Slide 1: Second-Quarter 2020 Highlights and Revised 2020 Outlook
AEROSPACE COMBAT SYSTEMS INFORMATION TECHNOLOGY MISSION SYSTEMS MARINE MARINE SYSTEMS SYSTEMS Second-Quarter 2020 Highlights and Revised 2020 Outlook July 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 • US operations remain open and fully operational • European sites reopened and fully operational • COVID-related disruptions impacted Aerospace and Information Technology disproportionally • Accelerated $700 million to defense suppliers in excess of DoD advances – Strengthened defen
Slide 4: Financial Highlights
Financial Highlights Three Months First Half ($ in millions) 2Q20 2Q19 1H20 1H19 Revenue $9,264 $9,555 $18,013 $18,816 Operating Earnings $841 $1,090 $1,782 $2,104 Operating Margin 9.1% 11.4% 9.9% 11.2% Net Earnings $625 $806 $1,331 $1,551 Free Cash Flow * $622 $110 $(229) $(866) • Aerospace revenue
Slide 5: COVID Impact – First Half 2020
COVID Impact – First Half 2020 Operating Operating ($M) Revenue Earnings Margin EPS Reported 1H Results $ 18,013 $ 1,782 9.9% $ 4.61 (1) Aerospace Impact 832 272 +100bps $ 0.77 Aerospace Severance ‐ 42 +20bps $ 0.12 (2) GDIT Impact 285 42 +10bps $ 0.12 (3) GDIT CARES Act (175) ‐ +10bps $ ‐ (4) GDIT
Slide 6: Aerospace
Aerospace • Gulfstream deliveries of 32 aircraft against 23 sequentially – Even better than the year ago quarter of 31 • Operating earnings down from severance at Gulfstream and Jet Aviation, and pre-owned activity – Impacted Aerospace operating margin by 260 bps • Received G600 EASA certification o
Slide 7: Combat Systems
Combat Systems • 2Q revenue of $1.75B up 5.7%, 1H revenue up 5.1% – Double-digit growth in Ordnance & Tactical Systems for 2Q and 1H – North American revenue up, offset in part by COVID disruptions at European Land Systems (ELS) – Abrams sales up for 2Q and 1H, 17 quarters in a row • 1H operating ea
Slide 8: Information Technology
Information Technology • Revenue impacted by COVID and non-core business exited in 2019 – Limited access to customer sites reduced volume – Travel restrictions severely disrupted a GDIT legacy international contract • Operating Earnings – COVID-related disruptions, including cost reimbursement with
Slide 9: Mission Systems
Mission Systems • Revenue up 5.8% sequentially to $1.18B – Solid growth in cyber electronic systems coupled with increased activity in maritime and strategic systems, and offset partially by the sale of a satellite antenna systems business and COVID-19 demand disruptions • Operating earnings of $164
Slide 10: Marine Systems
Marine Systems • Strong revenue growth for 2Q (up 6.3%) and 1H (up 7.6%) – Strong growth at Electric Boat for work on the Columbia-class and Virginia-class Block V – Solid growth at NASSCO • Operating earnings up slightly – Electric Boat delivered solid performance, offset by NASSCO mix shift – No m
Slide 11: Financial Guidance
Financial Guidance 2020 Outlook Revised 2020 Outlook (4/29/20) (7/29/20) EPS, diluted $11.30 – 11.40 $11.00 – 11.10 Op Earnings ($B) Op Earnings ($B) Revenue ($B) Revenue ($B) or Margin or Margin ≈ $8.5 $1.15 ≈ $8.4 $1.13 Aerospace 125‐130 deliveries ≈ 13.5% 125‐130 deliveries ≈ 13.5% Combat Systems
Slide 12: Appendix
Appendix GENERAL DYNAMICS 12
Slide 13: Non-GAAP Financial Measures – Free Cash Flow
Non-GAAP Financial Measures – Free Cash Flow * We believe free cash flow from operations is a useful measure for investors because it portrays our ability to generate cash from our businesses for purposes such as repaying maturing debt, funding business acquisitions, repurchasing our common stock an
Slide 14: 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 15: General Dynamics
GENERAL DYNAMICS