General Dynamics Reports Third-Quarter 2018 Results

FALLS CHURCH, Va., Oct. 24, 2018 /PRNewswire/ --

    --  Revenue up 20% year-over-year to $9.1 billion
    --  Earnings from continuing operations up 13.1% to $864 million
    --  Diluted EPS from continuing operations up 14.7% year-over-year to $2.89

General Dynamics (NYSE: GD) today reported third-quarter 2018 earnings from continuing operations of $864 million, a 13.1 percent increase over third-quarter 2017. Revenue increased 20 percent to $9.1 billion. While a large portion of the growth was attributed to the acquisition of CSRA, revenue in all segments grew.

Diluted earnings per share (EPS) from continuing operations were $2.89 compared to $2.52 in the year-ago quarter, a 14.7 percent increase.

"We took action this quarter to streamline our portfolio, drive out risk from our supply chain and deliver increasingly sophisticated products and services to our customers in an efficient and timely manner," said Phebe Novakovic, chairman and chief executive officer. "We remain committed to generating steady and sustainable results from our businesses."

Significant activities this quarter included the delivery of the Virginia-class submarine SSN 790 (future USS South Dakota), the keel-laying of the first John Lewis-class fleet replenishment oiler and the continued integration of CSRA.

Margin
Company-wide operating margin for the third quarter of 2018 was 12.5 percent, a 70 basis-point increase over second-quarter 2018.

Cash
Net cash provided by operating activities in the quarter totaled $790 million, compared to $872 million in the year-ago quarter. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $622 million, after a $255 million discretionary pension plan contribution.

Capital Deployment
The company repurchased 450,000 of its outstanding shares in the third quarter of 2018. Year-to-date, the company has repurchased 2.5 million outstanding shares.

Backlog
The company's total backlog at the end of third-quarter 2018 was $69.5 billion, up 4.9 percent from second-quarter 2018. The estimated potential contract value, representing management's estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $34.7 billion. Total potential contract value, the sum of all backlog components, was $104.2 billion at the end of the quarter, a new record.

Order activity was robust across the company with a 1.4-to-1 total book-to-bill ratio, defined as orders divided by revenue. Significant awards in the quarter included $3.9 billion from the U.S. Navy for the construction of four Arleigh Burke-class (DDG-51) guided-missile destroyers; $580 from the Navy for surface ship maintenance and modernization work; $480 from the Navy to continue design and development work for the Columbia-class submarine program; $210 from the Centers for Medicare & Medicaid Services for benefits recovery services, cloud hosting and IT support; $170 from the Navy for combat and seaframe control systems for Littoral Combat Ships; and $150 from the U.S. Army for equipment to support the Army's mobile communications network. In addition, the Army awarded a $3.9 billion maximum-potential-value IDIQ contract for computing and communications equipment under the Common Hardware Systems-5 (CHS-5) program.

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; IT services; C4ISR solutions; and shipbuilding and ship repair. 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 risks and uncertainties that 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 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 third-quarter 2018 financial results conference call at 9 a.m. EDT on Wednesday, October 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 October 24 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 877-344-7529 (international: 412-317-0088); passcode 10125284. The phone replay will be available through October 31, 2018.


                                                                                
            
              EXHIBIT A


                                                            
            
              CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)


                                                              
            
              DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS






                                                                      
            
              Three Months Ended                                            
     
          Variance


                                                               September 30, 2018                                         October 1, 2017*          
     
       $                      %

                                                                                                                                                                               ---


     Revenue                                                                       $
            
              9,094                                              $
           7,580           $
        1,514  20.0
                                                                                                                                                                                                  %



     Operating costs and expenses                                        (7,959)                                                          (6,517)                         (1,442)




     Operating earnings                                                    1,135                                                             1,063                               72          6.8
                                                                                                                                                                                             %



     Interest, net                                                         (114)                                                             (27)                            (87)



     Other, net                                                                2                                                               (9)                              11




