Analysis of Reportable Segments
General Dynamics Corp. operates in 5 segments: Aerospace; Combat Systems; Information Technology; Mission Systems; and Marine Systems.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Segment Profit Margin
General Dynamics Corp., profit margin by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Marine Systems |
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).
- Aerospace Segment Profit Margin
- The Aerospace segment exhibited a generally declining trend over the five-year period. Starting at 19.27% in 2015, the margin decreased to 15.63% by 2019, reflecting a decline of approximately 3.64 percentage points. There were slight fluctuations within the period, with a marginal improvement in 2017 to 19.4%, but the overall direction was downward.
- Combat Systems Segment Profit Margin
- The Combat Systems division also experienced a downward progression. From 15.64% in 2015, the margin diminished steadily each year to reach 14.21% in 2019. This represents a decline of about 1.43 percentage points over the five-year interval, indicating some erosion in profitability within this segment.
- Information Technology Segment Profit Margin
- The Information Technology segment showed modest growth in profitability after initial missing data in 2015. Starting with 7.68% in 2016, the margin rose to a peak of 8.46% in 2017 before decreasing slightly to stabilize around 7.35%-7.46% in the last two recorded years. This suggests relative stability with minor volatility in profit margins.
- Mission Systems Segment Profit Margin
- For Mission Systems, available data start from 2016 with a margin of 12.74%. The segment’s profit margin grew to 14.24% in 2017, then experienced a gradual decline to 13.83% by 2019. Despite this slight reduction, the margin remained above the initial level, indicating an overall positive performance with mild fluctuation.
- Marine Systems Segment Profit Margin
- The Marine Systems segment revealed a mixed pattern. Beginning at 9.09% in 2015, profitability dipped to 7.37% in 2016, improved to 8.95% in 2018, and then slightly decreased again to 8.55% in 2019. Although the margin did not recover fully to the 2015 level, it demonstrated moderate resilience and some recovery within the examined timeframe.
Segment Profit Margin: Aerospace
General Dynamics Corp.; Aerospace; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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 2019 Calculation
Segment profit margin = 100 × Operating earnings ÷ Revenue
= 100 × ÷ =
- Revenue Trends
- Revenue for the aerospace segment experienced a decline from 2015 to 2016, dropping from $8,851 million to $7,815 million. This was followed by a gradual recovery over the next three years, reaching $9,801 million in 2019, which is the highest value in the observed period.
- Operating Earnings Patterns
- Operating earnings showed a decrease from $1,706 million in 2015 to $1,394 million in 2016. Earnings then rebounded to $1,577 million in 2017 before declining slightly to $1,490 million in 2018. A modest increase occurred in 2019, bringing operating earnings to $1,532 million. Overall, there is a pattern of fluctuation, with earnings remaining below the 2015 peak throughout most years.
- Segment Profit Margin Analysis
- The segment profit margin declined progressively over the period. Starting at 19.27% in 2015, it decreased to 17.84% in 2016, then showed a slight recovery to 19.4% in 2017. Afterward, the margin reduced steadily to 17.62% in 2018 and further down to 15.63% in 2019, indicating a diminishing profitability relative to revenue in the latter years.
- Overall Observations
- The aerospace segment exhibited revenue growth towards the end of the period despite operating earnings not fully recovering to their initial level. The decreasing trend in segment profit margin suggests that cost pressures or pricing conditions may have impacted profitability. This divergence between revenue growth and margin contraction points to potential challenges in maintaining operational efficiency or product mix optimization.
Segment Profit Margin: Combat Systems
General Dynamics Corp.; Combat Systems; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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 2019 Calculation
Segment profit margin = 100 × Operating earnings ÷ Revenue
= 100 × ÷ =
- Operating Earnings
- The operating earnings exhibited a fluctuating yet overall upward trend during the analyzed period. Beginning at $882 million in 2015, earnings decreased to $831 million in 2016 but subsequently increased each year thereafter, reaching $996 million by the end of 2019. This indicates a recovery and growth in operating profitability after a dip in 2016.
- Revenue
- Revenue showed a generally positive growth trajectory over the five-year span. Starting at $5,640 million in 2015, it dipped slightly to $5,530 million in 2016, then increased steadily each year, culminating at $7,007 million in 2019. The rise in revenue from 2016 to 2019 suggests expanding sales or contracts within the segment.
- Segment Profit Margin
- The segment profit margin displayed a slight decline over the period examined. Initially at 15.64% in 2015, it decreased to 15.03% in 2016, rebounded marginally to 15.75% in 2017, and then dropped again over the next two years, ending at 14.21% in 2019. The downward shift in profit margin despite revenue growth points to increasing costs or pricing pressures affecting profitability.
- Overall Insights
- The segment experienced revenue growth and an increase in operating earnings overall, signaling expanding scale and improved absolute profitability. However, the steady decline in the segment profit margin indicates that profitability relative to sales has diminished. This could suggest rising operational costs, competitive pricing challenges, or changes in product mix impacting margin quality. Maintaining or improving margins will be important for sustainable profit growth going forward.
Segment Profit Margin: Information Technology
General Dynamics Corp.; Information Technology; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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 2019 Calculation
Segment profit margin = 100 × Operating earnings ÷ Revenue
= 100 × ÷ =
- Operating Earnings
- Operating earnings exhibit a positive trend over the four reported years. Starting at $340 million in 2016, earnings increase moderately to $373 million in 2017, followed by a substantial jump to $608 million in 2018. The upward trend continues into 2019 with a slight increase to $628 million, indicating strong growth in profitability within the segment.
- Revenue
- Revenue figures remain relatively stable between 2016 and 2017, showing a slight decrease from $4,428 million to $4,410 million. However, there is a pronounced increase in revenue in 2018, reaching $8,269 million, which is nearly double the level of the previous years. This elevated revenue level persists in 2019, increasing marginally to $8,422 million. The sharp growth in revenue from 2017 to 2018 suggests a significant expansion in the segment's operations or market demand.
- Segment Profit Margin
- The segment profit margin shows some fluctuation over the observed period. It rises from 7.68% in 2016 to 8.46% in 2017, indicating improved profitability relative to revenue. However, the margin decreases to 7.35% in 2018 despite increased operating earnings and revenue, suggesting that cost increases or pricing pressure may have impacted profitability that year. The margin slightly recovers to 7.46% in 2019, stabilizing but not reaching the peak seen in 2017.
