General Dynamics Reports Fourth-quarter, Full-year 2012 Results

       General Dynamics Reports Fourth-quarter, Full-year 2012 Results

PR Newswire

FALLS CHURCH, Va., Jan. 23, 2013

FALLS CHURCH, Va., Jan. 23, 2013 /PRNewswire/ --General Dynamics (NYSE: GD)
today announced 2012 fourth-quarter and full-year financial results, which
include significant, primarily non-cash charges recorded in the fourth
quarter. Adjusting for the impact of those charges, non-GAAP fourth-quarter
2012 earnings from continuing operations were $491 million or $1.39 per share,
fully diluted. On an unadjusted GAAP basis, the company reported a loss from
continuing operations of $2.1 billion, or $6.07 per share fully diluted, for
the quarter.

Adjusted 2012 full-year earnings from continuing operations were $2.3 billion,
or $6.48 per share fully diluted. On a GAAP basis the company reported a loss
from continuing operations of $332 million for 2012, or $0.94 per share fully
diluted.

During the fourth quarter the company recorded a $2 billion goodwill
impairment related to its Information Systems and Technology (IS&T) group.
This charge recognizes the impact of slowed defense spending in the company's
IS&T businesses. The company also recorded $867 million in other charges in
the quarter, including intangible asset impairments of $301 million in its
Aerospace and IS&T groups, which are detailed in Exhibit C of this press
release.

Phebe N. Novakovic, chairman and chief executive officer of General Dynamics,
said, "General Dynamics' operating results in 2012 and the charges that we
have recorded in the fourth quarter reflect the fact that some of our markets
are contracting as government budgets shrink at home and abroad. They also
suggest opportunities for improvement in some areas of our performance, which
we are addressing.

"General Dynamics is a strong corporation with relevant product and service
offerings that are critical to our customers' missions. We will continue to
manage our business aggressively as we approach the opportunities and the
challenges of the future," Novakovic said.

Revenues

Revenues were $8.1 billion in the fourth quarter of 2012 and $31.5 billion for
the full year.

Margins

Company-wide operating margins on a non-GAAP basis were 10.1 percent for the
fourth quarter and 11.4 percent for the year. On a GAAP basis, company-wide
operating margins were -23.5 percent for the fourth quarter and 2.6 percent
for the year.

Cash

Net cash provided by operating activities, which was largely unaffected by the
charges described above, totaled $780 million in the fourth quarter of 2012
and $2.7 billion for the full year. Free cash flow from operations, defined as
net cash provided by operating activities less capital expenditures, was $616
million in the quarter and $2.2 billion for the year.

Backlog

The company's total backlog was $51.3 billion at the end of 2012. In the
fourth quarter, orders were particularly strong for the Marine Systems group,
including $2.4 billion in awards to continue the development of the U.S.
Navy's next-generation strategic deterrent submarine, to purchase long-lead
materials for three Virginia-class attack submarines, and to construct two
commercial containerships. Other notable orders received in the quarter
include awards for additional Stryker infantry combat vehicles, for Abrams
tanks for a foreign customer, and for the production of tactical networking
equipment and radios for the U.S. Army.

Estimated potential contract value was $26.9 billion at year-end 2012,
representing management's estimate of the value of unfunded indefinite
delivery, indefinite quantity (IDIQ) contracts and unexercised contract
options. Total potential contract value, the sum of all backlog components,
was $78.1 billion at the end of the year.

"Looking ahead to 2013, we anticipate earnings per share from continuing
operations to be in the range of $6.60 to $6.70," Novakovic said.

General Dynamics, headquartered in Falls Church, Virginia, employs
approximately 92,200 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.

Use of Non-GAAP Financial Information

To supplement the review of General Dynamics Corporation's consolidated
financial statements presented on a GAAP basis, the company has provided
non-GAAP calculations of certain financial measures along with explanations of
the company's use of these measures on Exhibits C, E, G and J to this press
release.

