue,which we generally refer to as volume.Operating earnings and margin in the defense segments are driven by changes in volume,performance or contract mix.Performance refers to changes in profitability based on adjustments to estim
186、ates at completion on individual contracts.Theseadjustments result from increases or decreases to the estimated value of the contract,the estimated costs to complete the contract orboth.Therefore,changes in costs incurred in the period compared with prior periods do not necessarily impact profitabil
187、ity.It is onlywhen total estimated costs at completion on a given contract change without a corresponding change in the contract value(or viceversa)that the profitability of that contract may be impacted.Contract mix refers to changes in the volume of higher-versus lower-margin work.Higher or26lower
188、 margins can result from a number of factors,including contract type(e.g.,fixed-price/cost-reimbursable)and type of work(e.g.,development/production).Contract mix can also refer to the stage of program maturity for our long-term production contracts.New long-term production contracts typically have
189、lower margins initially,and then margins generally increase as we achievelearning curve improvements or realize other cost reductions.CONSOLIDATED OVERVIEWThree Months EndedApril 2,2023April 3,2022VarianceRevenue$9,881$9,392$489 5.2%Operating costs and expenses(8,943)(8,484)(459)5.4%Operating earnin
190、gs938 908 30 3.3%Operating margin9.5%9.7%Our consolidated revenue increased in the first quarter of 2023 due to higher volume across our defense segments,primarily in U.S.Navy ship construction.Operating earnings increased in the three-month period,but were negatively impacted by program mix andsupp
191、ly chain-driven cost pressure that resulted in a 20 basis-point decrease in operating margin.REVIEW OF OPERATING SEGMENTSFollowing is a discussion of operating results for each of our operating segments.For the Aerospace segment,results are analyzed byspecific types of products and services,consiste
192、nt with how the segment is managed.For the defense segments,the discussion isbased on markets and the lines of products and services offered with a supplemental discussion of specific contracts and programswhen significant to the results.Additional information regarding our segments can be found in
193、Note L to the unaudited ConsolidatedFinancial Statements in Part I,Item 1.AEROSPACEThree Months EndedApril 2,2023April 3,2022VarianceRevenue$1,892$1,903$(11)(0.6)%Operating earnings229 243(14)(5.8)%Operating margin12.1%12.8%Gulfstream aircraft deliveries(in units)21 25(4)(16.0)%Operating ResultsThe
194、change in the Aerospace segments revenue in the first quarter of 2023 consisted of the following:Aircraft manufacturing$(111)Aircraft services100 Total decrease$(11)27Aircraft manufacturing revenue was down in the first quarter of 2023 due to fewer large-cabin aircraft deliveries.This decreasewas of
195、fset largely by an increase in demand for aircraft services,particularly maintenance and fixed-based operator(FBO)services,as customer flight activity remained at elevated levels during the quarter.The change in the segments operating earnings in the first quarter of 2023 consisted of the following:
196、Aircraft manufacturing$(38)Aircraft services15 G&A/other expenses9 Total decrease$(14)Aircraft manufacturing operating earnings were down in the first quarter of 2023 due primarily to the number and mix ofdeliveries and higher production costs resulting from supply chain challenges.This decrease was
197、 offset partially by higher operatingearnings from aircraft services driven by volume,and by lower G&A/other expenses.In total,the Aerospace segments operatingmargin decreased 70 basis points in the first quarter of 2023 compared with the prior-year period.MARINE SYSTEMSThree Months EndedApril 2,202
198、3April 3,2022VarianceRevenue$2,992$2,651$341 12.9%Operating earnings211 211%Operating margin7.1%8.0%Operating ResultsThe increase in the Marine Systems segments revenue in the first quarter of 2023 consisted of the following:U.S.Navy ship construction$233 U.S.Navy ship engineering,repair and other s
199、ervices108 Total increase$341 Revenue from U.S.Navy ship construction and engineering was up due primarily to increased volume on the Columbia-classsubmarine program.Overall,the Marine Systems segments operating margin decreased 90 basis points due to supply chain impactsto the Virginia-class submar
200、ine schedule.COMBAT SYSTEMSThree Months EndedApril 2,2023April 3,2022VarianceRevenue$1,756$1,675$81 4.8%Operating earnings245 227 18 7.9%Operating margin14.0%13.6%28Operating ResultsThe increase in the Combat Systems segments revenue in the first quarter of 2023 consisted of the following:U.S.milita
201、ry vehicles$62 Weapons systems and munitions16 International military vehicles3 Total increase$81 Revenue from U.S.military vehicles increased in the first quarter of 2023 due to higher volume on Mobile Protected Firepower(MPF)and Stryker vehicles,particularly the maneuver short-range air defense(M-
202、SHORAD)variant.Weapons systems andmunitions revenue was up due to increased artillery production.The strengthening of the U.S.dollar against the Canadian dollar,euro and British pound compared with the prior-year period hasnegatively impacted the Combat Systems segments results,specifically the tran