- Overall Insights
- The data indicates a phase of rapid growth in both revenue and operating earnings starting in 2018, with revenue nearly doubling and earnings increasing significantly. While the profit margin peaked in 2017 and declined in 2018 before stabilizing in 2019, the segment remains profitable with margins around 7.4% to 7.5%. The discrepancy between increased revenue and a lower margin in 2018 may warrant further investigation into cost structure changes or competitive dynamics during that period. Overall, the segment demonstrates strong growth momentum and sustained profitability.
Segment Profit Margin: Mission Systems
General Dynamics Corp.; Mission Systems; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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 2019 Calculation
Segment profit margin = 100 × Operating earnings ÷ Revenue
= 100 × ÷ =
- Operating Earnings
- Operating earnings show a continuous upward trend from 2016 to 2019. Beginning at 601 million US dollars in 2016, operating earnings increased steadily each year, reaching 683 million US dollars by 2019. This represents an overall growth of approximately 13.5% over the four-year period.
- Revenue
- Revenue experienced minor fluctuations over the same period. Starting at 4716 million US dollars in 2016, it slightly declined to 4481 million US dollars in 2017. However, revenue recovered in the subsequent years, increasing to 4726 million US dollars in 2018 and further to 4937 million US dollars in 2019. The net result over the period is a moderate increase in revenue, indicating resilience in market demand or successful sales strategies.
- Segment Profit Margin
- The segment profit margin demonstrated variability but remained relatively stable within a narrow range. It improved from 12.74% in 2016 to a peak of 14.24% in 2017, then slightly declined in the following years to 13.94% in 2018 and 13.83% in 2019. Despite this small decrease towards the end of the period, the margin levels indicate a consistently profitable segment.
- Overall Insights
- The operating earnings increased steadily, outpacing revenue growth, which suggests improving operational efficiency or cost management. The segment profit margin's stability supports this observation, indicating that the segment maintained strong profitability despite revenue fluctuations. The recovery in revenue after an initial dip signifies adaptability to market conditions or effective adjustments in business operations.
Segment Profit Margin: Marine Systems
General Dynamics Corp.; Marine Systems; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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 2019 Calculation
Segment profit margin = 100 × Operating earnings ÷ Revenue
= 100 × ÷ =
- Operating Earnings
- Operating earnings showed fluctuations over the five-year period. Starting at 728 million US dollars in 2015, there was a decline to 595 million in 2016. This was followed by a recovery and upward trend, increasing to 685 million in 2017, then further rising to 761 million in 2018, and continuing to 785 million in 2019. Overall, after an initial dip, operating earnings demonstrated growth, surpassing the starting level by the end of the period.
- Revenue
- Revenue showed a generally positive trend, with some minor variability. It remained relatively stable from 2015 to 2017, fluctuating slightly between 8004 million and 8072 million US dollars. From 2017 onwards, there was a consistent increase in revenue, reaching 8502 million in 2018 and accelerating to 9183 million by 2019. This reflects a strengthening top-line performance over the latter part of the period.
- Segment Profit Margin
- The segment profit margin exhibited variability throughout the years analyzed. It started at 9.09% in 2015, then declined sharply to 7.37% in 2016. Subsequently, it improved to 8.56% in 2017 and continued rising to 8.95% in 2018. However, in 2019, the margin decreased slightly to 8.55%. This pattern indicates some volatility in profitability efficiency, with a notable dip in 2016 followed by a period of recovery and a moderate retreat in the final year.
- Overall Insights
- The data suggests that after an initial downturn in earnings and profit margin in 2016, the segment managed to recover and improve profitability and revenue generation over the following years. Revenue growth was steady and particularly marked from 2017 through 2019, supporting the increase in operating earnings. Despite this, the profit margin did not reach the initial high levels of 2015 in the concluding year, pointing to potential pressures on cost structure or pricing. The combination of rising revenue and improving earnings indicates enhanced operational performance, albeit with some challenges in maintaining margin stability.
Segment Return on Assets (Segment ROA)
General Dynamics Corp., ROA by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Marine Systems |
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).
- Aerospace Segment ROA Trend
- The return on assets (ROA) in the Aerospace segment demonstrates a general downward trend over the five-year period. Starting at 20.41% in 2015, it declined noticeably in 2016 to 14.24%, followed by minor fluctuations. The ROA slightly improved to 15.57% in 2017, then decreased steadily through 2018 and 2019, reaching 12.43%. This indicates a reduction in asset efficiency or profitability in this segment over time.
- Combat Systems Segment ROA Trend
- The Combat Systems segment exhibits a relatively stable but moderately declining ROA across the period. Beginning at 10.02% in 2015, it decreased slightly to 9.35% in 2016, with minor increases thereafter, peaking at 9.76% in 2018, before dropping to 8.88% in 2019. This pattern suggests consistent but slightly weakening returns on assets in this area.
- Information Technology Segment ROA Trend
- The Information Technology segment shows initial growth in ROA from 2016 through 2017, increasing from 12.24% to 12.35%. However, there is a sharp decline observed in 2018 to 4.29%, with a marginal recovery to 4.41% in 2019. The marked decrease following 2017 indicates significant challenges or decreased asset profitability in this segment during the latter years.
- Mission Systems Segment ROA Trend
- For the Mission Systems segment, data begins in 2016, showing a consistent and slight upward trend. The ROA starts at 10.61% in 2016 and increases steadily each year, reaching 11.01% in both 2018 and 2019. This pattern indicates gradual improvement and stabilization in asset performance within this segment.
- Marine Systems Segment ROA Trend
- The Marine Systems segment has relatively high ROA values compared to other segments, with some volatility. Starting at 24.51% in 2015, there is a significant dip to 19.43% in 2016, followed by a recovery to 23.57% in 2017. The ROA remains strong at 24.31% in 2018 before declining to 20.04% in 2019. Overall, this segment maintains robust returns despite some fluctuations.
- Overall Insights
- Across segments, the trends indicate varying performances in asset returns. The Aerospace and Information Technology segments show notable declines, suggesting potential operational or market challenges. Combat Systems maintains a fairly stable but slightly downward trend. Mission Systems demonstrates gradual improvement, while Marine Systems exhibits strong but somewhat volatile returns. These observations may inform strategic focus areas for future resource allocation and performance improvement.
Segment ROA: Aerospace
General Dynamics Corp.; Aerospace; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Identifiable assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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 2019 Calculation
Segment ROA = 100 × Operating earnings ÷ Identifiable assets
= 100 × ÷ =
- Operating Earnings
- The operating earnings displayed a fluctuating pattern over the five-year period. Beginning at 1,706 million US dollars in 2015, the earnings dropped significantly to 1,394 million in 2016. Subsequently, there was a recovery in 2017 with an increase to 1,577 million. The earnings then saw a slight decline to 1,490 million in 2018, followed by a moderate increase to 1,532 million in 2019. Overall, the operating earnings did not return to the initial 2015 level but exhibited some recovery after the 2016 low.
