Exhibit 99.1
2941 Fairview Park Drive Suite 100 Falls Church, VA 22042-4513 www.generaldynamics.com	News

October 18, 2006

Contact: Rob Doolittle

Tel: 703 876 3199

Fax: 703 876 3555

rdoolitt@generaldynamics.com

General Dynamics Reports Strong Growth of Sales, Earnings
in Third Quarter 2006

• Revenues grow 14.5 percent

• EPS from continuing operations increases 20 percent

FALLS CHURCH, Va. – General Dynamics (NYSE: GD) today reported 2006 third-quarter revenues of $6.1 billion, a 14.5 percent increase over third-quarter 2005 revenues of $5.3 billion. Earnings from continuing operations in the quarter increased to $440 million, or $1.08 per share on a fully diluted basis, compared to 2005 third-quarter earnings from continuing operations of $364 million, or $0.90 per share fully diluted. (All per-share data has been adjusted to reflect a two-for-one stock split that occurred March 24, 2006.)

Net earnings, including discontinued operations, were $438 million for third-quarter 2006, or $1.08 per share on a fully diluted basis. In comparison, net earnings including discontinued operations for the third quarter of 2005 were $374 million, or $0.92 per share fully diluted.

Funded backlog at the end of the third quarter was $31.7 billion, and total backlog was $44.4 billion, compared to $30.5 billion and $42.4 billion, respectively, at the end of the second quarter of 2006.

Net cash provided by operating activities was $534 million for the three-month period ending Oct. 1, while free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $452 million.

The company enjoyed sales and operating earnings growth across all four of its operating groups – Information Systems and Technology, Combat Systems, Marine Systems and Aerospace. Overall operating margins improved 40 basis points compared to third quarter 2005. In addition, all four business groups generated substantial orders in the quarter, increasing funded backlog by more than $1 billion and total backlog by about $2 billion over the previous reporting period.

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“General Dynamics has delivered another strong performance in the third quarter of 2006,” said Nicholas D. Chabraja, General Dynamics chairman and chief executive officer. “Revenues and operating earnings increased significantly over the third quarter of 2005, and year-to-date cash generation continues to meet our expectations. Operating margins remained strong in all four business groups, with Marine Systems demonstrating dramatic operating-margin improvement over the year-ago period.

“Our focus on performance across the corporation continues to generate strong results for shareholders,” Chabraja said.

General Dynamics, headquartered in Falls Church, Va., employs approximately 81,100 people worldwide, and expects 2006 revenues of approximately $24 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 current 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 securities analyst conference call, scheduled for 11 a.m. Eastern Daylight Time on Wednesday, Oct. 18, 2006. Those accessing the webcast will be able to listen to management’s discussion of the third-quarter results, as well as the question-and-answer session with securities 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 Oct. 18 and will continue to be available for 12 months.

To hear a recording of the conference call by telephone, please call 719-457-0820; passcode 2385419. The telephone replay will be available from 2 p.m. on Oct. 18 until midnight on Nov. 1, 2006.

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CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

	Third Quarter						Variance
	2006			2005			$			%
NET SALES	$	6,069		$	5,302		$	767		14.5	%
OPERATING COSTS AND EXPENSES		5,392			4,727			(665	)
OPERATING EARNINGS		677			575			102		17.7	%
Interest, Net		(34	)		(30	)		(4	)
Other, Net		1			(4	)		5
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		644			541			103		19.0	%
Provision for Income Taxes		204			177			(27	)
EARNINGS FROM CONTINUING OPERATIONS	$	440		$	364		$	76		20.9	%
Discontinued Operations, Net of Tax		(2	)		10			(12	)
NET EARNINGS	$	438		$	374		$	64		17.1	%
EARNINGS PER SHARE—BASIC
Continuing Operations	$	1.09		$	0.91		$	0.18		19.8	%
Discontinued Operations	$	—		$	0.02		$	(0.02	)
Net Earnings	$	1.09		$	0.93		$	0.16		17.2	%
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		403.7			402.1
EARNINGS PER SHARE—DILUTED
Continuing Operations	$	1.08		$	0.90		$	0.18		20.0	%
Discontinued Operations	$	—		$	0.02		$	(0.02	)
Net Earnings	$	1.08		$	0.92		$	0.16		17.4	%
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		407.2			405.6

Exhibit A

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CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

