General Dynamics Corp. (NYSE:GD)

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General Dynamics Corp., adjusted total assets

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Total assets	48,841)	45,408)	35,046)	32,872)	31,997)
Adjustments
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	1,465)	1,206)	1,070)	946)
Less: Current deferred tax asset (included in Other current assets)²	—)	—)	—)	5)	3)
Less: Noncurrent deferred tax asset (included in Other assets)³	33)	38)	75)	1,362)	1,272)
After Adjustment
Adjusted total assets	48,808)	46,835)	36,177)	32,575)	31,668)

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).

¹ Operating lease right-of-use asset (before adoption of FASB Topic 842). See details »

² Current deferred tax asset (included in Other current assets). See details »

³ Noncurrent deferred tax asset (included in Other assets). See details »

The total asset base experienced consistent growth over the five-year period, increasing from 31,997 million US dollars in 2015 to 48,841 million US dollars by 2019. A significant acceleration in asset accumulation is observed between 2017 and 2018, during which total assets increased by approximately 29.6%.

Asset Growth Patterns: Continuous year-over-year increases are evident in both total and adjusted total assets. While growth remained moderate from 2015 to 2017, a substantial surge occurred in 2018, followed by a more tempered growth rate of 7.6% in 2019.
Adjusted Asset Variance: The relationship between total assets and adjusted total assets shifted over the analyzed timeframe. In 2015 and 2016, adjusted total assets were slightly lower than total assets. This pattern reversed in 2017 and 2018, where adjusted total assets exceeded total assets by 1,131 million and 1,427 million US dollars, respectively.
Convergence of Metrics: A notable convergence between the two figures occurred by December 31, 2019. The variance narrowed to 33 million US dollars, with total assets recorded at 48,841 million US dollars and adjusted total assets at 48,808 million US dollars.

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General Dynamics Corp., adjusted current liabilities

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Current liabilities	16,801)	14,739)	13,099)	12,846)	12,445)
Adjustments
Less: Current deferred tax liability¹	—)	—)	—)	1,258)	829)
After Adjustment
Adjusted current liabilities	16,801)	14,739)	13,099)	11,588)	11,616)

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).

¹ Current deferred tax liability. See details »

An analysis of the financial data from 2015 to 2019 reveals a consistent upward trajectory in current liabilities. Total current liabilities increased from US$ 12,445 million in 2015 to US$ 16,801 million in 2019, representing a total growth of approximately 34.9% over the five-year period. The pace of this increase accelerated notably after 2017.

Trend in Current Liabilities: Short-term obligations exhibited steady growth between 2015 and 2017, followed by a more significant escalation. The rise from US$ 13,099 million in 2017 to US$ 16,801 million in 2019 indicates an intensification of current liability accumulation in the latter half of the analyzed period.
Analysis of Liability Adjustments: A discrepancy between reported current liabilities and adjusted current liabilities is observable only in the first two years of the period. In 2015, the adjusted figure was US$ 829 million lower than the reported amount. In 2016, this variance widened, with adjusted current liabilities being US$ 1,258 million lower than reported liabilities, despite the reported figure increasing.
Convergence of Financial Metrics: A total convergence between current liabilities and adjusted current liabilities occurred starting in 2017. For the fiscal years 2017, 2018, and 2019, the reported and adjusted values are identical, indicating that the factors necessitating adjustments in 2015 and 2016 were no longer applicable or were restructured within the financial statements.

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General Dynamics Corp., adjusted total liabilities

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Total liabilities	35,264)	33,676)	23,611)	21,896)	21,259)
Adjustments
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	1,465)	1,206)	1,070)	946)
Less: Current deferred tax liability²	—)	—)	—)	1,258)	829)
Less: Noncurrent deferred tax liability³	481)	577)	244)	72)	75)
Less: Product warranty liabilities	619)	480)	467)	515)	465)
After Adjustment
Adjusted total liabilities	34,164)	34,084)	24,106)	21,121)	20,836)

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).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Current deferred tax liability. See details »

³ Noncurrent deferred tax liability. See details »

A consistent upward trajectory in both total liabilities and adjusted total liabilities is observed from 2015 through 2019. Total liabilities increased from 21,259 million US$ in 2015 to 35,264 million US$ by the end of 2019, indicating a significant expansion of the company's total obligations over the five-year period.

