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                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D. C.  20549
                                
                           ----------
                                
                            FORM 10-Q
                                
                                
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
        FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
                                
                           ----------
                                
                  COMMISSION FILE NUMBER 1-8461
                                
                           ----------
                                
                GULFSTREAM AEROSPACE CORPORATION
                         P. O. Box 2206
                       500 Gulfstream Road
                  Savannah, Georgia  31402-2206
                   Telephone:  (912) 965-3000
                State of incorporation:  Delaware
             IRS identification number:  13-3554834
                                
                           ----------
                                
     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     No  X
                                        ---    ---

     As of November 11, 1996, there were 73,911,773 shares of
Gulfstream Aerospace Corporation Common Stock outstanding.
     
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        GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
                                
                              INDEX
                                
                 PART I.  FINANCIAL INFORMATION
                                                                 
                                                         Page No.
ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS:
          
          Consolidated Balance Sheets
            September 30, 1996 and December 31, 1995............3
          
          Consolidated Statements of Operations
            Three and nine months ended
            September 30, 1996 and 1995.........................4
          
          Consolidated Statement of Stockholders' Equity
            Nine months ended September 30, 1996................5
          
          Consolidated Statements of Cash Flows
            Nine months ended September 30, 1996 and 1995.......6
          
          Notes to Consolidated Financial Statements......... 7-9
          
          
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS.............10-12
          
          
                   PART II.  OTHER INFORMATION
          
ITEM 1.   LEGAL PROCEEDINGS....................................13
          
ITEM 2.   CHANGES IN SECURITIES................................13
          
ITEM 3.   DEFAULTS UPON SENIOR SECURITIES......................13
          
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY
          HOLDERS..............................................13
          
ITEM 5.   OTHER INFORMATION....................................13
          
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.....................14
          
          SIGNATURE............................................14


<TABLE>
        GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                (In thousands, except share data)
<CAPTION>
                                         (UNAUDITED)         
                                        SEPTEMBER 30,  DECEMBER 31,
                                            1996           1995
                                        -------------  -------------
<S>                                     <C>            <C>
ASSETS                                                       
Cash and cash equivalents                 $   264,109   $   223,312
Accounts receivable (less allowance                     
for doubtful accounts:  $3,405 and                     
$3,437)                                       148,436        82,613
Inventories                                   598,122       393,125
Prepaids and other current assets               5,018         2,362
                                         ------------   -----------
  Total current assets                      1,015,685       701,412
                                                        
Property and equipment, net                   123,920       127,151
Tooling                                        48,005        46,412
Goodwill, net of accumulated                            
amortization:  $7,053 and $6,244               36,069        36,877
Other intangible assets, net                   56,824        60,628
Other assets and deferred charges               7,868         8,773
                                         ------------  ------------
  Total Assets                            $ 1,288,371   $   981,253
                                         ============   ===========
                                                        
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Current portion of long-term debt              66,532         53,065
Accounts payable                               70,409         58,191
Accrued liabilities                            85,487         79,911
Customer deposits - current portion           625,358        153,269
                                         -------------  -------------
  Total current liabilities                   847,786        344,436
                                                        
Long-term debt                                 
Accrued postretirement benefit cost            40,000         93,266
Customer deposits - long-term                 107,072        102,021
Other long-term liabilities                    96,550        158,325
Commitments and contingencies                  63,024         65,665                 
                                                        
Stockholders' equity                                    
Preferred stock, Series A, 7% -                         
cumulative; par value $.01; shares                     
authorized:  10,000,000; shares                        
issued:  100 in 1995 and 96 in 1996;                   
Liquidation preference, $546,282,058                   
in 1995 and $450,000,000 in 1996             450,000         468,938

Common stock, Class A, Series A-1 and                   
A-2 par value $.01; shares authorized:                 
93,493,000; shares issued:  41,347,833                 
in 1995 and 41,360,333 in 1996                   414             413                         
                              