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

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

WEBCAST INFORMATION: General Dynamics will webcast its fourth-quarter
securities-analyst conference call at 11:30 a.m. Eastern Standard Time on
Wednesday, January 23, 2013. The webcast will be a listen-only audio event,
available at www.generaldynamics.com. An on-demand replay of the webcast will
be available shortly after the conclusion of the call on January 23 and will
continue for12 months.To hear a recording of the conference call by
telephone, please call 888-286-8010 (international: 617-801-6888); passcode
19265786. The phone replay will be available shortly after the conclusion of
the call January 23 until midnight January 30.



EXHIBIT A
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
                         Fourth Quarter                Variance
                         2011         2012             $              %
Revenues                 $        $             $            (11.7)%
                         9,147       8,078           (1,069)
Operating costs and      8,197        9,980            (1,783)
expenses
Operating earnings       950          (1,902)          (2,852)        (300.2)%
(loss)
Interest, net            (38)         (41)             (3)
Other, net               (1)          (128)            (127)
Earnings (loss) from
continuing operations
 before income taxes    911          (2,071)          (2,982)        (327.3)%
Provision for income     308          59               249
taxes
Earnings (loss) from     $       $             $            (453.2)%
continuing operations     603        (2,130)          (2,733)
Discontinued             -            -                -
operations, net of tax
Net earnings (loss)      $       $             $            (453.2)%
                          603        (2,130)          (2,733)
Earnings (loss) per
share - basic
 Continuing           $       $            $           (459.2)%
operations               1.69        (6.07)           (7.76)
 Discontinued         $       $          $      
operations                  -       -             -
 Net earnings (loss)  $       $            $           (459.2)%
                         1.69        (6.07)           (7.76)
Basic weighted average   356.2        350.9
shares outstanding
Earnings (loss) per
share - diluted
 Continuing           $       $         *  $           (461.3)%
operations               1.68        (6.07)           (7.75)
 Discontinued         $       $          $      
operations                  -       -             -
 Net earnings (loss)  $       $         *  $           (461.3)%
                         1.68        (6.07)           (7.75)
Diluted weighted
average shares           359.4        350.9         *
outstanding
* Fourth quarter 2012 amounts exclude dilutive effect of stock options and
restricted stock as it would be antidilutive.



EXHIBIT B
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
                            Twelve Months                  Variance
                            2011          2012             $          %
Revenues                    $          $              $        (3.6)%
                            32,677       31,513          (1,164)
Operating costs and         28,851        30,680           (1,829)
expenses
Operating earnings         3,826         833              (2,993)    (78.2)%
Interest, net               (141)         (156)            (15)
Other, net                  33            (136)            (169)
Earnings from continuing
operations
 before income taxes       3,718         541              (3,177)    (85.4)%
Provision for income taxes  1,166         873              293
Earnings (loss) from        $         $            $        (113.0)%
continuing operations       2,552        (332)           (2,884)
Discontinued operations,    (26)          -                26
net of tax
Net earnings (loss)         $         $            $        (113.1)%
                            2,526        (332)           (2,858)
Earnings (loss) per share
- basic
 Continuing operations   $        $            $       (113.4)%
                            7.01         (0.94)           (7.95)
 Discontinued            $         $           $    
operations                  (0.07)         -           0.07
 Net earnings (loss)     $        $            $       (113.5)%
                            6.94         (0.94)           (7.88)
Basic weighted average      364.1         353.3
shares outstanding
Earnings (loss) per share
- diluted
 Continuing operations   $        $       *  $       (113.5)%
                            6.94         (0.94)           (7.88)
 Discontinued            $         $           $    
operations                  (0.07)          -          0.07
 Net earnings (loss)     $        $       *  $       (113.7)%
                            6.87         (0.94)           (7.81)
Diluted weighted average    367.5         353.3       *
shares outstanding
* 2012 amounts exclude dilutive effect of stock options and restricted stock
as it would be antidilutive.