203、slation of our international revenue from localcurrencies into U.S.dollars.Had foreign exchange rates in the first quarter of 2023 held constant from the same period in 2022,theCombat Systems segments revenue would have increased 7.1%in the first quarter of 2023 compared to the prior-year period.Ove
204、rall,the Combat Systems segments operating margin increased 40 basis points in the first quarter of 2023.TECHNOLOGIESThree Months EndedApril 2,2023April 3,2022VarianceRevenue$3,241$3,163$78 2.5%Operating earnings299 298 1 0.3%Operating margin9.2%9.4%Operating ResultsThe increase in the Technologies
205、segments revenue in the first quarter of 2023 consisted of the following:C5ISR*solutions$49 Information technology(IT)services29 Total increase$78*Command,control,communications,computers,cyber,intelligence,surveillance and reconnaissanceThe Technologies segments revenue was up due to increased dema
206、nd across the business and the acquisition of a C5ISRsolutions business in the third quarter of 2022.The Technologies segments operating margin decreased 20 basis points due toprogram mix.29CORPORATECorporate operating costs totaled$46 in the first quarter of 2023 compared with$71 in the first quart
207、er of 2022 and consistedprimarily of equity-based compensation expense.The decrease was due primarily to timing of expense recognition.OTHER INFORMATIONPRODUCT REVENUE AND OPERATING COSTSThree Months EndedApril 2,2023April 3,2022VarianceRevenue$5,513$5,209$304 5.8%Operating costs(4,641)(4,312)(329)7
208、.6%The increase in product revenue in the first quarter of 2023 consisted of the following:Ship construction$233 Military vehicle production118 Aircraft manufacturing(111)Other,net64 Total increase$304 Ship construction revenue increased due to higher volume on the Columbia-class submarine program.M
209、ilitary vehicleproduction revenue was up due primarily to higher volume on the U.S.Armys MPF and Stryker programs.These increases wereoffset partially by lower revenue from aircraft manufacturing due to fewer large-cabin aircraft deliveries.In the first quarter of 2023,product operating costs increa
210、sed at a higher rate than revenue due primarily to supply chain impacts to the Virginia-class submarineschedule.SERVICE REVENUE AND OPERATING COSTSThree Months EndedApril 2,2023April 3,2022VarianceRevenue$4,368$4,183$185 4.4%Operating costs(3,716)(3,546)(170)4.8%The increase in service revenue in th
211、e first quarter of 2023 consisted of the following:Ship services$108 Aircraft services100 Other,net(23)Total increase$185 Ship services revenue increased in the first quarter of 2023 due to a higher volume of engineering work on the Columbia-classsubmarine program.Aircraft services revenue increased
212、 due to additional maintenance work and FBO activity.The primary driversof the increase in service operating costs were the changes in volume on the programs described above.30G&A EXPENSESAs a percentage of revenue,G&A expenses were 5.9%in the first three months of 2023 compared with 6.7%in the firs
213、t threemonths of 2022,which included the accelerated recognition of equity-based compensation expense.OTHER,NETNet other income was$33 in the first three months of 2023 compared with$39 in the first three months of 2022 and representsprimarily the non-service components of pension and other post-ret
214、irement benefits.INTEREST,NETNet interest expense was$91 in the first three months of 2023 compared with$98 in the prior-year period,reflecting the repaymentof debt in the fourth quarter of 2022.See Note H to the unaudited Consolidated Financial Statements in Part I,Item 1,for additionalinformation
215、regarding our debt obligations,including interest rates.PROVISION FOR INCOME TAX,NETOur effective tax rate was 17%in the first three months of 2023 compared with 14%in the prior-year period.The lower effective taxrate in the first quarter of 2022 reflected a variety of factors,including the impact o
216、f tax benefits from equity-based compensation.BACKLOG AND ESTIMATED POTENTIAL CONTRACT VALUEOur total backlog,including funded and unfunded portions,was$89.8 billion at the end of the first quarter of 2023 compared with$91.1 billion on December 31,2022.Our total backlog is equal to our remaining per
217、formance obligations under contracts withcustomers as discussed in Note B to the unaudited Consolidated Financial Statements in Part I,Item 1.Our total estimated contractvalue,which combines total backlog with estimated potential contract value,was$128.4 billion on April 2,2023.31The following table
218、 details the backlog and estimated potential contract value of each segment at the end of the first quarter of2023 and fourth quarter of 2022:FundedUnfundedTotal BacklogEstimated PotentialContract ValueTotalEstimated ContractValueApril 2,2023Aerospace$18,853$484$19,337$804$20,141 Marine Systems34,84
219、8 8,759 43,607 3,499 47,106 Combat Systems13,953 143 14,096 5,599 19,695 Technologies9,465 3,320 12,785 28,637 41,422 Total$77,119$12,706$89,825$38,539$128,364 December 31,2022Aerospace$19,077$439$19,516$685$20,201 Marine Systems26,246 19,453 45,699 3,672 49,371 Combat Systems12,726 525 13,251 5,364
