8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) October 20, 2004 (October 20, 2004)

GENERAL DYNAMICS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	1-3671	13-1673581
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS 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)

Not Applicable

(Former Name or Former Address, If Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02    Results of Operations and Financial Condition

     On October 20, 2004, General Dynamics announced its financial results for the quarter ended October 3, 2004. A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01    Financial Statements and Exhibits

(c) Exhibits (furnished only)

99.1 General Dynamics press release dated October 20, 2004, with respect to the company’s financial results for the quarter ended October 3, 2004.

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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	/s/ John W. Schwartz John W. Schwartz Vice President and Controller (Authorized Officer and Chief Accounting Officer)

Dated: October 20, 2004

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EX-99.1

Exhibit 99.1

2941 Fairview Park Drive
Suite 100
Falls Church, VA 22042-4513
www.generaldynamics.com News

October 20, 2004
Contact: Rob Doolittle
Tel: 703 876 3199
Fax: 703 876 3555
rdoolitt@generaldynamics.com

General Dynamics Reports Continued Strength
in Third Quarter

•    EPS grows 21 percent
•    Solid cash flow
•    Stable backlog

FALLS CHURCH, Va. – General Dynamics (NYSE: GD) today reported $4.8 billion in revenues for the third quarter of 2004, compared to 2003 third-quarter revenues of $4.4 billion. Net earnings were $322 million in the quarter, or $1.60 per share on a fully diluted basis, compared with 2003 third-quarter net earnings of $262 million, or $1.32 per share fully diluted. Net cash provided by operating activities was $309 million for the quarter. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $249 million.

Funded backlog at the end of the third quarter was $25.3 billion, and total backlog was $40.3 billion, compared with $26.4 billion and $41.1 billion, respectively, at the end of the second quarter of 2004.

“General Dynamics generated strong results for the quarter in both absolute and relative terms,” said Nicholas D. Chabraja, General Dynamics chairman and chief executive officer. “Operating earnings increased over the year-ago period in all of our segments. Further, our operating earnings rate improved this quarter as it has in each of the last four quarters. In the Aerospace group, earnings more than doubled over the third quarter of 2003, based on improving market conditions, continuing cost improvement and tighter control of pre-owned activity. Combat Systems improved margins on a modest increase in revenue, and the Information Systems and Technology group continued to generate positive returns. Compared to the same period last year, Marine Systems also improved. However, the group’s margin rate declined relative to earlier quarters this year as a result of cost growth in our commercial tanker program during the period,” Chabraja said.

“Our backlog – both funded and unfunded – remained strong, and net cash continues to approximate net earnings,” Chabraja said.

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General Dynamics, headquartered in Falls Church, Virginia, employs approximately 71,600 people worldwide and anticipates 2004 revenue in excess of $19 billion. The company is a market leader in mission-critical information systems and technologies; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and business aviation.

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

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

WEBCAST INFORMATION: General Dynamics will webcast its third-quarter security analyst conference call, scheduled for 11 a.m. Eastern Time on Wednesday, October 20, 2004. Those accessing the webcast will be able to listen to management’s discussion of the third quarter, as well as the question-and-answer session with security analysts.

The webcast will be a listen-only audio broadcast, available at www.generaldynamics.com. A Real Audio player or Windows Media™ player is required to access the webcast; information about downloading those players is available on the company’s website. An on-demand replay of the webcast will be available by 2 p.m. on October 20 and will continue for 12 months.

To hear a recording of the conference call by telephone, please call 719-457-0820; passcode 980791. It will be available from 2 p.m. on October 20 until midnight on November 2, 2004.

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CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

	Third Quarter						Variance
	2004			2003			$			%
NET SALES	$	4,754		$	4,422		$	332			7.5	%
OPERATING COSTS AND EXPENSES		4,255			4,064			(191	)
OPERATING EARNINGS		499			358			141			39.4	%
Interest, Net		(33	)		(29	)		(4	)
Other Income (Expense), Net		3			(3	)		6
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		469			326			143			43.9	%
Provision for Income Taxes		146			71			(75	)
EARNINGS FROM CONTINUING OPERATIONS	$	323		$	255		$	68			26.7	%
Discontinued Operations, Net of Tax		(1	)		7			(8	)
NET EARNINGS	$	322		$	262		$	60			22.9	%
EARNINGS PER SHARE — BASIC
Continuing Operations	$	1.62		$	1.29		$	0.33			25.6	%
Discontinued Operations	$	(0.01	)	$	0.04		$	(0.05	)
Net Earnings	$	1.61		$	1.33		$	0.28			21.1	%
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		200.0			197.3
EARNINGS PER SHARE — DILUTED
Continuing Operations	$	1.60		$	1.28		$	0.32			25.0	%
Discontinued Operations	$	—		$	0.04		$	(0.04	)
Net Earnings	$	1.60		$	1.32		$	0.28			21.2	%
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		201.9			199.0

