10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 5, 2015

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-3671

GENERAL DYNAMICS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	13-1673581
State or other jurisdiction of incorporation or organization	I.R.S. employer identification no.
2941 Fairview Park Drive, Suite 100 Falls Church, Virginia	22042-4513
Address of principal executive offices	Zip code

(703) 876-3000

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ü No ___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ü No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filerü Accelerated Filer __ Non-Accelerated Filer __ Smaller Reporting Company ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ü

328,732,777 shares of the registrant’s common stock, $1 par value per share, were outstanding on April 5, 2015.

1

INDEX

PART I -	FINANCIAL INFORMATION	PAGE
Item 1 -	Unaudited Consolidated Financial Statements
	Consolidated Statements of Earnings	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Shareholders' Equity	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4 -	Controls and Procedures	35
	FORWARD-LOOKING STATEMENTS	35
PART II -	OTHER INFORMATION	36
Item 1 -	Legal Proceedings	36
Item 1A -	Risk Factors	36
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 6 -	Exhibits	38
	SIGNATURES	39

2

PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

	Three Months Ended
(Dollars in millions, except per-share amounts)	April 5, 2015			March 30, 2014
Revenues:
Products	$	4,932		$	4,438
Services	2,852			2,827
	7,784			7,265
Operating costs and expenses:
Products	3,819			3,464
Services	2,435			2,436
General and administrative (G&A)	503			491
	6,757			6,391
Operating earnings	1,027			874
Interest, net	(21		)	(22		)
Other, net	3			1
Earnings from continuing operations before income tax	1,009			853
Provision for income tax, net	293			257
Earnings from continuing operations	716			596
Discontinued operations, net of tax of ($1) in 2014	—			(1		)
Net earnings	$	716		$	595
Earnings per share
Basic:
Continuing operations	$	2.18		$	1.74
Discontinued operations	—			—
Net earnings	$	2.18		$	1.74
Diluted:
Continuing operations	$	2.14		$	1.71
Discontinued operations	—			—
Net earnings	$	2.14		$	1.71

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended
(Dollars in millions)	April 5, 2015			March 30, 2014
Net earnings	$	716		$	595
(Losses) gains on cash flow hedges	(383		)	4
Unrealized gains on securities	2			3
Foreign currency translation adjustments	(104		)	(65		)
Change in retirement plans' funded status	97			61
Other comprehensive (loss) income, pretax	(388		)	3
(Benefit) provision for income tax, net	(104		)	21
Other comprehensive loss, net of tax	(284		)	(18		)
Comprehensive income	$	432		$	577

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

4

CONSOLIDATED BALANCE SHEETS

	(Unaudited)
(Dollars in millions)	April 5, 2015			December 31, 2014
ASSETS
Current assets:
Cash and equivalents	$	4,412		$	4,388
Accounts receivable	3,661			4,050
Contracts in process	4,444			4,591
Inventories	3,397			3,221
Other current assets	438			1,157
Total current assets	16,352			17,407
Noncurrent assets:
Property, plant and equipment, net	3,323			3,329
Intangible assets, net	893			912
Goodwill	11,699			11,731
Other assets	2,118			1,976
Total noncurrent assets	18,033			17,948
Total assets	$	34,385		$	35,355
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	1		$	501
Accounts payable	2,266			2,057
Customer advances and deposits	6,487			7,335
Other current liabilities	4,358			3,858
Total current liabilities	13,112			13,751
Noncurrent liabilities:
Long-term debt	3,410			3,410
Other liabilities	6,343			6,365
Commitments and contingencies (See Note L)
Total noncurrent liabilities	9,753			9,775
Shareholders' equity:
Common stock	482			482
Surplus	2,588			2,548
Retained earnings	21,615			21,127
Treasury stock	(9,949		)	(9,396		)
Accumulated other comprehensive loss	(3,216		)	(2,932		)
Total shareholders' equity	11,520			11,829
Total liabilities and shareholders' equity	$	34,385		$	35,355

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended
(Dollars in millions)	April 5, 2015			March 30, 2014
Cash flows from operating activities - continuing operations:
Net earnings	$	716		$	595
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of property, plant and equipment	94			95
Amortization of intangible assets	30			30
Stock-based compensation expense	40			27
Excess tax benefit from stock-based compensation	(30		)	(32		)
Deferred income tax provision	(8		)	36
Discontinued operations, net of tax	—			1
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable	388			119
Contracts in process	152			(94		)
Inventories	(183		)	(21		)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable	210			(29		)
Customer advances and deposits	(871		)	(165		)
Income taxes payable	251			150
Other current liabilities	(38		)	(173		)
Other, net	(6		)	(117		)
Net cash provided by operating activities	745			422
Cash flows from investing activities - continuing operations:
Maturities of held-to-maturity securities	500			—
Capital expenditures	(98		)	(87		)
Other, net	94			10
Net cash provided (used) by investing activities	496			(77		)
Cash flows from financing activities - continuing operations:
Purchases of common stock	(620		)	(1,430		)
Repayment of fixed-rate notes	(500		)	—
Dividends paid	(206		)	(198		)
Proceeds from option exercises	87			249
Other, net	30			32
Net cash used by financing activities	(1,209		)	(1,347		)
Net cash used by discontinued operations	(8		)	(3		)
Net increase (decrease) in cash and equivalents	24			(1,005		)
Cash and equivalents at beginning of period	4,388			5,301
Cash and equivalents at end of period	$	4,412		$	4,296
Supplemental cash flow information:
Cash payments for:
Income taxes	$	53		$	67
Interest	$	19		$	19

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

6

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

	Common Stock				Retained			Treasury			Accumulated Other  Comprehensive			Total Shareholders’
(Dollars in millions)	Par		Surplus		Earnings			Stock			Loss			Equity
Balance, December 31, 2014	$	482	$	2,548	$	21,127		$	(9,396	)	$	(2,932	)	$	11,829
Net earnings	—		—		716			—			—			716
Cash dividends declared	—		—		(228		)	—			—			(228		)
Stock-based awards	—		40		—			81			—			121
Shares purchased	—		—		—			(634		)	—			(634		)
Other comprehensive loss	—		—		—			—			(284		)	(284		)
Balance, April 5, 2015	$	482	$	2,588	$	21,615		$	(9,949	)	$	(3,216	)	$	11,520
Balance, December 31, 2013	$	482	$	2,226	$	19,428		$	(6,450	)	$	(1,185	)	$	14,501
Net earnings	—		—		595			—			—			595
Cash dividends declared	—		—		(214		)	—			—			(214		)
Stock-based awards	—		99		—			205			—			304
Shares purchased	—		—		—			(1,478		)	—			(1,478		)
Other comprehensive loss	—		—		—			—			(18		)	(18		)
Balance, March 30, 2014	$	482	$	2,325	$	19,809		$	(7,723	)	$	(1,203	)	$	13,690

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

7

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per-share amounts or unless otherwise noted)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the unaudited Consolidated Financial Statements.

Consistent with defense industry practice, we classify assets and liabilities related to long-term production contracts as current, even though some of these amounts may not be realized within one year. In addition, some prior-year amounts have been reclassified among financial statement accounts to conform to the current-year presentation.

Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These rules and regulations permit some of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted.

Our fiscal quarters are 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three-month period ended April 5, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three-month periods ended April 5, 2015, and March 30, 2014.

These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Revenue Recognition. We account for revenues and earnings using the percentage-of-completion method. Under this method, contract costs and revenues are recognized as the work progresses, either as the products are produced or as services are rendered. We estimate the profit on a contract as the difference between the total estimated revenue and costs to complete a contract and recognize that profit over the life of the contract. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the loss in the quarter it is identified.

We review and update our contract-related estimates regularly. We recognize changes in estimated profit on contracts under the reallocation method. Under the reallocation method, the impact of a revision in estimate is recognized prospectively over the remaining contract term. The net increase in our operating earnings (and on a per-share basis) from the impact of revisions in contract estimates totaled favorable changes of $63 ($0.12) and $38($0.07) for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. No revisions on any one contract were material to our unaudited Consolidated Financial Statements in the first quarter of 2015 or 2014.

In the second quarter of 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 prescribes a single, common revenue standard that replaces most existing revenue recognition guidance in GAAP. The standard outlines a five-step model, whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition.

8

For public companies, ASU 2014-09 is effective in the first quarter of 2017. On April 1, 2015, the FASB proposed a one-year deferral of the standard's effective date, while permitting entities to still adopt one year earlier on the original effective date. A final determination will be made after a public comment period. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition date or method nor have we determined the effect of the standard on our consolidated financial statements as the standard continues to undergo changes.

The required adoption of the ASU will preclude our use of the reallocation method of recognizing revisions in estimated profit on contracts discussed above. As changes in estimated profit will be recognized in the period they are identified (cumulative catch-up method), rather than prospectively over the remaining contract term, we expect that the impact of revisions of contract estimates may be larger and potentially more variable from period to period. Anticipated losses on contracts will continue to be recognized in the quarter they are identified.

Discontinued Operations. We completed the sale of our axle business in the Combat Systems group in January 2015. The financial statements have been restated to reflect the results of operations of this business in discontinued operations.

Subsequent Events. We have evaluated material events and transactions that have occurred after April 5, 2015, and concluded that none have occurred that require adjustment to or disclosure in the unaudited Consolidated Financial Statements.

B. ACQUISITIONS, INTANGIBLE ASSETS AND GOODWILL

We did not acquire any businesses in the first quarter of 2015. In 2014, our Information Systems and Technology group acquired a provider of IT support to U.S. special operations forces.

The operating results of this acquisition have been included with our reported results since the closing date. The purchase price of this acquisition has been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill.

The changes in the carrying amount of goodwill by reporting unit for the three months ended

April 5, 2015, were as follows:

	Aerospace		Combat Systems			Information Systems and Technology			Marine Systems		Total Goodwill
December 31, 2014 (a)	$	2,555	$	2,750		$	6,137		$	289	$	11,731
Other (b)	58		(74		)	(16		)	—		(32		)
April 5, 2015	$	2,613	$	2,676		$	6,121		$	289	$	11,699

(a)Goodwill on December 31, 2014, in the Information Systems and Technology reporting unit is net of $1,994 of accumulated impairment losses.

(b)Consists primarily of adjustments for foreign currency translation.

9

Intangible assets consisted of the following:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	April 5, 2015							December 31, 2014
Contract and program intangible assets*	$	1,654	$	(1,148	)	$	506	$	1,652	$	(1,123	)	$	529
Trade names and trademarks	471		(115		)	356		462		(113		)	349
Technology and software	129		(98		)	31		130		(97		)	33
Other intangible assets	154		(154		)	—		154		(153		)	1
Total intangible assets	$	2,408	$	(1,515	)	$	893	$	2,398	$	(1,486	)	$	912

* Consists of acquired backlog and probable follow-on work and related customer relationships.

Amortization expense was $30for the three-month periods ended April 5, 2015, and March 30, 2014. We expect to record amortization expense of $120 in 2015.

C. EARNINGS PER SHARE

We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding have decreased throughout 2015 and 2014 due to share repurchases. See Note J for additional details of our share repurchases. Diluted EPS incorporates the additional shares issuable upon the assumed exercise of stock options and the release of restricted shares and restricted stock units (RSUs).

Basic and diluted weighted average shares outstanding were as follows (in thousands):

Three Months Ended	April 5, 2015	March 30, 2014
Basic weighted average shares outstanding	329,154	342,232
Dilutive effect of stock options and restricted stock/RSUs*	5,528	5,016
Diluted weighted average shares outstanding	334,682	347,248

* Excludes the following outstanding options to purchase shares of common stock because these options had exercise prices in excess of the average market price of our common stock during the period and therefore the effect of including these options would be antidilutive: 2015 - 722 and 2014 - 4,790.

D. FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:

10

• Level 1 – quoted prices in active markets for identical assets or liabilities;

• Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly; and

• Level 3 – unobservable inputs significant to the fair value measurement.

We did not have any significant non-financial assets or liabilities measured at fair value on April 5, 2015, or December 31, 2014, except for the assets of our axle business that were classified as held for sale on December 31, 2014, and were measured at fair value using Level 3 inputs.

Our financial instruments include cash and equivalents, marketable securities and other investments; accounts receivable and accounts payable; short- and long-term debt; and derivative financial instruments. The carrying values of cash and equivalents, accounts receivable and payable and short-term debt on the Consolidated Balance Sheets approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on April 5, 2015, and December 31, 2014, and the basis for determining their fair values:

	Carrying Value			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2) (a)
Financial assets (liabilities) (b)	April 5, 2015
Available-for-sale securities	$	188		$	188		$	120	$	68
Derivatives	(673		)	(673		)	—		(673		)
Long-term debt,      including current portion	(3,411		)	(3,433		)	—		(3,433		)
	December 31, 2014
Held-to-maturity marketable securities	$	500		$	500		$	10	$	490
Available-for-sale securities	188			188			123		65
Derivatives	(276		)	(276		)	—		(276		)
Long-term debt,      including current portion	(3,911		)	(3,911		)	—		(3,911		)

(a)Determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets and liabilities.

(b)We had no Level 3 financial instruments on April 5, 2015, or December 31, 2014.

E. INCOME TAXES

Net Deferred Tax Assets. Our net deferred tax asset was included on the Consolidated Balance Sheets in other assets and liabilities as follows:

	April 5, 2015			December 31, 2014
Current deferred tax asset	$	15		$	16
Current deferred tax liability	(739		)	(729		)
Noncurrent deferred tax asset	1,559			1,439
Noncurrent deferred tax liability	(85		)	(82		)
Net deferred tax asset	$	750		$	644

Tax Uncertainties. For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more

11

than a 50 percent chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense.

We participate in the Internal Revenue Service (IRS) Compliance Assurance Process, a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2013. We do not expect the resolution of tax matters for open years to have a material impact on our results of operations, financial condition, cash flows or effective tax rate.

Based on all known facts and circumstances and current tax law, we believe the total amount of any unrecognized tax benefits on April 5, 2015, is not material to our results of operations, financial condition or cash flows, and if recognized, would not have a material impact on our effective tax rate. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will significantly vary over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows.

F. CONTRACTS IN PROCESS

Contracts in process represent recoverable costs and, where applicable, accrued profit related to long-term contracts that have been inventoried until the customer is billed, and consisted of the following:

	April 5, 2015			December 31, 2014
Contract costs and estimated profits	$	7,390		$	7,494
Other contract costs	1,061			1,064
	8,451			8,558
Advances and progress payments	(4,007		)	(3,967		)
Total contracts in process	$	4,444		$	4,591

Contract costs consist primarily of labor, material, overhead and G&A expenses. Other contract costs represent amounts that are not currently allocable to government contracts, such as a portion of our estimated workers’ compensation obligations, other insurance-related assessments, pension and other post-retirement benefits and environmental expenses. These costs will become allocable to contracts generally after they are paid. We expect to recover these costs through ongoing business, including existing backlog and probable follow-on contracts. If the backlog in the future does not support the continued deferral of these costs, the profitability of our remaining contracts could be adversely affected.

G.INVENTORIES

Our inventories represent primarily business-jet components and are stated at the lower of cost or net realizable value. Work-in-process represents largely labor, material and overhead costs associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost of the units in a production lot. Raw materials are valued primarily on the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value.

12

Inventories consisted of the following:

	April 5, 2015		December 31, 2014
Work in process	$	1,980	$	1,828
Raw materials	1,327		1,290
Finished goods	23		28
Pre-owned aircraft	67		75
Total inventories	$	3,397	$	3,221

H. DEBT

Debt consisted of the following:

		April 5, 2015		December 31, 2014
Fixed-rate notes due:	Interest Rate
January 2015	1.375%	$	—	$	500
July 2016	2.250%	500		500
November 2017	1.000%	897		897
July 2021	3.875%	499		499
November 2022	2.250%	992		992
November 2042	3.600%	498		498
Other	Various	25		25
Total debt		3,411		3,911
Less current portion		1		501
Long-term debt		$	3,410	$	3,410

Our fixed-rate notes are fully and unconditionally guaranteed by several of our 100-percent-owned subsidiaries (see Note O for condensed consolidating financial statements). We have the option to redeem the notes prior to their maturity in whole or part for the principal plus any accrued but unpaid interest and applicable make-whole amounts. In January 2015, we repaid $500 of fixed-rate notes on their scheduled maturity date.

On April 5, 2015, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. We have $2 billion in committed bank credit facilities that provide backup liquidity to our commercial paper program. These credit facilities include a $1 billion multi-year facility expiring in July 2016 and a $1 billion multi-year facility expiring in July 2018. These facilities are required by rating agencies to support our commercial paper issuances. We may renew or replace, in whole or part, these credit facilities at or prior to their expiration dates. Our bank credit facilities are guaranteed by several of our 100-percent-owned subsidiaries. In addition, we have approximately $115 in committed bank credit facilities to provide backup liquidity to our European businesses.

Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants on April 5, 2015.

13

I. OTHER LIABILITIES

A summary of significant other liabilities by balance sheet caption follows:

	April 5, 2015		December 31, 2014
Deferred income taxes	$	739	$	729
Fair value of cash flow hedges	722		292
Salaries and wages	601		718
Workers' compensation	417		420
Retirement benefits	306		309
Other (a)	1,573		1,390
Total other current liabilities	$	4,358	$	3,858
Retirement benefits	$	4,595	$	4,596
Customer deposits on commercial contracts	594		617
Deferred income taxes	85		82
Other (b)	1,069		1,070
Total other liabilities	$	6,343	$	6,365

(a)Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, liabilities of discontinued operations and insurance-related costs.

(b)Consists primarily of liabilities for warranty reserves and workers' compensation and liabilities of discontinued operations.

The increase in the fair value of our cash flow hedge liabilities from December 31, 2014, to April 5, 2015, largely corresponds to the unrecognized losses on cash flow hedges deferred in accumulated other comprehensive loss (AOCL). These losses will be deferred in AOCL until the underlying transaction is reflected in earnings, at which time we believe the losses will be offset by corresponding gains in the remeasurement of the underlying transactions being hedged.

J. SHAREHOLDERS' EQUITY

Share Repurchases. In the first three months of 2015, we repurchased approximately 4.7 million of our outstanding shares for $634. On February 9, 2015, with shares from the prior authorization largely exhausted, the board of directors authorized management to repurchase 10 million additional shares of common stock on the open market. On April 5, 2015, 7.7 million shares remained authorized by our board of directors for repurchase, approximately 2 percent of our total shares outstanding. We repurchased 29 million shares for a total of approximately $3.4 billion in 2014, including 14 million shares in the first three months of 2014.

Dividends per Share. Dividends declared per share were $0.69 and $0.62 and for the three-month periods ended April 5, 2015, andMarch 30, 2014, respectively. Cash dividends paid were $206 and $198 for the three-month periods ended April 5, 2015andMarch 30, 2014, respectively.

14

Accumulated Other Comprehensive Loss. The changes, pretax and net of tax, in each component of AOCL consisted of the following:

	Losses on Cash Flow Hedges			Unrealized Gains on Securities		Foreign Currency Translation Adjustments			Changes in Retirement Plans’ Funded Status			AOCL
Balance, December 31, 2014	$	(173	)	$	22	$	541		$	(3,322	)	$	(2,932	)
Other comprehensive loss, pretax	(383		)	2		(104		)	97			(388		)
Benefit for income tax, net	(135		)	2		(5		)	34			(104		)
Other comprehensive loss, net of tax	(248		)	—		(99		)	63			(284		)
Balance, April 5, 2015	$	(421	)	$	22	$	442		$	(3,259	)	$	(3,216	)

	Gains on Cash Flow Hedges		Unrealized Gains on Securities		Foreign Currency Translation Adjustments			Changes in Retirement Plans’ Funded Status			AOCL
Balance, December 31, 2013	$	9	$	15	$	974		$	(2,183	)	$	(1,185	)
Other comprehensive income, pretax	4		3		(65		)	61			3
Provision for income tax, net	1		1		(1		)	20			21
Other comprehensive loss, net of tax	3		2		(64		)	41			(18		)
Balance, March 30, 2014	$	12	$	17	$	910		$	(2,142	)	$	(1,203	)

Amounts reclassified out of AOCL related primarily to changes in retirement plans' funded status and consisted of pretax recognized net actuarial losses of $112 and $76 for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. This was partially offset by pretax amortization of prior service credit of $18 and $17 for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. These AOCL components are included in our net periodic pension and other post-retirement benefit cost. See Note M for additional details.

K. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We are exposed to market risk, primarily from foreign currency exchange rates, interest rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivatives for trading or speculative purposes.

Foreign Currency Risk and Hedging Activities. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and inter-company transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The two-year average maturity of these instruments matches the duration of the activities that are at risk.

We had $9 billion in notional forward exchange contracts outstanding on April 5, 2015, and $9.1 billion on December 31, 2014. We recognize derivative financial instruments on the Consolidated Balance Sheets at fair value (see Note D).

We record changes in the fair value of derivative financial instruments in operating costs and expenses in the Consolidated Statements of Earnings or in other comprehensive loss (OCL) within the

15

Consolidated Statements of Comprehensive Income depending on whether the derivative is designated and qualifies for hedge accounting. Gains and losses related to derivatives that qualify as cash flow hedges are deferred in OCL until the underlying transaction is reflected in earnings. We adjust derivative financial instruments not designated as cash flow hedges to market value each period and record the gain or loss in the Consolidated Statements of Earnings. The gains and losses on these instruments generally offset losses and gains on the assets, liabilities and other transactions being hedged. Gains and losses resulting from hedge ineffectiveness are recognized in the Consolidated Statements of Earnings for all derivative financial instruments, regardless of designation.

Net gains and losses recognized in earnings, including gains and losses related to hedge ineffectiveness, were not material to our results of operations for the three-month periods ended April 5, 2015, and March 30, 2014. Net gains and losses reclassified to earnings from OCL were not material to our results of operations for the three-month periods ended April 5, 2015, and March 30, 2014, and we do not expect the amount of these gains and losses that will be reclassified to earnings during the next 12 months to be material.

We had no material derivative financial instruments designated as fair value or net investment hedges on April 5, 2015, or December 31, 2014.

Interest Rate Risk. Our financial instruments subject to interest rate risk include fixed-rate long-term debt obligations and variable-rate commercial paper. However, the risk associated with these instruments is not material.

Commodity Price Risk. We are subject to risk of rising labor and commodity prices, primarily on long-term fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Some of the protective terms included in our contracts are considered derivatives but are not accounted for separately because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in labor or commodity prices will have a material impact on our results of operations or cash flows.

Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years. On April 5, 2015, we held $4.4 billion in cash and equivalents, but held no marketable securities.

Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses' functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of OCL.

We do not hedge the fluctuation in reported revenues and earnings resulting from the translation of these international operations' results into U.S. dollars. The impact of translating our non-U.S. operations’ revenues and earnings into U.S. dollars was not material to our results of operations for the three-month periods ended April 5, 2015, or March 30, 2014. In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material in the first three months of either 2015 or 2014.

16

L. COMMITMENTS AND CONTINGENCIES

Litigation

Various claims and other legal proceedings incidental to the normal course of business are pending or threatened against us. These matters relate to such issues as government investigations and claims, the protection of the environment, asbestos-related claims and employee-related matters. The nature of litigation is such that we cannot predict the outcome of these matters. However, based on information currently available, we believe any potential liabilities in these proceedings, individually or in the aggregate, will not have a material impact on our results of operations, financial condition or cash flows.

Environmental

We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a Potentially Responsible Party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts.

As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions, will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows.

Other

Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows.

In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based upon the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications and other claims will be resolved without material impact to our results of operations, financial condition or cash flows.

Letters of Credit and Guarantees. In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $972 on April 5, 2015. In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance obligations of our subsidiaries arising under certain contracts.

Aircraft Trade-ins. In connection with orders for new aircraft in funded contract backlog, our Aerospace group has outstanding options with some customers to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are structured to establish the fair market

17

value of the trade-in aircraft at a date generally 120 or fewer days preceding delivery of the new aircraft to the customer. At that time, the customer is required to either exercise the option or allow its expiration. Any excess of the pre-established trade-in price above the fair market value at the time the new outfitted aircraft is delivered is treated as a reduction of revenue in the new-aircraft sales transaction.

Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is generally based on the number of months of warranty coverage remaining for products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business-jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheets.

The changes in the carrying amount of warranty liabilities for the three-month periods ended April 5, 2015, and March 30, 2014, were as follows:

Three Months Ended	April 5, 2015			March 30, 2014
Beginning balance	$	428		$	354
Warranty expense	31			33
Payments	(29		)	(14		)
Ending balance	$	430		$	373

M. RETIREMENT PLANS

We provide defined-contribution benefits, as well as some remaining defined-benefit pension and other post-retirement benefits.