- Identifiable Assets
- The identifiable assets demonstrated a consistent upward trajectory throughout the period. Starting at 8,358 million US dollars in 2015, asset values increased steadily each year, reaching 9,792 million in 2016, 10,126 million in 2017, 11,220 million in 2018, and peaking at 12,324 million in 2019. This continuous growth indicates ongoing asset accumulation or investment within the segment.
- Segment Return on Assets (ROA)
- The segment ROA showed a declining trend over the observed period. It began at a relatively strong 20.41% in 2015, dropped sharply to 14.24% in 2016, and then experienced minor fluctuations with a slight rise to 15.57% in 2017 before decreasing again to 13.28% in 2018 and further to 12.43% in 2019. This decline suggests diminishing profitability relative to the asset base over time, despite the increase in identifiable assets.
- Overall Insights
- The data reveals a complex dynamic within the segment. While the identifiable assets consistently increased, operating earnings did not show a matching growth trend, and the segment ROA declined notably. This suggests that although asset investment expanded, the efficiency in generating operating earnings from these assets diminished, indicating potential challenges in operational performance or changing market conditions affecting profitability.
Segment ROA: Combat Systems
General Dynamics Corp.; Combat Systems; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Identifiable assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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 2019 Calculation
Segment ROA = 100 × Operating earnings ÷ Identifiable assets
= 100 × ÷ =
- Operating Earnings
- Operating earnings displayed a generally positive trend over the five-year period. Starting at $882 million in 2015, earnings dipped slightly to $831 million in 2016 but then increased steadily to reach $996 million by the end of 2019. This progression indicates an overall improvement in operational profitability despite the minor decline observed in 2016.
- Identifiable Assets
- The identifiable assets showed a consistent upward trend throughout the period. Beginning at $8,800 million in 2015, assets increased almost every year, reaching $11,220 million by 2019. The most noticeable jump occurred between 2018 and 2019, suggesting possible asset acquisition or revaluation during that timeframe.
- Segment Return on Assets (ROA)
- Segment ROA experienced some fluctuation but tended to decrease overall. It started at 10.02% in 2015, then declined to 9.35% in 2016, rose slightly through 2017 and 2018 (9.52% and 9.76% respectively), before falling to 8.88% in 2019. The downward trend in the last year, despite the rising operating earnings and assets, points to a decrease in efficiency in generating returns from the asset base.
- Summary Insights
- The data indicates growth in operating earnings and identifiable assets, reflecting expansion and investment in the segment. However, the declining trend in segment ROA suggests that the efficiency in utilizing these assets to generate earnings is diminishing. This discrepancy may warrant further investigation into the factors affecting asset productivity and cost structure within the segment.
Segment ROA: Information Technology
General Dynamics Corp.; Information Technology; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Identifiable assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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 2019 Calculation
Segment ROA = 100 × Operating earnings ÷ Identifiable assets
= 100 × ÷ =
- Operating Earnings
- The operating earnings exhibit a clear upward trend from 2016 to 2019. Starting at $340 million in 2016, the earnings increased to $373 million in 2017, followed by a substantial rise to $608 million in 2018. The growth continued moderately with the segment reporting $628 million in 2019. This pattern indicates significant improvement in profitability over the observed periods, especially notable between 2017 and 2018.
- Identifiable Assets
- Identifiable assets demonstrate a pronounced increase, particularly between 2017 and 2018. From $2,778 million in 2016 and a slight rise to $3,021 million in 2017, asset values experienced a dramatic jump to $14,159 million in 2018, followed by a marginal increase to $14,248 million in 2019. This surge suggests a major acquisition, investment, or revaluation event around 2018, markedly expanding the asset base of the segment.
- Segment Return on Assets (ROA)
- Segment ROA remained relatively stable at approximately 12.2% in 2016 and 12.35% in 2017, reflecting efficient asset utilization during these years. However, the ROA sharply declined to 4.29% in 2018 and slightly improved to 4.41% in 2019. The decrease correlates with the substantial increase in identifiable assets, indicating that the additional assets have not yet translated into proportional operating earnings, thus diluting overall asset profitability in these later years.
- Overall Insights
- The segment shows robust operating earnings growth, suggesting improved core business performance or revenue generation capabilities. The sharp expansion in assets in 2018 is a significant event that considerably increased the asset base but reduced the efficiency of asset usage as reflected by the lower ROA. The reduced ROA following asset growth implies that the returns have not immediately kept pace with asset expansion, which may warrant further investigation into asset integration and utilization strategies.
Segment ROA: Mission Systems
General Dynamics Corp.; Mission Systems; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Identifiable assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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 2019 Calculation
Segment ROA = 100 × Operating earnings ÷ Identifiable assets
= 100 × ÷ =
The financial data for the segment over the five-year period indicates a consistent upward trend across key metrics. Operating earnings demonstrate steady growth, increasing from 601 million US dollars in 2016 to 683 million US dollars by the end of 2019, reflecting an improvement of approximately 13.6% over the four-year span.
Identifiable assets also exhibit continuous expansion, rising from 5,667 million US dollars in 2016 to 6,205 million US dollars in 2019. This increase in asset base, amounting to roughly 9.5%, suggests ongoing investments or asset accumulation within the segment.
The segment Return on Assets (ROA) percentage remains relatively stable yet shows a slight positive progression, moving from 10.61% in 2016 to 11.01% in 2019. This marginal increase indicates improved efficiency in utilizing assets to generate earnings despite the growth in asset base. The ROA reaching a plateau at 11.01% in both 2018 and 2019 may imply a stabilization in operational efficiency.
- Operating Earnings
- Consistent annual growth observed, increasing by 13.6% over four years.
- Identifiable Assets
- Steady accumulation of assets, with an increase of approximately 9.5% from 2016 to 2019.
- Segment ROA
- Maintained a steady level with a mild upward trend, improving operational effectiveness in asset use before stabilizing in the last two years.
