General Dynamics Reports Fourth-Quarter, Full-Year 2017 Results
FALLS CHURCH, Va., Jan. 24, 2018 /PRNewswire/ --
-- Revenue up 8.1% in the fourth quarter
-- Operating earnings up 34.6% to $1.03 billion in the fourth quarter
-- A $119 million one-time, non-cash decrement to earnings in the fourth
quarter from tax reform, primarily a provision that reduces the value of
a future deferred tax asset
-- Fourth-quarter diluted EPS expanded 11.1% to $2.10; adjusted EPS,
excluding the impact of tax reform, was $2.50, up 32.3%
-- Full-year diluted EPS expanded 10.6% to $9.56; adjusted EPS, excluding
the impact of tax reform, was $9.95, up 15.2%
-- Cash from operations was $3.9 billion for the year and free cash flow
was $3.5 billion
General Dynamics (NYSE: GD) today reported fourth-quarter 2017 earnings from continuing operations of $636 million, a 9.7 percent increase over fourth-quarter 2016, on revenue of $8.3 billion. Diluted earnings per share (EPS) from continuing operations was up 11.1 percent to $2.10 compared to $1.89 in the year-ago quarter. Absent a one-time, non-cash decrement to earnings from the 2017 Tax Cuts and Jobs Act, earnings from continuing operations were $755 million, up 30.2 percent and diluted EPS from continuing operations was $2.50, a 32.3 percent increase (see Exhibit A).
Full-year Results
Full-year earnings from continuing operations were $2.9 billion, an 8.7 percent increase from 2016 on revenue of $31 billion. Diluted EPS from continuing operations was up 10.6 percent to $9.56 compared to full-year 2016. Excluding the impact of tax reform, full-year earnings from continuing operations were $3 billion, up 13.1 percent, and diluted EPS from continuing operations was $9.95, a 15.2 percent increase (see Exhibit B).
"General Dynamics delivered strong results in 2017, with growth in revenue, earnings, margins and EPS," said Phebe Novakovic, chairman and chief executive officer of General Dynamics. "We are investing for the future and executing on our robust backlog. We see continued demand for our products, with backlog growth in 2017 in our defense business and strong order intake across the Gulfstream portfolio."
Margin
Company-wide operating margin was 12.5 percent for the fourth quarter, 250 basis points higher than the fourth-quarter 2016 margin. For the full year, operating margin was 13.5 percent, 130 basis points higher than the 2016 full-year margin. Margins improved in all four segments in both the fourth quarter and full year.
Segment Highlights
Aerospace
The Aerospace group reported 2017 full-year revenue of $8.13 billion, operating earnings of $1.59 billion and operating margin of 19.6 percent. Compared to 2016, revenue was up 4 percent, earnings were up 13.2 percent and margin was up 160 basis points. The group had solid order activity in 2017, with especially strong order intake in the fourth quarter across the Gulfstream portfolio.
Combat Systems
Combat Systems reported 2017 full-year revenue of $5.95 billion, operating earnings of $937 million and operating margin of 15.8 percent. Compared to 2016, revenue was up 7.6 percent, earnings were up 12.8 percent and margin was up 80 basis points, with continued strong program and operating performance. The group received multiple significant contracts in 2017, including awards to modernize Abrams tanks for the U.S. Army and its allies and several orders across our European vehicle business.
Information Systems and Technology
Information Systems and Technology reported 2017 full-year revenue of $8.89 billion, operating earnings of $1.01 billion and operating margin of 11.4 percent. Compared to 2016, revenue was down 2.8 percent, earnings were up 7.4 percent and margin was up 110 basis points. The group had a book-to-bill ratio (orders divided by revenue) higher than one-to-one in 2017 driven by continued strong demand for its products and services.
Marine Systems
Marine Systems reported 2017 full-year revenue of $8 billion, operating earnings of $685 million and operating margin of 8.6 percent. Compared to 2016, revenue was steady, earnings were up 15.1 percent and margin was up 120 basis points. The group continues to execute on its considerable backlog and received multiple significant contracts in 2017 including the design and prototype development for the U.S. Navy's Columbia-class submarine.
Cash
Net cash provided by operating activities for the full year totaled $3.9 billion, compared to $2.2 billion in 2016. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $3.5 billion for the year.
Backlog
General Dynamics' total backlog at the end of 2017 was $63.2 billion. There was strong demand in the quarter across the company's portfolio. The estimated potential contract value, representing management's estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $24.8 billion. Total potential contract value, the sum of all backlog components, was $88 billion at the end of the year.