Common stock, Class B, par value $.01;                  
shares authorized:  15,780,000; shares                 
issued:  11,045,833                              110             110
Additional paid-in capital                   220,326         210,631
Accumulated deficit                         (482,017)       (410,613)
                                                       
Minimum pension liability                     (1,450)         (1,450)
Unamortized stock plan expense                (2,955)   
Treasury stock, Common stock, Class A,                  
Series A-2, 8,220,833 shares                 (50,489)        (50,489)
                                         ------------    ------------
  Total stockholders' equity                 133,939         217,540
                                         ------------    ------------
Total Liabilities and Stockholders'                    
Equity                                   $ 1,288,371    $    981,253
                                        ============    =============
</TABLE>
See accompanying notes to consolidated financial statements.

<TABLE>
        GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS
              (In thousands, except per share data)
                           (Unaudited)
                                
<CAPTION>
                                    THREE MONTHS          NINE MONTHS
                                        ENDED                ENDED
                                     SEPTEMBER 30,       SEPTEMBER 30,
                                   --------------       --------------
                                    1996    1995         1996    1995
                                   --------------       --------------
<S>                                <C>       <C>       <C>       <C>
   Net Revenues                    $283,834  $239,420  $742,506  $714,304

   Cost and Expenses                            
     Cost of sales                  222,495   195,213   577,336   573,235
     Selling and                
      administrative                 24,819    22,445    70,009    65,096
     Stock option                 
      compensation
      expense                         1,463         -     6,663         -
     Research and                
      development                    16,356    14,708    51,102    48,784
     Amortization of                                              
      intangibles and
      deferred                 
      charges                         1,882     1,882     5,645     5,659
                                    -------   -------   -------   -------
      Total Costs                  
       and Expenses                 267,015   234,248   710,755   692,774
                                    -------    -------   -------   -------
            Income                  
            From Operations          16,819     5,172    31,751    21,530
     Interest income                  3,613     1,465    11,206     2,891
     Interest expense                (3,185)   (4,519)  (10,351)  (14,464)
                                    -------    -------   -------   -------
          Net Income                $17,247    $2,118   $32,606    $9,957
                                    =======    =======   =======   =======
Pro forma, for                                                     
 Recapitalization and               
 Offering, net income per
 share (Note 2)                       $0.22     $0.03     $0.42     $0.13
                                    =======    =======   =======   =======
Pro forma, for                                                     
 Recapitalization and              
 Offering,common shares
 outstanding (Note 2)                78,535    78,535    78,535    78,535
                                    =======    =======   =======   =======
</TABLE>

See accompanying notes to consolidated financial statements.
<TABLE>

                                                   GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
                                                    CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                                      (In Thousands)
                                                                        (Unaudited)
<CAPTION>

                                          Common Stock                                                          
                                        -------------------                        Minimum    
                             Preferred  Class A             Additional  Accumul-   Pension    Unamort-                 Total 
                               Stock    Series A-            Paid-In    ated	   Liability   ized      Treasury   Stockholders
                              Series A  1 & A-2   Class B    Capital   Deficity    Expense   Stock Plan    Stock       Equity
                              --------- ---------  -------- ---------- ----------  --------  ----------  ---------  -------------
<S>                           <C>       <C>       <C>       <C>        <C>         <C>       <C>         <C>        <C>
BALANCE AS OF 
  JANUARY 1,1996              $468,938  $    413  $    110  $  210,631 $(410,613)  $ (1,450)     --      $ (50,489) $     217,540
Net Income                                                                32,606                                           32,606
Issuance of stock pursuant
  to stock options                             1                    77                                                         78
Repurchase of preferred                                                                                             
  stock                        (18,938)                                                                                   (18,938)
Preferred stock dividend                                                (104,010)                                        (104,010)
Issuance of compensatory                                                                                        
  common stock options                                           9,618                         (2,955)                      6,663
                              --------- ---------  -------- ---------- ----------  --------  ----------  ---------  -------------

BALANCE AS OF SEPTEMBER 30,   
  1996                        $450,000   $   414   $   110   $ 220,326 $(482,017)  $ (1,450) $ (2,955)   $ (50,489) $     133,939
                              ========= =========  ======== ========== ==========  ========  ==========  =========  =============
</TABLE>

See accompanying notes to consolidated financial statements.

