General Dynamics Q2 2010 Earnings Call Transcript

General Dynamics (GD)

Q2 2010 Earnings Call

July 28, 2010 11:30 am ET

Executives

Jay Johnson - Chairman, Chief Executive Officer and President

Amy Gilliland -

L. Redd - Chief Financial Officer and Senior Vice President

Analysts

Cai Von Rumohr - Cowen and Company, LLC

Carter Copeland - Lehman Brothers

Douglas Harned - Bernstein Research

Howard Rubel - Jefferies & Company, Inc.

George Shapiro - Citi

Ronald Epstein - BofA Merrill Lynch

Heidi Wood - Morgan Stanley

Samuel Pearlstein - Wells Fargo Securities, LLC

Noah Poponak - Goldman Sachs Group Inc.

Myles Walton - Deutsche Bank AG

David Strauss - UBS Investment Bank

Presentation

L. Redd

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Thank you, Jay, and good morning, everyone. I'd like to start with a couple of notes on capital deployment in the second half of the year. We have $700 million of fixed rate notes that are still due to mature in August. We plan to satisfy that obligations with cash on hand. As a result, we'll see lower interest expense in the second half of the year, and we expect full year interest expense to be somewhere between $155 million and $160 million. We are also scheduled to make a voluntary contribution to our pension plans of approximately $270 million in September.

I would like to also point out that we recently renewed our 364-day bank line, increasing it by about $200 million and extending the term to three years. This increases our commercial paper capacity to approximately $2 billion. The increased commercial paper capacity, along with the debt repayment in the third quarter, further bolsters our strong balance sheet and gives us capacity to execute on future opportunities.