About General Dynamics
Headquartered in Falls Church, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; C4ISR and IT solutions; and shipbuilding. The company's 2017 revenue was $31 billion. More information is available at www.generaldynamics.com.
Certain statements made in this press release, including any statements as to future results of operations and financial projections, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management's expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in the company's filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. All forward-looking statements speak only as of the date they were made. The company does not undertake any obligation to update or publicly release any revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.
WEBCAST INFORMATION: General Dynamics will webcast its fourth-quarter 2017 financial results conference call at 9 a.m. EST on Wednesday, January 24, 2018. The webcast will be a listen-only audio event, available at www.generaldynamics.com. An on-demand replay of the webcast will be available by 12 p.m. on January 24 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 877-344-7529 (international: 1-412-317-0088); passcode 10115909. The phone replay will be available from January 24 through January 31, 2018.
EXHIBIT A
CONSOLIDATED STATEMENTS OF EARNINGS - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Three Months Ended December 31 Variance
2017 (a) 2016 (b) $ %
Revenue $8,277 $7,654 $623 8.1%
Operating costs and expenses 7,243 6,886 357
Operating earnings 1,034 768 266 34.6%
Interest, net (27) (23) (4)
Other, net 1 - 1
--- --- ---
Earnings from continuing operations before income tax 1,008 745 263 35.3%
Provision for income tax, net 372 165 207
--- ---
Earnings from continuing operations 636 580 56 9.7%
Discontinued operations, net of tax - (10) 10
Net earnings $636 $570 $66 11.6%
==== ==== ===
Earnings per share-basic
Continuing operations $2.14 $1.92 $0.22 11.5%
Discontinued operations - (0.04) 0.04
--- ----- ----
Net earnings $2.14 $1.88 $0.26 13.8%
===== ===== =====
Basic weighted average shares outstanding 297.0 302.5
===== =====
Earnings per share-diluted
Continuing operations $2.10 $1.89 $0.21 11.1%
Discontinued operations - (0.04) 0.04
--- ----- ----
Net earnings $2.10 $1.85 $0.25 13.5%
===== ===== =====
Diluted weighted average shares outstanding 302.4 308.5
===== =====
(a) 2017 results include the
unfavorable one-time, non-
cash impact of tax reform.
The table below adjusts the
provision for income tax,
earnings from continuing
operations and diluted
earnings per share from
continuing operations to
exclude this impact. Notes
describing these non-GAAP
adjustments follow Exhibit B.
Three Months Ended
December 31, 2017
-----------------
Calculation of adjusted non-GAAP provision for income tax and earnings
from continuing operations:
---------------------------
Earnings from continuing operations before income tax $1,008
------
Provision for income tax, net 372
Effective income tax rate 36.9%
Non-GAAP adjustment for change in tax law (119)
Adjusted non-GAAP provision for income tax, net 253
Adjusted non-GAAP effective income tax rate 25.1%
Adjusted non-GAAP earnings from continuing operations $755
====
Calculation of adjusted non-GAAP diluted earnings per share
from continuing operations:
---------------------------
Adjusted non-GAAP earnings from continuing operations $755
Diluted weighted average shares outstanding 302.4
Adjusted non-GAAP diluted earnings per share from continuing operations $2.50
=====
(b) Prior-period information has
been restated for the
adoption of Accounting
Standards Codification (ASC)
Topic 606, Revenue from
Contracts with Customers,
which we adopted on January
1, 2017.
EXHIBIT B
CONSOLIDATED STATEMENTS OF EARNINGS - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Year Ended December 31 Variance
2017 (a) 2016 (b) $ %
------- ------- --- ---
Revenue $30,973 $30,561 $412 1.3%
Operating costs and expenses 26,796 26,827 (31)
------ ------ ---
Operating earnings 4,177 3,734 443 11.9%
Interest, net (103) (91) (12)
Other, net 3 13 (10)
--- --- ---
Earnings from continuing operations before income tax 4,077 3,656 421 11.5%
Provision for income tax, net 1,165 977 188
----- --- ---
Earnings from continuing operations 2,912 2,679 233 8.7%
Discontinued operations, net of tax - (107) 107
--- ---- ---
Net earnings $2,912 $2,572 $340 13.2%
====== ====== ====
Earnings per share-basic
Continuing operations $9.73 $8.79 $0.94 10.7%
Discontinued operations - (0.35) 0.35
--- ----- ----
Net earnings $9.73 $8.44 $1.29 15.3%
===== ===== =====
Basic weighted average shares outstanding 299.2 304.7
===== =====
Earnings per share-diluted
Continuing operations $9.56 $8.64 $0.92 10.6%
Discontinued operations - (0.35) 0.35
--- ----- ----
Net earnings $9.56 $8.29 $1.27 15.3%
===== ===== =====
Diluted weighted average shares outstanding 304.6 310.4
===== =====
(a) 2017 results include the
unfavorable one-time, non-
cash impact of tax reform.