<TABLE>
        GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (In thousands)
                           (Unaudited)

<CAPTION>
                                               NINE MONTHS ENDED
                                               SEPTEMBER 30,
                                                  1996        1995
                                               ----------  ---------
<S>                                            <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES                                 
Net income                                     $   32,606  $    9,957
Adjustments to reconcile net income to net                            
cash provided by operating activities:
Depreciation and amortization                      18,273      17,264
Postretirement benefit cost                         5,051       4,902
Provision for loss on pre-owned aircraft            1,000       2,050
Non-cash stock option compensation expense          6,663            
All other operating activities                        322         276
Change in assets and liabilities:                                    
Accounts receivable                              (66,048)      49,408
Inventories                                     (205,997)    (66,089)
Prepaids and other assets                         (2,656)       (107)
Other assets and deferred charges                   (128)         467
Accounts payable                                   12,218     (8,329)
Accrued liabilities                                 5,576       7,268
Customer deposits                                 410,314     133,983
Other long-term liabilities                       (2,641)         299
                                               ----------  ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES         214,553     151,349
                                                                     
CASH FLOWS FROM INVESTING ACTIVITIES                                 
Additions to property and equipment               (9,518)    (14,579)
Dispositions of property and equipment                 24          30
Additions to tooling                              (1,593)    (24,440)
                                               ----------  ----------
NET CASH USED IN INVESTING ACTIVITIES            (11,087)    (38,989)
                                                                     
CASH FLOWS FROM FINANCING ACTIVITIES                                 
Proceeds from issuance of common stock                78          10
Repurchase of preferred stock                    (18,938)            
Repayment of term loans                          (39,799)    (18,548)
Payment of dividends on preferred stock         (104,010)            
                                               ----------  ----------
NET CASH USED IN FINANCING ACTIVITIES           (162,669)    (18,538)
                                               ----------  ----------
Increase in cash and cash equivalents              40,797      93,822
Cash and cash equivalents, beginning of period    223,312      23,605
                                               ----------  ----------
Cash and cash equivalents, end of period       $  264,109  $  117,427
                                               ==========  ==========
</TABLE>
See accompanying notes to consolidated financial statements.


        GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
NOTE 1.   BASIS OF PRESENTATION
     
     The accompanying unaudited consolidated financial statements
have been prepared by the Company pursuant to the rules of the
Securities and Exchange Commission ("SEC") and, in the opinion of
the Company, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of
financial position, results of operations and cash flows.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to SEC rules.  The operating results for the three and
nine months ended September 30, 1996 are not necessarily
indicative of the results to be expected for the full year.  It
is suggested that these financial statements be read in
conjunction with the Company's December 31, 1995 audited
consolidated financial statements and notes thereto included in
the Company's Registration Statement on Form S-1 (Reg. No. 333-
09897).

NOTE 2.   PRO FORMA PER SHARE INFORMATION
     
     Pro forma net income per share amounts are calculated based
upon net income, divided by the pro forma weighted average number
of common and common equivalent shares outstanding, assuming the
Recapitalization and Offering occurred at the beginning of all
periods (as discussed in Note 5) and assuming that all options to
purchase common stock were exercised (applying the treasury stock
method and using the initial public offering price of $24.00 per
share).  Options to purchase common stock issued or granted in
the twelve months ended September 30, 1996 were treated as
outstanding for all periods reported.  Historical net income per
common and common equivalent share is not presented as it is not
relevant.

