GENERAL DYNAMICS CORP | 2013 | FY | 3


CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The fixed-rate notes described in Note J are fully and unconditionally guaranteed on an unsecured, joint and several basis by certain of our 100-percent-owned subsidiaries (the guarantors). The following condensed consolidating financial statements illustrate the composition of the parent, the guarantors on a combined basis (each guarantor together with its majority owned subsidiaries) and all other subsidiaries on a combined basis.
CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (LOSS)
Year Ended December 31, 2011
Parent
Guarantors on a
Combined Basis
Other Subsidiaries
on a Combined Basis
Consolidating
Adjustments
Total
Consolidated
Revenues
$

$
26,253

$
6,424

$

$
32,677

Cost of sales
(13
)
21,336

5,498


26,821

G&A
90

1,499

441


2,030

Operating earnings
(77
)
3,418

485


3,826

Interest, net
(143
)

2


(141
)
Other, net
5

27

1


33

Earnings before income taxes
(215
)
3,445

488


3,718

Provision for income taxes
(43
)
1,097

112


1,166

Discontinued operations, net of tax
(26
)



(26
)
Equity in net earnings of subsidiaries
2,724



(2,724
)

Net earnings
$
2,526

$
2,348

$
376

$
(2,724
)
$
2,526

Comprehensive income
$
1,650

$
2,228

$
183

$
(2,411
)
$
1,650

Year Ended December 31, 2012
Parent
Guarantors on a
Combined Basis
Other Subsidiaries
on a Combined Basis
Consolidating
Adjustments
Total
Consolidated
Revenues
$

$
26,349

$
5,164

$

$
31,513

Cost of sales
(20
)
23,614

4,810


28,404

G&A
89

1,618

569


2,276

Operating earnings
(69
)
1,117

(215
)

833

Interest, net
(158
)
(3
)
5


(156
)
Other, net
(126
)
(4
)
(6
)

(136
)
Earnings before income taxes
(353
)
1,110

(216
)

541

Provision for income taxes
(137
)
854

156


873

Equity in net earnings of subsidiaries
(116
)


116


Net loss
$
(332
)
$
256

$
(372
)
$
116

$
(332
)
Comprehensive loss
$
(795
)
$
21

$
(90
)
$
69

$
(795
)
Year Ended December 31, 2013
Parent
Guarantors on a
Combined Basis
Other Subsidiaries
on a Combined Basis
Consolidating
Adjustments
Total
Consolidated
Revenues
$

$
27,272

$
3,946

$

$
31,218

Cost of sales
20

22,175

3,259


25,454

G&A
74

1,664

341


2,079

Operating earnings
(94
)
3,433

346


3,685

Interest, net
(93
)
1

6


(86
)
Other, net
1

6

1


8

Earnings before income taxes
(186
)
3,440

353


3,607

Provision for income taxes
(56
)
1,058

119


1,121

Discontinued operations, net of tax
(129
)



(129
)
Equity in net earnings of subsidiaries
2,616



(2,616
)

Net earnings
$
2,357

$
2,382

$
234

$
(2,616
)
$
2,357

Comprehensive income
$
3,947

$
2,820

$
191

$
(3,011
)
$
3,947

CONDENSED CONSOLIDATING BALANCE SHEETS
December 31, 2012
Parent
Guarantors
on a
Combined
Basis
Other
Subsidiaries
on a
Combined
Basis
Consolidating
Adjustments
Total
Consolidated
ASSETS
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and equivalents
$
2,248

$

$
1,048

$

$
3,296

Accounts receivable

1,254

2,950


4,204

Contracts in process
439

3,199

1,326


4,964

Inventories
 
 
 
 
 
Work in process

1,507

11


1,518

Raw materials

1,020

89


1,109

Finished goods

32

37


69

Pre-owned aircraft

80



80

Other current assets
45

249

210


504

Total current assets
2,732

7,341

5,671


15,744

Noncurrent assets:
 
