Slide 1: First-Quarter 2020 Highlights and Revised 2020 Outlook
AEROSPACE COMBAT SYSTEMS INFORMATION TECHNOLOGY MISSION SYSTEMS MARINE MARINE SYSTEMS SYSTEMS First-Quarter 2020 Highlights and Revised 2020 Outlook April 29, 2020 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains information about the company’s expectations of future performance, including future financial or operating performance. This information constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
Slide 3: COVID-19 Update
COVID-19 Update • As a designated national critical infrastructure company, all U.S. facilities are required to be open and are fully operating. • COVID-19-related travel restrictions delayed some Gulfstream deliveries. • Defense businesses experienced some supply chain delays. • Accelerating $300 m
Slide 4: Financial Highlights
Financial Highlights Three Months ($ in millions, except EPS) 1Q20 1Q19 Variance % Change Revenue $8,749 $9,261 ($512) (5.5%) Operating Earnings $941 $1,014 ($73) (7.2%) Operating Margin 10.8% 10.9% -10 bps - Net Earnings $706 $745 ($39) (5.2%) EPS, diluted $2.43 $2.56 ($0.13) (5.1%) • Revenue decli
Slide 5: Aerospace
Aerospace • Revenue down 24.5% to $1.7B related to COVID-19 travel restrictions – 13 completed aircraft deliveries delayed – 2 aircraft pulled forward from second quarter schedule • Operating Margin down 40 basis points to 14.2%, consistent with Q1 outlook – Lower G&A, including R&D, somewhat mitiga
Slide 6: Defense Businesses
Defense Businesses • Revenue up slightly to $7.1B – Despite late-quarter headwinds • Operating Earnings up ~ 2.2% to $705M • Operating Margin up 20 bps to 10% • Adjusting to the new environment – Creating innovative solutions to serve customers – Developing cost saving plans Staying Focused on Deliv
Slide 7: Combat Systems
Combat Systems • Revenue of $1.7B up 4.4% – Driven by Abrams, Stryker and munitions programs, offset by COVID-19 work disruptions at European Land Systems (ELS) – US Government sales up 12% • Operating Earnings of $223M up 8.3% – Operating margin up 50 bps to 13.1%, consistent with Q1 expectations –
Slide 8: Information Technology
Information Technology • Revenue of $2B, down 8.3% • Notable Wins – Ramp up of new programs, sunset of legacy – NOAA Climate Super Computing – 3Q 2019 exit from two non-core lines of business up to $505M – Late in the quarter COVID-19 impacts – Multiple State Department awards – Classified awards of
Slide 9: Mission Systems
Mission Systems • Revenue down 3.6% to $1.1B – Results impacted by demand disruptions for various short-cycle products – Solid growth in Naval, Air and Electronic Systems – Volume stable for Space, Intelligence, and Cyber Systems • Operating Margin expanded 50 basis points to 13.3% – Flat earnings o
Slide 10: Marine Systems
Marine Systems • Revenue rose 9.1% to $2.2B – Virginia-class Block V, Columbia and repair work drove higher volume – Each business unit delivered higher year-over-year revenue – Reduced shipyard staffing late in the quarter had a minor volume impact • Operating Earnings grew by 2.2%, to $184M – Q1 2
Slide 11: Pro Forma – for Delay of Gulfstream Deliveries
Pro Forma – for Delay of Gulfstream Deliveries Three Months Pro Forma ex-COVID-19 Impact * ($ in millions, except EPS) 1Q20 1Q19 Variance % Change Revenue $9,360 $9,261 $99 1.1% Operating Earnings $1,048 $1,014 $34 3.4% Operating Margin 11.2% 10.9% +30 bps - Net Earnings $795 $745 $50 6.7% EPS, dilu
Slide 12: Financial Guidance
Financial Guidance Initial 2020 Guidance Revised 2020 Outlook (1/29/20) (4/29/20) EPS, diluted $12.55 – 12.60 $11.30 – 11.40 Operating Operating Revenue ($B) Revenue ($B) Margin Earnings ($B) ≈ $10.0 ≈ $8.5 Aerospace 15.7 – 15.8% ≈ $1.15 ≈150 deliveries 125-130 deliveries Combat Systems ≈ $7.3 ≈ 14.
Slide 13: Appendix
Appendix GENERAL DYNAMICS 13
Slide 14: Non-GAAP Financial Measures – General Dynamics
Non-GAAP Financial Measures – General Dynamics * We believe earnings before interest, taxes, depreciation and amortization (EBITDA) is a useful measure for investors because it provides another measure of our profitability and our ability to service our debt. We calculate EBITDA by adding back inter
Slide 15: Non-GAAP Financial Measures – Information Technology
Non-GAAP Financial Measures – Information Technology * We believe the Information Technology segment’s earnings before interest, taxes, depreciation and amortization (EBITDA) is a useful measure for investors because it provides another measure of the segment’s operating performance. We calculate th
Slide 16: Non-GAAP Financial Measures – COVID-Related Impact
Non-GAAP Financial Measures – COVID-Related Impact First Quarter 2020 Effect of COVID-19 First Quarter 2020 As on Completed First Quarter 2020 ($ in millions, except EPS) Reported Aircraft Deliveries * Pro Forma Revenue $ 8,749 $ 611 $ 9,360 Operating earnings $ 941 $ 107 $ 1,048 Operating margin 10
Slide 17: General Dynamics
GENERAL DYNAMICS