10-KPeriod: FY2016

GENERAL DYNAMICS CORP Annual Report, Year Ended Dec 31, 2016

Filed February 6, 2017For Securities:GD

Summary

General Dynamics Corporation's 2016 Form 10-K highlights a robust year characterized by strong operating performance and strategic capital deployment. The company, a global aerospace and defense leader, reported stable revenue of $31.4 billion, coupled with record operating earnings of $4.3 billion and an improved operating margin of 13.7%. This financial strength was supported by growth in its defense segments, particularly Marine Systems and Information Systems and Technology, which offset a planned decrease in aircraft deliveries within the Aerospace group. The company demonstrated a strong commitment to shareholder returns, repurchasing $2 billion in stock and increasing its dividend. General Dynamics also maintained a significant backlog of $59.8 billion, providing visibility into future revenue streams. The report underscores the company's focus on innovation, operational efficiency, and disciplined execution across its diverse portfolio, positioning it well for continued success in the aerospace and defense sectors.

Financial Highlights

56 data points
Beta

Revenue

$30.56B

18.5% Gross Margin

Net Income

$2.57B

8.4% Net Margin

EPS (Diluted)

$8.29

Total Assets

$33.17B

Cash & Equivalents

$2.33B

Free Cash Flow

$1.77B

Financial Statements
Beta
Revenue$30.56B
Cost of Revenue$24.90B
Gross Profit$5.67B
Operating Expenses$26.82B
Operating Income$3.74B
Interest Expense$99.00M
Net Income$2.57B
EPS (Basic)$8.44
EPS (Diluted)$8.29
Shares Outstanding (Basic)304.71M
Shares Outstanding (Diluted)310.39M

Key Highlights

  • 1Revenue remained stable at $31.4 billion in 2016, with operating earnings reaching a record $4.3 billion.
  • 2Operating margin improved to 13.7%, driven by strong performance in defense segments and cost management.
  • 3The company returned approximately $2.9 billion to shareholders through share repurchases ($2 billion) and dividends ($0.9 billion).
  • 4Total backlog stood strong at $59.8 billion at year-end 2016, indicating robust future business.
  • 5The Marine Systems segment saw revenue growth, primarily due to increased U.S. Navy ship construction and engineering work.
  • 6The Information Systems and Technology segment experienced revenue growth driven by C4ISR solutions, despite a decrease in IT services.
  • 7The Aerospace segment reported lower revenue due to planned fewer aircraft deliveries but improved its operating margin.

Frequently Asked Questions

General Dynamics demonstrated strong financial performance in 2016, with revenue holding steady at $31.4 billion and operating earnings reaching a record $4.3 billion. The operating margin improved to 13.7%, reflecting effective cost management and strong performance in its defense-related business groups.

The company returned approximately $2.9 billion to shareholders in 2016 through share repurchases totaling $2 billion and dividend payments of $0.9 billion. This reflects a strong commitment to enhancing shareholder value.

The Marine Systems segment saw revenue growth driven by U.S. Navy contracts, while the Information Systems and Technology segment benefited from increased C4ISR solutions. The Aerospace segment's revenue decreased due to fewer aircraft deliveries, but its operating margin improved. The defense segments generally drove the company's overall strong performance.

With a substantial backlog of $59.8 billion at the end of 2016, General Dynamics has significant visibility into future revenue and business stability. This backlog, spread across its diverse portfolio, supports the company's strategic positioning and ability to execute on long-term contracts.