Segment ROA: Marine Systems
General Dynamics Corp.; Marine Systems; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating earnings | |||||
| Identifiable assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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 2019 Calculation
Segment ROA = 100 × Operating earnings ÷ Identifiable assets
= 100 × ÷ =
- Operating Earnings
- The operating earnings for the Marine Systems segment exhibited fluctuations over the five-year period. Initially, earnings decreased from 728 million in 2015 to 595 million in 2016. Thereafter, a recovery trend is evident with earnings increasing to 685 million in 2017, followed by continued growth reaching 761 million in 2018 and slightly further to 785 million in 2019. Overall, the segment returned to and surpassed its 2015 earnings level by the end of 2019.
- Identifiable Assets
- Identifiable assets showed a generally rising trend from 2015 through 2019. Starting at 2,970 million in 2015, the assets increased marginally to 3,063 million in 2016, decreased slightly in 2017 to 2,906 million, then resumed growth to 3,130 million in 2018, followed by a significant increase to 3,918 million in 2019. This substantial increase in 2019 indicates an expansion or investment phase within the segment.
- Segment Return on Assets (ROA)
- The segment’s return on assets displayed variability during the period. There was a noteworthy decline from 24.51% in 2015 to 19.43% in 2016, aligning with the reduction in operating earnings and a stable asset base. ROA then rebounded to 23.57% in 2017 and remained relatively stable at 24.31% in 2018. However, in 2019, despite the increase in operating earnings and a substantial rise in assets, ROA declined to 20.04%. This decline suggests that the asset growth in 2019 may not have translated proportionally into operating earnings, indicating potentially lower efficiency or increased capital intensity during that year.
Segment Asset Turnover
General Dynamics Corp., asset turnover by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Marine Systems |
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).
- Overall Asset Turnover Trends
- The annual reportable segment asset turnover ratios demonstrate varying performance trends across the company's different operational segments from December 31, 2015, to December 31, 2019.
- Aerospace Segment
- The asset turnover ratio for the Aerospace segment showed a declining trend overall. Starting at 1.06 in 2015, it decreased substantially to 0.8 in 2016 and remained relatively stable around 0.75 to 0.8 through 2019. This indicates a reduction in the efficiency with which assets were utilized in generating revenue within this segment over the period.
- Combat Systems Segment
- The Combat Systems segment experienced a slight decline in asset turnover. The ratio decreased from 0.64 in 2015 to a low of 0.6 in 2017, followed by minor fluctuations, ending at 0.62 in 2019. This marginal change suggests a relatively stable but modest asset efficiency in this segment.
- Information Technology Segment
- The Information Technology segment shows a notable fluctuation pattern. Data is unavailable for 2015, but the ratio started at a high of 1.59 in 2016, declining to 1.46 in 2017, then sharply decreasing to around 0.58-0.59 in the last two years. This steep drop indicates a significant reduction in asset utilization efficiency in recent years.
- Mission Systems Segment
- Asset turnover in the Mission Systems segment has slightly declined from 0.83 in 2016—its first reported year—to approximately 0.8 by 2019. The values indicate a relatively modest and stable asset utilization, with minor variability but no major deterioration.
- Marine Systems Segment
- This segment consistently demonstrates the highest asset turnover ratios among all segments, beginning at 2.7 in 2015 and maintaining a robust range between 2.34 and 2.75 through 2019. Although there is a slight downward trend towards the end of the period, asset efficiency remains strong compared to other segments.
Segment Asset Turnover: Aerospace
General Dynamics Corp.; Aerospace; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | |||||
| Identifiable assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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 2019 Calculation
Segment asset turnover = Revenue ÷ Identifiable assets
= ÷ =
- Revenue
- The revenue trend over the five-year period exhibits some fluctuations with an overall upward trajectory. Starting at $8,851 million in 2015, revenue declined to $7,815 million in 2016, representing a decrease. It then showed a moderate recovery in 2017 and 2018, reaching $8,455 million. A significant increase occurred in 2019, with revenue rising to $9,801 million, the highest value in the observed period.
- Identifiable Assets
- Identifiable assets demonstrated a consistent growth pattern throughout the period. Beginning at $8,358 million in 2015, these assets increased annually to reach $12,324 million by 2019. This steady rise indicates continued investment or accumulation of assets within the segment.
- Segment Asset Turnover
- Segment asset turnover, which measures the efficiency of asset use in generating revenue, showed a declining trend from 2015 to 2018. The ratio started at 1.06 in 2015 but decreased sharply to 0.8 in 2016 and remained relatively stable around 0.75 to 0.8 through 2018 and 2019. Despite the growth in revenue and assets, the lower asset turnover suggests that asset efficiency in revenue generation diminished in the middle years and barely improved by the end of the period.
- Overall Insights
- While revenue experienced a dip early in the period and then grew robustly by 2019, the identifiable assets steadily increased, indicating growth or expansion in asset base. However, the declining and then stabilizing segment asset turnover ratio points to a decrease in operational efficiency related to asset utilization. The combination suggests that revenue growth was largely driven by asset accumulation rather than improved efficiency in asset usage within the aerospace segment.
Segment Asset Turnover: Combat Systems
General Dynamics Corp.; Combat Systems; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | |||||
| Identifiable assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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 2019 Calculation
Segment asset turnover = Revenue ÷ Identifiable assets
= ÷ =
- Revenue
- The revenue exhibited a generally upward trend over the five-year period. Starting at $5,640 million in 2015, revenue experienced a slight decline in 2016 to $5,530 million. However, it rebounded in subsequent years, reaching $5,949 million in 2017 and continuing its ascent to $6,241 million in 2018. By 2019, revenue had grown significantly to $7,007 million, indicating sustained growth in the segment's sales performance.
- Identifiable assets
- Identifiable assets showed a steady increase throughout the period. Beginning at $8,800 million in 2015, the asset base expanded gradually each year with minor increments, reaching $8,885 million in 2016 and then $9,846 million in 2017. The level remained relatively stable between 2017 and 2018 at slightly above $9,800 million, before rising notably to $11,220 million in 2019. This suggests ongoing investments or asset acquisitions contributing to the company's capacity.
- Segment asset turnover
- The segment asset turnover ratio, which measures efficiency in generating revenue from assets, demonstrated modest fluctuations without a clear long-term trend. It started at 0.64 in 2015, declined slightly to 0.62 in 2016, and further to 0.60 in 2017. The ratio improved to 0.63 in 2018 but declined again to 0.62 in 2019. Overall, the ratio remained within a narrow range, indicating relatively stable asset utilization efficiency despite changes in revenue and asset base.