Net periodic cost associated with our defined-benefit pension and other post-retirement benefit plans for the three-month periods ended April 5, 2015, and March 30, 2014, consisted of the following:

	Pension Benefits						Other Post-retirement Benefits
Three Months Ended	April 5, 2015			March 30, 2014			April 5, 2015			March 30, 2014
Service cost	$	57		$	48		$	3		$	3
Interest cost	133			133			11			13
Expected return on plan assets	(174		)	(164		)	(8		)	(8		)
Recognized net actuarial loss	110			74			2			2
Amortization of prior service credit	(17		)	(17		)	(1		)	—
Net periodic cost	$	109		$	74		$	7		$	10

Our contractual arrangements with the U.S. government provide for the recovery of contributions to our pension and other post-retirement benefit plans covering employees working in our defense business groups. For non-funded plans, our government contracts allow us to recover claims paid. Following payment, these recoverable amounts are allocated to contracts and billed to the customer in accordance with the Cost Accounting Standards (CAS) and specific contractual terms. For some of these plans, the cumulative pension and post-retirement benefit cost exceeds the amount currently allocable to contracts. To the extent recovery of the cost is considered probable based on our backlog and probable follow-on contracts, we defer the excess in contracts in process on the Consolidated Balance Sheets until the cost is allocable to contracts. See Note F for discussion of our deferred contract costs. For other plans, the amount

18

allocated to contracts and included in revenues has exceeded the plans’ cumulative benefit cost. We have deferred recognition of these excess earnings to provide a better matching of revenues and expenses. These deferrals have been classified against the plan assets on the Consolidated Balance Sheets.

N. BUSINESS GROUP INFORMATION

We operate in four business groups: Aerospace, Combat Systems, Information Systems and Technology and Marine Systems. We organize our business groups in accordance with the nature of products and services offered. These business groups derive their revenues from business aviation; combat vehicles, weapons systems and munitions; communication and information technology systems and solutions; and military and commercial shipbuilding and services, respectively. We measure each group’s profit based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our business groups.

Summary financial information for each of our business groups follows:

	Revenues				Operating Earnings
Three Months Ended	April 5, 2015		March 30, 2014		April 5, 2015			March 30, 2014
Aerospace	$	2,108	$	2,125	$	431		$	404
Combat Systems	1,363		1,258		204			139
Information Systems and Technology	2,370		2,281		217			183
Marine Systems	1,943		1,601		188			166
Corporate*	—		—		(13		)	(18		)
	$	7,784	$	7,265	$	1,027		$	874

*Corporate operating results consist primarily of stock option expense.

19

O. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The fixed-rate notes described in Note H 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 (UNAUDITED)

Three Months Ended April 5, 2015	Parent			Guarantors on a Combined Basis		Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenues	$	—		$	6,768	$	1,016		$	—		$	7,784
Cost of sales	1			5,462		791			—			6,254
G&A	12			416		75			—			503
Operating earnings	(13		)	890		150			—			1,027
Interest, net	(23		)	1		1			—			(21		)
Other, net	1			2		—			—			3
Earnings before income tax	(35		)	893		151			—			1,009
Provision for income tax, net	(25		)	290		28			—			293
Equity in net earnings of subsidiaries	726			—		—			(726		)	—
Net earnings	$	716		$	603	$	123		$	(726	)	$	716
Comprehensive income	$	432		$	606	$	(224	)	$	(382	)	$	432
Three Months Ended March 30, 2014	Parent			Guarantors on a Combined Basis		Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenues	$	—		$	6,393	$	872		$	—		$	7,265
Cost of sales	6			5,198		696			—			5,900
G&A	14			368		109			—			491
Operating earnings	(20		)	827		67			—			874
Interest, net	(22		)	—		—			—			(22		)
Other, net	—			—		1			—			1
Earnings before income tax	(42		)	827		68			—			853
Provision for income tax, net	(9		)	249		17			—			257
Discontinued operations, net of tax	(1		)	—		—			—			(1		)
Equity in net earnings of subsidiaries	629			—		—			(629		)	—
Net earnings	$	595		$	578	$	51		$	(629	)	$	595
Comprehensive income	$	577		$	572	$	4		$	(576	)	$	577

20

CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)

April 5, 2015	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	2,599		$	—		$	1,813		$	—		$	4,412
Accounts receivable	—			1,310			2,351			—			3,661
Contracts in process	546			2,787			1,111			—			4,444
Inventories
Work in process	—			1,969			11			—			1,980
Raw materials	—			1,293			34			—			1,327
Finished goods	—			18			5			—			23
Pre-owned aircraft	—			67			—			—			67
Other current assets	81			207			150			—			438
Total current assets	3,226			7,651			5,475			—			16,352
Noncurrent assets:
Property, plant and equipment	150			6,119			1,095			—			7,364
Accumulated depreciation of PP&E	(54		)	(3,312		)	(675		)	—			(4,041		)
Intangible assets	—			1,482			926			—			2,408
Accumulated amortization of intangible assets	—			(1,065		)	(450		)	—			(1,515		)
Goodwill	—			8,122			3,577			—			11,699
Other assets	1,611			249			258			—			2,118
Investment in subsidiaries	38,078			—			—			(38,078		)	—
Total noncurrent assets	39,785			11,595			4,731			(38,078		)	18,033
Total assets	$	43,011		$	19,246		$	10,206		$	(38,078	)	$	34,385
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	—		$	1		$	—		$	—		$	1
Customer advances and deposits	—			3,373			3,114			—			6,487
Other current liabilities	1,444			3,424			1,756			—			6,624
Total current liabilities	1,444			6,798			4,870			—			13,112
Noncurrent liabilities:
Long-term debt	3,387			23			—			—			3,410
Other liabilities	3,487			2,369			487			—			6,343
Total noncurrent liabilities	6,874			2,392			487			—			9,753
Intercompany	23,173			(22,580		)	(593		)	—			—
Shareholders' equity:
Common stock	482			6			2,043			(2,049		)	482
Other shareholders' equity	11,038			32,630			3,399			(36,029		)	11,038
Total shareholders' equity	11,520			32,636			5,442			(38,078		)	11,520
Total liabilities and shareholders' equity	$	43,011		$	19,246		$	10,206		$	(38,078	)	$	34,385

21

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2014	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	2,536		$	—		$	1,852		$	—		$	4,388
Accounts receivable	—			1,379			2,671			—			4,050
Contracts in process	542			2,966			1,083			—			4,591
Inventories
Work in process	—			1,818			10			—			1,828
Raw materials	—			1,260			30			—			1,290
Finished goods	—			20			8			—			28
Pre-owned aircraft	—			75			—			—			75
Other current assets	781			215			161			—			1,157
Total current assets	3,859			7,733			5,815			—			17,407
Noncurrent assets:
Property, plant and equipment	148			6,035			1,109			—			7,292
Accumulated depreciation of PP&E	(52		)	(3,246		)	(665		)	—			(3,963		)
Intangible assets	—			1,484			914			—			2,398
Accumulated amortization of intangible assets	—			(1,042		)	(444		)	—			(1,486		)
Goodwill	—			8,095			3,636			—			11,731
Other assets	1,479			213			284			—			1,976
Investment in subsidiaries	37,449			—			—			(37,449		)	—
Total noncurrent assets	39,024			11,539			4,834			(37,449		)	17,948
Total assets	$	42,883		$	19,272		$	10,649		$	(37,449	)	$	35,355
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	500		$	1		$	—		$	—		$	501
Customer advances and deposits	—			3,529			3,806			—			7,335
Other current liabilities	1,298			3,511			1,106			—			5,915
Total current liabilities	1,798			7,041			4,912			—			13,751
Noncurrent liabilities:
Long-term debt	3,386			24			—			—			3,410
Other liabilities	3,514			2,369			482			—			6,365
Total noncurrent liabilities	6,900			2,393			482			—			9,775
Intercompany	22,356			(22,557		)	201			—			—
Shareholders' equity:
Common stock	482			6			2,043			(2,049		)	482
Other shareholders' equity	11,347			32,389			3,011			(35,400		)	11,347
Total shareholders' equity	11,829			32,395			5,054			(37,449		)	11,829
Total liabilities and shareholders' equity	$	42,883		$	19,272		$	10,649		$	(37,449	)	$	35,355

22

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended April 5, 2015	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments		Total Consolidated
Net cash provided by operating activities *	$	(101	)	$	760		$	86		$	—	$	745
Cash flows from investing activities:
Maturities of held-to-maturity securities	500			—			—			—		500
Capital expenditures	(2		)	(89		)	(7		)	—		(98		)
Other, net	1			93			—			—		94
Net cash provided by investing activities	499			4			(7		)	—		496
Cash flows from financing activities:
Purchases of common stock	(620		)	—			—			—		(620		)
Repayment of fixed-rate notes	(500		)	—			—			—		(500		)
Dividends paid	(206		)	—			—			—		(206		)
Proceeds from option exercises	87			—			—			—		87
Other, net	30			—			—			—		30
Net cash used by financing activities	(1,209		)	—			—			—		(1,209		)
Net cash used by discontinued operations	(8		)	—			—			—		(8		)
Cash sweep/funding by parent	882			(764		)	(118		)	—		—
Net increase in cash and equivalents	63			—			(39		)	—		24
Cash and equivalents at beginning of period	2,536			—			1,852			—		4,388
Cash and equivalents at end of period	$	2,599		$	—		$	1,813		$	—	$	4,412
Three Months Ended March 30, 2014
Net cash provided by operating activities *	$	(65	)	$	669		$	(182	)	$	—	$	422
Net cash used by investing activities	—			(68		)	(9		)	—		(77		)
Cash flows from financing activities:
Purchases of common stock	(1,430		)	—			—			—		(1,430		)
Other, net	83			—			—			—		83
Net cash used by financing activities	(1,347		)	—			—			—		(1,347		)
Net cash used by discontinued operations	(3		)	—			—			—		(3		)
Cash sweep/funding by parent	609			(601		)	(8		)	—		—
Net increase in cash and equivalents	(806		)	—			(199		)	—		(1,005		)
Cash and equivalents at beginning of period	4,180			—			1,121			—		5,301
Cash and equivalents at end of period	$	3,374		$	—		$	922		$	—	$	4,296

* Continuing operations only

23

(Dollars in millions, except per-share amounts or unless otherwise noted)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BUSINESS OVERVIEW

General Dynamics is an aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; communications and information technology systems and solutions; and shipbuilding. We operate globally through four business groups: Aerospace, Combat Systems, Information Systems and Technology, and Marine Systems. Our primary customer is the U.S. government, including the Department of Defense, other U.S. government customers and the intelligence community. We also do significant business with non-U.S. governments and a diverse base of corporate and individual buyers of business aircraft. The following discussion should be read in conjunction with our 2014 Annual Report on Form 10-K and with the unaudited Consolidated Financial Statements included in this Form 10-Q. The unaudited Consolidated Financial Statements have been restated to reflect the results of operations of our axle business in discontinued operations (for further discussion, see Note A to the unaudited Consolidated Financial Statements).

RESULTS OF OPERATIONS

INTRODUCTION

An understanding of our accounting practices is important to evaluate our operating results. We recognize the majority of our revenues using the percentage-of-completion method of accounting. The following paragraphs explain how this method is applied in recognizing revenues and operating costs in our business groups.

In the Aerospace group, contracts for new aircraft have two major phases: the manufacture of the “green” aircraft and the aircraft’s outfitting, which includes exterior painting and installation of customer-selected interiors. We record revenues on these contracts at the completion of these two phases: when green aircraft are delivered to and accepted by the customer, and when the customer accepts final delivery of the outfitted aircraft. We do not recognize revenue at green delivery unless (1) a contract has been executed with the customer and (2) the customer can be expected to satisfy its obligations under the contract, as evidenced by the receipt of significant deposits from the customer and other factors. Revenues associated with the group’s completions of other original equipment manufacturers' (OEMs) aircraft and the group's services businesses are recognized as work progresses or upon delivery of services. Fluctuations in revenues from period to period result from the number and mix of new aircraft deliveries (green and outfitted), progress on aircraft completions and the level of aircraft service activity during the period.

The majority of the Aerospace group’s operating costs relates to new aircraft production for firm orders and consists of labor, material, subcontractor and overhead costs. The costs are accumulated in production lots and recognized as operating costs at green aircraft delivery based on the estimated average unit cost in a production lot. While changes in the estimated average unit cost for a production lot impact the level of operating costs, the amount of operating costs reported in a given period is based largely on the number and type of aircraft delivered. Operating costs in the Aerospace group’s completions and services businesses are generally recognized as incurred.

For new aircraft, operating earnings and margins are a function of the prices of our aircraft, our operational efficiency in manufacturing and outfitting the aircraft, and the mix of aircraft deliveries between the higher-margin large-cabin and lower-margin mid-cabin aircraft. Additional factors affecting the group’s

24

earnings and margins include the volume, mix and profitability of completions and services work performed, the market for pre-owned aircraft, and the level of general and administrative (G&A) and net research and development (R&D) costs incurred by the group.

In the defense groups, revenue on long-term government contracts is recognized as work progresses, either as products are produced or services are rendered. As a result, variations in revenues are discussed generally in terms of volume, typically measured by the level of activity on individual contracts or programs. Year-over-year variances attributed to volume are due to changes in production or service levels and delivery schedules.

Operating costs for the defense groups consist of labor, material, subcontractor, overhead and G&A costs and are recognized generally as incurred. Variances in costs recognized from period to period primarily reflect increases and decreases in production or activity levels on individual contracts and, therefore, result largely from the same factors that drive variances in revenues.

Operating earnings and margins in the defense groups are driven by changes in volume, performance or contract mix. Performance refers to changes in profitability based on revisions to estimates at completion on individual contracts. These revisions result from increases or decreases to the estimated value of the contract, the estimated costs to complete or both. Therefore, changes in costs incurred in the period compared with prior periods do not necessarily impact profitability. It is only when total estimated costs at completion on a given contract change without a corresponding change in the contract value that the profitability of that contract may be impacted. Contract mix refers to changes in the volume of higher- vs. lower-margin work. Additionally, higher or lower margins can be inherent in the contract type (e.g., fixed-price/cost-reimbursable) or type of work (e.g., development/production).

CONSOLIDATED OVERVIEW

Three Months Ended	April 5, 2015			March 30, 2014			Variance
Revenues	$	7,784		$	7,265		$	519		7.1	%
Operating costs and expenses	6,757			6,391			(366		)	(5.7	)%
Operating earnings	1,027			874			153			17.5	%
Operating margins	13.2		%	12.0		%

Our revenues increased in the first quarter of 2015 compared with the prior-year period. Revenues were up in all of our defense business groups for the first time in over four years. The largest increase was in the Marine Systems group where higher ship construction, engineering and repair activity led to 21 percent year-over-year growth. Revenues were essentially flat in our Aerospace group.

Operating costs and expenses increased less than revenues, resulting in higher operating earnings and margins. The 120 basis point increase in operating margins was largely due to improved performance in the Combat Systems and Information Systems and Technology groups.

REVIEW OF BUSINESS GROUPS

Following is a discussion of operating results and outlook for each of our business groups. For the Aerospace group, results are analyzed for specific lines of products and services, consistent with how the group is managed. For the defense groups, the discussion is based on the types of products and services each group offers with a supplemental discussion of specific contracts and programs when significant to the group's results. Information regarding our business groups also can be found in Note N to the unaudited Consolidated Financial Statements.

25

AEROSPACE

Three Months Ended	April 5, 2015			March 30, 2014			Variance
Revenues	$	2,108		$	2,125		$	(17	)	(0.8	)%
Operating earnings	431			404			27			6.7	%
Operating margin	20.4		%	19.0		%
Gulfstream aircraft deliveries (in units):
Green	34			35			(1		)	(2.9	)%
Outfitted	32			39			(7		)	(17.9	)%

Operating Results

The change in the Aerospace group's revenues in the first quarter of 2015 consisted of the following:

Aircraft manufacturing, outfitting and completions	$	(26	)
Pre-owned aircraft	8
Aircraft services	1
Total decrease	$	(17	)

Aircraft manufacturing, outfitting and completions revenues declined slightly in the first quarter of 2015 primarily due to fewer deliveries of outfitted large-cabin aircraft.

The increase in the group's operating earnings in the first quarter of 2015 consisted of the following:

Aircraft manufacturing, outfitting and completions	$	38
Pre-owned aircraft	(1		)
Aircraft services	5
G&A/other expenses	(15		)
Total increase	$	27

Aircraft manufacturing, outfitting and completions earnings were up from operating improvements and a favorable supplier settlement associated with aircraft component design and delivery delays. In addition, the group's services performance was very strong in the quarter due to a favorable mix of work. Absent these factors, the group's margins would have been lower, primarily driven by the timing of G&A expenses.

Outlook

As noted in our 2014 Form 10-K, we expect an increase of approximately 8 percent in the group's full-year revenues in 2015 compared with 2014 as a result of Gulfstream aircraft deliveries. Operating margins are expected to be around 18 percent, down somewhat from 2014 primarily due to higher net R&D expenses, aircraft manufacturing mix and more pre-owned aircraft sales.

26

COMBAT SYSTEMS

Three Months Ended	April 5, 2015			March 30, 2014			Variance
Revenues	$	1,363		$	1,258		$	105	8.3	%
Operating earnings	204			139			65		46.8	%
Operating margins	15.0		%	11.0		%

Operating Results

The change in the Combat Systems group's revenues in the first quarter of 2015 consisted of the following:

International military vehicles	$	127
U.S. military vehicles	(21		)
Weapon systems and munitions	(1		)
Total increase	$	105

Revenues from international military vehicles were up in the first quarter of 2015 as work ramped up on a contract with the Government of Canada’s Canadian Commercial Corporation for a Middle Eastern customer and another with the British Army for Specialist Vehicle (SV) platforms. U.S. military vehicle revenues were down slightly due to the completion of the Ground Combat Vehicle (GCV) design and development program.

The Combat Systems group's operating margins increased 400 basis points in the first quarter of 2015. Operating margins were up across the group, largely as a result of reduced overhead costs following restructuring activities completed in 2014 and strong operating performance. Operating results in the first quarter of 2014 included $29 of restructuring charges in our European military vehicles business, primarily for employee severance.

Outlook

As noted in our 2014 Form 10-K, we expect the Combat Systems group’s revenues and operating margins in 2015 to be consistent with 2014 as growth on our international military vehicle contracts offsets some scheduled reductions in spending on several U.S. military production programs.

INFORMATION SYSTEMS AND TECHNOLOGY

Three Months Ended	April 5, 2015			March 30, 2014			Variance
Revenues	$	2,370		$	2,281		$	89	3.9	%
Operating earnings	217			183			34		18.6	%
Operating margins	9.2		%	8.0		%

Operating Results

The change in the Information Systems and Technology group's revenues in the first quarter of 2015 consisted of the following:

C4ISR solutions*	$	46
Information technology (IT) services	43
Total increase	$	89

*    Command, control, communications, computing (C4), intelligence, surveillance and reconnaissance (ISR) solutions

27

Revenues increased in the first quarter of 2015 in the C4ISR solutions business primarily as a result of higher volume on the Common Hardware Systems-4 (CHS-4) program and increased demand for encryption products. Revenues increased in the first three months of 2015 in our IT services business due to increased contact-center services work for the Centers for Medicare & Medicaid Services and the late 2014 acquisition of a provider of IT support to U.S. special operations forces.

The group's operating margins increased 120 basis points in the first quarter of 2015, the result of improved operating performance, favorable contract mix and ongoing cost-reduction efforts, including the consolidation of two businesses in the group effective in January of 2015.

Outlook

As noted in our 2014 Form 10-K, we expect 2015 full-year revenues in the Information Systems and Technology group to decrease approximately 5.5 percent from 2014. Operating margins are expected to improve to slightly more than 9 percent.

MARINE SYSTEMS

Three Months Ended	April 5, 2015			March 30, 2014			Variance
Revenues	$	1,943		$	1,601		$	342	21.4	%
Operating earnings	188			166			22		13.3	%
Operating margins	9.7		%	10.4		%

Operating Results

The change in the Marine Systems group’s revenues in the first quarter of 2015 consisted of the following:

Navy ship construction	$	186
Navy ship engineering, repair and other services	69
Commercial ship construction	87
Total increase	$	342

The increase in Navy ship construction revenues in 2015 is primarily due to higher volume on the Virginia-class program, including long-lead materials for the Block IV contract awarded in the second quarter of 2014. Revenues for Navy ship engineering, repair and other services increased in the first quarter of 2015 because of development work on the next-generation ballistic-missile submarine and surface-ship repair operations. Commercial ship construction revenues increased in the first quarter of 2015 as work ramped up on the group's construction of Jones Act ships.

Operating margins decreased somewhat in the first quarter of 2015 primarily due to a shift in contract mix to the Block IV Virginia-class and commercial ship contracts and continued construction on the DDG-1000 program and two of the DDG-51 ships in the Navy's restart of the program.

Outlook

As noted in our 2014 Form 10-K, we expect the Marine Systems group’s 2015 full-year revenues to increase approximately 2 to 2.5 percent from 2014, primarily due to higher revenues on the Virginia-class program. Operating margins are expected to remain in the mid-9 percent range.

28

CORPORATE

Corporate results consist primarily of compensation expense for stock options. Corporate costs totaled $13 in the first quarter of 2015 compared with $18 in the first quarter of 2014. We expect 2015 full-year Corporate costs of approximately $65 to $70.

OTHER INFORMATION

PRODUCT REVENUES AND OPERATING COSTS

Three Months Ended	April 5, 2015		March 30, 2014		Variance
Revenues	$	4,932	$	4,438	$	494	11.1	%
Operating costs	3,819		3,464		355		10.2	%

The change in product revenues in the first quarter of 2015 consisted of the following:

Ship construction	$	270
Military vehicle production	166
Other, net	58
Total increase	$	494

Ship construction revenues increased in the first quarter of 2015 due to higher volume on the Virginia-class submarine program and commercial Jones Act ships. Military vehicle production revenues increased as work ramped up on two large non-U.S. programs awarded in 2014.

Product operating costs were higher in the first quarter of 2015 primarily due to volume on the programs described above.

SERVICE REVENUES AND OPERATING COSTS

Three Months Ended	April 5, 2015		March 30, 2014		Variance
Revenues	$	2,852	$	2,827	$	25		0.9	%
Operating costs	2,435		2,436		(1		)	—	%

The change in service revenues in the first quarter of 2015 consisted of the following:

Navy engineering, repair and other services	$	72
Military vehicle services	(58		)
Other, net	11
Total increase	$	25

Navy engineering, repair and other services revenues increased in the first quarter of 2015 due to increased development work on the next-generation ballistic-missile submarine and higher surface-ship repair volume. Military vehicle services revenues decreased due to the completion of the Ground Combat Vehicle (GCV) design and development program.

29

Service operating costs were essentially flat in the first quarter of 2015 as there was little change in the overall volume of services.

OTHER INFORMATION

G&A Expenses

As a percentage of revenues, G&A expenses were 6.5 percent and 6.8 percent in the first three months of 2015 and 2014, respectively. G&A expenses in the first quarter of 2014 were negatively impacted by $29 of severance-related charges in our European military vehicles business in the Combat systems group. We expect G&A expenses in 2015 to be approximately 6.5 percent of revenues.

Interest, Net

Net interest expense was $21 in the first three months of 2015, compared with $22 in the same period in 2014. We expect full-year 2015 net interest expense to be $82, compared with $86 in 2014.

Provision for Income Tax, Net

Our effective tax rate was 29 percent in the first three months of 2015, compared with 30.1 percent in the prior-year period. The effective tax rate in the first three months of 2015 was favorably impacted by approval received in the first quarter of a research and development tax credit refund request. We anticipate the full-year effective tax rate to be approximately 29.5 percent in 2015.

BACKLOG AND ESTIMATED POTENTIAL CONTRACT VALUE

Our total backlog, including funded and unfunded portions, was $70.5 billion at the end of the first quarter of 2015, down 3 percent from $72.4 billion on December 31, 2014. Our total estimated contract value, which combines total backlog with estimated potential contract value, was $96.1 billion on April 5, 2015.

Estimated potential contract value includes work awarded on unfunded indefinite delivery, indefinite quantity (IDIQ) contracts or unexercised options associated with existing firm contracts. Contract options in our defense business represent agreements to perform additional work under existing contracts at the election of the customer. The actual amount of funding received in the future may be higher or lower than our estimate of potential contract value. We recognize options in backlog when the customer exercises the option and establishes a firm order. In the Aerospace group, estimated potential contract value primarily represents options to purchase new aircraft and long-term agreements with fleet customers.

30

The following table details the backlog and the estimated potential contract value of each business group at the end of the first quarter of 2015 and fourth quarter of 2014:

	Funded		Unfunded		Total Backlog		Estimated Potential Contract Value		Total Estimated Contract Value
	April 5, 2015
Aerospace	$	12,947	$	147	$	13,094	$	2,699	$	15,793
Combat Systems	18,942		462		19,404		5,459		24,863
Information Systems and Technology	6,842		1,815		8,657		15,296		23,953
Marine Systems	17,248		12,138		29,386		2,143		31,529
Total	$	55,979	$	14,562	$	70,541	$	25,597	$	96,138
	December 31, 2014
Aerospace	$	13,115	$	117	$	13,232	$	2,734	$	15,966
Combat Systems	19,292		506		19,798		5,522		25,320
Information Systems and Technology	7,070		1,539		8,609		16,115		24,724
Marine Systems	13,452		17,319		30,771		2,311		33,082
Total	$	52,929	$	19,481	$	72,410	$	26,682	$	99,092

AEROSPACE

Aerospace funded backlog represents aircraft orders for which we have definitive purchase contracts and deposits from customers. Unfunded backlog consists of agreements to provide future aircraft maintenance and support services.