220、 18,615 Technologies9,100 3,571 12,671 26,889 39,560 Total$67,149$23,988$91,137$36,610$127,747 AEROSPACEAerospace funded backlog represents primarily new aircraft orders for which we have definitive purchase contracts and depositsfrom customers.Unfunded backlog consists of agreements to provide futu
221、re aircraft maintenance and support services.TheAerospace segment ended the first quarter of 2023 with backlog of$19.3 billion.The Aerospace segments book-to-bill ratio(orders divided by revenue)was 0.9-to-1 in the first quarter of 2023.Aircraft orderswere solid until two regional banks failed in Ma
222、rch 2023.This created a pause in the market for about three weeks late in the quarter.Normal activity returned early in the second quarter.Beyond total backlog,estimated potential contract value represents primarily options and other agreements with existingcustomers to purchase new aircraft and lon
223、g-term aircraft services agreements.On April 2,2023,estimated potential contract valuein the Aerospace segment was$804.DEFENSE SEGMENTSThe total backlog in our defense segments represents the estimated remaining sales value of work to be performed under firmcontracts.The funded portion of total back
224、log includes items that have been authorized and appropriated by the U.S.Congress andfunded by customers,as well as commitments by international customers that are approved and funded similarly by theirgovernments.The unfunded portion of total backlog includes the amounts we believe are likely to be
225、 funded,but there is noguarantee 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 contractsand unfunded work on in
226、definite delivery,indefinite quantity(IDIQ)contracts.Contract options represent agreements to performadditional work under existing contracts at32the election of the customer.We recognize options in backlog when the customer exercises the option and establishes a firm order.For IDIQ contracts,we eva
227、luate the amount of funding we expect to receive and include this amount in our estimated potentialcontract 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 low
228、er than our estimate of potential contract value.Total backlog in our defense segments was$70.5 billion on April 2,2023.In the first quarter of 2023,the Combat Systems andTechnologies segments achieved book-to-bill ratios of 1.5-to-1 and 1-to-1,respectively.Estimated potential contract value in ourd
229、efense segments was$37.7 billion on April 2,2023,up 5%from$35.9 billion on December 31,2022.We received the followingsignificant contract awards during the first quarter of 2023:MARINE SYSTEMS$215 from the U.S.Navy for maintenance and modernization work on the USS Anchorage and USS Arlington,San Ant
230、onio-class amphibious transport docks.$45 from the Navy for maintenance and modernization work on the USS Sampson,an Arleigh Burke-class(DDG-51)guided-missile destroyer.$25 from the Navy to provide Trident II Strategic Weapon System Trainer Facility kits and engineering support services.COMBAT SYSTE
231、MS$285 from the U.S.Army to establish additional capacity for 155mm artillery projectile metal parts production.The contract hasa maximum potential value of$1.3 billion.$350 from the Army to upgrade Abrams main battle tanks to the system enhancement package version 3(SEPv3)configurationand provide s
232、ystem and sustainment technical support services for the Abrams program.$305 to produce light armored vehicles(LAVs)and provide the associated spares and logistics support services for Colombia.$255 for various munitions and ordnance.$210 from the Army to provide spare parts and inventory management
233、 and support services for the Stryker wheeled combatvehicle program.$205 to produce Abrams main battle tanks in the SEPv3 configuration for Poland,bringing the total firm backlog for the programto$1.1 billion.$65 to produce Stryker infantry carrier vehicles for North Macedonia.The contract has a max
234、imum potential value of$145.TECHNOLOGIESAn IDIQ contract to provide full spectrum security support services to protect mission critical infrastructure for the U.S.AirForce.The contract has a maximum potential value of$4.5 billion between two awardees.$130 to provide flight simulation and training se
235、rvices for the Army.The contract has a maximum potential value of$1.7 billion.33An IDIQ contract to provide sustainment services,spare parts and obsolescence risk management services,and system readinessfor the Armys Prophet Enhanced sensor systems.The contract has a maximum potential value of$480.$
236、400 for several key classified contracts.Two IDIQ contracts from the U.S.Environmental Protection Agency to provide technical,research and support services toenable the agencys critical environmental and climate initiatives.These contracts have a maximum potential value of$380.$135 from the Air Forc
237、e for the Battlefield Information Collection and Exploitation System(BICES)program to provideintelligence information sharing capabilities.$115 to provide global enterprise and digital modernization services under the Southern Commands(SOUTHCOM)CyberInformation Technology Enterprise Services(SCITES)
238、contract.$105 to provide enterprise IT,communications and mission command support services to U.S.Army Europe.$100 from the North Carolina Department of Health and Human Services in support of its Medicaid management informationsystem.$80 from the Army for computing and communications equipment unde
