Analysis of Debt
Total Debt (Carrying Amount)
General Dynamics Corp., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Between 2015 and 2019, the company experienced a substantial expansion in its total debt profile, characterized by a period of relative stability followed by a sharp escalation in 2018. The total carrying amount of debt grew from US$ 3,399 million in 2015 to US$ 11,930 million by the end of 2019.
- Total Debt Trajectory
- From 2015 to 2017, total debt remained stable, increasing incrementally from US$ 3,399 million to US$ 3,982 million. A significant inflection point occurred in 2018, where total debt surged to US$ 12,417 million, representing a growth of approximately 211% in a single year. This peak was followed by a slight reduction to US$ 11,930 million in 2019.
- Long-term Debt Analysis
- Long-term debt was the primary driver of the overall debt increase. After maintaining a range between US$ 2,898 million and US$ 3,980 million from 2015 to 2017, long-term obligations spiked to US$ 11,444 million in 2018. By the end of 2019, this amount decreased to US$ 9,010 million, suggesting either a partial repayment or a reclassification of liabilities.
- Short-term Debt Volatility
- Short-term debt and the current portion of long-term debt exhibited high volatility. After reaching US$ 900 million in 2016, the balance dropped to a negligible US$ 2 million in 2017. This was followed by a rapid upward trend, climbing to US$ 973 million in 2018 and spiking to US$ 2,920 million in 2019, the highest level recorded during the period.
- Shift in Debt Composition
- There was a notable shift in the composition of the debt portfolio. In 2017, long-term debt constituted nearly 100% of the total debt. However, by 2019, the proportion of short-term debt increased significantly, representing approximately 24% of the total carrying amount, which indicates a higher reliance on short-term financing or an increase in maturing long-term obligations.
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Total Debt (Fair Value)
| Dec 31, 2019 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total short- and long-term debt principal (fair value) | 12,339) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 1.03 |
Based on: 10-K (reporting date: 2019-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt: 2.97%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 2.88% | 2,000) | 58) | |
| 3.00% | 2,000) | 60) | |
| 3.88% | 500) | 19) | |
| 2.25% | 1,000) | 23) | |
| 3.38% | 750) | 25) | |
| 1.88% | 500) | 9) | |
| 2.38% | 500) | 12) | |
| 3.50% | 750) | 26) | |
| 2.13% | 500) | 11) | |
| 2.63% | 500) | 13) | |
| 3.75% | 1,000) | 38) | |
| 3.60% | 500) | 18) | |
| Total | 10,500) | 311) | |
| 2.97% | |||
Based on: 10-K (reporting date: 2019-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 311 ÷ 10,500 = 2.97%