The group ended the first quarter of 2015 with backlog of $13.1 billion, compared with $13.2 billion at year-end 2014. Orders for Gulfstream aircraft were up slightly compared to the first quarter of 2014 and reflected demand across our product portfolio. In addition, we received several orders for custom completions of narrow- and wide-body aircraft in our Jet Aviation business.

DEFENSE GROUPS

The total backlog in our defense groups represents the estimated remaining sales value of work to be performed under firm contracts. The funded portion of this backlog includes items that have been authorized and appropriated by the Congress and funded by the customer, as well as commitments by international customers that are similarly approved and funded by their governments. We have included in total backlog firm contracts at the amounts we believe we are likely to receive funding, but there is no guarantee that future budgets and appropriations will provide funding for a given program.

Total backlog in our defense groups was $57.4 billion on April 5, 2015, compared with $59.2 billion at year-end 2014. Estimated potential contract value was $22.9 billion on April 5, 2015. Each of our defense groups received notable contract awards during the first quarter of 2015.

Combat Systems awards included the following:

• $410 from the U.S. Army under the Stryker wheeled armored vehicle program for production of 107 double-V-hulled vehicles and for contractor logistics support.

31

• $220 from the Government of Canada for the integration of an enhanced surveillance suite onto Canadian LAV III vehicles.

• An IDIQ contract from the Army to supply 155mm ammunition. The program has a maximum potential value of $300 over five years.

Information Systems and Technology awards included the following:

• $175 from the National Geospatial-Intelligence Agency (NGA) to consolidate NGA's operations from six locations to one stand-alone location at New Campus East (NCE).

• $155 for combat and seaframe control systems on two Navy Littoral Combat Ships (LCS).

• $70 from the Army for ruggedized computing equipment under the CHS-4 program.

• $70 from the U.S. Department of State to provide supply chain management services.

• An IDIQ contract to manage the Army's Live Training Transformation (LT2) live training systems, including nearly 300 training ranges worldwide. The program has a maximum potential value of $415 over five years.

Marine Systems awards included the following:

• $180 from the U.S. Navy to provide engineering and technical support for nuclear submarines.

• $55 from the Navy for the design and development of moored training ship components.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We ended the first quarter of 2015 with a cash balance of $4.4 billion, up slightly from the end of 2014. Our net cash position, defined as cash and equivalents and marketable securities less debt, was $1 billion at the end of the first quarter of 2015, up from $977 at the end of 2014. The following is a discussion of our major operating, investing and financing activities, as classified on the unaudited Consolidated Statements of Cash Flows, in the first three months of 2015and2014.

OPERATING ACTIVITIES

We generated cash from operating activities of $745 in the first three months of 2015, compared with $422 in the same period in 2014. The primary driver of cash flows in both periods was net earnings. Deposits received in the second half of 2014 related to a large non-U.S. contract awarded in our Combat Systems group are being utilized to fund supplier commitments on the program, which is expected to negatively affect operating cash flows in 2015.

INVESTING ACTIVITIES

Cash provided by investing activities was $496 in the first three months of 2015, compared with cash used for investing activities of $77 in the same period in 2014. The primary use of cash for investing activities in both periods was capital expenditures. We expect capital expenditures of approximately 2 percent of revenues in 2015. Cash provided by investing activities in 2015 includes $500 of proceeds from maturing marketable securities as well as proceeds from the sale of our axle business in the Combat Systems group.

32

FINANCING ACTIVITIES

Cash used for financing activities was $1.2 billion in the first three months of 2015, compared with $1.3 billion in the same period in 2014. Our primary financing activities include debt repayments, repurchases of common stock and payment of dividends. Net cash from financing activities also includes proceeds received from stock option exercises.

In the first three months of 2015, we repurchased approximately 4.7 million of our outstanding shares for $634. As some of these shares did not settle until the second quarter of 2015, an associated cash outflow of $14 will be reported as a financing activity at that time. On February 9, 2015, with shares from the prior authorization largely exhausted, the board of directors authorized management to repurchase 10 million additional shares of common stock on the open market. On April 5, 2015, 7.7 million shares remained authorized by our board of directors for repurchase, approximately 2 percent of our total shares outstanding. We repurchased 29 million shares for a total of approximately $3.4 billion in 2014, including 14 million shares in the first three months of 2014.

On March 4, 2015, our board of directors declared an increased quarterly dividend of $0.69 per share, the 18th consecutive annual increase. The board had previously increased the quarterly dividend to $0.62 per share in March 2014.

In the first three months of 2015, we repaid $500 of fixed-rate notes on their scheduled maturity date with the proceeds from maturing marketable securities discussed above. We have no further material repayments of long-term debt scheduled until mid-2016. See Note H to the unaudited Consolidated Financial Statements for additional information regarding our debt obligations, including scheduled debt maturities and interest rates.

We had no commercial paper outstanding on April 5, 2015. We have $2 billion in bank credit facilities that remain available, including a $1 billion facility expiring in July 2016 and a $1 billion facility expiring in July 2018. These facilities provide backup liquidity to our commercial paper program. We also have an effective shelf registration on file with the Securities and Exchange Commission that allows us to access the debt markets.

NON-GAAP FINANCIAL MEASURES – FREE CASH FLOW

We define free cash flow from operations as net cash provided by operating activities less capital expenditures. We believe free cash flow from operations is a useful measure for investors, because it portrays our ability to generate cash from our businesses for purposes such as repaying maturing debt, funding business acquisitions, repurchasing our common stock 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 following table reconciles the free cash flow from operations with net cash provided by operating activities, as classified on the unaudited Consolidated Statements of Cash Flows:

Three Months Ended	April 5, 2015			March 30, 2014
Net cash provided by operating activities	$	745		$	422
Capital expenditures	(98		)	(87		)
Free cash flow from operations	$	647		$	335
Cash flows as a percentage of earnings from continuing operations:
Net cash provided by operating activities	104		%	71		%
Free cash flow from operations	90		%	56		%

33

We expect to continue to generate funds in excess of our short- and long-term liquidity needs. We believe we have adequate funds on hand and sufficient borrowing capacity to execute our financial and operating strategy.

ADDITIONAL FINANCIAL INFORMATION

ENVIRONMENTAL MATTERS AND OTHER CONTINGENCIES

For a discussion of environmental matters and other contingencies, see Note L to the unaudited Consolidated Financial Statements. We do not expect our aggregate liability with respect to these matters to have a material impact on our results of operations, financial condition or cash flows.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our unaudited Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period.

Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenues and costs. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. We review our performance monthly and update our contract estimates at least annually and often quarterly, as well as when required by specific events and circumstances. We recognize changes in estimated profit on contracts under the reallocation method. Under this method, the impact of revisions in estimates is recognized prospectively over the remaining contract term. The net increase in our operating earnings (and on a per-share basis) from the impact of revisions in contract estimates totaled favorable changes of $63 ($0.12) and $38($0.07) for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. No revisions on any one contract were material to our unaudited Consolidated Financial Statements in the first quarter of 2015 or 2014.

In the second quarter of 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 prescribes a single, common revenue standard that replaces most existing revenue recognition guidance in GAAP. The standard outlines a five-step model, whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition.

For public companies, ASU 2014-09 is effective in the first quarter of 2017. On April 1, 2015, the FASB proposed a one-year deferral of the standard's effective date, while permitting entities to still adopt one year earlier on the original effective date. A final determination will be made after a public comment period. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition date or method nor have we determined the effect of the standard on our consolidated financial statements as the standard continues to undergo changes.

The required adoption of the ASU will preclude our use of the reallocation method of recognizing revisions in estimated profit on contracts discussed above. Because changes in estimated profit will be recognized in the period they are identified (cumulative catch-up method), rather than prospectively over the remaining contract term, we expect that the impact of revisions of contract estimates may be larger and potentially more variable from period to period. Anticipated losses on contracts will continue to be recognized in the quarter they are identified.

34

Other significant estimates include those related to goodwill and other intangible assets, income taxes, pensions and other post-retirement benefits, workers’ compensation, warranty obligations and litigation and other contingencies. We employ judgment in making our estimates but they are based on historical experience, currently available information and various other assumptions that we believe to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.

We believe that our judgment is applied consistently and produces financial information that fairly depicts the results of operations for all periods presented. For a full discussion of our critical accounting policies, see our Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes with respect to this item from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 4. CONTROLS AND PROCEDURES

Our management, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, on April 5, 2015, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting that occurred during the quarter ended April 5, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “outlook,” “estimates,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements. Examples include projections of revenues, earnings, operating margins, segment performance, cash flows, contract awards, aircraft production, deliveries and backlog. In making these statements we rely on assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe our estimates and judgments are reasonable based on information available to us at the time. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks and uncertainties that 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, including the risk factors discussed in Item 1A of our Annual Report on Form 10-K. These factors include, without limitation:

• general U.S. and international political and economic conditions;

• decreases in U.S. government defense spending or changing priorities within the defense budget and the impacts of the Budget Control Act of 2011, including sequester;

• termination or restructuring of government contracts due to unilateral government action;

35

• differences in anticipated and actual program performance, including the ability to perform under long-term fixed-price contracts within estimated costs, and performance issues with key suppliers and subcontractors;

• expected recovery on contract claims and requests for equitable adjustment;

• changing customer demand or preferences for business aircraft, including the effects of economic conditions on the business-aircraft market;

• potential for changing prices for energy and raw materials; and

• the status or outcome of legal and/or regulatory proceedings.

All forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to the company or any person acting on the company’s behalf are qualified by the cautionary statements in this section. We do not undertake any obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report. These factors may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information relating to legal proceedings, see Note L to the unaudited Consolidated Financial Statements contained in Part I, Item 1.

ITEM 1A. RISK FACTORS

There have been no material changes with respect to this item from the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about our first quarter repurchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

36

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (a)	Maximum Number of Shares that May Yet Be Purchased Under the Program (a)
Pursuant to Share Buyback Program
1/1/15-2/1/15	400,000	$	133.91	400,000	1,994,152
2/2/15-3/1/15	2,301,517	$	137.81	2,301,517	9,692,635
3/2/15-4/5/15	1,951,786	$	134.78	1,951,786	7,740,849
Shares Delivered or Withheld Pursuant to Restricted Stock Vesting (b)
1/1/15-2/1/15	203,788	$	138.11
2/2/15-3/1/15	—	$	—
3/2/15-4/5/15	—	$	—
Total	4,857,091	$	—

(a) On February 9, 2015, with shares from the prior authorization largely exhausted, the board of directors authorized management to repurchase 10 million additional shares of common stock.

(b) Represents shares withheld by, or delivered to, us pursuant to provisions in agreements with recipients of restricted stock granted under our equity compensation plans that allow us to withhold, or the recipient to deliver to us, the number of shares with a fair value equal to the minimum statutory tax withholding due upon vesting of the restricted shares.

We did not make any unregistered sales of equity in the first quarter.

37

ITEM 6. EXHIBITS

4.1 Indenture dated as of March 24, 2015, by and among General Dynamics Corporation, the Guarantors (as defined therein) and The Bank of New York Mellon, as Trustee (incorporated herein by reference from the company's registration statement on Form S-3, filed with the Securities and Exchange Commission March 24, 2015)

10.1* Form of Non-Statutory Stock Option Agreement pursuant to the General Dynamics Corporation 2012 Equity Compensation Plan (for grants beginning March 4, 2015, and including, as indicated therein, provisions for certain executive officers who are subject to the General Dynamics Corporation Compensation Recoupment Policy)**

10.2* Form of Restricted Stock Award Agreement pursuant to the General Dynamics Corporation 2012 Equity Compensation Plan (for grants beginning March 4, 2015, and including, as indicated therein, provisions for certain executive officers who are subject to the General Dynamics Corporation Compensation Recoupment Policy)**

10.3* Form of Restricted Stock Unit Award Agreement pursuant to the General Dynamics Corporation 2012 Equity Compensation Plan (for grants beginning March 4, 2015)**

10.4* Form of Performance Restricted Stock Unit Award Agreement pursuant to the General Dynamics Corporation 2012 Equity Compensation Plan (for grants beginning March 4, 2015, and including, as indicated therein, provisions for certain executive officers who are subject to the General Dynamics Corporation Compensation Recoupment Policy)**

31.1 Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

31.2 Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

32.1 Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

32.2 Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

101 Interactive Data File**

* Indicates a management contract or compensatory plan or arrangement required to be filed pursuant to Item 15(b) of Form 10-K.

** Filed herewith.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GENERAL DYNAMICS CORPORATION
	by
		Kimberly A. Kuryea
		Vice President and Controller
		(Authorized Officer and Chief Accounting Officer)
Dated: April 29, 2015

39

EX-10.1

Exhibit 10.1

NON-STATUTORY STOCK OPTION AGREEMENT

PURSUANT TO THE GENERAL DYNAMICS CORPORATION

2012 EQUITY COMPENSATION PLAN

THIS OPTION AGREEMENT (the "Agreement") dated as of [DATE] (the "Grant Date") is made between General Dynamics Corporation (the "Company") and [NAME] (the "Optionee").

WHEREAS, the Company sponsors the General Dynamics Corporation 2012Equity Compensation Plan (the "Plan"), pursuant to which the Company may grant Options to purchase shares of Common Stock; and

WHEREAS, the Company desires to grant the Optionee a Non-Statutory Stock Option to purchase the number of shares of Common Stock provided for herein.

NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows:

1.Grant of Option.

(a)Number of Shares; Type of Option. The Company hereby grants to the Optionee an Option (the “Option Grant”) to purchase [NUMBER] shares of Common Stock (the "Option Shares") on the terms and conditions set forth in this Agreement. The Option is intended to be a Non-Statutory Stock Option.

(b)Incorporation of Plan by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement will have the definitions set forth in the Plan. The Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decisions will be binding and conclusive upon the Optionee and the Optionee's legal representative in respect of any questions arising under the Plan or this Agreement. If there exists any inconsistency between the terms of this Agreement and the Plan, the terms contained in the Plan will govern. If there exists any inconsistency between the terms of the Option as provided for herein (including, but not limited to, terms relating to the number of Option Shares, the Stated Expiration Date, the exercise price and the exercisability of the Option) and the terms as indicated in the records maintained by Company, the terms as indicated in the records of the Company will govern.

2.Terms and Conditions.

(a)Exercise Price. The exercise price for the purchase of Option Shares upon the exercise of all or any portion of the Option will be $[PRICE] per share of Common Stock.

(b)Expiration Date. Subject to earlier expiration as provided in Section 2(f) below, the Option will expire at the close of business on the business day immediately preceding the tenth anniversary of the date hereof (the "Stated Expiration Date").

(c)Exercisability of Option.

(i)General. Except as provided in Section 2(c)(ii) and (iii) below, the Option Grant will become vested and exercisable with respect to a number of Option Shares (rounded down to the nearest whole share) as follows: one-half (1/2) of the Option Shares on the second anniversary of the Grant Date and the remaining Option Shares on the third anniversary of the Grant Date, in each case, only if the Optionee is employed as an employee of the Company or any of its Subsidiaries or serves as a director of the Company as of the applicable vesting date.

(ii)Death. If, the Optionee’s employment with the Company or service as a director is terminated due to death prior to the third anniversary of the Grant Date, then the remaining unvested portion of the Option Grant will become fully vested and exercisable on the date of the Optionee’s death with respect to the remaining unvested Option Shares.

(iii)Certain Other Terminations. If, prior to the third anniversary of the Grant Date, the Optionee's employment or service as a director is terminated due to total and permanent disability, Retirement (as defined in Section 2(f)(i) below) or as a result of a divestiture or discontinued operation of a division or a Subsidiary with which the Optionee was associated, then the Option Grant will become vested and exercisable on the anniversary of the Grant Date next following such termination with respect to a number of Option Shares equal to the excess of (i) product of (A) the number of Option Shares and (B) a fraction, the numerator of which will be the number of days from January 1 of the year in which the Grant Date occurs to the last day of the month in which such termination occurs and the denominator of which will be 1,095, such product to be rounded down to the nearest whole share over (ii) the number of Option Shares, if any, with respect to which the Option Grant had become vested and exercisable prior to such termination.

(d)Change in Control. Notwithstanding the foregoing, in the event that within two (2) years following a Change in Control, the Optionee’s service with the Company and its affiliates is terminated (i) by the Company or any of its affiliates for any reason other than for Cause or (ii) by the Optionee for Good Reason, then the Option Grant, to the extent then outstanding, will become immediately vested and exercisable.

(e)Method of Exercise; Tax Withholding. The exercise price for any shares purchased pursuant to the exercise of all or part of the Option will be paid in accordance with Section 10(c) of the Plan. The Company is authorized to withhold from any payment relating to the Option, including from a distribution of Common Stock, or any payroll or other payment to the Optionee, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving the Option, and to take such other action as the Committee may deem advisable to enable the Company and the Optionee to satisfy obligations for the payment of withholding taxes and other tax obligations relating to the Option. This authority shall include authority to withhold or receive Common Stock or other property and to make cash payments in respect thereof in satisfaction of the Optionee’s tax obligations, either on a mandatory or elective basis in the discretion of the Committee.

(f)Exercise Following Termination. Notwithstanding anything in this Agreement to the contrary, the Option will expire upon the Optionee's termination of employment or service as a director; provided, however that to the extent that the Option is exercisable at the time of the Optionee’s termination of employment or service as a director, or becomes exercisable following such termination pursuant to Section 2(c) or Section (d) above, the Option will expire as follows:

(i)Death; Disability; Retirement; Divestiture. Three (3) years (but in no event later than the Stated Expiration Date) following the Optionee's termination of employment or service as a director due to death, total and permanent disability, Retirement or as a result of a divestiture or discontinued operation of a division or a Subsidiary with which the Optionee was associated. For purposes of this Agreement, "Retirement" means, (A) with respect to an employee who is not an elected officer of the Company on the date on which the employee's employment with the Company or any of its Subsidiaries terminates, the termination of employment after the attainment of age 55 with at least five (5) or more years of continuous service and (B) with respect to an employee who is an elected officer of the Company on the date on which the employee's employment with the Company or any of its Subsidiaries terminates, termination of employment after attaining age 55 with the consent of the Chief Executive Officer of the Company (or in the case of the Chief Executive Officer, with the consent of the Committee).

(ii)Lay-Off. One (1) year (but in no event later than the Stated Expiration Date) following the Optionee's termination of employment if the Optionee's employment terminates due to lay-off (other than as a result of a divestiture or discontinued operation of a division or a Subsidiary with which the Optionee was associated).

(iii)Other than Death; Disability; Retirement; Divestiture; Lay-Off. Ninety (90) days (but in no event later than the Stated Expiration Date) following the Optionee's termination of employment or service as a director for any reason (other than those set forth in clauses (i) and (ii) above).

(g)Nontransferability. The Option granted hereunder is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and the Option may be exercised during the lifetime of the Optionee only by the Optionee or the Optionee's guardian or legal representative. The terms of the Option will be binding upon the beneficiaries, executors, administrators, heirs and successors of the Optionee.

3.Nature of Grant. In accepting this Option, the Optionee acknowledges that:

(a)the Plan is discretionary in nature and established voluntarily by the Company and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan, and the award of the Option is at the sole discretion of the Company and does not create any contractual or other right to receive future awards of Options, or benefits in lieu of Options even if Options have been awarded repeatedly in the past;

(b)the Option is not part of normal or expected compensation or salary for any purposes, including calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and

(c)nothing in the Plan or in this Agreement will confer upon the Optionee any right to continue in the employ of the Company or any of its Subsidiaries nor interfere with or restrict in any way the right of the Company or any of its Subsidiaries, which is hereby expressly reserved, to remove, terminate or discharge the Optionee at any time for any reason whatsoever, with or without cause.

4.Data Privacy. The Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Parent and its Subsidiaries, for the exclusive purpose of implementing, administering and managing the Optionee's participation in the Plan.

The Optionee understands that the Company may hold certain personal information about the Optionee, including his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Optionee's favor, for the purpose of implementing, administering and managing the Plan ("Data"). Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Optionee's country or elsewhere and that the recipients' country may have different data privacy laws and protections than the Optionee's country. The Optionee may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Optionee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Optionee may elect to deposit any shares acquired upon exercise of the Option. Data will be held only as long as is necessary to implement, administer and manage the Optionee's participation in the Plan. The Optionee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Refusing or withdrawing his or her consent may affect the Optionee's ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Optionee may contact his or her local human resources representative.

5.[Compensation Recoupment Policy. This Agreement shall be subject to the Company’s Compensation Recoupment Policy. The Optionee acknowledges receipt of the Compensation Recoupment Policy and has read and understands the terms and conditions of the Compensation Recoupment Policy.] [This provision IS INCLUDED ONLY IN AGREEMENTS FOR certain executive officers who are subject to the General Dynamics Compensation Recoupment Policy.]

6.Miscellaneous.

(a)Modification; Entire Agreement; Waiver. No change, modification or waiver of any provision of this Agreement will be valid unless the same is agreed to in writing by the parties hereto. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and therein and supercede all prior communications, representations and negotiations in respect thereof. The failure of the Company to enforce, at any time, any provision of this Agreement will in no way be construed to be a waiver of such provision or of any other provision hereof.

(b)Bound by Plan and Other Related Documents. By accepting this Option, the Optionee acknowledges that the Optionee has received a copy of the Plan and the General Dynamics Corporate Policy regarding insider trading compliance (the "Trading Policy") and has had an opportunity to review the Plan and the Trading Policy and agrees to be bound by all the terms and provisions of the Plan and the Trading Policy.

(c)Successors. The terms of this Agreement will be binding upon and inure to the benefit of the Company, its successors and assigns, and of the beneficiaries, executors, administrators, heirs and successors of the Optionee.

(d)Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that

might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. For purposes of litigating any dispute that arises under this Award or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Virginia, and agree that such litigation shall be conducted exclusively in the courts of Virginia or the federal courts for the Eastern District of Virginia.

(e)Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.

(f)Language. If the Optionee has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different that the English version, the English version will control.

EX-10.2

Exhibit 10.2

RESTRICTED STOCK AWARD AGREEMENT

PURSUANT TO THE GENERAL DYNAMICS CORPORATION

2012 EQUITY COMPENSATION PLAN

This Restricted Stock Award Agreement (the "Agreement") is entered into as of [DATE], (the "Grant Date"), by and between General Dynamics Corporation (the "Company") and [NAME] (the "Grantee").

WHEREAS, the Company sponsors the General Dynamics Corporation 2012 Equity Compensation Plan (the "Plan"), pursuant to which the Company may grant shares of Restricted Stock; and

WHEREAS, the Company desires to grant the Grantee a Restricted Stock award.

NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows:

1.Number of Shares. The Grantee is hereby granted [NUMBER] shares of Restricted Stock, subject to the restrictions set forth herein.

2.Terms of Restricted Stock. The grant of Restricted Stock provided in Section 1 hereof will be subject to the following terms, conditions and restrictions:

(a)Incidents of Ownership. Subject to the restrictions set forth in the Plan and this Agreement, the Grantee will possess all incidents of ownership of the Restricted Stock granted hereunder, including the right to receive dividends with respect to such shares and the right to vote such shares.

(b)Restricted Period. Except as may otherwise be provided in Section 4 below, the restrictions on transfer of the Restricted Stock will lapse on the first day of January on which the New York Stock Exchange is open for business of the fourth calendar year following the calendar year in which the Grant Date occurs (the "Restricted Period") provided that the Grantee is employed by the Company or any of its Subsidiaries or is serving as a director of the Company on such date. Upon the lapse of restrictions relating to the Restricted Stock, the Company, in its sole discretion, may either issue to the Grantee or the Grantee's personal representative a stock certificate representing, or deposit in such Grantee's or the Grantee's personal representative's brokerage account via electronic transfer, one share of Common Stock, free of the restrictive legend described in Section 3 hereof, in exchange for each whole share of Restricted Stock with respect to which such restrictions have lapsed. If certificates representing such Restricted Stock have previously been delivered to the Grantee or shares have previously been deposited in such Grantee's brokerage account, the Grantee will return such certificates or shares to the Company, complete with any necessary signatures or instruments of transfer, prior to the issuance by the Company of such unlegended shares of Common Stock.

(c)Transfer Restrictions. Shares of Restricted Stock, and any interest therein, may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, prior to the lapse of restrictions set forth in the Plan and this Agreement applicable thereto.

(d)Incorporation of Plan by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement will have the definitions set forth in the Plan. The Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decisions will be binding and conclusive upon the Grantee and the Grantee's legal representative in respect of any questions arising under the Plan or this Agreement. If there exists any inconsistency between the terms of this Agreement and the Plan, the terms contained in the Plan will govern. If there exists any inconsistency between the terms of the Restricted Stock as provided for herein (including, but not limited to, terms relating to the number of shares of Restricted Stock or the termination of the Restricted Period) and the terms as indicated in the records maintained by the Company, the terms as indicated in the records of the Company will govern.

