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) January 26, 2011 (January 26, 2011)

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:

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

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

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

¨ 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 January 26, 2011, General Dynamics announced its financial results for the quarter and year ended December 31, 2010. A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K and is hereby incorporated by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits (furnished only)

99.1 General Dynamics press release dated January 26, 2011, with respect to the company’s financial results for the quarter and year ended December 31, 2010.

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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/ Jason W. Aiken
	Jason W. Aiken Vice President and Controller (Authorized Officer and Chief Accounting Officer)

Dated: January 26, 2011

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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

January 26, 2011

Contact: Rob Doolittle

Tel: 703 876 3199

rdoolitt@generaldynamics.com

General Dynamics Reports Strong Performance for Fourth Quarter 2010

• EPS from continuing operations grows 21 percent

• Cash generation exceeds earnings from continuing operations

• Management provides 2011 full-year EPS guidance

FALLS CHURCH, Va. – General Dynamics (NYSE: GD) today reported 2010 fourth-quarter earnings from continuing operations of $729 million, or $1.91 per share on a fully diluted basis, compared to 2009 fourth-quarter earnings from continuing operations of $618 million, or $1.58 per share fully diluted. Full-year 2010 earnings from continuing operations were $2.63 billion, or $6.82 per share on a fully diluted basis, compared to $2.41 billion and $6.20 per share, respectively, for 2009. Revenue was $8.6 billion in the fourth quarter and $32.5 billion for the full year.

Margins

Company-wide operating margins increased to 12.5 percent for the fourth quarter, led by a 250-basis-point improvement in the company’s Aerospace sector. Margins also increased in the Marine Systems and Information Systems and Technology businesses and remained steady in Combat Systems.

Cash

Net cash provided by operating activities totaled $1.42 billion in the fourth quarter and $2.99 billion for the full year. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $1.27 billion in the quarter and $2.62 billion for the year. Free cash flow significantly exceeded earnings from continuing operations in the fourth quarter and was equal to earnings from continuing operations for the year.

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Backlog

The company’s total backlog was $59.6 billion at the end of the year. The Aerospace group booked its largest order intake of the year, resulting in a $244 million increase in backlog over the third quarter. Significant domestic and international orders for vehicle production and improvements, ongoing ship design and development efforts, and combat mission-system integration work underscored the ongoing demand for many of the company’s key product and service offerings.

Estimated potential contract value, representing management’s estimate of the value of unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised contract options, increased to $21.8 billion at year-end 2010. Total potential contract value, the sum of all backlog components, was $81.3 billion at the end of the year.

“2010 was a good year for General Dynamics, marked by outstanding earnings growth, efficient cash conversion and focused execution across the company,” said Jay L. Johnson, chairman and chief executive officer. “Our businesses are well-positioned as we continue to provide mission-essential capabilities to our defense customers and capitalize on accelerating global business-jet demand.”

“Looking ahead, we expect 2011 earnings to be in the range of $7.00 to $7.10 per share, fully diluted,” Johnson said.

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 90,000 people worldwide. The company is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. More information about the company is available on the Internet at www.generaldynamics.com.

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

All forward-looking statements speak only as of the date they are 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.

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WEBCAST INFORMATION: General Dynamics will webcast its fourth-quarter securities-analyst conference call at 11:30 a.m. Eastern Time on Wednesday, January 26, 2011. The webcast will be a listen-only audio event, available at www.generaldynamics.com. An on-demand replay of the webcast will be available by 2:30 p.m. January 26 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 888-286-8010 (international: 617-801-6888); passcode 82244490. The phone replay will be available from 2:30 p.m. January 26, until midnight February 2, 2011.

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EXHIBIT A

CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

	Fourth Quarter						Variance
	2010			2009			$			%
Revenues	$	8,601		$	7,898		$	703			8.9	%
Operating costs and expenses		7,525			6,947			(578	)
Operating earnings		1,076			951			125			13.1	%
Interest, net		(33	)		(43	)		10
Other, net		—			1			(1	)
Earnings from continuing operations before income taxes		1,043			909			134			14.7	%
Provision for income taxes		314			291			(23	)
Earnings from continuing operations	$	729		$	618		$	111			18.0	%
Discontinued operations, net of tax		—			(4	)		4
Net earnings	$	729		$	614		$	115			18.7	%
Earnings per share - basic
Continuing operations	$	1.94		$	1.60		$	0.34			21.3	%
Discontinued operations	$	—		$	(0.01	)	$	0.01
Net earnings	$	1.94		$	1.59		$	0.35			22.0	%
Basic weighted average shares outstanding (in millions)		376.7			385.8
Earnings per share - diluted
Continuing operations	$	1.91		$	1.58		$	0.33			20.9	%
Discontinued operations	$	—		$	(0.01	)	$	0.01
Net earnings	$	1.91		$	1.57		$	0.34			21.7	%
Diluted weighted average shares outstanding (in millions)		380.9			390.1