239、r the Common Hardware Systems-5(CHS-5)program.LIQUIDITY AND CAPITAL RESOURCESWe place a strong emphasis on cash flow generation,which is underpinned by an operating discipline focused on cost control andworking capital management.This emphasis gives us the flexibility for prudent capital deployment,
240、while allowing us to step downdebt 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 webelieve agility is a key component of our capital deployment strategy as m
241、arket conditions change over time.Our capital deploymentpriorities include investments in our products and services to drive long-term growth,a predictable dividend,strategic acquisitionsand opportunistic share repurchases.We believe cash generated by operating activities,supplemented by commercial
242、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 markettransactions.We ended the first quarter of 2023 with a cash and equivalents balance of$2 billion compared with$1.2 billion at
243、the end of2022.The following is a discussion of our major operating,investing and financing activities in the first three months of 2023 and2022,as classified on the unaudited Consolidated Statement of Cash Flows in Part I,Item 1:Three Months EndedApril 2,2023April 3,2022Net cash provided by operati
244、ng activities$1,462$1,968 Net cash used by investing activities(190)(147)Net cash used by financing activities(475)(517)34OPERATING ACTIVITIESCash provided by operating activities was$1.5 billion in the first three months of 2023 compared with$2 billion in the same periodin 2022.The primary driver o
245、f cash inflows in both periods was net earnings.Cash flows in both periods were affected positively byan increase in customer deposits driven by Gulfstream aircraft orders and a decrease in unbilled receivables due to the receipt ofprogress payments on large international vehicle contracts in our Co
246、mbat Systems segment.INVESTING ACTIVITIESCash used by investing activities was$190 in the first three months of 2023 compared with$147 in the same period in 2022.Ourinvesting activities include cash paid for capital expenditures and business acquisitions;purchases,sales and maturities ofmarketable s
247、ecurities;and proceeds from asset sales.The primary use of cash for investing activities in both periods was capitalexpenditures.Capital expenditures were$161 in the first three months of 2023 compared with$141 in the same period in 2022.FINANCING ACTIVITIESCash used by financing activities was$475
248、in the first three months of 2023 compared with$517 in the same period in 2022.Financing activities include the use of cash for repurchases of common stock,payment of dividends,and debt and commercial paperrepayments.Our financing activities also include proceeds received from debt and commercial pa
249、per issuances and employee stockoption exercises.On March 8,2023,our board of directors(Board)declared an increased quarterly dividend of$1.32 per share,the 26thconsecutive annual increase.Previously,the Board had increased the quarterly dividend to$1.26 per share in March 2022.Cashdividends paid we
250、re$345 in the first three months of 2023 compared with$330 in the same period in 2022.Our Board from time to time authorizes management to repurchase outstanding shares of our common stock on the open market.We paid$90 and$294 in the first three months of 2023 and 2022,respectively,to repurchase our
251、 outstanding shares.On April 2,2023,6.3 million shares remained authorized by our Board for repurchase,representing 2.3%of our total shares outstanding.Fixed-rate notes of$750 and$500 mature in May 2023 and August 2023,respectively.We currently plan to repay these notes atmaturity using cash on hand
252、,potentially supplemented by commercial paper or other borrowings.For additional informationregarding our debt obligations,including scheduled debt maturities and interest rates,see Note H to the unaudited ConsolidatedFinancial Statements in Part I,Item 1.On April 2,2023,we had no commercial paper o
253、utstanding,but we maintain the ability to access the commercial paper market inthe future.Separately,we have a$4 billion committed bank credit facility for general corporate purposes and working capital needsand to support our commercial paper issuances.We also have an effective shelf registration o
254、n file with the Securities and ExchangeCommission(SEC)that allows us to access the debt markets.35NON-GAAP FINANCIAL MEASURE-FREE CASH FLOWWe emphasize the efficient conversion of net earnings into cash and the deployment of that cash to maximize shareholder returns.Asdescribed below,we use free cas
255、h flow to measure our performance in these areas.While we believe this metric provides usefulinformation,it is not a defined operating measure under U.S.generally accepted accounting principles(GAAP),and there arelimitations associated with its use.Our calculation of this metric may not be completel
256、y comparable to similarly titled measures ofother companies due to potential differences in the method of calculation.As a result,the use of this metric should not be consideredin isolation from,or as a substitute for,GAAP measures.We define free cash flow as net cash provided by operating activitie