3.Certificate; Restrictive Legend. The Grantee agrees that any certificate issued for Restricted Stock prior to the lapse of any outstanding restrictions relating thereto will be inscribed with the following legend:

This certificate and the shares of stock represented hereby are subject to the terms and conditions, including forfeiture provisions and restrictions against transfer (the "Restrictions"), contained in the General Dynamics Corporation Equity Compensation Plan and an agreement entered into between the registered owner and the Company. Any attempt to dispose of these shares in contravention of the Restrictions, including by way of sale, assignment, transfer, pledge, hypothecation or otherwise, will be null and void and without effect.

4.Termination of Employment or Service as a Director.

(a)General. In the event that (i) the Grantee ceases to be employed by the Company or any of its Subsidiaries or ceases to be a director of the Company for any reason (other than due to death, total and permanent disability, Retirement (as defined below), divestiture or discontinued operation of a Subsidiary or division with which the Grantee was associated, or lay-off), prior to the end of the Restricted Period or (ii) the Grantee ceases to be employed by the Company or any of its Subsidiaries on account of lay-off prior to December 31st of the calendar year in which the Grant Date occurs (the "Determination Date"), the Restricted Stock will be automatically forfeited by the Grantee on the date of such termination. For purposes of this Agreement, "Retirement" means, (A) with respect to an employee who is not an elected officer of the Company on the date on which the employee's employment with the Company or any of its Subsidiaries terminates, the termination of employment after the attainment of age 55 with at least five (5) or more years of continuous service and (B) with respect to an employee who is an elected officer of the Company on the date on which the employee's employment with the Company or any of its Subsidiaries terminates, termination of employment after attaining age 55 with the consent of the Chief Executive Officer of the Company (or in the case of the Chief Executive Officer, with the consent of the Committee).

(b)Certain Terminations.

(i)Prior to the Determination Date. In the event that the Grantee ceases to be employed by the Company or any of its Subsidiaries or ceases to be a director of the Company due to total and permanent disability, Retirement, divestiture or discontinued operation of a Subsidiary or division with which the Grantee was associated, prior to the Determination Date, then the restrictions on transfer will lapse on the last day of the Restricted Period with respect to a number of shares of Restricted Stock

equal to product of (i) the total number of shares of Restricted Stock granted hereunder and (ii) a fraction, the numerator of which will be the number of days from January 1 of the year in which the Grant Date occurs to the last day of the month in which such termination occurs and the denominator of which will be 365, such product to be rounded down to the nearest whole share (the "Pro Rated Restricted Stock"), and the remaining shares of Restricted Stock will be automatically forfeited by the Grantee as of the date of such termination.

(ii)On or After the Determination Date. In the event that the Grantee ceases to be employed by the Company or any of its Subsidiaries or ceases to serve as a director of the Company due to total and permanent disability, Retirement, divestiture or discontinued operation of a Subsidiary or division with which the Grantee was associated, or lay-off, in each case, on or after the Determination Date, then the restrictions on transfer will lapse on the last day of the Restricted Period with respect to all of the shares of Restricted Stock granted hereunder.

(iii)Death. In the event of the Grantee’s death on or prior to the last day of the Restricted Period, the restrictions on transfer will lapse on the date of the Grantee’s death with respect to all of the shares of Restricted Stock granted hereunder.

(iv)Change in Control. Notwithstanding the foregoing, in the event that within two (2) years following a Change in Control, the Grantee’s service with the Company and its affiliates is terminated (i) by the Company or any of its affiliates for any reason other than for Cause or (ii) by the Grantee for Good Reason, any shares of Restricted Stock outstanding as of such date, will become immediately vested.

(c)Harm. Notwithstanding the foregoing, all of the shares of Restricted Stock will be automatically forfeited by the Grantee if the Grantee causes "Harm" (as defined below) to the Company or any of its Subsidiaries during the Restricted Period. For purposes of this Agreement, "Harm" includes, but is not limited to, any actions that adversely affect the financial standing, reputation, or products of the Company or any of its Subsidiaries, or any actions involving personal dishonesty, a felony conviction related to the Company or any of its Subsidiaries, or any material violation of any confidentiality or non-competition agreement with the Company or any of its Subsidiaries.

5.Tax Withholding. Prior to the delivery of shares of unrestricted Common Stock upon vesting of this award of Restricted Stock, the Grantee shall pay, or make adequate arrangements satisfactory to the Company in its discretion to satisfy all applicable tax withholding obligations in respect of such shares. Alternatively, or in addition, the Company may in its sole discretion withhold from the shares of Common Stock otherwise deliverable hereunder such number of shares as it will determine is necessary to satisfy all applicable withholding tax obligations in respect of such shares. Regardless of any action the Company takes with respect to any withholding tax obligations, the Grantee acknowledges and agrees that the ultimate liability for all such obligations legally due by the Grantee is and remains the Grantee’s responsibility.

6.Nature of Grant. In accepting this award of Restricted Stock, the Grantee acknowledges that:

(a)the Plan is discretionary in nature and established voluntarily by the Company and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan, and the award of the Restricted Stock is at the sole discretion of the Company and does not create any contractual or other right to receive future awards of Restricted Stock, or benefits in lieu of Restricted Stock even if Restricted Stock has been awarded repeatedly in the past;

(b)the Restricted Stock is not part of normal or expected compensation or salary for any purposes, including calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and

(c)nothing in the Plan or in this Agreement will confer upon the Grantee any right to continue in the employ of the Company nor interfere with or restrict in any way the right of the Company, which is hereby expressly reserved, to remove, terminate or discharge the Grantee at any time for any reason whatsoever, with or without cause.

7.Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, holding, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Parent and its Subsidiaries, for the exclusive purpose of implementing, administering and managing the Grantee's participation in the Plan.

The Grantee understands that the Company may hold certain personal information about the Grantee, including his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee's favor, for the purpose of implementing, administering and managing the Plan ("Data"). Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee's country or elsewhere and that the recipients' country may have different data privacy laws and protections than the Grantee's country. The Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon release of the Restricted Stock. Data will be held only as long as is necessary to implement, administer and manage the Grantee's participation in the Plan. The Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Refusing or withdrawing his or her consent may affect the Grantee's ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Grantee may contact his or her local human resources representative.

8.[Compensation Recoupment Policy. This Agreement shall be subject to the Company’s Compensation Recoupment Policy. The Grantee acknowledges receipt of the Compensation Recoupment Policy and has read and understands the terms and conditions of the Compensation Recoupment Policy.][This provision IS INCLUDED ONLY IN AGREEMENTS FOR certain executive officers who are subject to the General Dynamics Compensation Recoupment Policy.]

9.Miscellaneous.

(a)Modification; Entire Agreement; Waiver. No change, modification or waiver of any provision of this Agreement will be valid unless the same is agreed to in writing by the parties hereto. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and therein and supercede all prior communications, representations and negotiations in respect thereof. The failure of the Company to enforce, at any time,

any provision of this Agreement will in no way be construed to be a waiver of such provision or of any other provision hereof.

(b)Bound by Plan and Other Related Documents. By accepting the award of Restricted Stock, the Grantee acknowledges that the Grantee has received a copy of the Plan and the General Dynamics Corporate Policy regarding insider trading compliance (the "Trading Policy") and has had an opportunity to review the Plan and the Trading Policy and agrees to be bound by all the terms and provisions of the Plan and the Trading Policy.

(c)Successors. The terms of this Agreement will be binding upon and inure to the benefit of the Company, its successors and assigns, and of the beneficiaries, executors, administrators, heirs and successors of the Grantee.

(d)Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. For purposes of litigating any dispute that arises under this Award or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Virginia, and agree that such litigation shall be conducted exclusively in the courts of Virginia or the federal courts for the Eastern District of Virginia.

(e)Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.

(f)Language. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different that the English version, the English version will control.

EX-10.3

Exhibit 10.3

RESTRICTED STOCK UNIT AWARD AGREEMENT

PURSUANT TO THE GENERAL DYNAMICS CORPORATION

2012 EQUITY COMPENSATION PLAN

This Restricted Stock Unit Award Agreement (the "Agreement") is entered into as of [DATE], (the "Grant Date"), by and between General Dynamics Corporation (the "Company") and [NAME] (the "Grantee").

WHEREAS, the Company sponsors the General Dynamics Corporation 2012 Equity Compensation Plan (the "Plan"), pursuant to which the Company may grant Restricted Stock Units; and

WHEREAS, the Company desires to grant to the Grantee an award of Restricted Stock Units.

NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows:

1.Number of RSUs. The Grantee is hereby granted [NUMBER] Restricted Stock Units (the “RSUs”), subject to the restrictions set forth herein. Each RSU represents an unfunded, unsecured promise by the Company to deliver one share of the Company's common stock ("Common Stock"), subject to certain restrictions and the terms and conditions contained in this Agreement.

2.Terms of RSUs. The RSUs will be subject to the following terms, conditions and restrictions:

(a)No Shareholder Rights. The RSUs do not entitle the Grantee to any rights of a shareholder of Common Stock, including dividends or voting rights.

(b)Scheduled Vesting Date. Except as may otherwise be provided in Section 3 below, the RSUs and the Dividend Equivalent RSUs (as defined below) that have been credited to the Grantee will vest on the first day of January on which the New York Stock Exchange is open for business of the fourth calendar year following the calendar year in which the Grant Date occurs (the "Scheduled Vesting Date") but only if the Grantee’s Termination Date (as defined below) has not occurred, and does not occur, prior to or on the Scheduled Vesting Date.

(c)Settlement of Awards. Settlement of the vested RSUs and Dividend Equivalent RSUs shall occur on, or no later than ninety (90) days following, the Scheduled Vesting Date; provided, however, that if (i) within two (2) years following a Change in Control the Grantee’s service with the Company and its affiliates is terminated by the Company or any of its affiliates for any reason other than for Cause or by the Grantee for Good Reason, or (ii) the Grantee’s service with the Company and its affiliates is terminated due to the Grantee’s death, then settlement of vested RSUs and Dividend Equivalent RSUs shall occur on, or no later than thirty (30) days following, the Termination Date. (The actual date of settlement is hereinafter referred to as the “Settlement Date”). The Company, in its sole discretion, may settle the vested RSUs and Dividend Equivalent RSUs by either (i) issuing to the Grantee or the Grantee's personal representative a stock certificate representing one share of Common Stock for each RSU that has vested and one share of Common Stock for each Dividend Equivalent RSU that has vested or (ii) depositing in such Grantee's or the Grantee's personal representative's brokerage account via electronic transfer, one share of Common Stock for each RSU that has vested and one share of Common Stock for each Dividend Equivalent RSU that has vested.

(d)Dividend Equivalents. Dividend equivalents will accrue on the RSUs during the period beginning on the Grant Date and ending on the Scheduled Vesting Date (the “Vesting Period”) and will be notionally credited in the form of additional RSUs (“Dividend Equivalent RSUs”) to the Grantee's bookkeeping account. Dividend equivalents will also accrue on the Dividend Equivalent RSUs during the Vesting Period. The Company will round down to the nearest whole share in settling any Dividend Equivalent RSUs and no fractional shares will be issued. Dividend Equivalent RSUs will in all cases be subject to the same terms and conditions, including but not limited to those related to vesting, transferability, and payment, that apply to the RSUs.

(e)Transfer Restrictions. Neither the RSUs, the Dividend Equivalent RSUs, nor any interest therein may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by the Grantee, except by will or the laws of descent and distribution, and any such purported sale, assignment, transfer, pledge, hypothecation or other disposition shall be void and unenforceable against the Company.

(f)Incorporation of Plan by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement will have the definitions set forth in the Plan. The Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decisions will be binding and conclusive upon the Grantee and the Grantee's legal representative in respect of any questions arising under the Plan or this Agreement. If there exists any inconsistency between the terms of this Agreement and the Plan, the terms contained in the Plan will govern. If there exists any inconsistency between the terms of the RSUs and Dividend Equivalent RSUs as provided for herein (including terms relating to the number of RSUs or Dividend Equivalent RSUs) and the terms as indicated in the records maintained by Company, the terms as indicated in the records of the Company will govern.

3.Termination of Employment or Service as a Director.

(a)General. In the event that (i) the Grantee ceases to be employed by the Company or ceases to be a director of the Company for any reason (the date of such cessation, the “Termination Date”) other than due to death, total and permanent disability, Retirement (as defined below), divestiture or discontinued operation of a Subsidiary or division with which the Grantee was associated, or lay-off, in each case prior to the Scheduled Vesting Date or (ii) the Grantee ceases to be employed by the Company on account of lay-off prior to December 31st of the calendar year in which the Grant Date occurs (the "Determination Date"), the RSUs and any Dividend Equivalent RSUs credited as of the Termination Date will be automatically forfeited by the Grantee as of the Termination Date. For purposes of this Agreement, the Termination Date will in all cases without exception (notwithstanding, for example, any failure under local labor laws) be deemed to occur as of the date that the Grantee is no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of "garden leave" or similar period pursuant to local law). For purposes of this Agreement, "Retirement" means, (A) with respect to an employee who is not an elected officer of the Company on the Termination Date, the termination of employment after the attainment of age 55 with at least five (5) or more years of continuous service and (B) with respect to an employee who is an elected officer of the Company on the Termination Date, termination of employment after attaining age 55 with the consent of the Chief Executive Officer of the Company (or for the Chief Executive Officer, with the consent of the Committee).

(b)Certain Terminations. This Section 3(b) provides for special vesting rules in certain circumstances. For the avoidance of doubt, regardless of when the vesting event occurs, all RSUs and

Dividend Equivalent RSUs that vest under this Section 3(b) will be settled in accordance with Section 2(c) on, or no later than ninety (90) days following, the Scheduled Vesting Date; provided, however, that if (i) within two (2) years following a Change in Control the Grantee’s service with the Company and its affiliates is terminated by the Company or any of its affiliates for any reason other than for Cause or by the Grantee for Good Reason, or (ii) the Grantee’s service with the Company and its affiliates is terminated due to the Grantee’s death, then the RSUs and Dividend Equivalent RSUs that vest under this Section 3(b) will be settled on, or no later than thirty (30) days following, the Termination Date.

(i)Prior to the Determination Date. In the event that the Grantee ceases to be employed by the Company or ceases to be a director of the Company due to total and permanent disability, Retirement, divestiture or discontinued operation of a Subsidiary or division with which the Grantee was associated, in each case prior to the Determination Date, then the award of RSUs will vest on the Termination Date with respect to a number of RSUs equal to the product of (A) the sum of (x) the total number of RSUs and (y) the total number of Dividend Equivalent RSUs that have been credited to the Grantee as of the Termination Date and (B) a fraction, the numerator of which will be the number of days from January 1 of the year in which the Grant Date occurs to the last day of the month in which the Termination Date occurs and the denominator of which will be 365, and the remaining RSUs and Dividend Equivalent RSUs will be automatically forfeited by the Grantee as of the Termination Date.

(ii)On or After the Determination Date. In the event that the Grantee ceases to be employed by the Company or ceases to serve as a director of the Company due to total and permanent disability, Retirement, divestiture or discontinued operation of a Subsidiary or division with which the Grantee was associated, or lay-off, in each case, on or after the Determination Date and on or prior to the Scheduled Vesting Date, then RSUs and the Dividend Equivalent RSUs that have been credited as of the Termination Date will become immediately vested.

(c)Death. In the event of the Grantee’s death on or prior to the Scheduled Vesting Date, the RSUs and the Dividend Equivalent RSUs that have been credited as of the date of the Grantee’s death will become immediately vested as of the date of Grantee’s death.

(d)Change in Control. Notwithstanding the foregoing, in the event that within two (2) years following a Change in Control, the Grantee’s service with the Company and its affiliates is terminated by the Company or any of its affiliates for any reason other than for Cause or by the Grantee for Good Reason, then the RSUs and the Dividend Equivalent RSUs that have been credited as of the Termination Date will become immediately vested.

(e)Harm. Notwithstanding anything to the contrary herein, all of the RSUs and Dividend Equivalent RSUs will be automatically forfeited by the Grantee if the Grantee causes Harm (as defined below) to the Company prior to the Settlement Date. For purposes of this Agreement, "Harm" includes, any actions that adversely affect the Company's financial standing, reputation, or products, or any actions involving personal dishonesty, a felony conviction related to the Company, or any material violation of any confidentiality or non-competition agreement with the Company.

4.Tax Withholding. Regardless of any action the Company or the Grantee's actual employer (the "Employer") takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding ("Tax-Related Items"), the Grantee acknowledges that the ultimate liability for all Tax-Related Items legally due by the Grantee is and remains the Grantee's responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs and the Dividend Equivalent RSUs, including the grant of the RSUs and crediting

of the Dividend Equivalent RSUs, the vesting of the RSUs and Dividend Equivalent RSUs, the settlement of the RSUs and Dividend Equivalent RSUs, and the subsequent sale of any shares acquired at settlement; and (ii) do not commit to structure the terms of the grant or any aspect of the RSUs and Dividend Equivalent RSUs to reduce or eliminate the Grantee's liability for Tax-Related Items.

Prior to the issuance of shares pursuant to this award of RSUs, the Grantee shall pay, or make adequate arrangements satisfactory to the Company or to the Employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or Employer. In this regard, the Grantee authorizes the Company or the Employer to withhold all applicable Tax-Related Items legally payable by the Grantee from the Grantee's wages or other cash compensation payable to the Grantee by the Company or the Employer. Alternatively, or in addition, if permissible under local law, the Company or the Employer may, in their sole discretion, (i) sell or arrange for the sale of shares of Common Stock to be issued on the settlement of the RSUs and/or the Dividend Equivalent RSUs to satisfy the withholding or payment on account obligation, and/or (ii) withhold from the shares to be delivered upon settlement of the RSUs and/or the Dividend Equivalent RSUs the amount of shares necessary to satisfy the minimum withholding amount (or such other rate that will not result in a negative accounting impact). The Grantee shall pay to the Company or to the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of the Grantee's receipt of this award, the vesting of the RSUs and the Dividend Equivalent RSUs, or the settlement of the RSUs and the Dividend Equivalent RSUs that cannot be satisfied by the means previously described. The Company may refuse to deliver shares pursuant to the RSUs and the Dividend Equivalent RSUs to the Grantee if the Grantee fails to comply with the Grantee's obligation in connection with the Tax-Related Items as described herein. If the Grantee fails to pay or make satisfactory arrangements to satisfy all withholding and payment on account obligations by the Settlement Date, then the RSUs and the Dividend Equivalent RSUs shall be forfeited.

5.Nature of Grant. In accepting the award of RSUs, the Grantee acknowledges that:

(a)the Plan is discretionary in nature and established voluntarily by the Company and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan, and the award of RSUs is at the sole discretion of the Company and does not create any contractual or other right to receive future awards of RSUs, or benefits in lieu of RSUs even if RSUs have been awarded repeatedly in the past;

(b)the RSUs and the Dividend Equivalent RSUs are not part of normal or expected compensation or salary for any purposes, including, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

(c)nothing in the Plan or in this Agreement will confer upon the Grantee any right to continue in the employ of the Company nor interfere with or restrict in any way the right of the Company, which is hereby expressly reserved, to remove, terminate or discharge the Grantee at any time for any reason whatsoever, with or without cause; and

(d)no claim or entitlement to compensation or damages arises from termination of the RSUs or Dividend Equivalent RSUs, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the RSUs, Dividend Equivalent RSUs, or shares received upon settlement of the RSUs or Dividend Equivalent RSUs resulting from termination of the Grantee's employment by the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and the Grantee irrevocably releases the Company and the Employer from any such claim that may arise; if,

notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, the Grantee shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

6.Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use, holding and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Employer, and the Parent and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Grantee's participation in the Plan.

The Grantee understands that the Company and the Employer may hold certain personal information about the Grantee, including his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee's favor, for the purpose of implementing, administering and managing the Plan ("Data"). Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee's country or elsewhere and that the recipients' country may have different data privacy laws and protections than the Grantee's country. The Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon settlement of the RSUs and Dividend Equivalent RSUs. Data will be held only as long as is necessary to implement, administer and manage the Grantee's participation in the Plan. The Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Refusing or withdrawing his or her consent may affect the Grantee's ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Grantee may contact his or her local human resources representative.

7.Miscellaneous.

(a)Modification; Entire Agreement; Waiver. No change, modification or waiver of any provision of this Agreement will be valid unless the same is agreed to in writing by the parties hereto. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and therein and supercede all prior communications, representations and negotiations in respect thereof. The failure of the Company to enforce at any time any provision of this Agreement will in no way be construed to be a waiver of such provision or of any other provision hereof. The Company reserves the right, however, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally alter or modify the awards to ensure all RSUs, Dividend Equivalent RSUs and the Agreements provided to Grantees are made in such a manner that either qualifies for exemption from or complies with Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"); provided, however, that the Company makes no representations that the RSUs and Dividend Equivalent RSUs will be exempt from or will comply with Section 409A and makes no undertaking to preclude Section 409A from applying to the RSUs and Dividend Equivalent RSUs.

(b)Bound by Plan and Other Related Documents. By accepting the award of RSUs, the Grantee acknowledges that the Grantee has received a copy of the Plan and the General Dynamics

Corporate Policy regarding insider trading compliance (the "Trading Policy") and has had an opportunity to review the Plan and the Trading Policy and agrees to be bound by all the terms and provisions of the Plan and the Trading Policy.

(c)Successors. The terms of this Agreement will be binding upon and inure to the benefit of the Company, its successors and assigns, and of the beneficiaries, executors, administrators, heirs and successors of the Grantee.

(d)Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. For purposes of litigating any dispute that arises under this Award or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Virginia, and agree that such litigation shall be conducted exclusively in the courts of Virginia or the federal courts for the Eastern District of Virginia.

(e)Section 409A Compliance. To the extent applicable, it is intended that the Plan and the Agreement comply with the requirements of Section 409A and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service. Accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, Grantee shall not be considered to have terminated employment with the Company for purposes of this Agreement until Grantee would be considered to have incurred a "separation from service" from the Company within the meaning of Section 409A. For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A. To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following Grantee's separation from service shall instead be paid on the first business day after the date that is six months following Grantee's separation from service (or death, if earlier).

(f)Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.

(g)Language. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different that the English version, the English version will control.

EX-10.4

Exhibit 10.4

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

PURSUANT TO THE GENERAL DYNAMICS CORPORATION

2012 EQUITY COMPENSATION PLAN

This Performance Restricted Stock Unit Award Agreement (the "Agreement") is entered into as of [DATE], (the "Grant Date"), by and between General Dynamics Corporation (the "Company") and [NAME] (the "Grantee").

WHEREAS, the Company sponsors the General Dynamics Corporation 2012 Equity Compensation Plan (the "Plan") and pursuant to Section 7 of the Plan the Company may grant performance-based restricted stock units ("Performance RSUs"); and

WHEREAS, the Company desires to grant to the Grantee an award of Performance RSUs.

NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows:

1.Number of Performance RSUs. The Grantee is hereby granted [NUMBER] Performance RSUs (the “Target Performance RSUs”). Each Performance RSU represents an unfunded, unsecured promise by the Company to deliver one share of the Company's common stock ("Common Stock"), subject to certain restrictions, terms and conditions. The number of shares of Common Stock actually required to be delivered to the Grantee (the “Earned Performance RSUs”) may vary from the number represented by the Target Performance RSUs, based on performance as described in Section 2(b) hereof.

2.Terms of Performance RSUs. The Performance RSUs will be subject to the following terms, conditions and restrictions:

(a)No Shareholder Rights. The grant of Performance RSUs does not entitle the Grantee to any rights of a shareholder of Common Stock, including dividends or voting rights.

(b)Performance Feature. The number of Earned Performance RSUs will range from 0% to 150% of the number of Target Performance RSUs, as determined by the extent to which the Performance Goal set forth on Schedule A to this Agreement is achieved in accordance with the formula described on Schedule A.

(c)Performance Period and Vesting. Except as otherwise provided in Section 3 below, attainment of the Performance Goal will be measured over the period commencing on [INSERT THE THREE-YEAR PERIOD BEGINNING JANUARY 1 OF THE CALENDAR YEAR IN WHICH THE GRANT OCCURS AND ENDING ON DECEMBER 31 OF THE CALENDAR YEAR THAT IS TWO YEARS FOLLOWING THE YEAR OF THE GRANT DATE] (the “Performance Period”), and the number of Earned Performance RSUs will be fixed as of the end of the Performance Period (the “Scheduled Vesting Date”), subject to the Committee certifying the level of attainment of the Performance Goal within two and one-half (2.5) months following the Scheduled Vesting Date. Except as may otherwise be provided in Section 3 below, the Earned Performance RSUs and the Total Dividend Equivalent RSUs (as defined below) will vest on the Scheduled Vesting Date, but only if the Grantee’s Termination Date (as defined below) has not occurred, and does not occur, prior to or on the Scheduled Vesting Date.

(d)Settlement of Awards. Except as set forth in Section 3(b), settlement of vested Earned Performance RSUs and vested Dividend Equivalent RSUs shall occur within two and one-half (2.5) months following the Scheduled Vesting Date. (The actual date of settlement is hereinafter referred to as the “Settlement Date”). The Company, in its sole discretion, may settle the vested Earned Performance RSUs and vested Dividend Equivalent RSUs by either (i) issuing to the Grantee or the Grantee's personal representative a stock certificate representing one share of Common Stock for each Earned Performance RSU that has vested and one share of Common Stock for each Dividend Equivalent RSU that has vested or (ii) depositing in such Grantee's or the Grantee's personal representative's brokerage account via electronic transfer one share of Common Stock for each Earned Performance RSU that has vested and one share of Common Stock for each Dividend Equivalent RSU that has vested.

