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                               UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                                 FORM 10-K
(MARK ONE)
   [X]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
                                     OR
   [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

                         COMMISSION FILE NO. 1-8461

                      GULFSTREAM AEROSPACE CORPORATION
              DELAWARE                              13-3554834
   (State or other jurisdiction of               (I.R.S. Employer
   incorporation or organization)               Identification No.)
                               P. O. BOX 2206
                            500 GULFSTREAM ROAD
                             SAVANNAH, GEORGIA
                                 31402-2206
                               (912) 965-3000

        Securities registered pursuant to Section 12(b) of the Act:

                                               Name of each exchange
         Title of each class                    on which registered
         -------------------                    -------------------
    COMMON STOCK, $.01 PAR VALUE              NEW YORK STOCK EXCHANGE

        Securities registered pursuant to Section 12(g) of the Act:

                                    NONE

     Indicate  by check  mark  whether  the  registrant  (1) has  filed all
reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934 during the  preceding  12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has
been  subject to such filing  requirements  for the past 90 days.  Yes X No

     Indicate by check mark if disclosure of delinquent  filers pursuant to
Item  405 of  Regulation  S-K is not  contained  herein,  and  will  not be
contained,  to the best of registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in Part III of this Form
10-K or any  amendment to this Form 10-K. X

     The  aggregate  market  value of the  shares of common  stock  held by
non-affiliates of the registrant (based on the closing price for the common
stock on the New York Stock  Exchange on March 1, 1999 was  $2,605,156,713.
For  purposes  of  this  computation,  shares  held  by  affiliates  and by
directors of the registrant  have been  excluded.  Such exclusion of shares
held by  directors  is not  intended,  nor  shall  it be  deemed,  to be an
admission that such persons are affiliates of the registrant.

     As of March 1, 1999, there were outstanding  72,765,418  shares of the
registrant's  common  stock,  par value  $.01,  which is the only  class of
common stock of the registrant.

                    DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the  Registrant's  Annual Report to  Stockholders  for the
fiscal  year  ended  December  31,  1998 (the  "1998  Annual  Report")  are
incorporated by reference in Parts II and IV of this Form 10-K. Portions of
the  Registrant's  definitive  Proxy  Statement  for the Annual  Meeting of
Stockholders  to be held on May 19, 1999 (the "1999 Proxy  Statement")  are
incorporated  by  reference  in Part III of this  Form  10-K to the  extent
stated herein. Except with respect to information specifically incorporated
by  reference  in this Form 10-K,  neither the Annual  Report nor the Proxy
Statement is deemed to be filed as a part hereof.

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<PAGE>
                                   PART I


ITEM 1.  BUSINESS


GENERAL

     Gulfstream   Aerospace   Corporation  (the  "Company")  is  recognized
worldwide as a leading  designer,  developer,  manufacturer and marketer of
advanced  intercontinental  business aircraft. Since 1966, when the Company
created the large cabin business jet category with the  introduction of the
Gulfstream  II, the  Company  has  dominated  this  segment of the  market,
capturing a cumulative  market share of approximately  60%. The Company has
manufactured  and  sold  over  1,000  large  business  aircraft  since  the
introduction of the Gulfstream product line in 1958.

     The Company  operates  principally  in three  segments:  New Aircraft,
Aircraft  Services  and  Pre-owned  Aircraft.   Within  New  Aircraft,  the
Company's   current  product   offerings  are  the  Gulfstream  IV-SP,  the
Gulfstream  V,  Gulfstream  Shares(R)  (fractional  ownership  interest  in
Gulfstream  IV-SPs and Gulfstream  Vs), and Gulfstream  LeaseSM.  Also, the
Company's  financial  services  subsidiary,  Gulfstream  Financial Services
Corporation,  through  its  private  label  relationship  with  third-party
aircraft  financing  providers,  offers customized  products to finance the
worldwide  sale of  Gulfstream  aircraft.  Within  it's  Aircraft  Services
segment, the Company offers aftermarket maintenance services,  spare parts,
engine  overhaul  and  auxiliary  power unit  service and overhaul for both
Gulfstream and other business  aircraft.  The Company's  Pre-owned Aircraft
segment markets and sells pre-owned  Gulfstream aircraft and other business
aircraft, acquired in trade, to a worldwide market.

     On  October  16,  1996,  the  Company  sold  4,559,100  shares  of the
Company's Common Stock,  and certain  partnerships  (the "Forstmann  Little
Partnerships")  formed by Forstmann Little & Co.  ("Forstmann  Little") and
certain  option  holders of the  Company's  common stock,  sold  37,940,900
shares of the Company's  common stock,  in an initial public  offering at a
price of $24.00 per share. In May 1998, the Forstmann  Little  Partnerships
and  certain  stockholders  and  option  holders  completed  the sale of 18
million shares of common stock in a secondary offering at a price of $43.00
per share.  As of March 1, 1999, the Forstmann  Little  Partnerships  owned
approximately  22.8% of the  outstanding  shares  of the  Company's  common
stock.

ACQUISITION OF K-C AVIATION

     On August 19,  1998,  the Company  completed  the  acquisition  of K-C
Aviation, Inc. for approximately $250 million, including acquisition costs.
The  acquisition  is a key part of  Gulfstream's  growth  strategy  and has
allowed  the  Company  to  obtain  a  skilled  workforce,  as  well  as add
additional  capacity  to  accelerate  its  aircraft  completions  business,
diversify  and  grow its  aircraft  maintenance  and  parts  business,  and
strongly establish the Gulfstream name in the aircraft engine and auxiliary
power unit service market.

     K-C Aviation was a leading provider of business  aviation services and
the largest  independent  completion  center for business aircraft in North
America.  The  acquisition  has  provided the Company with the capacity for
approximately 21 additional aircraft interior  completions.  In addition to
custom aircraft interiors,  K-C Aviation was the second largest independent
aircraft  engine  service  center in the  United  States  and also  offered
maintenance services,  spare parts, auxiliary power unit service,  avionics
retrofit, non-destructive testing and component overhaul.

NEW AIRCRAFT

     The Company's New Aircraft segment  operates in the business  aircraft
market which is  generally  divided  into four  segments -- light,  medium,
large and ultra-long range.  These market segments are defined on the basis
of range,  cabin volume and gross operating  weight.  The Company sells new
aircraft on a completed basis,  including  exterior paint,  installation of
customer selected interiors and optional avionics.  The Company's principal
product offerings are discussed below:

   GULFSTREAM V

     The  Company's  newest  aircraft  product is the  Gulfstream  V, which
serves the ultra-long  range market.  The Company believes the Gulfstream V
provides the longest range, fastest cruising speed and most technologically
advanced  avionics of any ultra-long range business jet aircraft  currently
in operation.  The Gulfstream V received final type  certification from the
Federal Aviation  Administration  ("FAA") on April 11, 1997.  Deliveries of
the first  outfitted  aircraft to  customers  began in 1997.  To date,  the
Gulfstream  V has set 55  world  and  national  records.  The  Company  had
received a total of 121 orders, 136 including options, for the Gulfstream V
and had  manufactured  and  delivered 61  Gulfstream  Vs through  1998.  As
confirmation   of  the   product's   innovative   design  and   outstanding
performance,  the  Gulfstream V received the 1997 Robert J. Collier  Trophy
for  aeronautical  achievement  and was  selected by the United  States Air
Force to provide  intercontinental  transportation  for  senior  government
officials and dignitaries.

     The  Gulfstream V has a maximum  operating  speed of Mach .885. It can
accommodate  up to 19  passengers  and has a range of up to 6,500  nautical
miles.  These  capabilities  permit  routine   intercontinental  travel  at
cruising speeds  comparable to commercial  airline cruising  speeds,  while
operating  efficiently  at altitudes  as high as 51,000 feet,  flying above
most commercial  airline traffic and adverse  weather.  The Gulfstream V is
versatile enough to fly long-range  missions,  such as New York to Tokyo in
approximately 14 hours, as well as high-speed missions, such as New York to
London, in approximately six hours.

     The  Gulfstream  V is  equipped  with  two  14,750-pound-thrust  BR710
engines built by BMW Rolls-Royce GmbH, which were specifically designed for
use on the Gulfstream V and for which  Gulfstream was the launch  customer.
The sound levels of the  Gulfstream  V's engines are well below FAA Stage 3
and  ICAO/Chapter  3  regulatory  requirements  (the FAA's and ICAO's  most
stringent  noise  abatement  regulations).  These  engines are  designed to
operate  7,000  flight  hours  between  major  overhauls  and,  due to fuel
efficiency,  operate  at a lower cost than the  engines  of the  Gulfstream
IV-SP.

     The aircraft  utilizes dual cabin  pressurization  systems to minimize
cabin altitude.  At its cruising  altitude of 51,000 feet, the Gulfstream V
cabin  altitude is only 6,000 feet,  the lowest  cabin  altitude of any jet
aircraft in its class. This low cabin altitude,  together with a 100% fresh
air  ventilation   system   (instead  of  a   recirculating   air  system),
significantly reduces passenger fatigue.

     The advanced  flight  systems on the  Gulfstream  V include  automatic
throttle  systems,  an integrated  performance  computer system,  an engine
information  crew advisory  system,  a dual global  positioning  system and
independent  inertial  reference  systems.  These systems provide  accurate
flight  planning,  as well as  automatic  control,  throughout  the planned
flight profile.  For maximum safety, a Traffic Collision  Avoidance System,
turbulence and wind shear-detecting  radar and an Enhanced Ground Proximity
Warning  System are also  standard.  An  additional  safety  feature of the
Gulfstream V is an optional  heads-up  display  ("HUD").  The HUD optimizes
pilot performance and improves flight safety,  especially in low visibility
conditions,  by reducing the pilot's  dependence on the  instrument  panel,
thus allowing the pilot to direct his vision outside the cockpit.

     In order to reduce the business  risk  associated  with the design and
manufacture of the Gulfstream V, the Company  entered into revenue  sharing
agreements  with  Northrop  Grumman  Corporation  for the wing  and  Fokker
Aviation B.V. (a subsidiary of Stork B.V.) for the  empennage.  Under these
agreements,  the revenue  share  partner is  responsible  for the  detailed
design,  tooling and  manufacture  of the  systems in exchange  for a fixed
percentage of revenues of each Gulfstream V sold (which the Company records
as a cost of goods sold upon an aircraft  delivery).  Thus,  in addition to
financing the development, manufacture and delivery of its components, each
manufacturer  shares in the risk of fluctuations in demand and market price
of the Gulfstream V.