The table below adjusts the
provision for income tax,
earnings from continuing
operations and diluted
earnings per share from
continuing operations to
exclude this impact. Notes
describing these non-GAAP
adjustments follow Exhibit B.
Year Ended
December 31, 2017
-----------------
Calculation of adjusted non-GAAP provision for income tax and earnings
from continuing operations:
---------------------------
Earnings from continuing operations before income tax $4,077
------
Provision for income tax, net 1,165
Effective income tax rate 28.6%
Non-GAAP adjustment for change in tax law (119)
Adjusted non-GAAP provision for income tax, net 1,046
Adjusted non-GAAP effective income tax rate 25.7%
Adjusted non-GAAP earnings from continuing operations $3,031
======
Calculation of adjusted non-GAAP diluted earnings per share
from continuing operations:
---------------------------
Adjusted non-GAAP earnings from continuing operations $3,031
Diluted weighted average shares outstanding 304.6
Adjusted non-GAAP diluted earnings per share from continuing operations $9.95
=====
(b) Prior-period information
has been restated for the
adoption of ASC Topic 606,
which we adopted on January
1, 2017.
EXHIBITS A and B (cont.)
CALCULATION OF ADJUSTED NON-GAAP PROVISION FOR INCOME TAX, EARNINGS FROM CONTINUING OPERATIONS AND DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Exhibits A and B include the following measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP):
-- Adjusted non-GAAP provision for income tax,
-- Adjusted non-GAAP earnings from continuing operations, and
-- Adjusted non-GAAP diluted earnings per share from continuing operations
(EPS).
These measures exclude the impact of tax reform enacted in December 2017, the Tax Cuts and Jobs Act (TCJA). The TCJA has several key provisions, most significantly reducing the corporate tax rate from 35% to 21% beginning in 2018. However, the impact of tax reform must be accounted for in 2017, primarily the remeasurement of U.S. federal deferred tax assets and liabilities at the tax rate expected to apply when the temporary differences are realized/settled (remeasured at a rate of 21% versus 35% for the majority of our deferred tax assets and liabilities). This impact is considered by management a one-time, non-cash event. Therefore, management developed the non-GAAP measures, which are used to evaluate results and analyze trends. Management believes the measures are also useful supplemental information for investors to understand the company's results.
The GAAP measure comparable to adjusted non-GAAP provision for income tax is provision for income tax. The GAAP measure comparable to adjusted non-GAAP earnings from continuing operations is earnings from continuing operations. The GAAP measure comparable to adjusted non-GAAP diluted earnings per share from continuing operations is diluted earnings per share from continuing operations. Exhibits A and B provide reconciliations of these non-GAAP measures to the corresponding GAAP measures.
EXHIBIT C
REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
Three Months Ended December 31 Variance
2017 2016* $ %
--- ---
Revenue:
--------
Aerospace $1,982 $1,825 $157 8.6%
Combat Systems 1,748 1,661 87 5.2%
Information Systems and Technology 2,487 2,271 216 9.5%
Marine Systems 2,060 1,897 163 8.6%
----- ----- ---
Total $8,277 $7,654 $623 8.1%
====== ====== ====
Operating earnings:
-------------------
Aerospace $340 $274 $66 24.1%
Combat Systems 260 230 30 13.0%
Information Systems and Technology 282 231 51 22.1%
Marine Systems 167 42 125 297.6%
Corporate (15) (9) (6) (66.7)%
--- --- ---
Total $1,034 $768 $266 34.6%
====== ==== ====
Operating margin:
-----------------
Aerospace 17.2% 15.0%
Combat Systems 14.9% 13.8%
Information Systems and Technology 11.3% 10.2%
Marine Systems 8.1% 2.2%
Total 12.5% 10.0%
* Prior-period information
has been restated for the
adoption of ASC Topic 606,
which we adopted on January
1, 2017.