(e)Dividend Equivalents. Dividend equivalents will accrue on the Performance RSUs and will be notionally credited in the form of additional Performance RSUs (“Dividend Equivalent RSUs”) to the Grantee's bookkeeping account. During the Performance Period, dividend equivalents will accrue on the Target Performance RSUs and on the Dividend Equivalent RSUs outstanding on each dividend equivalent determination date. At the end of the Performance Period the number of outstanding Dividend Equivalent RSUs will be adjusted to reflect the attainment of the Performance Goal in the same manner as the Target Performance RSUs (such adjusted number, the “Earned Dividend Equivalent RSUs”). During the period beginning on the Scheduled Vesting Date and ending on the Settlement Date (the “Crediting Period”), Dividend Equivalent RSUs will accrue on the Earned Performance RSUs and on the Earned Dividend Equivalent RSUs (the Earned Dividend Equivalent RSUs together with any additional Dividend Equivalent RSUs credited thereon and credited on the Earned Performance RSUs during the Crediting Period being referred to herein as the “Total Dividend Equivalent RSUs”). The Company will round down to the nearest whole share in settling any vested Dividend Equivalent RSUs and no fractional shares will be issued. Dividend Equivalent RSUs will in all cases be subject to the same terms and conditions, including but not limited to those related to vesting, transferability, and payment, that apply to the Performance RSUs.

(f)Transfer Restrictions. Neither the Performance RSUs, the Dividend Equivalent RSUs, nor any interest therein may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by the Grantee, except by will or the laws of descent and distribution, and any such purported sale, assignment, transfer, pledge, hypothecation or other disposition shall be void and unenforceable against the Company.

(g)    Incorporation of Plan by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement will be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement will have the definitions set forth in the Plan. The Committee will have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decisions will be binding and conclusive upon the Grantee and the Grantee's legal representative in respect of any questions arising under the Plan or this Agreement. If there exists any inconsistency between the terms of this Agreement and the Plan, the terms contained in the Plan will govern. If there exists any inconsistency between the terms of the Performance RSUs and Dividend Equivalent RSUs as provided for herein (including terms relating to the number of Performance RSUs or Dividend Equivalent RSUs) and the terms as indicated in the records maintained by Company, the terms as indicated in the records of the Company will govern.

3.Termination of Employment or Service as a Director.

(a)General. Except as set forth in Section 3(b), in the event that the Grantee ceases to be employed by the Company or ceases to be a director of the Company for any reason (the date of such cessation, the “Termination Date”) prior to the Scheduled Vesting Date, the Performance RSUs and any Dividend Equivalent RSUs credited as of the Termination Date will be automatically forfeited by the Grantee as of the Termination Date. For purposes of this Agreement, the Termination Date will in all cases without exception (notwithstanding, for example, any failure under local labor laws) be deemed to occur as of the date that the Grantee is no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of "garden leave" or similar period pursuant to local law). For purposes of this Agreement, "Retirement" means, (A) with respect to an employee who is not an elected officer of the Company on the Termination Date, the termination of employment after the attainment of age 55 with at least five (5) or more years of continuous service and (B) with respect to an employee who is an elected officer of the Company on the Termination Date, termination of employment after attaining age 55 with the consent of the Chief Executive Officer of the Company (or for the Chief Executive Officer, with the consent of the Committee).

(b)Certain Terminations. This Section 3(b) provides for special vesting and settlement rules in certain circumstances.

(i)Disability, Retirement or Divestiture Prior to the Scheduled Vesting Date. In the event that the Grantee ceases to be employed by the Company due to total and permanent disability, Retirement, divestiture or discontinued operation of a Subsidiary or division with which the Grantee was associated or ceases to be a director of the Company due to total and permanent disability, in each case prior to the Scheduled Vesting Date, then the award of Performance RSUs will vest on the Termination Date, subject to Sections 2(b) and 2(e), with respect to a number of Performance RSUs equal to the product of (A) the sum of (x) the total number of Earned Performance RSUs and (y) the total number of Earned Dividend Equivalent RSUs and (B) a fraction, the numerator of which will be the number of days from January 1 of the year in which the Grant Date occurs to the last day of the month in which the Termination Date occurs and the denominator of which will be 1,095, and the remaining Earned Performance RSUs and Earned Dividend Equivalent RSUs will be automatically forfeited by the Grantee as of the Termination Date. The Earned Performance RSUs and Earned Dividend Equivalent RSUs that vest pursuant to this Section 3(b)(i) shall be settled as provided in Section 2(d).

(ii)Cause After the Scheduled Vesting Date. In the event that the Grantee ceases to be employed by the Company for Cause on or after the Scheduled Vesting Date but prior to the Settlement Date, then the Earned Performance RSUs and the Total Dividend Equivalent RSUs that have been credited as of the Termination Date will be automatically forfeited.

(iii)Death. In the event of the Grantee ceases to be employed by the Company due to the Grantee’s death on or prior to the Scheduled Vesting Date, then a number of Performance RSUs equal to the sum of (x) the number of Earned Performance RSUs and (y) the number of Earned Dividend Equivalent RSUs, in each of (x) and (y), determined based on the achievement of the Performance Goal through the last day of the Company’s quarter in which the Grantee’s death occurs (the “Death Vesting Date)”, will become immediately vested on the Death Vesting Date, subject to certification by an appropriate executive of the Company with authority to make a determination of the level of attainment of the Performance Goal through the Death Vesting Date, or, solely with respect to the Company’ executive officers, subject to certification of the level of attainment of the Performance Goal through the Death Vesting Date by the Committee. The Earned Performance RSUs and Earned Dividend Equivalent RSUs

that vest pursuant to this Section 3(b)(iii) shall be settled within two and one-half (2.5) months after the Death Vesting Date.

(iv)Change in Control. Prior to a Change in Control, the Committee will specify how the Performance Goal will be adjusted for the remainder of the Performance Period following the Change in Control. Notwithstanding the foregoing, in the event that within two (2) years following a Change in Control, the Grantee’s employment with the Company and its affiliates is terminated (i) by the Company or any of its affiliates for any reason other than for Cause or (ii) by the Grantee for Good Reason, the Earned Performance RSUs and the Earned Dividend Equivalent RSUs, each determined based on achievement of the Performance Goal through the date of the Change in Control, will become immediately vested. The Earned Performance RSUs and Earned Dividend Equivalent RSUs that vest pursuant to this Section 3(b)(iii) shall be settled within two and one-half (2.5) months after the end of the calendar year in which the termination date occurs.

(c)Harm. Notwithstanding anything to the contrary herein, all of the Performance RSUs and Dividend Equivalent RSUs will be automatically forfeited by the Grantee if the Grantee causes Harm (as defined below) to the Company prior to the Settlement Date. For purposes of this Agreement, "Harm" includes, any actions that adversely affect the Company's financial standing, reputation, or products, or any actions involving personal dishonesty, a felony conviction related to the Company, or any material violation of any confidentiality or non-competition agreement with the Company.

4.Tax Withholding. Regardless of any action the Company or the Grantee's actual employer (the "Employer") takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding ("Tax-Related Items"), the Grantee acknowledges that the ultimate liability for all Tax-Related Items legally due by the Grantee is and remains the Grantee's responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance RSUs and the Dividend Equivalent RSUs, including the grant of the Performance RSUs and crediting of the Dividend Equivalent RSUs, the vesting of the Performance RSUs and Dividend Equivalent RSUs, the settlement of the Performance RSUs and Dividend Equivalent RSUs, and the subsequent sale of any shares acquired at settlement; and (ii) do not commit to structure the terms of the grant or any aspect of the Performance RSUs and Dividend Equivalent RSUs to reduce or eliminate the Grantee's liability for Tax-Related Items.

Prior to the issuance of shares pursuant to this award of Performance RSUs, the Grantee shall pay, or make adequate arrangements satisfactory to the Company or to the Employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or Employer. In this regard, the Grantee authorizes the Company or the Employer to withhold all applicable Tax-Related Items legally payable by the Grantee from the Grantee's wages or other cash compensation payable to the Grantee by the Company or the Employer. Alternatively, or in addition, if permissible under local law, the Company or the Employer may, in their sole discretion, (i) sell or arrange for the sale of shares of Common Stock to be issued on the settlement of the Performance RSUs and/or the Dividend Equivalent RSUs to satisfy the withholding or payment on account obligation, and/or (ii) withhold from the shares to be delivered upon settlement of the Performance RSUs and/or the Dividend Equivalent RSUs the amount of shares necessary to satisfy the minimum withholding amount (or such other rate that will not result in a negative accounting impact). The Grantee shall pay to the Company or to the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of the Grantee's receipt of this award, the vesting of the Performance RSUs and the Dividend Equivalent RSUs, or the settlement of the Performance RSUs and the Dividend Equivalent RSUs that cannot be satisfied by the means previously described. The Company may refuse to deliver

shares pursuant to the Performance RSUs and the Dividend Equivalent RSUs to the Grantee if the Grantee fails to comply with the Grantee's obligation in connection with the Tax-Related Items as described herein. If the Grantee fails to pay or make satisfactory arrangements to satisfy all withholding and payment on account obligations by the Settlement Date, then the Performance RSUs and the Dividend Equivalent RSUs shall be forfeited.

5.Nature of Grant. In accepting the award of Performance RSUs, the Grantee acknowledges that:

(a)the Plan is discretionary in nature and established voluntarily by the Company and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan, and the award of Performance RSUs is at the sole discretion of the Company and does not create any contractual or other right to receive future awards of Performance RSUs, or benefits in lieu of Performance RSUs even if Performance RSUs have been awarded repeatedly in the past;

(b)the award of Performance RSUs is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or to the Employer, and the Performance RSUs are outside the scope of the Grantee's employment contract, if any;

(c)the Performance RSUs and the Dividend Equivalent RSUs are not part of normal or expected compensation or salary for any purposes, including, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

(d)neither the award of Performance RSUs nor any provision of this Agreement nor the Plan confer upon the Grantee any right with respect to employment or continuation of current employment, and in the event that the Grantee is not an employee of the Company, the Performance RSUs shall not be interpreted to form an employment contract or relationship with the Company; and

(e)no claim or entitlement to compensation or damages arises from termination of the Performance RSUs or Dividend Equivalent RSUs, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the Performance RSUs, Dividend Equivalent RSUs, or shares received upon settlement of the Performance RSUs or Dividend Equivalent RSUs resulting from termination of the Grantee's employment by the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and the Grantee irrevocably releases the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, the Grantee shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

6.Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, holding, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Employer, and the Parent and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Grantee's participation in the Plan.

The Grantee understands that the Company and the Employer may hold certain personal information about the Grantee, including his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee's favor, for the purpose of implementing, administering and managing the Plan ("Data"). Data may be transferred to any third

parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Grantee's country or elsewhere and that the recipients' country may have different data privacy laws and protections than the Grantee's country. The Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon settlement of the Performance RSUs and Dividend Equivalent RSUs. Data will be held only as long as is necessary to implement, administer and manage the Grantee's participation in the Plan. The Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Refusing or withdrawing his or her consent may affect the Grantee's ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Grantee may contact his or her local human resources representative.

7.[Compensation Recoupment Policy. This Agreement shall be subject to the Company’s Compensation Recoupment Policy. The Grantee acknowledges receipt of the Compensation Recoupment Policy and has read and understands the terms and conditions of the Compensation Recoupment Policy.][This provision IS INCLUDED ONLY IN AGREEMENTS FOR certain executive officers who are subject to the General Dynamics Compensation Recoupment Policy.]

8.Miscellaneous.

(a)Modification; Entire Agreement; Waiver. No change or modification to any provision of this Agreement will be valid unless the same is agreed to in writing by the parties hereto. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and therein and supercede all prior communications, representations and negotiations in respect thereof. The failure of the Company to enforce at any time any provision of this Agreement will in no way be construed to be a waiver of such provision or of any other provision hereof. The Company reserves the right, however, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally alter or modify the awards to ensure all Performance RSUs, Dividend Equivalent RSUs and the Agreements provided to Grantees are made in such a manner that either qualifies for exemption from or complies with Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended; provided, however that the Company makes no representations that the Performance RSUs and Dividend Equivalent RSUs will be exempt from or will comply with Section 409A and makes no undertaking to preclude Section 409A from applying to the Performance RSUs and Dividend Equivalent RSUs.

(b)Bound by Plan and Other Related Documents. By accepting the award of Performance RSUs, the Grantee acknowledges that the Grantee has received a copy of the Plan and General Dynamics Corporate Policy regarding insider trading compliance (the "Trading Policy") and has had an opportunity to review the Plan and the Trading Policy and agrees to be bound by all the terms and provisions of the Plan and the Trading Policy.

(c)Successors. The terms of this Agreement will be binding upon and inure to the benefit of the Company, its successors and assigns, and of the beneficiaries, executors, administrators, heirs and successors of the Grantee.

(d)Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. For purposes of litigating any dispute that arises under this Award or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Virginia, and agree that such litigation shall be conducted exclusively in the courts of Virginia or the federal courts for the Eastern District of Virginia.

(e)Section 409A Compliance. To the extent applicable, it is intended that the Plan and the Agreement comply with the requirements of Section 409A and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service. Accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, Grantee shall not be considered to have terminated employment with the Company for purposes of this Agreement until Grantee would be considered to have incurred a "separation from service" from the Company within the meaning of Section 409A. For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A. To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following Grantee's separation from service shall instead be paid on the first business day after the date that is six months following Grantee's separation from service (or death, if earlier).

(f)Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.

(g)Language. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different that the English version, the English version will control.

EX-31.1

Exhibit 31.1

CERTIFICATION BY CEO PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Phebe N. Novakovic, certify that:

1) I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Phebe N. Novakovic

Phebe N. Novakovic

Chairman and Chief Executive Officer

April 29, 2015

EX-31.2

Exhibit 31.2

CERTIFICATION BY CFO PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Jason W. Aiken, certify that:

1) I have reviewed this quarterly report on Form 10-Q of General Dynamics Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Jason W. Aiken

Jason W. Aiken

Senior Vice President and Chief Financial Officer

April 29, 2015

EX-32.1

Exhibit 32.1

CERTIFICATION BY CEO PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of General Dynamics Corporation (the Company) on Form 10-Q for the quarter ended April 5, 2015, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Phebe N. Novakovic, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Phebe N. Novakovic

Phebe N. Novakovic

Chairman and Chief Executive Officer

April 29, 2015

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION BY CEO PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of General Dynamics Corporation (the Company) on Form 10-Q for the quarter ended April 5, 2015, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Jason W. Aiken, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Jason W. Aiken

Jason W. Aiken

Senior Vice President and Chief Financial Officer

April 29, 2015

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	Apr. 05, 2015		Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 2,408		$ 2,398
Accumulated Amortization	(1,515)		(1,486)
Net Carrying Amount	893		912
Contract and Program Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,654	[1]	1,652	[1]
Accumulated Amortization	(1,148)	[1]	(1,123)	[1]
Net Carrying Amount	506	[1]	529	[1]
Tradenames and Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	471		462
Accumulated Amortization	(115)		(113)
Net Carrying Amount	356		349
Technology and Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	129		130
Accumulated Amortization	(98)		(97)
Net Carrying Amount	31		33
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	154		154
Accumulated Amortization	(154)		(153)
Net Carrying Amount	$ 0		$ 1

[1] Consists of acquired backlog and probable follow-on work and related customer relationships.

XML

Commitments and Contingency - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015
Commitments and Contingencies [Line Items]
Letters of credit and guarantees	972
Maximum
Commitments and Contingencies [Line Items]
Period preceding delivery of aircraft to customer fair market value of trade-in aircraft is established, days, maximum	120 days

XML

Debt (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Commercial Paper	$ 0
Total debt	3,411	3,911
Debt, Current	1	501
Long-term debt	3,410	3,410
Fixed-Rate Notes Due January 2015
Debt Instrument [Line Items]
Total debt	0	500
Interest Rate	1.375%
Fixed-Rate Notes Due July 2016
Debt Instrument [Line Items]
Total debt	500	500
Interest Rate	2.25%
Fixed Rate Notes Due November 2017
Debt Instrument [Line Items]
Total debt	897	897
Interest Rate	1.00%
Fixed-Rate Notes Due July 2021
Debt Instrument [Line Items]
Total debt	499	499
Interest Rate	3.875%
Fixed Rate Notes Due November 2022
Debt Instrument [Line Items]
Total debt	992	992
Interest Rate	2.25%
Fixed Rate Notes Due November 2042
Debt Instrument [Line Items]
Total debt	498	498
Interest Rate	3.60%
Other Debt Securities
Debt Instrument [Line Items]
Other	Various
Total debt	$ 25	$ 25

XML

Product Guarantee (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Beginning balance	$ 428	$ 354
Warranty expense	31	33
Payments	(29)	(14)
Ending balance	$ 430	$ 373

XML

Cost Of Contracts (Detail) (USD $) In Millions, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Contractors [Abstract]
Contract costs and estimated profits	$ 7,390	$ 7,494
Other contract costs	1,061	1,064
Costs in excess of billings on uncompleted contracts or programs, total	8,451	8,558
Advances and progress payments	(4,007)	(3,967)
Total contracts in process	$ 4,444	$ 4,591

XML

Commitments And Contingencies (Tables)

3 Months Ended

Apr. 05, 2015

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Changes In Carrying Amount Of Warranty Liabilities

The changes in the carrying amount of warranty liabilities for the three-month periods ended April 5, 2015, and March 30, 2014, were as follows:

Three Months Ended	April 5, 2015			March 30, 2014
Beginning balance	$	428		$	354
Warranty expense	31			33
Payments	(29		)	(14		)
Ending balance	$	430		$	373

XML

Business Group Information - Additional Information (Detail)	3 Months Ended
	Apr. 05, 2015 Segment
Disclosure Business Group Information Additional Information [Abstract]
Number of operating business groups	4

XML

Earnings And Dividends Per Share (Tables)

3 Months Ended

Apr. 05, 2015

Earnings Per Share [Abstract]

Basic and diluted weighted average shares outstanding

Basic and diluted weighted average shares outstanding were as follows (in thousands):

Three Months Ended	April 5, 2015	March 30, 2014
Basic weighted average shares outstanding	329,154	342,232
Dilutive effect of stock options and restricted stock/RSUs*	5,528	5,016
Diluted weighted average shares outstanding	334,682	347,248

* Excludes the following outstanding options to purchase shares of common stock because these options had exercise prices in excess of the average market price of our common stock during the period and therefore the effect of including these options would be antidilutive: 2015 - 722 and 2014 - 4,790.

XML

Liabilities Balance (Detail) (USD $) In Millions, unless otherwise specified	Apr. 05, 2015		Dec. 31, 2014
Other Liabilities Disclosure [Abstract]
Deferred income taxes	$ 739		$ 729
Fair value of cash flow hedges	722		292
Salaries and wages	601		718
Workers' compensation	417		420
Retirement benefits	306		309
Other	1,573	[1]	1,390	[1]
Total other current liabilities	4,358		3,858
Retirement benefits	4,595		4,596
Customer deposits on commercial contracts	594		617
Deferred income taxes	85		82
Other	1,069	[2]	1,070	[2]
Total other liabilities	$ 6,343		$ 6,365

[1] Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, liabilities of discontinued operations and insurance-related costs.

[2] Consists primarily of liabilities for warranty reserves and workers' compensation and liabilities of discontinued operations.

XML

Earnings And Dividends Per Share - Additional Information (Detail) (Stock Options and Restricted Stock [Member]) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Stock Options and Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	722	4,790

XML

Summary Of Significant Accounting Policies - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Accounting Policies [Abstract]
Length of fiscal quarters, weeks	0 years 0 months 91 days
Net increase in operating earnings from the quarterly impact of revisions in contract	$ 63	$ 38
Net increase in operating earnings per share from the quarterly impact of revisions in contract	$ 0.12	$ 0.07

XML

Shareholders' Equity - Changes in AOCI (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance,	$ (2,932)	$ (1,185)
Other comprehensive income (loss) before tax	(388)	3
Provision (benefit) for income tax, net	(104)	21
Other comprehensive income (loss) net of tax	(284)	(18)
Balance,	(3,216)	(1,203)
Gains (Losses) on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance,	(173)	9
Other comprehensive income (loss) before tax	(383)	4
Provision (benefit) for income tax, net	(135)	1
Other comprehensive income (loss) net of tax	(248)	3
Balance,	(421)	12
Unrealized Gains on Securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance,	22	15
Other comprehensive income (loss) before tax	2	3
Provision (benefit) for income tax, net	2	1
Other comprehensive income (loss) net of tax	0	2
Balance,	22	17
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance,	541	974
Other comprehensive income (loss) before tax	(104)	(65)
Provision (benefit) for income tax, net	(5)	(1)
Other comprehensive income (loss) net of tax	(99)	(64)
Balance,	442	910
Changes in Retirement Plans’ Funded Status
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance,	(3,322)	(2,183)
Other comprehensive income (loss) before tax	97	61
Provision (benefit) for income tax, net	34	20
Other comprehensive income (loss) net of tax	63	41
Balance,	$ (3,259)	$ (2,142)

XML

Condensed Consolidating Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014		Mar. 30, 2014	Dec. 31, 2013
Current assets:
Cash and equivalents	$ 4,412	$ 4,388		$ 4,296	$ 5,301
Accounts receivable	3,661	4,050
Contracts in process	4,444	4,591
Inventories
Work in process	1,980	1,828
Raw materials	1,327	1,290
Finished goods	23	28
Pre-owned aircraft	67	75
Other current assets	438	1,157
Total current assets	16,352	17,407
Noncurrent assets:
Property, plant and equipment	7,364	7,292
Accumulated depreciation of PP&E	(4,041)	(3,963)
Intangible assets	2,408	2,398
Accumulated amortization of intangible assets	(1,515)	(1,486)
Goodwill	11,699	11,731	[1]
Other assets	2,118	1,976
Investment in subsidiaries	0	0
Total noncurrent assets	18,033	17,948
Total assets	34,385	35,355
Current liabilities:
Short-term debt	1	501
Customer advances and deposits	6,487	7,335
Other current liabilities	6,624	5,915
Total current liabilities	13,112	13,751
Noncurrent liabilities:
Long-term debt	3,410	3,410
Other liabilities	6,343	6,365
Total noncurrent liabilities	9,753	9,775
Intercompany	0	0
Shareholders' equity:
Common stock	482	482
Other shareholders' equity	11,038	11,347
Total shareholders' equity	11,520	11,829		13,690	14,501
Total liabilities and shareholders' equity	34,385	35,355
Parent Company [Member]
Current assets:
Cash and equivalents	2,599	2,536		3,374	4,180
Accounts receivable	0	0
Contracts in process	546	542
Inventories
Work in process	0	0
Raw materials	0	0
Finished goods	0	0
Pre-owned aircraft	0	0
Other current assets	81	781
Total current assets	3,226	3,859
Noncurrent assets:
Property, plant and equipment	150	148
Accumulated depreciation of PP&E	(54)	(52)
Intangible assets	0	0
Accumulated amortization of intangible assets	0	0
Goodwill	0	0
Other assets	1,611	1,479
Investment in subsidiaries	38,078	37,449
Total noncurrent assets	39,785	39,024
Total assets	43,011	42,883
Current liabilities:
Short-term debt	0	500
Customer advances and deposits	0	0
Other current liabilities	1,444	1,298
Total current liabilities	1,444	1,798
Noncurrent liabilities:
Long-term debt	3,387	3,386
Other liabilities	3,487	3,514
Total noncurrent liabilities	6,874	6,900
Intercompany	23,173	22,356
Shareholders' equity:
Common stock	482	482
Other shareholders' equity	11,038	11,347
Total shareholders' equity	11,520	11,829
Total liabilities and shareholders' equity	43,011	42,883
Guarantor Subsidiaries [Member]
Current assets:
Cash and equivalents	0	0		0	0
Accounts receivable	1,310	1,379
Contracts in process	2,787	2,966
Inventories
Work in process	1,969	1,818
Raw materials	1,293	1,260
Finished goods	18	20
Pre-owned aircraft	67	75
Other current assets	207	215
Total current assets	7,651	7,733
Noncurrent assets:
Property, plant and equipment	6,119	6,035
Accumulated depreciation of PP&E	(3,312)	(3,246)
Intangible assets	1,482	1,484
Accumulated amortization of intangible assets	(1,065)	(1,042)
Goodwill	8,122	8,095
Other assets	249	213
Investment in subsidiaries	0	0
Total noncurrent assets	11,595	11,539
Total assets	19,246	19,272
Current liabilities:
Short-term debt	1	1
Customer advances and deposits	3,373	3,529
Other current liabilities	3,424	3,511
Total current liabilities	6,798	7,041
Noncurrent liabilities:
Long-term debt	23	24
Other liabilities	2,369	2,369
Total noncurrent liabilities	2,392	2,393
Intercompany	(22,580)	(22,557)
Shareholders' equity:
Common stock	6	6
Other shareholders' equity	32,630	32,389
Total shareholders' equity	32,636	32,395
Total liabilities and shareholders' equity	19,246	19,272
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and equivalents	1,813	1,852		922	1,121
Accounts receivable	2,351	2,671
Contracts in process	1,111	1,083
Inventories
Work in process	11	10
Raw materials	34	30
Finished goods	5	8
Pre-owned aircraft	0	0
Other current assets	150	161
Total current assets	5,475	5,815
Noncurrent assets:
Property, plant and equipment	1,095	1,109
Accumulated depreciation of PP&E	(675)	(665)
Intangible assets	926	914
Accumulated amortization of intangible assets	(450)	(444)
Goodwill	3,577	3,636
Other assets	258	284
Investment in subsidiaries	0	0
Total noncurrent assets	4,731	4,834
Total assets	10,206	10,649
Current liabilities:
Short-term debt	0	0
Customer advances and deposits	3,114	3,806
Other current liabilities	1,756	1,106
Total current liabilities	4,870	4,912
Noncurrent liabilities:
Long-term debt	0	0
Other liabilities	487	482
Total noncurrent liabilities	487	482
Intercompany	(593)	201
Shareholders' equity:
Common stock	2,043	2,043
Other shareholders' equity	3,399	3,011
Total shareholders' equity	5,442	5,054
Total liabilities and shareholders' equity	10,206	10,649
Consolidating Adjustments [Member]
Current assets:
Cash and equivalents	0	0		0	0
Accounts receivable	0	0
Contracts in process	0	0
Inventories
Work in process	0	0
Raw materials	0	0
Finished goods	0	0
Pre-owned aircraft	0	0
Other current assets	0	0
Total current assets	0	0
Noncurrent assets:
Property, plant and equipment	0	0
Accumulated depreciation of PP&E	0	0
Intangible assets	0	0
Accumulated amortization of intangible assets	0	0
Goodwill	0	0
Other assets	0	0
Investment in subsidiaries	(38,078)	(37,449)
Total noncurrent assets	(38,078)	(37,449)
Total assets	(38,078)	(37,449)
Current liabilities:
Short-term debt	0	0
Customer advances and deposits	0	0
Other current liabilities	0	0
Total current liabilities	0	0
Noncurrent liabilities:
Long-term debt	0	0
Other liabilities	0	0
Total noncurrent liabilities	0	0
Intercompany	0	0
Shareholders' equity:
Common stock	(2,049)	(2,049)
Other shareholders' equity	(36,029)	(35,400)
Total shareholders' equity	(38,078)	(37,449)
Total liabilities and shareholders' equity	$ (38,078)	$ (37,449)

[1] Goodwill on December 31, 2014, in the Information Systems and Technology reporting unit is net of $1,994 of accumulated impairment losses.