EXHIBIT C
CALCULATION OF ADJUSTED NON-GAAP EARNINGS FROM CONTINUING OPERATIONS AND
ADJUSTED NON-GAAP DILUTED EARNINGS PER SHARE - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
                                         Fourth               Twelve
                                         Quarter              Months
                                         2012                 2012
Calculation of adjusted non-GAAP
earnings from continuing operations:
Loss from continuing operations (from    $                 $   
Exhibits A and B, respectively)          (2,130)              (332)
Non-GAAP adjustments:
Goodwill impairment (a)                  1,994                1,994
Intangible asset impairments (a)         301                  301
Contract disputes accruals (b)           292                  292
Restructuring-related charges (c)        98                   98
Inventory-related charges (d)            53                   78
Debt retirement charge (e)               123                  123
Tax effects (f)                          (240)                (249)
Adjusted non-GAAP earnings from          $               $  
continuing operations                    491                 2,305
Calculation of diluted (loss)
earnings per share from continuing
operations:
Loss from continuing operations          $                 $   
                                         (2,130)              (332)
Basic weighted average shares            350.9                353.3
outstanding
 Diluted loss per share from          $       (g)    $     (g)
continuing operations                   (6.07)               (0.94)
Adjusted non-GAAP earnings from          $               $  
continuing operations                    491                 2,305
Diluted weighted average shares          353.2                355.7
outstanding
 Adjusted non-GAAP diluted            $               $   
earnings per share from continuing       1.39                 6.48
operations
This Exhibit includes the following financial measures which are not
calculated in accordance with generally accepted accounting principles (GAAP)
in the United States – adjusted earnings from continuing operations and
adjusted diluted earnings per share from continuing operations. Each of
these calculations excludes the impact of certain items and therefore, is
considered a non-GAAP financial measure. The items excluded were considered
by management to be unusual and not reflective of the underlying performance
of the company as explained in the notes for each item. The GAAP financial
measure most directly comparable to adjusted earnings from continuing
operations is loss from continuing operations and the GAAP financial measure
most directly comparable to adjusted diluted earnings per share is diluted
loss per share. Reconciliations of each of these non-GAAP financial measures
to the corresponding GAAP financial measure are included above. Management
uses these measures to evaluate the operating performance of the company and
analyze trends. For this reason, management believes the measures are useful
supplemental information for investors to understand the company's operating
results. Notes describing each non-GAAP adjustment are on the following
page.

EXHIBIT C (cont.)
CALCULATION OF ADJUSTED NON-GAAP EARNINGS FROM CONTINUING OPERATIONS AND
ADJUSTED NON-GAAP DILUTED EARNINGS PER SHARE - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
(a) Impairments - Represents goodwill impairment charge of $1,994 in the
Information Systems and Technology group and intangible asset impairments of
$191 in the Aerospace group and $110 in the Information Systems and Technology
group. Management believes that the exclusion of these items is useful
because management does not consider impairment charges in evaluating the
operating performance of its on-going operations. The exclusions permit
investors to evaluate the company's performance and analyze trends in a
similar manner as management.
(b) Contract disputes accruals - Represents accruals of $292 for contract
disputes related to the Combat Systems group's European Land Systems business,
primarily with the government of Portugal. While the company has contract
disputes from time to time, management believes this item is unique due to the
nature of the disputes and not reflective of the operating performance of its
underlying operations. The exclusion permits investors to evaluate the
company's performance in a similar manner as management and facilitates a
comparison of its operating performance to the company's past operating
performance.
(c) Restructuring-related charges - Represents restructuring-related charges
of $98, primarily severance costs, related to the Combat Systems group's
European Land Systems business. Management believes that the exclusion of
this item is useful because management does not consider this item as
reflective of its operating performance of its underlying operations. The
exclusion permits investors to evaluate the company's performance in a similar
manner as management and facilitates a comparison of its operating performance
to the company's past operating performance.
(d) Inventory-related charges - Represents increases to inventory reserves for
obsolete inventory in the Information Systems and Technology group of $38 and
in the Combat Systems group of $15 for the quarter ended December 31, 2012.
Represents increases to inventory reserves for obsolete inventory in the
Information Systems and Technology group of $63 and in the Combat Systems
group of $15 for the twelve months ended December 31, 2012. The Information
Systems and Technology charge was primarily for ruggedized hardware products
that ceased production in 2012. Management has adjusted for this item because
it does not believe that it is indicative of its on-going operations or the
on-going operating costs of its products since it does not generally build
products to inventory within its defense groups. The exclusion permits
investors to evaluate the company's performance in a similar manner as
management and facilitates a comparison of its operating performance to the
company's past operating performance.
(e) Debt retirement charges - Represents the premium associated with the early
redemption of debt completed in December 2012. Management has excluded this
item for comparative purposes and views this charge as uniquely related to its
debt refinancing completed in 2012. By excluding this item, investors can
evaluate the company's performance in a similar manner as management.
(f) Tax effects - Represents the limited tax benefit on the charges in (a) -
(e) due to the non-deductible nature of a substantial portion of the charges.
The tax effects of these changes have been reflected because management
evaluates performance on an after-tax basis. This permits investors to
evaluate the company's performance in a similar manner as management and
compare the operating performance of the company to prior periods.
(g) Calculated based on basic weighted average shares outstanding as the
inclusion of dilutive securities (stock options and restricted stock) would
have an antidilutive effect.