EXHIBIT D
REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
Year Ended December 31 Variance
2017 2016* $ %
---- ---- --- ---
Revenue:
--------
Aerospace $8,129 $7,815 $314 4.0%
Combat Systems 5,949 5,530 419 7.6%
Information Systems and Technology 8,891 9,144 (253) (2.8)%
Marine Systems 8,004 8,072 (68) (0.8)%
----- ----- ---
Total $30,973 $30,561 $412 1.3%
======= ======= ====
Operating earnings:
-------------------
Aerospace $1,593 $1,407 $186 13.2%
Combat Systems 937 831 106 12.8%
Information Systems and Technology 1,011 941 70 7.4%
Marine Systems 685 595 90 15.1%
Corporate (49) (40) (9) (22.5)%
--- --- ---
Total $4,177 $3,734 $443 11.9%
====== ====== ====
Operating margin:
-----------------
Aerospace 19.6% 18.0%
Combat Systems 15.8% 15.0%
Information Systems and Technology 11.4% 10.3%
Marine Systems 8.6% 7.4%
Total 13.5% 12.2%
* Prior-period information
has been restated for the
adoption of ASC Topic 606,
which we adopted on January
1, 2017.
EXHIBIT E
CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
DOLLARS IN MILLIONS
December 31, 2017 December 31, 2016*
----------------- -----------------
ASSETS
Current assets:
Cash and equivalents $2,983 $2,334
Accounts receivable 3,617 3,399
Unbilled receivables 5,240 4,212
Inventories 5,303 5,118
Other current assets 1,133 1,471
----- -----
Total current assets 18,276 16,534
------ ------
Noncurrent assets:
Property, plant and equipment, net 3,517 3,477
Intangible assets, net 702 678
Goodwill 11,914 11,445
Other assets 585 1,038
--- -----
Total noncurrent assets 16,718 16,638
------ ------
Total assets $34,994 $33,172
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt $2 $900
Accounts payable 3,207 2,538
Customer advances and deposits 6,992 6,827
Other current liabilities 2,846 3,185
----- -----
Total current liabilities 13,047 13,450
------ ------
Noncurrent liabilities:
Long-term debt 3,980 2,988
Other liabilities 6,532 6,433
-----
Total noncurrent liabilities 10,512 9,421
------ -----
Shareholders' equity:
Common stock 482 482
Surplus 2,872 2,819
Retained earnings 26,444 24,543
Treasury stock (15,543) (14,156)
Accumulated other comprehensive loss (2,820) (3,387)
------ ------
Total shareholders' equity 11,435 10,301
------ ------
Total liabilities and shareholders' equity $34,994 $33,172
======= =======
* Prior-period information has
been restated for the adoption
of Accounting Standards Update
(ASU) 2015-17, Income Taxes
(Topic 740): Balance Sheet
Classification of Deferred
Taxes, and ASC Topic 606, which
we adopted on January 1, 2017.
EXHIBIT F
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
DOLLARS IN MILLIONS
Year Ended December 31
2017 2016*
---- ----
Cash flows from operating activities-continuing operations:
Net earnings $2,912 $2,572
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of property, plant and equipment 362 365
Amortization of intangible assets 79 88
Equity-based compensation expense 123 95
Deferred income tax provision 401 184
Discontinued operations, net of tax - 107
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable (195) (122)
Unbilled receivables (987) (1,048)
Inventories (182) (377)
Other current assets 259 315
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable 657 567
Customer advances and deposits 264 (305)
Other, net 186 (243)
--- ----
Net cash provided by operating activities 3,879 2,198
----- -----
Cash flows from investing activities:
Capital expenditures (428) (392)
Business acquisitions, net of cash acquired (399) (58)
Other, net 36 24
--- ---
Net cash used by investing activities (791) (426)
---- ----
Cash flows from financing activities:
Purchases of common stock (1,558) (1,996)
Dividends paid (986) (911)
Proceeds from fixed-rate notes 985 992
Repayment of fixed-rate notes (900) (500)
Proceeds from stock option exercises 163 292
Other, net (103) (46)
---- ---
Net cash used by financing activities (2,399) (2,169)
------ ------
Net cash used by discontinued operations (40) (54)
--- ---
Net increase (decrease) in cash and equivalents 649 (451)
Cash and equivalents at beginning of year 2,334 2,785
----- -----
Cash and equivalents at end of year $2,983 $2,334
====== ======
* Prior-period information
has been restated for the
adoption of ASC Topic 606,
which we adopted on January
1, 2017.
