10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[☑] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 2, 2023

OR

[☐] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 1-3671

GENERAL DYNAMICS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware			13-1673581
State or other jurisdiction of incorporation or organization			I.R.S. Employer Identification No.
11011 Sunset Hills Road	Reston,	Virginia	20190
Address of principal executive offices			Zip code

(703) 876-3000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	GD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No ___

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ü No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ü Accelerated filer ___ Non-accelerated filer ___

Smaller reporting company___☐ Emerging growth company___☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes___☐ No ü

273,042,571 shares of the registrant’s common stock, $1 par value per share, were outstanding on July 2, 2023.

INDEX

PART I -	FINANCIAL INFORMATION	PAGE
Item 1 -	Unaudited Consolidated Financial Statements
	Consolidated Statement of Earnings (Three Months)	3
	Consolidated Statement of Earnings (Six Months)	4
	Consolidated Statement of Comprehensive Income (Three and Six Months)	5
	Consolidated Balance Sheet	6
	Consolidated Statement of Cash Flows	7
	Consolidated Statement of Shareholders’ Equity (Three and Six Months)	8
	Notes to Unaudited Consolidated Financial Statements	9
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4 -	Controls and Procedures	42
	FORWARD-LOOKING STATEMENTS	43
PART II -	OTHER INFORMATION	44
Item 1 -	Legal Proceedings	44
Item 1A -	Risk Factors	44
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 6 -	Exhibits	45
	SIGNATURES	46

    

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PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)

	Three Months Ended
(Dollars in millions, except per-share amounts)	July 2, 2023		July 3, 2022
Revenue:
Products	$	5,797	$	5,057
Services	4,355		4,132
	10,152		9,189
Operating costs and expenses:
Products	(4,915)		(4,169)
Services	(3,670)		(3,428)
General and administrative (G&A)	(605)		(614)
	(9,190)		(8,211)
Operating earnings	962		978
Other, net	13		40
Interest, net	(89)		(95)
Earnings before income tax	886		923
Provision for income tax, net	(142)		(157)
Net earnings	$	744	$	766
Earnings per share
Basic	$	2.72	$	2.77
Diluted	$	2.70	$	2.75

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

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CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)

	Six Months Ended
(Dollars in millions, except per-share amounts)	July 2, 2023		July 3, 2022
Revenue:
Products	$	11,310	$	10,266
Services	8,723		8,315
	20,033		18,581
Operating costs and expenses:
Products	(9,556)		(8,481)
Services	(7,386)		(6,974)
G&A	(1,191)		(1,240)
	(18,133)		(16,695)
Operating earnings	1,900		1,886
Other, net	46		79
Interest, net	(180)		(193)
Earnings before income tax	1,766		1,772
Provision for income tax, net	(292)		(276)
Net earnings	$	1,474	$	1,496
Earnings per share
Basic	$	5.39	$	5.41
Diluted	$	5.34	$	5.35

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended				Six Months Ended
(Dollars in millions)	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Net earnings	$	744	$	766	$	1,474	$	1,496
Changes in unrealized cash flow hedges	(12)		(102)		(19)		(156)
Foreign currency translation adjustments	100		(251)		191		(189)
Changes in retirement plans’ funded status	184		47		357		89
Other comprehensive income (loss), pretax	272		(306)		529		(256)
(Provision) benefit for income tax, net	(37)		18		(72)		23
Other comprehensive income (loss), net of tax	235		(288)		457		(233)
Comprehensive income	$	979	$	478	$	1,931	$	1,263

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

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CONSOLIDATED BALANCE SHEET

	(Unaudited)
(Dollars in millions)	July 2, 2023		December 31, 2022
ASSETS
Current assets:
Cash and equivalents	$	1,154	$	1,242
Accounts receivable	3,167		3,008
Unbilled receivables	8,291		8,795
Inventories	7,642		6,322
Other current assets	1,571		1,696
Total current assets	21,825		21,063
Noncurrent assets:
Property, plant and equipment, net	5,947		5,900
Intangible assets, net	1,732		1,824
Goodwill	20,443		20,334
Other assets	2,609		2,464
Total noncurrent assets	30,731		30,522
Total assets	$	52,556	$	51,585
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	508	$	1,253
Accounts payable	3,365		3,398
Customer advances and deposits	8,628		7,436
Other current liabilities	3,185		3,254
Total current liabilities	15,686		15,341
Noncurrent liabilities:
Long-term debt	9,247		9,243
Other liabilities	8,145		8,433
Commitments and contingencies (see Note J)
Total noncurrent liabilities	17,392		17,676
Shareholders’ equity:
Common stock	482		482
Surplus	3,614		3,556
Retained earnings	38,154		37,403
Treasury stock	(21,077)		(20,721)
Accumulated other comprehensive loss	(1,695)		(2,152)
Total shareholders’ equity	19,478		18,568
Total liabilities and shareholders’ equity	$	52,556	$	51,585

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

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CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

	Six Months Ended
(Dollars in millions)	July 2, 2023		July 3, 2022
Cash flows from operating activities – continuing operations:
Net earnings	$	1,474	$	1,496
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation of property, plant and equipment	297		278
Amortization of intangible and finance lease right-of-use assets	136		147
Equity-based compensation expense	87		120
Deferred income tax benefit	(154)		(218)
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable	(159)		(172)
Unbilled receivables	513		695
Inventories	(1,264)		(816)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable	(33)		(29)
Customer advances and deposits	1,286		1,402
Other, net	10		(276)
Net cash provided by operating activities	2,193		2,627
Cash flows from investing activities:
Capital expenditures	(373)		(365)
Other, net	(31)		—
Net cash used by investing activities	(404)		(365)
Cash flows from financing activities:
Repayment of fixed-rate notes	(750)		—
Dividends paid	(705)		(679)
Purchases of common stock	(378)		(1,094)
Other, net	(42)		110
Net cash used by financing activities	(1,875)		(1,663)
Net cash (used) provided by discontinued operations	(2)		21
Net (decrease) increase in cash and equivalents	(88)		620
Cash and equivalents at beginning of period	1,242		1,603
Cash and equivalents at end of period	$	1,154	$	2,223
Supplemental cash flow information:
Income tax payments, net	$	(327)	$	(565)
Interest payments	$	(195)	$	(191)

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

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CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)

	Three Months Ended
	Common Stock				Retained		Treasury		Accumulated Other  Comprehensive		Total Shareholders’
(Dollars in millions)	Par		Surplus		Earnings		Stock		Loss		Equity
April 2, 2023	$	482	$	3,562	$	37,769	$	(20,796)	$	(1,930)	$	19,087
Net earnings	—		—		744		—		—		744
Cash dividends declared	—		—		(359)		—		—		(359)
Equity-based awards	—		52		—		7		—		59
Shares purchased	—		—		—		(288)		—		(288)
Other comprehensive income	—		—		—		—		235		235
July 2, 2023	$	482	$	3,614	$	38,154	$	(21,077)	$	(1,695)	$	19,478
April 3, 2022	$	482	$	3,434	$	35,800	$	(19,837)	$	(1,865)	$	18,014
Net earnings	—		—		766		—		—		766
Cash dividends declared	—		—		(348)		—		—		(348)
Equity-based awards	—		32		—		10		—		42
Shares purchased	—		—		—		(805)		—		(805)
Other comprehensive loss	—		—		—		—		(288)		(288)
July 3, 2022	$	482	$	3,466	$	36,218	$	(20,632)	$	(2,153)	$	17,381

	Six Months Ended
	Common Stock				Retained		Treasury		Accumulated Other  Comprehensive		Total Shareholders’
(Dollars in millions)	Par		Surplus		Earnings		Stock		Loss		Equity
December 31, 2022	$	482	$	3,556	$	37,403	$	(20,721)	$	(2,152)	$	18,568
Net earnings	—		—		1,474		—		—		1,474
Cash dividends declared	—		—		(723)		—		—		(723)
Equity-based awards	—		58		—		22		—		80
Shares purchased	—		—		—		(378)		—		(378)
Other comprehensive income	—		—		—		—		457		457
July 2, 2023	$	482	$	3,614	$	38,154	$	(21,077)	$	(1,695)	$	19,478
December 31, 2021	$	482	$	3,278	$	35,420	$	(19,619)	$	(1,920)	$	17,641
Net earnings	—		—		1,496		—		—		1,496
Cash dividends declared	—		—		(698)		—		—		(698)
Equity-based awards	—		188		—		84		—		272
Shares purchased	—		—		—		(1,097)		—		(1,097)
Other comprehensive loss	—		—		—		—		(233)		(233)
July 3, 2022	$	482	$	3,466	$	36,218	$	(20,632)	$	(2,153)	$	17,381

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these financial statements.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except share and per-share amounts or unless otherwise noted)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services.

The following is a discussion of certain significant accounting policies, and further discussion is contained in other notes to these financial statements.

Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all intercompany balances and transactions in the unaudited Consolidated Financial Statements.

Consistent with industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year.

Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted.

Our fiscal quarters are typically 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three- and six-month periods ended July 2, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three- and six-month periods ended July 2, 2023, and July 3, 2022.

These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Property, Plant and Equipment, Net. Property, plant and equipment (PP&E) is carried at historical cost, net of accumulated depreciation. Net PP&E consisted of the following:

	July 2, 2023		December 31, 2022
PP&E	$	12,603	$	12,292
Accumulated depreciation	(6,656)		(6,392)
PP&E, net	$	5,947	$	5,900

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Accounting Standards Updates. There are accounting standards that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective. These standards are not expected to have a material impact on our results of operations, financial condition or cash flows.

B. REVENUE

Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue. A contract’s transaction price is allocated to each distinct performance obligation within that contract and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product life cycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service.

Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract.

Our performance obligations are satisfied over time as work progresses or at a point in time. Revenue from products and services transferred to customers over time accounted for 80% and 81% of our revenue for the three- and six-month periods ended July 2, 2023, respectively, and 80% of our revenue for the three- and six-month periods ended July 3, 2022. Substantially all of our revenue in the defense segments is recognized over time because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses.

Revenue from goods and services transferred to customers at a point in time accounted for 20% and 19% of our revenue for the three- and six-month periods ended July 2, 2023, respectively, and 20% of our revenue for the three- and six-month periods ended July 3, 2022. Most of our revenue recognized at a point in time is for the manufacture of business jet aircraft in our Aerospace segment. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft.

On July 2, 2023, we had $91.4 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 53% of our remaining performance obligations as revenue by year-end 2024, an additional 31% by year-end 2026 and the balance thereafter.

Contract Estimates. The majority of our revenue is derived from long-term contracts and programs that can span several years. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit

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on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer.

The nature of our contracts gives rise to several types of variable consideration, including claims, award fees and incentive fees. We include in our contract estimates additional revenue for contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award fees or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time.

As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified.

The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. The aggregate impact of adjustments in contract estimates increased our revenue, operating earnings and diluted earnings per share as follows:

	Three Months Ended				Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Revenue	$	58	$	112	$	152	$	219
Operating earnings	10		101		87		206
Diluted earnings per share	$	0.03	$	0.29	$	0.25	$	0.58

While no adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three- and six-month periods ended July 2, 2023, or July 3, 2022, our Marine Systems segment’s 2023 results were affected negatively by supply chain impacts to the Virginia-class submarine schedule and cost growth on the Arleigh Burke-class (DDG-51) guided-missile destroyer program, offset partially by improved performance on the John Lewis-class (T-AO-205) fleet replenishment oiler program.

Our Virginia-class submarine contracts include provisions for various equitable adjustments, which is a process for obtaining contract modifications (see discussion above on variable consideration). We have included in our contract estimates additional revenue on the Virginia-class contract for the estimated value of these adjustments. It is reasonably possible that the actual amount sustained in this process could be less than our estimate, which could have a material unfavorable impact on our results of operations.

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Revenue by Category. Our portfolio of products and services consists of approximately 10,000 active contracts. The following series of tables presents our revenue disaggregated by several categories.

Revenue by major products and services was as follows:

	Three Months Ended				Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Aircraft manufacturing	$	1,216	$	1,112	$	2,367	$	2,374
Aircraft services	737		755		1,478		1,396
Total Aerospace	1,953		1,867		3,845		3,770
Nuclear-powered submarines	2,122		1,710		4,159		3,472
Surface ships	638		611		1,319		1,204
Repair and other services	299		330		573		626
Total Marine Systems	3,059		2,651		6,051		5,302
Military vehicles	1,280		1,084		2,427		2,179
Weapons systems, armament and munitions	473		418		911		834
Engineering and other services	171		164		342		328
Total Combat Systems	1,924		1,666		3,680		3,341
Information technology (IT) services	2,127		2,010		4,296		4,150
C5ISR* solutions	1,089		995		2,161		2,018
Total Technologies	3,216		3,005		6,457		6,168
Total revenue	$	10,152	$	9,189	$	20,033	$	18,581

*Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance

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Revenue by contract type was as follows:

Three Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
Fixed-price	$	1,697	$	1,609	$	1,684	$	1,374	$	6,364
Cost-reimbursement	—		1,449		222		1,383		3,054
Time-and-materials	256		1		18		459		734
Total revenue	$	1,953	$	3,059	$	1,924	$	3,216	$	10,152
Three Months Ended July 3, 2022
Fixed-price	$	1,614	$	1,609	$	1,441	$	1,286	$	5,950
Cost-reimbursement	—		1,042		211		1,256		2,509
Time-and-materials	253		—		14		463		730
Total revenue	$	1,867	$	2,651	$	1,666	$	3,005	$	9,189
Six Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
Fixed-price	$	3,329	$	3,174	$	3,212	$	2,827	$	12,542
Cost-reimbursement	—		2,876		431		2,710		6,017
Time-and-materials	516		1		37		920		1,474
Total revenue	$	3,845	$	6,051	$	3,680	$	6,457	$	20,033
Six Months Ended July 3, 2022
Fixed-price	$	3,287	$	3,210	$	2,906	$	2,624	$	12,027
Cost-reimbursement	—		2,092		408		2,584		5,084
Time-and-materials	483		—		27		960		1,470
Total revenue	$	3,770	$	5,302	$	3,341	$	6,168	$	18,581

Our segments operate under fixed-price, cost-reimbursement and time-and-materials contracts. Our production contracts are primarily fixed-price. Under these contracts, we agree to perform a specific scope of work for a fixed amount. Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials. Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee. The amount for an incentive or award fee is determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance. Under time-and-materials contracts, the customer pays a fixed hourly rate for direct labor and generally reimburses us for the cost of materials.

Each of these contract types presents advantages and disadvantages. Typically, we assume more risk with fixed-price contracts. However, these types of contracts offer additional profits when we complete the work for less than originally estimated. Cost-reimbursement contracts generally subject us to lower risk. Accordingly, the associated base fees are usually lower than fees earned on fixed-price contracts. Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates. Also, because these contracts may provide little or no fee for managing material costs, the content mix can impact profitability.

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Revenue by customer was as follows:

Three Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
U.S. government:
Department of Defense (DoD)	$	54	$	3,029	$	941	$	1,867	$	5,891
Non-DoD	—		—		3		1,178		1,181
Foreign military sales (FMS)	21		29		159		10		219
Total U.S. government	75		3,058		1,103		3,055		7,291
U.S. commercial	985		1		55		48		1,089
Non-U.S. government	142		—		733		92		967
Non-U.S. commercial	751		—		33		21		805
Total revenue	$	1,953	$	3,059	$	1,924	$	3,216	$	10,152
Three Months Ended July 3, 2022
U.S. government:
DoD	$	80	$	2,620	$	940	$	1,667	$	5,307
Non-DoD	—		—		3		1,178		1,181
FMS	49		29		50		6		134
Total U.S. government	129		2,649		993		2,851		6,622
U.S. commercial	1,088		1		60		53		1,202
Non-U.S. government	179		1		590		93		863
Non-U.S. commercial	471		—		23		8		502
Total revenue	$	1,867	$	2,651	$	1,666	$	3,005	$	9,189
Six Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
U.S. government:
DoD	$	195	$	5,978	$	1,875	$	3,740	$	11,788
Non-DoD	—		1		5		2,370		2,376
FMS	39		70		292		19		420
Total U.S. government	234		6,049		2,172		6,129		14,584
U.S. commercial	2,183		1		106		102		2,392
Non-U.S. government	250		1		1,352		192		1,795
Non-U.S. commercial	1,178		—		50		34		1,262
Total revenue	$	3,845	$	6,051	$	3,680	$	6,457	$	20,033
Six Months Ended July 3, 2022
U.S. government:
DoD	$	160	$	5,225	$	1,795	$	3,418	$	10,598
Non-DoD	—		1		5		2,421		2,427
FMS	82		73		119		16		290
Total U.S. government	242		5,299		1,919		5,855		13,315
U.S. commercial	2,198		1		105		103		2,407
Non-U.S. government	299		2		1,275		195		1,771
Non-U.S. commercial	1,031		—		42		15		1,088
Total revenue	$	3,770	$	5,302	$	3,341	$	6,168	$	18,581

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Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In our defense segments, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period. In our Aerospace segment, we generally receive deposits from customers upon contract execution and upon achievement of contractual milestones. These deposits are liquidated when revenue is recognized. Changes in the contract asset and liability balances during the six-month period ended July 2, 2023, were not materially impacted by any other factors.

Revenue recognized for the three- and six-month periods ended July 2, 2023, and July 3, 2022, that was included in the contract liability balance at the beginning of each year was $949 and $2.7 billion, and $865 and $2.6 billion, respectively. This revenue represented primarily the sale of business jet aircraft.

C. EARNINGS PER SHARE

We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding have decreased in 2023 and 2022 due to share repurchases. See Note K for further discussion of our share repurchases. Diluted EPS incorporates the additional shares issuable upon the assumed exercise of stock options and the release of restricted stock and restricted stock units (RSUs).

Basic and diluted weighted average shares outstanding were as follows (in thousands):

	Three Months Ended		Six Months Ended
	July 2, 2023	July 3, 2022	July 2, 2023	July 3, 2022
Basic weighted average shares outstanding	273,137	276,267	273,570	276,670
Dilutive effect of stock options and restricted stock/RSUs*	1,950	2,676	2,266	2,712
Diluted weighted average shares outstanding	275,087	278,943	275,836	279,382

*    Excludes outstanding options to purchase shares of common stock that had exercise prices in excess of the average market price of our common stock during the period and, therefore, the effect of including these options would be antidilutive. These options totaled 4,468 and 3,925 for the three- and six-month periods ended July 2, 2023, and 1,713 and 1,212 for the three- and six-month periods ended July 3, 2022, respectively.

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D. INCOME TAXES

Net Deferred Tax Liability. Our deferred tax assets and liabilities are included in other noncurrent assets and liabilities on the Consolidated Balance Sheet. Our net deferred tax liability consisted of the following:

	July 2, 2023		December 31, 2022
Deferred tax asset	$	36	$	39
Deferred tax liability	(603)		(685)
Net deferred tax liability	$	(567)	$	(646)

Tax Uncertainties. We participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2021.

For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50% chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense.

Based on all known facts and circumstances and applicable tax law, we believe the total amount of any unrecognized tax benefits on July 2, 2023, was not material to our results of operations, financial condition or cash flows. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows.

E. UNBILLED RECEIVABLES

Unbilled receivables represent revenue recognized on long-term contracts (contract costs and estimated profits) less associated advances and progress billings. These amounts will be billed in accordance with the agreed-upon contractual terms. Unbilled receivables consisted of the following:

	July 2, 2023		December 31, 2022
Unbilled revenue	$	40,525	$	39,482
Advances and progress billings	(32,234)		(30,687)
Net unbilled receivables	$	8,291	$	8,795

On July 2, 2023, and December 31, 2022, net unbilled receivables included $1.5 billion and $1.7 billion, respectively, associated with a large international tracked vehicle contract in our Combat Systems segment. The contract, signed in 2010, had been experiencing an unbilled receivable build-up since 2021. Based on ongoing discussions with the customer and continued successful program activity, the customer resumed payments on the contract in the first quarter of 2023.

