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General Dynamics Reports Second-Quarter 2012 Results

FALLS CHURCH, Va., July 25, 2012 /PRNewswire/ -- General Dynamics (NYSE: GD) today reported second-quarter 2012 earnings from continuing operations of $634 million, or $1.77 per share on a fully diluted basis, compared with 2011 second-quarter earnings from continuing operations of $666 million, or $1.79 per share fully diluted. Revenues in the quarter were $7.9 billion. Net earnings for the second quarter of 2012 were $634 million, compared to $653 million in the second quarter of 2011.

Margins

Company-wide operating margins for the second quarter of 2012 were 12.2 percent, which reflected 90-basis-point increases in each of the Aerospace, Combat Systems and Marine Systems groups over the year-ago period. Operating margins in the Information Systems and Technology group were 8.9 percent.

Cash

Net cash provided by operating activities in the quarter totaled $789 million. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $703 million in second-quarter 2012, or approximately 111 percent of earnings from continuing operations.

Backlog

Funded backlog declined slightly in the second quarter, compared to first-quarter 2012. However, demand for information technology (IT) services was strong in the quarter, and other significant awards received included an indefinite delivery, indefinite quantity (IDIQ) contract from the Federal Aviation Administration for air traffic control radios which has a maximum potential value of $365 million over 10 years; a $270 million order for Hydra-70 rockets in support of Army requirements; $115 million for conversion of additional Stryker vehicles to the new double-V-hulled configuration and contractor logistics support; and a $125 million contract for continued development of the U.S. Navy's next-generation ballistic-missile submarine (SSBN(X)).

The company's total backlog at the end of second-quarter 2012 was $52.4 billion, and the estimated potential contract value was an additional $26.2 billion, representing management's estimate of value under unfunded IDIQ contracts and unexercised options. The sum of all backlog components exceeded $78 billion at the end of the quarter.

"General Dynamics' operating results in the second quarter reflect our continued focus on disciplined execution and effective cash conversion across the corporation," said Jay L. Johnson, chairman and chief executive officer.

"Heading into the second half of 2012, I remain very confident in our continued ability to execute. However, given the impact of first-half award delays in IS&T's tactical communications business, as well as the likelihood of further delays in the second half, I believe it is prudent to revise the full-year earnings guidance range downward to $7.00 to $7.10 per share, fully diluted."

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 93,500 people worldwide. The company is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. More information about the company is available on the Internet at www.generaldynamics.com.

Certain statements made in this press release, including any statements as to future results of operations and financial projections, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management's expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in the company's filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.

All forward-looking statements speak only as of the date they were made. The company does not undertake any obligation to update or publicly release any revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

WEBCAST INFORMATION: General Dynamics will webcast its second-quarter securities analyst conference call at 9 a.m. Eastern Daylight Time on Wednesday, July 25, 2012. The webcast will be a listen-only audio event, available at www.generaldynamics.com. An on-demand replay of the webcast will be available by noon on July 25 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 888-286-8010 (international: 617-801-6888); passcode 12521089. The phone replay will be available from noon July 25 until midnight August 1, 2012.

                                                                                                                                   EXHIBIT A
                                                                                                                                                                                                                                                                          
                                                                                                                CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
                                                                                                                 DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
                                                                                                                                                                                                                                                                          
                                                                                                           Second Quarter                                        Variance
                                                                                                                                2011                                              2012                                               $                        %
                                                                                                                                ----                                              ----                                             ---                       ---
                                                                                                                                                                                                                                                                          
    Revenues                                                                                                                  $7,879                                            $7,922                                             $43                              0.5 %
    Operating costs and expenses                                                                                               6,930                                             6,952                                             (22)
                                                                                                                               -----                                             -----                                             ---
                                                                                                                                                                                                                                                                          
    Operating earnings                                                                                                           949                                               970                                              21                              2.2 %
                                                                                                                                                                                                                                                                          
    Interest, net                                                                                                                (31)                                              (37)                                             (6)
    Other, net                                                                                                                    41                                                (5)                                            (46)
                                                                                                                                 ---                                               ---                                             ---
                                                                                                                                                                                                                                                                          
    Earnings from continuing operations
      before income taxes                                                                                                        959                                               928                                             (31)                            (3.2)%
                                                                                                                                      