     The  list  price  for  a  completed  Gulfstream  V is  expected  to be
approximately $39.5 million depending upon selected options, escalation and
availability.  The Company provides a purchaser of a Gulfstream V with a 20
year or 20,000 flight hour warranty (whichever comes first) on the airframe
structure and a six-year  warranty on components  (other than the engines).
BMW  Rolls-Royce  GmbH  provides a direct  five-year  or 2,500  flight hour
warranty  (whichever  comes  first)  on  the  engines  to  purchasers  of a
Gulfstream V.

   GULFSTREAM IV-SP

     The New Aircraft  segment's  other principal  aircraft  product is the
Gulfstream IV-SP,  serving the large cabin business jet market. The Company
believes that the  Gulfstream  IV-SP offers the best  combination  of large
cabin size, long range,  fast cruising speed and  technologically  advanced
avionics of any large  business  jet  aircraft in its market  segment.  The
Gulfstream IV-SP is an enhanced version of the Gulfstream IV. In total, the
Company has  manufactured  and sold 359  Gulfstream  IV/IV-SPs from 1985 to
1998, making it the best selling large cabin business jet in the history of
business aviation.

     The Gulfstream IV-SP can accommodate up to 19 passengers,  has a range
of up to 4,220 nautical miles and a cruising speed of up to Mach .85. These
capabilities  permit  routine  intercontinental  travel at cruising  speeds
comparable  to  commercial   airline  cruising   speeds,   while  operating
efficiently  at  altitudes  as high  as  45,000  feet,  flying  above  most
commercial airline traffic and adverse weather.  The Gulfstream IV/IV-SP is
the holder of over 70 distance,  altitude and speed records for aircraft of
its  class  including  east-bound  and  west-bound  around-the-world  speed
records  (36 hours and 8 minutes  (east-bound)  and 45 hours and 25 minutes
(west-bound)).

     The  Gulfstream  IV-SP is equipped  with two  Rolls-Royce  Tay fan jet
engines which have commercial  airline-proven  reliability and performance.
The Tay engines can operate  8,000 flight hours  between  major  overhauls,
producing  aircraft  operating  costs  for the  Gulfstream  IV-SP  that the
Company believes are comparable to those of its competitors.  Additionally,
the Gulfstream IV-SP, together with the Gulfstream IV and the Gulfstream V,
combine an electronic  "all glass  cockpit" and an advanced  avionics suite
consisting of a fully integrated  computerized  flight  management  system,
including a performance computer and automatic throttle systems.

     The list price for a Gulfstream IV-SP, is expected to be approximately
$29.5 million depending upon selected options, escalation and availability.
The Company  provides a purchaser of a  Gulfstream  IV-SP with a 15 year or
15,000  flight  hour  warranty  (whichever  comes  first)  on the  airframe
structure  and a 30 month  warranty  on most other  parts  (other  than the
engines).  Rolls-Royce  provides  a  direct  5 year or  2,500  flight  hour
warranty  (whichever  comes  first) on the engines to  purchasers  of a new
Gulfstream IV-SP.

   GULFSTREAM SHARES(R)

     The Company has offered customers  fractional  ownership in Gulfstream
IV-SP  aircraft  through a program  established  by the  Company in 1995 in
conjunction  with  Executive  Jet  ("EJ").  In  1998,  the  Company  and EJ
announced the  expansion of that program to include  Gulfstream V aircraft.
This program is designed to provide customers with the benefits of aircraft
ownership  at a  substantially  lower cost than the  purchase  of an entire
aircraft. The program significantly expands the market for Gulfstream IV-SP
and Gulfstream V aircraft to include those  customers  whose aircraft usage
patterns  or  financial  resources  do not  justify  or permit  the  direct
purchase of a  Gulfstream  aircraft.  The  Gulfstream  Shares  program,  by
teaming  Gulfstream  and EJ, has  brought  the  Gulfstream  name,  quality,
reputation  and  marketing  infrastructure  together  with the  operational
experience  and  reputation  of the founder and leader in the  business jet
aircraft fractional ownership market.

     The Gulfstream Shares program is marketed by the Company. EJ purchases
Gulfstream  IV-SPs  and  Gulfstream  Vs from the  Company  and  then  sells
fractional  ownership interests in such aircraft generally in one-eighth or
one-quarter  increments for which the customer receives 100 or 200 hours of
flying time per year,  respectively,  with a guaranteed  response  time for
pick-up of ten hours or six hours,  respectively.  As of December 31, 1998,
the Company had  contracted  to deliver to EJ 44  Gulfstream  IV-SPs and 12
Gulfstream  Vs in  connection  with the North  American  Gulfstream  Shares
program,  plus  options  for  additional  12  Gulfstream  Vs. Of these,  18
Gulfstream  IV-SPs are in service,  and the remaining 50 Gulfstream  IV-SPs
and  Gulfstream Vs are scheduled for delivery  through 2007.  The customers
enter  into  management  and  operating  contracts  with EJ  which  provide
guaranteed  services and operating costs. EJ's agreement with its customers
provides  for a term of five years with  certain  termination  and  renewal
rights.  There is no recourse to the Company under the  provisions of these
agreements or under the Company's contractual agreement with EJ.

     The  Gulfstream  aircraft  are  maintained  by  the  Company  under  a
maintenance  agreement with EJ.  Further,  under a lease  arrangement,  the
Company  provides EJ up to 3 pre-owned  Gulfstream  IV aircraft  (which are
included in the Company's  pre-owned aircraft inventory) which make up EJ's
core fleet and are used to  facilitate  EJ's meeting its response  time and
service  guarantees.  In 1998, EJ exercised an option to purchase three new
aircraft  to  replace  these  core-fleet   aircraft.   The  Company  has  a
proprietary  agreement  with EJ relating to the  marketing  activities  and
provision  of the core fleet,  pursuant to which the Company is  reimbursed
for  certain  marketing  expenses  and earns  royalty  fees on  certain  EJ
revenues.  The Company's marketing services agreement for Gulfstream Shares
has a term of five years to 2003 and can be extended by mutual agreement of
the parties.

     In 1998, the Company expanded the Shares Program into the Middle East,
with a 12  aircraft  $335  million  contract  with a group of  Middle  East
investors. The first Middle East Shares aircraft was delivered green in the
third quarter of 1998 and will enter service in the second quarter of 1999.

   SPECIAL MISSION AIRCRAFT

     The Company has designed and manufactured  several  derivatives of the
Gulfstream  V and  Gulfstream  IV-SP which are  utilized  for  military and
government  Special Mission  applications.  These  derivatives  include the
cargo door equipped  Gulfstream IV/IV-SP aircraft in service with the U. S.
Navy and  Japanese  Air  Force  which  are  designated  the  C-20G and U-4,
respectively,  and the long  established  U. S. Air Force C-20H Special Air
Mission  Gulfstream IV-SPs.  Additional Special Mission  derivatives are in
military and government use throughout the world in diverse roles including
signal   intelligence,   reconnaissance,   medical  evacuation,   hurricane
tracking, airways flight inspection and priority transport.

     In 1997, a Gulfstream V derivative was selected by the U. S. Air Force
for its VCX high  priority  transport  program.  With the 1998  order for a
Gulfstream V for the U. S. Army and the additional C-37 option exercised in
February  1999, the program  currently  includes four firm orders and three
options  for  Gulfstream  V C-37A  aircraft.  The  C-37A  aircraft  will be
operated  by the U. S. Air Force  Special  Air  Mission  Wing and the U. S.
Army.

     There are  currently  49  Gulfstream  IV/IV-SP  and four  Gulfstream V
aircraft  in  military  or  government  service  in 34  countries,  with an
additional  13  Special  Mission  aircraft  to be  delivered.  The  Company
believes  the  Special  Mission  derivatives  of the  Gulfstream  IV-SP and
Gulfstream V will  continue to be important  products for meeting the needs
of government  operators,  military  organizations,  civil  authorities and
intelligence gathering agencies.

   GULFSTREAM LEASE

     In 1998,  Gulfstream announced Gulfstream Lease, a venture between the
Company and GATX Capital. The venture, Gulfstream GATX Leasing Company, LLC
("GGLC"),  has signed a contract to purchase six aircraft (five  Gulfstream
Vs and one  Gulfstream  IV-SP) and options to purchase an additional  three
Gulfstream  Vs and  three  Gulfstream  IV-SPs.  GGLC is  owned  85% by GATX
Capital  and 15% by  Gulfstream.  This  program is  expected  to provide an
important vehicle for new Gulfstream  aircraft sales, by offering customers
an  additional  solution for their  interim  aircraft  operating  needs and
introducing  customers with less initial  capital to  Gulfstream's  product
offerings.  Gulfstream  will  market  the leases  and  provide  maintenance
services, while GATX Capital will provide account management services.

   GULFSTREAM CHARTER AND AIRCRAFT MANAGEMENT SERVICES

     The Company has developed  Gulfstream  Charter Services to provide its
customers with easy access to the Gulfstream  charter  market.  The program
helps customers meet their interim and  supplemental  lift  requirements by
connecting  potential Gulfstream charter customers with operators through a
private label  relationship with a charter services  manager.  In addition,
Gulfstream,  in conjunction with Chrysler Pentastar Aviation,  Inc., offers
Gulfstream  Management Services, a program for the management of Gulfstream
aircraft.  Through  this  service,   individual  and  corporate  owners  of
Gulfstream   aircraft  can  receive   aircrew,   dispatch  and  maintenance
management services.

   AIRCRAFT FINANCING

     The Company,  through its  subsidiary  Gulfstream  Financial  Services
Corporation   ("GFSC"),   provides  customers  with  access  to  customized
financial  products to support the  worldwide  sale of  Gulfstream  new and
pre-owned aircraft.  GFSC representatives  typically consult with potential
customers to develop the most effective  means of financing the purchase of
a Gulfstream aircraft for each such customer's specialized needs.

     The financial products (including capital and operating leases, loans,
tax advantaged  leases,  like-kind  exchange options and Export-Import Bank
support) are provided on a competitive basis through a proprietary, private
label  relationship  with a prominent  provider of aircraft  financing (the
"Financing Provider"),  that has full credit review and approval rights and
assumes all credit risk with no recourse to the Company.  Additionally, the
Company  and  the  Financing  Provider  have  entered  into a  re-marketing
arrangement  which  enables  the  Company  to  manage  the  resale  of  any
Gulfstream  aircraft whose lease financing  period has ended.  This private
label  agreement has a term of five years from 1996 with a minimum  lending
commitment  of  $250  million  annually,  and  can be  extended  by  mutual
agreement of the parties.