F. INVENTORIES

The majority of our inventories are for business jet aircraft. Our inventories are stated at the lower of cost or net realizable value. Work in process represents largely labor, material and overhead costs

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associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost in a production lot. Substantially all of our raw materials are valued on either the average cost or the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value.

Inventories consisted of the following:

	July 2, 2023		December 31, 2022
Work in process	$	5,225	$	4,182
Raw materials	2,358		2,072
Finished goods	21		17
Pre-owned aircraft	38		51
Total inventories	$	7,642	$	6,322

The increase in total inventories during the six-month period ended July 2, 2023, was due primarily to the ramp-up in production of new Gulfstream aircraft models, including the G700 in anticipation of its certification from the U.S. Federal Aviation Administration in the fourth quarter of 2023, as well as increased production of in-service aircraft reflecting strong customer demand. Customer deposits associated with firm orders for these aircraft, which are reflected in customer advances and deposits and other noncurrent liabilities on the Consolidated Balance Sheet, have correspondingly increased.

G. GOODWILL AND INTANGIBLE ASSETS

Goodwill. The changes in the carrying amount of goodwill by reporting unit were as follows:

	Aerospace		Marine Systems		Combat Systems		Technologies		Total Goodwill
December 31, 2022 (a)	$	3,019	$	297	$	2,766	$	14,252	$	20,334
Acquisitions (b)	—		—		—		16		16
Other (c)	56		—		29		8		93
July 2, 2023 (a)	$	3,075	$	297	$	2,795	$	14,276	$	20,443

(a)Goodwill in the Technologies reporting unit was net of $1.8 billion of accumulated impairment losses.

(b)Included adjustments during the purchase price allocation period.

(c)Consisted primarily of adjustments for foreign currency translation.

Intangible Assets. Intangible assets consisted of the following:

	Gross Carrying Amount (a)		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount (a)		Accumulated Amortization		Net Carrying Amount
	July 2, 2023						December 31, 2022
Contract and program intangible assets (b)	$	3,252	$	(1,783)	$	1,469	$	3,247	$	(1,688)	$	1,559
Trade names and trademarks	511		(263)		248		496		(248)		248
Technology and software	65		(50)		15		64		(48)		16
Other intangible assets	64		(64)		—		64		(63)		1
Total intangible assets	$	3,892	$	(2,160)	$	1,732	$	3,871	$	(2,047)	$	1,824

(a)Changes in gross carrying amounts consisted primarily of adjustments for foreign currency translation.

(b)Consisted of acquired backlog and probable follow-on work and associated customer relationships.

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Amortization expense is included in operating costs and expenses in the Consolidated Statement of Earnings. Amortization expense for intangible assets was $47 and $100 for the three- and six-month periods ended July 2, 2023, and $49 and $99 for the three- and six-month periods ended July 3, 2022, respectively.

H. DEBT

Debt consisted of the following:

		July 2, 2023		December 31, 2022
Fixed-rate notes due:	Interest rate:
May 2023	3.375%	$	—	$	750
August 2023	1.875%	500		500
November 2024	2.375%	500		500
April 2025	3.250%	750		750
May 2025	3.500%	750		750
June 2026	1.150%	500		500
August 2026	2.125%	500		500
April 2027	3.500%	750		750
November 2027	2.625%	500		500
May 2028	3.750%	1,000		1,000
April 2030	3.625%	1,000		1,000
June 2031	2.250%	500		500
April 2040	4.250%	750		750
June 2041	2.850%	500		500
November 2042	3.600%	500		500
April 2050	4.250%	750		750
Other	Various	90		90
Total debt principal		9,840		10,590
Less unamortized debt issuance costs and discounts		85		94
Total debt		9,755		10,496
Less current portion		508		1,253
Long-term debt		$	9,247	$	9,243

In May 2023, we repaid fixed-rate notes of $750 at the scheduled maturity using cash on hand. On July 2, 2023, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. Separately, we have a $4 billion committed bank credit facility for general corporate purposes and working capital needs and to support our commercial paper issuances. This credit facility expires in March 2027. We may renew or replace this credit facility in whole or in part at or prior to its expiration date. We also have an effective shelf registration on file with the SEC that allows us to access the debt markets.

Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants and restrictions on July 2, 2023.

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I. OTHER LIABILITIES

A summary of significant other liabilities by balance sheet caption follows:

	July 2, 2023		December 31, 2022
Salaries and wages	$	1,062	$	1,116
Dividends payable	361		347
Lease liabilities	302		288
Workers’ compensation	242		215
Other	1,218		1,288
Total other current liabilities	$	3,185	$	3,254
Retirement benefits	$	2,320	$	2,453
Customer deposits on commercial contracts	2,269		2,175
Lease liabilities	1,428		1,330
Other	2,128		2,475
Total other liabilities	$	8,145	$	8,433

J. COMMITMENTS AND CONTINGENCIES

Litigation

In 2015, Electric Boat Corporation, a subsidiary of General Dynamics Corporation, received a civil investigative demand from the U.S. Department of Justice regarding an investigation of potential False Claims Act violations relating to alleged failures of Electric Boat’s quality system with respect to allegedly non-conforming parts purchased from a supplier. In 2016, Electric Boat was made aware that it is a defendant in a lawsuit related to this matter which had been filed under seal in U.S. district court. Also in 2016, the Suspending and Debarring Official for the U.S. Department of the Navy issued a show cause letter to Electric Boat requesting that Electric Boat respond to the official’s concerns regarding Electric Boat’s oversight and management with respect to its quality assurance systems for subcontractors and suppliers. Electric Boat responded to the show cause letter and engaged in discussions with the U.S. government.

In the third quarter of 2019, the Department of Justice declined to intervene in the qui tam action, noting that its investigation continues, and the court unsealed the relator’s complaint. In the fourth quarter of 2020, the relator filed a second amended complaint. In the third quarter of 2021, the court dismissed the relator’s complaint with prejudice. The relator appealed the dismissal of the complaint to the United States Court of Appeals. In the fourth quarter of 2022, the Court of Appeals heard oral arguments on the appeal, and thereafter took the case under submission. Given the current status of these matters, we are unable to express a view regarding the ultimate outcome or, if the outcome is adverse, to estimate an amount or range of reasonably possible loss. Depending on the outcome of these matters, there could be a material impact on our results of operations, financial condition and cash flows.

Additionally, various other claims and legal proceedings incidental to the normal course of business are pending or threatened against us. These other matters relate to such issues as government investigations and claims, the protection of the environment, asbestos-related claims and employee-related matters. The nature of litigation is such that we cannot predict the outcome of these other matters. However, based on information currently available, we believe any potential liabilities in these

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other proceedings, individually or in the aggregate, will not have a material impact on our results of operations, financial condition or cash flows.

Environmental

We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a potentially responsible party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts.

As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows.

Other

Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows.

In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and other claims will be resolved without material impact to our results of operations, financial condition or cash flows.

Letters of Credit and Guarantees. In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $1.4 billion on July 2, 2023. In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance of our subsidiaries arising under certain contracts.

Aircraft Trade-ins. In connection with orders for new aircraft in contract backlog, some Gulfstream customers hold options to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are generally structured to establish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft to the customer. At that time, the customer is required to either exercise the option or allow its expiration. Other trade-in commitments are structured to guarantee a predetermined trade-in value. These commitments present more risk in the event of an adverse change in market conditions. In either case, any excess of the preestablished trade-in

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price above the fair market value at the time the new aircraft is delivered is treated as a reduction of revenue in the new-aircraft sales transaction. As of July 2, 2023, the estimated change in fair market values from the date of the commitments was not material.

Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheet.

The changes in the carrying amount of warranty liabilities for the six-month periods ended July 2, 2023, and July 3, 2022, were as follows:

Six Months Ended	July 2, 2023		July 3, 2022
Beginning balance	$	603	$	641
Warranty expense	35		39
Payments	(47)		(63)
Adjustments	2		(8)
Ending balance	$	593	$	609

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K. SHAREHOLDERS’ EQUITY

Share Repurchases. Our board of directors (Board), from time to time, authorizes management to repurchase outstanding shares of our common stock on the open market. In the six-month period ended July 2, 2023, we repurchased 1.8 million of our outstanding shares for $378 million. On July 2, 2023, 4.9 million shares remained authorized by our Board for repurchase, representing 1.8% of our total shares outstanding. We repurchased 4.9 million shares for $1.1 billion in the six-month period ended July 3, 2022.

Dividends per Share. Our Board declared dividends per share of $1.32 and $2.64 for the three- and six-month periods ended July 2, 2023, and $1.26 and $2.52 for the three- and six-month periods ended July 3, 2022, respectively. We paid cash dividends of $360 and $705 for the three- and six-month periods ended July 2, 2023, and $349 and $679 for the three- and six-month periods ended July 3, 2022, respectively.

Accumulated Other Comprehensive Loss. The changes, pretax and net of tax, in each component of accumulated other comprehensive loss (AOCL) consisted of the following:

	Changes in Unrealized Cash Flow Hedges		Foreign Currency Translation Adjustments		Changes in Retirement Plans’ Funded Status		AOCL
December 31, 2022	$	4	$	260	$	(2,416)	$	(2,152)
Other comprehensive income, pretax	(19)		191		357		529
Provision for income tax, net	4		—		(76)		(72)
Other comprehensive income, net of tax	(15)		191		281		457
July 2, 2023	$	(11)	$	451	$	(2,135)	$	(1,695)

December 31, 2021	$	144	$	538	$	(2,602)	$	(1,920)
Other comprehensive loss, pretax	(156)		(189)		89		(256)
Benefit for income tax, net	41		—		(18)		23
Other comprehensive loss, net of tax	(115)		(189)		71		(233)
July 3, 2022	$	29	$	349	$	(2,531)	$	(2,153)

Amounts reclassified out of AOCL related primarily to changes in our retirement plans’ funded status and included pretax recognized net actuarial losses and amortization of prior service credit. See Note O for these amounts, which are included in our net periodic pension and other post-retirement benefit cost (credit).

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L. SEGMENT INFORMATION

We have four operating segments: Aerospace, Marine Systems, Combat Systems and Technologies. We organize our segments in accordance with the nature of products and services offered. We measure each segment’s profitability based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our segments.

Summary financial information for each of our segments follows:

	Revenue (a)				Operating Earnings
Three Months Ended	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Aerospace	$	1,953	$	1,867	$	236	$	238
Marine Systems	3,059		2,651		235		211
Combat Systems	1,924		1,666		251		245
Technologies	3,216		3,005		283		304
Corporate (b)	—		—		(43)		(20)
Total	$	10,152	$	9,189	$	962	$	978
Six Months Ended
Aerospace	$	3,845	$	3,770	$	465	$	481
Marine Systems	6,051		5,302		446		422
Combat Systems	3,680		3,341		496		472
Technologies	6,457		6,168		582		602
Corporate (b)	—		—		(89)		(91)
Total	$	20,033	$	18,581	$	1,900	$	1,886

(a)See Note B for additional revenue information by segment.

(b)Corporate operating costs consisted primarily of equity-based compensation expense.

M. FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:

•Level 1 – quoted prices in active markets for identical assets or liabilities.

•Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly.

•Level 3 – unobservable inputs significant to the fair value measurement.

We did not have any significant non-financial assets or liabilities measured at fair value on July 2, 2023, or December 31, 2022.

Our financial instruments include cash and equivalents, accounts receivable and payable, marketable securities held in trust and other investments, short- and long-term debt, and derivative financial instruments. The carrying values of cash and equivalents and accounts receivable and payable on the unaudited Consolidated Balance Sheet approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on July 2, 2023, and December 31, 2022, and the basis for determining their fair values:

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	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets (Liabilities)	July 2, 2023
Measured at fair value:
Marketable securities held in trust:
Cash and equivalents	$	5	$	5	$	—	$	5	$	—
Available-for-sale debt securities	127		127		—		127		—
Commingled equity funds	48		48		48		—		—
Commingled fixed-income funds	6		6		6		—		—
Other investments	17		17		—		—		17
Cash flow hedge assets	110		110		—		110		—
Cash flow hedge liabilities	(57)		(57)		—		(57)		—
Measured at amortized cost:
Short- and long-term debt principal	(9,840)		(9,104)		—		(9,104)		—

	December 31, 2022
Measured at fair value:
Marketable securities held in trust:
Cash and equivalents	$	7	$	7	$	—	$	7	$	—
Available-for-sale debt securities	107		107		—		107		—
Commingled equity funds	42		42		42		—		—
Commingled fixed-income funds	6		6		6		—		—
Other investments	17		17		—		—		17
Cash flow hedge assets	109		109		—		109		—
Cash flow hedge liabilities	(67)		(67)		—		(67)		—
Measured at amortized cost:
Short- and long-term debt principal	(10,590)		(9,773)		—		(9,773)		—

Our Level 1 assets include commingled equity and fixed-income funds that are valued using a unit price or net asset value (NAV). These funds are actively traded and valued using quoted prices for identical securities from the market exchanges. The fair value of our Level 2 assets and liabilities, which consist primarily of fixed-income securities, cash flow hedges and our fixed-rate notes, is determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our Level 3 assets include direct private equity investments that are measured using inputs unobservable to a marketplace participant.

N. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

We are exposed to market risk, primarily from foreign currency exchange rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivative financial instruments for trading or speculative purposes.

Foreign Currency Risk. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we

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enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The dollar-weighted two-year average maturity of these instruments generally matches the duration of the activities that are at risk.

Commodity Price Risk. We are subject to commodity price risk, primarily on long-term, fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from these risks. Some of the protective terms included in our contracts are considered derivative financial instruments but are not accounted for separately, because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in commodity prices will have a material impact on our results of operations or cash flows.

Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years. On July 2, 2023, and December 31, 2022, we held $1.2 billion in cash and equivalents, but held no marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified pension plans. On July 2, 2023, and December 31, 2022, we held marketable securities in trust of $186 and $162, respectively. These marketable securities are reflected at fair value on the Consolidated Balance Sheet in other current and noncurrent assets. See Note M for additional details.

Hedging Activities. We had notional forward exchange contracts outstanding of $6 billion and $6.9 billion on July 2, 2023, and December 31, 2022, respectively. These derivative financial instruments are cash flow hedges, and are reflected at fair value on the Consolidated Balance Sheet in other current assets and liabilities. See Note M for additional details.

Changes in fair value (gains and losses) related to derivative financial instruments that qualify as cash flow hedges are deferred in AOCL until the underlying transaction is reflected in earnings. Alternatively, gains and losses on derivative financial instruments that do not qualify for hedge accounting are recorded each period in earnings. All gains and losses from derivative financial instruments recognized in the Consolidated Statement of Earnings are presented in the same line item as the underlying transaction, generally operating costs and expenses.

Net gains and losses recognized in earnings on derivative financial instruments that do not qualify for hedge accounting were not material to our results of operations for the three- and six-month periods ended July 2, 2023, and July 3, 2022. Net gains and losses reclassified to earnings from AOCL related to qualified hedges were also not material to our results of operations for the three- and six-month periods ended July 2, 2023, and July 3, 2022, and we do not expect the amount of these gains and losses that will be reclassified to earnings during the next 12 months to be material.

We had no material derivative financial instruments designated as fair value or net investment hedges on July 2, 2023, and December 31, 2022.

Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses’ functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of AOCL.

We do not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations’ results into U.S. dollars. The impact of translating our non-U.S. operations’ revenue and earnings into U.S. dollars was not material to our results of operations for the three- and six-month periods ended July 2, 2023, and July 3, 2022. In addition, the effect of changes in

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foreign exchange rates on non-U.S. cash balances was not material for the six-month periods ended July 2, 2023, and July 3, 2022.

O. RETIREMENT PLANS

We provide retirement benefits to eligible employees through a variety of plans:

•Defined contribution

•Defined benefit

◦Pension (qualified and non-qualified)

◦Other post-retirement benefit

For our defined benefit plans, net periodic benefit cost (credit) for the three- and six-month periods ended July 2, 2023, and July 3, 2022, consisted of the following:

	Pension Benefits				Other Post-retirement Benefits
Three Months Ended	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Service cost	$	16	$	26	$	1	$	2
Interest cost	162		100		8		5
Expected return on plan assets	(208)		(227)		(8)		(8)
Net actuarial loss (gain)	184		53		(8)		(5)
Prior service (credit) cost	(3)		(5)		—		1
Net periodic benefit cost (credit)	$	151	$	(53)	$	(7)	$	(5)
Six Months Ended
Service cost	$	33	$	52	$	2	$	3
Interest cost	325		200		15		10
Expected return on plan assets	(415)		(455)		(16)		(16)
Net actuarial loss (gain)	367		107		(16)		(9)
Prior service (credit) cost	(7)		(10)		1		1
Net periodic benefit cost (credit)	$	303	$	(106)	$	(14)	$	(11)

Our contractual arrangements with the U.S. government provide for the recovery of pension and other post-retirement benefit costs related to employees working on government contracts. The amount allocated to U.S. government contracts is determined in accordance with the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS), which may result in a timing difference with the amount determined under GAAP. We defer this difference on the Consolidated Balance Sheet. At this time, the amount allocated to contracts exceeds cumulative benefit costs, resulting in a deferred credit that is reported in other noncurrent liabilities. To the extent there is a non-service component of net periodic benefit cost (credit) for our defined benefit plans, it is reported in other income (expense) in the Consolidated Statement of Earnings.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

(Dollars in millions, except per-share amounts or unless otherwise noted)

BUSINESS OVERVIEW

General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services.

Our company is organized into four operating segments: Aerospace, Marine Systems, Combat Systems and Technologies. We refer to the latter three collectively as our defense segments. Our primary customer is the U.S. government, including the Department of Defense (DoD), the intelligence community and other U.S. government customers. We also have significant business with non-U.S. governments and a diverse base of corporate and individual buyers of business jet aircraft and related services. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022, and with the unaudited Consolidated Financial Statements included in this Form 10-Q.

BUSINESS ENVIRONMENT

The disruptions caused by the coronavirus (COVID-19) pandemic and the ongoing conflict in Ukraine continue to impact global economies and businesses. The impact primarily affecting our business is supply chain challenges, including inflationary pressures. In our Aerospace segment, supply chain challenges have paced our ability to ramp up production in response to strong customer demand for our aircraft and have caused out-of-sequence manufacturing which increases costs and decreases operational efficiency. Within our defense segments, the COVID-19 pandemic resulted in supply chain challenges, which we continue to experience, particularly in our Marine Systems (especially in the submarine supply chain) and Technologies segments. The Russia-Ukraine conflict has created additional demand for our products and services, particularly in our Combat Systems segment, though the timing and extent of incremental contract activity resulting from that demand remains uncertain.

Any longer-term impact of these global events on our business is currently unknown due to the uncertainty around their duration and broader impact. The Review of Operating Segments includes information on these global events for the affected segments.

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RESULTS OF OPERATIONS

INTRODUCTION

The following paragraphs explain how we recognize revenue and operating costs in our operating segments and the terminology we use to describe our operating results.

In the Aerospace segment, we record revenue on contracts for new aircraft when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft. Revenue associated with the segment’s services businesses is recognized as work progresses or upon delivery of services. Fluctuations in revenue from period to period result from the number and mix of new aircraft deliveries, and the level and type of aircraft services performed during the period.

The majority of the Aerospace segment’s operating costs relates to new aircraft production on firm orders and consists of labor, material, subcontractor and overhead costs. The costs are accumulated in production lots, recorded in inventory and recognized as operating costs at aircraft delivery based on the estimated average unit cost in a production lot. While changes in the estimated average unit cost for a production lot impact the level of operating costs, the amount of operating costs reported in a given period is based largely on the number and type of aircraft delivered. Operating costs in the Aerospace segment’s services businesses are recognized generally as incurred.