Segment Asset Turnover: Information Technology
General Dynamics Corp.; Information Technology; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | |||||
| Identifiable assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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 2019 Calculation
Segment asset turnover = Revenue ÷ Identifiable assets
= ÷ =
The data indicates the financial performance and asset management of the "Information Technology" segment over the period from 2015 to 2019, with some data missing for the initial year.
- Revenue Trends
- The revenue figures show a slight decline from 2016 to 2017, decreasing from 4,428 million US dollars to 4,410 million US dollars. Following this period, there is a significant increase in revenue for 2018 and 2019, reaching 8,269 million and 8,422 million US dollars respectively. This represents nearly a doubling of revenue in the last two years compared to the earlier years recorded.
- Identifiable Assets
- The identifiable assets have increased progressively throughout the reported years. Starting at 2,778 million US dollars in 2016, assets rose steadily to 3,021 million in 2017, and then experienced a substantial jump to 14,159 million in 2018, with a slight additional increase to 14,248 million in 2019. This sharp rise in assets corresponds with the timing of the significant revenue growth noted.
- Segment Asset Turnover
- The segment asset turnover ratio, which measures the efficiency of asset use in generating revenue, shows a downward trend. It declined from 1.59 in 2016 to 1.46 in 2017, followed by a more pronounced decrease to 0.58 in 2018 and a minimal rise to 0.59 in 2019. This decline suggests that despite increased asset levels, the segment's efficiency in generating revenue relative to asset size has decreased significantly, particularly after 2017.
Overall, the data reflects that while the segment expanded its asset base considerably from 2017 onwards, the increase in revenue was accompanied by a proportional decrease in asset utilization efficiency. This may imply investments in assets or acquisitions that have yet to be fully optimized for revenue generation, or a strategic shift involving asset-heavy operations.
Segment Asset Turnover: Mission Systems
General Dynamics Corp.; Mission Systems; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | |||||
| Identifiable assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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 2019 Calculation
Segment asset turnover = Revenue ÷ Identifiable assets
= ÷ =
The financial data for the Mission Systems segment shows several notable trends over the five-year period ending in 2019.
- Revenue
- Revenue demonstrated a fluctuating but generally upward trend between 2016 and 2019. It increased from $4,716 million in 2016 to $4,937 million in 2019, peaking at $4,937 million. However, a slight decline is observed in 2017 when revenue fell to $4,481 million before recovering in subsequent years. Overall, the segment shows modest growth in revenue during this period.
- Identifiable Assets
- Identifiable assets steadily grew each year from 2016 to 2019. Starting at $5,667 million in 2016, these assets increased consistently, reaching $6,205 million in 2019. This upward trend suggests ongoing investment or accumulation of assets within the segment, supporting its operational capacity or expansion efforts.
- Segment Asset Turnover
- The asset turnover ratio, which measures the efficiency of using assets to generate revenue, decreased from 0.83 in 2016 to 0.77 in 2017, indicating a slight drop in asset utilization efficiency. In the following years, it showed gradual improvement, rising to 0.8 by 2019. Despite this recovery, it did not return to the initial 2016 level, implying some challenges in maximizing asset productivity during the period.
In summary, the segment experienced a moderate growth in revenue and identifiable assets, alongside a temporary dip in asset turnover that was partially corrected towards the end of the period. These patterns indicate an expansion in asset base and revenue generation with modest improvements in efficiency.
Segment Asset Turnover: Marine Systems
General Dynamics Corp.; Marine Systems; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | |||||
| Identifiable assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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 2019 Calculation
Segment asset turnover = Revenue ÷ Identifiable assets
= ÷ =
- Revenue
- Revenue for the segment exhibited a generally upward trend over the five-year period. Starting at 8,013 million US dollars in 2015, revenue remained relatively stable through 2017 with slight fluctuations, followed by a notable increase in 2018 and a further rise in 2019, reaching 9,183 million US dollars. This indicates steady growth in sales or contracts for the segment in the latter part of the period.
- Identifiable Assets
- The identifiable assets showed moderate variation during the period. Beginning at 2,970 million US dollars in 2015, assets increased slightly in 2016, decreased in 2017, and then increased again in 2018. A significant increase occurred in 2019, with assets reaching 3,918 million US dollars. This trend suggests potential investment or acquisition activity leading to asset growth, especially in the final year of the review period.
- Segment Asset Turnover
- The segment asset turnover ratio, which reflects revenue generated per unit of assets, demonstrated some volatility. It started at 2.7 in 2015, decreased to 2.64 in 2016, increased to 2.75 in 2017, and slightly dropped to 2.72 in 2018 before declining more noticeably to 2.34 in 2019. The declining ratio in 2019, despite higher revenue and higher asset levels, points to a decrease in efficiency in using assets to generate revenue during that year.
Segment Capital Expenditures to Depreciation
General Dynamics Corp., capital expenditures to depreciation by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Marine Systems |
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).
The analysis of the annual reportable segment capital expenditures to depreciation ratios over the five-year period reveals varied trends across the different segments.
- Aerospace
- The ratio exhibits a fluctuating trend, beginning at 1.43 in 2015, declining sharply to 0.82 in 2016, and showing some recovery to 1.26 in 2018, before falling again to 0.78 in 2019. This suggests inconsistent capital investment relative to depreciation, with potential periods of underinvestment or accelerated depreciation.
- Combat Systems
- This segment shows a generally upward trend in the ratio. Starting at 0.87 in 2015, the ratio steadily increases, reaching 1.28 by the end of 2019. This indicates growing capital expenditures compared to depreciation, which may reflect ongoing investment or expansion efforts in this segment.
- Information Technology
- Data for 2015 is not available. From 2016 onward, the ratio remains low, starting at 0.24, rising to 0.50 in 2017, dropping to 0.19 in 2018, and increasing again to 0.39 in 2019. The ratios consistently remain below 0.5, indicating relatively low capital expenditure compared to depreciation.
- Mission Systems
- With missing data for 2015, the ratio starts at 1.43 in 2016, drops to below 1.0 in the subsequent two years (0.78 in 2017 and 0.75 in 2018), then climbs back to 1.25 in 2019. This pattern reveals a cycle of high capital expenditures initially, a reduction in mid-period investment, followed by increased spending towards the end of the period analyzed.
- Marine Systems
- This segment shows a strong upward trend throughout the period. Beginning at 1.57 in 2015, the ratio dips slightly in 2016 to 0.88, then consistently rises from 1.13 in 2017 to 2.09 in 2018, reaching 3.68 in 2019. Such a trend underscores significantly increased capital expenditures relative to depreciation, likely signaling major investment activities or expansion in this segment.