EXHIBIT D
REVENUES AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
                       Fourth Quarter                Variance
                       2011           2012           $               %
Revenues:
Aerospace              $          $           $         0.2 %
                       1,857         1,861          4
Combat Systems         2,611          1,976          (635)           (24.3)%
Marine Systems         1,758          1,664          (94)            (5.3)%
Information Systems    2,921          2,577          (344)           (11.8)%
and Technology
Total                  $          $           $   (1,069)  (11.7)%
                       9,147         8,078
Operating earnings
(loss):
Aerospace              $        $        $         (5.5)%
                        73           69            (4)
Combat Systems         388            (136)          (524)           (135.1)%
Marine Systems         190            196            6               3.2 %
Information Systems    315            (2,014)        (2,329)         (739.4)%
and Technology
Corporate              (16)           (17)           (1)             (6.3)%
Total                  $        $           $   (2,852)  (300.2)%
                       950            (1,902)
Operating margins:
Aerospace              3.9 %          3.7 %
Combat Systems         14.9 %         (6.9)%
Marine Systems         10.8 %         11.8 %
Information Systems    10.8 %         (78.2)%
and Technology
Total                  10.4 %         (23.5)%



EXHIBIT E
CALCULATION OF ADJUSTED NON-GAAP REVENUES
AND ADJUSTED NON-GAAP OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
                           GAAP                                   Adjusted
                           Fourth                                 Non-GAAP
                           Quarter
                           2012             Non-GAAP              Fourth
                                                                  Quarter
                           (from Exhibit    Adjustments           2012
                           D)
Revenues:
Aerospace                  $          $              $     
                              1,861         -                 1,861
Combat Systems             1,976            169              (a)  2,145
Marine Systems             1,664            -                     1,664
Information Systems        2,577            -                     2,577
and Technology
Total                      $          $              $     
                              8,078       169                   8,247
Operating earnings
(loss):
                           $          $              $     
Aerospace                              191           (b)      
                           69                                     260
Combat Systems             (136)            405              (c)  269
Marine Systems             196              -                     196
Information Systems        (2,014)          2,142            (d)  128
and Technology
Corporate                  (17)             -                     (17)
                           $          $              $     
Total                        (1,902)      2,738                     
                                                                  836
Operating margins:
Aerospace                  3.7 %                                  14.0 %
Combat Systems             (6.9)%                                 12.5 %
Marine Systems             11.8 %                                 11.8 %
Information Systems        (78.2)%                                5.0 %
and Technology
Total                      (23.5)%                                10.1 %
This Exhibit includes the following financial measures which are not
calculated in accordance with generally accepted accounting principles (GAAP)
in the United States – adjusted revenues and operating earnings by segment.
Each of these calculations excludes the impact of certain items and therefore,
is considered a non-GAAP financial measure. The items excluded were
considered by management to be unusual and not reflective of the underlying
performance of the company. The GAAP financial measure most directly
comparable to adjusted revenues by segment is revenues by segment and the GAAP
financial measure most directly comparable to adjusted operating earnings by
segment is operating earnings by segment. Reconciliations of each of these
non-GAAP financial measures to the corresponding GAAP financial measure are
included above. Management uses these measures to evaluate the operating
performance of the company and analyze trends. For this reason, management
believes the measures are useful supplemental information for investors to
understand the company's operating results. Notes describing each non-GAAP
adjustment are on the following page.