                                                                                                                                                                                                                                                                          
    Provision for income taxes                                                                                                   293                                               294                                              (1)
                                                                                                                                 ---                                               ---                                             ---
                                                                                                                                                                                                                                                                          
    Earnings from continuing operations                                                                                         $666                                              $634                                            $(32)                            (4.8)%
                                                                                                                                ====                                              ====                                            ====
                                                                                                                                                                                                                                                                          
    Discontinued operations, net of tax                                                                                          (13)                                                -                                              13
                                                                                                                                 ---                                               ---                                             ---
                                                                                                                                                                                                                                                                          
    Net earnings                                                                                                                $653                                              $634                                            $(19)                            (2.9)%
                                                                                                                                ====                                              ====                                            ====
                                                                                                                                                                                                                                                                          
    Earnings per share - basic
        Continuing operations                                                                                                  $1.81                                             $1.79                                          $(0.02)                            (1.1)%
        Discontinued operations                                                                                               $(0.04)                              $                 -                                           $0.04
                                                                                                                              ------                               -------------------                                           -----
        Net earnings                                                                                                           $1.77                                             $1.79                                           $0.02                              1.1 %
                                                                                                                               =====                                             =====                                           =====
                                                                                                                                                                                                                                                                          
    Basic weighted average
      shares outstanding (in millions)                                                                                         368.0                                             355.0
                                                                                                                               =====                                             =====
                                                                                                                                                                                                                                                                          
    Earnings per share - diluted
        Continuing operations                                                                                                  $1.79                                             $1.77                                          $(0.02)                            (1.1)%
        Discontinued operations                                                                                               $(0.03)                              $                 -                                           $0.03
                                                                                                                              ------                               -------------------
        Net earnings                                                                                                           $1.76                                             $1.77                                           $0.01                              0.6 %
                                                                                                                               =====                                             =====                                           =====
                                                                                                                                                                                                                                                                          
    Diluted weighted average
      shares outstanding (in millions)                                                                                         371.4                                             357.4
                                                                                                                               =====                                             =====

                                                                                                                                   EXHIBIT B
                                                                                                                                                                                                                                                                          
                                                                                                                CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
                                                                                                                 DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
                                                                                                                                                                                                                                                                          
                                                                                                             Six Months                                          Variance
                                                                                                                                2011                                              2012                                               $                        %
                                                                                                                                ----                                              ----                                             ---                       ---
                                                                                                                                                                                                                                                                          
    Revenues                                                                                                                 $15,677                                           $15,501                                           $(176)                            (1.1)%
    Operating costs and expenses                                                                                              13,799                                            13,671                                             128
                                                                                                                              ------                                            ------                                             ---
                                                                                                                                                                                                                                                                          
    Operating earnings                                                                                                         1,878                                             1,830                                             (48)                            (2.6)%
                                                                                                                                                                                                                                                                          
    Interest, net                                                                                                                (65)                                              (76)                                            (11)
    Other, net                                                                                                                    42                                                (5)                                            (47)
                                                                                                                                 ---                                               ---                                             ---
                                                                                                                                                                                                                                                                          
    Earnings from continuing operations
      before income taxes                                                                                                      1,855                                             1,749                                            (106)                            (5.7)%
                                                                                                                                      
                                                                                                                                                                                                                                                                          
    Provision for income taxes                                                                                                   571                                               551                                              20
                                                                                                                                 ---                                               ---                                             ---
                                                                                                                                                                                                                                                                          
    Earnings from continuing operations                                                                                       $1,284                                            $1,198                                            $(86)                            (6.7)%
                                                                                                                              ======                                            ======                                            ====
                                                                                                                                                                                                                                                                          
    Discontinued operations, net of tax                                                                                          (13)                                                -                                              13
                                                                                                                                 ---                                               ---                                             ---
                                                                                                                                                                                                                                                                          
    Net earnings                                                                                                              $1,271                                            $1,198                                            $(73)                            (5.7)%
                                                                                                                              ======                                            ======                                            ====
                                                                                                                                                                                                                                                                          
    Earnings per share - basic
        Continuing operations                                                                                                  $3.47                                             $3.37                                          $(0.10)                            (2.9)%
        Discontinued operations                                                                                               $(0.04)                               $                -                                           $0.04
                                                                                                                              ------                                ------------------                                           -----
        Net earnings                                                                                                           $3.43                                             $3.37                                          $(0.06)                            (1.7)%
                                                                                                                               =====                                             =====                                          ======
                                                                                                                                                                                                                                                                          