XML

Inventory (Detail) (USD $) In Millions, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Work in process	$ 1,980	$ 1,828
Raw materials	1,327	1,290
Finished goods	23	28
Pre-owned aircraft	67	75
Total inventories	$ 3,397	$ 3,221

XML

Acquisitions, Intangible Assets And Goodwill

3 Months Ended

Apr. 05, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Acquisitions, Intangible Assets And Goodwill

ACQUISITIONS, INTANGIBLE ASSETS AND GOODWILL

We did not acquire any businesses in the first quarter of 2015. In 2014, our Information Systems and Technology group acquired a provider of IT support to U.S. special operations forces.

The operating results of this acquisition have been included with our reported results since the closing date. The purchase price of this acquisition has been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill.

The changes in the carrying amount of goodwill by reporting unit for the three months ended

April 5, 2015, were as follows:

	Aerospace		Combat Systems			Information Systems and Technology			Marine Systems		Total Goodwill
December 31, 2014 (a)	$	2,555	$	2,750		$	6,137		$	289	$	11,731
Other (b)	58		(74		)	(16		)	—		(32		)
April 5, 2015	$	2,613	$	2,676		$	6,121		$	289	$	11,699

(a)Goodwill on December 31, 2014, in the Information Systems and Technology reporting unit is net of $1,994 of accumulated impairment losses.

(b)Consists primarily of adjustments for foreign currency translation.

Intangible assets consisted of the following:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	April 5, 2015							December 31, 2014
Contract and program intangible assets*	$	1,654	$	(1,148	)	$	506	$	1,652	$	(1,123	)	$	529
Trade names and trademarks	471		(115		)	356		462		(113		)	349
Technology and software	129		(98		)	31		130		(97		)	33
Other intangible assets	154		(154		)	—		154		(153		)	1
Total intangible assets	$	2,408	$	(1,515	)	$	893	$	2,398	$	(1,486	)	$	912

* Consists of acquired backlog and probable follow-on work and related customer relationships.

Amortization expense was $30for the three-month periods ended April 5, 2015, and March 30, 2014. We expect to record amortization expense of $120 in 2015.

XML

Condensed Consolidating Statements Of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015		Mar. 30, 2014
Condensed Consolidating Financial Information [Line Items]
Net cash provided by operating activities	$ 745	[1]	$ 422	[1]
Proceeds from Maturities, Prepayments and Calls of Held-to-maturity Securities	500		0
Cash flows from investing activities - continuing operations:
Capital expenditures	(98)		(87)
Other, net	94
Net cash used by investing activities	496		(77)
Cash flows from financing activities - continuing operations:
Purchases of common stock	(620)		(1,430)
Repayments of fixed-rate notes	(500)		0
Dividends paid	(206)		(198)
Proceeds from option exercises	87
Other, net	30		83
Net cash used by financing activities	(1,209)		(1,347)
Net cash (used) provided by discontinued operations	(8)		(3)
Cash sweep/funding by parent	0		0
Net increase (decrease) in cash and equivalents	24		(1,005)
Cash and equivalents at beginning of period	4,388		5,301
Cash and equivalents at end of period	4,412		4,296
Parent Company [Member]
Condensed Consolidating Financial Information [Line Items]
Net cash provided by operating activities	(101)	[1]	(65)	[1]
Proceeds from Maturities, Prepayments and Calls of Held-to-maturity Securities	500
Cash flows from investing activities - continuing operations:
Capital expenditures	(2)
Other, net	1
Net cash used by investing activities	499		0
Cash flows from financing activities - continuing operations:
Purchases of common stock	(620)		(1,430)
Repayments of fixed-rate notes	(500)
Dividends paid	(206)
Proceeds from option exercises	87
Other, net	30		83
Net cash used by financing activities	(1,209)		(1,347)
Net cash (used) provided by discontinued operations	(8)		(3)
Cash sweep/funding by parent	882		609
Net increase (decrease) in cash and equivalents	63		(806)
Cash and equivalents at beginning of period	2,536		4,180
Cash and equivalents at end of period	2,599		3,374
Guarantor Subsidiaries [Member]
Condensed Consolidating Financial Information [Line Items]
Net cash provided by operating activities	760	[1]	669	[1]
Proceeds from Maturities, Prepayments and Calls of Held-to-maturity Securities	0
Cash flows from investing activities - continuing operations:
Capital expenditures	(89)
Other, net	93
Net cash used by investing activities	4		(68)
Cash flows from financing activities - continuing operations:
Purchases of common stock	0		0
Repayments of fixed-rate notes	0
Dividends paid	0
Proceeds from option exercises	0
Other, net	0		0
Net cash used by financing activities	0		0
Net cash (used) provided by discontinued operations	0		0
Cash sweep/funding by parent	(764)		(601)
Net increase (decrease) in cash and equivalents	0		0
Cash and equivalents at beginning of period	0		0
Cash and equivalents at end of period	0		0
Non-Guarantor Subsidiaries [Member]
Condensed Consolidating Financial Information [Line Items]
Net cash provided by operating activities	86	[1]	(182)	[1]
Proceeds from Maturities, Prepayments and Calls of Held-to-maturity Securities	0
Cash flows from investing activities - continuing operations:
Capital expenditures	(7)
Other, net	0
Net cash used by investing activities	(7)		(9)
Cash flows from financing activities - continuing operations:
Purchases of common stock	0		0
Repayments of fixed-rate notes	0
Dividends paid	0
Proceeds from option exercises	0
Other, net	0		0
Net cash used by financing activities	0		0
Net cash (used) provided by discontinued operations	0		0
Cash sweep/funding by parent	(118)		(8)
Net increase (decrease) in cash and equivalents	(39)		(199)
Cash and equivalents at beginning of period	1,852		1,121
Cash and equivalents at end of period	1,813		922
Consolidating Adjustments [Member]
Condensed Consolidating Financial Information [Line Items]
Net cash provided by operating activities	0	[1]	0	[1]
Proceeds from Maturities, Prepayments and Calls of Held-to-maturity Securities	0
Cash flows from investing activities - continuing operations:
Capital expenditures	0
Other, net	0
Net cash used by investing activities	0		0
Cash flows from financing activities - continuing operations:
Purchases of common stock	0		0
Repayments of fixed-rate notes	0
Dividends paid	0
Proceeds from option exercises	0
Other, net	0		0
Net cash used by financing activities	0		0
Net cash (used) provided by discontinued operations	0		0
Cash sweep/funding by parent	0		0
Net increase (decrease) in cash and equivalents	0		0
Cash and equivalents at beginning of period	0		0
Cash and equivalents at end of period	$ 0		$ 0

[1] * Continuing operations only

XML

Fair Value Of Assets And Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Apr. 05, 2015		Dec. 31, 2014
Financial assets (liabilities)
Long-term debt, including current portion	$ (3,411)		$ (3,911)
Fair Value, Inputs, Level 1
Financial assets (liabilities)
Available-for-sale Securities	120	[1]	123	[1]
Derivatives	0	[1]	0	[1]
Long-term debt, including current portion	0	[1]	0	[1]
Held-to-maturity Securities, Fair Value			10	[1]
Fair Value, Inputs, Level 2
Financial assets (liabilities)
Available-for-sale Securities	68	[1],[2]	65	[1],[2]
Derivatives	(673)	[1],[2]	(276)	[1],[2]
Long-term debt, including current portion	(3,433)	[1],[2]	(3,911)	[1],[2]
Held-to-maturity Securities, Fair Value			490	[1],[2]
Carrying (Reported) Amount, Fair Value Disclosure
Financial assets (liabilities)
Available-for-sale Securities	188	[1]	188	[1]
Derivatives	(673)	[1]	(276)	[1]
Long-term debt, including current portion	(3,411)	[1]	(3,911)	[1]
Held-to-maturity Securities, Fair Value			500	[1]
Estimate of Fair Value, Fair Value Disclosure
Financial assets (liabilities)
Available-for-sale Securities	188	[1]	188	[1]
Derivatives	(673)	[1]	(276)	[1]
Long-term debt, including current portion	(3,433)	[1]	(3,911)	[1]
Held-to-maturity Securities, Fair Value			$ 500	[1]

[1] We had no Level 3 financial instruments on April 5, 2015, or December 31, 2014.

[2] Determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets and liabilities.

XML

Inventories (Tables)

3 Months Ended

Apr. 05, 2015

Inventory Disclosure [Abstract]

Schedule Of Inventories

Inventories consisted of the following:

	April 5, 2015		December 31, 2014
Work in process	$	1,980	$	1,828
Raw materials	1,327		1,290
Finished goods	23		28
Pre-owned aircraft	67		75
Total inventories	$	3,397	$	3,221

XML

Contracts In Process (Tables)

3 Months Ended

Apr. 05, 2015

Contractors [Abstract]

Schedule Of Contracts In Process

Contracts in process represent recoverable costs and, where applicable, accrued profit related to long-term contracts that have been inventoried until the customer is billed, and consisted of the following:

	April 5, 2015			December 31, 2014
Contract costs and estimated profits	$	7,390		$	7,494
Other contract costs	1,061			1,064
	8,451			8,558
Advances and progress payments	(4,007		)	(3,967		)
Total contracts in process	$	4,444		$	4,591

XML

Benefits Plans (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 57	$ 48
Interest cost	133	133
Expected return on plan assets	(174)	(164)
Recognized net actuarial loss	110	74
Amortization of prior service (credit) cost	(17)	(17)
Net periodic cost	109	74
Other Postretirement Benefit Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost	3	3
Interest cost	11	13
Expected return on plan assets	(8)	(8)
Recognized net actuarial loss	2	2
Amortization of prior service (credit) cost	(1)	0
Net periodic cost	$ 7	$ 10

XML

Deferred Tax (Detail) (USD $) In Millions, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Current deferred tax asset	$ 15	$ 16
Current deferred tax liability	(739)	(729)
Noncurrent deferred tax asset	1,559	1,439
Noncurrent deferred tax liability	(85)	(82)
Net deferred tax asset	$ 750	$ 644

XML

Debt (Tables)

3 Months Ended

Apr. 05, 2015

Debt Disclosure [Abstract]

Schedule Of Debt

Debt consisted of the following:

		April 5, 2015		December 31, 2014
Fixed-rate notes due:	Interest Rate
January 2015	1.375%	$	—	$	500
July 2016	2.250%	500		500
November 2017	1.000%	897		897
July 2021	3.875%	499		499
November 2022	2.250%	992		992
November 2042	3.600%	498		498
Other	Various	25		25
Total debt		3,411		3,911
Less current portion		1		501
Long-term debt		$	3,410	$	3,410

XML

Other Liabilities (Tables)

3 Months Ended

Apr. 05, 2015

Other Liabilities Disclosure [Abstract]

Summary Of Significant Other Liabilities By Balance Sheet Caption

A summary of significant other liabilities by balance sheet caption follows:

	April 5, 2015		December 31, 2014
Deferred income taxes	$	739	$	729
Fair value of cash flow hedges	722		292
Salaries and wages	601		718
Workers' compensation	417		420
Retirement benefits	306		309
Other (a)	1,573		1,390
Total other current liabilities	$	4,358	$	3,858
Retirement benefits	$	4,595	$	4,596
Customer deposits on commercial contracts	594		617
Deferred income taxes	85		82
Other (b)	1,069		1,070
Total other liabilities	$	6,343	$	6,365

(a)Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, liabilities of discontinued operations and insurance-related costs.

(b)Consists primarily of liabilities for warranty reserves and workers' compensation and liabilities of discontinued operations.

XML

Summary Of Significant Accounting Policies

3 Months Ended

Apr. 05, 2015

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the unaudited Consolidated Financial Statements.

Consistent with defense industry practice, we classify assets and liabilities related to long-term production contracts as current, even though some of these amounts may not be realized within one year. In addition, some prior-year amounts have been reclassified among financial statement accounts to conform to the current-year presentation.

Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These rules and regulations permit some of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted.

Our fiscal quarters are 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three-month period ended April 5, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three-month periods ended April 5, 2015, and March 30, 2014.

These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Revenue Recognition. We account for revenues and earnings using the percentage-of-completion method. Under this method, contract costs and revenues are recognized as the work progresses, either as the products are produced or as services are rendered. We estimate the profit on a contract as the difference between the total estimated revenue and costs to complete a contract and recognize that profit over the life of the contract. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the loss in the quarter it is identified.

We review and update our contract-related estimates regularly. We recognize changes in estimated profit on contracts under the reallocation method. Under the reallocation method, the impact of a revision in estimate is recognized prospectively over the remaining contract term. The net increase in our operating earnings (and on a per-share basis) from the impact of revisions in contract estimates totaled favorable changes of $63 ($0.12) and $38($0.07) for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. No revisions on any one contract were material to our unaudited Consolidated Financial Statements in the first quarter of 2015 or 2014.

In the second quarter of 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 prescribes a single, common revenue standard that replaces most existing revenue recognition guidance in GAAP. The standard outlines a five-step model, whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition.

For public companies, ASU 2014-09 is effective in the first quarter of 2017. On April 1, 2015, the FASB proposed a one-year deferral of the standard's effective date, while permitting entities to still adopt one year earlier on the original effective date. A final determination will be made after a public comment period. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition date or method nor have we determined the effect of the standard on our consolidated financial statements as the standard continues to undergo changes.

The required adoption of the ASU will preclude our use of the reallocation method of recognizing revisions in estimated profit on contracts discussed above. As changes in estimated profit will be recognized in the period they are identified (cumulative catch-up method), rather than prospectively over the remaining contract term, we expect that the impact of revisions of contract estimates may be larger and potentially more variable from period to period. Anticipated losses on contracts will continue to be recognized in the quarter they are identified.

Discontinued Operations. We completed the sale of our axle business in the Combat Systems group in January 2015. The financial statements have been restated to reflect the results of operations of this business in discontinued operations.

Subsequent Events. We have evaluated material events and transactions that have occurred after April 5, 2015, and concluded that none have occurred that require adjustment to or disclosure in the unaudited Consolidated Financial Statements.

XML

Shareholders' Equity Shareholders' Equity (Tables)

3 Months Ended

Apr. 05, 2015

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The changes, pretax and net of tax, in each component of AOCL consisted of the following:

	Losses on Cash Flow Hedges			Unrealized Gains on Securities		Foreign Currency Translation Adjustments			Changes in Retirement Plans’ Funded Status			AOCL
Balance, December 31, 2014	$	(173	)	$	22	$	541		$	(3,322	)	$	(2,932	)
Other comprehensive loss, pretax	(383		)	2		(104		)	97			(388		)
Benefit for income tax, net	(135		)	2		(5		)	34			(104		)
Other comprehensive loss, net of tax	(248		)	—		(99		)	63			(284		)
Balance, April 5, 2015	$	(421	)	$	22	$	442		$	(3,259	)	$	(3,216	)

	Gains on Cash Flow Hedges		Unrealized Gains on Securities		Foreign Currency Translation Adjustments			Changes in Retirement Plans’ Funded Status			AOCL
Balance, December 31, 2013	$	9	$	15	$	974		$	(2,183	)	$	(1,185	)
Other comprehensive income, pretax	4		3		(65		)	61			3
Provision for income tax, net	1		1		(1		)	20			21
Other comprehensive loss, net of tax	3		2		(64		)	41			(18		)
Balance, March 30, 2014	$	12	$	17	$	910		$	(2,142	)	$	(1,203	)

XML

Changes In Amount Of Goodwill (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015		Dec. 31, 2014
Goodwill [Roll Forward]
Goodwill, beginning of period	$ 11,731	[1]
Other	(32)	[2]
Goodwill, end of period	11,699
Aerospace
Goodwill [Roll Forward]
Goodwill, beginning of period	2,555	[1]
Other	58	[2]
Goodwill, end of period	2,613
Combat Systems
Goodwill [Roll Forward]
Goodwill, beginning of period	2,750	[1]
Other	(74)	[2]
Goodwill, end of period	2,676
Marine Systems
Goodwill [Roll Forward]
Goodwill, beginning of period	289	[1]
Other	0	[2]
Goodwill, end of period	289
Information Systems and Technology
Goodwill [Line Items]
Goodwill, Impaired, Accumulated Impairment Loss			1,994
Goodwill [Roll Forward]
Goodwill, beginning of period	6,137	[1]
Other	(16)	[2]
Goodwill, end of period	$ 6,121

[1] Goodwill on December 31, 2014, in the Information Systems and Technology reporting unit is net of $1,994 of accumulated impairment losses.

[2] Consists primarily of adjustments for foreign currency translation.

XML

Derivative Instruments And Hedging Activity - Additional Information (Detail) (USD $)	3 Months Ended
	Apr. 05, 2015	Dec. 31, 2014	Mar. 30, 2014	Dec. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Fair Value Hedges, Net	$ 0	$ 0
Average maturity of foreign currency forward contracts, in years	2 years
Cash and equivalents	4,412,000,000	4,388,000,000	4,296,000,000	5,301,000,000
Notional forward foreign exchange contracts outstanding	9,000,000,000	9,100,000,000
Derivative Instruments in Hedges, Net Investment in Foreign Operations, Assets, Fair Value, Net	$ 0	$ 0
Maximum
Derivative Instruments, Gain (Loss) [Line Items]
Maturity of fixed-income securities, in years	5 years

XML

Consolidated Statements of Earnings (Unaudited) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Revenues:
Products	$ 4,932	$ 4,438
Services	2,852	2,827
Revenues	7,784	7,265
Operating costs and expenses:
Products	3,819	3,464
Services	2,435	2,436
General and administrative (G&A)	503	491
Operating costs and expenses, total	6,757	6,391
Operating earnings	1,027	874
Interest, net	(21)	(22)
Other, net	3	1
Earnings from continuing operations before income taxes	1,009	853
Provision for income taxes, net	293	257
Earnings from Continuing Operations	716	596
Discontinued operations, net of tax	0	(1)
Net earnings	$ 716	$ 595
Basic:
Continuing operations	$ 2.18	$ 1.74
Discontinued operations	$ 0.00	$ 0
Basic earnings per share	$ 2.18	$ 1.74
Diluted:
Continuing operations	$ 2.14	$ 1.71
Discontinued operations	$ 0.00	$ 0
Diluted earnings per share	$ 2.14	$ 1.71

XML

Income Tax - Additional Information (Detail) (USD $)	Apr. 05, 2015
Income Tax Disclosure [Abstract]
Possible chance of tax position sustained, percentage	50.00%
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 0

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015		Mar. 30, 2014
Cash flows from operating activities - continuing operations:
Net earnings	$ 716		$ 595
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of property, plant and equipment	94		95
Amortization of intangible assets	30		30
Stock-based compensation expense	40		27
Excess tax benefit from stock-based compensation	(30)		(32)
Deferred income tax provision	(8)		36
Discontinued operations, net of tax	0		1
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable	388		119
Contracts in process	152		(94)
Inventories	(183)		(21)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable	210		(29)
Customer advances and deposits	(871)		(165)
Income taxes payable	251		150
Other current liabilities	(38)		(173)
Other, net	(6)		(117)
Net cash provided by operating activities	745	[1]	422	[1]
Cash flows from investing activities - continuing operations:
Maturities of held-to-maturity securities	500		0
Capital expenditures	(98)		(87)
Other, net	94		10
Net cash provided (used) by investing activities	496		(77)
Cash flows from financing activities - continuing operations:
Purchases of common stock	(620)		(1,430)
Repayments of fixed-rate notes	(500)		0
Dividends paid	(206)		(198)
Proceeds from option exercises	87		249
Other, net	30		32
Net cash used by financing activities	(1,209)		(1,347)
Net cash used by discontinued operations	(8)		(3)
Net increase (decrease) in cash and equivalents	24		(1,005)
Cash and equivalents at beginning of period	4,388		5,301
Cash and equivalents at end of period	4,412		4,296
Cash payments for:
Income taxes	53		67
Interest	$ 19		$ 19

[1] * Continuing operations only

XML

Condensed Consolidating Financial Statements Narrative (Details)	3 Months Ended
	Apr. 05, 2015
Consolidating Financial Statements [Abstract]
Percentage of owned subsidiaries (the guarantors)	100.00%

XML

Business Group Information (Tables)

3 Months Ended

Apr. 05, 2015

Segment Reporting [Abstract]

Summary Of Financial Information For Each Of Our Business Groups

Summary financial information for each of our business groups follows:

	Revenues				Operating Earnings
Three Months Ended	April 5, 2015		March 30, 2014		April 5, 2015			March 30, 2014
Aerospace	$	2,108	$	2,125	$	431		$	404
Combat Systems	1,363		1,258		204			139
Information Systems and Technology	2,370		2,281		217			183
Marine Systems	1,943		1,601		188			166
Corporate*	—		—		(13		)	(18		)
	$	7,784	$	7,265	$	1,027		$	874

*Corporate operating results consist primarily of stock option expense.