EXHIBIT E (cont.)
CALCULATION OF ADJUSTED NON-GAAP REVENUES
AND ADJUSTED NON-GAAP OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
(a) Represents the portion of the $292 of contract disputes accruals related
to the contract with the government of Portugal in the Combat Systems group
from Exhibit C that was recorded as a reduction of revenue.
(b) Represents intangible asset impairment of $191 in the Aerospace group from
Exhibit C.
(c) Represents contract disputes accruals of $292, restructuring-related
charges of $98 and inventory-related charges of $15 in the Combat Systems
group from Exhibit C.
(d) Represents goodwill impairment of $1,994, intangible asset impairment of
$110 and inventory-related charges of $38 in the Information Systems and
Technology group from Exhibit C.



EXHIBIT F
REVENUES AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
                           Twelve Months                 Variance
                           2011           2012           $            %
Revenues:
Aerospace                  $          $           $       15.2 %
                           5,998         6,912         914
Combat Systems             8,827          7,992          (835)        (9.5)%
Marine Systems             6,631          6,592          (39)         (0.6)%
Information Systems and    11,221         10,017         (1,204)      (10.7)%
Technology
Total                      $           $   31,513  $          (3.6)%
                           32,677                       (1,164)
Operating earnings
(loss):
Aerospace                  $        $         $       17.7 %
                           729            858           129
Combat Systems             1,283          663            (620)        (48.3)%
Marine Systems             691            750            59           8.5 %
Information Systems and    1,200          (1,369)        (2,569)      (214.1)%
Technology
Corporate                  (77)           (69)           8            10.4 %
Total                      $          $         $          (78.2)%
                           3,826         833           (2,993)
Operating margins:
Aerospace                  12.2 %         12.4 %
Combat Systems             14.5 %         8.3 %
Marine Systems             10.4 %         11.4 %
Information Systems and    10.7 %         (13.7)%
Technology
Total                      11.7 %         2.6 %



EXHIBIT G
CALCULATION OF ADJUSTED NON-GAAP REVENUES
AND ADJUSTED NON-GAAP OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
                          GAAP                                   Adjusted
                          Twelve Months                          Non-GAAP
                          2012             Non-GAAP              Twelve Months
                          (from Exhibit    Adjustments           2012
                          F)
Revenues:
Aerospace                 $          $              $      
                             6,912         -                 6,912
Combat Systems            7,992            169              (a)  8,161
Marine Systems            6,592            -                     6,592
Information Systems       10,017           -                     10,017
and Technology
Total                     $          $              $      
                            31,513        169                  31,682
Operating earnings
(loss):
Aerospace                 $          $         (b)  $      
                              858      191                   1,049
Combat Systems            663              405              (c)  1,068
Marine Systems            750              -                     750
Information Systems       (1,369)          2,167            (d)  798
and Technology
Corporate                 (69)             -                     (69)
Total                     $          $              $      
                              833     2,763                    3,596
Operating margins:
Aerospace                 12.4 %                                 15.2 %
Combat Systems            8.3 %                                  13.1 %
Marine Systems            11.4 %                                 11.4 %
Information Systems       (13.7)%                                8.0 %
and Technology
Total                     2.6 %                                  11.4 %
This Exhibit includes the following financial measures which are not
calculated in accordance with generally accepted accounting principles (GAAP)
in the United States – adjusted revenues and operating earnings by segment.
Each of these calculations excludes the impact of certain items and therefore,
is considered a non-GAAP financial measure. The items excluded were
considered by management to be unusual and not reflective of the underlying
performance of the company. The GAAP financial measure most directly
comparable to adjusted revenues by segment is revenues by segment and the GAAP
financial measure most directly comparable to adjusted operating earnings by
segment is operating earnings by segment. Reconciliations of each of these
non-GAAP financial measures to the corresponding GAAP financial measure are
included above. Management uses these measures to evaluate the operating
performance of the company and analyze trends. For this reason, management
believes the measures are useful supplemental information for investors to
understand the company's operating results. Notes describing each non-GAAP
adjustment are on the following page.