Exhibit A
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CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

	Nine Months						Variance
	2004			2003			$			%
NET SALES	$	14,266		$	11,768		$	2,498			21.2	%
OPERATING COSTS AND EXPENSES		12,831			10,713			(2,118	)
OPERATING EARNINGS		1,435			1,055			380			36.0	%
Interest, Net		(111	)		(59	)		(52	)
Other (Expense) Income, Net		(9	)		3			(12	)
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		1,315			999			316			31.6	%
Provision for Income Taxes		427			280			(147	)
EARNINGS FROM CONTINUING OPERATIONS	$	888		$	719		$	169			23.5	%
Discontinued Operations, Net of Tax		3			6			(3	)
NET EARNINGS	$	891		$	725		$	166			22.9	%
EARNINGS PER SHARE — BASIC
Continuing Operations	$	4.46		$	3.64		$	0.82			22.5	%
Discontinued Operations	$	0.01		$	0.03		$	(0.02	)
Net Earnings	$	4.47		$	3.67		$	0.80			21.8	%
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		199.2			197.8
EARNINGS PER SHARE — DILUTED
Continuing Operations	$	4.42		$	3.61		$	0.81			22.4	%
Discontinued Operations	$	0.01		$	0.03		$	(0.02	)
Net Earnings	$	4.43		$	3.64		$	0.79			21.7	%
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		201.1			199.4

Exhibit B
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NET SALES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)
DOLLARS IN MILLIONS

	Third Quarter						Variance
	2004			2003			$			%
NET SALES:
INFORMATION SYSTEMS AND TECHNOLOGY	$	1,657		$	1,301		$	356			27.4	%
COMBAT SYSTEMS		1,071			1,045			26			2.5	%
MARINE SYSTEMS		1,154			1,190			(36	)		(3.0	)%
AEROSPACE		798			808			(10	)		(1.2	)%
RESOURCES		74			78			(4	)		(5.1	)%
TOTAL	$	4,754		$	4,422		$	332			7.5	%
OPERATING EARNINGS:
INFORMATION SYSTEMS AND TECHNOLOGY	$	176		$	148		$	28			18.9	%
COMBAT SYSTEMS		134			116			18			15.5	%
MARINE SYSTEMS		62			36			26			72.2	%
AEROSPACE		117			50			67			134.0	%
RESOURCES		10			8			2			25.0	%
TOTAL	$	499		$	358		$	141			39.4	%
OPERATING MARGINS:
INFORMATION SYSTEMS AND TECHNOLOGY		10.6	%		11.4	%
COMBAT SYSTEMS		12.5	%		11.1	%
MARINE SYSTEMS		5.4	%		3.0	%
AEROSPACE		14.7	%		6.2	%
RESOURCES		13.5	%		10.3	%
TOTAL		10.5	%		8.1	%

Exhibit C
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NET SALES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)
DOLLARS IN MILLIONS

	Nine Months						Variance
	2004			2003			$			%
NET SALES:
INFORMATION SYSTEMS AND TECHNOLOGY	$	5,084		$	3,444		$	1,640			47.6	%
COMBAT SYSTEMS		3,210			2,870			340			11.8	%
MARINE SYSTEMS		3,611			3,149			462			14.7	%
AEROSPACE		2,175			2,117			58			2.7	%
RESOURCES		186			188			(2	)		(1.1	)%
TOTAL	$	14,266		$	11,768		$	2,498			21.2	%
OPERATING EARNINGS:
INFORMATION SYSTEMS AND TECHNOLOGY	$	542		$	401		$	141			35.2	%
COMBAT SYSTEMS		367			327			40			12.2	%
MARINE SYSTEMS		241			165			76			46.1	%
AEROSPACE		277			135			142			105.2	%
RESOURCES		8			27			(19	)		(70.4	)%
TOTAL	$	1,435		$	1,055		$	380			36.0	%
OPERATING MARGINS:
INFORMATION SYSTEMS AND TECHNOLOGY		10.7	%		11.6	%
COMBAT SYSTEMS		11.4	%		11.4	%
MARINE SYSTEMS		6.7	%		5.2	%
AEROSPACE		12.7	%		6.4	%
RESOURCES		4.3	%		14.4	%
TOTAL		10.1	%		9.0	%

