General Dynamics Corp. (GD)

Cash and Equivalents and Investments in Debt and Equity Securities

General Dynamics considers securities with a maturity of three months or less to be cash equivalents. General Dynamics' cash balances are invested primarily in time deposits rated A-/A3 or higher. General Dynamics' investments in other securities are included in other current and noncurrent assets on the Consolidated Balance Sheet. General Dynamics reports the held-to-maturity securities at amortized cost. General Dynamics reports the available-for-sale securities at fair value. Changes in the fair value of available-for-sale securities are recognized as a component of other comprehensive income (loss) in the Consolidated Statement of Comprehensive Income. General Dynamics had no trading securities on December 31, 2017 or 2016.

Cash flows in 2016 and 2015 were affected negatively by growth in operating working capital in General Dynamics' Combat Systems group due to the utilization of deposits and the timing of billings on a large contract for a Middle Eastern customer, and in the Aerospace group from the build-up of inventory related to the new G500 and G600 aircraft programs and the liquidation of customer deposits associated with aircraft deliveries. In 2017, the growth in operating working capital due to these factors slowed and was offset by lower income tax payments.

Source: 10-K (filing date: 2018-02-12).

General Dynamics Corp., adjustment to Net Earnings

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Net earnings (as reported)
	Add: Unrealized gains (losses) on securities
	Net earnings (adjusted)

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08), 10-K (filing date: 2015-02-09), 10-K (filing date: 2014-02-07).

General Dynamics Corp., adjusted ratios

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08), 10-K (filing date: 2015-02-09), 10-K (filing date: 2014-02-07).

General Dynamics Corp., Ratios: Reported vs. Adjusted

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Revenue
	Ratio
	Net profit margin1
	Adjusted: Mark to Market Available-for-sale Securities
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Revenue
	Ratio
	Adjusted net profit margin2

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08), 10-K (filing date: 2015-02-09), 10-K (filing date: 2014-02-07).

2017 Calculations

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Shareholders' equity
	Ratio
	ROE1
	Adjusted: Mark to Market Available-for-sale Securities
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Shareholders' equity
	Ratio
	Adjusted ROE2

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08), 10-K (filing date: 2015-02-09), 10-K (filing date: 2014-02-07).

2017 Calculations

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Total assets
	Ratio
	ROA1
	Adjusted: Mark to Market Available-for-sale Securities
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Total assets
	Ratio
	Adjusted ROA2

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-08), 10-K (filing date: 2015-02-09), 10-K (filing date: 2014-02-07).

2017 Calculations