EXHIBIT G (cont.)
CALCULATION OF ADJUSTED NON-GAAP REVENUES
AND ADJUSTED NON-GAAP OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
(a) Represents the portion of the $292 of contract disputes accruals related
to the contract with the government of Portugal in the Combat Systems group
from Exhibit C that was recorded as a reduction of revenue.
(b) Represents intangible asset impairment of $191 in the Aerospace group from
Exhibit C.
(c) Represents contract disputes accruals of $292, restructuring-related
charges of $98 and inventory-related charges of $15 in the Combat Systems
group from Exhibit C.
(d) Represents goodwill impairment of $1,994, intangible asset impairment of
$110 and inventory-related charges of $63 in the Information Systems and
Technology group from Exhibit C.



EXHIBIT H
PRELIMINARY CONSOLIDATED BALANCE SHEETS
DOLLARS IN MILLIONS
                                                      (Unaudited)
                                 December 31, 2011    December 31, 2012
ASSETS
Current assets:
Cash and equivalents             $           $           
                                    2,649          3,296
Accounts receivable              4,429                4,204
Contracts in process             5,168                4,964
Inventories                      2,310                2,776
Other current assets             812                  504
Total current assets             15,368               15,744
Noncurrent assets:
Property, plant and equipment,   3,284                3,403
net
Intangible assets, net           1,813                1,383
Goodwill                         13,576               12,048
Other assets                     842                  1,731
Total noncurrent assets          19,515               18,565
Total assets                     $           $          
                                   34,883           34,309
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Short-term debt and current      $           $           
portion of long-term debt             23            1
Accounts payable                 2,895                2,469
Customer advances and deposits   5,011                6,042
Other current liabilities        3,216                3,108
Total current liabilities        11,145               11,620
Noncurrent liabilities:
Long-term debt                   3,907                3,908
Other liabilities                6,599                7,391
Total noncurrent liabilities     10,506               11,299
Shareholders' equity:
Common stock                     482                  482
Surplus                          1,888                1,988
Retained earnings                18,917               17,860
Treasury stock                   (5,743)              (6,165)
Accumulated other               (2,312)              (2,775)
comprehensive loss
Total shareholders' equity       13,232               11,390
Total liabilities and            $           $          
shareholders' equity               34,883           34,309



EXHIBIT I
PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
DOLLARS IN MILLIONS
                                         Twelve Months Ended
Cash flows from operating activities:    December 31, 2011  December 31, 2012
Net earnings (loss)                      $          $        
                                         2,526                  (332)
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation of property, plant and      354                386
equipment
Amortization of intangible assets        238                234
Goodwill and intangible asset            111                2,295
impairments
Stock-based compensation expense         128                114
Excess tax benefit from stock-based      (24)               (29)
compensation
Deferred income tax (benefit) provision  14                 (148)
Discontinued operations, net of tax      26                 -
(Increase) decrease in assets, net of
effects of business acquisitions:
Accounts receivable                      (397)              240
Contracts in process                     (62)               149
Inventories                              (186)              (478)
Increase (decrease) in liabilities, net
of effects of business acquisitions:
Accounts payable                         17                 (441)
Customer advances and deposits           629                730
Other current liabilities                86                 22
Other, net                               (222)              (55)
Net cash provided by operating           3,238              2,687
activities
Cash flows from investing activities:
Capital expenditures                     (458)              (450)
Business acquisitions, net of cash       (1,560)            (444)
acquired
Purchases of held-to-maturity            (459)              (260)
securities
Maturities of held-to-maturity           441                224
securities
Sales of held-to-maturity securities     -                  211
Purchases of available-for-sale          (373)              (252)
securities
Sales of available-for-sale securities   107                186
Maturities of available-for-sale         235                110
securities
Other, net                               93                 19
Net cash used by investing activities    (1,974)            (656)
Cash flows from financing activities:
Repayment of fixed-rate notes            (750)              (2,400)
Proceeds from fixed-rate notes          1,497              2,382
Dividends paid                           (673)              (893)
Purchases of common stock                (1,468)            (602)
Proceeds from option exercises           198                146
Other, net                               (5)                (15)
Net cash used by financing activities    (1,201)            (1,382)
Net cash used by discontinued            (27)               (2)
operations
Net increase in cash and equivalents     36                 647
Cash and equivalents at beginning of     2,613              2,649
period
Cash and equivalents at end of period    $          $        
                                         2,649                 3,296