    Basic weighted average
      shares outstanding (in millions)                                                                                         370.3                                             356.0
                                                                                                                               =====                                             =====
                                                                                                                                                                                                                                                                          
    Earnings per share - diluted
        Continuing operations                                                                                                  $3.43                                             $3.34                                          $(0.09)                            (2.6)%
        Discontinued operations                                                                                               $(0.03)                               $                -                                           $0.03
                                                                                                                              ------                                ------------------
        Net earnings                                                                                                           $3.40                                             $3.34                                          $(0.06)                            (1.8)%
                                                                                                                               =====                                             =====                                          ======
                                                                                                                                                                                                                                                                          
    Diluted weighted average
      shares outstanding (in millions)
                                                                                         373.9                                              358.4
                                                                                         =====                                              =====
                                                                                                                                                                                              
                                                                                                                                                                                              
                                                                                                                                                                                              
                                                                                            EXHIBIT C
                                                                                                                                                                                            
                                                                     REVENUES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)
                                                                                       DOLLARS IN MILLIONS
                                                                                                                                                                                            
                                                                Second Quarter                         Variance
                                                                             2011                                2012                                 $                        %
                                                                             ----                                ----                               ---                       ---
    Revenues:
    ---------
                                                                                                                                                                                            
    Aerospace                                                              $1,376                              $1,592                              $216                              15.7 %
                                                                                                                                                                                            
    Combat Systems                                                          2,121                               2,149                                28                               1.3 %
                                                                                                                                                                                            
    Marine Systems                                                          1,576                               1,653                                77                               4.9 %
                                                                                                                                                                                            
    Information Systems and
    Technology
                                                     2,806                               2,528                                (278)                           (9.9)%
                                                     -----                               -----                                ----
                                                                                                                                                                                            
    Total                                                                  $7,879                              $7,922                               $43                               0.5 %
                                                                           ======                              ======                               ===
                                                                                                                                                                                            
    Operating earnings:
    -------------------
                                                                                                                                                                                            
    Aerospace                                                                $209                                $257                               $48                              23.0 %
                                                                                                                                                                                            
    Combat Systems                                                            299                                 322                                23                               7.7 %
                                                                                                                                                                                            
    Marine Systems                                                            161                                 183                                22                              13.7 %
                                                                                                                                                                                            
    Information Systems and
    Technology
                                                       299                                 226                                 (73)                          (24.4)%
                                                                                                                                                                                            
    Corporate                                                                 (19)                                (18)                                1                               5.3 %
                                                                                                                                                                                            
    Total                                                                    $949                                $970                               $21                               2.2 %
                                                                             ====                                ====                               ===
                                                                                                                                                                                            
    Operating margins:
    ------------------
                                                                                                                                                                                            
    Aerospace                                                               15.2 %                              16.1 %
                                                                                                                                                                                            
    Combat Systems                                                          14.1 %                              15.0 %
                                                                                                                                                                                            
    Marine Systems                                                          10.2 %                              11.1 %
                                                                                                                                                                                            
    Information Systems and
    Technology
                                                     10.7 %                               8.9 %
                                                                                                                                                                                            
    Total                                                                   12.0 %                              12.2 %
                                                                                                                                                                                                  
                                                                                                                                                                                                  
                                                                                                                                                                                                  
                                                                                              EXHIBIT D
                                                                                                                                                                                                
                                                                       REVENUES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)
                                                                                         DOLLARS IN MILLIONS
                                                                                                                                                                                                
                                                                   Six Months                             Variance
                                                                               2011                                  2012                                 $                        %
                                                                               ----                                  ----                               ---                       ---
    Revenues:
    ---------
                                                                                                                                                                                                
    Aerospace                                                                $2,729                                $3,215                              $486                              17.8 %
                                                                                                                                                                                                
    Combat Systems                                                            4,076                                 4,060                               (16)                             (0.4)%
                                                                                                                                                                                                
    Marine Systems                                                            3,252                                 3,258                                 6                               0.2 %
                                                                                                                                                                                                
    Information Systems and
    Technology
                                                     5,620                                 4,968                                  (652)                          (11.6)%
                                                     -----                                 -----                                  ----
                                                                                                                                                                                                