Liability Growth Trends: The most substantial increase in liabilities occurred between December 31, 2017, and December 31, 2018, where total liabilities rose from 23,611 million US$ to 33,676 million US$, representing a sharp escalation in the company's leverage profile during that interval.
Adjustment Variance Analysis: The relationship between total liabilities and adjusted total liabilities shifted over the analyzed period. In 2015 and 2016, adjusted total liabilities were lower than the reported total liabilities. This trend reversed in 2017 and 2018, during which adjusted totals exceeded reported totals. By 2019, the adjusted total liabilities again fell below the reported figures, with a divergence of 1,100 million US$.
Comparative Stability: Despite the volatility in the direction of the adjustments, the adjusted total liabilities closely mirrored the growth pattern of the total liabilities, suggesting that the factors necessitating these adjustments did not fundamentally alter the overall liability trend.

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General Dynamics Corp., adjusted shareholders’ equity

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Shareholders’ equity	13,577)	11,732)	11,435)	10,976)	10,738)
Adjustments
Less: Net deferred tax asset (liability)¹	(448)	(539)	(169)	37)	371)
Add: Product warranty liabilities	619)	480)	467)	515)	465)
After Adjustment
Adjusted shareholders’ equity	14,644)	12,751)	12,071)	11,454)	10,832)

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).

¹ Net deferred tax asset (liability). See details »

A consistent upward trajectory is observed in both reported and adjusted shareholders' equity between December 31, 2015, and December 31, 2019. Both metrics demonstrate steady year-over-year growth, with a significant acceleration in value occurring in the final year of the period.

Shareholders' Equity Trend: Reported shareholders' equity grew from 10,738 million US$ in 2015 to 13,577 million US$ in 2019. The growth remained relatively moderate between 2015 and 2018, with annual increases ranging from approximately 2.2% to 4.1%. However, a notable surge occurred in 2019, where equity increased by approximately 15.7% compared to the previous year.
Adjusted Shareholders' Equity Performance: Adjusted shareholders' equity followed a similar positive trend, starting at 10,832 million US$ in 2015 and reaching 14,644 million US$ by 2019. This metric grew at a more consistent pace than reported equity during the early stages of the period, maintaining an average annual growth rate of over 5% between 2015 and 2018 before increasing by 14.8% in 2019.
Analysis of Equity Variance: A widening gap is observed between the reported shareholders' equity and the adjusted shareholders' equity over the five-year span. In 2015, the variance was 94 million US$. By 2019, this difference expanded to 1,067 million US$. The steady increase in this delta indicates that the adjustments applied to the equity base became increasingly significant over time, contributing to a higher adjusted valuation relative to the reported book value.

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General Dynamics Corp., adjusted capitalization table

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Short-term debt and current portion of long-term debt	2,920)	973)	2)	900)	501)
Long-term debt, excluding current portion	9,010)	11,444)	3,980)	2,988)	2,898)
Total reported debt	11,930)	12,417)	3,982)	3,888)	3,399)
Shareholders’ equity	13,577)	11,732)	11,435)	10,976)	10,738)
Total reported capital	25,507)	24,149)	15,417)	14,864)	14,137)
Adjustments to Debt
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	1,465)	1,206)	1,070)	946)
Add: Current operating lease liabilities²	252)	—)	—)	—)	—)
Add: Noncurrent operating lease liabilities³	1,251)	—)	—)	—)	—)
Adjusted total debt	13,433)	13,882)	5,188)	4,958)	4,345)
Adjustments to Equity
Less: Net deferred tax asset (liability)⁴	(448)	(539)	(169)	37)	371)
Add: Product warranty liabilities	619)	480)	467)	515)	465)
Adjusted shareholders’ equity	14,644)	12,751)	12,071)	11,454)	10,832)
After Adjustment
Adjusted total capital	28,077)	26,633)	17,259)	16,412)	15,177)

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).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Current operating lease liabilities. See details »

³ Noncurrent operating lease liabilities. See details »

⁴ Net deferred tax asset (liability). See details »

The financial structure from 2015 through 2019 is characterized by a period of relative stability followed by a significant expansion of leverage starting in 2018. While shareholders' equity maintained a consistent upward trajectory throughout the period, the debt profile experienced a substantial step-change, fundamentally altering the composition of total capital.