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EXHIBIT B

CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

	Twelve Months						Variance
	2010			2009			$			%
Revenues	$	32,466		$	31,981		$	485			1.5	%
Operating costs and expenses		28,521			28,306			(215	)
Operating earnings		3,945			3,675			270			7.3	%
Interest, net		(157	)		(160	)		3
Other, net		2			(2	)		4
Earnings from continuing operations before income taxes		3,790			3,513			277			7.9	%
Provision for income taxes		1,162			1,106			(56	)
Earnings from continuing operations	$	2,628		$	2,407		$	221			9.2	%
Discontinued operations, net of tax		(4	)		(13	)		9
Net earnings	$	2,624		$	2,394		$	230			9.6	%
Earnings per share - basic
Continuing operations	$	6.89		$	6.24		$	0.65			10.4	%
Discontinued operations	$	(0.01	)	$	(0.03	)	$	0.02
Net earnings	$	6.88		$	6.21		$	0.67			10.8	%
Basic weighted average shares outstanding (in millions)		381.2			385.5
Earnings per share - diluted
Continuing operations	$	6.82		$	6.20		$	0.62			10.0	%
Discontinued operations	$	(0.01	)	$	(0.03	)	$	0.02
Net earnings	$	6.81		$	6.17		$	0.64			10.4	%
Diluted weighted average shares outstanding (in millions)		385.2			387.9

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EXHIBIT C

REVENUES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)

DOLLARS IN MILLIONS

	Fourth Quarter						Variance
	2010			2009			$			%
Revenues:
Aerospace	$	1,268		$	1,181		$	87			7.4	%
Combat Systems		2,696			2,486			210			8.4	%
Marine Systems		1,701			1,551			150			9.7	%
Information Systems and Technology		2,936			2,680			256			9.6	%
Total	$	8,601		$	7,898		$	703			8.9	%
Operating earnings:
Aerospace	$	210		$	167		$	43			25.7	%
Combat Systems		400			367			33			9.0	%
Marine Systems		177			156			21			13.5	%
Information Systems and Technology		311			282			29			10.3	%
Corporate		(22	)		(21	)		(1	)		(4.8	)%
Total	$	1,076		$	951		$	125			13.1	%
Operating margins:
Aerospace		16.6	%		14.1	%
Combat Systems		14.8	%		14.8	%
Marine Systems		10.4	%		10.1	%
Information Systems and Technology		10.6	%		10.5	%
Total		12.5	%		12.0	%

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EXHIBIT D

REVENUES AND OPERATING EARNINGS BY SEGMENT (UNAUDITED)

DOLLARS IN MILLIONS

	Twelve Months						Variance
	2010			2009			$			%
Revenues:
Aerospace	$	5,299		$	5,171		$	128			2.5	%
Combat Systems		8,878			9,645			(767	)		(8.0	)%
Marine Systems		6,677			6,363			314			4.9	%
Information Systems and Technology		11,612			10,802			810			7.5	%
Total	$	32,466		$	31,981		$	485			1.5	%
Operating earnings:
Aerospace	$	860		$	707		$	153			21.6	%
Combat Systems		1,275			1,262			13			1.0	%
Marine Systems		674			642			32			5.0	%
Information Systems and Technology		1,219			1,151			68			5.9	%
Corporate		(83	)		(87	)		4			4.6	%
Total	$	3,945		$	3,675		$	270			7.3	%
Operating margins:
Aerospace		16.2	%		13.7	%
Combat Systems		14.4	%		13.1	%
Marine Systems		10.1	%		10.1	%
Information Systems and Technology		10.5	%		10.7	%
Total		12.2	%		11.5	%

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EXHIBIT E

PRELIMINARY CONSOLIDATED BALANCE SHEET (UNAUDITED)