    Total                                                                   $15,677                               $15,501                             $(176)                             (1.1)%
                                                                            =======                               =======                             =====
                                                                                                                                                                                                
    Operating earnings:
    -------------------
                                                                                                                                                                                                
    Aerospace                                                                  $439                                  $528                               $89                              20.3 %
                                                                                                                                                                                                
    Combat Systems                                                              576                                   525                               (51)                             (8.9)%
                                                                                                                                                                                                
    Marine Systems                                                              328                                   368                                40                              12.2 %
                                                                                                                                                                                                
    Information Systems and
    Technology
                                                       575                                   444                                  (131)                          (22.8)%
                                                                                                                                                                                                
    Corporate                                                                   (40)                                  (35)                                5                              12.5 %
                                                                                                                                                                                                
    Total                                                                    $1,878                                $1,830                              $(48)                             (2.6)%
                                                                             ======                                ======                              ====
                                                                                                                                                                                                
    Operating margins:
    ------------------
                                                                                                                                                                                                
    Aerospace                                                                 16.1 %                                16.4 %
                                                                                                                                                                                                
    Combat Systems                                                            14.1 %                                12.9 %
                                                                                                                                                                                                
    Marine Systems                                                            10.1 %                                11.3 %
                                                                                                                                                                                                
    Information Systems and
    Technology
                                                     10.2 %                                 8.9 %
                                                                                                                                                                                                
    Total                                                                     12.0 %                                11.8 %



                                                                         EXHIBIT E

                                                          PRELIMINARY CONSOLIDATED BALANCE SHEETS
                                                                    DOLLARS IN MILLIONS
                                                                                                                             (Unaudited)
                                                                                                  December 31, 2011          July 1, 2012
                                                                                                  -----------------          ------------
    ASSETS
    Current assets:
    Cash and equivalents                                                                                             $2,649                $2,540
    Accounts receivable                                                                                               4,452                 4,571
    Contracts in process                                                                                              5,168                 4,916
    Inventories                                                                                                       2,310                 2,648
    Other current assets                                                                                                789                   852
    --------------------
    Total current assets                                                                                             15,368                15,527
    --------------------                                                                                             ------                ------

    Noncurrent assets:
    Property, plant and equipment, net                                                                                3,284                 3,248
    Intangible assets, net                                                                                            1,813                 1,738
    Goodwill                                                                                                         13,576                13,762
    Other assets                                                                                                        842                   928
    ------------
    Total noncurrent assets                                                                                          19,515                19,676
    -----------------------                                                                                          ------                ------
    Total assets                                                                                                    $34,883               $35,203
                                                                                                                    -------               -------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Short-term debt and current portion of long-term debt                                                               $23                $1,028
    Accounts payable                                                                                                  2,895                 2,559
    Customer advances and deposits                                                                                    5,011                 5,398
    Other current liabilities                                                                                         3,216                 3,194
    -------------------------
    Total current liabilities                                                                                        11,145                12,179
    -------------------------                                                                                        ------                ------

    Noncurrent liabilities:
    Long-term debt                                                                                                    3,907                 2,905
    Other liabilities                                                                                                 6,599                 6,457
    -----------------                                                                                                 -----                 -----
    Total noncurrent liabilities                                                                                     10,506                 9,362
    ----------------------------                                                                                     ------                 -----

    Shareholders' equity:
    Common stock                                                                                                        482                   482
    Surplus                                                                                                           1,888                 1,939
    Retained earnings                                                                                                18,917                19,751
    Treasury stock                                                                                                   (5,743)               (6,208)
    Accumulated other comprehensive loss                                                                             (2,312)               (2,302)
    ------------------------------------
    Total shareholders' equity                                                                                       13,232                13,662
    --------------------------                                                                                       ------                ------
    Total liabilities and shareholders' equity                                                                      $34,883               $35,203
    ------------------------------------------                                                                      -------               -------

                                                                                                           EXHIBIT F

                                                                                 PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                                                                      DOLLARS IN MILLIONS