Segment Capital Expenditures to Depreciation: Aerospace
General Dynamics Corp.; Aerospace; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
The analysis of the Aerospace segment's capital expenditures and depreciation over the five-year period reveals notable fluctuations and varying trends.
- Capital Expenditures
- Capital expenditures showed a declining trend from 210 million US dollars at the end of 2015 to 125 million at the end of 2016. This was followed by a slight increase to 132 million in 2017, then a more significant rise to 194 million in 2018. However, in 2019, capital expenditures decreased again to 138 million. Overall, the values suggest a pattern of initial reduction, a rebound, and subsequent decline.
- Depreciation and Amortization
- Depreciation and amortization expenses remained relatively stable with mild fluctuations. The values ranged from 147 million in 2015 to a peak of 178 million in 2019. The progression shows a slight increase over time, indicating ongoing consumption or wear of assets consistent with the capital asset base.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation shows considerable variability. Starting at 1.43 in 2015, it dropped sharply to 0.82 in 2016 and remained below 1.0 in 2017 and 2019, suggesting that capital spending was less than depreciation expense in these years. A rebound occurred in 2018 with the ratio rising to 1.26, reflecting higher capital investments relative to depreciation.
In summary, the Aerospace segment’s capital expenditure activity appears cyclical with periods of investment increases followed by reductions, while depreciation expenses steadily grow. The capital expenditure to depreciation ratio indicates periods where asset renewal may not have fully offset asset consumption, potentially impacting future operational capacity.
Segment Capital Expenditures to Depreciation: Combat Systems
General Dynamics Corp.; Combat Systems; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital expenditures
- The capital expenditures for the segment show an overall upward trend from 2015 through 2019. Starting at US$79 million in 2015, there was a slight decrease to US$71 million in 2016, followed by a consistent increase each subsequent year, reaching US$109 million by the end of 2019. This indicates growing investment in the segment’s assets over the period under review.
- Depreciation and amortization
- Depreciation and amortization expenses remained relatively stable across the five years. The figures slightly declined from US$91 million in 2015 to US$85 million in 2019, with minor fluctuations in between. This stability suggests consistent aging and usage patterns of the segment’s capital assets over time.
- Segment capital expenditures to depreciation ratio
- The ratio of capital expenditures to depreciation steadily increased each year from 0.87 in 2015 to 1.28 in 2019. Starting below 1.0 in the initial years, indicating capital spending was less than depreciation charges, the ratio surpasses 1.0 from 2018 onward. This shift signifies that capital investment began to outpace asset depreciation, suggesting potential asset base expansion or modernization within the segment during the last two years of the period analyzed.
Segment Capital Expenditures to Depreciation: Information Technology
General Dynamics Corp.; Information Technology; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital Expenditures
- Capital expenditures demonstrated a significant upward trend over the observed period. From 2016 to 2019, expenditures increased from 10 million US dollars to 147 million US dollars. Notably, there was a sharp rise between 2017 and 2018 where capital expenditures grew from 16 million to 62 million US dollars, followed by another substantial increase reaching 147 million US dollars in 2019.
- Depreciation and Amortization
- This financial metric showed an overall increasing pattern. Starting with 42 million US dollars in 2016, it experienced a decline to 32 million in 2017, but this was followed by a large surge to 333 million in 2018. The upward trajectory continued into 2019, reaching 377 million US dollars. The surge after 2017 indicates a significant change in either assets base or amortization policy.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation fluctuated across the years. It was 0.24 in 2016, increasing to 0.5 in 2017, signaling that capital spending grew relative to depreciation during this year. However, the ratio decreased sharply to 0.19 in 2018 despite the large absolute increases in capital expenditures, indicating that depreciation expenses had increased at a faster pace. The ratio then rose to 0.39 in 2019, reflecting a relative increase in capital expenditures compared to depreciation, but still below the 2017 peak.
Segment Capital Expenditures to Depreciation: Mission Systems
General Dynamics Corp.; Mission Systems; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital Expenditures
- Capital expenditures exhibited a fluctuating trend from 2016 to 2019. Starting at 87 million USD in 2016, the value significantly decreased to 47 million USD in 2017, remained nearly stable at 49 million USD in 2018, and then increased notably to 75 million USD in 2019. This indicates a period of reduced investment in 2017 and 2018 followed by a pronounced resurgence in 2019.
- Depreciation and Amortization
- Depreciation and amortization expenses remained relatively stable over the observed period, fluctuating within a narrow range. The amount was 61 million USD in 2016, with a slight decrease to 60 million USD in 2017, an increase to 65 million USD in 2018, and a return to 60 million USD in 2019. These movements suggest a consistent amortization pattern with minor annual variations.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation experienced varying dynamics during the period. It was relatively high at 1.43 in 2016, declined sharply to 0.78 in 2017, and remained almost flat at 0.75 in 2018, before rising back to 1.25 in 2019. This trend parallels the changes in capital expenditures, highlighting initial substantial reinvestment relative to asset depreciation, followed by a period of curtailed investment and a rebound in the final year.
Segment Capital Expenditures to Depreciation: Marine Systems
General Dynamics Corp.; Marine Systems; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
The Marine Systems segment exhibits significant changes in its capital expenditure and related financial metrics over the five-year period from 2015 to 2019.
- Capital Expenditures
- Capital expenditures have shown a fluctuating but overall increasing trend. Beginning at 166 million USD in 2015, there was a notable decrease to 92 million USD in 2016. Subsequently, capital expenditures rose moderately to 123 million USD in 2017, followed by a marked increase to 243 million USD in 2018, and reaching a peak of 449 million USD by the end of 2019. This suggests an escalating investment in the segment’s assets, particularly in the latter years.
- Depreciation and Amortization
- Depreciation and amortization have remained relatively stable, exhibiting only a slight upward trend over the period. The values increased from 106 million USD in 2015 to 122 million USD in 2019. This steady change implies consistent asset usage and amortization practices without abrupt variations.
- Segment Capital Expenditures to Depreciation Ratio
- This ratio, which compares capital expenditures to depreciation, more than doubled from 1.57 in 2015 to 3.68 in 2019. After a dip in 2016 to 0.88, the ratio gradually rose over the following years, indicating that capital spending increasingly outpaced depreciation. A ratio above 1 suggests growing asset base investment, and the sharp rise towards 2019 reflects aggressive expansion or renewal of fixed assets within the segment.
In summary, the data reveals a pattern of intensified capital investment in the Marine Systems segment, particularly accelerating from 2017 onwards. Depreciation remains stable, but increasing capital expenditures relative to depreciation highlight a growing asset base and potentially heightened capacity or modernization efforts within the segment.