257、s less capital expenditures.We believe free cash flow is auseful 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 ass
258、ess the quality ofour earnings and as a key performance measure in evaluating management.The following table reconciles free cash flow with netcash provided by operating activities,as classified on the unaudited Consolidated Statement of Cash Flows in Part I,Item 1:Three Months EndedApril 2,2023Apri
259、l 3,2022Net cash provided by operating activities$1,462$1,968 Capital expenditures(161)(141)Free cash flow$1,301$1,827 Cash flows as a percentage of net earnings:Net cash provided by operating activities200%270%Free cash flow178%250%ADDITIONAL FINANCIAL INFORMATIONENVIRONMENTAL MATTERS AND OTHER CON
260、TINGENCIESFor a discussion of environmental matters and other contingencies,see Note J to the unaudited Consolidated Financial Statements inPart I,Item 1.Except as otherwise noted in Note J,we do not expect our aggregate liability with respect to these matters to have amaterial impact on our results
261、 of operations,financial condition or cash flows.APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATESManagements Discussion and Analysis of Financial Condition and Results of Operations is based on the unaudited ConsolidatedFinancial Statements,which have been prepared in accordance with GAAP.T
262、he preparation of financial statements in accordancewith GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and thedisclosure of contingent assets and liabilities at the date of the financial statements,as well as the reported amounts of r
263、evenue andexpenses 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.Actualresults may differ from these estimates.W
264、e believe our judgment is applied consistently and produces financial information thatfairly depicts our results of operations for all periods presented.36Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue andcosts.Contract estim
265、ates are based on various assumptions to project the outcome of future events that often span several years.Wereview and update our contract-related estimates regularly.We recognize adjustments in estimated profit on contracts under thecumulative catch-up method.Under this method,the impact of the a
266、djustment on profit recorded to date on a contract is recognizedin the period the adjustment is identified.The aggregate impact of adjustments in contract estimates increased our operating earnings(and diluted earnings per share)by$77($0.22)and$105($0.30)for the three-month periods ended April 2,202
267、3,and April 3,2022,respectively.While no adjustment on any one contract was material to the unaudited Consolidated Financial Statements for thethree-month periods ended April 2,2023,or April 3,2022,our Marine Systems segments first-quarter 2023 results were affectednegatively by supply chain impacts
268、 to the Virginia-class submarine schedule.Other critical accounting policies and estimates include long-lived assets and goodwill,commitments and contingencies,andretirement plans.For a full discussion of our critical accounting policies and estimates,see our Annual Report on Form 10-K for theyear e
269、nded December 31,2022.GUARANTOR FINANCIAL INFORMATIONThe outstanding notes described in Note H to the unaudited Consolidated Financial Statements in Part I,Item 1,issued by GeneralDynamics Corporation(the parent),are fully and unconditionally guaranteed on an unsecured,joint and several basis by sev
270、eral ofthe parents 100%-owned subsidiaries(the guarantors).The guarantee of each guarantor ranks equally in right of payment with allother existing and future senior unsecured indebtedness of such guarantor.A listing of the guarantors is included in an exhibit to thisForm 10-Q.Because the parent is
271、a holding company,its cash flow and ability to service its debt,including the outstanding notes,depends onthe performance of its subsidiaries and the ability of those subsidiaries to distribute cash to the parent,whether by dividends,loans orotherwise.Holders of the outstanding notes have a direct c
272、laim 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 withoutrendering the guarantee voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer or similar lawsa
273、ffecting the rights of creditors generally.Each indenture also provides that,in the event(1)of a merger,consolidation or sale ordisposition 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 o
274、r other disposition of the voting stock of a guarantor so that the guarantor is no longer a subsidiaryof the parent,then the guarantor or the entity acquiring the assets(in the event of a sale or other disposition of all or substantially allof the assets of a guarantor)will be released and relieved
275、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 earningsof subsidiari
276、es related to interests held by the combined obligor group in subsidiaries that are not guarantors of the notes.37STATEMENT OF EARNINGS INFORMATIONThree Months Ended April2,2023Year EndedDecember 31,2022Revenue$3,771$14,246 Operating costs and expenses,excluding G&A(3,337)(12,310)Net earnings166 840