                                                                                                                                               Six Months Ended
                                                                                                                                               ----------------
    Cash flows from operating activities:                                                                                                        July 3, 2011           July 1, 2012
                                                                                                                                                 ------------           ------------
    Net earnings                                                                                                                                                $1,271               $1,198
    Adjustments to reconcile net earnings to net cash provided by
    operating activities:
    Depreciation of property, plant and equipment                                                                                                                  172                  189
    Amortization of intangible assets                                                                                                                              116                  115
    Stock-based compensation expense                                                                                                                                64                   69
    Excess tax benefit from stock-based compensation                                                                                                               (21)                 (22)
    Deferred income tax provision                                                                                                                                   34                    3
    Discontinued operations, net of tax                                                                                                                             13                    -
    (Increase) decrease in assets, net of effects of business acquisitions:
    Accounts receivable                                                                                                                                           (385)                (110)
    Contracts in process                                                                                                                                          (132)                 194
    Inventories                                                                                                                                                   (224)                (316)
    Increase (decrease) in liabilities, net of effects of business acquisitions:
    Accounts payable                                                                                                                                              (103)                (342)
    Customer advances and deposits                                                                                                                                 283                  226
    Other, net                                                                                                                                                      (9)                  (1)
    Net cash provided by operating activities                                                                                                                    1,079                1,203
    -----------------------------------------                                                                                                                    -----                -----

    Cash flows from investing activities:
    Capital expenditures                                                                                                                                          (152)                (176)
    Business acquisitions, net of cash acquired                                                                                                                      -                 (165)
    Purchases of held-to-maturity securities                                                                                                                      (278)                (160)
    Maturities of held-to-maturity securities                                                                                                                      221                   19
    Purchases of available-for-sale securities                                                                                                                    (257)                (100)
    Other, net                                                                                                                                                     215                   76
    Net cash used by investing activities                                                                                                                         (251)                (506)
    -------------------------------------                                                                                                                         ----                 ----

    Cash flows from financing activities:
    Purchases of common stock                                                                                                                                   (1,121)                (592)
    Dividends paid                                                                                                                                                (333)                (353)
    Proceeds from option exercises                                                                                                                                 175                  111
    Other, net                                                                                                                                                      (2)                  28
    Net cash used by financing activities                                                                                                                       (1,281)                (806)
    -------------------------------------                                                                                                                       ------                 ----

    Net cash used by discontinued operations                                                                                                                        (3)                   -
    ----------------------------------------                                                                                                                       ---                  ---

    Net decrease in cash and equivalents                                                                                                                          (456)                (109)
    Cash and equivalents at beginning of period                                                                                                                  2,613                2,649
    -------------------------------------------
    Cash and equivalents at end of period                                                                                                                       $2,157               $2,540
    -------------------------------------                                                                                                                       ------               ------



                                                                                                                                                                            EXHIBIT G

                                                                                                                                                          PRELIMINARY FINANCIAL INFORMATION (UNAUDITED)
                                                                                                                                                    DOLLARS IN MILLIONS EXCEPT PER SHARE AND EMPLOYEE AMOUNTS

                                                                                                                                  Second Quarter                                                                                                            Second Quarter
                                                                                                                                                               2011                                                                                                                 2012
                                                                                                                                                               ----                                                                                                                 ----
    Non-GAAP Financial Measures:
    ----------------------------

    Free cash flow from operations:                                                                                                   Quarter                                                      Year-to-date                                                 Quarter                                               Year-to-date
                                                                                                                                     -------                                                       ------------                                                -------                                               ------------
    Net cash provided by operating activities                                                                                                                  $751                                                      $1,079                                                     $789                                           $1,203
    Capital expenditures                                                                                                                                        (91)                                                       (152)                                                     (86)                                            (176)
    Free cash flow from operations (A)                                                                                                                         $660                                                        $927                                                     $703                                           $1,027
                                                                                                                                                               ====                                                        ====                                                     ====                                           ======

    Return on invested capital:
    Earnings from continuing operations                                                                                                                      $2,662                                                                                                               $2,466
     After-tax interest expense                                                                                                                                 104                                                                                                                  113
     After-tax amortization expense                                                                                                                             159                                                                                                                  162
    Net operating profit after taxes                                                                                                                          2,925                                                                                                                2,741
    Average debt and equity                                                                                                                                  16,838                                                                                                               17,475
    Return on invested capital (B)                                                                                                                             17.4%                                                                                                                15.7%
                                                                                                                                                               ====                                                                                                                 ====

    Other Financial Information:
    ----------------------------
    Return on equity (C)                                                                                                                                       19.7%                                                                                                                18.1%