Revenue
General Dynamics Corp., revenue by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Information Systems and Technology (legacy) | |||||
| Marine Systems | |||||
| Total |
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).
- Revenue Trends by Segment
-
The Aerospace segment exhibits a fluctuating but generally upward trend over the five-year period. After a decline from 8,851 million in 2015 to 7,815 million in 2016, revenue gradually increased each subsequent year, reaching 9,801 million in 2019, representing an overall growth despite the initial dip.
-
The Combat Systems segment shows steady growth throughout the period. Revenue slightly decreased from 5,640 million in 2015 to 5,530 million in 2016 but rebounded in 2017 and continued to rise annually, culminating at 7,007 million in 2019. This indicates consistent expansion and strengthening in this segment.
-
The Information Technology segment data is missing for 2015 but starts at 4,428 million in 2016. It remains relatively stable in 2017 at 4,410 million before undergoing a significant increase in 2018, nearly doubling to 8,269 million and maintaining a slight growth to 8,422 million in 2019. This notable surge suggests a major development or acquisition impacting revenue in this segment starting in 2018.
-
The Mission Systems segment also lacks data for 2015 but shows a slight decline from 4,716 million in 2016 to 4,481 million in 2017, followed by steady increases in 2018 and 2019, reaching 4,937 million. This pattern signifies a recovery phase followed by moderate growth.
-
Information Systems and Technology (legacy) appears only in 2015 with revenue of 8,965 million and does not report in subsequent years, implying that this segment was either restructured, renamed, or integrated into other segments after 2015.
-
The Marine Systems segment demonstrates consistent but moderate revenue increases across all years, beginning at 8,013 million in 2015 and rising each year to 9,183 million in 2019. This steady growth indicates stable demand and performance in this area.
- Total Revenue
-
Total reported revenue shows a decline from 31,469 million in 2015 to 30,561 million in 2016, followed by a slight increase to 30,973 million in 2017. From 2017 onward, there is a marked acceleration in growth, with revenue reaching 36,193 million in 2018 and rising further to 39,350 million in 2019. This significant increase in the latter years is likely influenced by the surge recorded in the Information Technology segment and consistent growth in other segments.
Operating earnings
General Dynamics Corp., operating earnings by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Information Systems and Technology (legacy) | |||||
| Marine Systems | |||||
| Corporate | |||||
| Total |
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).
The data reveals several notable trends across the reportable segments over the five-year period from 2015 to 2019. Overall, the company's total segment operating earnings demonstrate a general upward trajectory, increasing from $4,178 million in 2015 to $4,648 million in 2019. However, this growth was not linear, with a decline observed between 2015 and 2016, followed by consistent increases thereafter.
- Aerospace
- This segment shows a fluctuating pattern with an initial decline from $1,706 million in 2015 to $1,394 million in 2016, then a recovery to $1,577 million in 2017. Subsequently, earnings declined slightly to $1,490 million in 2018 before rising modestly to $1,532 million in 2019. Overall, the segment experienced some volatility but maintained earnings near the $1.5 billion mark in the latter years.
- Combat Systems
- Combat Systems earnings exhibit a steady incremental growth over the period, moving from $882 million in 2015 to $996 million in 2019. There is a consistent year-over-year increase, indicating stable development within this segment without significant fluctuation.
- Information Technology
- This segment, with data available only from 2016 onwards, shows substantial growth, increasing from $340 million in 2016 to $628 million in 2019. The growth is particularly pronounced between 2017 and 2018, when earnings jump from $373 million to $608 million, suggesting a significant expansion or increased profitability in this area during that period.
- Mission Systems
- Mission Systems also shows continuous growth across the available years, rising from $601 million in 2016 to $683 million in 2019. Though the growth rate is more moderate compared to Information Technology, it reflects steady improvement in segment performance.
- Information Systems and Technology (legacy)
- There is data only for 2015 at $903 million, with no subsequent figures reported, indicating that this segment may have been restructured, discontinued, or integrated into other segments after 2015.
- Marine Systems
- This segment records a general upward trend, increasing from $728 million in 2015 to $785 million in 2019, with a dip in 2016 to $595 million. The recovery and subsequent growth from 2016 onward suggest resilience and strengthening performance within this segment.
- Corporate
- The corporate segment exhibits volatility, including negative earnings in most years, with the exception of 2017 and 2019 where modest positive earnings of $26 million and $24 million were recorded respectively. The negative values in 2015, 2016, and 2018 indicate corporate-level costs or charges impacting earnings, although the positive results in some years show potential fluctuation in these expenses or income.
In summary, the company’s total operating earnings have improved over the analyzed period, driven by growth in Combat Systems, Information Technology, Mission Systems, and Marine Systems segments. The Aerospace segment experienced variability but remained a significant contributor. The disappearance of the legacy Information Systems and Technology segment after 2015 suggests structural changes. Corporate results reflect inconsistent expenses or income impacting overall earnings. The data points to a period of transition and growth with some segments showing strong expansion and others demonstrating stabilization or decline.
Identifiable assets
General Dynamics Corp., identifiable assets by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Information Systems and Technology (legacy) | |||||
| Marine Systems | |||||
| Corporate | |||||
| Total |
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).
- Aerospace Segment
- The identifiable assets in the Aerospace segment displayed a consistent upward trend from 2015 through 2019. Starting at $8,358 million in 2015, assets increased steadily each year, reaching $12,324 million by the end of 2019. This represents an approximate 47.6% growth over the five-year period, indicating ongoing investment or asset accumulation in this segment.
- Combat Systems Segment
- The Combat Systems segment showed relatively stable asset levels in the initial years, with a slight increase from $8,800 million in 2015 to $8,885 million in 2016. A more notable growth occurred between 2016 and 2019, with assets rising to $11,220 million. This reflects a moderate upward trend overall, although the growth was less consistent year-over-year compared to the Aerospace segment.
- Information Technology Segment
- Data for the Information Technology segment began in 2016 at $2,778 million and showed steady growth through 2017. A significant surge occurred between 2017 and 2018, with assets increasing sharply from $3,021 million to $14,159 million, and stabilization in 2019 at $14,248 million. This dramatic increase suggests a major expansion or acquisition impacting this segment during that period.
- Mission Systems Segment
- The Mission Systems segment experienced modest but consistent growth over the four reported years, rising from $5,667 million in 2016 to $6,205 million in 2019. The incremental increases each year indicate steady asset growth without abrupt fluctuations.