For new aircraft, operating earnings and margin are a function of the prices of our aircraft, our operational efficiency in manufacturing and outfitting the aircraft, and the mix of ultra-large-cabin, large-cabin and mid-cabin aircraft deliveries. Aircraft mix can also refer to the stage of program maturity for our aircraft models. A new aircraft model typically has lower margins in its initial production lots, and then margins generally increase as we realize efficiencies in the production process. Additional factors affecting the segment’s earnings and margin include the volume, mix and profitability of services work performed, the market for pre-owned aircraft, and the level of general and administrative (G&A) and net research and development (R&D) costs incurred by the segment.

In the defense segments, revenue on long-term government contracts is recognized generally over time as the work progresses, either as products are produced or as services are rendered. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses. Variances in costs recognized from period to period reflect primarily increases and decreases in production or activity levels on individual contracts. Because costs are used as a measure of progress, year-over-year variances in costs result in corresponding variances in revenue, which we generally refer to as volume.

Operating earnings and margin in the defense segments are driven by changes in volume, performance or contract mix. Performance refers to changes in profitability based on adjustments to estimates at completion on individual contracts. These adjustments result from increases or decreases to the estimated value of the contract, the estimated costs to complete the contract or both. Therefore, changes in costs incurred in the period compared with prior periods do not necessarily impact profitability. It is only when total estimated costs at completion on a given contract change without a corresponding change in the contract value (or vice versa) that the profitability of that contract may be impacted. Contract mix refers to changes in the volume of higher- versus lower-margin work. Higher or

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lower margins can result from a number of factors, including contract type (e.g., fixed-price/cost-reimbursable) and type of work (e.g., development/production). Contract mix can also refer to the stage of program maturity for our long-term production contracts. New long-term production contracts typically have lower margins initially, and then margins generally increase as we achieve learning curve improvements or realize other cost reductions.

CONSOLIDATED OVERVIEW

Three Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	10,152		$	9,189		$	963	10.5	%
Operating costs and expenses	(9,190)			(8,211)			(979)		11.9	%
Operating earnings	962			978			(16)		(1.6)	%
Operating margin	9.5		%	10.6		%
Six Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	20,033		$	18,581		$	1,452	7.8	%
Operating costs and expenses	(18,133)			(16,695)			(1,438)		8.6	%
Operating earnings	1,900			1,886			14		0.7	%
Operating margin	9.5		%	10.2		%

Our consolidated revenue increased in the second quarter and first six months of 2023 due primarily to higher volume across our defense segments, driven by double-digit growth in U.S. Navy ship construction and international military vehicles. Operating margin decreased 110 basis points in the second quarter and 70 basis points in the first six months of 2023 compared with prior-year periods due to program mix and supply chain-driven cost pressure.

REVIEW OF OPERATING SEGMENTS

Following is a discussion of operating results and outlook for each of our operating segments. For the Aerospace segment, results are analyzed by specific types of products and services, consistent with how the segment is managed. For the defense segments, the discussion is based on markets and the lines of products and services offered with a supplemental discussion of specific contracts and programs when significant to the results. Additional information regarding our segments can be found in Note L to the unaudited Consolidated Financial Statements in Part I, Item 1.

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AEROSPACE

Three Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	1,953		$	1,867		$	86	4.6	%
Operating earnings	236			238			(2)		(0.8)	%
Operating margin	12.1		%	12.7		%
Gulfstream aircraft deliveries (in units)	24			22			2		9.1	%
Six Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	3,845		$	3,770		$	75	2.0	%
Operating earnings	465			481			(16)		(3.3)	%
Operating margin	12.1		%	12.8		%
Gulfstream aircraft deliveries (in units)	45			47			(2)		(4.3)	%

Operating Results

The increase in the Aerospace segment’s revenue in the second quarter and first six months of 2023 consisted of the following:

	Second Quarter		Six Months
Aircraft manufacturing	$	104	$	(7)
Aircraft services	(18)		82
Total increase	$	86	$	75

Aircraft manufacturing revenue increased in the second quarter of 2023 due primarily to higher deliveries of ultra-large-cabin aircraft. A favorable mix of aircraft partially offset fewer deliveries in the first six months. Aircraft services revenue was up in the first six months of 2023 due primarily to increased demand for aircraft maintenance as customer flight activity remained at elevated levels. The growth in aircraft maintenance was offset by lower volume on aircraft completion projects in Basel, Switzerland, in the second quarter.

The change in the segment’s operating earnings in the second quarter and first six months of 2023 consisted of the following:

	Second Quarter		Six Months
Aircraft manufacturing	$	33	$	(5)
Aircraft services	(9)		6
G&A/other expenses	(26)		(17)
Total decrease	$	(2)	$	(16)

Aircraft manufacturing operating earnings increased in the second quarter due to higher deliveries and the impact of customer accommodations in the second quarter of 2022 associated with a G500/G600 airworthiness directive. Aircraft manufacturing operating earnings were down in the first six months of 2023 due primarily to fewer aircraft deliveries and higher production costs resulting from supply chain challenges. Aircraft services operating earnings reflected the volume and mix of services in the second quarter and first six months of 2023. G&A/other expenses increased in the second quarter and first six months of 2023 due primarily to increased R&D expenses associated with ongoing product development efforts, particularly those related to the G700 certification.

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In total, the Aerospace segment’s operating margin decreased 60 basis points in the second quarter and 70 basis points in the first six months of 2023 compared with the prior-year periods.

2023 Outlook

We expect the Aerospace segment’s 2023 revenue to be approximately $10.2 billion due to the certification and entry into service of the new G700 aircraft in the fourth quarter of 2023. We expect the segment’s operating margin to be approximately 14.1%.

MARINE SYSTEMS

Three Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	3,059		$	2,651		$	408	15.4	%
Operating earnings	235			211			24		11.4	%
Operating margin	7.7		%	8.0		%
Six Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	6,051		$	5,302		$	749	14.1	%
Operating earnings	446			422			24		5.7	%
Operating margin	7.4		%	8.0		%

Operating Results

The increase in the Marine Systems segment’s revenue in the second quarter and first six months of 2023 consisted of the following:

	Second Quarter		Six Months
U.S. Navy ship construction	$	311	$	544
U.S. Navy ship engineering, repair and other services	97		205
Total increase	$	408	$	749

Revenue from U.S. Navy ship construction and engineering was up in the second quarter and first six months of 2023 due primarily to increased volume on the Columbia-class submarine program. Overall, the Marine Systems segment’s operating margin decreased 30 basis points in the second quarter and 60 basis points in the first six months of 2023 due to supply chain impacts to the Virginia-class submarine schedule and cost growth on the Arleigh Burke-class (DDG-51) guided-missile destroyer program, offset partially by improved performance on the John Lewis-class (T-AO-205) fleet replenishment oiler program.

2023 Outlook

We expect the Marine Systems segment’s 2023 revenue to be approximately $11.8 billion with operating margin of approximately 7.6%.

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COMBAT SYSTEMS

Three Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	1,924		$	1,666		$	258	15.5	%
Operating earnings	251			245			6		2.4	%
Operating margin	13.0		%	14.7		%
Six Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	3,680		$	3,341		$	339	10.1	%
Operating earnings	496			472			24		5.1	%
Operating margin	13.5		%	14.1		%

Operating Results

The increase in the Combat Systems segment’s revenue in the second quarter and first six months of 2023 consisted of the following:

	Second Quarter		Six Months
International military vehicles	$	234	$	237
Weapons systems and munitions	59		75
U.S. military vehicles	(35)		27
Total increase	$	258	$	339

Revenue from international military vehicles increased in the second quarter and first six months of 2023 due to higher volume on several wheeled and tracked vehicle contracts, including the sale of the Abrams main battle tank to U.S. allies and partners. Weapons systems and munitions revenue was up due to facility expansion efforts associated with increased artillery production. Revenue from U.S. military vehicles increased in the first six months of 2023 due primarily to higher volume on the U.S. Army’s M10 Booker Combat Vehicle (Booker) program (formerly known as Mobile Protected Firepower). In the second quarter, revenue on U.S. programs was down due to lower volume on the Abrams tank and Stryker vehicle programs.

Overall, the Combat Systems segment’s operating margin decreased 170 basis points in the second quarter and 60 basis points in the first six months of 2023 driven by contract mix in our U.S. business, including the artillery facilities expansion work that carries a lower margin.

2023 Outlook

We expect the Combat Systems segment’s 2023 revenue to be approximately $7.8 billion with operating margin of approximately 14.2%.

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TECHNOLOGIES

Three Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	3,216		$	3,005		$	211	7.0	%
Operating earnings	283			304			(21)		(6.9)	%
Operating margin	8.8		%	10.1		%
Six Months Ended	July 2, 2023			July 3, 2022			Variance
Revenue	$	6,457		$	6,168		$	289	4.7	%
Operating earnings	582			602			(20)		(3.3)	%
Operating margin	9.0		%	9.8		%

Operating Results

The increase in the Technologies segment’s revenue in the second quarter and first six months of 2023 consisted of the following:

	Second Quarter		Six Months
Information technology (IT) services	$	117	$	146
C5ISR* solutions	94		143
Total increase	$	211	$	289

*Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance

The Technologies segment’s revenue was up due to increased demand across the business and the acquisition of a C5ISR solutions business in the third quarter of 2022. The Technologies segment’s operating margin decreased 130 basis points in the second quarter and 80 basis points in the first six months of 2023 due to program mix.

2023 Outlook

We expect the Technologies segment’s 2023 revenue to be approximately $12.7 billion with operating margin of approximately 9.4%.

CORPORATE

Corporate operating costs totaled $43 in the second quarter and $89 in the first six months of 2023 compared with $20 and $91 in the prior-year periods, respectively, and consisted primarily of equity-based compensation expense. Corporate operating costs are expected to be approximately $160 in 2023.

OTHER INFORMATION

PRODUCT REVENUE AND OPERATING COSTS

Three Months Ended	July 2, 2023		July 3, 2022		Variance
Revenue	$	5,797	$	5,057	$	740	14.6	%
Operating costs	(4,915)		(4,169)		(746)		17.9	%
Six Months Ended	July 2, 2023		July 3, 2022		Variance
Revenue	$	11,310	$	10,266	$	1,044	10.2	%
Operating costs	(9,556)		(8,481)		(1,075)		12.7	%

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The increase in product revenue in the second quarter and first six months of 2023 consisted of the following:

	Second Quarter		Six Months
Ship construction	$	311	$	544
Military vehicle production	240		358
Other, net	189		142
Total increase	$	740	$	1,044

Ship construction revenue increased in the second quarter and first six months of 2023 due primarily to higher volume on the Columbia-class submarine program. Military vehicle production revenue was up due primarily to higher volume on several international wheeled and tracked vehicle contracts. The primary drivers of the increase in product operating costs were the changes in volume on the programs described above.

SERVICE REVENUE AND OPERATING COSTS

Three Months Ended	July 2, 2023		July 3, 2022		Variance
Revenue	$	4,355	$	4,132	$	223	5.4	%
Operating costs	(3,670)		(3,428)		(242)		7.1	%
Six Months Ended	July 2, 2023		July 3, 2022		Variance
Revenue	$	8,723	$	8,315	$	408	4.9	%
Operating costs	(7,386)		(6,974)		(412)		5.9	%

The increase in service revenue in the second quarter and first six months of 2023 consisted of the following:

	Second Quarter		Six Months
Ship services	$	97	$	205
IT services	117		146
Other, net	9		57
Total increase	$	223	$	408

Services revenue increased in the second quarter and first six months of 2023 due to a higher volume of engineering work on the Columbia-class submarine program and increased demand for IT services. The primary drivers of the increase in service operating costs were the changes in volume on the programs described above.

G&A EXPENSES

As a percentage of revenue, G&A expenses were 5.9% in the first six months of 2023 compared with 6.7% in the first six months of 2022, which included the accelerated recognition of equity-based compensation expense. We expect G&A expenses as a percentage of revenue in 2023 to be generally consistent with 2022.

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OTHER, NET

Net other income was $46 in the first six months of 2023 compared with $79 in the first six months of 2022, and represents primarily the non-service components of pension and other post-retirement benefits. In 2023, we expect net other income to be approximately $90.

INTEREST, NET

Net interest expense was $180 in the first six months of 2023 compared with $193 in the prior-year period, reflecting the repayment of debt in the fourth quarter of 2022. See Note H to the unaudited Consolidated Financial Statements in Part I, Item 1, for additional information regarding our debt obligations, including interest rates. We expect 2023 net interest expense to be consistent with 2022.

PROVISION FOR INCOME TAX, NET

Our effective tax rate was 16.5% in the first six months of 2023 compared with 15.6% in the prior-year period. The lower effective tax rate in the first six months of 2022 reflected a variety of factors, including the impact of tax benefits from equity-based compensation. For 2023, we anticipate a full-year effective tax rate of approximately 17%.

BACKLOG AND ESTIMATED POTENTIAL CONTRACT VALUE

Our total backlog, including funded and unfunded portions, was $91.4 billion at the end of the second quarter of 2023 compared with $89.8 billion at the end of the first quarter. Our total backlog is equal to our remaining performance obligations under contracts with customers as discussed in Note B to the unaudited Consolidated Financial Statements in Part I, Item 1. Our total estimated contract value, which combines total backlog with estimated potential contract value, was $129.3 billion on July 2, 2023.

The following table details the backlog and estimated potential contract value of each segment at the end of the second and first quarters of 2023:

	Funded			Unfunded			Total Backlog		Estimated Potential Contract Value		Total Estimated Contract Value
	July 2, 2023
Aerospace	$	19,050		$	447		$	19,497	$	888	$	20,385
Marine Systems	30,318			13,410			43,728		3,238		46,966
Combat Systems	14,349			718			15,067		6,196		21,263
Technologies	9,732			3,333			13,065		27,639		40,704
Total	$	73,449		$	17,908		$	91,357	$	37,961	$	129,318
	April 2, 2023
Aerospace	$	18,853		$	484		$	19,337	$	804	$	20,141
Marine Systems	30,722		*	12,885		*	43,607		3,499		47,106
Combat Systems	13,953			143			14,096		5,599		19,695
Technologies	9,465			3,320			12,785		28,637		41,422
Total	$	72,993		$	16,832		$	89,825	$	38,539	$	128,364

* Revised

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AEROSPACE

Aerospace funded backlog represents primarily new aircraft orders for which we have definitive purchase contracts and deposits from customers. Unfunded backlog consists of agreements to provide future aircraft maintenance and support services. The Aerospace segment ended the second quarter of 2023 with backlog of $19.5 billion.

Orders in the second quarter of 2023 reflected strong demand across our portfolio of products and services. The segment’s book-to-bill ratio (orders divided by revenue) was 1.3-to-1 in the second quarter of 2023 and 1.1-to-1 over the trailing 12 months.

Beyond total backlog, estimated potential contract value represents primarily options and other agreements with existing customers to purchase new aircraft and long-term aircraft services agreements. On July 2, 2023, estimated potential contract value in the Aerospace segment was $888.

DEFENSE SEGMENTS

The total backlog in our defense segments represents the estimated remaining sales value of work to be performed under firm contracts. The funded portion of total backlog includes items that have been authorized and appropriated by the U.S. Congress and funded by customers, as well as commitments by international customers that are approved and funded similarly by their governments. The unfunded portion of total backlog includes the amounts we believe are likely to be funded, but there is no guarantee that future budgets and appropriations will provide the same funding level currently anticipated for a given program.

Estimated potential contract value in our defense segments includes unexercised options associated with existing firm contracts and unfunded work on indefinite delivery, indefinite quantity (IDIQ) contracts. Contract options represent agreements to perform additional work under existing contracts at the election of the customer. 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. This amount is often less than the total IDIQ contract value, particularly when the contract has multiple awardees. The actual amount of funding received in the future may be higher or lower than our estimate of potential contract value.

Total backlog in our defense segments was $71.9 billion on July 2, 2023. In the second quarter of 2023, each defense segment achieved book-to-bill ratios of 1-to-1 or greater. Estimated potential contract value in our defense segments was $37.1 billion on July 2, 2023. We received the following significant contract awards during the second quarter of 2023:

MARINE SYSTEMS

•$1.1 billion from the U.S. Navy for long-lead materials and advance construction for Block V Virginia-class submarines.

•$735 from the Navy for construction of an additional T-AO-205 oiler.

•$55 from the Navy to support non-nuclear maintenance on submarines based at the New London Naval Submarine Support Facility. The award includes additional option value of $220.

•$160 from the Navy for advanced nuclear plant studies (ANPS) in support of the Columbia-class submarine program.

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•$75 from the Navy for lead yard services, development studies and design efforts for Virginia-class submarines.

•$65 from the Navy for maintenance and modernization on the USS Makin Island, a Wasp-class amphibious assault ship.

COMBAT SYSTEMS

•$340 from the U.S. Army for various munitions and ordnance with a maximum potential value of $1.4 billion.

•$695 from the Army to advance to the detailed design and prototype build and test phases of the XM30 Mechanized Infantry Combat Vehicle (MICV) competition, formerly known as the Optionally Manned Fighting Vehicle (OMFV). The award includes additional option value of $75.

•$710 from the Army to upgrade Stryker vehicles to the double-V-hull (DVH) A1 configuration.

•$260 from the Army for the second phase of low-rate initial production (LRIP) of the Booker Combat Vehicle.

•$140 from the Army to establish additional capacity for 155mm artillery projectile metal parts production.

•$65 to provide light armored vehicle (LAV) spare parts for an international customer.

•$60 from the Army to provide system and sustainment technical support services for Abrams main battle tanks.

TECHNOLOGIES

•$435 for several key contracts for classified customers with additional options and potential contract value of $935.

•$60 to provide training support services to the Navy, and options totaling $325 of additional potential value.

•$95 from the U.S. Department of State (DoS) to provide overseas consular services to support visa application and issuance at U.S. embassies and consulates throughout the world under the Global Support Strategy (GSS) program, and options totaling $265 of additional potential value.

•$270 from the National Geospatial-Intelligence Agency (NGA) to provide hybrid cloud services and IT design, engineering, and operations and sustainment services.

•$15 to modernize the Payments, Claims, and Enhanced Reconciliation (PACER) application for the U.S. Department of the Treasury. The contract has a maximum potential value of $190.

•$185 to manufacture and deliver hardware in support of the SPY-6 radar program.

•$160 from the Centers for Medicare and Medicaid Services (CMS) to provide cloud services and software tools.

•$145 to provide ship modernization services for the Navy.

•$60 from the DoS to provide IT end-user support services to the Bureau of Information Resource Management (IRM); the contract including options has a maximum potential value of $125.

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LIQUIDITY AND CAPITAL RESOURCES

We place a strong emphasis on cash flow generation, which is underpinned by an operating discipline focused on cost control and working capital management. This emphasis gives us the flexibility for prudent capital deployment, while allowing us to step down debt over time, and preserves a strong balance sheet for future opportunities.

We evaluate a variety of capital deployment options based on current market conditions and our long-term outlook, and we believe agility is a key component of our capital deployment strategy as market conditions change over time. Our capital deployment priorities include investments in our products and services to drive long-term growth, a predictable dividend, strategic acquisitions and opportunistic share repurchases.

We believe cash generated by operating activities, supplemented by commercial paper issuances, is sufficient to satisfy our short- and long-term liquidity needs. An additional potential source of capital is the issuance of long-term debt in capital market transactions.

We ended the second quarter of 2023 with a cash and equivalents balance of $1.2 billion consistent with the balance at the end of 2022. The following is a discussion of our major operating, investing and financing activities in the first six months of 2023 and 2022, as classified on the unaudited Consolidated Statement of Cash Flows in Part I, Item 1:

Six Months Ended	July 2, 2023		July 3, 2022
Net cash provided by operating activities	$	2,193	$	2,627
Net cash used by investing activities	(404)		(365)
Net cash used by financing activities	(1,875)		(1,663)

OPERATING ACTIVITIES

Cash provided by operating activities was $2.2 billion in the first six months of 2023 compared with $2.6 billion in the same period in 2022. The primary driver of cash inflows in both periods was net earnings. Cash flows in both periods were affected positively by an increase in customer deposits driven by Gulfstream aircraft orders and a decrease in unbilled receivables due to the receipt of progress payments on large international vehicle contracts in our Combat Systems segment.