     The Company  believes  that the access  provided by GFSC to  financing
sources for customers  throughout the world serves to expedite and increase
sales  of new and  pre-owned  aircraft  and also  enables  the  Company  to
effectively manage the residual values of the Gulfstream fleet.

   TRAINING

     The Company  provides pilot and maintenance  training  services to its
customers  as an integral  component of the sale of new  Gulfstream  IV-SP,
Gulfstream V and pre-owned Gulfstream  aircraft.  The Company has long-term
agreements  with  FlightSafety  International  ("FSI") for the provision of
this high quality training service.

     FSI maintains and operates  training  facilities  co-located  with the
Company's Savannah and Long Beach operations.  In 1997, FSI completed a new
65,000 square foot training  facility  adjacent to the  Gulfstream  Service
Center in Savannah.  This  facility,  which became  operational  in January
1998,  contains  21  classrooms,  16 briefing  rooms and four CPM  (cockpit
procedures modules) rooms. In addition, it houses simulators supporting the
entire  Gulfstream  product  line  (Gulfstream  I  through  Gulfstream  V).
Gulfstream  facilitates the operation of a Customer Training Advisory Board
which provides direct customer and original equipment manufacturer input to
FSI's training curriculums and course content.

     Additionally,  pilot and maintenance training services are provided to
Gulfstream  owners  and  operators  by  SimuFlite  Training   International
("SimuFlite")  located at Dallas-Fort Worth International  Airport,  Texas.
SimuFlite  provides training services for Gulfstream II, Gulfstream III and
Gulfstream  IV  aircraft.   Gulfstream,   in  conjunction  with  SimuFlite,
facilitates  the  operation  of a Customer  Training  Advisory  Board which
provides  direct  customer and  original  equipment  manufacturer  input to
SimuFlite training curriculums and course content.

   MATERIALS AND COMPONENTS

     Approximately 70% of the production costs of both the Gulfstream IV-SP
and the  Gulfstream V consist of purchased  materials and  equipment.  Many
materials  and items of equipment  used in the  production of the Company's
aircraft,  such as the engines,  wings,  landing gear and avionics systems,
are purchased from manufacturers,  generally pursuant to long-term purchase
orders.  For the Gulfstream V, the Company has entered into revenue sharing
agreements for the wing and empennage.  Under these agreements, the revenue
share  partner  is  responsible  for  the  detailed  design,   tooling  and
manufacture  of the systems in exchange for a fixed  percentage of revenues
of each  Gulfstream V sold. The terms of the revenue share  agreements with
Northrop Grumman  Corporation for the wing and Fokker Aviation B.V. for the
empennage continue so long as the Company is manufacturing the Gulfstream V
and prices are determined as a function of the sale price of the Gulfstream
aircraft.

     As is typical  among  general  aviation  aircraft  manufacturers,  the
Company relies on single source suppliers for complex  aircraft  components
and systems.  These single sources are selected  based on overall  aircraft
systems   requirements,   quality  and   certification   requirements   and
competitiveness  in the  market.  The  Company's  major  suppliers  include
Rolls-Royce Commercial Aero Engines Limited (Gulfstream IV-SP engines), BMW
Rolls-Royce GmbH (Gulfstream V engines), Honeywell Incorporated (Gulfstream
IV-SP  and   Gulfstream   V  flight   management   systems/avionics),   The
Aerostructures   Corporation  (Gulfstream  IV-SP  wing),  Northrop  Grumman
Corporation  (Gulfstream V wing revenue share partner and Gulfstream  IV-SP
nacelle  supplier),  Fokker  Aviation  B.V.,  a  subsidiary  of Stork B.V.,
(Gulfstream  V empennage  revenue  share  partner),  The B.F.  Goodrich Co.
(Gulfstream  IV-SP and  Gulfstream V landing gears and air speed  sensors),
Sundstrand  Corp.  (Gulfstream  V  electrical  system  and  actuators)  and
AlliedSignal,  Inc. (Gulfstream IV-SP and Gulfstream V auxiliary power unit
and environmental control systems and Gulfstream IV-SP electrical systems).
The Company has negotiated  multi-year agreements with its major Gulfstream
IV-SP and Gulfstream V suppliers. All of the agreements, with the exception
of the revenue share  agreements,  allow schedule  flexibility  and have no
cost  termination  clauses  at the  Company's  option,  subject  to certain
conditions and prior notification periods.

     Suppliers  are selected on the basis of their  ability to produce high
quality  systems and  components at  competitive  prices on a timely basis.
While the Company's production activities have not been materially affected
by the  inability to obtain  essential  components,  and while it maintains
business interruption  insurance in the event that such a disruption should
occur,  the  failure of certain  suppliers  or  subcontractors  to meet the
Company's  performance   specifications,   quality  standards  or  delivery
schedules could adversely impact the Company's operations. In addition, the
Company's  ability to  significantly  increase its production rate could be
limited by the  ability of its key  suppliers  to increase  their  delivery
rates;  however, in the past, the Company's ability to maintain or increase
production has not been significantly limited by suppliers' performance. In
addition,  under many of its supply contracts,  the Company is permitted to
increase or decrease the quantity of components or systems being ordered at
no cost on six months' notice.

AIRCRAFT SERVICES

     Within its Aircraft Services segment,  the Company offers  aftermarket
maintenance services, spare parts, engine overhaul and auxiliary power unit
service and overhaul for both Gulfstream and other business jets.

     As part of its customer-oriented strategy, the Company is committed to
supporting and servicing the Gulfstream  aircraft  fleet,  which  presently
numbers  over 900  aircraft in  service.  The  Company  provides  worldwide
service  and  support by  integrating  a network of  Company-owned  service
centers,   three  levels  of  authorized   third-party  service  providers,
worldwide parts depots, worldwide service representatives and 24 hour-a-day
technical/AOG (aircraft on the ground) support.

     The  Company  also  provides  airframe  and engine  service  and parts
support  for  non-Gulfstream  aircraft.  As a  result  of the K-C  Aviation
acquisition in 1998, Gulfstream now offers services for Challenger, Hawker,
Falcon and other aircraft  types at their  Appleton,  WI;  Dallas,  TX; and
Westfield,  MA  locations.  In addition  to the  incremental  revenues  and
margins  that these  services  generate,  they  provide the Company with an
additional  channel to establish new customer  relationships  with aircraft
owners/operators that could ultimately result in the sale of new Gulfstream
aircraft.

     The  Company  has  license  agreements  with  Marshalls  of  Cambridge
(Cambridge,  England), Chrysler's Pentastar Aviation subsidiary (Ypsilanti,
Michigan) and Jet Aviation (Singapore) to provide service,  maintenance and
repairs  for  Gulfstream   aircraft.   The  licensees  provide   additional
geographic  service  locations  for  the  expanding  Gulfstream  fleet.  In
addition, Jet Aviation Business Jets (Geneva and Basel, Switzerland), Jamco
(Japan) and Linden Airtaxi (Sao Paulo, Brazil) serve as authorized warranty
centers.

     Parts are provided worldwide to Gulfstream and non-Gulfstream aircraft
owners and maintenance  facilities  through a network of nine  distribution
centers.  Sales force initiatives include aggressive new aircraft provision
sales, replacement, modification and enhancement sales to existing airframe
and engine customers.

     The  Company  markets  aircraft  support  publications  and  technical
documents  to  its  customers  and  to  third  party  service   facilities.
Additionally,  a proprietary  computerized  maintenance  program ("CMP") is
offered as a  subscription  service to  customers  for the  management  and
tracking of the maintenance status of their aircraft.  Approximately 95% of
the Company's customers utilize this service.  The Company has instituted a
policy  requiring  third-party  maintenance  facilities to purchase factory
technical support for scheduled maintenance performed on customer aircraft.

     Additionally, the Company provides, through its ServiceCareSM program,
a comprehensive  airframe,  engine and avionics maintenance program,  which
provides  customers of new Gulfstream IV-SPs with scheduled and unscheduled
maintenance  at  guaranteed  costs.  Coverage is  provided on a  world-wide
basis,  with  all  work to be  accomplished  at  Gulfstream  or  Gulfstream
authorized service centers.

     The Company has  developed a proactive  marketing  and sales effort in
its maintenance  services  operations.  This has resulted in an increase in
the Gulfstream  maintenance  service market share to  approximately  75% in
1998. The Company's estimated market share was approximately 60% in 1997.

 PRE-OWNED AIRCRAFT

     Pre-owned  aircraft are routinely  accepted in trade to facilitate the
sale  of new  Gulfstream  IV-SPs  and  Gulfstream  Vs.  The  Company  backs
pre-owned  Gulfstream  aircraft  with a five year  warranty on the airframe
structure and a 12 month  warranty on virtually all other parts,  including
the engines under a separate  warranty  from  Rolls-Royce  Commercial  Aero
Engines Limited.

     Trade-in  values for  pre-owned  aircraft are based on estimated  fair
market value ("FMV") at the trade-in  date. If the trade-in date is greater
than twelve months into the future,  the Company's  current  practice is to
reserve  the  right to  determine  FMV not more  than six  months  prior to
delivery of the green aircraft.  Trade-in  aircraft are always entered into
inventory at the lower of cost or estimated  realizable  value.  Any excess
value offered to a customer above estimated  realizable value is recognized
as  a  reduction  in  the  revenue   received  in  the  new  aircraft  sale
transaction.

     Through its  trade-in  agreements,  the Company  reserves the right to
pre-market  the trade-in  aircraft  prior to  acceptance  of title from the
customer.  Over the past several years,  the Company has been successful in
entering  sales  agreements  on trade-in  aircraft  prior to  acceptance of
title. If market conditions change, however, no assurances can be made that
the Company can continue this practice.

     The Company has provided a portion of its Gulfstream V customers whose
contracts  are currently in backlog with an option to trade in a Gulfstream
aircraft at the time of their Gulfstream V aircraft delivery. These options
may be at a specified  dollar amount or at FMV "to be determined six months
prior to green  delivery"  of the  Gulfstream  V. The Company  continues to
assess those  options which are at a fixed dollar amount in light of market
conditions and has  determined  such fixed dollar options are less than the
FMV estimated for the time of Gulfstream V aircraft  delivery.  Although no
assurance can be given that the fixed dollar trade-in  aircraft values will
remain at or below FMV at the time of trade,  any adjustments  required for
values in excess of FMV will be appropriately reflected in the new aircraft
sales  transaction  and  the  pre-owned  inventory  will be  stated  on the
Company's books at the lower of cost or estimated realizable value.