     Earnings from continuing operations before income tax                 1,023                                                             1,027                              (4)       (0.4)
                                                                                                                                                                                             %



     Provision for income tax, net                                         (159)                                                            (263)                             104




     Earnings from continuing operations                                     864                                                               764                              100         13.1
                                                                                                                                                                                             %



     Discontinued operations, net of tax                                    (13)                                                                                             (13)




     Net earnings                                                                    $
            
              851                                                $
           764              $
        87  11.4
                                                                                                                                                                                                  %




     Earnings per share-basic



     Continuing operations                                                          $
            
              2.92                                               $
           2.56            $
        0.36  14.1
                                                                                                                                                                                                  %



     Discontinued operations                                              (0.04)                                                                                           (0.04)




     Net earnings                                                                   $
            
              2.88                                               $
           2.56            $
        0.32  12.5
                                                                                                                                                                                                  %




     Basic weighted average shares outstanding                             295.3                                                             298.1




     Earnings per share-diluted



     Continuing operations                                                          $
            
              2.89                                               $
           2.52            $
        0.37  14.7
                                                                                                                                                                                                  %



     Discontinued operations                                              (0.04)                                                                                           (0.04)




     Net earnings                                                                   $
            
              2.85                                               $
           2.52            $
        0.33  13.1
                                                                                                                                                                                                  %




     Diluted weighted average shares outstanding                           299.1                                                             303.8



               *               Prior-period information has been
                                restated for the adoption of
                                Accounting Standards Update (ASU)
                                2017-07, Compensation -
                                Retirement Benefits (Topic 715):
                                Improving the Presentation of Net
                                Periodic Pension Cost and Net
                                Periodic Postretirement Benefit
                                Cost, which we adopted on January
                                1, 2018.


                                                                                   
              
                EXHIBIT B


                                                                  
              
              CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)


                                                                   
              
              DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS






                                                                    
              
              Nine Months Ended                                                     Variance


                                                            September 30, 2018 (a)                                              October 1, 2017
                                                                                                                                       (b)                
     
     $                       %

                                                                                                                                                                                    ---


     Revenue                                                                      $
              
                25,815                                                 $
        22,696           $
       3,119  13.7

                                                                                                                                                                                                      %



     Operating costs and expenses                                        (22,584)                                                              (19,520)                        (3,064)




     Operating earnings                                                     3,231                                                                  3,176                              55         1.7

                                                                                                                                                                                                 %



     Interest, net                                                          (244)                                                                  (76)                          (168)



     Other, net                                                              (34)                                                                  (31)                            (3)




     Earnings from continuing operations before income tax                  2,953                                                                  3,069                           (116)      (3.8)

                                                                                                                                                                                                 %



     Provision for income tax, net                                          (504)                                                                 (793)                            289



     Earnings from continuing operations                                    2,449                                                                  2,276                             173         7.6

                                                                                                                                                                                                 %



     Discontinued operations, net of tax                                     (13)                                                                                                 (13)




     Net earnings                                                                  $
              
                2,436                                                  $
        2,276             $
       160   7.0

                                                                                                                                                                                                      %




     Earnings per share-basic



     Continuing operations                                                          $
              
                8.27                                                   $
        7.59            $
       0.68   9.0

                                                                                                                                                                                                      %



     Discontinued operations                                               (0.04)                                                                                               (0.04)




     Net earnings                                                                   $
              
                8.23                                                   $
        7.59            $
       0.64   8.4

                                                                                                                                                                                                      %




     Basic weighted average shares outstanding                              296.0                                                                  299.9




     Earnings per share-diluted



     Continuing operations                                                          $
              
                8.16                                                   $
        7.45            $
       0.71   9.5

                                                                                                                                                                                                      %



     Discontinued operations                                               (0.04)                                                                                               (0.04)




     Net earnings                                                                   $
              
                8.12                                                   $
        7.45            $
       0.67   9.0

                                                                                                                                                                                                      %




     Diluted weighted average shares outstanding                            300.1                                                                  305.5



               (a)               2018 results include the unfavorable
                                  impact of one-time charges of
                                  approximately $75 associated with
                                  costs to complete the acquisition of
                                  CSRA Inc. In the table above,
                                  approximately $45 of compensation-
                                  related costs was reported in
                                  operating costs and expenses, and
                                  approximately $30 of transaction
                                  costs was reported in other, net.


