FALLS CHURCH, Va. – General Dynamics (NYSE: GD) today reported first-quarter 2010 earnings from continuing operations of $599 million, or $1.54 per share on a fully diluted basis, compared with 2009 first-quarter earnings from continuing operations of $593 million, or $1.54 per share fully diluted. Revenues in the quarter were $7.75 billion. Net earnings for the first quarter of 2010 were $597 million, compared to $590 million in the first quarter of 2009.

Margins

Company-wide operating margins for the first quarter of 2010 were 11.8 percent, compared to 11 percent in the year-ago period. Aerospace and Combat Systems margin growth was especially strong, increasing by 240 basis points and 180 basis points, respectively.

Backlog

Funded backlog at the end of first-quarter 2010 grew to $47.4 billion, a 3 percent increase over the end of the fourth quarter 2009. Significant orders received include contracts valued at $845 million for construction of two additional T-AKE combat-logistics ships and $115 million for construction materials for an additional DDG-51 destroyer for the U.S. Navy, and $515 million for Stryker vehicle production and support for the U.S. Army. The Information Systems and Technology group was awarded a contract valued at $340 million to initiate production of the second increment of Army’s next-generation on-the-move tactical battlefield network, called WIN-T. The Aerospace group saw strong order activity in the quarter, particularly among large-cabin Gulfstream aircraft.

The company’s total backlog at the end of the first quarter 2010 was $63.9 billion, and the estimated potential contract value was an additional $17 billion, which represents management’s estimate of value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options.

Cash

Net cash provided by operating activities in the quarter totaled $210 million. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $150 million for the period.

“General Dynamics delivered a strong operational performance in the first quarter of 2010,” said Jay L. Johnson, president and chief executive officer. “Operating margins across the company were steady or improving, demonstrating the benefits of our commitment to continuous improvement, and we saw good order activity across the corporation. On balance, General Dynamics delivered solid results, giving us a good first step down the path toward meeting our overall performance objectives for the year,” Johnson said.

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 91,200 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.

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 first-quarter securities analyst conference call, scheduled for 11:30 a.m. Eastern Time on Wednesday, April 28, 2010

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. April 28 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 23755253. The phone replay will be available from 1:30 p.m. April 28 until midnight May 5, 2010.

Combat Systems

• Approximately $515 from the U.S. Army for vehicle production, contractor logistics support and battle-damage assessment under the Stryker wheeled armored vehicle program.

• Approximately $300 from the U.S. Marine Corps under the mine-resistant, ambush-protected (MRAP) vehicle program to provide 250 RG-31 vehicles, suspension kits and spare parts.

• Approximately $100 from the Army to provide improved ribbon bridge (IRB) bays and accessories.

Marine Systems

• Approximately $845 from the U.S. Navy for the construction of the 13th and 14th T-AKE combat-logistics ships, scheduled for delivery in 2012.

• Approximately $115 from the Navy for long-lead material for the construction of an additional DDG-51 Arleigh Burke-class destroyer.

• Approximately $65 from the Navy to continue to provide Advance Nuclear Plant Studies (ANPS) in support of hull, mechanical, and electrical (HM&E) systems. The award has a maximum potential value of $185.

Information Systems and Technology

• Approximately $390 from the Army under the Warfighter Information Network-Tactical (WIN-T) program for Increment 1 satellite communication equipment and low rate initial production of Increment 2 equipment.

• Approximately $165 of orders for ruggedized computing and networking equipment under the Common Hardware/Software III (CHS-3) program, bringing the total contract value to more than $2.1 billion.

• Approximately $110 for the Joint Tactical Radio System (JTRS) Handheld, Manpack and Small Form-Fit (HMS) radio program, bringing the total contract value to approximately $685.

• Approximately $25 from the Army for Constructive Training Systems support. This five-year IDIQ contract has a maximum potential value of approximately $390.

• Approximately $30 from the Army to support the Medical Communications for Combat Casualty Care (MC4) Product Management Office. The contract has a maximum potential value of approximately $150 over five years.