INVESTING ACTIVITIES

Cash used by investing activities was $404 in the first six months of 2023 compared with $365 in the same period in 2022. Our investing activities include cash paid for capital expenditures and business acquisitions; purchases, sales and maturities of marketable securities; and proceeds from asset sales. The primary use of cash for investing activities in both periods was capital expenditures. Capital expenditures were $373 in the first six months of 2023 compared with $365 in the same period in 2022.

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FINANCING ACTIVITIES

Cash used by financing activities was $1.9 billion in the first six months of 2023 compared with $1.7 billion in the same period in 2022. Financing activities include the use of cash for repurchases of common stock, payment of dividends, and debt and commercial paper repayments. Our financing activities also include proceeds received from debt and commercial paper issuances and employee stock option exercises.

On March 8, 2023, our board of directors (Board) declared an increased quarterly dividend of $1.32 per share, the 26th consecutive annual increase. Previously, the Board had increased the quarterly dividend to $1.26 per share in March 2022. Cash dividends paid were $705 in the first six months of 2023 compared with $679 in the same period in 2022.

Our Board from time to time authorizes management to repurchase outstanding shares of our common stock on the open market. We paid $378 and $1.1 billion in the first six months of 2023 and 2022, respectively, to repurchase our outstanding shares. On July 2, 2023, 4.9 million shares remained authorized by our Board for repurchase, representing 1.8% of our total shares outstanding.

In May 2023, we repaid fixed-rate notes of $750 at the scheduled maturity using cash on hand. Fixed-rate notes of $500 mature in August 2023. We currently plan to repay these notes at maturity using cash on hand, potentially supplemented by commercial paper or other borrowings. For additional information regarding our debt obligations, including scheduled debt maturities and interest rates, see Note H to the unaudited Consolidated Financial Statements in Part I, Item 1.

On July 2, 2023, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. Separately, we have a $4 billion committed bank credit facility for general corporate purposes and working capital needs and to support our commercial paper issuances. We also have an effective shelf registration on file with the Securities and Exchange Commission (SEC) that allows us to access the debt markets.

39

NON-GAAP FINANCIAL MEASURE - FREE CASH FLOW

We emphasize the efficient conversion of net earnings into cash and the deployment of that cash to maximize shareholder returns. As described below, we use free cash flow to measure our performance in these areas. While we believe this metric provides useful information, it is not a defined operating measure under U.S. generally accepted accounting principles (GAAP), and there are limitations associated with its use. Our calculation of this metric may not be completely comparable to similarly titled measures of other companies due to potential differences in the method of calculation. As a result, the use of this metric should not be considered in isolation from, or as a substitute for, GAAP measures.

We define free cash flow as net cash provided by operating activities less capital expenditures. We believe free cash flow is a useful measure for investors because it portrays our ability to generate cash from our businesses for purposes such as repaying debt, funding business acquisitions, repurchasing our common stock and paying dividends. We use free cash flow to assess the quality of our earnings and as a key performance measure in evaluating management. The following table reconciles free cash flow with net cash provided by operating activities, as classified on the unaudited Consolidated Statement of Cash Flows in Part I, Item 1:

Six Months Ended	July 2, 2023			July 3, 2022
Net cash provided by operating activities	$	2,193		$	2,627
Capital expenditures	(373)			(365)
Free cash flow	$	1,820		$	2,262
Cash flows as a percentage of net earnings:
Net cash provided by operating activities	149		%	176		%
Free cash flow	123		%	151		%

ADDITIONAL FINANCIAL INFORMATION

ENVIRONMENTAL MATTERS AND OTHER CONTINGENCIES

For a discussion of environmental matters and other contingencies, see Note J to the unaudited Consolidated Financial Statements in Part I, Item 1. Except as otherwise noted in Note J, we do not expect our aggregate liability with respect to these matters to have a material impact on our results of operations, financial condition or cash flows.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on the unaudited Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. We employ judgment in making our estimates, but they are based on historical experience, currently available information and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. We believe our judgment is applied consistently and produces financial information that fairly depicts our results of operations for all periods presented.

40

Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. We review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. The aggregate impact of adjustments in contract estimates increased our operating earnings (and diluted earnings per share) by $10 ($0.03) and $87 ($0.25) for the three- and six-month periods ended July 2, 2023, and $101 ($0.29) and $206 ($0.58) for the three- and six-month periods ended July 3, 2022, respectively. While no adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three- and six-month periods ended July 2, 2023, or July 3, 2022, our Marine Systems segment’s 2023 results were affected negatively by supply chain impacts to the Virginia-class submarine schedule and cost growth on the DDG-51 program, offset partially by improved performance on the T-AO-205 program.

Other critical accounting policies and estimates include long-lived assets and goodwill, commitments and contingencies, and retirement plans. For a full discussion of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the year ended December 31, 2022.

GUARANTOR FINANCIAL INFORMATION

The outstanding notes described in Note H to the unaudited Consolidated Financial Statements in Part I, Item 1, issued by General Dynamics Corporation (the parent), are fully and unconditionally guaranteed on an unsecured, joint and several basis by several of the parent’s 100%-owned subsidiaries (the guarantors). The guarantee of each guarantor ranks equally in right of payment with all other existing and future senior unsecured indebtedness of such guarantor. A listing of the guarantors is included in an exhibit to this Form 10-Q.

Because the parent is a holding company, its cash flow and ability to service its debt, including the outstanding notes, depends on the performance of its subsidiaries and the ability of those subsidiaries to distribute cash to the parent, whether by dividends, loans or otherwise. Holders of the outstanding notes have a direct claim only against the parent and the guarantors.

Under the relevant indenture, the guarantee of each guarantor is limited to the maximum amount that can be guaranteed without rendering the guarantee voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each indenture also provides that, in the event (1) of a merger, consolidation or sale or disposition of all or substantially all of the assets of a guarantor (other than a transaction with the parent or any of its subsidiaries) or (2) there occurs a transfer, sale or other disposition of the voting stock of a guarantor so that the guarantor is no longer a subsidiary of the parent, then the guarantor or the entity acquiring the assets (in the event of a sale or other disposition of all or substantially all of the assets of a guarantor) will be released and relieved of any obligations under the guarantee.

The following summarized financial information presents the parent and guarantors (collectively, the combined obligor group) on a combined basis. The summarized financial information of the combined obligor group excludes net investment in and earnings of subsidiaries related to interests held by the combined obligor group in subsidiaries that are not guarantors of the notes.

41

STATEMENT OF EARNINGS INFORMATION

	Six Months Ended July 2, 2023		Year Ended December 31, 2022
Revenue	$	7,615	$	14,246
Operating costs and expenses, excluding G&A	(6,720)		(12,310)
Net earnings	346		840

BALANCE SHEET INFORMATION

	July 2, 2023		December 31, 2022
Cash and equivalents	$	312	$	540
Other current assets	4,417		4,279
Noncurrent assets	4,232		4,164
Total assets	$	8,961	$	8,983
Short-term debt and current portion of long-term debt	$	504	$	1,250
Other current liabilities	2,850		3,392
Long-term debt	9,192		9,189
Other noncurrent liabilities	3,428		3,814
Total liabilities	$	15,974	$	17,645

The summarized balance sheet information presented above includes the funded status of the company’s primary qualified U.S. government pension plans as the parent has the ultimate obligation for the plans.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes with respect to this item from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Our management, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of July 2, 2023. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, on July 2, 2023, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting that occurred during the quarter ended July 2, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The certifications of the company’s Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report.

42

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements, which are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “forecasts,” “scheduled,” “outlook,” “estimates,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements. Examples include projections of revenue, earnings, operating margin, segment performance, cash flows, contract awards, aircraft production, deliveries and backlog. In making these statements, we rely on assumptions and analyses based on our experience and perception of historical trends; current conditions and expected future developments; and other factors, estimates and judgments we consider reasonable and appropriate based on information available to us at the time. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve factors, risks and uncertainties that are difficult to predict. Actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors, including the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022. These factors include, among others:

•general U.S. and international political and economic conditions;

•decreases in U.S. government defense spending or changing priorities within the defense budget;

•termination of government contracts due to unilateral government action;

•differences in anticipated and actual program performance, including the ability to perform within estimated costs, and performance issues with key suppliers;

•expected recovery on contract claims and requests for equitable adjustment;

•changing customer demand for business aircraft, including the effects of economic conditions on the business-aircraft market;

•changing prices for energy and raw materials;

•the negative impact of the COVID-19 pandemic, or other similar outbreaks;

•the status or outcome of legal and/or regulatory proceedings;

•potential effects of audits and reviews by government agencies of our government contract performance, compliance and internal control systems and policies;

•cybersecurity events and other disruptions;

•risks and uncertainties relating to our acquisitions and joint ventures; and

•potential for increased regulation related to global climate change.

All forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to General Dynamics or any person acting on our behalf are qualified by the cautionary statements in this section. We do not undertake any obligation to update or publicly release revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report. These factors may be revised or supplemented in future SEC filings.

43

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information relating to legal proceedings, see Note J to the unaudited Consolidated Financial Statements in Part I, Item 1.

ITEM 1A. RISK FACTORS

There have been no material changes with respect to this item from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about our second-quarter purchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

Period	Total Number of Shares	Average Price per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares That May Yet Be Purchased Under the Program
Shares Purchased Pursuant to Share Buyback Program
4/3/23-4/30/23	229,781	$	217.33	229,781	6,073,443
5/1/23-5/28/23	1,127,004	211.27		1,127,004	4,946,439
5/29/23-7/2/23	—	—		—	4,946,439
Shares Delivered or Withheld Pursuant to Restricted Stock Vesting*
4/3/23-4/30/23	8,637	227.47
5/1/23-5/28/23	238	219.21
5/29/23-7/2/23	358	205.28
	1,366,018	$	212.39

*Represents shares withheld by, or delivered to, us pursuant to provisions in agreements with recipients of restricted stock granted under our equity compensation plans that allow us to withhold, or the recipient to deliver to us, the number of shares with a fair value equal to the statutory tax withholding due upon vesting of the restricted shares.

We did not make any unregistered sales of equity securities in the second quarter of 2023.

44

ITEM 6. EXHIBITS

3.1    Restated Certificate of Incorporation of the company (incorporated herein by reference from the company’s current report on Form 8-K, filed with the SEC on October 7, 2004)

3.2    Certificate of Amendment of Restated Certificate of Incorporation of the company dated as of May 8, 2023*

22    Subsidiary Guarantors*

31.1    Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2    Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1    Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2    Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101.INS    Inline eXtensible Business Reporting Language (XBRL) Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH    Inline XBRL Taxonomy Extension Schema Document*

101.CAL    Inline XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF    Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB    Inline XBRL Taxonomy Extension Label Linkbase Document*

101.PRE    Inline XBRL Taxonomy Extension Presentation Linkbase Document*

104    Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)

*    Filed or furnished electronically herewith.

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GENERAL DYNAMICS CORPORATION
	by	/s/ William A. Moss
		William A. Moss
		Vice President and Controller
		(Authorized Officer and Chief Accounting Officer)
Dated: July 26, 2023

46

EX-3.2

Exhibit 3.2

CERTIFICATE OFAMENDMENT

OF

RESTATED CERTIFICATE OF INCORPORATION

OF

GENERAL DYNAMICS CORPORATION

Pursuant to Section 242

of the General Corporation Law of the State of Delaware

General Dynamics Corporation, a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify that:

1.The Restated Certificate of Incorporation of the Corporation, filed with the Secretary of State of the State of Delaware on October 6, 2004, is hereby amended by deleting Article THIRTEENTH thereof in its entirety and inserting the following in lieu thereof:

“THIRTEENTH: Limitation on Director and Officer Liability. A director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law, as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.”

2.The foregoing amendment to the Restated Certificate of Incorporation of the Corporation was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to the Restated Certificate of Incorporation on this 8th day of May, 2023.

GENERAL DYNAMICS CORPORATION

By: /s/ Gregory S. Gallopoulos

Name: Gregory S. Gallopoulos

Title: Senior Vice President, General

Counsel and Secretary

EX-22

Exhibit 22

Subsidiary Guarantors

Each of the following subsidiaries of General Dynamics Corporation, a Delaware corporation (the Company), has fully and unconditionally guaranteed on an unsecured, joint and several basis each of the debt securities of the Company listed below.

Subsidiary Guarantors

American Overseas Marine Company, LLC, a Delaware limited liability company

Bath Iron Works Corporation, a Maine corporation

Electric Boat Corporation, a Delaware corporation

General Dynamics Government Systems Corporation, a Delaware corporation

General Dynamics Land Systems Inc., a Delaware corporation

General Dynamics Ordnance and Tactical Systems, Inc., a Virginia corporation

General Dynamics-OTS, Inc., a Delaware corporation

Gulfstream Aerospace Corporation, a Delaware corporation

National Steel and Shipbuilding Company, a Nevada corporation

Debt Securities of the Company Guaranteed by each of the Subsidiary Guarantors

1.875% Fixed-Rate Notes due August 2023

2.375% Fixed-Rate Notes due November 2024

3.250% Fixed-Rate Notes due April 2025

3.500% Fixed-Rate Notes due May 2025

1.150% Fixed-Rate Notes due June 2026

2.125% Fixed-Rate Notes due August 2026

3.500% Fixed-Rate Notes due April 2027

2.625% Fixed-Rate Notes due November 2027

3.750% Fixed-Rate Notes due May 2028

3.625% Fixed-Rate Notes due April 2030

2.250% Fixed-Rate Notes due June 2031

4.250% Fixed-Rate Notes due April 2040

2.850% Fixed-Rate Notes due June 2041

3.600% Fixed-Rate Notes due November 2042

4.250% Fixed-Rate Notes due April 2050

EX-31.1

Exhibit 31.1

CERTIFICATION BY CEO PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Phebe N. Novakovic, certify that:

1.I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 26, 2023	/s/ Phebe N. Novakovic
	Phebe N. Novakovic
	Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION BY CFO PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Jason W. Aiken, certify that:

1.I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 26, 2023	/s/ Jason W. Aiken
	Jason W. Aiken
	Executive Vice President, Technologies and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION BY CEO PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of General Dynamics Corporation (the Company) on Form 10-Q for the quarter ended July 2, 2023, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Phebe N. Novakovic, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 26, 2023	/s/ Phebe N. Novakovic
	Phebe N. Novakovic
	Chairman and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION BY CFO PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of General Dynamics Corporation (the Company) on Form 10-Q for the quarter ended July 2, 2023, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Jason W. Aiken, Executive Vice President, Technologies and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 26, 2023	/s/  Jason W. Aiken
	Jason W. Aiken
	Executive Vice President, Technologies and Chief Financial Officer

XML

Cover	6 Months Ended
	Jul. 02, 2023 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 02, 2023
Document Transition Report	false
Entity File Number	1-3671
Entity Registrant Name	GENERAL DYNAMICS CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-1673581
Entity Address, Address Line One	11011 Sunset Hills Road
Entity Address, City or Town	Reston,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20190
City Area Code	703
Local Phone Number	876-3000
Title of 12(b) Security	Common Stock
Trading Symbol	GD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	273,042,571
Entity Central Index Key	0000040533
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Statement of Earnings (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Revenue:
Total revenue	$ 10,152	$ 9,189	$ 20,033	$ 18,581
Operating costs and expenses:
General and administrative (G&A)	(605)	(614)	(1,191)	(1,240)
Operating costs and expenses, total	(9,190)	(8,211)	(18,133)	(16,695)
Operating earnings	962	978	1,900	1,886
Other, net	13	40	46	79
Interest, net	(89)	(95)	(180)	(193)
Earnings before income tax	886	923	1,766	1,772
Provision for income tax, net	(142)	(157)	(292)	(276)
Net earnings	$ 744	$ 766	$ 1,474	$ 1,496
Earnings per share
Basic (in dollars per share)	$ 2.72	$ 2.77	$ 5.39	$ 5.41
Diluted (in dollars per share)	$ 2.70	$ 2.75	$ 5.34	$ 5.35
Products
Revenue:
Total revenue	$ 5,797	$ 5,057	$ 11,310	$ 10,266
Operating costs and expenses:
Cost of sales	(4,915)	(4,169)	(9,556)	(8,481)
Services
Revenue:
Total revenue	4,355	4,132	8,723	8,315
Operating costs and expenses:
Cost of sales	$ (3,670)	$ (3,428)	$ (7,386)	$ (6,974)

XML

Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Statement of Comprehensive Income [Abstract]
Net earnings	$ 744	$ 766	$ 1,474	$ 1,496
Changes in unrealized cash flow hedges	(12)	(102)	(19)	(156)
Foreign currency translation adjustments	100	(251)	191	(189)
Changes in retirement plans’ funded status	184	47	357	89
Other comprehensive income (loss), pretax	272	(306)	529	(256)
(Provision) benefit for income tax, net	(37)	18	(72)	23
Other comprehensive income (loss), net of tax	235	(288)	457	(233)
Comprehensive income	$ 979	$ 478	$ 1,931	$ 1,263

XML

Consolidated Balance Sheet - USD ($) $ in Millions		Jul. 02, 2023	Dec. 31, 2022
Current assets:
Cash and equivalents		$ 1,154	$ 1,242
Accounts receivable		3,167	3,008
Unbilled receivables		8,291	8,795
Inventories		7,642	6,322
Other current assets		1,571	1,696
Total current assets		21,825	21,063
Noncurrent assets:
Property, plant and equipment, net		5,947	5,900
Intangible assets, net		1,732	1,824
Goodwill	[1]	20,443	20,334
Other assets		2,609	2,464
Total noncurrent assets		30,731	30,522
Total assets		52,556	51,585
Current liabilities:
Short-term debt and current portion of long-term debt		508	1,253
Accounts payable		3,365	3,398
Customer advances and deposits		8,628	7,436
Other current liabilities		3,185	3,254
Total current liabilities		15,686	15,341
Noncurrent liabilities:
Long-term debt		9,247	9,243
Other liabilities		8,145	8,433
Commitments and contingencies (see Note J)
Total noncurrent liabilities		17,392	17,676
Shareholders’ equity:
Common stock		482	482
Surplus		3,614	3,556
Retained earnings		38,154	37,403
Treasury stock		(21,077)	(20,721)
Accumulated other comprehensive loss		(1,695)	(2,152)
Total shareholders’ equity		19,478	18,568
Total liabilities and shareholders’ equity		$ 52,556	$ 51,585

[1] Goodwill in the Technologies reporting unit was net of $1.8 billion of accumulated impairment losses.