               (b)               Prior-period information has been
                                  restated for the adoption of ASU
                                  2017-07, which we adopted on
                                  January 1, 2018.


                                                                                                 
              
                EXHIBIT C


                                                                            
              
              REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)


                                                                                              
            
                DOLLARS IN MILLIONS






                                                                           Three Months Ended                                                                    Variance


                                                   September 30, 2018                                       October 1, 2017*               
              
       $                 %

                                                                                                                                                                          ---


       
                
             Revenue:

    ---


       Aerospace                                                     $
          
                2,031                                                            $
         1,995           $
        36     1.8
                                                                                                                                                                                               %



       Combat Systems                                          1,523                                                               1,500                                    23          1.5
                                                                                                                                                                                        %



       Information Technology                                  2,307                                                               1,068                                 1,239        116.0

                                                                                                                                                                                        %



       Mission Systems                                         1,230                                                               1,086                                   144         13.3
                                                                                                                                                                                        %



       Marine Systems                                          2,003                                                               1,931                                    72          3.7
                                                                                                                                                                                        %




       
                Total                                            $
          
                9,094                                                            $
         7,580        $
        1,514    20.0
                                                                                                                                                                                               %




       
                
             Operating earnings:

    ---


       Aerospace                                                       $
          
                376                                                              $
         381          $
        (5)  (1.3)

                                                                                                                                                                                               %



       Combat Systems                                            241                                                                 247                                   (6)       (2.4)

                                                                                                                                                                                        %



       Information Technology                                    157                                                                 101                                    56         55.4
                                                                                                                                                                                        %



       Mission Systems                                           179                                                                 152                                    27         17.8
                                                                                                                                                                                        %



       Marine Systems                                            169                                                                 179                                  (10)       (5.6)

                                                                                                                                                                                        %



       Corporate                                                  13                                                                   3                                    10        333.3

                                                                                                                                                                                        %




       
                Total                                            $
          
                1,135                                                            $
         1,063           $
        72     6.8
                                                                                                                                                                                               %




       
                
             Operating margin:

    ---


       Aerospace                                                18.5                                                                19.1
                                                           
            %                                                                  %



       Combat Systems                                           15.8                                                                16.5
                                                           
            %                                                                  %



       Information Technology                                    6.8                                                                 9.5
                                                           
            %                                                                  %



       Mission Systems                                          14.6                                                                14.0
                                                           
            %                                                                  %



       Marine Systems                                            8.4                                                                 9.3
                                                           
            %                                                                  %



       
                Total                                       12.5                                                                14.0
                                                           
            %                                                                  %



               *               Prior-period information has
                                been restated for the
                                adoption of ASU 2017-07,
                                which we adopted on January
                                1, 2018.


                                                                                                       
              
                EXHIBIT D


                                                                                  
              
              REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)


                                                                                                    
            
                DOLLARS IN MILLIONS






                                                           
              
           Nine Months Ended                                                       
              
       Variance


                                                   September 30, 2018 (a)                                         October 1, 2017
                                                                                                                         (b)                        
              
       $                   %

                                                                                                                                                                                     ---


       
                
             Revenue:

    ---


       Aerospace                                                          $
           
                5,751                                                                   $
        6,147       $
           (396)   (6.4)
                                                                                                                                                                                                              %



       Combat Systems                                              4,497                                                                    4,201                                     296             7.0
                                                                                                                                                                                                      %



       Information Technology                                      5,887                                                                    3,178                                   2,709            85.2
                                                                                                                                                                                                      %



       Mission Systems                                             3,475                                                                    3,226                                     249             7.7
                                                                                                                                                                                                      %