DOLLARS IN MILLIONS

	December 31, 2010			December 31, 2009
ASSETS
Current assets:
Cash and equivalents	$	2,613		$	2,263
Accounts receivable		3,848			3,678
Contracts in process		4,873			4,449
Inventories		2,158			2,126
Other current assets		694			733
Total current assets		14,186			13,249
Noncurrent assets:
Property, plant and equipment, net		2,971			2,912
Intangible assets, net		1,992			2,098
Goodwill		12,649			12,269
Other assets		747			549
Total noncurrent assets		18,359			17,828
Total assets	$	32,545		$	31,077
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	773		$	705
Accounts payable		2,736			2,365
Customer advances and deposits		4,465			4,313
Other current liabilities		3,203			2,988
Total current liabilities		11,177			10,371
Noncurrent liabilities:
Long-term debt		2,430			3,159
Other liabilities		5,622			5,124
Commitments and contingencies
Total noncurrent liabilities		8,052			8,283
Shareholders’ equity:
Common stock		482			482
Surplus		1,729			1,518
Retained earnings		17,076			15,093
Treasury stock		(4,535	)		(3,463	)
Accumulated other comprehensive loss		(1,436	)		(1,207	)
Total shareholders’ equity		13,316			12,423
Total liabilities and shareholders’ equity	$	32,545		$	31,077

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EXHIBIT F

PRELIMINARY CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

DOLLARS IN MILLIONS

	Twelve Months Ended
	December 31, 2010			December 31, 2009
Cash flows from operating activities:
Net earnings	$	2,624		$	2,394
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation of property, plant and equipment		345			344
Amortization of intangible assets		224			218
Stock-based compensation expense		118			117
Excess tax benefit from stock-based compensation		(18	)		(5	)
Deferred income tax provision		56			227
Discontinued operations, net of tax		4			13
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable		(152	)		(151	)
Contracts in process		(334	)		(112	)
Inventories		(23	)		(72	)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable		366			(92	)
Customer advances and deposits		30			145
Other current liabilities		(285	)		(306	)
Other, net		31			135
Net cash provided by operating activities		2,986			2,855
Cash flows from investing activities:
Maturities of held-to-maturity securities		605			—
Purchases of held-to-maturity securities		(468	)		(337	)
Capital expenditures		(370	)		(385	)
Business acquisitions, net of cash acquired		(233	)		(811	)
Other, net		58			141
Net cash used by investing activities		(408	)		(1,392	)
Cash flows from financing activities:
Purchases of common stock		(1,185	)		(209	)
(Repayment of) proceeds from fixed-rate notes		(700	)		747
Dividends paid		(631	)		(577	)
Proceeds from option exercises		277			142
Repayment of commercial paper		—			(904	)
Other, net		13			(5	)
Net cash used by financing activities		(2,226	)		(806	)
Net cash used by discontinued operations - operating activities		(2	)		(15	)
Net increase in cash and equivalents		350			642
Cash and equivalents at beginning of period		2,263			1,621
Cash and equivalents at end of period	$	2,613		$	2,263

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EXHIBIT G

PRELIMINARY FINANCIAL INFORMATION (UNAUDITED)

DOLLARS IN MILLIONS EXCEPT PER SHARE AND EMPLOYEE AMOUNTS

	Fourth Quarter 2010						Fourth Quarter 2009
Non-GAAP Financial Measures:
Free cash flow from operations:
	Quarter			Year-to-date			Quarter			Year-to-date
Net cash provided by operating activities	$	1,419		$	2,986		$	1,498		$	2,855
Capital expenditures		(151	)		(370	)		(134	)		(385	)
Free cash flow from operations (A)	$	1,268		$	2,616		$	1,364		$	2,470
Return on invested capital:
Earnings from continuing operations	$	2,628					$	2,407
After-tax interest expense		116						117
After-tax amortization expense		155						149
Net operating profit after taxes		2,899						2,673
Average debt and equity		16,587						15,003
Return on invested capital (B)		17.5	%					17.8	%
Other Financial Information:
Return on equity (C)		20.2	%					21.7	%
Debt-to-equity (D)		24.1	%					31.1	%
Debt-to-capital (E)		19.4	%					23.7	%
Book value per share (F)	$	35.79					$	32.21
Total taxes paid	$	310					$	246
Company-sponsored research and development (G)	$	124					$	123
Employment		90,000						91,700
Sales per employee (H)	$	358,100					$	346,500
Shares outstanding		372,052,313						385,704,691

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

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

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

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

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

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

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

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

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EXHIBIT H

BACKLOG (UNAUDITED)