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Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022
Cash flows from operating activities – continuing operations:
Net earnings	$ 1,474	$ 1,496
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation of property, plant and equipment	297	278
Amortization of intangible and finance lease right-of-use assets	136	147
Equity-based compensation expense	87	120
Deferred income tax benefit	(154)	(218)
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable	(159)	(172)
Unbilled receivables	513	695
Inventories	(1,264)	(816)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable	(33)	(29)
Customer advances and deposits	1,286	1,402
Other, net	10	(276)
Net cash provided by operating activities	2,193	2,627
Cash flows from investing activities:
Capital expenditures	(373)	(365)
Other, net	(31)	0
Net cash used by investing activities	(404)	(365)
Cash flows from financing activities:
Repayment of notes	(750)	0
Dividends paid	(705)	(679)
Purchases of common stock	(378)	(1,094)
Other, net	(42)	110
Net cash used by financing activities	(1,875)	(1,663)
Net cash (used) provided by discontinued operations	(2)	21
Net (decrease) increase in cash and equivalents	(88)	620
Cash and equivalents at beginning of period	1,242	1,603
Cash and equivalents at end of period	1,154	2,223
Supplemental cash flow information:
Income tax payments, net	(327)	(565)
Interest payments	$ (195)	$ (191)

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Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock, Par	Common Stock, Surplus	Retained Earnings	Treasury Stock, Common	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2021	$ 17,641	$ 482	$ 3,278	$ 35,420	$ (19,619)	$ (1,920)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	1,496			1,496
Cash dividends declared	(698)			(698)
Equity-based awards	272		188		84
Shares purchased	(1,097)				(1,097)
Other comprehensive income	(233)					(233)
Ending balance at Jul. 03, 2022	17,381	482	3,466	36,218	(20,632)	(2,153)
Beginning balance at Apr. 03, 2022	18,014	482	3,434	35,800	(19,837)	(1,865)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	766			766
Cash dividends declared	(348)			(348)
Equity-based awards	42		32		10
Shares purchased	(805)				(805)
Other comprehensive income	(288)					(288)
Ending balance at Jul. 03, 2022	17,381	482	3,466	36,218	(20,632)	(2,153)
Beginning balance at Dec. 31, 2022	18,568	482	3,556	37,403	(20,721)	(2,152)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	1,474			1,474
Cash dividends declared	(723)			(723)
Equity-based awards	80		58		22
Shares purchased	(378)				(378)
Other comprehensive income	457					457
Ending balance at Jul. 02, 2023	19,478	482	3,614	38,154	(21,077)	(1,695)
Beginning balance at Apr. 02, 2023	19,087	482	3,562	37,769	(20,796)	(1,930)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	744			744
Cash dividends declared	(359)			(359)
Equity-based awards	59		52		7
Shares purchased	(288)				(288)
Other comprehensive income	235					235
Ending balance at Jul. 02, 2023	$ 19,478	$ 482	$ 3,614	$ 38,154	$ (21,077)	$ (1,695)

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Summary of Significant Accounting Policies

6 Months Ended

Jul. 02, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services.

The following is a discussion of certain significant accounting policies, and further discussion is contained in other notes to these financial statements.

Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all intercompany balances and transactions in the unaudited Consolidated Financial Statements.

Consistent with industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year.

Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted.

Our fiscal quarters are typically 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three- and six-month periods ended July 2, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three- and six-month periods ended July 2, 2023, and July 3, 2022.

These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Property, Plant and Equipment, Net. Property, plant and equipment (PP&E) is carried at historical cost, net of accumulated depreciation. Net PP&E consisted of the following:

	July 2, 2023		December 31, 2022
PP&E	$	12,603	$	12,292
Accumulated depreciation	(6,656)		(6,392)
PP&E, net	$	5,947	$	5,900

Accounting Standards Updates. There are accounting standards that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective. These standards are not expected to have a material impact on our results of operations, financial condition or cash flows.

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Revenue

6 Months Ended

Jul. 02, 2023

Revenue Recognition [Abstract]

Revenue

REVENUE

Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue. A contract’s transaction price is allocated to each distinct performance obligation within that contract and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product life cycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service.

Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract.

Our performance obligations are satisfied over time as work progresses or at a point in time. Revenue from products and services transferred to customers over time accounted for 80% and 81% of our revenue for the three- and six-month periods ended July 2, 2023, respectively, and 80% of our revenue for the three- and six-month periods ended July 3, 2022. Substantially all of our revenue in the defense segments is recognized over time because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses.

Revenue from goods and services transferred to customers at a point in time accounted for 20% and 19% of our revenue for the three- and six-month periods ended July 2, 2023, respectively, and 20% of our revenue for the three- and six-month periods ended July 3, 2022. Most of our revenue recognized at a point in time is for the manufacture of business jet aircraft in our Aerospace segment. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft.

On July 2, 2023, we had $91.4 billion of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 53% of our remaining performance obligations as revenue by year-end 2024, an additional 31% by year-end 2026 and the balance thereafter.

Contract Estimates. The majority of our revenue is derived from long-term contracts and programs that can span several years. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit

on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer.

The nature of our contracts gives rise to several types of variable consideration, including claims, award fees and incentive fees. We include in our contract estimates additional revenue for contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award fees or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time.

As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified.

The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. The aggregate impact of adjustments in contract estimates increased our revenue, operating earnings and diluted earnings per share as follows:

	Three Months Ended				Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Revenue	$	58	$	112	$	152	$	219
Operating earnings	10		101		87		206
Diluted earnings per share	$	0.03	$	0.29	$	0.25	$	0.58

While no adjustment on any one contract was material to the unaudited Consolidated Financial Statements for the three- and six-month periods ended July 2, 2023, or July 3, 2022, our Marine Systems segment’s 2023 results were affected negatively by supply chain impacts to the Virginia-class submarine schedule and cost growth on the Arleigh Burke-class (DDG-51) guided-missile destroyer program, offset partially by improved performance on the John Lewis-class (T-AO-205) fleet replenishment oiler program.

Our Virginia-class submarine contracts include provisions for various equitable adjustments, which is a process for obtaining contract modifications (see discussion above on variable consideration). We have included in our contract estimates additional revenue on the Virginia-class contract for the estimated value of these adjustments. It is reasonably possible that the actual amount sustained in this process could be less than our estimate, which could have a material unfavorable impact on our results of operations.

Revenue by Category. Our portfolio of products and services consists of approximately 10,000 active contracts. The following series of tables presents our revenue disaggregated by several categories.

Revenue by major products and services was as follows:

	Three Months Ended				Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Aircraft manufacturing	$	1,216	$	1,112	$	2,367	$	2,374
Aircraft services	737		755		1,478		1,396
Total Aerospace	1,953		1,867		3,845		3,770
Nuclear-powered submarines	2,122		1,710		4,159		3,472
Surface ships	638		611		1,319		1,204
Repair and other services	299		330		573		626
Total Marine Systems	3,059		2,651		6,051		5,302
Military vehicles	1,280		1,084		2,427		2,179
Weapons systems, armament and munitions	473		418		911		834
Engineering and other services	171		164		342		328
Total Combat Systems	1,924		1,666		3,680		3,341
Information technology (IT) services	2,127		2,010		4,296		4,150
C5ISR* solutions	1,089		995		2,161		2,018
Total Technologies	3,216		3,005		6,457		6,168
Total revenue	$	10,152	$	9,189	$	20,033	$	18,581

*Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance

Revenue by contract type was as follows:

Three Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
Fixed-price	$	1,697	$	1,609	$	1,684	$	1,374	$	6,364
Cost-reimbursement	—		1,449		222		1,383		3,054
Time-and-materials	256		1		18		459		734
Total revenue	$	1,953	$	3,059	$	1,924	$	3,216	$	10,152
Three Months Ended July 3, 2022
Fixed-price	$	1,614	$	1,609	$	1,441	$	1,286	$	5,950
Cost-reimbursement	—		1,042		211		1,256		2,509
Time-and-materials	253		—		14		463		730
Total revenue	$	1,867	$	2,651	$	1,666	$	3,005	$	9,189
Six Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
Fixed-price	$	3,329	$	3,174	$	3,212	$	2,827	$	12,542
Cost-reimbursement	—		2,876		431		2,710		6,017
Time-and-materials	516		1		37		920		1,474
Total revenue	$	3,845	$	6,051	$	3,680	$	6,457	$	20,033
Six Months Ended July 3, 2022
Fixed-price	$	3,287	$	3,210	$	2,906	$	2,624	$	12,027
Cost-reimbursement	—		2,092		408		2,584		5,084
Time-and-materials	483		—		27		960		1,470
Total revenue	$	3,770	$	5,302	$	3,341	$	6,168	$	18,581

Our segments operate under fixed-price, cost-reimbursement and time-and-materials contracts. Our production contracts are primarily fixed-price. Under these contracts, we agree to perform a specific scope of work for a fixed amount. Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials. Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee. The amount for an incentive or award fee is determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance. Under time-and-materials contracts, the customer pays a fixed hourly rate for direct labor and generally reimburses us for the cost of materials.

Each of these contract types presents advantages and disadvantages. Typically, we assume more risk with fixed-price contracts. However, these types of contracts offer additional profits when we complete the work for less than originally estimated. Cost-reimbursement contracts generally subject us to lower risk. Accordingly, the associated base fees are usually lower than fees earned on fixed-price contracts. Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates. Also, because these contracts may provide little or no fee for managing material costs, the content mix can impact profitability.

Revenue by customer was as follows:

Three Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
U.S. government:
Department of Defense (DoD)	$	54	$	3,029	$	941	$	1,867	$	5,891
Non-DoD	—		—		3		1,178		1,181
Foreign military sales (FMS)	21		29		159		10		219
Total U.S. government	75		3,058		1,103		3,055		7,291
U.S. commercial	985		1		55		48		1,089
Non-U.S. government	142		—		733		92		967
Non-U.S. commercial	751		—		33		21		805
Total revenue	$	1,953	$	3,059	$	1,924	$	3,216	$	10,152
Three Months Ended July 3, 2022
U.S. government:
DoD	$	80	$	2,620	$	940	$	1,667	$	5,307
Non-DoD	—		—		3		1,178		1,181
FMS	49		29		50		6		134
Total U.S. government	129		2,649		993		2,851		6,622
U.S. commercial	1,088		1		60		53		1,202
Non-U.S. government	179		1		590		93		863
Non-U.S. commercial	471		—		23		8		502
Total revenue	$	1,867	$	2,651	$	1,666	$	3,005	$	9,189
Six Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
U.S. government:
DoD	$	195	$	5,978	$	1,875	$	3,740	$	11,788
Non-DoD	—		1		5		2,370		2,376
FMS	39		70		292		19		420
Total U.S. government	234		6,049		2,172		6,129		14,584
U.S. commercial	2,183		1		106		102		2,392
Non-U.S. government	250		1		1,352		192		1,795
Non-U.S. commercial	1,178		—		50		34		1,262
Total revenue	$	3,845	$	6,051	$	3,680	$	6,457	$	20,033
Six Months Ended July 3, 2022
U.S. government:
DoD	$	160	$	5,225	$	1,795	$	3,418	$	10,598
Non-DoD	—		1		5		2,421		2,427
FMS	82		73		119		16		290
Total U.S. government	242		5,299		1,919		5,855		13,315
U.S. commercial	2,198		1		105		103		2,407
Non-U.S. government	299		2		1,275		195		1,771
Non-U.S. commercial	1,031		—		42		15		1,088
Total revenue	$	3,770	$	5,302	$	3,341	$	6,168	$	18,581

Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In our defense segments, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period. In our Aerospace segment, we generally receive deposits from customers upon contract execution and upon achievement of contractual milestones. These deposits are liquidated when revenue is recognized. Changes in the contract asset and liability balances during the six-month period ended July 2, 2023, were not materially impacted by any other factors.

Revenue recognized for the three- and six-month periods ended July 2, 2023, and July 3, 2022, that was included in the contract liability balance at the beginning of each year was $949 and $2.7 billion, and $865 and $2.6 billion, respectively. This revenue represented primarily the sale of business jet aircraft.

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Earnings Per Share

6 Months Ended

Jul. 02, 2023

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding have decreased in 2023 and 2022 due to share repurchases. See Note K for further discussion of our share repurchases. Diluted EPS incorporates the additional shares issuable upon the assumed exercise of stock options and the release of restricted stock and restricted stock units (RSUs).

Basic and diluted weighted average shares outstanding were as follows (in thousands):

	Three Months Ended		Six Months Ended
	July 2, 2023	July 3, 2022	July 2, 2023	July 3, 2022
Basic weighted average shares outstanding	273,137	276,267	273,570	276,670
Dilutive effect of stock options and restricted stock/RSUs*	1,950	2,676	2,266	2,712
Diluted weighted average shares outstanding	275,087	278,943	275,836	279,382

*    Excludes outstanding options to purchase shares of common stock that had exercise prices in excess of the average market price of our common stock during the period and, therefore, the effect of including these options would be antidilutive. These options totaled 4,468 and 3,925 for the three- and six-month periods ended July 2, 2023, and 1,713 and 1,212 for the three- and six-month periods ended July 3, 2022, respectively.

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Income Taxes

6 Months Ended

Jul. 02, 2023

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Net Deferred Tax Liability. Our deferred tax assets and liabilities are included in other noncurrent assets and liabilities on the Consolidated Balance Sheet. Our net deferred tax liability consisted of the following:

	July 2, 2023		December 31, 2022
Deferred tax asset	$	36	$	39
Deferred tax liability	(603)		(685)
Net deferred tax liability	$	(567)	$	(646)

Tax Uncertainties. We participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2021.

For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50% chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense.

Based on all known facts and circumstances and applicable tax law, we believe the total amount of any unrecognized tax benefits on July 2, 2023, was not material to our results of operations, financial condition or cash flows. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows.

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Unbilled Receivables

6 Months Ended

Jul. 02, 2023

Contractors [Abstract]

Unbilled Receivables

UNBILLED RECEIVABLES

Unbilled receivables represent revenue recognized on long-term contracts (contract costs and estimated profits) less associated advances and progress billings. These amounts will be billed in accordance with the agreed-upon contractual terms. Unbilled receivables consisted of the following:

	July 2, 2023		December 31, 2022
Unbilled revenue	$	40,525	$	39,482
Advances and progress billings	(32,234)		(30,687)
Net unbilled receivables	$	8,291	$	8,795

On July 2, 2023, and December 31, 2022, net unbilled receivables included $1.5 billion and $1.7 billion, respectively, associated with a large international tracked vehicle contract in our Combat Systems segment. The contract, signed in 2010, had been experiencing an unbilled receivable build-up since 2021. Based on ongoing discussions with the customer and continued successful program activity, the customer resumed payments on the contract in the first quarter of 2023.

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Inventories

6 Months Ended

Jul. 02, 2023

Inventory Disclosure [Abstract]

Inventories

INVENTORIESThe majority of our inventories are for business jet aircraft. Our inventories are stated at the lower of cost or net realizable value. Work in process represents largely labor, material and overhead costs

associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost in a production lot. Substantially all of our raw materials are valued on either the average cost or the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value.

Inventories consisted of the following:

	July 2, 2023		December 31, 2022
Work in process	$	5,225	$	4,182
Raw materials	2,358		2,072
Finished goods	21		17
Pre-owned aircraft	38		51
Total inventories	$	7,642	$	6,322

The increase in total inventories during the six-month period ended July 2, 2023, was due primarily to the ramp-up in production of new Gulfstream aircraft models, including the G700 in anticipation of its certification from the U.S. Federal Aviation Administration in the fourth quarter of 2023, as well as increased production of in-service aircraft reflecting strong customer demand. Customer deposits associated with firm orders for these aircraft, which are reflected in customer advances and deposits and other noncurrent liabilities on the Consolidated Balance Sheet, have correspondingly increased.

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Goodwill and Intangible Assets

6 Months Ended

Jul. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

Goodwill. The changes in the carrying amount of goodwill by reporting unit were as follows:

	Aerospace		Marine Systems		Combat Systems		Technologies		Total Goodwill
December 31, 2022 (a)	$	3,019	$	297	$	2,766	$	14,252	$	20,334
Acquisitions (b)	—		—		—		16		16
Other (c)	56		—		29		8		93
July 2, 2023 (a)	$	3,075	$	297	$	2,795	$	14,276	$	20,443

(a)Goodwill in the Technologies reporting unit was net of $1.8 billion of accumulated impairment losses.

(b)Included adjustments during the purchase price allocation period.

(c)Consisted primarily of adjustments for foreign currency translation.

Intangible Assets. Intangible assets consisted of the following:

	Gross Carrying Amount (a)		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount (a)		Accumulated Amortization		Net Carrying Amount
	July 2, 2023						December 31, 2022
Contract and program intangible assets (b)	$	3,252	$	(1,783)	$	1,469	$	3,247	$	(1,688)	$	1,559
Trade names and trademarks	511		(263)		248		496		(248)		248
Technology and software	65		(50)		15		64		(48)		16
Other intangible assets	64		(64)		—		64		(63)		1
Total intangible assets	$	3,892	$	(2,160)	$	1,732	$	3,871	$	(2,047)	$	1,824

(a)Changes in gross carrying amounts consisted primarily of adjustments for foreign currency translation.

(b)Consisted of acquired backlog and probable follow-on work and associated customer relationships.

Amortization expense is included in operating costs and expenses in the Consolidated Statement of Earnings. Amortization expense for intangible assets was $47 and $100 for the three- and six-month periods ended July 2, 2023, and $49 and $99 for the three- and six-month periods ended July 3, 2022, respectively.

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Debt

6 Months Ended

Jul. 02, 2023

Debt Disclosure [Abstract]

Debt

DEBT

Debt consisted of the following:

		July 2, 2023		December 31, 2022
Fixed-rate notes due:	Interest rate:
May 2023	3.375%	$	—	$	750
August 2023	1.875%	500		500
November 2024	2.375%	500		500
April 2025	3.250%	750		750
May 2025	3.500%	750		750
June 2026	1.150%	500		500
August 2026	2.125%	500		500
April 2027	3.500%	750		750
November 2027	2.625%	500		500
May 2028	3.750%	1,000		1,000
April 2030	3.625%	1,000		1,000
June 2031	2.250%	500		500
April 2040	4.250%	750		750
June 2041	2.850%	500		500
November 2042	3.600%	500		500
April 2050	4.250%	750		750
Other	Various	90		90
Total debt principal		9,840		10,590
Less unamortized debt issuance costs and discounts		85		94
Total debt		9,755		10,496
Less current portion		508		1,253
Long-term debt		$	9,247	$	9,243

In May 2023, we repaid fixed-rate notes of $750 at the scheduled maturity using cash on hand. On July 2, 2023, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. Separately, we have a $4 billion committed bank credit facility for general corporate purposes and working capital needs and to support our commercial paper issuances. This credit facility expires in March 2027. We may renew or replace this credit facility in whole or in part at or prior to its expiration date. We also have an effective shelf registration on file with the SEC that allows us to access the debt markets.

Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants and restrictions on July 2, 2023.

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Other Liabilities

6 Months Ended

Jul. 02, 2023

Other Liabilities Disclosure [Abstract]

Other Liabilities

OTHER LIABILITIES

A summary of significant other liabilities by balance sheet caption follows:

	July 2, 2023		December 31, 2022
Salaries and wages	$	1,062	$	1,116
Dividends payable	361		347
Lease liabilities	302		288
Workers’ compensation	242		215
Other	1,218		1,288
Total other current liabilities	$	3,185	$	3,254
Retirement benefits	$	2,320	$	2,453
Customer deposits on commercial contracts	2,269		2,175
Lease liabilities	1,428		1,330
Other	2,128		2,475
Total other liabilities	$	8,145	$	8,433

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Commitments And Contingencies

6 Months Ended

Jul. 02, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

COMMITMENTS AND CONTINGENCIES

Litigation

In 2015, Electric Boat Corporation, a subsidiary of General Dynamics Corporation, received a civil investigative demand from the U.S. Department of Justice regarding an investigation of potential False Claims Act violations relating to alleged failures of Electric Boat’s quality system with respect to allegedly non-conforming parts purchased from a supplier. In 2016, Electric Boat was made aware that it is a defendant in a lawsuit related to this matter which had been filed under seal in U.S. district court. Also in 2016, the Suspending and Debarring Official for the U.S. Department of the Navy issued a show cause letter to Electric Boat requesting that Electric Boat respond to the official’s concerns regarding Electric Boat’s oversight and management with respect to its quality assurance systems for subcontractors and suppliers. Electric Boat responded to the show cause letter and engaged in discussions with the U.S. government.

In the third quarter of 2019, the Department of Justice declined to intervene in the qui tam action, noting that its investigation continues, and the court unsealed the relator’s complaint. In the fourth quarter of 2020, the relator filed a second amended complaint. In the third quarter of 2021, the court dismissed the relator’s complaint with prejudice. The relator appealed the dismissal of the complaint to the United States Court of Appeals. In the fourth quarter of 2022, the Court of Appeals heard oral arguments on the appeal, and thereafter took the case under submission. Given the current status of these matters, we are unable to express a view regarding the ultimate outcome or, if the outcome is adverse, to estimate an amount or range of reasonably possible loss. Depending on the outcome of these matters, there could be a material impact on our results of operations, financial condition and cash flows.