EXHIBIT G
PRELIMINARY FINANCIAL INFORMATION - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
2017 2016 (a)
Fourth Quarter Fourth Quarter
-------------- --------------
Other Financial Information:
----------------------------
Return on equity (b) 26.6% 25.6%
Debt-to-equity (c) 34.8% 37.7%
Debt-to-capital (d) 25.8% 27.4%
Book value per share (e) $38.52 $34.06
Total income tax payments $219 $282
Company-sponsored research and development (f) $154 $94
Shares outstanding 296,895,608 302,418,528
Non-GAAP Financial Measures:
----------------------------
2017 2016 (a)
---- -------
Fourth Quarter Twelve Months Fourth Quarter Twelve Months
-------------- ------------- -------------- -------------
Free cash flow from operations:
Net cash provided by operating activities $1,998 $3,879 $826 $2,198
Capital expenditures (155) (428) (148) (392)
---- ---- ---- ----
Free cash flow from operations (g) $1,843 $3,451 $678 $1,806
====== ====== ==== ======
Return on invested capital:
Earnings from continuing operations $2,912 $2,679
After-tax interest expense 76 64
After-tax amortization expense 51 57
--- ---
Net operating profit after taxes 3,039 2,800
Average invested capital 18,099 17,168
------ ------
Return on invested capital (h) 16.8% 16.3%
==== ====
Notes describing the calculation
of the other financial
information and a
reconciliation of non-GAAP
financial measures are on the
following page.
EXHIBIT G (cont.)
PRELIMINARY FINANCIAL INFORMATION - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
(a) Prior-period information has been
restated for the adoption of ASC
Topic 606, which we adopted on
January 1, 2017.
(b) Return on equity is calculated by
dividing earnings from continuing
operations for the latest 12-month
period by our average equity during
that period.
(c) Debt-to-equity ratio is calculated
as total debt divided by total
equity as of year end.
(d) Debt-to-capital ratio is calculated
as total debt divided by the sum of
total debt plus total equity as of
year end.
(e) Book value per share is calculated as
total equity divided by total
outstanding shares as of year end.
(f) Includes independent research and
development and Aerospace product-
development costs.
(g) 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 and paying
dividends. We use free cash flow
from operations to assess the
quality of our earnings and as a
performance measure in evaluating
management. The most directly
comparable GAAP measure to free cash
flow from operations is net cash
provided by operating activities.
(h) We believe return on invested capital
(ROIC) is a useful measure for
investors because it reflects our
ability to generate returns from the
capital we have deployed in our
operations. We use ROIC to evaluate
investment decisions and as a
performance measure in evaluating
management. We define ROIC as net
operating profit after taxes divided
by average invested capital. Net
operating profit after taxes is
defined as earnings from continuing
operations plus after-tax interest
and amortization expense. Average
invested capital is defined as the
sum of the average debt and
shareholders' equity excluding
accumulated other comprehensive loss
for the year. ROIC excludes goodwill
impairments and non-economic
accounting changes as they are not
reflective of company performance.
The most directly comparable GAAP
measure to net operating profit
after taxes is earnings from
continuing operations. After-tax
interest and amortization expense is
calculated using the statutory tax
rate of 35 percent.
EXHIBIT H
BACKLOG - (UNAUDITED)
DOLLARS IN MILLIONS
Funded Unfunded Total Estimated Total Potential
Backlog Potential Contract
Contract Value (a) Value
----------------- -----
Fourth Quarter 2017:
--------------------
Aerospace $12,319 $147 $12,466 $1,955 $14,421
Combat Systems 17,158 458 17,616 3,154 20,770
Information Systems and Technology 6,682 2,192 8,874 14,875 23,749
Marine Systems 15,872 8,347 24,219 4,809 29,028
------ ----- ------ ----- ------
Total $52,031 $11,144 $63,175 $24,793 $87,968
======= ======= ======= ======= =======
Third Quarter 2017:
-------------------
Aerospace $11,729 $86 $11,815 $1,909 $13,724
Combat Systems 17,060 494 17,554 4,607 22,161
Information Systems and Technology 7,109 2,413 9,522 14,384 23,906
Marine Systems 16,791 8,247 25,038 4,826 29,864
------ ----- ------ ----- ------
Total $52,689 $11,240 $63,929 $25,726 $89,655
======= ======= ======= ======= =======
Fourth Quarter 2016 (b):
------------------------
Aerospace $13,119 $96 $13,215 $2,127 $15,342
Combat Systems 17,206 597 17,803 4,698 22,501
Information Systems and Technology 6,458 2,007 8,465 14,327 22,792
Marine Systems 15,000 7,723 22,723 3,873 26,596
------ ----- ------ ----- ------
Total $51,783 $10,423 $62,206 $25,025 $87,231
======= ======= ======= ======= =======
(a) The estimated potential
contract value includes work
awarded on unfunded indefinite
delivery, indefinite quantity
(IDIQ) contracts and
unexercised options associated
with existing firm contracts,
including options to purchase
new aircraft and long-term
aircraft services agreements.