	Nine Months						Variance
	2006			2005			$			%
NET SALES	$	17,549		$	15,211		$	2,338		15.4	%
OPERATING COSTS AND EXPENSES		15,627			13,644			(1,983	)
OPERATING EARNINGS		1,922			1,567			355		22.7	%
Interest, Net		(74	)		(93	)		19
Other, Net		3			(4	)		7
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		1,851			1,470			381		25.9	%
Provision for Income Taxes		604			420			(184	)
EARNINGS FROM CONTINUING OPERATIONS	$	1,247		$	1,050		$	197		18.8	%
Discontinued Operations, Net of Tax		201			5			196
NET EARNINGS	$	1,448		$	1,055		$	393		37.3	%
EARNINGS PER SHARE—BASIC
Continuing Operations	$	3.09		$	2.61		$	0.48		18.4	%
Discontinued Operations	$	0.50		$	0.01		$	0.49
Net Earnings	$	3.59		$	2.62		$	0.97		37.0	%
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		402.9			401.6
EARNINGS PER SHARE—DILUTED
Continuing Operations	$	3.07		$	2.60		$	0.47		18.1	%
Discontinued Operations	$	0.49		$	0.01		$	0.48
Net Earnings	$	3.56		$	2.61		$	0.95		36.4	%
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (IN MILLIONS)		406.2			404.7

Exhibit B

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NET SALES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)

DOLLARS IN MILLIONS

	Third Quarter						Variance
	2006			2005			$			%
NET SALES:
INFORMATION SYSTEMS AND TECHNOLOGY	$	2,396		$	1,985		$	411		20.7	%
COMBAT SYSTEMS		1,365			1,240			125		10.1	%
MARINE SYSTEMS		1,221			1,171			50		4.3	%
AEROSPACE		1,087			906			181		20.0	%
TOTAL	$	6,069		$	5,302		$	767		14.5	%
OPERATING EARNINGS:
INFORMATION SYSTEMS AND TECHNOLOGY	$	258		$	228		$	30		13.2	%
COMBAT SYSTEMS		164			159			5		3.1	%
MARINE SYSTEMS		102			52			50		96.2	%
AEROSPACE		165			146			19		13.0	%
CORPORATE		(12	)		(10	)		(2	)
TOTAL	$	677		$	575		$	102		17.7	%
OPERATING MARGINS:
INFORMATION SYSTEMS AND TECHNOLOGY		10.8	%		11.5	%
COMBAT SYSTEMS		12.0	%		12.8	%
MARINE SYSTEMS		8.4	%		4.4	%
AEROSPACE		15.2	%		16.1	%
TOTAL		11.2	%		10.8	%

Exhibit C

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NET SALES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)

DOLLARS IN MILLIONS

	Nine Months						Variance
	2006			2005			$			%
NET SALES:
INFORMATION SYSTEMS AND TECHNOLOGY	$	6,526		$	5,750		$	776		13.5	%
COMBAT SYSTEMS		4,178			3,415			763		22.3	%
MARINE SYSTEMS		3,762			3,559			203		5.7	%
AEROSPACE		3,083			2,487			596		24.0	%
TOTAL	$	17,549		$	15,211		$	2,338		15.4	%
OPERATING EARNINGS:
INFORMATION SYSTEMS AND TECHNOLOGY	$	710		$	650		$	60		9.2	%
COMBAT SYSTEMS		483			386			97		25.1	%
MARINE SYSTEMS		291			166			125		75.3	%
AEROSPACE		476			372			104		28.0	%
CORPORATE		(38	)		(7	)		(31	)
TOTAL	$	1,922		$	1,567		$	355		22.7	%
OPERATING MARGINS:
INFORMATION SYSTEMS AND TECHNOLOGY		10.9	%		11.3	%
COMBAT SYSTEMS		11.6	%		11.3	%
MARINE SYSTEMS		7.7	%		4.7	%
AEROSPACE		15.4	%		15.0	%
TOTAL		11.0	%		10.3	%

Exhibit D

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PRELIMINARY FINANCIAL INFORMATION (UNAUDITED)

DOLLARS IN MILLIONS EXCEPT PER SHARE AND EMPLOYEE AMOUNTS

	Third Quarter 2006						Third Quarter 2005
Cash and Liquidity Information:
Cash	$	1,139					$	1,754
Short-term Investments		3						—
Total Cash and Short-term Investments	$	1,142					$	1,754
Short-term Debt	$	329					$	506
Long-term Debt		2,778						2,787
Total Debt	$	3,107					$	3,293
Net Debt (A)	$	1,965					$	1,539
	Quarter			Year-to-date			Quarter			Year-to-date
Net Cash Provided by Operating Activities	$	534		$	1,327		$	599		$	1,156
Capital Expenditures		(82	)		(211	)		(72	)		(167	)
Free Cash Flow from Operations (B)	$	452		$	1,116		$	527		$	989
Total Taxes Paid	$	241					$	101
Other Information:
Depreciation and Depletion	$	59					$	56
Intangible Asset Amortization		38						25
Depreciation, Depletion and Amortization	$	97					$	81
Company Sponsored R&D (C)	$	100					$	86
Employment		81,100						70,600
Sales Per Employee (D)	$	309,900					$	293,700
Shares Outstanding		404,430,136						402,499,448
Weighted Average Shares Outstanding -
Basic		403,723,024						402,120,282
Diluted		407,177,077						405,606,746

(A) Net Debt is defined as total debt less cash and short-term investments.