 
 
 
 
PP&E
155

5,556

1,292


7,003

Accumulated depreciation of PP&E
(56
)
(2,850
)
(694
)

(3,600
)
Intangible assets

1,693

1,222


2,915

Accumulated amortization of intangible assets

(1,068
)
(464
)

(1,532
)
Goodwill

7,661

4,387


12,048

Other assets
700

738

328

(35
)
1,731

Investment in subsidiaries
33,324



(33,324
)

Total noncurrent assets
34,123

11,730

6,071

(33,359
)
18,565

Total assets
$
36,855

$
19,071

$
11,742

$
(33,359
)
$
34,309

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Customer advances and deposits
$

$
3,052

$
2,990

$

$
6,042

Other current liabilities
394

3,743

1,441


5,578

Total current liabilities
394

6,795

4,431


11,620

Noncurrent liabilities:
 
 
 
 
 
Long-term debt
3,881

27



3,908

Other liabilities
4,121

2,704

566


7,391

Total noncurrent liabilities
8,002

2,731

566


11,299

Intercompany
17,069

(17,388
)
319



Shareholders’ equity:
 
 
 
 
 
Common stock
482

6

44

(50
)
482

Other shareholders’ equity
10,908

26,927

6,382

(33,309
)
10,908

Total shareholders’ equity
11,390

26,933

6,426

(33,359
)
11,390

Total liabilities and shareholders’ equity
$
36,855

$
19,071

$
11,742

$
(33,359
)
$
34,309

December 31, 2013
Parent
Guarantors
on a
Combined
Basis
Other
Subsidiaries
on a
Combined
Basis
Consolidating
Adjustments
Total
Consolidated
ASSETS
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and equivalents
$
4,175

$

$
1,126

$

$
5,301

Accounts receivable

1,451

2,951


4,402

Contracts in process
571

3,124

1,085


4,780

Inventories
 
 
 
 
 
Work in process

1,623

12


1,635

Raw materials

1,172

86


1,258

Finished goods

24

33


57

Pre-owned aircraft

18



18

Other current assets
35

202

198


435

Total current assets
4,781

7,614

5,491


17,886

Noncurrent assets:
 
 
 
 
 
PP&E
156

5,827

1,265


7,248

Accumulated depreciation of PP&E
(64
)
(3,062
)
(707
)

(3,833
)
Intangible assets

1,614

1,230


2,844

Accumulated amortization of intangible assets

(1,111
)
(516
)

(1,627
)
Goodwill

7,631

4,346


11,977

Other assets
558

483

398

(486
)
953

Investment in subsidiaries
36,067



(36,067
)

Total noncurrent assets
36,717

11,382

6,016

(36,553
)
17,562

Total assets
$
41,498

$
18,996

$
11,507

$
(36,553
)
$
35,448

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Customer advances and deposits
$

$
3,493

$
3,091

$

$
6,584

Other current liabilities
763

3,643

1,204


5,610

Total current liabilities
763

7,136

4,295


12,194

Noncurrent liabilities:
 
 
 
 
 
Long-term debt
3,883

25



3,908

Other liabilities
2,335

2,008

502


4,845

Total noncurrent liabilities
6,218

2,033

502


8,753

Intercompany
20,016

(20,108
)
92



Shareholders’ equity:
 
 
 
 
 
Common stock
482

6

3,570

(3,576
)
482

Other shareholders’ equity
14,019

29,929

3,048

(32,977
)
14,019

Total shareholders’ equity
14,501

29,935

6,618

(36,553
)
14,501

Total liabilities and shareholders’ equity
$
41,498

$
18,996

$
11,507

$
(36,553
)
$
35,448

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Year Ended December 31, 2011
Parent
Guarantors
on a
Combined
Basis
Other
Subsidiaries
on a
Combined
Basis
Consolidating
Adjustments
Total
Consolidated
Net cash provided by operating activities
$
(359
)
$
3,524