   BACKLOG

     At December 31, 1998, the Company had a financial  contract backlog of
approximately  $3.3  billion,  representing  a total  of 50  contracts  for
Gulfstream  IV-SPs,  56 contracts  for  Gulfstream  Vs,  compared with $2.8
billion  at the end of  1997,  representing  a total  of 43  contracts  for
Gulfstream  IV-SPs and 45 contracts  for  Gulfstream  Vs.  Including the 11
undelivered aircraft in the Middle East Shares contract,  the Company had a
total of 117 aircraft,  valued at  approximately  $3.6 billion of potential
future  revenues,  under  contract at December 31, 1998.  This  excludes 18
options valued at $0.7 billion.

     During the third  quarter of 1998,  Gulfstream  GATX  Leasing  Company
executed  agreements  to purchase  five  Gulfstream  Vs and one  Gulfstream
IV-SP,  valued at  approximately  $210 million,  with  deliveries from 1999
through 2001. It also executed  options to purchase three Gulfstream Vs and
three  Gulfstream  IV-SPs,  valued  at  approximately  $200  million,  with
potential deliveries from 2001 through 2004.

     During the first  quarter of 1998,  the Company  signed a $335 million
contract  for  12  Gulfstream   IV-SPs  to  expand  its  highly  successful
Gulfstream Shares  fractional  ownership program to the Middle East region.
The first  green  aircraft  delivery  for the Middle  East  Shares  Program
occurred  during the third quarter of 1998.  The  remaining 11  undelivered
aircraft are not included in the Company's  financial contract backlog.  In
1993, the Company  established  very  stringent  deposit  requirements  for
recording  aircraft  into its  backlog.  The  contract  for the Middle East
Shares expansion includes modestly different deposit  requirements early in
the program.  The Company has decided for the initial  phase of the program
to record these orders into backlog when the aircraft are delivered.

     As of December 31, 1998,  the Company had  contracted to deliver to EJ
44 Gulfstream  IV-SPs and 12  Gulfstream  Vs in  connection  with the North
American   Gulfstream   Shares  program  plus  options  for  additional  12
Gulfstream  Vs. Of these,  18  Gulfstream  IV-SPs are in service,  with the
remaining 50 Gulfstream  IV-SPs and  Gulfstream Vs to be delivered  through
2007.

     The Company  includes an order in financial  contract  backlog only if
the Company has entered into a purchase  contract  (with no  contingencies)
with a customer and has received a significant  (generally  non-refundable)
deposit from the customer.  Approximately 50% of the Company's  contractual
backlog is scheduled  for delivery  beyond 1999.  Approximately  80% of the
Company's backlog is North American and approximately 20% is international.

     Generally,  at the  signing  of a  Gulfstream  IV-SP or  Gulfstream  V
contract,  a customer makes a non-refundable  deposit with the Company, and
subsequently  makes a series of  significant  progress  payments,  prior to
delivery of the aircraft. The Company monitors the condition of its backlog
and  believes,  based on the  nature of its  customers  and its  historical
experience,  that there will not be a significant  number of cancellations.
However,  to the extent  that there is a lengthy  period of time  between a
customer's  aircraft  order and its expected  delivery  date,  there may be
increased  uncertainty  as to changes in business and  economic  conditions
which may affect customer cancellations.

   CUSTOMERS AND MARKETING

     The  majority  of the  Company's  aircraft  are sold to  national  and
multinational  corporations  and  governments.  Gulfstream's  aircraft  are
operated by customers in a wide spectrum of industries and customer groups,
including:  pharmaceuticals,   consumer  goods,  high  technology,  energy,
industrial   manufacturing,   finance,   insurance,  real  estate,  mining,
transportation,  communications, public utilities, retail trade, the United
States government, other sovereign entities and individuals.  Seventy-seven
percent of the  Gulfstream  fleet is based in North  America and 23% of the
fleet is based in 50  countries  worldwide.  Current  owners of  Gulfstream
aircraft  include 32 of the Fortune 50 companies and 119 of the Fortune 500
companies.  In  addition,  the  United  States  government,  including  all
branches of the United States military,  and 33 foreign governments operate
Gulfstream aircraft. Gulfstream aircraft provide air transportation for the
President,  Vice  President  and other senior  members of the United States
government.  Over 40 Gulfstream  aircraft are  currently in operation  with
various United States government agencies, including the FAA.

     The diverse  Gulfstream  customer base  combined with wide  geographic
distribution  requires an integrated  marketing,  communications  and sales
approach. The Company's marketing and communications program is designed to
create  general  awareness of the Company,  and its products and  services,
while the sales  approach  is highly  personalized  and  focused on the key
decision  makers,  as well as flight  departments and other managers within
the customer's organization.

     Gulfstream  operates an  International  Advisory Board of 16 prominent
international  business  executives  and  senior  statesmen  to advise  the
Company on international  activities in support of the Company's  strategic
initiatives to further penetrate the international markets.

     The  Company's  marketing  and  communications  program is a carefully
integrated  combination  of business  and trade  advertising,  direct mail,
press  coverage,  trade  shows and special  events.  These  activities  are
specifically  developed to create personal  selling  opportunities  for the
sales  team  and  senior  management  with  assistance  from  the  Board of
Directors and International Advisory Board.

     The Company has 28 sales executives  located both in North America and
around the world.  Internationally,  the Company also utilizes  independent
agents who facilitate transactions in selected local markets.

     The Company's  revenues by geographic  area are included on page 38 of
Gulfstream's 1998 Annual Report,  which information is incorporated  herein
by  reference.  During 1996,  revenues from one  customer,  Executive  Jet,
included in the New  Aircraft and Aircraft  Services  reportable  segments,
represented approximately 11.7% of the Company's total revenues.

   COMPETITION

     The business  aircraft market  generally is divided into four segments
-- (light,  medium, large and ultra-long range) of aircraft either designed
or converted for business use.

     The Gulfstream  IV-SP  competes in the large cabin  business  aircraft
market segment, principally with Dassault Aviation S.A.'s Falcon 900 EX and
900B. The Gulfstream V competes in the ultra-long  range business  aircraft
market  segment,  primarily with  Bombardier's  Global  Express,  and, to a
lesser  extent,  corporate  versions of the Boeing 737 and Airbus A319. The
Company's competitors may have access to greater resources  (including,  in
certain cases,  governmental  subsidies) than are available to the Company.
The  Company  believes,  however,  that  it  competes  favorably  with  its
competitors  on  the  basis  of  the  performance  characteristics  of  its
aircraft,  the quality, range and timeliness of the service it provides and
its innovative marketing techniques.  In addition,  the Company was able to
certify the Gulfstream V significantly in advance of its  competition.  The
Company believes its aircraft's  operating costs are comparable to or lower
than  those of its  competitors  and that its  products  are  competitively
priced.

   RESEARCH AND DEVELOPMENT

     The Company  conducts an internally  funded  research and  development
program primarily for the enhancement of the existing  Gulfstream  aircraft
fleet, through product and process improvement to satisfy changing customer
needs and changing  regulatory  requirements.  The  Company's  research and
development  efforts  have  focused on  improving  operating  efficiencies,
performance,  safety and reliability,  reducing pilot workloads,  realizing
environmental benefits, reducing weight and improving ease of manufacture.

     The  Company  believes  that its  emphasis on  technology  and product
improvements  for  aircraft in the  Gulfstream  fleet has provided and will
continue to provide added value for the Gulfstream  customer.  For aircraft
already  produced  and in  service,  aircraft  changes,  which  incorporate
product improvements, are generally made available for purchase by existing
owners of Gulfstream aircraft.

     In 1998, the Company announced plans, in collaboration with a division
of the Lockheed  Martin  Corp.,  to study the  feasibility  of a supersonic
business  jet.  The study is expected to take 18-24 months and require only
an insignificant level of research and development spending.  The companies
expect  that  if they do  decide  to  develop  such a jet it  would  not be
introduced to the market for at least eight to ten years.

     Information   regarding   the  Company's   research  and   development
expenditures is contained on page 22 of  Gulfstream's  1998 Annual Report,
which information is incorporated herein by reference.

   REGULATION

     In order for an aircraft  model to be  manufactured  for sale, the FAA
must issue a Type Certificate and a Production Certificate for the aircraft
model  and,  in  order  for  an  individual  aircraft  to be  operated,  an
Airworthiness Certificate.  Type Certificates are issued by the FAA when an
aircraft  model is determined to meet certain  performance,  environmental,
safety and other technical  criteria.  The Production  Certificate  ensures
that the  aircraft  is  built to  specifications  approved  under  the Type
Certificate.  An  Airworthiness  Certificate  is  issued  for a  particular
aircraft  when it is  certified  to have  been  built  in  accordance  with
specifications  approved  under the Type  Certificate  for that  particular
model aircraft. Gulfstream has never had a Type Certificate or a Production
Certificate  suspended,  nor had any jet aircraft grounded as the result of
regulatory action.

     All of  the  Company's  aircraft  models  comply  with  all  currently
applicable  federal laws and  regulations  pertaining to aircraft noise and
engine emissions. Due to their weight (under 75,000 pounds), all Gulfstream
II, III, IV and IV-SP  aircraft are  currently  exempt from the FAA Stage 3
noise requirements. Notwithstanding federal requirements, foreign and local
jurisdictions   and  airport   authorities  may  establish  more  stringent
restrictions   pertaining  to  aircraft  noise.   Such  local  and  foreign
regulations  in several  locations  currently  restrict  the  operation  of
certain jet aircraft,  including the Gulfstream II, IIB and III and certain
of their  competitors  from  landing or taking off during late  evening and
early  morning  hours.  Each of the  Gulfstream  IV,  IV-SP and V  aircraft
produce  noise  levels  below the FAA's Stage 3 and ICAO's  Chapter 3 noise
ceilings.

   EMPLOYEES

     At March 1, 1999, the Company employed  approximately 7,740 people, of
whom approximately 4,410 were employed at the Company's  Savannah,  Georgia
facility,  130 at the  Brunswick,  Georgia  facility,  630 at the  Bethany,
Oklahoma facility,  810 at the Long Beach,  California facility, 730 at the
Dallas, Texas facility, 370 at the Appleton, Wisconsin facility, 130 at the
Westfield, Massachusetts and 530 at the Mexicali, Mexico facility. In 1996,
the Company entered into a 5-year contract with the International  Union of
United Automobile,  Aerospace & Agricultural  Implement Workers of America,
which  represents  certain  employees at the  Company's  Bethany,  Oklahoma
plant. The Company considers its overall employee relations to be good.