       Marine Systems                                              6,205                                                                    5,944                                     261             4.4
                                                                                                                                                                                                      %




       
                Total                                                $
           
                25,815                                                                  $
        22,696       $
           3,119     13.7
                                                                                                                                                                                                              %




       
                
             Operating earnings:

    ---


       Aerospace                                                          $
           
                1,108                                                                   $
        1,241       $
           (133)  (10.7)
                                                                                                                                                                                                              %



       Combat Systems                                                701                                                                      677                                      24             3.5
                                                                                                                                                                                                      %



       Information Technology                                        414                                                                      278                                     136            48.9
                                                                                                                                                                                                      %



       Mission Systems                                               478                                                                      451                                      27             6.0
                                                                                                                                                                                                      %



       Marine Systems                                                548                                                                      518                                      30             5.8
                                                                                                                                                                                                      %



       Corporate                                                    (18)                                                                      11                                    (29)        (263.6)
                                                                                                                                                                                                      %




       
                Total                                                 $
           
                3,231                                                                   $
        3,176          $
           55      1.7
                                                                                                                                                                                                              %




       
                
             Operating margin:

    ---


       Aerospace                                                    19.3                                                                     20.2
                                                                        %                                                                       %



       Combat Systems                                               15.6                                                                     16.1
                                                                        %                                                                       %



       Information Technology                                        7.0
                                                                        %                                                           8.7
            %



       Mission Systems                                              13.8                                                                     14.0
                                                                        %                                                                       %



       Marine Systems                                                8.8
                                                                        %                                                           8.7
            %



       
                Total                                           12.5                                                                     14.0
                                                                        %                                                                       %



               (a)               2018 results include the unfavorable
                                  impact of approximately $45 of
                                  compensation-related one-time
                                  charges associated with costs to
                                  complete the acquisition of CSRA
                                  Inc. This amount was reported as a
                                  reduction of Corporate operating
                                  earnings in the table above.


               (b)               Prior-period information has been
                                  restated for the adoption of ASU
                                  2017-07, which we adopted on
                                  January 1, 2018.


                                                                  
         
              EXHIBIT E


                                                              
         
         CONSOLIDATED BALANCE SHEET


                                                                
         
           DOLLARS IN MILLIONS






                                                                                           (Unaudited)


                                                                                       September 30, 2018               December 31, 2017

                                                                                                                                      ---


     
                ASSETS



     
                Current assets:



     Cash and equivalents                                                                                 $
      
      1,010                              $
         2,983



     Accounts receivable                                                                           3,736                                     3,617



     Unbilled receivables                                                                          7,564                                     5,240



     Inventories                                                                                   6,247                                     5,303



     Other current assets                                                                          1,401                                     1,185




     Total current assets                                                                         19,958                                    18,328




     
                Noncurrent assets:



     Property, plant and equipment, net                                                            4,244                                     3,517



     Intangible assets, net                                                                        2,667                                       702



     Goodwill                                                                                     19,486                                    11,914



     Other assets                                                                                    608                                       585




     Total noncurrent assets                                                                      27,005                                    16,718



     
                Total assets                                                                           $
      
      46,963                             $
         35,046




     
                LIABILITIES AND SHAREHOLDERS' EQUITY



     
                Current liabilities:



     Short-term debt and current portion of long-term debt                                                $
      
      1,678                                 $
          2



     Accounts payable                                                                              3,033                                     3,207



     Customer advances and deposits                                                                7,327                                     6,992



     Other current liabilities                                                                     3,651                                     2,898




     Total current liabilities                                                                    15,689                                    13,099




     
                Noncurrent liabilities:



     Long-term debt                                                                               11,403                                     3,980



     Other liabilities                                                                             7,116                                     6,532




     Total noncurrent liabilities                                                                 18,519                                    10,512




     
                Shareholders' equity:



     Common stock                                                                                    482                                       482



     Surplus                                                                                       2,914                                     2,872



     Retained earnings                                                                            28,691                                    26,444