EXHIBIT J
PRELIMINARY FINANCIAL INFORMATION - (UNAUDITED)
DOLLARS IN MILLIONS EXCEPT PER SHARE AND EMPLOYEE AMOUNTS
                     Fourth                       Fourth
                     Quarter                      Quarter
                     2011                         2012
Other Financial
Information:
Return on equity     18.8%                        (2.5)%
(a)
Debt-to-equity (b)   29.7%                        34.3%
Debt-to-capital (c)  22.9%                        25.6%
Book value per       $                       $     
share (d)                                        
                     37.12                        32.20
                     $                       $     
Total taxes paid                                 
                       279                         350
Company-sponsored    $                       $     
researchand                                     
development (e)        154                         113
Employment          95,100                       92,200
Sales per employee   $                       $     
(f)                                               
                     357,700                     337,300
Shares outstanding   356,437,880                  353,674,248
Non-GAAP Financial
Measures:
Free cash flow from  Quarter    Year-to-date  Quarter    Year-to-date
operations:
Net cash provided    $       $         $       $      
by operating                  3,238              2,687
activities           2,022                          780
Capital              (185)        (458)           (164)        (450)
expenditures
Free cash flow from  $       $         $       $      
operations (g)                2,780              2,237
                     1,837                          616
Return on invested
capital:
Earnings from                     $                      $      
continuing                          2,552                    (332)
operations
After-tax interest               106                          109
expense
After-tax
amortization                      163                          152
expense
Net operating                     2,821                        (71)
profit after taxes
Average debt and                  17,123                       17,203
equity
Return on invested                16.5%                        (0.4)%
capital (h)
Notes describing the calculation of other financial information and a
reconciliation of non-GAAP financial measures are on the following page.



EXHIBIT J (cont.)
PRELIMINARY FINANCIAL INFORMATION - (UNAUDITED)
DOLLARS IN MILLIONS EXCEPT PER SHARE AND EMPLOYEE AMOUNTS
(a) Return on equity is calculated by dividing earnings from continuing
operations for the latest 12-month period by our average equity during that
period.
(b) Debt-to-equity ratio is calculated as total debt divided by total equity
as of the end of the period.
(c) 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.
(d) Book value per share is calculated as total equity divided by total
outstanding shares as of the end of the period.
(e) Includes independent research and development and bid and proposal costs
and Gulfstream product-development costs.
(f) Sales per employee is calculated by dividing revenues for the latest
12-month period by our average number of employees during that period.
(g) 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.
(h) We believe return on invested capital (ROIC) is a measurement that is
useful to investors because it reflects our ability to generate returns from
the capital we have deployed in our operations. We use ROIC to evaluate
investment decisions and as a performance measure in evaluating management.
We define ROIC as net operating profit after taxes for the latest 12-month
period divided by the sum of the average debt and shareholders' equity for the
same period. Net operating profit after taxes is defined as earnings from
continuing operations plus after-tax interest and amortization expense. The
most directly comparable GAAP measure to net operating profit after taxes is
earnings from continuing operations. Fourth quarter of 2012 after-tax interest
expense and amortization expense is calculated using the statutory tax rate of
35 percent.