277、 BALANCE SHEET INFORMATIONApril 2,2023December 31,2022Cash and equivalents$1,015$540 Other current assets4,141 4,279 Noncurrent assets4,146 4,164 Total assets$9,302$8,983 Short-term debt and current portion of long-term debt$1,254$1,250 Other current liabilities2,975 3,392 Long-term debt9,189 9,189
278、Other noncurrent liabilities3,456 3,814 Total liabilities$16,874$17,645 The summarized balance sheet information presented above includes the funded status of the companys primary qualified U.S.government pension plans as the parent has the ultimate obligation for the plans.ITEM 3.QUANTITATIVE AND Q
279、UALITATIVE DISCLOSURES ABOUT MARKET RISKThere have been no material changes with respect to this item from the disclosure included in our Annual Report on Form 10-K forthe year ended December 31,2022.ITEM 4.CONTROLS AND PROCEDURESOur management,under the supervision and with the participation of the
280、 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 theSecurities Exchange Act of 1934,as amended)as of April 2,2023.Based on this evaluation,the Chief Executive Officer and
281、 ChiefFinancial Officer concluded that,on April 2,2023,our disclosure controls and procedures were effective.There were no changes in our internal control over financial reporting that occurred during the quarter ended April 2,2023,thathave materially affected,or are reasonably likely to materially
282、affect,our internal control over financial reporting.The certifications of the companys Chief Executive Officer and Chief Financial Officer required under Section 302 of theSarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report.38FORWARD-LOOKING STATEMENTSThis quarterly report o
283、n Form 10-Q contains forward-looking statements,which are based on managements 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 in
284、tended to identify forward-looking statements.Examples include projections of revenue,earnings,operating margin,segment performance,cash flows,contract awards,aircraftproduction,deliveries and backlog.In making these statements,we rely on assumptions and analyses based on our experience andperceptio
285、n of historical trends;current conditions and expected future developments;and other factors,estimates and judgments weconsider reasonable and appropriate based on information available to us at the time.Forward-looking statements are made pursuantto the safe harbor provisions of the Private Securit
286、ies Litigation Reform Act of 1995,as amended.These statements are notguarantees of future performance and involve factors,risks and uncertainties that are difficult to predict.Actual future results andtrends may differ materially from what is forecast in forward-looking statements due to a variety o
287、f factors,including the risk factorsdiscussed in Part I,Item 1A of our Annual Report on Form 10-K for the year ended December 31,2022.These factors include,among others:general U.S.and international political and economic conditions;decreases in U.S.government defense spending or changing priorities
288、 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,andperformance issues with key suppliers;expected recovery on contract claims and reque
289、sts 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
290、 and/or regulatory proceedings;potential effects of audits and reviews by government agencies of our government contract performance,compliance and internalcontrol systems and policies;cybersecurity events and other disruptions;risks and uncertainties relating to our acquisitions and joint ventures;
291、andpotential 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
292、 General Dynamics or anyperson acting on our behalf are qualified by the cautionary statements in this section.We do not undertake any obligation to updateor publicly release revisions to any forward-looking statements to reflect events,circumstances or changes in expectations after thedate of this
293、report.These factors may be revised or supplemented in future SEC filings.39PART II-OTHER INFORMATIONITEM 1.LEGAL PROCEEDINGSFor information relating to legal proceedings,see Note J to the unaudited Consolidated Financial Statements in Part I,Item 1.ITEM 1A.RISK FACTORSThere have been no material ch
294、anges with respect to this item from the disclosure included in our Annual Report on Form 10-K forthe year ended December 31,2022.ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSThe following table provides information about our first-quarter purchases of equity securities that are
295、 registered pursuant to Section12 of the Securities Exchange Act of 1934,as amended:PeriodTotal Number ofSharesAverage Price perShareTotal Number of SharesPurchased as Part of PubliclyAnnounced ProgramMaximum Number of SharesThat May Yet Be PurchasedUnder the ProgramShares Purchased Pursuant to Shar
296、e Buyback Program1/1/23-1/29/23$6,709,278 1/30/23-2/26/23 6,709,278 2/27/23-4/2/23406,054 220.61 406,054 6,303,224 Shares Delivered or Withheld Pursuant to Restricted Stock Vesting*1/1/23-1/29/23849 247.87 1/30/23-2/26/23 2/27/23-4/2/23153,257 231.91 560,160$223.74*Represents shares withheld by,or d
297、elivered 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 restri
298、cted shares.We did not make any unregistered sales of equity securities in the first quarter of 2023.40ITEM 6.EXHIBITS10.1*Form of Non-Statutory Stock Option Award Agreement pursuant to the General Dynamics Corporation Amended andRestated 2012 Equity Compensation Plan(for grants to executive officer