NOTE 3.   INVENTORIES
     
     Inventories consisted of the following at:
<TABLE>
<CAPTION>
                                          September   December
                                          30, 1996    31, 1995
                                             (In thousands)
                                         ----------  ----------
<S>                                      <C>         <C>
Finished goods                           $    _      $  17,996
Pre-owned aircraft                          90,150      57,750
Work in process                            317,690     173,756
Raw materials                               80,332      75,768
Vendor progress payments                   109,950      67,855
                                         ----------  ----------
                                         $ 598,122   $ 393,125
                                         ==========  ==========
</TABLE>

NOTE 4.   CONTINGENCIES
     
     In the normal course of business, lawsuits, claims and
proceedings have been or may be instituted or asserted against
the Company relating to various matters, including products
liability.  Although the outcome of litigation cannot be
predicted with certainty and some lawsuits, claims or proceedings
may be disposed of unfavorably to the Company, management has
made provision for all known probable losses related to lawsuits
and claims and believes that the disposition of all matters which
are pending or asserted will not have a material adverse effect
on the financial statements of the Company.

        GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4.   CONTINGENCIES (CONTINUED)
     
     The Company is involved in a tax audit by the Internal
Revenue Service covering the years ended December 31, 1990 and
1991. The revenue agent's report includes several proposed
adjustments involving the deductibility of certain compensation
expense and items relating to the capitalization of the Company
as well as 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 and 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.
     
     The Company is currently engaged in the monitoring and
cleanup of certain ground water at its Savannah facility under
the oversight of the Georgia Department of Natural Resources.
Expenses incurred for cleanup have not been significant.  The
Company received in 1992, at its Long Beach facility, two
inquiries from the U.S. Environmental Protection Agency and, in
1991, at its Oklahoma facility, a soil contamination inquiry.
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 Company believes
the liabilities, if any, that will result from the above
environmental matters will not have a material adverse effect on
its financial statements.
     
     Management of the Company expects that its new Gulfstream V
aircraft will be certified by the Federal Aviation Administration
by the end of 1996.  While a significant delay in such
certification could have near term adverse consequences,
management believes that certification will occur on schedule.

NOTE 5.   SUBSEQUENT EVENTS
     
     On October 16, 1996, the Company issued 4,559,100 shares of
Common Stock, and selling stockholders sold 37,940,900 shares of
Common Stock, in an initial public offering pursuant to the
Securities Act of 1933 (the "Offering").  In connection and
simultaneously with the closing of the Offering, the Company (a)
effected a recapitalization plan (the "Recapitalization") which
included (i) the repurchase of all of its outstanding 7% Series A
Cumulative Preferred Stock (the "7% Cumulative Preferred Stock")
for a purchase price of $450 million plus approximately $1.3
million of unpaid dividends, (ii)  the exchange of all
outstanding shares of Class A, Series A-2 and Class B Common
Stock for Class A,  Series A-1 Common Stock, (iii) the
redesignation of all Class A, Series A-1 Common Stock into Common
Stock, (iv) a 1.5-for-1 stock split of the Common Stock, and (v)
the restatement of the Company's certificate of incorporation to
provide that the authorized capital stock of the Company consists
of  300,000,000 shares of Common Stock, par value of $.01 per
share, and 20,000,000 shares of Preferred Stock, par value of
$0.01 per share,  and (b) issued 3,949,346 shares of Common Stock
to certain option holders pursuant to existing option agreements,
who subsequently sold those shares in the Offering.
     
     Also, on October 16, 1996, as part of the Recapitalization
described above, the Company entered into a new long-term credit
agreement  (the "Credit Agreement") under which the lenders, who
are parties to the Credit Agreement, made available to the
Company a $400 million term loan and a $250 million revolving
credit facility.  A portion of the revolving credit facility, in
an amount not to exceed $150 million, may be used for standby and
commercial letters of credit and up to $20 million of the
revolving credit facility may be used for swingline loans.  The
term loan will be repayable in consecutive quarterly installments
commencing June 30, 1997 with a final maturity on September 30,
2002, in aggregate amounts for each of the following periods as


        GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                
NOTE 5.   SUBSEQUENT EVENTS (CONTINUED)

follows  (with the installments within each year being equal):
1997 - $20.0 million; 1998 through  2001 - $75.0 million; 2002 -
$80.0 million.  The Company will be required to pay commitment
fees on the average daily unutilized portion of the term loan
facility and the revolving credit facility, which fees will
initially be set at .375% per annum, and which may range from
 .250% to .500% per annum based on a certain financial ratio.
     