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

	Third Quarter						Third Quarter
	2004						2003
Cash	$	686					$	697
Short-term Debt	$	391					$	1,234
Long-term Debt		3,296						3,310
Total Debt	$	3,687					$	4,544
Net Debt	$	3,001					$	3,847
Shareholders’ Equity	$	6,777					$	5,586
Debt-to-Equity		54.4	%					81.3	%
Debt-to-Capital		35.2	%					44.9	%
Book Value per Share	$	33.86					$	28.27
	Quarter			Year-to-date			Quarter			Year-to-date
Net Cash Provided by Operating Activities	$	309		$	999		$	368		$	826
Capital Expenditures		(60	)		(178	)		(48	)		(115	)
Free Cash Flow From Operations (A)	$	249		$	821		$	320		$	711
Total Taxes Paid	$	58					$	47
Depreciation and Depletion	$	61					$	52
Intangible Asset Amortization		24						27
Depreciation, Depletion and Amortization	$	85					$	79
Company Sponsored R&D (B)	$	70					$	74
Employment		71,600						66,800
Sales Per Employee	$	278,500					$	275,700
Shares Outstanding		200,161,655						197,561,240
Weighted Average Shares Outstanding -
Basic		199,964,232						197,310,727
Diluted		201,852,318						199,022,170

(A)

The company’s management believes free cash flow from operations is a measurement that is useful to investors, because it portrays the company’s ability to generate cash from its core businesses for such purposes as repaying maturing debt, funding business acquisitions and paying dividends. The most directly comparable GAAP measure to free cash flow from operations is net cash provided by operating activities.

(B)

Includes independent research and development and bid and proposal costs and Gulfstream product development costs.

Exhibit E
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BACKLOG (UNAUDITED)
DOLLARS IN MILLIONS

	Third Quarter 2004
					Total		IDIQ		Total Estimated
	Funded		Unfunded		Backlog		Contract Value (A)		Contract Value
INFORMATION SYSTEMS AND TECHNOLOGY	$	6,257	$	1,543	$	7,800	$	6,402	$	14,202
COMBAT SYSTEMS		6,351		2,438		8,789		142		8,931
MARINE SYSTEMS		8,446		8,688		17,134		—		17,134
AEROSPACE		4,066		2,201		6,267		—		6,267
RESOURCES		216		57		273		—		273
TOTAL	$	25,336	$	14,927	$	40,263	$	6,544	$	46,807

	Second Quarter 2004
					Total		IDIQ		Total Estimated
	Funded		Unfunded		Backlog		Contract Value (A)		Contract Value
INFORMATION SYSTEMS AND TECHNOLOGY	$	6,172	$	1,406	$	7,578	$	5,826	$	13,404
COMBAT SYSTEMS		6,643		2,497		9,140		152		9,292
MARINE SYSTEMS		9,387		8,512		17,899		—		17,899
AEROSPACE		3,970		2,257		6,227		—		6,227
RESOURCES		235		57		292		—		292
TOTAL	$	26,407	$	14,729	$	41,136	$	5,978	$	47,114

(A) IDIQ contract value represents management’s estimate of the future contract value under existing indefinite delivery, indefinite quantity contracts. Because the value in these arrangements is subject to the customer’s future exercise of an indeterminate quantity of delivery orders, the company recognizes these contracts in backlog only when they are funded.

Exhibit F
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AIRCRAFT DELIVERIES (UNAUDITED)

	Third Quarter				Nine Months
	2004		2003		2004		2003
GREEN:
LARGE AIRCRAFT		14		14		41		37
MID-SIZE AIRCRAFT		6		5		16		16
TOTAL		20		19		57		53
COMPLETIONS:
LARGE AIRCRAFT		14		12		36		37
MID-SIZE AIRCRAFT		7		8		15		13
TOTAL		21		20		51		50
PRE-OWNED:		5		9		12		24

Exhibit G

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