Debt Profile and Leverage Trends: Total reported debt remained relatively stable between 2015 and 2017, fluctuating between 3,399 million and 3,982 million USD. However, a sharp increase occurred in 2018, where reported debt rose to 12,417 million USD, representing a more than three-fold increase from the previous year. This peak subsided slightly in 2019 to 11,930 million USD, indicating a period of aggressive financing or capital restructuring in 2018 that remained largely in place through 2019.
Equity Growth and Capital Stability: Shareholders' equity demonstrated steady year-over-year growth, rising from 10,738 million USD in 2015 to 13,577 million USD by the end of 2019. This consistent growth suggests a stable internal accumulation of retained earnings or capital contributions. Consequently, total reported capital grew from 14,137 million USD in 2015 to 25,507 million USD in 2019, though the primary driver of this increase was the surge in debt rather than the growth in equity.
Impact of Capitalization Adjustments: A consistent variance is observed between reported and adjusted figures across all metrics. Adjusted total debt is systematically higher than reported debt, with the gap widening from 946 million USD in 2015 to 1,503 million USD in 2019. Similarly, adjusted shareholders' equity exceeded reported equity, with the differential increasing from approximately 94 million USD in 2015 to 1,067 million USD in 2019. These adjustments result in an adjusted total capital figure that is consistently higher than the reported total, peaking at 28,077 million USD in 2019.
Capital Composition Analysis: The ratio of debt to equity shifted dramatically in 2018. Prior to 2018, equity was the dominant component of the capital structure. Following the 2018 increase in debt, the capital composition shifted toward a higher reliance on borrowed funds, as evidenced by the adjusted total debt reaching 13,882 million USD against adjusted equity of 12,751 million USD in 2018.

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General Dynamics Corp., adjusted net earnings

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Net earnings	3,484)	3,345)	2,912)	2,955)	2,965)
Adjustments
Add: Deferred income tax expense (benefit)¹	92)	(3)	401)	376)	167)
Add: Increase (decrease) in product warranty liabilities	139)	13)	(7)	50)	37)
Less: Discontinued operations, net of tax	—)	(13)	—)	(107)	—)
Add: Other comprehensive income (loss), net of tax	(441)	(320)	567)	(110)	(354)
After Adjustment
Adjusted net earnings	3,274)	3,048)	3,873)	3,378)	2,815)

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).

¹ Deferred income tax expense (benefit). See details »

An analysis of the financial results between 2015 and 2019 reveals a divergence between reported net earnings and adjusted net earnings, indicating the influence of non-recurring items on the final income figures.

Reported Net Earnings Trend: Reported net earnings remained relatively stagnant from 2015 through 2017, maintaining a narrow range between US$ 2.91 billion and US$ 2.97 billion. A growth phase began in 2018, with earnings rising to US$ 3.35 billion and continuing upward to reach US$ 3.48 billion by the end of 2019.
Adjusted Net Earnings Volatility: Adjusted net earnings demonstrated greater volatility compared to reported figures. Following a value of US$ 2.82 billion in 2015, there was a significant upward trend that peaked in 2017 at US$ 3.87 billion. This peak was followed by a sharp contraction in 2018 to US$ 3.05 billion, with a subsequent moderate recovery to US$ 3.27 billion in 2019.
Variance Between Reported and Adjusted Income: The relationship between the two metrics shifted noticeably over the observed period. During 2016 and 2017, adjusted net earnings exceeded reported net earnings, with the most significant gap occurring in 2017. This pattern suggests that substantial one-time expenses or non-cash charges negatively impacted the reported bottom line during those years. In contrast, during 2018 and 2019, reported net earnings were higher than adjusted net earnings, indicating that non-recurring gains or favorable adjustments likely bolstered the reported results relative to the adjusted operational performance.

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