DOLLARS IN MILLIONS

Fourth Quarter 2010	Funded		Unfunded		Total Backlog		Estimated Potential Contract  Value*		Total Potential Contract  Value
Aerospace	$	17,443	$	378	$	17,821	$	1,361	$	19,182
Combat Systems		10,908		892		11,800		4,645		16,445
Marine Systems		7,050		13,069		20,119		584		20,703
Information Systems and Technology		7,978		1,843		9,821		15,196		25,017
Total	$	43,379	$	16,182	$	59,561	$	21,786	$	81,347
Third Quarter 2010
Aerospace	$	17,184	$	393	$	17,577	$	1,361	$	18,938
Combat Systems		11,771		1,006		12,777		4,702		17,479
Marine Systems		7,972		12,620		20,592		768		21,360
Information Systems and Technology		8,666		2,219		10,885		13,978		24,863
Total	$	45,593	$	16,238	$	61,831	$	20,809	$	82,640
Fourth Quarter 2009
Aerospace	$	18,891	$	433	$	19,324	$	1,361	$	20,685
Combat Systems		11,431		1,985		13,416		2,327		15,743
Marine Systems		7,111		15,362		22,473		1,072		23,545
Information Systems and Technology		8,423		1,909		10,332		12,815		23,147
Total	$	45,856	$	19,689	$	65,545	$	17,575	$	83,120

* The estimated potential contract value represents management’s estimate of our future contract value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options associated with existing firm contracts, including options to purchase new aircraft and long-term agreements with fleet customers. Because the value in the unfunded IDIQ arrangements is subject to the customer’s future exercise of an indeterminate quantity of delivery orders, we recognize these contracts in backlog only when they are funded. Unexercised options are recognized in backlog when the customer exercises the option and establishes a firm order.

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EXHIBIT I

FOURTH QUARTER 2010 SIGNIFICANT ORDERS (UNAUDITED)

DOLLARS IN MILLIONS

We received the following significant contract orders during the fourth quarter of 2010:

Combat Systems

• Approximately $500 from the U.S. Army under the Stryker wheeled armored vehicle program for production of double-V-hulled vehicles, contractor logistics support and battle-damage assessment and repair.

• Approximately $350 from the U.S. Marine Corps under the mine-resistant, ambush-protected (MRAP) vehicle program for upgrade kits for previously delivered vehicles.

• Approximately $165 from Germany to produce Eagle armored vehicles. The contract has a maximum potential value of over $565 if all options are exercised.

• Approximately $140 from the Army under the Foreign Military Sales program to produce Light Armored Vehicles (LAVs) for an international customer.

Marine Systems

• Approximately $65 from the U.S. Navy for engineering and design services for the Ohio Replacement Program (ORP).

• Approximately $60 from the Navy to operate and maintain large, medium-speed, roll-on/roll-off (LMSR) vessels.

• Approximately $60 from the Navy for engineering, design and technical services for the DDG-1000 destroyer program.

• Approximately $35 from the Navy for the development of advanced submarine technologies. The contract has a maximum potential value of over $710 over five years.

Information Systems and Technology

• Approximately $150 from Austal USA for design, integration and testing of combat and seaframe control systems for one Littoral Combat Ship (LCS) along with options for nine additional ships, which are expected to be exercised over the next five years.

• Approximately $80 from the Army for information technology (IT) infrastructure support for the Walter Reed National Military Medical Center.

• Approximately $60 under the Warfighter Field Operations Customer Support (FOCUS) program to provide life-cycle contractor support services.

• Approximately $55 in orders for networking communications products and support under the Network-Centric Solutions (NETCENTS) program, bringing the total value in backlog to approximately $235.

• An IDIQ contract from the Army under the Warfighter Information Network-Tactical (WIN-T) program for low-rate initial production of Increment 2 equipment. The group expects to receive orders under the contract beginning in the first quarter of 2011.

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EXHIBIT J

AEROSPACE SUPPLEMENTAL DATA (UNAUDITED)

	Fourth Quarter				Twelve Months
	2010		2009		2010		2009
Gulfstream Green Deliveries (units):
Large aircraft		18		19		75		75
Mid-size aircraft		2		1		24		19
Total		20		20		99		94
Gulfstream Outfitted Deliveries (units):
Large aircraft		20		18		74		78
Mid-size aircraft		4		3		15		32
Total		24		21		89		110
Pre-owned Deliveries (units):	1		1		7		6

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