Additionally, various other claims and legal proceedings incidental to the normal course of business are pending or threatened against us. These other matters relate to such issues as government investigations and claims, the protection of the environment, asbestos-related claims and employee-related matters. The nature of litigation is such that we cannot predict the outcome of these other matters. However, based on information currently available, we believe any potential liabilities in these

other proceedings, individually or in the aggregate, will not have a material impact on our results of operations, financial condition or cash flows.

Environmental

We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a potentially responsible party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts.

As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows.

Other

Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows.

In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and other claims will be resolved without material impact to our results of operations, financial condition or cash flows.

Letters of Credit and Guarantees. In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $1.4 billion on July 2, 2023. In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance of our subsidiaries arising under certain contracts.

Aircraft Trade-ins. In connection with orders for new aircraft in contract backlog, some Gulfstream customers hold options to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are generally structured to establish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft to the customer. At that time, the customer is required to either exercise the option or allow its expiration. Other trade-in commitments are structured to guarantee a predetermined trade-in value. These commitments present more risk in the event of an adverse change in market conditions. In either case, any excess of the preestablished trade-in

price above the fair market value at the time the new aircraft is delivered is treated as a reduction of revenue in the new-aircraft sales transaction. As of July 2, 2023, the estimated change in fair market values from the date of the commitments was not material.

Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheet.

The changes in the carrying amount of warranty liabilities for the six-month periods ended July 2, 2023, and July 3, 2022, were as follows:

Six Months Ended	July 2, 2023		July 3, 2022
Beginning balance	$	603	$	641
Warranty expense	35		39
Payments	(47)		(63)
Adjustments	2		(8)
Ending balance	$	593	$	609

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Shareholders' Equity

6 Months Ended

Jul. 02, 2023

Equity [Abstract]

Shareholders' Equity

SHAREHOLDERS’ EQUITY

Share Repurchases. Our board of directors (Board), from time to time, authorizes management to repurchase outstanding shares of our common stock on the open market. In the six-month period ended July 2, 2023, we repurchased 1.8 million of our outstanding shares for $378 million. On July 2, 2023, 4.9 million shares remained authorized by our Board for repurchase, representing 1.8% of our total shares outstanding. We repurchased 4.9 million shares for $1.1 billion in the six-month period ended July 3, 2022.

Dividends per Share. Our Board declared dividends per share of $1.32 and $2.64 for the three- and six-month periods ended July 2, 2023, and $1.26 and $2.52 for the three- and six-month periods ended July 3, 2022, respectively. We paid cash dividends of $360 and $705 for the three- and six-month periods ended July 2, 2023, and $349 and $679 for the three- and six-month periods ended July 3, 2022, respectively.

Accumulated Other Comprehensive Loss. The changes, pretax and net of tax, in each component of accumulated other comprehensive loss (AOCL) consisted of the following:

	Changes in Unrealized Cash Flow Hedges		Foreign Currency Translation Adjustments		Changes in Retirement Plans’ Funded Status		AOCL
December 31, 2022	$	4	$	260	$	(2,416)	$	(2,152)
Other comprehensive income, pretax	(19)		191		357		529
Provision for income tax, net	4		—		(76)		(72)
Other comprehensive income, net of tax	(15)		191		281		457
July 2, 2023	$	(11)	$	451	$	(2,135)	$	(1,695)

December 31, 2021	$	144	$	538	$	(2,602)	$	(1,920)
Other comprehensive loss, pretax	(156)		(189)		89		(256)
Benefit for income tax, net	41		—		(18)		23
Other comprehensive loss, net of tax	(115)		(189)		71		(233)
July 3, 2022	$	29	$	349	$	(2,531)	$	(2,153)

Amounts reclassified out of AOCL related primarily to changes in our retirement plans’ funded status and included pretax recognized net actuarial losses and amortization of prior service credit. See Note O for these amounts, which are included in our net periodic pension and other post-retirement benefit cost (credit).

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Segment Information

6 Months Ended

Jul. 02, 2023

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We have four operating segments: Aerospace, Marine Systems, Combat Systems and Technologies. We organize our segments in accordance with the nature of products and services offered. We measure each segment’s profitability based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our segments.

Summary financial information for each of our segments follows:

	Revenue (a)				Operating Earnings
Three Months Ended	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Aerospace	$	1,953	$	1,867	$	236	$	238
Marine Systems	3,059		2,651		235		211
Combat Systems	1,924		1,666		251		245
Technologies	3,216		3,005		283		304
Corporate (b)	—		—		(43)		(20)
Total	$	10,152	$	9,189	$	962	$	978
Six Months Ended
Aerospace	$	3,845	$	3,770	$	465	$	481
Marine Systems	6,051		5,302		446		422
Combat Systems	3,680		3,341		496		472
Technologies	6,457		6,168		582		602
Corporate (b)	—		—		(89)		(91)
Total	$	20,033	$	18,581	$	1,900	$	1,886

(a)See Note B for additional revenue information by segment.

(b)Corporate operating costs consisted primarily of equity-based compensation expense.

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Fair Value

6 Months Ended

Jul. 02, 2023

Fair Value Disclosures [Abstract]

Fair Value

FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:

•Level 1 – quoted prices in active markets for identical assets or liabilities.

•Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly.

•Level 3 – unobservable inputs significant to the fair value measurement.

We did not have any significant non-financial assets or liabilities measured at fair value on July 2, 2023, or December 31, 2022.

Our financial instruments include cash and equivalents, accounts receivable and payable, marketable securities held in trust and other investments, short- and long-term debt, and derivative financial instruments. The carrying values of cash and equivalents and accounts receivable and payable on the unaudited Consolidated Balance Sheet approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on July 2, 2023, and December 31, 2022, and the basis for determining their fair values:

	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets (Liabilities)	July 2, 2023
Measured at fair value:
Marketable securities held in trust:
Cash and equivalents	$	5	$	5	$	—	$	5	$	—
Available-for-sale debt securities	127		127		—		127		—
Commingled equity funds	48		48		48		—		—
Commingled fixed-income funds	6		6		6		—		—
Other investments	17		17		—		—		17
Cash flow hedge assets	110		110		—		110		—
Cash flow hedge liabilities	(57)		(57)		—		(57)		—
Measured at amortized cost:
Short- and long-term debt principal	(9,840)		(9,104)		—		(9,104)		—

	December 31, 2022
Measured at fair value:
Marketable securities held in trust:
Cash and equivalents	$	7	$	7	$	—	$	7	$	—
Available-for-sale debt securities	107		107		—		107		—
Commingled equity funds	42		42		42		—		—
Commingled fixed-income funds	6		6		6		—		—
Other investments	17		17		—		—		17
Cash flow hedge assets	109		109		—		109		—
Cash flow hedge liabilities	(67)		(67)		—		(67)		—
Measured at amortized cost:
Short- and long-term debt principal	(10,590)		(9,773)		—		(9,773)		—

Our Level 1 assets include commingled equity and fixed-income funds that are valued using a unit price or net asset value (NAV). These funds are actively traded and valued using quoted prices for identical securities from the market exchanges. The fair value of our Level 2 assets and liabilities, which consist primarily of fixed-income securities, cash flow hedges and our fixed-rate notes, is determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our Level 3 assets include direct private equity investments that are measured using inputs unobservable to a marketplace participant.

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Derivative Financial Instruments and Hedging Activities

6 Months Ended

Jul. 02, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

We are exposed to market risk, primarily from foreign currency exchange rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivative financial instruments for trading or speculative purposes.

Foreign Currency Risk. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we

enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The dollar-weighted two-year average maturity of these instruments generally matches the duration of the activities that are at risk.

Commodity Price Risk. We are subject to commodity price risk, primarily on long-term, fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from these risks. Some of the protective terms included in our contracts are considered derivative financial instruments but are not accounted for separately, because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in commodity prices will have a material impact on our results of operations or cash flows.

Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years. On July 2, 2023, and December 31, 2022, we held $1.2 billion in cash and equivalents, but held no marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified pension plans. On July 2, 2023, and December 31, 2022, we held marketable securities in trust of $186 and $162, respectively. These marketable securities are reflected at fair value on the Consolidated Balance Sheet in other current and noncurrent assets. See Note M for additional details.

Hedging Activities. We had notional forward exchange contracts outstanding of $6 billion and $6.9 billion on July 2, 2023, and December 31, 2022, respectively. These derivative financial instruments are cash flow hedges, and are reflected at fair value on the Consolidated Balance Sheet in other current assets and liabilities. See Note M for additional details.

Changes in fair value (gains and losses) related to derivative financial instruments that qualify as cash flow hedges are deferred in AOCL until the underlying transaction is reflected in earnings. Alternatively, gains and losses on derivative financial instruments that do not qualify for hedge accounting are recorded each period in earnings. All gains and losses from derivative financial instruments recognized in the Consolidated Statement of Earnings are presented in the same line item as the underlying transaction, generally operating costs and expenses.

Net gains and losses recognized in earnings on derivative financial instruments that do not qualify for hedge accounting were not material to our results of operations for the three- and six-month periods ended July 2, 2023, and July 3, 2022. Net gains and losses reclassified to earnings from AOCL related to qualified hedges were also not material to our results of operations for the three- and six-month periods ended July 2, 2023, and July 3, 2022, and we do not expect the amount of these gains and losses that will be reclassified to earnings during the next 12 months to be material.

We had no material derivative financial instruments designated as fair value or net investment hedges on July 2, 2023, and December 31, 2022.

Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses’ functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of AOCL.

We do not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations’ results into U.S. dollars. The impact of translating our non-U.S. operations’ revenue and earnings into U.S. dollars was not material to our results of operations for the three- and six-month periods ended July 2, 2023, and July 3, 2022. In addition, the effect of changes in

foreign exchange rates on non-U.S. cash balances was not material for the six-month periods ended July 2, 2023, and July 3, 2022.

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Retirement Plans

6 Months Ended

Jul. 02, 2023

Retirement Benefits [Abstract]

Retirement Plans

RETIREMENT PLANS

We provide retirement benefits to eligible employees through a variety of plans:

•Defined contribution

•Defined benefit

◦Pension (qualified and non-qualified)

◦Other post-retirement benefit

For our defined benefit plans, net periodic benefit cost (credit) for the three- and six-month periods ended July 2, 2023, and July 3, 2022, consisted of the following:

	Pension Benefits				Other Post-retirement Benefits
Three Months Ended	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Service cost	$	16	$	26	$	1	$	2
Interest cost	162		100		8		5
Expected return on plan assets	(208)		(227)		(8)		(8)
Net actuarial loss (gain)	184		53		(8)		(5)
Prior service (credit) cost	(3)		(5)		—		1
Net periodic benefit cost (credit)	$	151	$	(53)	$	(7)	$	(5)
Six Months Ended
Service cost	$	33	$	52	$	2	$	3
Interest cost	325		200		15		10
Expected return on plan assets	(415)		(455)		(16)		(16)
Net actuarial loss (gain)	367		107		(16)		(9)
Prior service (credit) cost	(7)		(10)		1		1
Net periodic benefit cost (credit)	$	303	$	(106)	$	(14)	$	(11)

Our contractual arrangements with the U.S. government provide for the recovery of pension and other post-retirement benefit costs related to employees working on government contracts. The amount allocated to U.S. government contracts is determined in accordance with the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS), which may result in a timing difference with the amount determined under GAAP. We defer this difference on the Consolidated Balance Sheet. At this time, the amount allocated to contracts exceeds cumulative benefit costs, resulting in a deferred credit that is reported in other noncurrent liabilities. To the extent there is a non-service component of net periodic benefit cost (credit) for our defined benefit plans, it is reported in other income (expense) in the Consolidated Statement of Earnings.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jul. 02, 2023

Accounting Policies [Abstract]

Basis of Consolidation and Classification

The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all intercompany balances and transactions in the unaudited Consolidated Financial Statements.Consistent with industry practice, we classify assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year.

Interim Financial Statements

The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). These rules and regulations permit some of the information and footnote disclosures included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted.

Our fiscal quarters are typically 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three- and six-month periods ended July 2, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three- and six-month periods ended July 2, 2023, and July 3, 2022.

These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Accounting Standards Updates

There are accounting standards that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective. These standards are not expected to have a material impact on our results of operations, financial condition or cash flows.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue. A contract’s transaction price is allocated to each distinct performance obligation within that contract and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Some of our contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the product life cycle (development, production, maintenance and support). For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service.Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract.Our performance obligations are satisfied over time as work progresses or at a point in time. Substantially all of our revenue in the defense segments is recognized over time because control is transferred continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, G&A expenses.Most of our revenue recognized at a point in time is for the manufacture of business jet aircraft in our Aerospace segment. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft.The majority of our revenue is derived from long-term contracts and programs that can span several years. Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit

on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; the performance of subcontractors; and the availability and timing of funding from the customer.

The nature of our contracts gives rise to several types of variable consideration, including claims, award fees and incentive fees. We include in our contract estimates additional revenue for contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We include award fees or incentive fees in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee. These estimates are based on historical award experience, anticipated performance and our best judgment at the time.

As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified.

The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue.Revenue by Category. Our portfolio of products and services consists of approximately 10,000 active contracts. The following series of tables presents our revenue disaggregated by several categories.

Our segments operate under fixed-price, cost-reimbursement and time-and-materials contracts. Our production contracts are primarily fixed-price. Under these contracts, we agree to perform a specific scope of work for a fixed amount. Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials. Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee. The amount for an incentive or award fee is determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance. Under time-and-materials contracts, the customer pays a fixed hourly rate for direct labor and generally reimburses us for the cost of materials.

Each of these contract types presents advantages and disadvantages. Typically, we assume more risk with fixed-price contracts. However, these types of contracts offer additional profits when we complete the work for less than originally estimated. Cost-reimbursement contracts generally subject us to lower risk. Accordingly, the associated base fees are usually lower than fees earned on fixed-price contracts. Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates. Also, because these contracts may provide little or no fee for managing material costs, the content mix can impact profitability.

Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In our defense segments, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers, particularly on our international contracts, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period. In our Aerospace segment, we generally receive deposits from customers upon contract execution and upon achievement of contractual milestones. These deposits are liquidated when revenue is recognized.

Earnings Per Share

We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding have decreased in 2023 and 2022 due to share repurchases. See Note K for further discussion of our share repurchases. Diluted EPS incorporates the additional shares issuable upon the assumed exercise of stock options and the release of restricted stock and restricted stock units (RSUs).

Tax Uncertainties

We participate in the Internal Revenue Service (IRS) Compliance Assurance Process (CAP), a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2021.

For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50% chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense.

Based on all known facts and circumstances and applicable tax law, we believe the total amount of any unrecognized tax benefits on July 2, 2023, was not material to our results of operations, financial condition or cash flows. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows.

Unbilled Receivables

Unbilled receivables represent revenue recognized on long-term contracts (contract costs and estimated profits) less associated advances and progress billings. These amounts will be billed in accordance with the agreed-upon contractual terms.

Inventories

The majority of our inventories are for business jet aircraft. Our inventories are stated at the lower of cost or net realizable value. Work in process represents largely labor, material and overhead costs associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost in a production lot. Substantially all of our raw materials are valued on either the average cost or the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value.

Commitments and Contingencies

Environmental

We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a potentially responsible party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts.

As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows.

Other

Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows.

In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based on the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications, REAs and other claims will be resolved without material impact to our results of operations, financial condition or cash flows.

Letters of Credit and Guarantees. In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $1.4 billion on July 2, 2023. In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance of our subsidiaries arising under certain contracts.

Aircraft Trade-ins. In connection with orders for new aircraft in contract backlog, some Gulfstream customers hold options to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are generally structured to establish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft to the customer. At that time, the customer is required to either exercise the option or allow its expiration. Other trade-in commitments are structured to guarantee a predetermined trade-in value. These commitments present more risk in the event of an adverse change in market conditions. In either case, any excess of the preestablished trade-in

price above the fair market value at the time the new aircraft is delivered is treated as a reduction of revenue in the new-aircraft sales transaction. As of July 2, 2023, the estimated change in fair market values from the date of the commitments was not material.

Product Warranties

Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheet.

Segment Information

We organize our segments in accordance with the nature of products and services offered. We measure each segment’s profitability based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our segments.

Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:

•Level 1 – quoted prices in active markets for identical assets or liabilities.

•Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly.

•Level 3 – unobservable inputs significant to the fair value measurement.

Our financial instruments include cash and equivalents, accounts receivable and payable, marketable securities held in trust and other investments, short- and long-term debt, and derivative financial instruments. The carrying values of cash and equivalents and accounts receivable and payable on the unaudited Consolidated Balance Sheet approximate their fair value.Our Level 1 assets include commingled equity and fixed-income funds that are valued using a unit price or net asset value (NAV). These funds are actively traded and valued using quoted prices for identical securities from the market exchanges. The fair value of our Level 2 assets and liabilities, which consist primarily of fixed-income securities, cash flow hedges and our fixed-rate notes, is determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our Level 3 assets include direct private equity investments that are measured using inputs unobservable to a marketplace participant.

Derivative Financial Instruments and Hedging Activities

We are exposed to market risk, primarily from foreign currency exchange rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivative financial instruments for trading or speculative purposes.Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The dollar-weighted two-year average maturity of these instruments generally matches the duration of the activities that are at risk.We are subject to commodity price risk, primarily on long-term, fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from these risks. Some of the protective terms included in our contracts are considered derivative financial instruments but are not accounted for separately, because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in commodity prices will have a material impact on our results of operations or cash flows.Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years.Changes in fair value (gains and losses) related to derivative financial instruments that qualify as cash flow hedges are deferred in AOCL until the underlying transaction is reflected in earnings. Alternatively, gains and losses on derivative financial instruments that do not qualify for hedge accounting are recorded each period in earnings. All gains and losses from derivative financial instruments recognized in the Consolidated Statement of Earnings are presented in the same line item as the underlying transaction, generally operating costs and expenses.

Foreign Currency and Financial Statement Translation

We translate foreign currency balance sheets from our international businesses’ functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of AOCL.We do not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations’ results into U.S. dollars.