- Information Systems and Technology (legacy) Segment
- Data for the Information Systems and Technology (legacy) segment was only reported for 2015, with $8,577 million in identifiable assets. No subsequent data were available for the years following, suggesting that this segment may have been restructured, renamed, or integrated into other reporting categories after 2015.
- Marine Systems Segment
- The Marine Systems segment generally showed a gradual increase in identifiable assets over the five-year period. Starting at $2,970 million in 2015, assets slightly rose to $3,063 million in 2016, temporarily decreased to $2,906 million in 2017, then resumed growth reaching $3,918 million by 2019. Overall, this pattern reflects moderate growth with some volatility.
- Corporate Segment
- Identifiable assets attributed to the Corporate segment demonstrated a downward trend. Beginning at $3,292 million in 2015, assets slightly decreased to $2,987 million in 2016, increased somewhat in 2017 to $3,291 million, then dropped significantly in 2018 to $1,062 million and further to $926 million in 2019. This marked decrease in the last two years could indicate a reallocation of corporate assets or a change in accounting treatment.
- Total Identifiable Assets
- Total identifiable assets across all segments increased steadily from $31,997 million in 2015 to $48,841 million in 2019. The most notable increase occurred between 2017 and 2018, aligning with the substantial rise in the Information Technology segment. This overall upward trend reflects growth in the company's asset base, driven particularly by expansion or acquisitions in selected segments.
Capital expenditures
General Dynamics Corp., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Information Systems and Technology (legacy) | |||||
| Marine Systems | |||||
| Corporate | |||||
| Total |
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).
The capital expenditures across the various segments show distinct trends over the five-year period.
- Aerospace
- Capital expenditures decreased from $210 million in 2015 to $125 million in 2016, followed by a slight increase to $132 million in 2017. There was a notable rise to $194 million in 2018, but expenditures then declined to $138 million in 2019. Overall, the pattern shows fluctuations with a peak in 2015 and 2018 and a decline in 2019 relative to those peak years.
- Combat Systems
- The expenditure levels in Combat Systems experienced a gradual increase over the period. Starting at $79 million in 2015, the segment dipped slightly to $71 million in 2016 but then rose steadily to $84 million, $91 million, and finally $109 million by 2019. This suggests increasing investment attention in this segment over time.
- Information Technology
- This segment's capital expenditures began recording from 2016 with $10 million and showed substantial growth each year thereafter. By 2019, expenditures reached $147 million, representing a significant increase and highlighting a growing focus on this category.
- Mission Systems
- Expenditures in Mission Systems were first reported in 2016 at $87 million, but dropped sharply to $47 million in 2017. Subsequently, there was a modest increase through 2018 and 2019, reaching $75 million. This indicates some volatility but a general recovery trend following an initial decline.
- Information Systems and Technology (legacy)
- This category shows recorded expenditures only in 2015 at $73 million. Thereafter, no capital spending is noted, suggesting either the reclassification of this segment, completion of significant investments, or a strategic shift away from this legacy category.
- Marine Systems
- The Marine Systems segment displays a clear upward trajectory in capital expenditures. Starting at $166 million in 2015, it fell to $92 million in 2016 but then increased significantly to $123 million in 2017. The upward trend accelerated markedly in 2018 and 2019, with expenditures nearly doubling from $243 million to $449 million, underscoring a considerable expansion or upgrade in this area.
- Corporate
- Corporate-level capital expenditures fluctuated, beginning at $41 million in 2015, dropping sharply to $7 million in 2016, and then rising to $26 million in 2017. The upward trend continued with increases to $51 million in 2018 and $69 million in 2019, indicating growing corporate investment or administrative capital requirements.
- Total
- The overall capital expenditures followed a similar pattern to that of individual segments, starting at $569 million in 2015, dropping to $392 million in 2016, and gradually increasing to $428 million in 2017. There was a significant surge to $690 million in 2018 and an even more pronounced rise to $987 million in 2019, indicating an overall strong increase in capital investment across segments, particularly driven by Marine Systems, Information Technology, and Corporate expenditures.
Depreciation and amortization
General Dynamics Corp., depreciation and amortization by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Aerospace | |||||
| Combat Systems | |||||
| Information Technology | |||||
| Mission Systems | |||||
| Information Systems and Technology (legacy) | |||||
| Marine Systems | |||||
| Corporate | |||||
| Total |
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).
- Overall Trend
- The total depreciation and amortization expense displays a declining pattern from 2015 to 2017, followed by a significant increase in 2018 and 2019. The total decreases from 482 million US dollars in 2015 to 441 million in 2017, before rising sharply to 763 million in 2018 and further to 829 million in 2019.
- Aerospace Segment
- Depreciation and amortization expenses in the Aerospace segment remain relatively stable from 2015 through 2018, fluctuating between 147 million and 154 million US dollars. There is a notable increase in 2019, reaching 178 million, indicating higher asset write-downs or increased capital expenditures in that period.
- Combat Systems Segment
- Combat Systems shows a slight downward trend over the analyzed period, declining from 91 million in 2015 to 85 million in 2019. This trend suggests reduced asset value depreciation or amortization, potentially reflecting stable or declining investments in this segment.
- Information Technology Segment
- The Information Technology segment reveals a significant upward trajectory beginning in 2016, starting from 42 million US dollars, then declining to 32 million in 2017, followed by a dramatic jump to 333 million in 2018 and 377 million in 2019. This sharp increase post-2017 indicates substantial capital investment or asset acquisition, or possibly a change in accounting practices affecting amortization schedules.
- Mission Systems Segment
- Depreciation and amortization expenses for Mission Systems remain relatively steady, moving slightly from 61 million in 2016 to 60 million in 2019, with a peak of 65 million in 2018. This stability points to a consistent asset base and steady investment levels.
- Information Systems and Technology (legacy) Segment
- Information Systems and Technology (legacy) has reported values only in 2015, with 131 million US dollars, and no reported data in subsequent years. This absence might indicate the disposal or reclassification of this segment's assets or integration into other segments after 2015.
- Marine Systems Segment
- Marine Systems demonstrates a gradual increase in depreciation and amortization expenses from 106 million in 2015 to 122 million in 2019. The steady rise suggests ongoing asset additions or increased capitalization within this segment over the analyzed period.
- Corporate Segment
- The Corporate segment maintains low and relatively stable depreciation and amortization expenses, fluctuating slightly between 6 million and 8 million US dollars across the years, indicating minimal changes in corporate-level capital assets.