     The Credit Agreement permits the Company to choose between
two interest rate options:  (i) the Adjusted Base Rate (the
"ABR"), which is based on the greater of (a) the prime rate
published by The Chase Manhattan Bank ("Chase") and (b) the
federal funds effective rate, or (ii) a Eurodollar Loan Rate.  In
addition, swingline loans made pursuant to the Credit Agreement
will accrue interest at the ABR or the Money Market Rate, which
money market rate is based on the money market rate quoted by
Chase.  The Credit Agreement contains financial and operating
covenants, including limitations on total indebtedness,
contingent obligations, liens and the payment of dividends, and
requires the maintenance of certain financial ratios.
Concurrently with entering into the Credit Agreement, the Company
repaid all amounts outstanding under its pre-existing credit
agreements totalling $107.7 million, and terminated such
agreements.

              MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     
     The following discussion should be read in conjunction with
the Notes to Consolidated Financial Statements beginning on page
7 and with Management's Discussion and Analysis of Financial
Condition and Results of Operations (MD&A) and the audited
Consolidated Financial Statements and Notes to Consolidated
Financial Statements appearing in the Company's Registration
Statement on Form S-1 (Reg. No. 333-09897).

COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTER AND NINE
MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
     
     NET REVENUES.  Net revenue increased $44.4 million, or
18.6%, from $239.4 million in the third quarter of 1995 to $283.8
million in the third quarter of 1996.  In the third quarter of
1996, Gulfstream delivered nine new GIV-SPs, up from five in the
third quarter of 1995, offset by a decrease in the sale of pre-
owned aircraft ($36.2 million) resulting from a reduced number of
trade-ins requiring resales.  During the nine months ended
September 30, 1996, total net revenues increased by $28.2
million, or 3.9%, to $742.5 million from $714.3 million for the
nine months ended September 30, 1995.  For the nine month period
ended September 30, 1996, Gulfstream delivered 20 new GIV-SPs, up
from 19 in the same period in 1995.  Other factors contributing
to the overall revenue increase in the nine month period ended
September 30, 1996 were higher Gulfstream IV-SP average selling
prices ($14.6 million), additional completion volume ($22.8
million), and increased international spares sales and service
center volume ($20.5 million).  Offsetting these increases was a
decrease in the sale of pre-owned aircraft ($45.9 million)
resulting from a reduced number of trade-ins requiring resales
and the conclusion in late 1995 of a U.S. Department of Defense
logistical supply contract ($15.0 million).
     
     COST OF SALES.  Total cost of sales increased $27.3 million,
or 14.0%, from $195.2 million in the third quarter of 1995 to
$222.5 million in the third quarter of 1996.  The increase was a
result of four additional new aircraft deliveries, partially
offset by two less pre-owned aircraft deliveries.  Excluding pre-
owned aircraft, which generally are sold at break-even levels,
the gross profit percentage for the third quarter of 1996 was
24.7% compared to 24.3% for the third quarter 1995.  Total cost
of sales increased by less than 1.0%, or $4.1 million, to $577.3
million for the nine months ended September 30, 1996 from $573.2
million for the nine months ended September 30, 1995.  The
increase in total cost of sales during 1996 was due to increased
level of Gulfstream IV-SP deliveries, completion deliveries, and
spare sales and service volume.  Excluding pre-owned aircraft,
the gross profit percentage increased to 26.0% for the nine
months ended September 30, 1996 from 25.2% for the comparable
period in 1995, primarily as a result of cost and cycle time
reduction initiatives and price appreciation on Gulfstream IV-SP
new aircraft and completion sales.
     