The actual amount of funding
received in the future may be
higher or lower than our
estimate of potential contract
value. We recognize options in
backlog when the customer
exercises the option and
establishes a firm order.
(b) Prior-period information has
been restated for the adoption
of ASC Topic 606, which we
adopted on January 1, 2017.
EXHIBIT I
FOURTH QUARTER 2017 SIGNIFICANT
ORDERS -(UNAUDITED)
DOLLARS IN MILLIONS
We received the following
significant contract awards
during the fourth quarter of
2017:
Combat Systems:
---------------
-- $1 billion from the U.S. Army to upgrade Abrams tanks to the M1A2 System Enhancement Package Version 3 (SEPv3) configuration and upgrade M1A1 tanks to the M1A2S and M1A2K configurations under foreign military sales contracts for the Kingdom of Saudi Arabia and Kuwait. The award has a potential contract value of $2.4 billion over three years.
-- $90 from the Army and U.S. Air Force for various calibers of ammunition and ordnance.
-- $45 from the Army for Abrams technical support and engineering and logistics services.
-- $45 from the U.S. Defense Logistics Agency for fire control electronic equipment.
-- $45 from the U.S. Special Operations Command for the production of Ground Mobility Vehicles (GMVs).
-- $40 from the Canadian government for various calibers of ammunition.
-- $25 for guns and weapons systems for U.S. Navy Littoral Combat Ships (LCS).
Information Systems and
Technology:
-----------------------
-- $165 from the Army for additional equipment for the WIN-T Increment 2 program.
-- $135 from the U.S. Department of State to provide supply chain management services.
-- $90 from the U.S. Navy for maintenance, logistics and support services for the integrated ground segments of the Mobile User Objective System (MUOS) program.
-- $75 from the Navy to provide fire control system modifications for ballistic-missile (SSBN) submarines.
-- $75 from the Navy for combat and seaframe control systems for the Independence-variant LCS.
-- $70 from a Middle Eastern customer to install long-range integrated security systems at multiple offshore sites in the Persian Gulf.
-- $55 to provide support for live and virtual operations under the Warfighter Field Operations Customer Support (FOCUS) program.
-- $35 from the Army for computing and communications equipment under the Common Hardware Systems-4 (CHS-4) program.
-- $35 for commercial wireless network systems and support.
-- $35 from the National Geospatial-Intelligence Agency (NGA) for information technology (IT) lifecycle management services and virtual desktop services.
Marine Systems:
---------------
-- $505 from the Navy to provide research and development and lead yard services for Virginia-class submarines.
-- $110 from the Navy for maintenance, modernization and repair work on the USS Mesa Verde (LPD-19) and USS Carter Hall (LSD-50).
-- $75 from the Navy for Advanced Nuclear Plant Studies in support of the Columbia-class submarine program.
-- $70 from the Navy for advance procurement for the TAO-205 next-generation fleet oiler program.
-- $45 from the Navy for submarine maintenance and repair services.
-- $40 from the Navy for planning yard services for the Arleigh Burke-class (DDG-51) guided-missile destroyer and Oliver Hazard Perry-class (FFG-7) frigate programs.
-- $30 from the Navy for planning yard services for nuclear-powered submarines and support yard services for moored training ships.
EXHIBIT J
AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED)
Fourth Quarter Twelve Months
2017 2016* 2017 2016*
---- ---- ---- ----
Gulfstream Aircraft Deliveries (units):
---------------------------------------
Large-cabin aircraft 23 22 90 94
Mid-cabin aircraft 7 6 30 27
--- --- --- ---
Total 30 28 120 121
=== === === ===
Pre-owned Deliveries (units): 1 2 5 8
----------------------------- === === === ===
* Prior-period information
has been restated for the
adoption of ASC Topic 606,
which we adopted on January
1, 2017.
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SOURCE General Dynamics