   ENVIRONMENTAL

     The  Company's  operations,  in  common  with  those  of the  industry
generally,  are subject to various laws and  regulations  governing,  among
other things,  the handling and disposal of solid and hazardous  materials,
wastewater discharges and the remediation of contamination  associated with
the use and disposal of hazardous substances.  Because of the nature of its
business,  the  Company has  incurred,  and will  continue to incur,  costs
relating to compliance with such environmental  laws.  Although the Company
believes  that it is in  substantial  compliance  with  such  environmental
requirements, and has not in the past been required to incur material costs
in connection therewith, there can be no assurance that the Company's costs
to comply with such requirements will not increase in the future.  Although
the Company is unable to predict what  legislation  or  regulations  may be
adopted in the future with respect to  environmental  protection  and waste
disposal, compliance with existing legislation and regulations has not had,
and is not  expected  to have,  a material  adverse  effect on its  capital
expenditures, results of operations, or competitive position.

     The Company's expenses for remedial  environmental matters and capital
outlays for environmental compliance were less than $2.0 million in 1998.

     The Company  has been named as a  Potentially  Responsible  Party with
respect to two cleanup sites, one operated by the Mountaineer  Refinery and
the  other  operated  by Omega  Chemical  Company.  Based on the  Company's
limited  involvement with such sites, the Company believes that it will not
incur material costs in respect of such cleanup sites.

     The  Company is  currently  engaged in the  monitoring  and cleanup of
certain  groundwater  at its Savannah  facility  under the oversight of the
Georgia  Department of Natural Resources.  The continuing  expenses for the
cleanup are not expected to be material. The Company believes other aspects
of the Savannah facility, as well as other Gulfstream properties, are being
carefully monitored and are in substantial compliance with current federal,
state and local environmental regulations.

     The Savannah  facility has been in existence  for over 30 years.  Like
the Savannah facility,  certain of the Company's other facilities have been
in operation  for a number of years and, over such time,  these  facilities
have used  substances  or generated and disposed of wastes which are or may
be considered hazardous. As a result, it is possible that the Company could
become  subject to additional  environmental  liabilities  in the future in
connection with these sites.

ITEM 2.  PROPERTIES

   The  locations  and square  footage of the  Company's  principal  operating
properties at March 1, 1999, are indicated in the following table:
<TABLE>
<CAPTION>
                                                   Approximate           Lease
                                                     Square           Expiration
      Location                    Purpose            Footage             Date
--------------------------------------------------------------------------------------
<S>                      <C>                        <C>               <C>

Savannah, Georgia        Corporate offices,         1,500,000           Owned
                         principal manufacturing
                         facility, aircraft
                         services and engineering

Brunswick, Georgia       Aircraft services and
                         completions                   53,000         May 31, 1999

Long Beach, California   Aircraft services and
                         completions                  250,000           Owned
                         Aircraft services and
                         completion                    62,000         August 14, 1999
                         Aircraft completions          22,000         March 31, 2000
                         Aircraft painting             59,000           Owned

Dallas, Texas            Aircraft services and
                         completions                  200,000           Owned
                         Aircraft services and
                         completions                   35,000         January 1, 2003
                         Aircraft services and
                         completions                   57,000         October 31, 2001
                         Engine and auxiliary power
                         unit maintenance and
                         overhaul                      48,000         April 30, 2002

Appleton, Wisconsin      Aircraft services and
                         completions                  120,000           Owned
                         Aircraft services             35,000         August 31, 2001

Westfield,               Aircraft services             50,000           Owned
Massachusetts            Aircraft services             20,000         July 31, 2000

Oklahoma City,           Manufacturing operations     500,000         December 31, 2007
Oklahoma

Mexicali, Mexico         Manufacturing operations      75,000         December 31, 1999
</TABLE>


     Any  prolonged  disruptions  in the  use of a  major  facility  due to
destruction of or material damage to such facility, or other reasons, could
have an adverse effect on the Company's  operations.  The Company maintains
property and business  interruption  insurance to protect  against any such
disruption,  but  there  can be no  assurance  that  the  proceeds  of such
insurance  would be adequate to repair or rebuild  its  facilities  in such
event or to compensate the Company for losses incurred during the period of
any such disruption.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is a defendant  in a lawsuit  instituted  on December  12,
1992 and pending in Oklahoma styled KMC Leasing,  Inc. et al. v. Gulfstream
Aerospace  Corporation et al. (District Court, State of Oklahoma,  Oklahoma
County,  Case No. CJ 92 10313).  This action arises from claims relating to
potential  damage from  corrosion  and fatigue  fractures on wing spars and
requirements  to  inspect  and  possibly  replace  wing  spars  in  certain
aircraft. These aircraft were part of a product line which was discontinued
in 1985 and sold during 1989.  This lawsuit is not an insured claim.  Other
than an  allegation  that the  plaintiffs'  damages  exceed  jurisdictional
requirements,  the  plaintiffs  have not  specified  a dollar  value of the
extent of their damages.  The Company believes it has meritorious  defenses
to all  these  claims  based  upon the  facts  that  underlie  them.  Class
certification  has been denied,  but plaintiffs  have filed an appeal.  The
Company  does not  expect  the  results  in this  action to have a material
adverse  effect  on its  financial  condition  or  results  of  operations.
Although  there  are  other  lawsuits   pending   involving  the  Company's
discontinued  light aircraft product lines, those claims are (i) covered by
the General Aviation Revitalization Act of 1994, which is a federal statute
of  repose,  (ii) the  responsibility  of the  purchasers  of  those  light
aircraft product lines, or (iii) covered by the Company's product liability
insurance. There are no accident or incident claims pending with respect to
any Gulfstream jet aircraft.

     The Company  maintains product  liability  insurance  coverage of $500
million  per  occurrence  and in the  aggregate  per year,  subject  to $10
million of self-insurance  retention.  Management believes this coverage is
adequate.

     The Company is involved in tax audits by the Internal  Revenue Service
covering the years 1990 through 1994. The revenue  agent's  reports include
several  proposed  adjustments   involving  the  deductibility  of  certain
compensation expense,  items relating to the initial  capitalization of the
Company,  the allocation of the original purchase price for the acquisition
by the Company of the  Gulfstream  business,  including  the  treatment  of
advance  payments with respect to the cost of aircraft that were in backlog
at the time of the acquisition,  and the amortization of amounts  allocated
to intangible assets. The Company believes that the ultimate  resolution of
these  issues  will not have a  material  adverse  effect on its  financial
statements  because  the  financial  statements  already  reflect  what the
Company currently believes is the expected loss of benefit arising from the
resolution of these issues.  However,  because the revenue  agent's reports
are  proposing  adjustments  in  amounts  materially  in excess of what the
Company has reflected in its financial  statements  and because it may take
several years to resolve the disputed  matters,  the ultimate extent of the
Company's  expected loss of benefit and the liability with respect to these
matters  cannot be predicted  with  certainty and no assurance can be given
that the Company's  financial position or results of operations will not be
adversely affected.

     The Company is also involved in other  litigation,  including  product
and general liability matters, and governmental  proceedings arising in the
ordinary course of its business,  the ultimate  disposition of which in the
opinion  of the  Company's  management,  will not have a  material  adverse
effect on the financial position or results of operations of the Company.

     See also -- Item 1. "Business -- Environmental."

     FORWARD-LOOKING  INFORMATION  IS  SUBJECT  TO  RISKS  AND  UNCERTAINTY
Certain  statements  contained in or incorporated by reference in this Form
10-K contain forward-looking information.  These forward-looking statements
are  subject  to risks  and  uncertainties.  Actual  results  might  differ
materially  from  those  projected  in  the   forward-looking   statements.
Additional  information  concerning factors that could cause actual results
to materially differ from those contained in the forward-looking statements
is contained in Exhibit 99, CAUTIONARY  STATEMENT FOR PURPOSES OF THE "SAFE
HARBOR" PROVISIONS OF THE PRIVATE SECURITIES  LITIGATION REFORM ACT OF 1995
to the Company's Securities and Exchange Commission filings.
<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of the Company's  security holders
during the last quarter of the year ended December 31, 1998.

ADDITIONAL ITEM.  EXECUTIVE OFFICERS OF THE COMPANY

     The following  paragraphs set forth the name, age and offices with the
Company of each present executive officer of the Company, the period during
which  each  executive  officer  has  served  as such  and  each  executive
officer's business experience during the past five years:

     Theodore J. Forstmann,  age 59, has served as Chairman of the Board of
     the Company since November 1993 and as Chief  Executive  Officer since
     December  1998.  Mr.  Forstmann  has  been a  general  partner  of FLC
     Partnership,  L.P. since he co-founded Forstmann Little & Co. in 1978.
     He is also a director of General Instrument  Corporation.  Theodore J.
     Forstmann and Nicholas C. Forstmann are brothers.

     W.W.  Boisture,  Jr.,  age 54,  has  served  as  President  and  Chief
     Operating Officer of the Company since December 1998 and as a director
     since  February  1995  and is a  member  of the  Office  of the  Chief
     Executive.  Mr.  Boisture  served as  Executive  Vice  President  from
     February 1994 to December 1998.  Prior to joining the Company,  he was
     President and Chief Executive Officer of British  Aerospace  Corporate
     Jets from October 1992 through 1993,  where he was responsible for the
     "Hawker" business jet product line and its worldwide marketing,  sales
     and support  organization.  From early 1990 to 1992, Mr.  Boisture was
     Chairman,  President and Chief Executive Officer of Butler Aviation, a
     nationwide aviation services company.

     Chris A. Davis,  age 48, has served as Executive  Vice  President  and
     Chief  Financial  Officer of the  Company  since July 1993,  Secretary
     since August 1996,  Chief  Administrative  Officer since December 1998
     and a director  since  March 1997 and is a member of the Office of the
     Chief Executive.  She is also President and Chief Operating Officer of
     Gulfstream  Financial  Services  Corporation.   Ms.  Davis  served  in
     increasingly senior financial management positions at General Electric
     Company from 1978 to 1993, most recently as chief financial officer of
     its  Electronic  Systems  Division.  Ms.  Davis is also a director  of
     Wolverine Tube, Inc.