(B) 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.

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

(D) Sales per employee is calculated by dividing net sales for the latest 12-month period by the company’s average employment during that period.

Exhibit E

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RECONCILIATION OF

YEAR-TO-DATE CASH FLOW TO

CHANGE IN NET DEBT (UNAUDITED)

DOLLARS IN MILLIONS

	2006			2005
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	1,327		$	1,156
CAPITAL EXPENDITURES		(211	)		(167	)
FREE CASH FLOW FROM OPERATIONS		1,116			989
BUSINESS ACQUISITIONS		(2,318	)		(277	)
ASSET SALES		329			362
DIVIDENDS		(266	)		(232	)
PROCEEDS FROM OPTION EXERCISES		192			127
SHARE REPURCHASES		(85	)		(200	)
OTHER		23			9
(INCREASE)/ DECREASE IN NET DEBT	$	(1,009	)	$	778
NET DEBT, BEGINNING OF PERIOD		(956	)		(2,317	)
NET DEBT, END OF PERIOD	$	(1,965	)	$	(1,539	)

Exhibit F

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BACKLOG (UNAUDITED)

DOLLARS IN MILLIONS

	Third Quarter 2006
	Funded		Unfunded		Total Backlog		IDIQ Contract Value*		Total Estimated Contract Value
INFORMATION SYSTEMS AND TECHNOLOGY	$	7,344	$	2,649	$	9,993	$	8,444	$	18,437
COMBAT SYSTEMS		9,213		1,985		11,198		1,073		12,271
MARINE SYSTEMS		8,640		5,751		14,391		—		14,391
AEROSPACE		6,500		2,329		8,829		—		8,829
TOTAL	$	31,697	$	12,714	$	44,411	$	9,517	$	53,928
	Second Quarter 2006
	Funded		Unfunded		Total Backlog		IDIQ Contract Value*		Total Estimated Contract Value
INFORMATION SYSTEMS AND TECHNOLOGY	$	7,125	$	2,430	$	9,555	$	7,659	$	17,214
COMBAT SYSTEMS		8,314		2,125		10,439		1,190		11,629
MARINE SYSTEMS		8,803		5,162		13,965		—		13,965
AEROSPACE		6,294		2,182		8,476		—		8,476
TOTAL	$	30,536	$	11,899	$	42,435	$	8,849	$	51,284
	Third Quarter 2005
	Funded		Unfunded		Total Backlog		IDIQ Contract Value*		Total Estimated Contract Value
INFORMATION SYSTEMS AND TECHNOLOGY	$	7,310	$	2,748	$	10,058	$	5,196	$	15,254
COMBAT SYSTEMS		7,771		2,416		10,187		861		11,048
MARINE SYSTEMS		8,876		6,660		15,536		—		15,536
AEROSPACE		5,156		2,188		7,344		—		7,344
TOTAL	$	29,113	$	14,012	$	43,125	$	6,057	$	49,182

* 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 G

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AIRCRAFT DELIVERIES (UNAUDITED)

	Third Quarter				Nine Months
	2006		2005		2006		2005
GREEN (UNITS):
LARGE AIRCRAFT		18		17		52		46
MID-SIZE AIRCRAFT		11		7		31		19
TOTAL		29		24		83		65
COMPLETIONS (UNITS):
LARGE AIRCRAFT		18		17		54		43
MID-SIZE AIRCRAFT		8		5		21		16
TOTAL		26		22		75		59
PRE-OWNED:
UNITS		2		3		10		8
SALES (millions)	$	54	$	56	$	204	$	132
OPERATING EARNINGS (millions)	$	4	$	8	$	17	$	10

Exhibit H

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DISCONTINUED OPERATIONS (UNAUDITED)

DOLLARS IN MILLIONS

	Third Quarter					Nine Months
	2006			2005		2006			2005
NET SALES	$	20		$	78	$	130		$	248
OPERATING COSTS AND EXPENSES		25			65		155			228
OPERATING (LOSS)/ EARNINGS		(5	)		13		(25	)		20
OTHER (EXPENSE)/INCOME		(1	)		2		(1	)		1
(LOSS)/GAIN ON DISPOSAL		(1	)		—		203			33
(LOSS)/EARNINGS BEFORE TAXES		(7	)		15		177			54
TAX (BENEFIT)/ PROVISION		(5	)		5		(24	)		49
(LOSS)/EARNINGS FROM DISCONTINUED OPERATIONS	$	(2	)	$	10	$	201		$	5

Exhibit I

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