XML

Condensed Consolidating Financial Statements

3 Months Ended

Apr. 05, 2015

Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The fixed-rate notes described in Note H 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 (UNAUDITED)

Three Months Ended April 5, 2015	Parent			Guarantors on a Combined Basis		Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenues	$	—		$	6,768	$	1,016		$	—		$	7,784
Cost of sales	1			5,462		791			—			6,254
G&A	12			416		75			—			503
Operating earnings	(13		)	890		150			—			1,027
Interest, net	(23		)	1		1			—			(21		)
Other, net	1			2		—			—			3
Earnings before income tax	(35		)	893		151			—			1,009
Provision for income tax, net	(25		)	290		28			—			293
Equity in net earnings of subsidiaries	726			—		—			(726		)	—
Net earnings	$	716		$	603	$	123		$	(726	)	$	716
Comprehensive income	$	432		$	606	$	(224	)	$	(382	)	$	432
Three Months Ended March 30, 2014	Parent			Guarantors on a Combined Basis		Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenues	$	—		$	6,393	$	872		$	—		$	7,265
Cost of sales	6			5,198		696			—			5,900
G&A	14			368		109			—			491
Operating earnings	(20		)	827		67			—			874
Interest, net	(22		)	—		—			—			(22		)
Other, net	—			—		1			—			1
Earnings before income tax	(42		)	827		68			—			853
Provision for income tax, net	(9		)	249		17			—			257
Discontinued operations, net of tax	(1		)	—		—			—			(1		)
Equity in net earnings of subsidiaries	629			—		—			(629		)	—
Net earnings	$	595		$	578	$	51		$	(629	)	$	595
Comprehensive income	$	577		$	572	$	4		$	(576	)	$	577

CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)

April 5, 2015	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	2,599		$	—		$	1,813		$	—		$	4,412
Accounts receivable	—			1,310			2,351			—			3,661
Contracts in process	546			2,787			1,111			—			4,444
Inventories
Work in process	—			1,969			11			—			1,980
Raw materials	—			1,293			34			—			1,327
Finished goods	—			18			5			—			23
Pre-owned aircraft	—			67			—			—			67
Other current assets	81			207			150			—			438
Total current assets	3,226			7,651			5,475			—			16,352
Noncurrent assets:
Property, plant and equipment	150			6,119			1,095			—			7,364
Accumulated depreciation of PP&E	(54		)	(3,312		)	(675		)	—			(4,041		)
Intangible assets	—			1,482			926			—			2,408
Accumulated amortization of intangible assets	—			(1,065		)	(450		)	—			(1,515		)
Goodwill	—			8,122			3,577			—			11,699
Other assets	1,611			249			258			—			2,118
Investment in subsidiaries	38,078			—			—			(38,078		)	—
Total noncurrent assets	39,785			11,595			4,731			(38,078		)	18,033
Total assets	$	43,011		$	19,246		$	10,206		$	(38,078	)	$	34,385
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	—		$	1		$	—		$	—		$	1
Customer advances and deposits	—			3,373			3,114			—			6,487
Other current liabilities	1,444			3,424			1,756			—			6,624
Total current liabilities	1,444			6,798			4,870			—			13,112
Noncurrent liabilities:
Long-term debt	3,387			23			—			—			3,410
Other liabilities	3,487			2,369			487			—			6,343
Total noncurrent liabilities	6,874			2,392			487			—			9,753
Intercompany	23,173			(22,580		)	(593		)	—			—
Shareholders' equity:
Common stock	482			6			2,043			(2,049		)	482
Other shareholders' equity	11,038			32,630			3,399			(36,029		)	11,038
Total shareholders' equity	11,520			32,636			5,442			(38,078		)	11,520
Total liabilities and shareholders' equity	$	43,011		$	19,246		$	10,206		$	(38,078	)	$	34,385

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2014	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	2,536		$	—		$	1,852		$	—		$	4,388
Accounts receivable	—			1,379			2,671			—			4,050
Contracts in process	542			2,966			1,083			—			4,591
Inventories
Work in process	—			1,818			10			—			1,828
Raw materials	—			1,260			30			—			1,290
Finished goods	—			20			8			—			28
Pre-owned aircraft	—			75			—			—			75
Other current assets	781			215			161			—			1,157
Total current assets	3,859			7,733			5,815			—			17,407
Noncurrent assets:
Property, plant and equipment	148			6,035			1,109			—			7,292
Accumulated depreciation of PP&E	(52		)	(3,246		)	(665		)	—			(3,963		)
Intangible assets	—			1,484			914			—			2,398
Accumulated amortization of intangible assets	—			(1,042		)	(444		)	—			(1,486		)
Goodwill	—			8,095			3,636			—			11,731
Other assets	1,479			213			284			—			1,976
Investment in subsidiaries	37,449			—			—			(37,449		)	—
Total noncurrent assets	39,024			11,539			4,834			(37,449		)	17,948
Total assets	$	42,883		$	19,272		$	10,649		$	(37,449	)	$	35,355
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	500		$	1		$	—		$	—		$	501
Customer advances and deposits	—			3,529			3,806			—			7,335
Other current liabilities	1,298			3,511			1,106			—			5,915
Total current liabilities	1,798			7,041			4,912			—			13,751
Noncurrent liabilities:
Long-term debt	3,386			24			—			—			3,410
Other liabilities	3,514			2,369			482			—			6,365
Total noncurrent liabilities	6,900			2,393			482			—			9,775
Intercompany	22,356			(22,557		)	201			—			—
Shareholders' equity:
Common stock	482			6			2,043			(2,049		)	482
Other shareholders' equity	11,347			32,389			3,011			(35,400		)	11,347
Total shareholders' equity	11,829			32,395			5,054			(37,449		)	11,829
Total liabilities and shareholders' equity	$	42,883		$	19,272		$	10,649		$	(37,449	)	$	35,355

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended April 5, 2015	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments		Total Consolidated
Net cash provided by operating activities *	$	(101	)	$	760		$	86		$	—	$	745
Cash flows from investing activities:
Maturities of held-to-maturity securities	500			—			—			—		500
Capital expenditures	(2		)	(89		)	(7		)	—		(98		)
Other, net	1			93			—			—		94
Net cash provided by investing activities	499			4			(7		)	—		496
Cash flows from financing activities:
Purchases of common stock	(620		)	—			—			—		(620		)
Repayment of fixed-rate notes	(500		)	—			—			—		(500		)
Dividends paid	(206		)	—			—			—		(206		)
Proceeds from option exercises	87			—			—			—		87
Other, net	30			—			—			—		30
Net cash used by financing activities	(1,209		)	—			—			—		(1,209		)
Net cash used by discontinued operations	(8		)	—			—			—		(8		)
Cash sweep/funding by parent	882			(764		)	(118		)	—		—
Net increase in cash and equivalents	63			—			(39		)	—		24
Cash and equivalents at beginning of period	2,536			—			1,852			—		4,388
Cash and equivalents at end of period	$	2,599		$	—		$	1,813		$	—	$	4,412
Three Months Ended March 30, 2014
Net cash provided by operating activities *	$	(65	)	$	669		$	(182	)	$	—	$	422
Net cash used by investing activities	—			(68		)	(9		)	—		(77		)
Cash flows from financing activities:
Purchases of common stock	(1,430		)	—			—			—		(1,430		)
Other, net	83			—			—			—		83
Net cash used by financing activities	(1,347		)	—			—			—		(1,347		)
Net cash used by discontinued operations	(3		)	—			—			—		(3		)
Cash sweep/funding by parent	609			(601		)	(8		)	—		—
Net increase in cash and equivalents	(806		)	—			(199		)	—		(1,005		)
Cash and equivalents at beginning of period	4,180			—			1,121			—		5,301
Cash and equivalents at end of period	$	3,374		$	—		$	922		$	—	$	4,296

* Continuing operations only

XML

Condensed Consolidating Financial Statements (Tables)

3 Months Ended

Apr. 05, 2015

Consolidating Financial Statements [Abstract]

Condensed Consolidating Statements of Earnings (Unaudited)

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (UNAUDITED)

Three Months Ended April 5, 2015	Parent			Guarantors on a Combined Basis		Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenues	$	—		$	6,768	$	1,016		$	—		$	7,784
Cost of sales	1			5,462		791			—			6,254
G&A	12			416		75			—			503
Operating earnings	(13		)	890		150			—			1,027
Interest, net	(23		)	1		1			—			(21		)
Other, net	1			2		—			—			3
Earnings before income tax	(35		)	893		151			—			1,009
Provision for income tax, net	(25		)	290		28			—			293
Equity in net earnings of subsidiaries	726			—		—			(726		)	—
Net earnings	$	716		$	603	$	123		$	(726	)	$	716
Comprehensive income	$	432		$	606	$	(224	)	$	(382	)	$	432
Three Months Ended March 30, 2014	Parent			Guarantors on a Combined Basis		Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
Revenues	$	—		$	6,393	$	872		$	—		$	7,265
Cost of sales	6			5,198		696			—			5,900
G&A	14			368		109			—			491
Operating earnings	(20		)	827		67			—			874
Interest, net	(22		)	—		—			—			(22		)
Other, net	—			—		1			—			1
Earnings before income tax	(42		)	827		68			—			853
Provision for income tax, net	(9		)	249		17			—			257
Discontinued operations, net of tax	(1		)	—		—			—			(1		)
Equity in net earnings of subsidiaries	629			—		—			(629		)	—
Net earnings	$	595		$	578	$	51		$	(629	)	$	595
Comprehensive income	$	577		$	572	$	4		$	(576	)	$	577

Condensed Consolidating Balance Sheet

April 5, 2015	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	2,599		$	—		$	1,813		$	—		$	4,412
Accounts receivable	—			1,310			2,351			—			3,661
Contracts in process	546			2,787			1,111			—			4,444
Inventories
Work in process	—			1,969			11			—			1,980
Raw materials	—			1,293			34			—			1,327
Finished goods	—			18			5			—			23
Pre-owned aircraft	—			67			—			—			67
Other current assets	81			207			150			—			438
Total current assets	3,226			7,651			5,475			—			16,352
Noncurrent assets:
Property, plant and equipment	150			6,119			1,095			—			7,364
Accumulated depreciation of PP&E	(54		)	(3,312		)	(675		)	—			(4,041		)
Intangible assets	—			1,482			926			—			2,408
Accumulated amortization of intangible assets	—			(1,065		)	(450		)	—			(1,515		)
Goodwill	—			8,122			3,577			—			11,699
Other assets	1,611			249			258			—			2,118
Investment in subsidiaries	38,078			—			—			(38,078		)	—
Total noncurrent assets	39,785			11,595			4,731			(38,078		)	18,033
Total assets	$	43,011		$	19,246		$	10,206		$	(38,078	)	$	34,385
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	—		$	1		$	—		$	—		$	1
Customer advances and deposits	—			3,373			3,114			—			6,487
Other current liabilities	1,444			3,424			1,756			—			6,624
Total current liabilities	1,444			6,798			4,870			—			13,112
Noncurrent liabilities:
Long-term debt	3,387			23			—			—			3,410
Other liabilities	3,487			2,369			487			—			6,343
Total noncurrent liabilities	6,874			2,392			487			—			9,753
Intercompany	23,173			(22,580		)	(593		)	—			—
Shareholders' equity:
Common stock	482			6			2,043			(2,049		)	482
Other shareholders' equity	11,038			32,630			3,399			(36,029		)	11,038
Total shareholders' equity	11,520			32,636			5,442			(38,078		)	11,520
Total liabilities and shareholders' equity	$	43,011		$	19,246		$	10,206		$	(38,078	)	$	34,385

December 31, 2014	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments			Total Consolidated
ASSETS
Current assets:
Cash and equivalents	$	2,536		$	—		$	1,852		$	—		$	4,388
Accounts receivable	—			1,379			2,671			—			4,050
Contracts in process	542			2,966			1,083			—			4,591
Inventories
Work in process	—			1,818			10			—			1,828
Raw materials	—			1,260			30			—			1,290
Finished goods	—			20			8			—			28
Pre-owned aircraft	—			75			—			—			75
Other current assets	781			215			161			—			1,157
Total current assets	3,859			7,733			5,815			—			17,407
Noncurrent assets:
Property, plant and equipment	148			6,035			1,109			—			7,292
Accumulated depreciation of PP&E	(52		)	(3,246		)	(665		)	—			(3,963		)
Intangible assets	—			1,484			914			—			2,398
Accumulated amortization of intangible assets	—			(1,042		)	(444		)	—			(1,486		)
Goodwill	—			8,095			3,636			—			11,731
Other assets	1,479			213			284			—			1,976
Investment in subsidiaries	37,449			—			—			(37,449		)	—
Total noncurrent assets	39,024			11,539			4,834			(37,449		)	17,948
Total assets	$	42,883		$	19,272		$	10,649		$	(37,449	)	$	35,355
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	500		$	1		$	—		$	—		$	501
Customer advances and deposits	—			3,529			3,806			—			7,335
Other current liabilities	1,298			3,511			1,106			—			5,915
Total current liabilities	1,798			7,041			4,912			—			13,751
Noncurrent liabilities:
Long-term debt	3,386			24			—			—			3,410
Other liabilities	3,514			2,369			482			—			6,365
Total noncurrent liabilities	6,900			2,393			482			—			9,775
Intercompany	22,356			(22,557		)	201			—			—
Shareholders' equity:
Common stock	482			6			2,043			(2,049		)	482
Other shareholders' equity	11,347			32,389			3,011			(35,400		)	11,347
Total shareholders' equity	11,829			32,395			5,054			(37,449		)	11,829
Total liabilities and shareholders' equity	$	42,883		$	19,272		$	10,649		$	(37,449	)	$	35,355

Condensed Consolidating Statements of Cash Flows (Unaudited)

Three Months Ended April 5, 2015	Parent			Guarantors on a Combined Basis			Other Subsidiaries on a Combined Basis			Consolidating Adjustments		Total Consolidated
Net cash provided by operating activities *	$	(101	)	$	760		$	86		$	—	$	745
Cash flows from investing activities:
Maturities of held-to-maturity securities	500			—			—			—		500
Capital expenditures	(2		)	(89		)	(7		)	—		(98		)
Other, net	1			93			—			—		94
Net cash provided by investing activities	499			4			(7		)	—		496
Cash flows from financing activities:
Purchases of common stock	(620		)	—			—			—		(620		)
Repayment of fixed-rate notes	(500		)	—			—			—		(500		)
Dividends paid	(206		)	—			—			—		(206		)
Proceeds from option exercises	87			—			—			—		87
Other, net	30			—			—			—		30
Net cash used by financing activities	(1,209		)	—			—			—		(1,209		)
Net cash used by discontinued operations	(8		)	—			—			—		(8		)
Cash sweep/funding by parent	882			(764		)	(118		)	—		—
Net increase in cash and equivalents	63			—			(39		)	—		24
Cash and equivalents at beginning of period	2,536			—			1,852			—		4,388
Cash and equivalents at end of period	$	2,599		$	—		$	1,813		$	—	$	4,412
Three Months Ended March 30, 2014
Net cash provided by operating activities *	$	(65	)	$	669		$	(182	)	$	—	$	422
Net cash used by investing activities	—			(68		)	(9		)	—		(77		)
Cash flows from financing activities:
Purchases of common stock	(1,430		)	—			—			—		(1,430		)
Other, net	83			—			—			—		83
Net cash used by financing activities	(1,347		)	—			—			—		(1,347		)
Net cash used by discontinued operations	(3		)	—			—			—		(3		)
Cash sweep/funding by parent	609			(601		)	(8		)	—		—
Net increase in cash and equivalents	(806		)	—			(199		)	—		(1,005		)
Cash and equivalents at beginning of period	4,180			—			1,121			—		5,301
Cash and equivalents at end of period	$	3,374		$	—		$	922		$	—	$	4,296

XML

Acquisitions, Intangible Assets And Goodwill (Tables)

3 Months Ended

Apr. 05, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Changes In The Carrying Amount Of Goodwill By Reporting Unit

The changes in the carrying amount of goodwill by reporting unit for the three months ended

April 5, 2015, were as follows:

	Aerospace		Combat Systems			Information Systems and Technology			Marine Systems		Total Goodwill
December 31, 2014 (a)	$	2,555	$	2,750		$	6,137		$	289	$	11,731
Other (b)	58		(74		)	(16		)	—		(32		)
April 5, 2015	$	2,613	$	2,676		$	6,121		$	289	$	11,699

(a)Goodwill on December 31, 2014, in the Information Systems and Technology reporting unit is net of $1,994 of accumulated impairment losses.

(b)Consists primarily of adjustments for foreign currency translation.

Intangible assets

Intangible assets consisted of the following:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	April 5, 2015							December 31, 2014
Contract and program intangible assets*	$	1,654	$	(1,148	)	$	506	$	1,652	$	(1,123	)	$	529
Trade names and trademarks	471		(115		)	356		462		(113		)	349
Technology and software	129		(98		)	31		130		(97		)	33
Other intangible assets	154		(154		)	—		154		(153		)	1
Total intangible assets	$	2,408	$	(1,515	)	$	893	$	2,398	$	(1,486	)	$	912

* Consists of acquired backlog and probable follow-on work and related customer relationships.

XML

Consolidated Statements of Shareholders' Equity (Unaudited) Statement (USD $) In Millions, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance, at Dec. 31, 2013	$ 14,501	$ 482	$ 2,226	$ 19,428	$ (6,450)	$ (1,185)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	595	0	0	595	0	0
Cash dividends declared	(214)	0	0	(214)	0	0
Stock-based awards	304	0	99	0	205	0
Shares purchased	(1,478)	0	0	0	(1,478)	0
Other comprehensive loss	(18)	0	0	0	0	(18)
Balance, at Mar. 30, 2014	13,690	482	2,325	19,809	(7,723)	(1,203)
Balance, at Dec. 31, 2014	11,829	482	2,548	21,127	(9,396)	(2,932)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	716	0	0	716	0	0
Cash dividends declared	(228)	0	0	(228)	0	0
Stock-based awards	121	0	40	0	81	0
Shares purchased	(634)	0	0	0	(634)	0
Other comprehensive loss	(284)	0	0	0	0	(284)
Balance, at Apr. 05, 2015	$ 11,520	$ 482	$ 2,588	$ 21,615	$ (9,949)	$ (3,216)

XML

Consolidated Statements of Earnings (Parentheticals) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 30, 2014
Condensed Statements Of Earnings (Parenthetical) [Abstract]
Discontinued Operation, Tax Effect of Discontinued Operation	$ (1)

XML

Shareholders' Equity Shareholders' Equity

3 Months Ended

Apr. 05, 2015

Equity [Abstract]

Shareholders' Equity

SHAREHOLDERS' EQUITY

Share Repurchases. In the first three months of 2015, we repurchased approximately 4.7 million of our outstanding shares for $634. On February 9, 2015, with shares from the prior authorization largely exhausted, the board of directors authorized management to repurchase 10 million additional shares of common stock on the open market. On April 5, 2015, 7.7 million shares remained authorized by our board of directors for repurchase, approximately 2 percent of our total shares outstanding. We repurchased 29 million shares for a total of approximately $3.4 billion in 2014, including 14 million shares in the first three months of 2014.

Dividends per Share. Dividends declared per share were $0.69 and $0.62 and for the three-month periods ended April 5, 2015, andMarch 30, 2014, respectively. Cash dividends paid were $206 and $198 for the three-month periods ended April 5, 2015andMarch 30, 2014, respectively.

Accumulated Other Comprehensive Loss. The changes, pretax and net of tax, in each component of AOCL consisted of the following:

	Losses on Cash Flow Hedges			Unrealized Gains on Securities		Foreign Currency Translation Adjustments			Changes in Retirement Plans’ Funded Status			AOCL
Balance, December 31, 2014	$	(173	)	$	22	$	541		$	(3,322	)	$	(2,932	)
Other comprehensive loss, pretax	(383		)	2		(104		)	97			(388		)
Benefit for income tax, net	(135		)	2		(5		)	34			(104		)
Other comprehensive loss, net of tax	(248		)	—		(99		)	63			(284		)
Balance, April 5, 2015	$	(421	)	$	22	$	442		$	(3,259	)	$	(3,216	)

	Gains on Cash Flow Hedges		Unrealized Gains on Securities		Foreign Currency Translation Adjustments			Changes in Retirement Plans’ Funded Status			AOCL
Balance, December 31, 2013	$	9	$	15	$	974		$	(2,183	)	$	(1,185	)
Other comprehensive income, pretax	4		3		(65		)	61			3
Provision for income tax, net	1		1		(1		)	20			21
Other comprehensive loss, net of tax	3		2		(64		)	41			(18		)
Balance, March 30, 2014	$	12	$	17	$	910		$	(2,142	)	$	(1,203	)

Amounts reclassified out of AOCL related primarily to changes in retirement plans' funded status and consisted of pretax recognized net actuarial losses of $112 and $76 for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. This was partially offset by pretax amortization of prior service credit of $18 and $17 for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. These AOCL components are included in our net periodic pension and other post-retirement benefit cost. See Note M for additional details.

XML

Document and Entity Information	3 Months Ended
	Apr. 05, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 05, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	GD
Entity Registrant Name	GENERAL DYNAMICS CORPORATION
Entity Central Index Key	0000040533
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	328,732,777

XML

Derivative Instruments And Hedging Activities

3 Months Ended

Apr. 05, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We are exposed to market risk, primarily from foreign currency exchange rates, interest rates, commodity prices and investments. We may use derivative financial instruments to hedge some of these risks as described below. We do not use derivatives for trading or speculative purposes.

Foreign Currency Risk and Hedging Activities. Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and inter-company transactions denominated in foreign currencies. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk. The two-year average maturity of these instruments matches the duration of the activities that are at risk.

We had $9 billion in notional forward exchange contracts outstanding on April 5, 2015, and $9.1 billion on December 31, 2014. We recognize derivative financial instruments on the Consolidated Balance Sheets at fair value (see Note D).

We record changes in the fair value of derivative financial instruments in operating costs and expenses in the Consolidated Statements of Earnings or in other comprehensive loss (OCL) within the Consolidated Statements of Comprehensive Income depending on whether the derivative is designated and qualifies for hedge accounting. Gains and losses related to derivatives that qualify as cash flow hedges are deferred in OCL until the underlying transaction is reflected in earnings. We adjust derivative financial instruments not designated as cash flow hedges to market value each period and record the gain or loss in the Consolidated Statements of Earnings. The gains and losses on these instruments generally offset losses and gains on the assets, liabilities and other transactions being hedged. Gains and losses resulting from hedge ineffectiveness are recognized in the Consolidated Statements of Earnings for all derivative financial instruments, regardless of designation.

Net gains and losses recognized in earnings, including gains and losses related to hedge ineffectiveness, were not material to our results of operations for the three-month periods ended April 5, 2015, and March 30, 2014. Net gains and losses reclassified to earnings from OCL were not material to our results of operations for the three-month periods ended April 5, 2015, and March 30, 2014, and we do not expect the amount of these gains and losses that will be reclassified to earnings during the next 12 months to be material.

We had no material derivative financial instruments designated as fair value or net investment hedges on April 5, 2015, or December 31, 2014.

Interest Rate Risk. Our financial instruments subject to interest rate risk include fixed-rate long-term debt obligations and variable-rate commercial paper. However, the risk associated with these instruments is not material.

Commodity Price Risk. We are subject to risk of rising labor and commodity prices, primarily on long-term fixed-price contracts. To the extent possible, we include terms in our contracts that are designed to protect us from this risk. Some of the protective terms included in our contracts are considered derivatives but are not accounted for separately because they are clearly and closely related to the host contract. We have not entered into any material commodity hedging contracts but may do so as circumstances warrant. We do not believe that changes in labor or commodity prices will have a material impact on our results of operations or cash flows.

Investment Risk. Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years. On April 5, 2015, we held $4.4 billion in cash and equivalents, but held no marketable securities.

Foreign Currency Financial Statement Translation. We translate foreign currency balance sheets from our international businesses' functional currency (generally the respective local currency) to U.S. dollars at the end-of-period exchange rates, and statements of earnings at the average exchange rates for each period. The resulting foreign currency translation adjustments are a component of OCL.

We do not hedge the fluctuation in reported revenues and earnings resulting from the translation of these international operations' results into U.S. dollars. The impact of translating our non-U.S. operations’ revenues and earnings into U.S. dollars was not material to our results of operations for the three-month periods ended April 5, 2015, or March 30, 2014. In addition, the effect of changes in foreign exchange rates on non-U.S. cash balances was not material in the first three months of either 2015 or 2014.

XML

Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Net earnings	$ 716	$ 595
(Losses) gains on cash flow hedges	(383)	4
Unrealized gains on securities	2	3
Foreign currency translation adjustments	(104)	(65)
Change in retirement plans' funded status	97	61
Other comprehensive (loss) income, pretax	(388)	3
(Benefit) provision for income tax, net	(104)	21
Other comprehensive loss, net of tax	(284)	(18)
Comprehensive income	$ 432	$ 577

XML

Income Taxes

3 Months Ended

Apr. 05, 2015

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Net Deferred Tax Assets. Our net deferred tax asset was included on the Consolidated Balance Sheets in other assets and liabilities as follows:

	April 5, 2015			December 31, 2014
Current deferred tax asset	$	15		$	16
Current deferred tax liability	(739		)	(729		)
Noncurrent deferred tax asset	1,559			1,439
Noncurrent deferred tax liability	(85		)	(82		)
Net deferred tax asset	$	750		$	644

Tax Uncertainties. For all periods open to examination by tax authorities, we periodically assess our liabilities and contingencies based on the latest available information. Where we believe there is more than a 50 percent chance that our tax position will not be sustained, we record our best estimate of the resulting tax liability, including interest, in the Consolidated Financial Statements. We include any interest or penalties incurred in connection with income taxes as part of income tax expense.

We participate in the Internal Revenue Service (IRS) Compliance Assurance Process, a real-time audit of our consolidated federal corporate income tax return. The IRS has examined our consolidated federal income tax returns through 2013. We do not expect the resolution of tax matters for open years to have a material impact on our results of operations, financial condition, cash flows or effective tax rate.

Based on all known facts and circumstances and current tax law, we believe the total amount of any unrecognized tax benefits on April 5, 2015, is not material to our results of operations, financial condition or cash flows, and if recognized, would not have a material impact on our effective tax rate. In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will significantly vary over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows.

XML

Fair Value Of Financial Instruments

3 Months Ended

Apr. 05, 2015

Fair Value Disclosures [Abstract]

Fair Value Of Financial Instruments

FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:

• Level 1 – quoted prices in active markets for identical assets or liabilities;

• Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly; and

• Level 3 – unobservable inputs significant to the fair value measurement.

We did not have any significant non-financial assets or liabilities measured at fair value on April 5, 2015, or December 31, 2014, except for the assets of our axle business that were classified as held for sale on December 31, 2014, and were measured at fair value using Level 3 inputs.