299、s beginning March 8,2023,and including,asindicated therein,provisions for certain executive officers who are subject to the companys CompensationRecoupment Policy)*10.2*Form of Restricted Stock Award Agreement pursuant to the General Dynamics Corporation Amended and Restated 2012Equity Compensation
300、Plan(for grants to executive officers beginning March 8,2023,and including,as indicatedtherein,provisions for certain executive officers who are subject to the companys Compensation RecoupmentPolicy)*10.3*Form of Performance Stock Unit Award Agreement pursuant to the General Dynamics Corporation Ame
301、nded and Restated2012 Equity Compensation Plan(for grants to executive officers beginning March 8,2023,and including,asindicated therein,provisions for certain executive officers who are subject to the companys CompensationRecoupment Policy)*22 Subsidiary Guarantors(incorporated herein by reference
302、from Exhibit 22 to the companys annual report on Form 10-K for theyear ended December 31,2022,filed with the SEC on February 7,2023)31.1 Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*31.2 Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
303、32.1 Certification by CEO pursuant to 18 U.S.C.Section 1350,as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002*32.2 Certification by CFO pursuant to 18 U.S.C.Section 1350,as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002*101.INS Inline eXtensible Business Reporting
304、 Language(XBRL)Instance Document the instance document does not appear inthe Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.101.SCH Inline XBRL Taxonomy Extension Schema Document*101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document*101.DEF In
305、line XBRL Taxonomy Extension Definition Linkbase Document*101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document*101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document*104 Cover Page Interactive Data File(embedded within the Inline XBRL document and contained in Exhibit 101)*I
306、ndicates a management contract or compensatory plan or arrangement required to be filed pursuant to Item 6 of Form 10-Q.*Filed or furnished electronically herewith.41SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed
307、on itsbehalf by the undersigned thereunto duly authorized.GENERAL DYNAMICS CORPORATIONby/s/William A.MossWilliam A.MossVice President and Controller(Authorized Officer and Chief Accounting Officer)Dated:April 26,202342Exhibit 10.1FORM OF NON-STATUTORY STOCK OPTION AGREEMENTPURSUANT TO THE GENERAL DY
308、NAMICS CORPORATIONAMENDED AND RESTATED 2012 EQUITY COMPENSATION PLANTHIS OPTION AGREEMENT(the Agreement)dated as of DATE(the Grant Date)is made between GeneralDynamics Corporation(the Company)and NAME(the Optionee).WHEREAS,the Company sponsors the General Dynamics Corporation Amended and Restated 20
309、12 EquityCompensation Plan(the Plan),pursuant to which the Company may grant Options to purchase shares of Common Stock;andWHEREAS,the Company desires to grant the Optionee a Non-Statutory Stock Option to purchase the number ofshares of Common Stock provided for herein.NOW,THEREFORE,in consideration
310、 of the recitals and the mutual agreements herein contained,the parties heretoagree as follows:1.Grant of Option.(a)Number of Shares;Type of Option.The Company hereby grants to the Optionee an Option(the“OptionGrant”)to purchase NUMBER shares of Common Stock(the Option Shares)on the terms and condit
311、ions set forth in thisAgreement.The Option is intended to be a Non-Statutory Stock Option.(b)Incorporation of Plan by Reference,Etc.The provisions of the Plan are hereby incorporated herein byreference.Except as otherwise expressly set forth herein,this Agreement will be construed in accordance with
312、 the provisions of thePlan and any capitalized terms not otherwise defined in this Agreement will have the definitions set forth in the Plan.The Committeewill have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them,and its decision
313、s will be binding and conclusive upon the Optionee and the Optionees legal representative in respect of anyquestions arising under the Plan or this Agreement.If there exists any inconsistency between the terms of this Agreement and thePlan,the terms contained in the Plan will govern.If there exists
314、any inconsistency between the terms of the Option as provided forherein(including,but not limited to,terms relating to the number of Option Shares,the Stated Expiration Date,the exercise priceand the exercisability of the Option)and the terms as indicated in the records maintained by Company,the ter
315、ms as indicated in therecords of the Company will govern.2.Terms and Conditions.(a)Exercise Price.The exercise price for the purchase of Option Shares upon the exercise of all or any portion ofthe Option will be$PRICE per share of Common Stock.(b)Expiration Date.Subject to earlier expiration as prov
316、ided in Sections 2(f)and 2(g)below,the Option willexpire at the close of business on the business day immediately preceding the tenth anniversary of the Grant Date(the StatedExpiration Date).(c)Exercisability of Option.(i)General.Except as provided in Section 2(c)(ii)and(iii)below,the Option Grant w