$
73

$

$
3,238

Cash flows from investing activities:
 
 
 
 
 
Business acquisitions, net of cash acquired
(233
)
(1,327
)


(1,560
)
Purchases of held-to-maturity securities
(459
)



(459
)
Maturities of held-to-maturity securities
334


107


441

Capital expenditures
(6
)
(381
)
(71
)

(458
)
Purchases of available-for-sale securities
(274
)
(99
)


(373
)
Other, net
246

192

(3
)

435

Net cash used by investing activities
(392
)
(1,615
)
33


(1,974
)
Cash flows from financing activities:
 
 
 
 
 
Proceeds from fixed-rate notes
1,497




1,497

Purchases of common stock
(1,468
)



(1,468
)
Repayment of fixed-rate notes
(750
)



(750
)
Dividends paid
(673
)



(673
)
Other, net
216

(20
)
(3
)

193

Net cash used by financing activities
(1,178
)
(20
)
(3
)

(1,201
)
Net cash used by discontinued operations
(27
)



(27
)
Cash sweep/funding by parent
1,878

(1,889
)
11



Net increase in cash and equivalents
(78
)

114


36

Cash and equivalents at beginning of year
1,608


1,005


2,613

Cash and equivalents at end of year
$
1,530

$

$
1,119

$

$
2,649

Year Ended December 31, 2012
Parent
Guarantors
on a
Combined
Basis
Other
Subsidiaries
on a
Combined
Basis
Consolidating
Adjustments
Total
Consolidated
Net cash provided by operating activities
$
(541
)
$
2,850

$
378

$

$
2,687

Cash flows from investing activities:
 
 
 
 
 
Capital expenditures
(2
)
(390
)
(58
)

(450
)
Business acquisitions, net of cash acquired
(121
)
(297
)
(26
)

(444
)
Other, net
221

(1
)
18


238

Net cash used by investing activities
98

(688
)
(66
)

(656
)
Cash flows from financing activities:
 
 
 
 
 
Repayment of fixed-rate notes
(2,400
)



(2,400
)
Proceeds from fixed-rate notes
2,382




2,382

Dividends paid
(893
)



(893
)
Purchases of common stock
(602
)



(602
)
Other, net
154

(21
)
(2
)

131

Net cash used by financing activities
(1,359
)
(21
)
(2
)

(1,382
)
Net cash used by discontinued operations
(2
)



(2
)
Cash sweep/funding by parent
2,522

(2,141
)
(381
)


Net increase in cash and equivalents
718


(71
)

647

Cash and equivalents at beginning of year
1,530


1,119


2,649

Cash and equivalents at end of year
$
2,248

$

$
1,048

$

$
3,296


R. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Year Ended December 31, 2013
Parent
Guarantors
on a
Combined
Basis
Other
Subsidiaries
on a
Combined
Basis
Consolidating
Adjustments
Total
Consolidated
Net cash provided by operating activities
$
(454
)
$
2,810

$
750

$

$
3,106

Cash flows from investing activities:
 
 
 
 
 
Capital expenditures
(1
)
(381
)
(58
)

(440
)
Other, net
3

59

11


73

Net cash used by investing activities
2

(322
)
(47
)

(367
)
Cash flows from financing activities:
 
 
 
 
 
Purchases of common stock
(740
)



(740
)
Dividends paid
(591
)



(591
)
Proceeds from option exercises
583




583

Other, net
23




23

Net cash used by financing activities
(725
)



(725
)
Net cash used by discontinued operations
(9
)



(9
)
Cash sweep/funding by parent
3,113

(2,488
)
(625
)


Net increase in cash and equivalents
1,927


78


2,005

Cash and equivalents at beginning of year
2,248


1,048


3,296

Cash and equivalents at end of year
$
4,175

$

$
1,126

$

$
5,301


us-gaap:CondensedFinancialStatementsTextBlock