Retirement Plans

We provide retirement benefits to eligible employees through a variety of plans:

•Defined contribution

•Defined benefit

◦Pension (qualified and non-qualified)

◦Other post-retirement benefit

Our contractual arrangements with the U.S. government provide for the recovery of pension and other post-retirement benefit costs related to employees working on government contracts. The amount allocated to U.S. government contracts is determined in accordance with the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS), which may result in a timing difference with the amount determined under GAAP. We defer this difference on the Consolidated Balance Sheet. At this time, the amount allocated to contracts exceeds cumulative benefit costs, resulting in a deferred credit that is reported in other noncurrent liabilities. To the extent there is a non-service component of net periodic benefit cost (credit) for our defined benefit plans, it is reported in other income (expense) in the Consolidated Statement of Earnings.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jul. 02, 2023

Accounting Policies [Abstract]

Schedule of Property, Plant and Equipment, Net

Property, plant and equipment (PP&E) is carried at historical cost, net of accumulated depreciation. Net PP&E consisted of the following:

	July 2, 2023		December 31, 2022
PP&E	$	12,603	$	12,292
Accumulated depreciation	(6,656)		(6,392)
PP&E, net	$	5,947	$	5,900

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Revenue (Tables)

6 Months Ended

Jul. 02, 2023

Revenue Recognition [Abstract]

Schedule of Impact of Adjustments in Contract Estimates

The aggregate impact of adjustments in contract estimates increased our revenue, operating earnings and diluted earnings per share as follows:

	Three Months Ended				Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Revenue	$	58	$	112	$	152	$	219
Operating earnings	10		101		87		206
Diluted earnings per share	$	0.03	$	0.29	$	0.25	$	0.58

Revenue by Major Product Line

Revenue by major products and services was as follows:

	Three Months Ended				Six Months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Aircraft manufacturing	$	1,216	$	1,112	$	2,367	$	2,374
Aircraft services	737		755		1,478		1,396
Total Aerospace	1,953		1,867		3,845		3,770
Nuclear-powered submarines	2,122		1,710		4,159		3,472
Surface ships	638		611		1,319		1,204
Repair and other services	299		330		573		626
Total Marine Systems	3,059		2,651		6,051		5,302
Military vehicles	1,280		1,084		2,427		2,179
Weapons systems, armament and munitions	473		418		911		834
Engineering and other services	171		164		342		328
Total Combat Systems	1,924		1,666		3,680		3,341
Information technology (IT) services	2,127		2,010		4,296		4,150
C5ISR* solutions	1,089		995		2,161		2,018
Total Technologies	3,216		3,005		6,457		6,168
Total revenue	$	10,152	$	9,189	$	20,033	$	18,581

*Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance

Revenue by Contract Type

Revenue by contract type was as follows:

Three Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
Fixed-price	$	1,697	$	1,609	$	1,684	$	1,374	$	6,364
Cost-reimbursement	—		1,449		222		1,383		3,054
Time-and-materials	256		1		18		459		734
Total revenue	$	1,953	$	3,059	$	1,924	$	3,216	$	10,152
Three Months Ended July 3, 2022
Fixed-price	$	1,614	$	1,609	$	1,441	$	1,286	$	5,950
Cost-reimbursement	—		1,042		211		1,256		2,509
Time-and-materials	253		—		14		463		730
Total revenue	$	1,867	$	2,651	$	1,666	$	3,005	$	9,189
Six Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
Fixed-price	$	3,329	$	3,174	$	3,212	$	2,827	$	12,542
Cost-reimbursement	—		2,876		431		2,710		6,017
Time-and-materials	516		1		37		920		1,474
Total revenue	$	3,845	$	6,051	$	3,680	$	6,457	$	20,033
Six Months Ended July 3, 2022
Fixed-price	$	3,287	$	3,210	$	2,906	$	2,624	$	12,027
Cost-reimbursement	—		2,092		408		2,584		5,084
Time-and-materials	483		—		27		960		1,470
Total revenue	$	3,770	$	5,302	$	3,341	$	6,168	$	18,581

Revenue by Customer

Revenue by customer was as follows:

Three Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
U.S. government:
Department of Defense (DoD)	$	54	$	3,029	$	941	$	1,867	$	5,891
Non-DoD	—		—		3		1,178		1,181
Foreign military sales (FMS)	21		29		159		10		219
Total U.S. government	75		3,058		1,103		3,055		7,291
U.S. commercial	985		1		55		48		1,089
Non-U.S. government	142		—		733		92		967
Non-U.S. commercial	751		—		33		21		805
Total revenue	$	1,953	$	3,059	$	1,924	$	3,216	$	10,152
Three Months Ended July 3, 2022
U.S. government:
DoD	$	80	$	2,620	$	940	$	1,667	$	5,307
Non-DoD	—		—		3		1,178		1,181
FMS	49		29		50		6		134
Total U.S. government	129		2,649		993		2,851		6,622
U.S. commercial	1,088		1		60		53		1,202
Non-U.S. government	179		1		590		93		863
Non-U.S. commercial	471		—		23		8		502
Total revenue	$	1,867	$	2,651	$	1,666	$	3,005	$	9,189
Six Months Ended July 2, 2023	Aerospace		Marine Systems		Combat Systems		Technologies		Total Revenue
U.S. government:
DoD	$	195	$	5,978	$	1,875	$	3,740	$	11,788
Non-DoD	—		1		5		2,370		2,376
FMS	39		70		292		19		420
Total U.S. government	234		6,049		2,172		6,129		14,584
U.S. commercial	2,183		1		106		102		2,392
Non-U.S. government	250		1		1,352		192		1,795
Non-U.S. commercial	1,178		—		50		34		1,262
Total revenue	$	3,845	$	6,051	$	3,680	$	6,457	$	20,033
Six Months Ended July 3, 2022
U.S. government:
DoD	$	160	$	5,225	$	1,795	$	3,418	$	10,598
Non-DoD	—		1		5		2,421		2,427
FMS	82		73		119		16		290
Total U.S. government	242		5,299		1,919		5,855		13,315
U.S. commercial	2,198		1		105		103		2,407
Non-U.S. government	299		2		1,275		195		1,771
Non-U.S. commercial	1,031		—		42		15		1,088
Total revenue	$	3,770	$	5,302	$	3,341	$	6,168	$	18,581

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Earnings Per Share (Tables)

6 Months Ended

Jul. 02, 2023

Earnings Per Share [Abstract]

Basic and diluted weighted average shares outstanding

Basic and diluted weighted average shares outstanding were as follows (in thousands):

	Three Months Ended		Six Months Ended
	July 2, 2023	July 3, 2022	July 2, 2023	July 3, 2022
Basic weighted average shares outstanding	273,137	276,267	273,570	276,670
Dilutive effect of stock options and restricted stock/RSUs*	1,950	2,676	2,266	2,712
Diluted weighted average shares outstanding	275,087	278,943	275,836	279,382

*    Excludes outstanding options to purchase shares of common stock that had exercise prices in excess of the average market price of our common stock during the period and, therefore, the effect of including these options would be antidilutive. These options totaled 4,468 and 3,925 for the three- and six-month periods ended July 2, 2023, and 1,713 and 1,212 for the three- and six-month periods ended July 3, 2022, respectively.

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Income Taxes (Tables)

6 Months Ended

Jul. 02, 2023

Income Tax Disclosure [Abstract]

Net Deferred Tax Assets and Liabilities

Our net deferred tax liability consisted of the following:

	July 2, 2023		December 31, 2022
Deferred tax asset	$	36	$	39
Deferred tax liability	(603)		(685)
Net deferred tax liability	$	(567)	$	(646)

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Unbilled Receivables (Tables)

6 Months Ended

Jul. 02, 2023

Contractors [Abstract]

Schedule of Unbilled Receivables

Unbilled receivables consisted of the following:

	July 2, 2023		December 31, 2022
Unbilled revenue	$	40,525	$	39,482
Advances and progress billings	(32,234)		(30,687)
Net unbilled receivables	$	8,291	$	8,795

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Inventories (Tables)

6 Months Ended

Jul. 02, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following:

	July 2, 2023		December 31, 2022
Work in process	$	5,225	$	4,182
Raw materials	2,358		2,072
Finished goods	21		17
Pre-owned aircraft	38		51
Total inventories	$	7,642	$	6,322

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jul. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill By Reporting Unit

The changes in the carrying amount of goodwill by reporting unit were as follows:

	Aerospace		Marine Systems		Combat Systems		Technologies		Total Goodwill
December 31, 2022 (a)	$	3,019	$	297	$	2,766	$	14,252	$	20,334
Acquisitions (b)	—		—		—		16		16
Other (c)	56		—		29		8		93
July 2, 2023 (a)	$	3,075	$	297	$	2,795	$	14,276	$	20,443

(a)Goodwill in the Technologies reporting unit was net of $1.8 billion of accumulated impairment losses.

(b)Included adjustments during the purchase price allocation period.

(c)Consisted primarily of adjustments for foreign currency translation.

Intangible Assets

Intangible assets consisted of the following:

	Gross Carrying Amount (a)		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount (a)		Accumulated Amortization		Net Carrying Amount
	July 2, 2023						December 31, 2022
Contract and program intangible assets (b)	$	3,252	$	(1,783)	$	1,469	$	3,247	$	(1,688)	$	1,559
Trade names and trademarks	511		(263)		248		496		(248)		248
Technology and software	65		(50)		15		64		(48)		16
Other intangible assets	64		(64)		—		64		(63)		1
Total intangible assets	$	3,892	$	(2,160)	$	1,732	$	3,871	$	(2,047)	$	1,824

(a)Changes in gross carrying amounts consisted primarily of adjustments for foreign currency translation.

(b)Consisted of acquired backlog and probable follow-on work and associated customer relationships.

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Debt (Tables)

6 Months Ended

Jul. 02, 2023

Debt Disclosure [Abstract]

Schedule Of Debt

Debt consisted of the following:

		July 2, 2023		December 31, 2022
Fixed-rate notes due:	Interest rate:
May 2023	3.375%	$	—	$	750
August 2023	1.875%	500		500
November 2024	2.375%	500		500
April 2025	3.250%	750		750
May 2025	3.500%	750		750
June 2026	1.150%	500		500
August 2026	2.125%	500		500
April 2027	3.500%	750		750
November 2027	2.625%	500		500
May 2028	3.750%	1,000		1,000
April 2030	3.625%	1,000		1,000
June 2031	2.250%	500		500
April 2040	4.250%	750		750
June 2041	2.850%	500		500
November 2042	3.600%	500		500
April 2050	4.250%	750		750
Other	Various	90		90
Total debt principal		9,840		10,590
Less unamortized debt issuance costs and discounts		85		94
Total debt		9,755		10,496
Less current portion		508		1,253
Long-term debt		$	9,247	$	9,243

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Other Liabilities (Tables)

6 Months Ended

Jul. 02, 2023

Other Liabilities Disclosure [Abstract]

Summary Of Significant Other Liabilities By Balance Sheet Caption

A summary of significant other liabilities by balance sheet caption follows:

	July 2, 2023		December 31, 2022
Salaries and wages	$	1,062	$	1,116
Dividends payable	361		347
Lease liabilities	302		288
Workers’ compensation	242		215
Other	1,218		1,288
Total other current liabilities	$	3,185	$	3,254
Retirement benefits	$	2,320	$	2,453
Customer deposits on commercial contracts	2,269		2,175
Lease liabilities	1,428		1,330
Other	2,128		2,475
Total other liabilities	$	8,145	$	8,433

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Commitments And Contingencies (Tables)

6 Months Ended

Jul. 02, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Changes In Carrying Amount Of Warranty Liabilities

The changes in the carrying amount of warranty liabilities for the six-month periods ended July 2, 2023, and July 3, 2022, were as follows:

Six Months Ended	July 2, 2023		July 3, 2022
Beginning balance	$	603	$	641
Warranty expense	35		39
Payments	(47)		(63)
Adjustments	2		(8)
Ending balance	$	593	$	609

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Shareholders' Equity (Tables)

6 Months Ended

Jul. 02, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The changes, pretax and net of tax, in each component of accumulated other comprehensive loss (AOCL) consisted of the following:

	Changes in Unrealized Cash Flow Hedges		Foreign Currency Translation Adjustments		Changes in Retirement Plans’ Funded Status		AOCL
December 31, 2022	$	4	$	260	$	(2,416)	$	(2,152)
Other comprehensive income, pretax	(19)		191		357		529
Provision for income tax, net	4		—		(76)		(72)
Other comprehensive income, net of tax	(15)		191		281		457
July 2, 2023	$	(11)	$	451	$	(2,135)	$	(1,695)

December 31, 2021	$	144	$	538	$	(2,602)	$	(1,920)
Other comprehensive loss, pretax	(156)		(189)		89		(256)
Benefit for income tax, net	41		—		(18)		23
Other comprehensive loss, net of tax	(115)		(189)		71		(233)
July 3, 2022	$	29	$	349	$	(2,531)	$	(2,153)

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Segment Information (Tables)

6 Months Ended

Jul. 02, 2023

Segment Reporting [Abstract]

Summary Of Financial Information For Each Of Our Segments

Summary financial information for each of our segments follows:

	Revenue (a)				Operating Earnings
Three Months Ended	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Aerospace	$	1,953	$	1,867	$	236	$	238
Marine Systems	3,059		2,651		235		211
Combat Systems	1,924		1,666		251		245
Technologies	3,216		3,005		283		304
Corporate (b)	—		—		(43)		(20)
Total	$	10,152	$	9,189	$	962	$	978
Six Months Ended
Aerospace	$	3,845	$	3,770	$	465	$	481
Marine Systems	6,051		5,302		446		422
Combat Systems	3,680		3,341		496		472
Technologies	6,457		6,168		582		602
Corporate (b)	—		—		(89)		(91)
Total	$	20,033	$	18,581	$	1,900	$	1,886

(a)See Note B for additional revenue information by segment.

(b)Corporate operating costs consisted primarily of equity-based compensation expense.

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Fair Value (Tables)

6 Months Ended

Jul. 02, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Values of Other Financial Assets and Liabilities

The following tables present the fair values of our other financial assets and liabilities on July 2, 2023, and December 31, 2022, and the basis for determining their fair values:

	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets (Liabilities)	July 2, 2023
Measured at fair value:
Marketable securities held in trust:
Cash and equivalents	$	5	$	5	$	—	$	5	$	—
Available-for-sale debt securities	127		127		—		127		—
Commingled equity funds	48		48		48		—		—
Commingled fixed-income funds	6		6		6		—		—
Other investments	17		17		—		—		17
Cash flow hedge assets	110		110		—		110		—
Cash flow hedge liabilities	(57)		(57)		—		(57)		—
Measured at amortized cost:
Short- and long-term debt principal	(9,840)		(9,104)		—		(9,104)		—

	December 31, 2022
Measured at fair value:
Marketable securities held in trust:
Cash and equivalents	$	7	$	7	$	—	$	7	$	—
Available-for-sale debt securities	107		107		—		107		—
Commingled equity funds	42		42		42		—		—
Commingled fixed-income funds	6		6		6		—		—
Other investments	17		17		—		—		17
Cash flow hedge assets	109		109		—		109		—
Cash flow hedge liabilities	(67)		(67)		—		(67)		—
Measured at amortized cost:
Short- and long-term debt principal	(10,590)		(9,773)		—		(9,773)		—

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Retirement Plans (Tables)

6 Months Ended

Jul. 02, 2023

Retirement Benefits [Abstract]

Net Periodic Defined-Benefit Pension And Other Post-Retirement Benefit Cost

For our defined benefit plans, net periodic benefit cost (credit) for the three- and six-month periods ended July 2, 2023, and July 3, 2022, consisted of the following:

	Pension Benefits				Other Post-retirement Benefits
Three Months Ended	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Service cost	$	16	$	26	$	1	$	2
Interest cost	162		100		8		5
Expected return on plan assets	(208)		(227)		(8)		(8)
Net actuarial loss (gain)	184		53		(8)		(5)
Prior service (credit) cost	(3)		(5)		—		1
Net periodic benefit cost (credit)	$	151	$	(53)	$	(7)	$	(5)
Six Months Ended
Service cost	$	33	$	52	$	2	$	3
Interest cost	325		200		15		10
Expected return on plan assets	(415)		(455)		(16)		(16)
Net actuarial loss (gain)	367		107		(16)		(9)
Prior service (credit) cost	(7)		(10)		1		1
Net periodic benefit cost (credit)	$	303	$	(106)	$	(14)	$	(11)

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Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jul. 02, 2023
Accounting Policies [Abstract]
Length of fiscal quarters, weeks	91 days

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Summary of Significant Accounting Policies - Property, Plant, and Equipment, Net (Details) - USD ($) $ in Millions	Jul. 02, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
PP&E	$ 12,603	$ 12,292
Accumulated depreciation	(6,656)	(6,392)
PP&E, net	$ 5,947	$ 5,900

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Revenue - Additional Information (Details) contract in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023 USD ($) contract	Jul. 03, 2022 USD ($)	Jul. 02, 2023 USD ($)	Jul. 03, 2022 USD ($)
Disaggregation of Revenue [Line Items]
Number of active contracts | contract	10
Revenue recognized in contract liability balance | $	$ 949	$ 865	$ 2,700	$ 2,600
Transferred over Time
Disaggregation of Revenue [Line Items]
Revenue, percentage from products and services transferred to customers	80.00%	80.00%	81.00%	80.00%
Transferred at Point in Time
Disaggregation of Revenue [Line Items]
Revenue, percentage from products and services transferred to customers	20.00%	20.00%	19.00%	20.00%

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Revenue - Remaining Performance Obligations to be Recognized as Revenue (Details) $ in Billions	Jul. 02, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-03
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligations	$ 91.4
Revenue, remaining performance obligation percentage	53.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year 6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation percentage	31.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	2 years

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Revenue - Impact of Adjustments in Contract Estimates (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Change in Accounting Estimate [Line Items]
Total revenue	$ 10,152	$ 9,189	$ 20,033	$ 18,581
Operating Earnings	962	978	1,900	1,886
Contracts Accounted for under Percentage of Completion
Change in Accounting Estimate [Line Items]
Total revenue	58	112	152	219
Operating Earnings	$ 10	$ 101	$ 87	$ 206
Diluted earnings per share (in dollars per share)	$ 0.03	$ 0.29	$ 0.25	$ 0.58

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Revenue - Revenue by Products and Services (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Revenue [Line Items]
Total revenue		$ 10,152	$ 9,189	$ 20,033	$ 18,581
Aerospace
Revenue [Line Items]
Total revenue		1,953	1,867	3,845	3,770
Aerospace | Aircraft manufacturing
Revenue [Line Items]
Total revenue		1,216	1,112	2,367	2,374
Aerospace | Aircraft services
Revenue [Line Items]
Total revenue		737	755	1,478	1,396
Marine Systems
Revenue [Line Items]
Total revenue		3,059	2,651	6,051	5,302
Marine Systems | Nuclear-powered submarines
Revenue [Line Items]
Total revenue		2,122	1,710	4,159	3,472
Marine Systems | Surface ships
Revenue [Line Items]
Total revenue		638	611	1,319	1,204
Marine Systems | Repair and other services
Revenue [Line Items]
Total revenue		299	330	573	626
Combat Systems
Revenue [Line Items]
Total revenue		1,924	1,666	3,680	3,341
Combat Systems | Military vehicles
Revenue [Line Items]
Total revenue		1,280	1,084	2,427	2,179
Combat Systems | Weapons systems, armament and munitions
Revenue [Line Items]
Total revenue		473	418	911	834
Combat Systems | Engineering and other services
Revenue [Line Items]
Total revenue		171	164	342	328
Technologies
Revenue [Line Items]
Total revenue		3,216	3,005	6,457	6,168
Technologies | Information technology (IT) services
Revenue [Line Items]
Total revenue		2,127	2,010	4,296	4,150
Technologies | C5ISR* solutions
Revenue [Line Items]
Total revenue	[1]	$ 1,089	$ 995	$ 2,161	$ 2,018

[1] Command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance

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Revenue - Revenue by Contract Type (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Revenue [Line Items]
Total revenue	$ 10,152	$ 9,189	$ 20,033	$ 18,581
Fixed-price
Revenue [Line Items]
Total revenue	6,364	5,950	12,542	12,027
Cost-reimbursement
Revenue [Line Items]
Total revenue	3,054	2,509	6,017	5,084
Time-and-materials
Revenue [Line Items]
Total revenue	734	730	1,474	1,470
Aerospace
Revenue [Line Items]
Total revenue	1,953	1,867	3,845	3,770
Aerospace | Fixed-price
Revenue [Line Items]
Total revenue	1,697	1,614	3,329	3,287
Aerospace | Cost-reimbursement
Revenue [Line Items]
Total revenue	0	0	0	0
Aerospace | Time-and-materials
Revenue [Line Items]
Total revenue	256	253	516	483
Marine Systems
Revenue [Line Items]
Total revenue	3,059	2,651	6,051	5,302
Marine Systems | Fixed-price
Revenue [Line Items]
Total revenue	1,609	1,609	3,174	3,210
Marine Systems | Cost-reimbursement
Revenue [Line Items]
Total revenue	1,449	1,042	2,876	2,092
Marine Systems | Time-and-materials
Revenue [Line Items]
Total revenue	1	0	1	0
Combat Systems
Revenue [Line Items]
Total revenue	1,924	1,666	3,680	3,341
Combat Systems | Fixed-price
Revenue [Line Items]
Total revenue	1,684	1,441	3,212	2,906
Combat Systems | Cost-reimbursement
Revenue [Line Items]
Total revenue	222	211	431	408
Combat Systems | Time-and-materials
Revenue [Line Items]
Total revenue	18	14	37	27
Technologies
Revenue [Line Items]
Total revenue	3,216	3,005	6,457	6,168
Technologies | Fixed-price
Revenue [Line Items]
Total revenue	1,374	1,286	2,827	2,624
Technologies | Cost-reimbursement
Revenue [Line Items]
Total revenue	1,383	1,256	2,710	2,584
Technologies | Time-and-materials
Revenue [Line Items]
Total revenue	$ 459	$ 463	$ 920	$ 960