317、ill become vestedand exercisable with respect to a number of Option Shares(rounded down to the nearest whole share)as follows:one-half(1/2)ofthe Option Shares on the second anniversary of the Grant Date and the remaining Option Shares on the third anniversary of the Grant Date,in each case,only if e
318、ither:(A)the Optionee is employed as an employee of the Company or any of itsSubsidiaries or serves as a director of the Company as of the applicable vesting date,or(B)the Optionees employment with theCompany and its Subsidiaries or service as a director of the Company is terminated due to Retiremen
319、t.For purposes of thisAgreement,Retirement means,(x)with respect to an employee who is not an elected officer of the Company on the date on whichthe employees employment with the Company and its Subsidiaries terminates,a termination of employment(other than for Cause)after the attainment of(i)age 55
320、 with at least five(5)or more years of continuous service,or(ii)age 65 regardless of the number ofyears of service,(y)with respect to an employee who is an elected officer of the Company on the date on which the employeesemployment with the Company and its Subsidiaries terminates,termination of empl
321、oyment(other than for Cause)after attaining age55 with the consent of the Chief Executive Officer of the Company(or in the case of the Chief Executive Officer,with the consent ofthe Committee),or(z)with respect to any non-employee director,cessation of service after attaining age 55 with the consent
322、 of theCommittee.In the event of a Grantees Retirement within nine(9)months of continuous service of the Grant Date,theentire grant shall be forfeited;provided,however that(i)if the Grantee is a Covered Employee(as defined in the Plan)or isotherwise subject to Section 16 of the Securities Exchange A
323、ct of 1934,as amended(the“Exchange Act”),the Committee may,in itssole discretion,waive or agree to another arrangement with the Grantee and(ii)if the Grantee is an employee other than a CoveredEmployee or is not otherwise subject to Section 16 of the Exchange Act,the Chief Executive Officer may,whet
324、her prior to,inconnection with,or subsequent to the execution by both parties of this Agreement,explicitly waive or agree to another arrangementwith the Grantee in writing with respect to this condition.(ii)Death;Total and Permanent Disability.If the Optionees employment with the Company and itsSubs
325、idiaries or service as a director of the Company is terminated due to death or total and permanent disability,in each case,priorto the third anniversary of the Grant Date,then the remaining unvested portion of the Option Grant will become fully vested andexercisable on the date of such termination w
326、ith respect to the remaining unvested Option Shares.(iii)Divestiture or Discontinued Operation.If,prior to the third anniversary of the Grant Date,theOptionees employment with the Company and its Subsidiaries or service as a director of the Company is terminated as a result of adivestiture or discon
327、tinued operation of a division or a Subsidiary with which the Optionee was associated,then the Option Grantwill become vested and exercisable on the anniversary of the Grant Date next following such termination with respect to a number ofOption Shares equal to the excess of(i)product of(A)the number
328、 of Option Shares and(B)a fraction,the numerator of which willbe the number of days from the Grant Date to the last day of the month in which such termination occurs and the denominator ofwhich will be 1,095,such product to be rounded down to the nearest whole share over(ii)the number of Option Shar
329、es,if any,withrespect to which the Option Grant had become vested and exercisable prior to such termination.(d)Change in Control.Notwithstanding the foregoing,in the event that within two(2)years following a Changein Control,the Optionees service with the Company and its affiliates is terminated(i)b
330、y the Company or any of its affiliates for anyreason other than for Cause(and other than due to death,disability or Retirement)or(ii)by the Optionee for Good Reason,then theOption Grant,to the extent then outstanding,will become immediately vested and exercisable.(e)Method of Exercise;Tax Withholdin
331、g.The exercise price for any shares purchased pursuant to the exercise ofall or part of the Option will be paid in accordance with Section 10(c)of the Plan.The Company is authorized to withhold from any payment relating to the Option,including from adistribution of Common Stock,or any payroll or oth
332、er payment to the Optionee,amounts of withholding and other taxes due orpotentially payable in connection with any transaction involving the Option,and to take such other action as the Committee maydeem advisable to enable the Company and the Optionee to satisfy obligations for the payment of withho
333、lding taxes and other taxobligations relating to the Option.This authority shall include authority to withhold or receive Common Stock or other property andto make cash payments in respect thereof in satisfaction of the Optionees tax obligations,either on a mandatory or elective basis inthe discretion of the Committee.(f)Exercise Following Termination.Notwithstanding anything in this Agreement to