     Treasury stock                                                                             (15,971)                                 (15,543)



     Accumulated other comprehensive loss                                                        (3,361)                                  (2,820)




     Total shareholders' equity                                                                   12,755                                    11,435



     
                Total liabilities and shareholders' equity                                             $
      
      46,963                             $
         35,046


                                                                                                
            
                EXHIBIT F


                                                                                          
     
         CONSOLIDATED STATEMENT OF CASH FLOWS - (UNAUDITED)


                                                                                              
         
                DOLLARS IN MILLIONS






                                                                                                                                                                           Nine Months Ended


                                                                                                                                                     September 30, 2018                          October 1, 2017

                                                                                                                                                                                                             ---


     
                Cash flows from operating activities-continuing operations:



     Net earnings                                                                                                                                                      $
        
                2,436                          $
     2,276



     Adjustments to reconcile net earnings to net cash provided by operating activities:



     Depreciation of property, plant and equipment                                                                                                                 352                                               269



     Amortization of intangible assets                                                                                                                             190                                                57



     Equity-based compensation expense                                                                                                                             110                                                93



     Deferred income tax (benefit) provision                                                                                                                      (66)                                              155



     Discontinued operations, net of tax                                                                                                                            13



     (Increase) decrease in assets, net of effects of business acquisitions:



     Accounts receivable                                                                                                                                           472                                                26



     Unbilled receivables                                                                                                                                      (1,625)                                          (1,361)



     Inventories                                                                                                                                                 (854)                                               57



     Increase (decrease) in liabilities, net of effects of business acquisitions:



     Accounts payable                                                                                                                                            (324)                                              167



     Customer advances and deposits                                                                                                                                112                                             (296)



     Income taxes payable                                                                                                                                          250                                               223



     Other, net                                                                                                                                                     15                                               216




     Net cash provided by operating activities                                                                                                                   1,081                                             1,882




     
                Cash flows from investing activities:



     Business acquisitions, net of cash acquired                                                                                                              (10,039)                                            (364)



     Capital expenditures                                                                                                                                        (447)                                            (273)



     Other, net                                                                                                                                                    169                                                52



     Net cash used by investing activities                                                                                                                    (10,317)                                            (585)




     
                Cash flows from financing activities:



     Proceeds from fixed-rate notes                                                                                                                              6,461                                               985



     Proceeds from (repayments of) commercial paper, net                                                                                                         1,668                                               (2)



     Proceeds from floating-rate notes                                                                                                                           1,000



     Dividends paid                                                                                                                                              (801)                                            (735)



     Purchases of common stock                                                                                                                                   (533)                                          (1,172)



     Repayment of CSRA accounts receivable purchase agreement                                                                                                    (450)



     Other, net                                                                                                                                                   (68)                                               43




     Net cash provided (used) by financing activities                                                                                                            7,277                                             (881)




     Net cash used by discontinued operations                                                                                                                     (14)                                             (28)




     
                Net (decrease) increase in cash and equivalents                                                                                              (1,973)                                              388



     
                Cash and equivalents at beginning of period                                                                                                    2,983                                             2,334




     
                Cash and equivalents at end of period                                                                                                                $
        
                1,010                          $
     2,722


                                                                                                 
           
                EXHIBIT G


                                                                                       
        
          PRELIMINARY FINANCIAL INFORMATION - (UNAUDITED)


                                                                                        
        
          DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS






                                                                          2018                                                                               2017


                                                                 Third Quarter                                                                     Third Quarter




       
                
                  Other Financial Information:

    ---


       Debt-to-equity (a)                                               102.6                                                                                                    42.2
                                                                    
            %                                                                                                      %



       Debt-to-capital (b)                                               50.6                                                                                                    29.7
                                                                    
            %                                                                                                      %



       Book value per share (c)                                               $
       
          43.07                                                                                                   $
        38.73



       Income tax payments, net                                                 $
       
          150                                                                                                      $
        70



       Company-sponsored research and development (d)                           $
       
          126                                                                                                     $
        120