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Revenue - Revenue by Customer (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Revenue [Line Items]
Total revenue	$ 10,152	$ 9,189	$ 20,033	$ 18,581
U.S. Government - DoD
Revenue [Line Items]
Total revenue	5,891	5,307	11,788	10,598
U.S. Government - Non-DoD
Revenue [Line Items]
Total revenue	1,181	1,181	2,376	2,427
U.S. Government - Foreign Military Sales (FMS)
Revenue [Line Items]
Total revenue	219	134	420	290
Total U.S. government
Revenue [Line Items]
Total revenue	7,291	6,622	14,584	13,315
U.S. commercial
Revenue [Line Items]
Total revenue	1,089	1,202	2,392	2,407
Non-U.S. government
Revenue [Line Items]
Total revenue	967	863	1,795	1,771
Non-U.S. commercial
Revenue [Line Items]
Total revenue	805	502	1,262	1,088
Aerospace
Revenue [Line Items]
Total revenue	1,953	1,867	3,845	3,770
Aerospace | U.S. Government - DoD
Revenue [Line Items]
Total revenue	54	80	195	160
Aerospace | U.S. Government - Non-DoD
Revenue [Line Items]
Total revenue	0	0	0	0
Aerospace | U.S. Government - Foreign Military Sales (FMS)
Revenue [Line Items]
Total revenue	21	49	39	82
Aerospace | Total U.S. government
Revenue [Line Items]
Total revenue	75	129	234	242
Aerospace | U.S. commercial
Revenue [Line Items]
Total revenue	985	1,088	2,183	2,198
Aerospace | Non-U.S. government
Revenue [Line Items]
Total revenue	142	179	250	299
Aerospace | Non-U.S. commercial
Revenue [Line Items]
Total revenue	751	471	1,178	1,031
Marine Systems
Revenue [Line Items]
Total revenue	3,059	2,651	6,051	5,302
Marine Systems | U.S. Government - DoD
Revenue [Line Items]
Total revenue	3,029	2,620	5,978	5,225
Marine Systems | U.S. Government - Non-DoD
Revenue [Line Items]
Total revenue	0	0	1	1
Marine Systems | U.S. Government - Foreign Military Sales (FMS)
Revenue [Line Items]
Total revenue	29	29	70	73
Marine Systems | Total U.S. government
Revenue [Line Items]
Total revenue	3,058	2,649	6,049	5,299
Marine Systems | U.S. commercial
Revenue [Line Items]
Total revenue	1	1	1	1
Marine Systems | Non-U.S. government
Revenue [Line Items]
Total revenue	0	1	1	2
Marine Systems | Non-U.S. commercial
Revenue [Line Items]
Total revenue	0	0	0	0
Combat Systems
Revenue [Line Items]
Total revenue	1,924	1,666	3,680	3,341
Combat Systems | U.S. Government - DoD
Revenue [Line Items]
Total revenue	941	940	1,875	1,795
Combat Systems | U.S. Government - Non-DoD
Revenue [Line Items]
Total revenue	3	3	5	5
Combat Systems | U.S. Government - Foreign Military Sales (FMS)
Revenue [Line Items]
Total revenue	159	50	292	119
Combat Systems | Total U.S. government
Revenue [Line Items]
Total revenue	1,103	993	2,172	1,919
Combat Systems | U.S. commercial
Revenue [Line Items]
Total revenue	55	60	106	105
Combat Systems | Non-U.S. government
Revenue [Line Items]
Total revenue	733	590	1,352	1,275
Combat Systems | Non-U.S. commercial
Revenue [Line Items]
Total revenue	33	23	50	42
Technologies
Revenue [Line Items]
Total revenue	3,216	3,005	6,457	6,168
Technologies | U.S. Government - DoD
Revenue [Line Items]
Total revenue	1,867	1,667	3,740	3,418
Technologies | U.S. Government - Non-DoD
Revenue [Line Items]
Total revenue	1,178	1,178	2,370	2,421
Technologies | U.S. Government - Foreign Military Sales (FMS)
Revenue [Line Items]
Total revenue	10	6	19	16
Technologies | Total U.S. government
Revenue [Line Items]
Total revenue	3,055	2,851	6,129	5,855
Technologies | U.S. commercial
Revenue [Line Items]
Total revenue	48	53	102	103
Technologies | Non-U.S. government
Revenue [Line Items]
Total revenue	92	93	192	195
Technologies | Non-U.S. commercial
Revenue [Line Items]
Total revenue	$ 21	$ 8	$ 34	$ 15

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Earnings Per Share (Details) - shares shares in Thousands		3 Months Ended		6 Months Ended
		Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Basic weighted average shares outstanding (shares)		273,137	276,267	273,570	276,670
Dilutive effect of stock options and restricted stock/RSUs (shares)	[1]	1,950	2,676	2,266	2,712
Diluted weighted average shares outstanding (shares)		275,087	278,943	275,836	279,382
Stock/RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (shares)		4,468	1,713	3,925	1,212

[1] Excludes outstanding options to purchase shares of common stock that had exercise prices in excess of the average market price of our common stock during the period and, therefore, the effect of including these options would be antidilutive. These options totaled 4,468 and 3,925 for the three- and six-month periods ended July 2, 2023, and 1,713 and 1,212 for the three- and six-month periods ended July 3, 2022, respectively.

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Income Taxes - Net Deferred Tax Liability (Details) - USD ($) $ in Millions	Jul. 02, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Deferred tax asset	$ 36	$ 39
Deferred tax liability	(603)	(685)
Net deferred tax liability	$ (567)	$ (646)

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Income Taxes - Additional Information (Details)	Jul. 02, 2023 USD ($)
Income Tax Disclosure [Abstract]
Amount of unrecorded tax benefit that will vary significantly over the next 12 months	$ 0

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Unbilled Receivables (Details) - USD ($) $ in Millions	Jul. 02, 2023	Dec. 31, 2022
Contractors [Abstract]
Unbilled revenue	$ 40,525	$ 39,482
Advances and progress billings	(32,234)	(30,687)
Net unbilled receivables	$ 8,291	$ 8,795

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Unbilled Receivables - Additional Information (Details) - USD ($) $ in Millions	Jul. 02, 2023	Dec. 31, 2022
Contracts In Process [Line Items]
Net unbilled receivables	$ 8,291	$ 8,795
Combat Systems | Large International Contract [Member]
Contracts In Process [Line Items]
Net unbilled receivables	$ 1,500	$ 1,700

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Inventories - Schedule of Inventory (Details) - USD ($) $ in Millions	Jul. 02, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Work in process	$ 5,225	$ 4,182
Raw materials	2,358	2,072
Finished goods	21	17
Pre-owned aircraft	38	51
Total inventories	$ 7,642	$ 6,322

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Goodwill and Intangible Assets - Changes In Carrying Amount of Goodwill by Reporting Unit (Details) $ in Millions	6 Months Ended
	Jul. 02, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning of period	$ 20,334	[1]
Acquisitions	16
Other	93	[2]
Goodwill, end of period	20,443	[1]
Aerospace
Goodwill [Roll Forward]
Goodwill, beginning of period	3,019	[1]
Acquisitions	0
Other	56	[2]
Goodwill, end of period	3,075	[1]
Marine Systems
Goodwill [Roll Forward]
Goodwill, beginning of period	297	[1]
Acquisitions	0
Other	0	[2]
Goodwill, end of period	297	[1]
Combat Systems
Goodwill [Roll Forward]
Goodwill, beginning of period	2,766	[1]
Acquisitions	0
Other	29	[2]
Goodwill, end of period	2,795	[1]
Technologies
Goodwill [Roll Forward]
Goodwill, beginning of period	14,252	[1]
Acquisitions	16
Other	8	[2]
Goodwill, end of period	14,276	[1]
Accumulated impairment losses	$ 1,800

[1] Goodwill in the Technologies reporting unit was net of $1.8 billion of accumulated impairment losses.

[2] Consisted primarily of adjustments for foreign currency translation.

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Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions		Jul. 02, 2023	Dec. 31, 2022
Intangible Assets [Line Items]
Gross Carrying Amount	[1]	$ 3,892	$ 3,871
Accumulated Amortization		(2,160)	(2,047)
Net Carrying Amount		1,732	1,824
Contract and program intangible assets
Intangible Assets [Line Items]
Gross Carrying Amount	[1],[2]	3,252	3,247
Accumulated Amortization	[2]	(1,783)	(1,688)
Net Carrying Amount		1,469	1,559
Trade names and trademarks
Intangible Assets [Line Items]
Gross Carrying Amount	[1]	511	496
Accumulated Amortization		(263)	(248)
Net Carrying Amount		248	248
Technology and software
Intangible Assets [Line Items]
Gross Carrying Amount	[1]	65	64
Accumulated Amortization		(50)	(48)
Net Carrying Amount		15	16
Other intangible assets
Intangible Assets [Line Items]
Gross Carrying Amount	[1]	64	64
Accumulated Amortization		(64)	(63)
Net Carrying Amount		$ 0	$ 1

[1] Changes in gross carrying amounts consisted primarily of adjustments for foreign currency translation.

[2] Consisted of acquired backlog and probable follow-on work and associated customer relationships.

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Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense of intangibles	$ 47	$ 49	$ 100	$ 99

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Debt - Schedule of Debt (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total debt principal	$ 9,840	$ 10,590
Less unamortized debt issuance costs and discounts	85	94
Total debt	9,755	10,496
Less current portion	508	1,253
Long-term debt	$ 9,247	9,243
Fixed Rate Notes Due May 2023
Debt Instrument [Line Items]
Interest rate:	3.375%
Long term debt	$ 0	750
Fixed Rate Notes Due August 2023
Debt Instrument [Line Items]
Interest rate:	1.875%
Long term debt	$ 500	500
Fixed Rate Notes Due November 2024
Debt Instrument [Line Items]
Interest rate:	2.375%
Long term debt	$ 500	500
Fixed Rate Notes Due April 2025
Debt Instrument [Line Items]
Interest rate:	3.25%
Long term debt	$ 750	750
Fixed Rate Notes Due May 2025
Debt Instrument [Line Items]
Interest rate:	3.50%
Long term debt	$ 750	750
Fixed Rate Notes Due June 2026
Debt Instrument [Line Items]
Interest rate:	1.15%
Long term debt	$ 500	500
Fixed Rate Notes Due August 2026
Debt Instrument [Line Items]
Interest rate:	2.125%
Long term debt	$ 500	500
Fixed Rate Notes Due April 2027
Debt Instrument [Line Items]
Interest rate:	3.50%
Long term debt	$ 750	750
Fixed Rate Notes Due November 2027
Debt Instrument [Line Items]
Interest rate:	2.625%
Long term debt	$ 500	500
Fixed Rate Notes Due May 2028
Debt Instrument [Line Items]
Interest rate:	3.75%
Long term debt	$ 1,000	1,000
Fixed Rate Notes Due April 2030
Debt Instrument [Line Items]
Interest rate:	3.625%
Long term debt	$ 1,000	1,000
Fixed Rate Notes Due June 2031
Debt Instrument [Line Items]
Interest rate:	2.25%
Long term debt	$ 500	500
Fixed Rate Notes Due April 2040
Debt Instrument [Line Items]
Interest rate:	4.25%
Long term debt	$ 750	750
Fixed Rate Notes Due June 2041
Debt Instrument [Line Items]
Interest rate:	2.85%
Long term debt	$ 500	500
Fixed Rate Notes Due November 2042
Debt Instrument [Line Items]
Interest rate:	3.60%
Long term debt	$ 500	500
Fixed Rate Notes Due April 2050
Debt Instrument [Line Items]
Interest rate:	4.25%
Long term debt	$ 750	750
Other
Debt Instrument [Line Items]
Other Interest rate	Various
Long term debt	$ 90	$ 90

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Debt - Additional Information (Details) - USD ($)	1 Months Ended	6 Months Ended
	May 31, 2023	Jul. 02, 2023	Jul. 03, 2022
Debt Instrument [Line Items]
Repayment of fixed-rate notes	$ 750,000,000	$ 750,000,000	$ 0
Credit facility, maximum borrowing capacity		4,000,000,000
Commercial paper
Debt Instrument [Line Items]
Commercial paper outstanding		$ 0

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Other Liabilities (Details) - USD ($) $ in Millions	Jul. 02, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Salaries and wages	$ 1,062	$ 1,116
Dividends payable	361	347
Lease liabilities	302	288
Workers’ compensation	242	215
Other	1,218	1,288
Total other current liabilities	3,185	3,254
Retirement benefits	2,320	2,453
Customer deposits on commercial contracts	2,269	2,175
Lease liabilities	1,428	1,330
Other	2,128	2,475
Total other liabilities	$ 8,145	$ 8,433

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Commitments And Contingencies - Additional Information (Details) $ in Billions	3 Months Ended
	Jul. 02, 2023 USD ($)
Other Commitments [Line Items]
Letters of credit and guarantees	$ 1.4
Aerospace | Maximum
Other Commitments [Line Items]
Period preceding delivery of aircraft to customer fair market value of trade-in aircraft is established, days, maximum	45 days

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Commitments And Contingencies - Product Guarantee (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Beginning balance	$ 603	$ 641
Warranty expense	35	39
Payments	(47)	(63)
Adjustments	2	(8)
Ending balance	$ 593	$ 609

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Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Equity [Abstract]
Stock repurchased during the period (shares)			1.8	4.9
Stock repurchased during the period, value			$ 378	$ 1,100
Remaining number of shares authorized to be repurchased (shares)	4.9		4.9
Shares remaining to be repurchased as a percent of total shares outstanding	1.80%		1.80%
Dividends declared per share	$ 1.32	$ 1.26	$ 2.64	$ 2.52
Dividends paid in cash	$ 360	$ 349	$ 705	$ 679

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Shareholders' Equity - Changes in AOCI (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	$ (2,152)
Ending Balance	(1,695)
Changes in Unrealized Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	4	$ 144
Other comprehensive income, pretax	(19)	(156)
Provision for income tax, net	4	41
Other comprehensive loss, net of tax	(15)	(115)
Ending Balance	(11)	29
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	260	538
Other comprehensive income, pretax	191	(189)
Provision for income tax, net	0	0
Other comprehensive loss, net of tax	191	(189)
Ending Balance	451	349
Changes in Retirement Plans’ Funded Status
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(2,416)	(2,602)
Other comprehensive income, pretax	357	89
Provision for income tax, net	(76)	(18)
Other comprehensive loss, net of tax	281	71
Ending Balance	(2,135)	(2,531)
AOCL
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance	(2,152)	(1,920)
Other comprehensive income, pretax	529	(256)
Provision for income tax, net	(72)	23
Other comprehensive loss, net of tax	457	(233)
Ending Balance	$ (1,695)	$ (2,153)

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Segment Information - Additional Information (Details)	6 Months Ended
	Jul. 02, 2023 segment
Segment Reporting [Abstract]
Number of operating segments	4

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Segment Information - Summary of Financial Information (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jul. 02, 2023		Jul. 03, 2022		Jul. 02, 2023	Jul. 03, 2022
Segment Reporting Information [Line Items]
Total revenue	$ 10,152		$ 9,189		$ 20,033	$ 18,581
Operating Earnings	962		978		1,900	1,886
Aerospace
Segment Reporting Information [Line Items]
Total revenue	1,953		1,867		3,845	3,770
Marine Systems
Segment Reporting Information [Line Items]
Total revenue	3,059		2,651		6,051	5,302
Combat Systems
Segment Reporting Information [Line Items]
Total revenue	1,924		1,666		3,680	3,341
Technologies
Segment Reporting Information [Line Items]
Total revenue	3,216		3,005		6,457	6,168
Operating Segments | Aerospace
Segment Reporting Information [Line Items]
Total revenue	1,953		1,867		3,845	3,770
Operating Earnings	236		238		465	481
Operating Segments | Marine Systems
Segment Reporting Information [Line Items]
Total revenue	3,059		2,651		6,051	5,302
Operating Earnings	235		211		446	422
Operating Segments | Combat Systems
Segment Reporting Information [Line Items]
Total revenue	1,924		1,666		3,680	3,341
Operating Earnings	251		245		496	472
Operating Segments | Technologies
Segment Reporting Information [Line Items]
Total revenue	3,216		3,005		6,457	6,168
Operating Earnings	283		304		582	602
Corporate
Segment Reporting Information [Line Items]
Total revenue	0	[1]	0	[1]	0	0
Operating Earnings	$ (43)	[1]	$ (20)	[1]	$ (89)	$ (91)

[1] (a)See Note B for additional revenue information by segment. (b)Corporate operating costs consisted primarily of equity-based compensation expense.

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Fair Value (Details) - USD ($) $ in Millions	Jul. 02, 2023	Dec. 31, 2022
Quoted Prices in Active Markets for Identical Assets (Level 1)
Marketable securities held in trust:
Cash and equivalents	$ 0	$ 0
Available-for-sale debt securities	0	0
Other investments	0	0
Cash flow hedge assets	0	0
Cash flow hedge liabilities	0	0
Short- and long-term debt principal	0	0
Significant Other Observable Inputs (Level 2)
Marketable securities held in trust:
Cash and equivalents	5	7
Available-for-sale debt securities	127	107
Other investments	0	0
Cash flow hedge assets	110	109
Cash flow hedge liabilities	(57)	(67)
Short- and long-term debt principal	(9,104)	(9,773)
Significant Unobservable Inputs (Level 3)
Marketable securities held in trust:
Cash and equivalents	0	0
Available-for-sale debt securities	0	0
Other investments	17	17
Cash flow hedge assets	0	0
Cash flow hedge liabilities	0	0
Short- and long-term debt principal	0	0
Carrying Value
Marketable securities held in trust:
Cash and equivalents	5	7
Available-for-sale debt securities	127	107
Commingled equity funds	48	42
Commingled fixed-income funds	6	6
Other investments	17	17
Cash flow hedge assets	110	109
Cash flow hedge liabilities	(57)	(67)
Short- and long-term debt principal	(9,840)	(10,590)
Fair Value
Marketable securities held in trust:
Cash and equivalents	5	7
Available-for-sale debt securities	127	107
Commingled equity funds	48	42
Commingled fixed-income funds	6	6
Other investments	17	17
Cash flow hedge assets	110	109
Cash flow hedge liabilities	(57)	(67)
Short- and long-term debt principal	(9,104)	(9,773)
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1)
Marketable securities held in trust:
Commingled equity funds	48	42
Commingled fixed-income funds	6	6
Fair Value | Significant Other Observable Inputs (Level 2)
Marketable securities held in trust:
Commingled equity funds	0	0
Commingled fixed-income funds	0	0
Fair Value | Significant Unobservable Inputs (Level 3)
Marketable securities held in trust:
Commingled equity funds	0	0
Commingled fixed-income funds	$ 0	$ 0

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Derivative Financial Instruments and Hedging Activities (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 02, 2023	Dec. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Average maturity of foreign currency forward contracts, in years	2 years
Cash and equivalents	$ 1,154	$ 1,242
Marketable securities held in trust	186	162
Notional forward foreign exchange contracts outstanding	$ 6,000	$ 6,900
Maximum
Derivative Instruments, Gain (Loss) [Line Items]
Maturity of fixed-income securities, in years	5 years

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Retirement Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 16	$ 26	$ 33	$ 52
Interest cost	162	100	325	200
Expected return on plan assets	(208)	(227)	(415)	(455)
Net actuarial loss (gain)	184	53	367	107
Prior service (credit) cost	(3)	(5)	(7)	(10)
Net periodic benefit cost (credit)	151	(53)	303	(106)
Other Post-retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	1	2	2	3
Interest cost	8	5	15	10
Expected return on plan assets	(8)	(8)	(16)	(16)
Net actuarial loss (gain)	(8)	(5)	(16)	(9)
Prior service (credit) cost	0	1	1	1
Net periodic benefit cost (credit)	$ (7)	$ (5)	$ (14)	$ (11)