     Bryan T. Moss,  age 59, has served as Vice  Chairman and a director of
     the Company  since March 1995.  Prior to joining the  Company,  he was
     President  of  Bombardier  Business  Aircraft  Division,  where he was
     responsible  for  the  Challenger  and  Global  Express  business  jet
     programs from 1989 to March 1995.

     Ira P. Berman, age 37, has served as Senior Vice President and General
     Counsel of the Company since March 1997.  Before  joining the Company,
     Mr. Berman was a partner in the  corporate  department of the law firm
     of Fried, Frank, Harris,  Shriver & Jacobson, New York, New York, from
     September  1997 to March  1998,  and an  associate  from  June 1996 to
     September 1997.

     G. Kenneth  Burckhardt,  age 44, has served as Senior Vice  President,
     Finance of the Company since December 1998. Mr.  Burckhardt  served as
     Vice  President,  Finance from June 1996 to December 1998 and Director
     of  Finance  from  December  1994 to June 1996.  Prior to joining  the
     Company, he was Director,  Financial Planning & Analysis of a division
     of GE Capital Corp. from September 1991 to December 1994.

     Patrick C.G. Coulter,  age 58, has served as the Company's Senior Vice
     President,  Corporate  Communications  since  January  1999.  Prior to
     joining the Company,  he was Vice President of Communications  for The
     Boeing  Company  Commercial  Airplane Group from July 1997 to December
     1998. Mr. Coulter was Vice President of Corporate  Communications  for
     Bell Atlantic Corporation from July 1995 to June 1997, and Director of
     Corporate  Communications of The Raytheon Company from January 1991 to
     July 1995.

     Larry R. Flynn, age 47, has served as Senior Vice President,  Aircraft
     Services since December 1998. Mr. Flynn was Vice  President,  Aircraft
     Services  from  June  1995 to  December  1998.  Prior to  joining  the
     Company,  Mr. Flynn served as Vice President of Stevens  Aviation from
     April 1993 to May 1995.

     Preston A.  Henne,  age 51, has served as the  Company's  Senior  Vice
     President, Programs since September 1994. He was employed by McDonnell
     Douglas  Corporation  from July 1969 to August 1994,  most recently as
     Vice President & General Manager.

     Joseph T.  Lombardo,  age 51,  has  served as Senior  Vice  President,
     Operations of the Company since December 1998. Mr.  Lombardo served as
     Vice President,  Co-Production  from June 1996 to December 1998. Prior
     to joining the  Company,  he was  Director of Twin-Jet  Production  at
     McDonnell Douglas from February 1993 to June 1996.

     Joseph K. Walker, age 45, has served as Senior Vice President, Sales &
     Marketing of the Company since December 1998. Mr. Walker served as the
     Company's  Senior Vice President,  International  Sales from September
     1997 to December  1998,  and as Vice  President,  North American Sales
     from 1995 to September 1997. Prior to joining the Company,  Mr. Walker
     served as Vice  President,  Worldwide Sales of Cessna  Aircraft,  Inc.
     from 1994 to 1995.

                                  PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Information  required  by  this  Item  is  contained  on  page  40  of
Gulfstream's 1998 Annual Report,  which information is incorporated  herein
by  reference.  At  December  31,  1998,  the  Company's  Credit  Agreement
prohibited the payment of dividends.

ITEM 6.  SELECTED FINANCIAL DATA

     The  information  required by this Item is included  under the caption
"Selected  Financial Data" on page 41 of  Gulfstream's  1998 Annual Report,
and that information is hereby incorporated by reference in this Form 10-K.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     Information  required  by  this  Item  is  included  in  "Management's
Discussion  and  Analysis"  on pages 20 to 25 of  Gulfstream's  1998 Annual
Report, incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Information  required  by this Item is  included  in the  Consolidated
Financial  Statements of the Company for the years ended December 31, 1998,
1997 and 1996, the Notes to the Consolidated Financial Statements,  and the
independent  auditors'  report thereon on pages 26 to 39 of the 1998 Annual
Report,  and in the Company's  unaudited  quarterly  financial data for the
years  ended  December  31, 1998 and 1997 on page 40 of  Gulfstream's  1998
Annual Report, incorporated herein by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     Not applicable.
<PAGE>
                                   PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information  required  by this  Item is  included  in the  1999  Proxy
Statement  in the  section  captioned  "Election  of  Directors,"  and such
information is incorporated  herein by reference.  Information  required by
this  Item  concerning  compliance  with  Section  16(a) of the  Securities
Exchange Act of 1934 is included in the 1999 Proxy Statement in the section
captioned "Section 16(a) Beneficial  Ownership  Reporting  Compliance," and
such   information  is  incorporated   herein  by  reference.   Information
concerning  executive  officers  required by this Item 10 is located  under
Part I, Additional Item on pages 14 and 15 of this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

     Information  required  by this  Item is  included  in the  1999  Proxy
Statement in the sections  captioned  "Further  Information  Concerning the
Board of Directors and Committees -- Compensation  Committee Interlocks and
Insider  Participation"  and "-- Director  Compensation" and in the section
captioned  "Compensation of Executive Officers" (other than the subsections
thereof  captioned  "Committee  Reports  on  Executive   Compensation"  and
"Performance  Graph"),  and such  information  (other than the  subsections
thereof  captioned  "Committee  Reports  on  Executive   Compensation"  and
"Performance Graph") is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information  required  by this  Item is  included  in the  1999  Proxy
Statement  in  the  section  captioned   "Security   Ownership  of  Certain
Beneficial  Owners and  Management,"  and such  information is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information  required  by this  Item is  included  in the  1999  Proxy
Statement in the sections  captioned  "Further  Information  Concerning the
Board of Directors and Committees -- Compensation  Committee Interlocks and
Insider   Participation"   and  "Related  Party   Transactions,"  and  such
information is incorporated  herein by reference.  See also, Note 12 to the
Consolidated  Financial  Statements on page 37 of Gulfstream's  1998 Annual
Report.
<PAGE>
                                  PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

                                                                      1998
                                                    FORM 10-K     ANNUAL REPORT
                                                      (PAGE)         (PAGE)
                                                  -------------  --------------

(a)     FINANCIAL STATEMENTS

           Consolidated Statements of Income for the
           years ended December 31, 1998, 1997, and                      26
           1996

           Consolidated Balance Sheets at December
           31, 1998 and December 31, 1997                                27
           

           For the years ended December 31, 1998,
           1997, and 1996:

           Consolidated Statements of Stockholders'                      28
           Equity

           Consolidated Statements of Cash Flows                         29

           Notes to Consolidated Financial                             30-38
           Statements

           Independent Auditors' Report                                  39

           Supplementary Information (Unaudited)

           Quarterly Financial Results for 1998                          40
           and 1997

         FINANCIAL STATEMENT SCHEDULES

           Independent Auditors' Report                       19
           I.  Condensed financial information               20-21
           II. Valuation and qualifying                       22
               accounts

     All other schedules have been omitted because they are not applicable,
not required or the  information  required is included in the  consolidated
financial statements or notes thereof.

         EXHIBITS

     The exhibits are listed in the accompanying Index to Exhibits on pages
26 to 30.

(b)     REPORTS ON FORM 8-K

     None in the fourth quarter of 1998.
<PAGE>
                        INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Gulfstream Aerospace Corporation:

     We  have  audited  the  consolidated   balance  sheets  of  Gulfstream
Aerospace  Corporation and subsidiaries  (the "Company") as of December 31,
1998  and  1997  and  the  related   consolidated   statements  of  income,
stockholders' equity and cash flows for the three years in the period ended
December 31, 1998,  and have issued our report  thereon  dated  February 1,
1999 (March 1, 1999 as to Note 16); such  financial  statements  and report
are  included  in the  Company's  1998 Annual  Report and are  incorporated
herein by reference.  Our audits also included the  consolidated  financial
statement  schedules of the Company,  listed in Item 14 of Form 10-K. These
consolidated  financial  statement  schedules are the responsibility of the
Company's management.  Our responsibility is to express an opinion based on
our  audits.  In  our  opinion,   such  consolidated   financial  statement
schedules,  when considered in relation to the basic consolidated financial
statements  taken as a whole,  present fairly in all material  respects the
information set forth therein.



DELOITTE & TOUCHE LLP
Atlanta, Georgia
February 1, 1999
<PAGE>
                      GULFSTREAM AEROSPACE CORPORATION
                           (PARENT COMPANY ONLY)

               SCHEDULE I -- CONDENSED FINANCIAL INFORMATION

                               BALANCE SHEETS

                      AS OF DECEMBER 31, 1998 AND 1997
                  (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)

                                   ASSETS


                                                        1998          1997
                                                    ------------  -----------
                                                    ------------  -----------
Investment in subsidiary                            $  310,538    $ 200,895
                                                    ============  ===========
   Total Assets                                        310,538      200,895
                                                    ============  ===========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

                                                        1998          1997
                                                    ------------  -----------
Payable to subsidiary                               $   14,858    $   8,138
Note Payable to subsidiary                             100,000      100,000
                                                    ------------  -----------
   Total liabilities                                   114,858      108,138
                                                    ------------  -----------

Stockholders' equity:
 Preferred stock; Series A, 7% Cumulative; $.01
   par value; 20,000,000 shares authorized;                  -            -
   no shares outstanding
 Common stock, $.01 par value;
   300,000,000 shares authorized;
   Shares issued:  89,818,774 and 86,522,089               898          865
Additional paid-in capital                             444,301      370,258
Accumulated deficit                                       (672)    (225,960)
Accumulated other comprehensive income                  (2,441)        (762)
Unamortized stock plan expense                             (52)      (1,155)
Less:  Treasury stock:  17,244,581 and 11,978,439     (246,354)     (50,489)
 shares
                                                    ------------  -----------
   Total stockholders' equity                          195,680       92,757
                                                    ============  ===========
Total Liabilities and Stockholders' Equity          $  310,538    $ 200,895
                                                    ============  ===========

--------------

Notes:

(1)  The Company  accounts for its investment in its  subsidiary  using the
     equity method of accounting.

(2)  The Company  received cash dividends in 1996 of  approximately  $355.0
     million from its subsidiary in satisfaction of intercompany balances.