       Shares outstanding                                         296,149,755                                                                                             298,582,883





       
                
                  Non-GAAP Financial Measure:

    ---

                                                                                          2018                                                           2017



                                                                 Third Quarter                                       Nine Months                   Third Quarter                       Nine Months




       
                Free cash flow from operations:



       Net cash provided by operating activities                                $
       
          790                                                                  $
       
             1,081                         $
         872 $
     1,882



       Capital expenditures                                             (168)                                                         (447)                                                 (120)                (273)




       Free cash flow from operations (e)                                       $
       
          622                                                                    $
       
             634                         $
         752 $
     1,609



               (a)               Debt-to-equity ratio is
                                  calculated as total debt divided
                                  by total equity as of the end of
                                  the period.


               (b)               Debt-to-capital ratio is
                                  calculated as total debt divided
                                  by the sum of total debt plus
                                  total equity as of the end of the
                                  period.


               (c)               Book value per share is calculated
                                  as total equity divided by total
                                  outstanding shares as of the end
                                  of the period.


               (d)               Includes independent research and
                                  development and Aerospace product-
                                  development costs.


               (e)               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
                                  key performance measure in
                                  evaluating management. The most
                                  directly comparable GAAP measure
                                  to free cash flow from operations
                                  is net cash provided by operating
                                  activities.


                                                                                                 
            
             EXHIBIT H


                                                                                           
            
             BACKLOG - (UNAUDITED)


                                                                                            
            
             DOLLARS IN MILLIONS






                                                    Funded                     Unfunded                            Total                    Estimated                     Total Potential
                                                                                          Backlog                              Potential                 Contract
                                                                                                                            Contract Value*                Value



                               Third Quarter 2018:

    ---


       Aerospace                                              $
     11,696                        $
            173                                                     $
     11,869                           $
      2,239       $
      14,108



       Combat Systems                              15,865                 395                                16,260                                                   3,857              20,117



       Information Technology                       5,222               4,731                                 9,953                                                  17,365              27,318



       Mission Systems                              5,024                 587                                 5,611                                                   7,453              13,064



       Marine Systems                              16,615               9,221                                25,836                                                   3,797              29,633




       
                Total                                 $
     
       54,422               $
       
              15,107                                         $
             
       69,529                      $
     
        34,711 $
      
        104,240



                               Second Quarter 2018:

    ---


       Aerospace                                              $
     12,187                        $
            157                                                     $
     12,344                           $
      2,282       $
      14,626



       Combat Systems                              16,646                 376                                17,022                                                   2,840              19,862



       Information Technology                       4,633               4,576                                 9,209                                                  18,931              28,140



       Mission Systems                              4,636                 645                                 5,281                                                   4,287               9,568



       Marine Systems                              17,310               5,124                                22,434                                                   4,333              26,767




       
                Total                                 $
     
       55,412               $
       
              10,878                                         $
             
       66,290                      $
     
        32,673  $
      
        98,963



                               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 Technology                       2,425               1,705                                 4,130                                                   9,641              13,771



       Mission Systems                              4,684                 708                                 5,392                                                   4,743              10,135



       Marine Systems                              16,791               8,247                                25,038                                                   4,826              29,864




       
                Total                                 $
     
       52,689               $
       
              11,240                                         $
             
       63,929                      $
     
        25,726  $
      
        89,655



               *               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.
                                We recognize options in backlog
                                when the customer exercises the
                                option and establishes a firm
                                order. For IDIQ contracts, we
                                evaluate the amount of funding
                                we expect to receive and
                                include this amount in our
                                estimated potential contract
                                value. The actual amount of
                                funding received in the future
                                may be higher or lower than our
                                estimate of potential contract
                                value.