    Debt-to-equity (D)                                                                                                                                         22.8%                                                                                                                28.8%

    Debt-to-capital (E)                                                                                                                                        18.6%                                                                                                                22.4%

    Book value per share (F)                                                                                                                                 $38.49                                                                                                               $38.73

    Total taxes paid                                                                                                                                           $479                                                                                                                 $424

    Company-sponsored research
     and development (G)                                                                                                                                       $149                                                                                                                 $130

    Employment                                                                                                                                               88,400                                                                                                               93,500

    Sales per employee (H)                                                                                                                                 $359,600                                                                                                             $348,800

    Shares outstanding                                                                                                                                  361,764,830                                                                                                          352,778,253

    (A) We believe free cash flow from operations is a measurement that is useful to investors because it portrays our ability to generate cash from our core businesses for such purposes as repaying maturing debt, funding business acquisitions and paying dividends.  We use free cash flow from operations to assess
     the quality of our earnings and as a performance measure in evaluating management.  The most directly comparable GAAP measure to free cash flow from operations is net cash provided by operating activities.

    (B) We believe return on invested capital (ROIC) is a measurement that is useful to investors because it reflects our ability to generate returns from the capital we have deployed in our operations.  We use ROIC to evaluate investment decisions and as a performance measure in evaluating management.  We define
     ROIC as net operating profit after taxes for the latest 12-month period divided by the sum of the average debt and shareholders' equity for the same period.  Net operating profit after taxes is defined as earnings from continuing operations plus after-tax interest and amortization expense.  The most
     directly comparable GAAP measure to net operating profit after taxes is earnings from continuing operations.

    (C) Return on equity is calculated by dividing earnings from continuing operations for the latest 12-month period by our average equity during that period.

    (D) Debt-to-equity ratio is calculated as total debt divided by total equity as of the end of the period.

    (E) Debt-to-capital ratio is calculated as total debt divided by the sum of total debt plus total equity as of the end of the period.

    (F) Book value per share is calculated as total equity divided by total outstanding shares as of the end of the period.

    (G) Includes independent research and development and bid and proposal costs and Gulfstream product-development costs.

    (H) Sales per employee is calculated by dividing revenues for the latest 12-month period by our average number of employees during that period.

                                                                                                                                                   EXHIBIT H
                                                                                                                                                                                                                                                                                                          
                                                                                                                                              BACKLOG (UNAUDITED)
                                                                                                                                              DOLLARS IN MILLIONS
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                   Estimated
                                                                                                                                                                        Total                                      Potential                                        Total Potential
    Second Quarter 2012                                                           Funded                                     Unfunded                                  Backlog                                  Contract Value*                                     Contract Value
    -------------------                                                           ------                                     --------                                  -------                                  --------------                                      --------------
    Aerospace                                                                                $16,058                                          $241                              $16,299                               $                    -                                            $16,299
                                                                                                                                                                                                                                                                                                          
    Combat Systems                                                                             8,854                                           905                                9,759                                                3,090                                             12,849
                                                                                                                                                                                                                                                                                                          
    Marine Systems                                                                            11,666                                         5,339                               17,005                                                1,377                                             18,382
                                                                                                                                                                                                                                                                                                          
    Information Systems and
    Technology
                                                                                               7,348                                         1,951                                9,299                                               21,774                                             31,073
                                                                                               -----                                         -----                                -----                                               ------                                             ------
                                                                                                                                                                                                                                                                                                          
    Total                                                                                    $43,926                                        $8,436                              $52,362                                              $26,241                                            $78,603
                                                                                             =======                                        ======                              =======                                              =======                                            =======
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                          
    First Quarter 2012
    ------------------
    Aerospace                                                                                $16,718                                          $266                              $16,984                             $                      -                                            $16,984
                                                                                                                                                                                                                                                                                                          
    Combat Systems                                                                             9,623                                         1,042                               10,665                                                3,473                                             14,138
                                                                                                                                                                                                                                                                                                          
    Marine Systems                                                                            12,261                                         5,754                               18,015                                                1,199                                             19,214
                                                                                                                                                                                                                                                                                                          
    Information Systems and
    Technology
                                                                                               7,649                                         1,913                                9,562                                               22,256                                             31,818
                                                                                               -----                                         -----                                -----                                               ------                                             ------
                                                                                                                                                                                                                                                                                                          