EXHIBIT K
BACKLOG - (UNAUDITED)
DOLLARS IN MILLIONS
                                                     Estimated
                                         Total       Potential     Total
                                                                   Potential
Fourth Quarter   Funded    Unfunded    Backlog    Contract      Contract
2012                                                 Value*        Value
Aerospace        $        $        $        $        $    
                 15,458       209    15,667         -      15,667
Combat Systems   7,442      1,298        8,740       2,794         11,534
Marine Systems   13,495     3,606        17,101      3,047         20,148
Information
Systems and      8,130      1,643        9,773       21,009        30,782
Technology
Total            $         $        $         $        $    
                 44,525    6,756       51,281     26,850         78,131
Third Quarter
2012
Aerospace        $        $        $        $        $    
                 15,827       215    16,042          -    16,042
Combat Systems   8,259      1,101        9,360       2,627         11,987
Marine Systems   10,909     5,036        15,945      1,382         17,327
Information
Systems and      8,224      1,887        10,111      22,052        32,163
Technology
Total            $         $        $         $        $    
                 43,219    8,239       51,458     26,061         77,519
Fourth Quarter
2011
Aerospace        $        $        $        $        $    
                 17,618       289    17,907          -    17,907
Combat Systems   10,283     1,137        11,420      3,453         14,873
Marine Systems   9,364      9,140        18,504      2,163         20,667
Information
Systems and      7,434      2,145        9,579       22,384        31,963
Technology
Total            $         $         $         $        $    
                 44,699    12,711      57,410     28,000         85,410
* The estimated potential contract value represents management's estimate of
our future contract value under unfunded indefinite delivery, indefinite
quantity (IDIQ) contracts and unexercised options associated with existing
firm contracts, including options to purchase new aircraft and long-term
agreements with fleet customers, as applicable. Because the value in the
unfunded IDIQ arrangements is subject to the customer's future exercise of an
indeterminate quantity of orders, we recognize these contracts in backlog
only when they are funded. Unexercised options are recognized in backlog
when the customer exercises the option and establishes a firm order.



EXHIBIT L
FOURTH QUARTER 2012 SIGNIFICANT ORDERS - (UNAUDITED)
DOLLARS IN MILLIONS

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

Combat Systems

  o$355 from the U.S. Army under the Stryker wheeled combat vehicle program
    for contractor logistics support and for the production of 62 Nuclear,
    Biological, Chemical Reconnaissance vehicles.
  o$135 to upgrade 66 additional Light Armored Vehicles (LAVs) for the
    Canadian government.
  o$135 from the Army for continued technical support on the Abrams main
    battle tank program.
  o$135 for the production of Saudi M1A2 Abrams tanks for the Kingdom of
    Saudi Arabia.
  o$85 from the U.K. Ministry of Defence for the production of 51 Foxhound
    vehicles.
  o$65 from the Columbian government for the production of 24 LAVs.

Marine Systems

  o$1.8 billion from the U.S. Navy for research and development work for a
    new class of ballistic-missile submarines under the Ohio Replacement
    Program.
  o$335 from TOTE, Inc., for the construction of two liquefied natural gas
    (LNG)-powered containerships, with an option for three additional ships.
  o$310 from the Navy to purchase long-lead materials for three
    Virginia-class submarines.
  o$125 from the Navy to perform maintenance and modernization work on the
    USS Essex and the USS Toledo.
  o$65 from the Navy to provide ongoing planning yard services for the DDG 51
    Arleigh Burke-class destroyer and the FFG 7 Oliver Hazard Perry-class
    frigate programs.

Information Systems and Technology

  o$250 from the Army for production of 3,726 Handheld, Manpack and Small
    Form-Fit (HMS) radios and accessory kits.
  o$130 from the Army under the Warfighter Information Network-Tactical
    (WIN-T) program for Increment 2 equipment production and training.
  o$125 from the Navy for production and support of the U.S. and U.K. Trident
    II submarine weapons systems.
  o$70 from the U.S. Department of State to provide supply chain management
    services.
  o$65 for commercial wireless network systems and support.



EXHIBIT M
AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED)
                                          Fourth Quarter  Twelve Months
                                          2011     2012   2011    2012
Gulfstream Green Deliveries (units):
Large aircraft                            30       26     90      104
Mid-size aircraft                         5        7      17      17
Total                                     35       33     107     121
Gulfstream Outfitted Deliveries (units):
Large aircraft                            20       31     78      83
Mid-size aircraft                         7        6      21      11
Total                                     27       37     99      94
Pre-owned Deliveries (units):             1        3      5       4



SOURCE General Dynamics

Website: http://www.generaldynamics.com
Contact: Media: Rob Doolittle, General Dynamics, +1-703-876-3199, or
Investors: Amy Gilliland, General Dynamics, +1-703-876-3748