See notes to Consolidated  Financial Statements included in the 1998 Annual
Report, incorporated herein by reference.
<PAGE>
                      GULFSTREAM AEROSPACE CORPORATION
                           (PARENT COMPANY ONLY)

               SCHEDULE I -- CONDENSED FINANCIAL INFORMATION

                            STATEMENTS OF INCOME

                               (IN THOUSANDS)



                                               YEAR ENDED DECEMBER 31,
                                          ----------------------------------
                                              1998        1997        1996
                                           ----------  ----------  ----------
Interest expense                         $  (6,720)   $ (6,720)   $ (1,418)
Net income of subsidiary                   232,008     249,731      48,383
                                           ----------  ----------  ----------
Net income                               $ 225,288    $243,011    $ 46,965
Other comprehensive income,
  net of tax                                (1,679)        702         (14)
                                           ----------  ----------  ----------
Total comprehensive income               $ 223,609    $243,713    $ 46,951
                                           ==========  ==========  ==========

----------------


Statements of cash flows are not presented  since the Parent Company had no
cash flows from operations.

See notes to Consolidated  Financial Statements included in the 1998 Annual
Report, incorporated herein by reference.
<PAGE>
<TABLE>

                      GULFSTREAM AEROSPACE CORPORATION

       SCHEDULE II -- CONDENSED SCHEDULE OF VALUATION AND QUALIFYING
       ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998

                               (IN THOUSANDS)

<CAPTION>

                             BALANCE                    CHARGED
                               AT          CHARGED        TO                          BALANCE
                            BEGINNING        TO          OTHER                        AT END
                               OF         COSTS AND     ACCOUNTS     DEDUCTIONS         OF
       DESCRIPTION           PERIOD       EXPENSES        (1)            (2)          PERIOD
-------------------------  ---------     ----------    ----------   ------------    ---------
<S>                        <C>           <C>           <C>          <C>             <C>

Allowance for Doubtful
Accounts:
  Year ended December      $ 3,437       $   344       $     -       $   538        $  3,243
    31, 1996                                                          
  Year ended December        3,243        (1,588)            -           511           1,144
    31, 1997
  Year ended December        1,144           326         1,484           429           2,525
    31, 1998

--------------
<FN>
(1)  The amount of $1,484 represents amounts assumed in connection with the
     acquisition of K-C Aviation.  See Note 2 to the Consolidated Financial
     Statements included in the 1998 Annual Report,  incorporated herein by
     reference.

(2)  Deductions  from  the  allowance  for  doubtful  accounts   represent  the
     write-off of uncollectible accounts.
</FN>
</TABLE>
<PAGE>
                                 SIGNATURES

     Pursuant to the  requirements of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  registrant  has duly  caused this report to be
signed on its behalf by the undersigned,  thereunto duly authorized on this
29th day of March 1999.


                                    GULFSTREAM AEROSPACE CORPORATION


                                    By:        /s/Chris A. Davis
                                    -------------------------------------------
                                                  Chris A. Davis
                                            Executive Vice President &
                                     Chief Financial & Administrative Officer
                                                  and Secretary


     Pursuant to the  requirements of the Securities  Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


           SIGNATURE                          TITLE                    DATE
--------------------------------  ----------------------------   --------------


   /s/Theodore J. Forstmann       Chairman of the Board, Chief   March 29, 1999
--------------------------------  Executive Officer and                        
     Theodore J. Forstmann        Director



    /s/W. W. Boisture, Jr.        President, Chief Operating     March 29, 1999
--------------------------------  Officer and Director
      W. W. Boisture, Jr.         



       /s/Chris A. Davis          Executive Vice President,      March 29, 1999
--------------------------------   Chief Financial
        Chris A. Davis              & Administrative Officer,
                                      Secretary and
                                      Director (Principal
                                      Financial Officer and
                                      Principal Accounting
                                      Officer)


       /s/Bryan T. Moss           Vice Chairman of the Board     March 29, 1999
--------------------------------   and Director                
         Bryan T. Moss



      /s/Robert Anderson          Director                       March 29, 1999
--------------------------------                                  
        Robert Anderson



     /s/Charlotte L. Beers        Director                       March 29, 1999
--------------------------------                                  
      Charlotte L. Beers



    /s/Thomas D. Bell, Jr.        Director                       March 29, 1999
--------------------------------                                 
      Thomas D. Bell, Jr.



       /s/Lynn Forester           Director                       March 29, 1999
--------------------------------                                 
         Lynn Forester



   /s/Nicholas C. Forstmann       Director                       March 29, 1999
--------------------------------                                 
     Nicholas C. Forstmann



     /s/Sandra J. Horbach         Director                       March 29, 1999
--------------------------------                                 
       Sandra J. Horbach



      /s/James T. Johnson         Director                       March 29, 1999
--------------------------------                                 
       James T. Johnson



     /s/Henry A. Kissinger        Director                       March 29, 1999
--------------------------------                                   
      Henry A. Kissinger



         /s/Drew Lewis            Director                       March 29, 1999
--------------------------------                                   
          Drew Lewis



     /s/Mark H. McCormack         Director                       March 29, 1999
--------------------------------                                 
       Mark H. McCormack



      /s/Michael S. Ovitz         Director                       March 29, 1999
--------------------------------                                 
       Michael S. Ovitz



      /s/Allen E. Paulson         Director                       March 29, 1999
--------------------------------                                 
       Allen E. Paulson



      /s/Roger S. Penske          Director                       March 29, 1999
--------------------------------                                   
        Roger S. Penske



      /s/Colin L. Powell          Director                       March 29, 1999
--------------------------------                                 
        Colin L. Powell



      /s/Gerard R. Roche          Director                       March 29, 1999
--------------------------------                                 
        Gerard R. Roche



     /s/Donald H. Rumsfeld        Director                       March 29, 1999
--------------------------------                                 
      Donald H. Rumsfeld



      /s/George P. Shultz         Director                       March 29, 1999
--------------------------------                                  
       George P. Shultz



     /s/Robert S. Strauss         Director                       March 29, 1999
--------------------------------                                   
       Robert S. Strauss
<PAGE>
                      GULFSTREAM AEROSPACE CORPORATION
                             INDEX TO EXHIBITS




Exhibit                                Description

  2.1    Agreement of Purchase and Sale, dated as of July 23, 1998 by and
            between Kimberly-Clark Corporation and Gulfstream Aerospace
            Corporation.  (Incorporated herein by reference to Exhibit 10.28 of
            Registrant's Quarterly Report on Form 10-Q for the quarter ended
            June 30, 1998.)

  3.1    Restated Certificate of Incorporation of the Company.  (Incorporated
            herein by reference to Exhibit 3.1 of Registrant's Quarterly Report
            on Form 10-Q for the quarter ended September 30, 1996.)

  3.2    Restated By-Laws of the Company.  (Incorporated herein by reference to
            Exhibit 3.2 of Registrant's Quarterly Report on Form 10-Q for the
            quarter ended September 30, 1996.)

  4.1    Specimen Form of Company's Common Stock Certificate.  (Incorporated
            herein by reference to Exhibit 4.1 of Registrant's Registration
            Statement on Form S-1, No. 333-09897.)

  10.1   Gulfstream Aerospace Corporation Pension Plan, amended and restated
            January 1, 1989, as amended ("GAC Pension Plan").  (Incorporated
            herein by reference to Exhibit 10.1 of Registrant's Registration
            Statement on Form S-1, No. 333-09897.) **

  10.2   First Amendment to GAC Pension Plan, dated December 10, 1996.
            (Incorporated herein by reference to Exhibit 10.2 of Registrant's
            Annual Report on Form 10-K for the year ended December 31,
            1996.)**

  10.3   Gulfstream Aerospace Corporation Supplemental Executive Retirement
            Plan, effective as of April 1, 1991.  (Incorporated herein by
            reference to Exhibit 10.2 of Registrant's Registration Statement on
            Form S-1, No. 333-09897.)**

  10.4   Gulfstream Aerospace Corporation November 1, 1991 Supplemental
            Executive Retirement Plan.  (Incorporated herein by reference to
            Exhibit 10.3 of Registrant's Registration Statement on
            Form S-1, No. 333-09897.)**

  10.5   Form of Indemnification Agreement between the Company and its 
            directors and executive officers. (Incorporated herein by reference
            to Exhibit 10.4 of Registrant's Registration Statement on
            Form S-1, No. 333-09897.)

  10.6   Form of Outside Director Stock Option Agreement.  (Incorporated herein
            by reference to Exhibit 10.5 of Registrant's Registration Statement
            on Form S-1, No. 333-09897.)**

  10.7   Form of Outside Director Stockholder's Agreement.  (Incorporated
             herein by reference to Exhibit 10.6 of Registrant's Registration
             Statement on Form S-1, No. 333-09897.)**

  10.8   [Reserved]

  10.9   Form of Employee Stock Option Agreement.  (Incorporated herein by
            reference to Exhibit 10.9 of Registrant's Annual Report on Form 
            10-K for the year ended December 31, 1996.)**

 10.10   Form of Employee Stockholder's Agreement.  (Incorporated herein by
            reference to Exhibit 10.10 of Registrant's Annual Report on Form
            10-K for the year ended December 31, 1996.)**

 10.11   Lease Agreement, dated as of February 22, 1995, between Oklahoma City
            Airport Trust and Gulfstream Aerospace Corporation.  (Incorporated
            herein by reference to Exhibit 10.11 of Registrant's Annual Report
            on Form 10-K for the year ended December 31, 1997.)

 10.12   Lease Agreement, dated as of March 14, 1989, between City of Long 
            Beach and 7701 Woodley Avenue Corporation d/b/a Gulfstream 
            Aerospace.  (Incorporated herein by reference to Exhibit 10.12 of 
            Registrant's Registration Statement on Form S-1, No. 333-09897.)

 10.13   Form of Lease Agreements, dated January 1, 1994 between Immuebles El
            Vigia, S.A., and Interiores Aeros, S.A. De C.V.  (Incorporated
            herein by reference to Exhibit 10.13 of Registrant's Registration
            Statement on Form S-1, No. 333-09897.)

 10.14   Lease Agreement, dated May 1, 1996, between Immuebles El Vigia, S.A.,
            and Interiores Aeros, S.A. De C.V.  (Incorporated herein by
            reference to Exhibit 10.14 of Registrant's Registration Statement 
            on Form S-1, No. 333-09897.)

 10.15   Sublease Agreement, dated June 1, 1992, between Brunswick and Glynn
            County Development Authority and Gulfstream Aerospace Corporation.
            (Incorporated herein by reference to Exhibit 10.15 of Registrant's
            Registration Statement on Form S-1, No. 333-09897.)