    Total                                                                                    $46,251                                        $8,975                              $55,226                                              $26,928                                            $82,154
                                                                                             =======                                        ======                              =======                                              =======                                            =======
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                          
    Second Quarter 2011
    -------------------
    Aerospace                                                                                $17,948                                          $340                              $18,288                             $                      -                                            $18,288
                                                                                                                                                                                                                                                                                                          
    Combat Systems                                                                             9,657                                         1,135                               10,792                                                4,370                                             15,162
                                                                                                                                                                                                                                                                                                          
    Marine Systems                                                                             9,191                                         9,209                               18,400                                                1,097                                             19,497
                                                                                                                                                                                                                                                                                                          
    Information Systems and
    Technology
                                                                                               7,468                                         2,168                                9,636                                               15,697                                             25,333
                                                                                               -----                                         -----                                -----                                               ------                                             ------
                                                                                                                                                                                                                                                                                                          
    Total                                                                                    $44,264                                       $12,852                              $57,116                                              $21,164                                            $78,280
                                                                                             =======                                       =======                              =======                                              =======                                            =======
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                          
    *  The estimated potential contract value represents management's estimate of our future contract value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options associated with existing firm contracts, including options to
     purchase new aircraft and long-term agreements with fleet customers, as applicable.  Because the value in the unfunded IDIQ arrangements is subject to the customer's future exercise of an indeterminate quantity of orders, we recognize these contracts in backlog only
     when they are funded.  Unexercised options are recognized in backlog when the customer exercises the option and establishes a firm order.

                 EXHIBIT I

      SECOND QUARTER 2012 SIGNIFICANT
             ORDERS (UNAUDITED)
            DOLLARS IN MILLIONS

We received the following significant contract orders during the second quarter of 2012:

Combat Systems

    --  $270 from the U.S. Army for the production of Hydra-70 rockets.
    --  $170 from the Army to upgrade Abrams main battle tanks to the M1A2
        System Enhancement Package (SEP) configuration and for continued
        technical support on the program.
    --  $115 from the Army for the double-V-hull conversion of 49
        previously-delivered Stryker vehicles and contractor logistics support.

Marine Systems

    --  $125 from the U.S. Navy for Advanced Nuclear Plant Studies (ANPS) in
        support of development of the next-generation ballistic-missile
        submarine (SSBN(X)).
    --  $80 from the Navy for long-lead funding for the construction of the
        first Virginia-class submarine under Block IV of the program.
    --  $65 from the Navy for planning yard services for the DDG-51 guided
        missile destroyer and FFG-7 Oliver Hazard Perry-class frigate programs.

Information Systems and Technology

    --  $80 for support of the Trident missile D5 life-extension program, which
        extends the life of existing missiles by replacing and upgrading
        obsolete components.
    --  $30 from the Army under the Range Radar Replacement Program (RRRP) to
        develop modernized instrumentation radars at U.S Army test ranges.
    --  An award from the Centers for Medicare & Medicaid Services (CMS) to
        combine the Coordination of Benefits and the Medicare Secondary Payer
        systems.  The program has a maximum potential value of $100 over 5
        years.
    --  An indefinite delivery, indefinite quantity (IDIQ) contract from the
        Federal Aviation Administration to deliver radios that allow air traffic
        control personnel to communicate with aircraft.  The program has a
        maximum potential value of $365 over 10 years.
                                      EXHIBIT J

                       AEROSPACE SUPPLEMENTAL DATA (UNAUDITED)

                Second Quarter              Six Months
                           2011                      2012      2011 2012
                           ----                      ----      ---- ----
    Gulfstream
     Green
     Deliveries
     (units):
    -----------

    Large
     aircraft                20                        24        40   50

    Mid-size
     aircraft                 3                         2         7    4
                            ---                       ---       ---  ---

    Total                    23                        26        47   54
                            ===                       ===       ===  ===

    Gulfstream
     Outfitted
     Deliveries
     (units):
    -----------

    Large
     aircraft                19                        18        38   35

    Mid-size
     aircraft                 3                         3         8    5
                            ---                       ---       ---  ---

    Total                    22                        21        46   40
                            ===                       ===       ===  ===

    Pre-owned
     Deliveries
     (units):                 2                         -         2    -
    -----------             ===                       ===       ===  ===

SOURCE General Dynamics

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