Our financial instruments include cash and equivalents, marketable securities and other investments; accounts receivable and accounts payable; short- and long-term debt; and derivative financial instruments. The carrying values of cash and equivalents, accounts receivable and payable and short-term debt on the Consolidated Balance Sheets approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on April 5, 2015, and December 31, 2014, and the basis for determining their fair values:

	Carrying Value			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2) (a)
Financial assets (liabilities) (b)	April 5, 2015
Available-for-sale securities	$	188		$	188		$	120	$	68
Derivatives	(673		)	(673		)	—		(673		)
Long-term debt,      including current portion	(3,411		)	(3,433		)	—		(3,433		)
	December 31, 2014
Held-to-maturity marketable securities	$	500		$	500		$	10	$	490
Available-for-sale securities	188			188			123		65
Derivatives	(276		)	(276		)	—		(276		)
Long-term debt,      including current portion	(3,911		)	(3,911		)	—		(3,911		)

(a)Determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets and liabilities.

(b)We had no Level 3 financial instruments on April 5, 2015, or December 31, 2014.

XML

Summary Of Significant Accounting Policies (Policies)

3 Months Ended

Apr. 05, 2015

Accounting Policies [Abstract]

Basis of Consolidation and Classification

Basis of Consolidation and Classification. The unaudited Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the unaudited Consolidated Financial Statements.

Consistent with defense industry practice, we classify assets and liabilities related to long-term production contracts as current, even though some of these amounts may not be realized within one year. In addition, some prior-year amounts have been reclassified among financial statement accounts to conform to the current-year presentation.

Interim Financial Statements

Interim Financial Statements. The unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These rules and regulations permit some of the information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) to be condensed or omitted.

Our fiscal quarters are 13 weeks in length. Because our fiscal year ends on December 31, the number of days in our first and fourth quarters varies slightly from year to year. Operating results for the three-month period ended April 5, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

The unaudited Consolidated Financial Statements contain all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations and financial condition for the three-month periods ended April 5, 2015, and March 30, 2014.

These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Revenue Recognition

Revenue Recognition. We account for revenues and earnings using the percentage-of-completion method. Under this method, contract costs and revenues are recognized as the work progresses, either as the products are produced or as services are rendered. We estimate the profit on a contract as the difference between the total estimated revenue and costs to complete a contract and recognize that profit over the life of the contract. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the loss in the quarter it is identified.

We review and update our contract-related estimates regularly. We recognize changes in estimated profit on contracts under the reallocation method. Under the reallocation method, the impact of a revision in estimate is recognized prospectively over the remaining contract term. The net increase in our operating earnings (and on a per-share basis) from the impact of revisions in contract estimates totaled favorable changes of $63 ($0.12) and $38($0.07) for the three-month periods ended April 5, 2015, and March 30, 2014, respectively. No revisions on any one contract were material to our unaudited Consolidated Financial Statements in the first quarter of 2015 or 2014.

In the second quarter of 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 prescribes a single, common revenue standard that replaces most existing revenue recognition guidance in GAAP. The standard outlines a five-step model, whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition.

For public companies, ASU 2014-09 is effective in the first quarter of 2017. On April 1, 2015, the FASB proposed a one-year deferral of the standard's effective date, while permitting entities to still adopt one year earlier on the original effective date. A final determination will be made after a public comment period. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition date or method nor have we determined the effect of the standard on our consolidated financial statements as the standard continues to undergo changes.

The required adoption of the ASU will preclude our use of the reallocation method of recognizing revisions in estimated profit on contracts discussed above. As changes in estimated profit will be recognized in the period they are identified (cumulative catch-up method), rather than prospectively over the remaining contract term, we expect that the impact of revisions of contract estimates may be larger and potentially more variable from period to period. Anticipated losses on contracts will continue to be recognized in the quarter they are identified.

Discontinued Operations

Discontinued Operations. We completed the sale of our axle business in the Combat Systems group in January 2015. The financial statements have been restated to reflect the results of operations of this business in discontinued operations.

Subsequent Events

Subsequent Events. We have evaluated material events and transactions that have occurred after April 5, 2015, and concluded that none have occurred that require adjustment to or disclosure in the unaudited Consolidated Financial Statements.

XML

Commitments And Contingencies

3 Months Ended

Apr. 05, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

COMMITMENTS AND CONTINGENCIES

Litigation

Various claims and other legal proceedings incidental to the normal course of business are pending or threatened against us. These matters relate to such issues as government investigations and claims, the protection of the environment, asbestos-related claims and employee-related matters. The nature of litigation is such that we cannot predict the outcome of these matters. However, based on information currently available, we believe any potential liabilities in these proceedings, individually or in the aggregate, will not have a material impact on our results of operations, financial condition or cash flows.

Environmental

We are subject to and affected by a variety of federal, state, local and foreign environmental laws and regulations. We are directly or indirectly involved in environmental investigations or remediation at some of our current and former facilities and third-party sites that we do not own but where we have been designated a Potentially Responsible Party (PRP) by the U.S. Environmental Protection Agency or a state environmental agency. Based on historical experience, we expect that a significant percentage of the total remediation and compliance costs associated with these facilities will continue to be allowable contract costs and, therefore, recoverable under U.S. government contracts.

As required, we provide financial assurance for certain sites undergoing or subject to investigation or remediation. We accrue environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. Where applicable, we seek insurance recovery for costs related to environmental liabilities. We do not record insurance recoveries before collection is considered probable. Based on all known facts and analyses, we do not believe that our liability at any individual site, or in the aggregate, arising from such environmental conditions, will be material to our results of operations, financial condition or cash flows. We also do not believe that the range of reasonably possible additional loss beyond what has been recorded would be material to our results of operations, financial condition or cash flows.

Other

Government Contracts. As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages. We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows.

In the performance of our contracts, we routinely request contract modifications that require additional funding from the customer. Most often, these requests are due to customer-directed changes in the scope of work. While we are entitled to recovery of these costs under our contracts, the administrative process with our customer may be protracted. Based upon the circumstances, we periodically file requests for equitable adjustment (REAs) that are sometimes converted into claims. In some cases, these requests are disputed by our customer. We believe our outstanding modifications and other claims will be resolved without material impact to our results of operations, financial condition or cash flows.

Letters of Credit and Guarantees. In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $972 on April 5, 2015. In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance obligations of our subsidiaries arising under certain contracts.

Aircraft Trade-ins. In connection with orders for new aircraft in funded contract backlog, our Aerospace group has outstanding options with some customers to trade in aircraft as partial consideration in their new-aircraft transaction. These trade-in commitments are structured to establish the fair market value of the trade-in aircraft at a date generally 120 or fewer days preceding delivery of the new aircraft to the customer. At that time, the customer is required to either exercise the option or allow its expiration. Any excess of the pre-established trade-in price above the fair market value at the time the new outfitted aircraft is delivered is treated as a reduction of revenue in the new-aircraft sales transaction.

Product Warranties. We provide warranties to our customers associated with certain product sales. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is generally based on the number of months of warranty coverage remaining for products delivered and the average historical monthly warranty payments. Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion. Our other warranty obligations, primarily for business-jet aircraft, are included in other current and noncurrent liabilities on the Consolidated Balance Sheets.

The changes in the carrying amount of warranty liabilities for the three-month periods ended April 5, 2015, and March 30, 2014, were as follows:

Three Months Ended	April 5, 2015			March 30, 2014
Beginning balance	$	428		$	354
Warranty expense	31			33
Payments	(29		)	(14		)
Ending balance	$	430		$	373

XML

Debt

3 Months Ended

Apr. 05, 2015

Debt Disclosure [Abstract]

Debt

DEBT

Debt consisted of the following:

		April 5, 2015		December 31, 2014
Fixed-rate notes due:	Interest Rate
January 2015	1.375%	$	—	$	500
July 2016	2.250%	500		500
November 2017	1.000%	897		897
July 2021	3.875%	499		499
November 2022	2.250%	992		992
November 2042	3.600%	498		498
Other	Various	25		25
Total debt		3,411		3,911
Less current portion		1		501
Long-term debt		$	3,410	$	3,410

Our fixed-rate notes are fully and unconditionally guaranteed by several of our 100-percent-owned subsidiaries (see Note O for condensed consolidating financial statements). We have the option to redeem the notes prior to their maturity in whole or part for the principal plus any accrued but unpaid interest and applicable make-whole amounts. In January 2015, we repaid $500 of fixed-rate notes on their scheduled maturity date.

On April 5, 2015, we had no commercial paper outstanding, but we maintain the ability to access the commercial paper market in the future. We have $2 billion in committed bank credit facilities that provide backup liquidity to our commercial paper program. These credit facilities include a $1 billion multi-year facility expiring in July 2016 and a $1 billion multi-year facility expiring in July 2018. These facilities are required by rating agencies to support our commercial paper issuances. We may renew or replace, in whole or part, these credit facilities at or prior to their expiration dates. Our bank credit facilities are guaranteed by several of our 100-percent-owned subsidiaries. In addition, we have approximately $115 in committed bank credit facilities to provide backup liquidity to our European businesses.

Our financing arrangements contain a number of customary covenants and restrictions. We were in compliance with all covenants on April 5, 2015.

XML

Condensed Consolidating Statements Of Earnings (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Condensed Consolidating Financial Information [Line Items]
Revenues	$ 7,784	$ 7,265
Cost of sales	6,254	5,900
G&A	503	491
Operating earnings	1,027	874
Interest, net	(21)	(22)
Other, net	3	1
Earnings before income taxes	1,009	853
Provision for income tax, net	293	257
Discontinued operations, net of tax	0	(1)
Equity in net earnings of subsidiaries	0	0
Net earnings	716	595
Comprehensive income	432	577
Parent Company [Member]
Condensed Consolidating Financial Information [Line Items]
Revenues	0	0
Cost of sales	1	6
G&A	12	14
Operating earnings	(13)	(20)
Interest, net	(23)	(22)
Other, net	1	0
Earnings before income taxes	(35)	(42)
Provision for income tax, net	(25)	(9)
Discontinued operations, net of tax		(1)
Equity in net earnings of subsidiaries	726	629
Net earnings	716	595
Comprehensive income	432	577
Guarantor Subsidiaries [Member]
Condensed Consolidating Financial Information [Line Items]
Revenues	6,768	6,393
Cost of sales	5,462	5,198
G&A	416	368
Operating earnings	890	827
Interest, net	1	0
Other, net	2	0
Earnings before income taxes	893	827
Provision for income tax, net	290	249
Discontinued operations, net of tax		0
Equity in net earnings of subsidiaries	0	0
Net earnings	603	578
Comprehensive income	606	572
Non-Guarantor Subsidiaries [Member]
Condensed Consolidating Financial Information [Line Items]
Revenues	1,016	872
Cost of sales	791	696
G&A	75	109
Operating earnings	150	67
Interest, net	1	0
Other, net	0	1
Earnings before income taxes	151	68
Provision for income tax, net	28	17
Discontinued operations, net of tax		0
Equity in net earnings of subsidiaries	0	0
Net earnings	123	51
Comprehensive income	(224)	4
Consolidating Adjustments [Member]
Condensed Consolidating Financial Information [Line Items]
Revenues	0	0
Cost of sales	0	0
G&A	0	0
Operating earnings	0	0
Interest, net	0	0
Other, net	0	0
Earnings before income taxes	0	0
Provision for income tax, net	0	0
Discontinued operations, net of tax		0
Equity in net earnings of subsidiaries	(726)	(629)
Net earnings	(726)	(629)
Comprehensive income	$ (382)	$ (576)

XML

Contracts In Process

3 Months Ended

Apr. 05, 2015

Contractors [Abstract]

Contracts In Process

CONTRACTS IN PROCESS

Contracts in process represent recoverable costs and, where applicable, accrued profit related to long-term contracts that have been inventoried until the customer is billed, and consisted of the following:

	April 5, 2015			December 31, 2014
Contract costs and estimated profits	$	7,390		$	7,494
Other contract costs	1,061			1,064
	8,451			8,558
Advances and progress payments	(4,007		)	(3,967		)
Total contracts in process	$	4,444		$	4,591

Contract costs consist primarily of labor, material, overhead and G&A expenses. Other contract costs represent amounts that are not currently allocable to government contracts, such as a portion of our estimated workers’ compensation obligations, other insurance-related assessments, pension and other post-retirement benefits and environmental expenses. These costs will become allocable to contracts generally after they are paid. We expect to recover these costs through ongoing business, including existing backlog and probable follow-on contracts. If the backlog in the future does not support the continued deferral of these costs, the profitability of our remaining contracts could be adversely affected.

XML

Inventories

3 Months Ended

Apr. 05, 2015

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

Our inventories represent primarily business-jet components and are stated at the lower of cost or net realizable value. Work-in-process represents largely labor, material and overhead costs associated with aircraft in the manufacturing process and is based primarily on the estimated average unit cost of the units in a production lot. Raw materials are valued primarily on the first-in, first-out method. We record pre-owned aircraft acquired in connection with the sale of new aircraft at the lower of the trade-in value or the estimated net realizable value.

Inventories consisted of the following:

	April 5, 2015		December 31, 2014
Work in process	$	1,980	$	1,828
Raw materials	1,327		1,290
Finished goods	23		28
Pre-owned aircraft	67		75
Total inventories	$	3,397	$	3,221

XML

Other Liabilities

3 Months Ended

Apr. 05, 2015

Other Liabilities Disclosure [Abstract]

Other Liabilities

OTHER LIABILITIES

A summary of significant other liabilities by balance sheet caption follows:

	April 5, 2015		December 31, 2014
Deferred income taxes	$	739	$	729
Fair value of cash flow hedges	722		292
Salaries and wages	601		718
Workers' compensation	417		420
Retirement benefits	306		309
Other (a)	1,573		1,390
Total other current liabilities	$	4,358	$	3,858
Retirement benefits	$	4,595	$	4,596
Customer deposits on commercial contracts	594		617
Deferred income taxes	85		82
Other (b)	1,069		1,070
Total other liabilities	$	6,343	$	6,365

(a)Consists primarily of dividends payable, taxes payable, environmental remediation reserves, warranty reserves, liabilities of discontinued operations and insurance-related costs.

(b)Consists primarily of liabilities for warranty reserves and workers' compensation and liabilities of discontinued operations.

The increase in the fair value of our cash flow hedge liabilities from December 31, 2014, to April 5, 2015, largely corresponds to the unrecognized losses on cash flow hedges deferred in accumulated other comprehensive loss (AOCL). These losses will be deferred in AOCL until the underlying transaction is reflected in earnings, at which time we believe the losses will be offset by corresponding gains in the remeasurement of the underlying transactions being hedged.

XML

Retirement Plans (Tables)

3 Months Ended

Apr. 05, 2015

Compensation and Retirement Disclosure [Abstract]

Net Periodic Cost Associated With Defined-Benefit Pension And Other Post-Retirement Benefit Plans

Net periodic cost associated with our defined-benefit pension and other post-retirement benefit plans for the three-month periods ended April 5, 2015, and March 30, 2014, consisted of the following:

	Pension Benefits						Other Post-retirement Benefits
Three Months Ended	April 5, 2015			March 30, 2014			April 5, 2015			March 30, 2014
Service cost	$	57		$	48		$	3		$	3
Interest cost	133			133			11			13
Expected return on plan assets	(174		)	(164		)	(8		)	(8		)
Recognized net actuarial loss	110			74			2			2
Amortization of prior service credit	(17		)	(17		)	(1		)	—
Net periodic cost	$	109		$	74		$	7		$	10

XML

Shareholders' Equity Shareholders' Equity (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		12 Months Ended
	Apr. 05, 2015	Mar. 30, 2014	Dec. 31, 2014	Feb. 09, 2015
Class of Stock [Line Items]
Stock Repurchased During Period, Shares	4.7	14.0	29.0
Stock Repurchased During Period, Value	$ 634		$ 3,400
Stock Repurchase Program, Number of Shares Authorized to be Repurchased				10
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	7.7
Stock Repurchase Program, Authorized Shares Remaining for Repurchase, Percentage Of Total Shares Outstanding	2.00%
Recognized net actuarial loss (before tax)	112	76
Amortization of prior service credit (before tax)	(18)	(17)
Common Stock, Dividends, Per Share, Declared	$ 0.69	$ 0.62
Dividends paid in cash	$ 206	$ 198

XML

Business Group Information

3 Months Ended

Apr. 05, 2015

Segment Reporting [Abstract]

Business Group Information

BUSINESS GROUP INFORMATION

We operate in four business groups: Aerospace, Combat Systems, Information Systems and Technology and Marine Systems. We organize our business groups in accordance with the nature of products and services offered. These business groups derive their revenues from business aviation; combat vehicles, weapons systems and munitions; communication and information technology systems and solutions; and military and commercial shipbuilding and services, respectively. We measure each group’s profit based on operating earnings. As a result, we do not allocate net interest, other income and expense items, and income taxes to our business groups.

Summary financial information for each of our business groups follows:

	Revenues				Operating Earnings
Three Months Ended	April 5, 2015		March 30, 2014		April 5, 2015			March 30, 2014
Aerospace	$	2,108	$	2,125	$	431		$	404
Combat Systems	1,363		1,258		204			139
Information Systems and Technology	2,370		2,281		217			183
Marine Systems	1,943		1,601		188			166
Corporate*	—		—		(13		)	(18		)
	$	7,784	$	7,265	$	1,027		$	874

*Corporate operating results consist primarily of stock option expense.

XML

Fair Value Of Financial Instruments (Tables)

3 Months Ended

Apr. 05, 2015

Fair Value Disclosures [Abstract]

Carrying And Fair Values Of Other Financial Assets And Liabilities

The following tables present the fair values of our other financial assets and liabilities on April 5, 2015, and December 31, 2014, and the basis for determining their fair values:

	Carrying Value			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2) (a)
Financial assets (liabilities) (b)	April 5, 2015
Available-for-sale securities	$	188		$	188		$	120	$	68
Derivatives	(673		)	(673		)	—		(673		)
Long-term debt,      including current portion	(3,411		)	(3,433		)	—		(3,433		)
	December 31, 2014
Held-to-maturity marketable securities	$	500		$	500		$	10	$	490
Available-for-sale securities	188			188			123		65
Derivatives	(276		)	(276		)	—		(276		)
Long-term debt,      including current portion	(3,911		)	(3,911		)	—		(3,911		)

(a)Determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets and liabilities.

(b)We had no Level 3 financial instruments on April 5, 2015, or December 31, 2014.

XML

Debt - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Debt Outstanding [Line Items]
Percentage of owned subsidiaries guaranteed	100.00%
Repayments of Long-term Debt	$ 500	$ 0
European Businesses [Member]
Debt Outstanding [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity	115
Commercial Paper
Debt Outstanding [Line Items]
Percentage of owned subsidiaries guaranteed	100.00%
Line of Credit Facility, Remaining Borrowing Capacity	2,000
Commercial Paper | Multi-Year Facility Expiring July 2018
Debt Outstanding [Line Items]
Line of credit facility, expiration date	2018-07
Line of Credit Facility, Remaining Borrowing Capacity	1,000
Commercial Paper | Multi-Year Facility, Expiring July 2016
Debt Outstanding [Line Items]
Line of credit facility, expiration date	2016-07
Line of Credit Facility, Remaining Borrowing Capacity	$ 1,000

XML

Earning Per Share (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015		Mar. 30, 2014
Earnings Per Share [Abstract]
Basic weighted average shares outstanding	329,154		342,232
Dilutive effect of other securities	5,528	[1]	5,016	[1]
Diluted weighted average shares outstanding	334,682		347,248

[1] Excludes the following outstanding options to purchase shares of common stock because these options had exercise prices in excess of the average market price of our common stock during the period and therefore the effect of including these options would be antidilutive: 2015 - 722 and 2014 - 4,790.

XML

Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Current assets:
Cash and equivalents	$ 4,412	$ 4,388
Accounts receivable	3,661	4,050
Contracts in process	4,444	4,591
Inventories	3,397	3,221
Other current assets	438	1,157
Total current assets	16,352	17,407
Noncurrent assets:
Property, plant and equipment, net	3,323	3,329
Intangible assets, net	893	912
Goodwill	11,699	11,731	[1]
Other assets	2,118	1,976
Total noncurrent assets	18,033	17,948
Total assets	34,385	35,355
Current liabilities:
Short-term debt and current portion of long-term debt	1	501
Accounts payable	2,266	2,057
Customer advances and deposits	6,487	7,335
Other current liabilities	4,358	3,858
Total current liabilities	13,112	13,751
Noncurrent liabilities:
Long-term debt	3,410	3,410
Other liabilities	6,343	6,365
Commitments and contingencies (See Note L)
Total noncurrent liabilities	9,753	9,775
Shareholders' equity:
Common stock	482	482
Surplus	2,588	2,548
Retained earnings	21,615	21,127
Treasury stock	(9,949)	(9,396)
Accumulated other comprehensive loss	(3,216)	(2,932)
Total shareholders' equity	11,520	11,829
Total liabilities and shareholders' equity	$ 34,385	$ 35,355

[1] Goodwill on December 31, 2014, in the Information Systems and Technology reporting unit is net of $1,994 of accumulated impairment losses.

XML

Earnings And Dividends Per Share

3 Months Ended

Apr. 05, 2015

Earnings Per Share [Abstract]

Earnings And Dividends Per Share

EARNINGS PER SHARE

We compute basic earnings per share (EPS) using net earnings for the period and the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding have decreased throughout 2015 and 2014 due to share repurchases. See Note J for additional details of our share repurchases. Diluted EPS incorporates the additional shares issuable upon the assumed exercise of stock options and the release of restricted shares and restricted stock units (RSUs).

Basic and diluted weighted average shares outstanding were as follows (in thousands):

Three Months Ended	April 5, 2015	March 30, 2014
Basic weighted average shares outstanding	329,154	342,232
Dilutive effect of stock options and restricted stock/RSUs*	5,528	5,016
Diluted weighted average shares outstanding	334,682	347,248

* Excludes the following outstanding options to purchase shares of common stock because these options had exercise prices in excess of the average market price of our common stock during the period and therefore the effect of including these options would be antidilutive: 2015 - 722 and 2014 - 4,790.

XML

Segment Reporting Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015		Mar. 30, 2014
Segment Reporting Information [Line Items]
Revenues	$ 7,784		$ 7,265
Operating Earnings	1,027		874
Aerospace
Segment Reporting Information [Line Items]
Revenues	2,108		2,125
Operating Earnings	431		404
Combat Systems
Segment Reporting Information [Line Items]
Revenues	1,363		1,258
Operating Earnings	204		139
Marine Systems
Segment Reporting Information [Line Items]
Revenues	1,943		1,601
Operating Earnings	188		166
Information Systems and Technology
Segment Reporting Information [Line Items]
Revenues	2,370		2,281
Operating Earnings	217		183
Corporate
Segment Reporting Information [Line Items]
Revenues	0	[1]	0	[1]
Operating Earnings	$ (13)	[1]	$ (18)	[1]

[1] *Corporate operating results consist primarily of stock option expense.

XML

Income Taxes (Tables)

3 Months Ended

Apr. 05, 2015

Income Tax Disclosure [Abstract]

Deferred Tax Assets and Liabilities

Net Deferred Tax Assets. Our net deferred tax asset was included on the Consolidated Balance Sheets in other assets and liabilities as follows:

	April 5, 2015			December 31, 2014
Current deferred tax asset	$	15		$	16
Current deferred tax liability	(739		)	(729		)
Noncurrent deferred tax asset	1,559			1,439
Noncurrent deferred tax liability	(85		)	(82		)
Net deferred tax asset	$	750		$	644

XML

Acquisitions, Intangible Assets And Goodwill - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Number of Businesses Acquired	0
Amortization expense	$ 30	$ 30
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	$ 120

XML

Retirement Plans

3 Months Ended

Apr. 05, 2015

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

RETIREMENT PLANS

We provide defined-contribution benefits, as well as some remaining defined-benefit pension and other post-retirement benefits.

Net periodic cost associated with our defined-benefit pension and other post-retirement benefit plans for the three-month periods ended April 5, 2015, and March 30, 2014, consisted of the following:

	Pension Benefits						Other Post-retirement Benefits
Three Months Ended	April 5, 2015			March 30, 2014			April 5, 2015			March 30, 2014
Service cost	$	57		$	48		$	3		$	3
Interest cost	133			133			11			13
Expected return on plan assets	(174		)	(164		)	(8		)	(8		)
Recognized net actuarial loss	110			74			2			2
Amortization of prior service credit	(17		)	(17		)	(1		)	—
Net periodic cost	$	109		$	74		$	7		$	10

Our contractual arrangements with the U.S. government provide for the recovery of contributions to our pension and other post-retirement benefit plans covering employees working in our defense business groups. For non-funded plans, our government contracts allow us to recover claims paid. Following payment, these recoverable amounts are allocated to contracts and billed to the customer in accordance with the Cost Accounting Standards (CAS) and specific contractual terms. For some of these plans, the cumulative pension and post-retirement benefit cost exceeds the amount currently allocable to contracts. To the extent recovery of the cost is considered probable based on our backlog and probable follow-on contracts, we defer the excess in contracts in process on the Consolidated Balance Sheets until the cost is allocable to contracts. See Note F for discussion of our deferred contract costs. For other plans, the amount allocated to contracts and included in revenues has exceeded the plans’ cumulative benefit cost. We have deferred recognition of these excess earnings to provide a better matching of revenues and expenses. These deferrals have been classified against the plan assets on the Consolidated Balance Sheets.