 10.16   Credit Agreement, dated as of October 16, 1996, among Gulfstream
            Delaware Corporation, The Chase Manhattan Bank, and the banks and
            other financial institutions parties thereto (including guaranty 
            and pledge agreement).  (Incorporated herein by reference to
            Exhibit 10.16 of Registrant's Quarterly Report on Form 10-Q for the
            quarter ended September 30, 1996.)

 10.17   Registration Rights Agreement, among Gulfstream Aerospace Corporation,
            Gulfstream Delaware Corporation, Gulfstream Partners, Gulfstream
            Partners II, L.P., and MBO-IV.  (Incorporated herein by reference 
            to Exhibit 10.17 of Registrant's Registration Statement on Form 
            S-1, No. 333-09897.)

 10.18   Repurchase Agreement, dated as of May 15, 1996, between Gulfstream
            Aerospace Corporation and MBO-IV.  (Incorporated herein by 
            reference to Exhibit 10.18 of Registrant's Registration Statement 
            on Form S-1, No. 333-09897.)

 10.19   Repurchase Agreement, dated as of August 8, 1996, between Gulfstream
            Aerospace Corporation and MBO-IV.  (Incorporated herein by 
            reference to Exhibit 10.19 of Registrant's Registration Statement 
            on Form S-1, No. 333-09897.)

 10.20   Amendment No. 1 to Sublease Agreement, dated May 23, 1996, by and
            between Brunswick and Glynn County Development Authority and
            Gulfstream Aerospace Corporation.  (Incorporated herein by 
            reference to Exhibit 10.20 of Registrant's Registration Statement
             on Form S-1, No. 333-09897.)

 10.21   Amendment No. 2 to Sublease Agreement, dated May 25, 1996, by and
            between Brunswick and Glynn County Development Authority and
            Gulfstream Aerospace Corporation.  (Incorporated herein by
            reference to Exhibit 10.21 of Registrant's Registration Statement
            on Form S-1, No. 333-09897.)

 10.22   Agreement, effective August 9, 1996, between Gulfstream Aerospace
            Technologies and the International Union, United Automobile,
            Aerospace and Agricultural Implement Workers of America Local
            #2130.  (Incorporated herein by reference to Exhibit 10.22 of
            Registrant's Registration Statement on Form S-1, No. 333-09897.)

 10.23   Lease Agreement, dated as of August 27, 1996, between Long Beach
            Million Air, Inc. and Gulfstream Aerospace Corporation.
            (Incorporated herein by reference to Exhibit 10.23 of Registrant's
            Registration Statement on Form S-1, No. 333-09897.)

 10.24   Outfitted Gulfstream V Sales Agreement dated June 13, 1997 between
            Gulfstream Aerospace Corporation and Allen E. Paulson.
            (Incorporated herein by reference to Exhibit 10.24 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1997.)

 10.25   Marketing Services Agreement dated June 13, 1997 between
            Gulfstream Aerospace Corporation and Allen E. Paulson.
            (Incorporated herein by reference to Exhibit 10.25 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1997.)

 10.26   Gulfstream IV Aircraft Purchase Agreement and amendment to
            Outfitted Gulfstream V Sales Agreement dated August 1, 1997
            between Gulfstream Aerospace Corporation and Allen E. Paulson.
            (Incorporated herein by reference to Exhibit 10.26 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1997.)

 10.27   Amended and Restated Gulfstream Aerospace Corporation 1990 Stock
            Option Plan, as further amended through July 30, 1997.
            (Incorporated herein by reference to Exhibit 10.27 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1997.)**

 10.28   Amendment dated December 24, 1997 to Credit Agreement among
            Gulfstream Delaware Corporation, The Chase Manhattan Bank, and
            the banks and other financial institutions parties thereto.
            (Incorporated herein by reference to Exhibit 10.28 of
            Registrant's Annual Report on Form 10-K for the year ended
            December 31, 1997.)

 10.29   Agreement dated December 24, 1997 between Gulfstream Aerospace
            Corporation and its wholly owned subsidiaries, Gulfstream
            Delaware Corporation, Gulfstream Aerospace Corporation, a
            Georgia Corporation and the Pension Benefit Guaranty
            Corporation.  (Incorporated herein by reference to Exhibit
            10.29 of Registrant's Annual Report on Form 10-K for the year
            ended December 31, 1997.)

 10.30   Lease Agreement, dated April 11, 1997, between Aeroplex Aviation
            and Gulfstream Aerospace Corporation.  (Incorporated herein by
            reference to Exhibit 10.30 of Registrant's Annual Report on
            Form 10-K for the year ended December 31, 1997.)

 10.31   Amendment dated February 26, 1998 to Credit Agreement among
            Gulfstream Delaware Corporation, The Chase Manhattan Bank, and
            the banks and other financial institutions parties thereto.
            (Incorporated herein by reference to Exhibit 10.31 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended March 31, 1998.)

 10.32   Amendment dated July 15, 1998 to Credit Agreement among Gulfstream
            Delaware Corporation, The Chase Manhattan Bank, and the banks
            and other financial institutions parties thereto.
            (Incorporated herein by reference to Exhibit 10.32 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1998.)

 10.33   Amendment dated October 6, 1998 to Credit Agreement among
            Gulfstream Delaware Corporation, The Chase Manhattan Bank, and
            the banks and other financial institutions parties thereto.
            (Incorporated herein by reference to Exhibit 10.33 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended September 30, 1998.)

 10.34   Lease Agreement, dated January 1, 1998, by and between Immuebles
            El Vigia, S.A., and Interiores Aeroes, S.A. De C.V.
            (Incorporated herein by reference to Exhibit 10.34 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended September 30, 1998.)

 10.35   Amendment No. 3 to Sublease Agreement, dated February 23, 1998, by
             and between the Brunswick and Glynn County Development
             Authority and Gulfstream Aerospace Corporation.  (Incorporated
             herein by reference to Exhibit 10.35 of Registrant's Quarterly
             Report on Form 10-Q for the quarter ended September 30, 1998.)

 10.36   Amendment No. 4 to Sublease Agreement, dated March 23, 1998, by
            and between the Brunswick and Glynn County Development
            Authority and Gulfstream Aerospace Corporation. (Incorporated
            herein by reference to Exhibit 10.36 of Registrant's Quarterly
            Report on Form 10-Q for the quarter ended September 30, 1998.)

 10.37   Lease Agreement, dated January 25, 1968, by and between Outagamie
            County, Wisconsin and K-C Aviation Incorporated which was
            assigned to K-C Aviation on October 9, 1980; as amended by
            Addendum No. 1, dated December 24, 1980, Addendum No. 2, dated
            February 9, 1988, Addendum No. 3 dated January 26, 1989,
            Addendum No. 4 dated October 22, 1996, and Addendum No. 5 to
            Lease Agreement, dated March 11, 1997.  (Incorporated herein by
            reference to Exhibit 10.37 of Registrant's Quarterly Report on
            Form 10-Q for the quarter ended September 30, 1998.)

 10.38   Lease Agreement, dated February 1, 1978, by and between City of
             Dallas and K-C Aviation, Incorporated for lease of land and
             facility at Dallas Love Field; as amended by Agreement
             Amending Lease dated October 28, 1981, Second Amendment dated
             June 1, 1989, and that certain letter from the City of Dallas
             to K-C Aviation dated December 9, 1997.  (Incorporated herein
             by reference to Exhibit 10.38 of Registrant's Quarterly Report
             on Form 10-Q for the quarter ended September 30, 1998.)

 10.39   Sublease Agreement, dated January 17, 1989, by and between Dalfort
            Aviation Services, a division of Dalfort Corporation and K-C
            Aviation, Incorporated, as amended by that certain First
            Additional Agreement effective January 17, 1989.  (Incorporated
            herein by reference to Exhibit 10.39 of Registrant's Quarterly
            Report on Form 10-Q for the quarter ended September 30, 1998.)

 10.40   Sublease Agreement, dated December 1, 1996, by and between Dallas
            Airmotive, Incorporated and K-C Aviation, Incorporated.
            (Incorporated herein by reference to Exhibit 10.40 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended September 30, 1998.)

 10.41   Lease Agreement, dated May 1, 1997, by and between Carpenter
            Freeway Properties and K-C Aviation, Incorporated.
            (Incorporated herein by reference to Exhibit 10.41 of
            Registrant's Quarterly Report on Form 10-Q for the quarter
            ended September 30, 1998.)

 10.42   Amendment dated December 2, 1998 to the Amended and Restated
            Gulfstream Aerospace Corporation 1990 Stock Option Plan.* **

 10.43   Form of Stock Option Agreement effective December 1998.* **

 10.44   Form of Stock Option Agreement for partners or employees of FLC
            Partnership effective December 1998.* **

 10.45   Fifth Amendment dated March 1, 1999 to Credit Agreement among
            Gulfstream Delaware Corporation, The Chase Manhattan Bank, and
            the banks and other financial institutions parties thereto.*

 10.46   Secured Promissory Note dated November 30, 1998 between Gulfstream
            Aerospace Corporation and The CIT Group/Equipment Financing,
            Inc.*

 10.47   Secured Promissory Note dated November 30, 1998 between Gulfstream
            Aerospace Corporation and The CIT Group/Equipment Financing,
            Inc.*

 10.48   Secured Promissory Note dated November 30, 1998 between Gulfstream
            Aerospace Corporation and The CIT Group/Equipment Financing,
            Inc.*

 10.49   Form of Security Agreement, dated as of November 30, 1998 by and
            between Gulfstream Aerospace Corporation, as Borrower and The
            CIT Group/Equipment Financing, Inc., as Secured Party.*

 10.50   Form of Guaranty Agreement, dated November 30, 1998, given in
            connection with the Security Agreement and Promissory Note,
            between Gulfstream Aerospace Corporation, as Borrower and The
            CIT Group/Equipment Financing, Inc., as Secured Party.*

  13.1   Annual Report to Stockholders for fiscal year ended December 31,
            1998.  (The 1998 Annual Report, except for those portions
            thereof which are expressly incorporated by reference in this
            Annual Report on Form 10-K, is being furnished for the
            information of the Commission and is not to be deemed "filed"
            as part of the Form 10-K.)*

  21.1   Subsidiaries of the Company.*

  27.1   Financial Data Schedule - Fiscal 1998.*

  99.1   Cautionary Statement for Purpose of the "Safe Harbor" Provisions of The
            Private Securities Litigation Reform Act of 1995.*



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**    Management contract or compensatory plan.

*     Filed herewith.