EXHIBIT H-1
BACKLOG AND ESTIMATED CONTRACT VALUE - (UNAUDITED)
DOLLARS IN MILLIONS

Photo - https://mma.prnewswire.com/media/773647/EXHIBIT_H_1.jpg

EXHIBIT H-2
BACKLOG AND ESTIMATED CONTRACT VALUE BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS

Photo - https://mma.prnewswire.com/media/773651/EXHIBIT_H_2.jpg


                                                                                                  
              
                EXHIBIT I


                                                                                                               THIRD QUARTER 2018 SIGNIFICANT
                                                                                                                     ORDERS -(UNAUDITED)


                                                                                                                     DOLLARS IN MILLIONS




        We received the following
         significant contract awards
         during the third quarter of 2018:




                                    Combat Systems:

    ---



        --                                                                                                                                      
              $160 from the U.S. Army for munitions and ordnance, including Hydra-70 rockets.




        --                                                                                                                                         
              $85 from the U.S. Air Force for various rounds of medium-caliber ammunition.




        --                                                                                                  
              $55 to integrate a Mission Equipment Package onto Stryker vehicles to provide short range air defense capabilities.




        --                                                                                                                      
              $30 from the U.S. Defense Logistics Agency to provide spare parts for Abrams main battle tanks.




        --                                                                                                                              
              $30 to produce Patriot Advanced Capability-3 (PAC-3) guided-missile system motor cases.




                                    Information Technology:

    ---



        --                                                                      
              $330 from the U.S. Census Bureau to provide contact-center systems and operations support for the 2020 Census Questionnaire Assistance program.




        --                                                                                                 
              $210 from the Centers for Medicare & Medicaid Services for benefits recovery services, cloud hosting and IT support.




        --    
              $100 to provide logistics, sustainment and maintenance support services for the U.S. Army's worldwide command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) systems.




        --                                                                          
              $95 from the U.S. Department of State to provide visa application and issuance support services to U.S. embassies and consulates worldwide.




        --                                                                                                  
              $95 from the U.S. Naval Air Warfare Center for design, development and support of shipboard and airborne platforms.




        --                                                                                                     
              $90 from the U.S. Federal Emergency Management Agency (FEMA) for contact-center operations and support services.




                                    Mission Systems:

    ---



        --                                                                                                 
              $170 from the U.S. Navy for combat and seaframe control systems on Independence-variant Littoral Combat Ships (LCS).




        --                                                                                                                              
              $150 for additional equipment to support the U.S. Army's mobile communications network.




        --                                                                                                   
              $100 from the Army for computing and communications equipment under the Common Hardware Systems-4 (CHS-4) program.




        --                                        
              $75 from the Canadian Department of National Defence to modernize and provide in-service support for the underwater warfare sensor suite installed on Halifax-class frigates.




        --                                                                                                         
              $75 to rebuild and repair MK6 missile guidance systems and produce MK6 circuit card assemblies for the Navy.




        --               An IDIQ contract from the Army for
                         computing and communications equipment
                         under the Common Hardware Systems-5
                         (CHS-5) program. The program has a
                         maximum potential value of $3.9 billion
                         over five years.




                                    Marine Systems:

    ---



        --                                                                                                 
              $3.9 billion from the U.S. Navy for the construction of four Arleigh Burke-class (DDG-51) guided-missile destroyers.




        --                                                                                                                                              
              $580 from the Navy for surface ship maintenance and modernization work.




        --                                                                                                       
              $480 from the Navy to continue design and development work in support of the Columbia-class submarine program.




        --                                                                 
              $55 from the Navy for the procurement and management of spare parts and equipment for the Zumwalt-class (DDG-1000) guided-missile destroyer program.


                                                                         
        
                EXHIBIT J


                                                                     
     
       AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED)






                                                                                 Third Quarter                       Nine Months


                                                                                          2018                               2017    2018 2017




       
                
           Gulfstream Aircraft Deliveries (units):

    ---


       Large-cabin aircraft                                                                21                                    21       58  67



       Mid-cabin aircraft                                                                   6                                     9       21  23




       
                Total                                                                  27                                    30       79  90




       
                
           Pre-owned Aircraft Deliveries (units):                          2                                     1        4   4

    ---

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SOURCE General Dynamics