     SELLING AND ADMINISTRATIVE EXPENSE.  Selling and
administrative expense increased by $2.4 million, or 10.6%, from
$22.4 million for the third quarter of 1995 to $24.8 million for
the third quarter of 1996.  For the nine month period ended
September 30, 1996, selling and administrative expense increased
by $4.9 million, or 7.5%, to $70.0 million, from $65.1 million
for the nine month period ended September 30, 1995.  The dollar
increase principally resulted from increased advertising and
marketing expenses associated with the Gulfstream V program.
     
     STOCK OPTION COMPENSATION EXPENSE.  The issuance of options
to purchase common stock of the Company during the nine months
ended September 30, 1996 resulted in a non-cash compensation
charge of $6.7 million, of which $1.5 million was recorded in the
third quarter of 1996.
     
     RESEARCH AND DEVELOPMENT EXPENSE.  Research and development
expense increased by $1.7 million, or 11.2%, from $14.7 million
for the third quarter of 1995 to $16.4 million for the third
quarter of 1996.  For the nine month period ended ended September
30, 1996, research and development expense increased by $2.3
million, or 4.8%, to $51.1 million, from $48.8 million for the
nine month period ended September 30, 1995.  Substantially all
research and development expense was associated with the
Gulfstream V development program, which the Company expects to be
materially completed by the end of 1996.
     
     AMORTIZATION OF INTANGIBLES AND DEFERRED CHARGES.
Amortization of intangibles and deferred charges of $1.9 million
and $5.7 million for the third quarter of 1996 and the nine
months ended September 30, 1996, respectively, remained
essentially unchanged from the comparable periods in 1995.
     
     INTEREST INCOME AND EXPENSE.  Interest income increased by
$2.1 million to $3.6 million in the third quarter of 1996 from
$1.5 million in the third quarter of 1995 and increased by $8.3
million to $11.2 million in the nine months ended September 30,
1996 from $2.9 million in the nine months ended September 30,
1995, in each case, as a result of an increase in cash generated
from operations.  Interest expense decreased by $1.3 million to
$3.2 million for the third quarter of 1996 and by $4.1 million to
$10.4 million for the nine months ended September 30, 1996,
respectively, from comparable periods in 1995.  This decrease was
due to limited use of the revolving credit facility and a
reduction in borrowings under the existing term loans.
     
     INCOME TAXES.  The Company had available at September 30,
1996 net operating loss carryforwards for regular federal income
tax purposes of approximately $150 million, which will begin
expiring in 2006.  Although the Company recorded net income
during the nine months ended September 30, 1996 and the nine
months ended September 30, 1995, no provision for income taxes
was recorded in either period principally as a result of the
utilization of net operating loss carryforwards.

LIQUIDITY AND CAPITAL RESOURCES
     
     The Company's liquidity needs arise from working capital
requirements, capital expenditures, principal and interest
payments on long-term debt, and the payment of dividends on the
7% Cumulative Preferred Stock (which was repurchased on October
16, 1996 simultaneously with the consummation of the Offering).
During the nine months ended September 30, 1996, the Company
relied on cash flows from operations to finance these needs.
     
     During the nine months ended September 30, 1996, $214.6
million of cash was generated from operations versus $151.3
million in the first nine months of 1995.  This increase was
principally due to the increase in customer progress payments
associated with aircraft orders in backlog and deposits on new
Gulfstream V aircraft orders, a portion of which funds the
temporary inventory build-up associated with Gulfstream V
production occurring prior to initial customer aircraft
deliveries.  The Company expects to begin deliveries of
Gulfstream V aircraft in the fourth quarter of 1996 with six
deliveries planned for 1996 and 27 deliveries planned for 1997.
     
     During the nine months ended September 30, 1996, additions
to property and equipment were $9.5 million and capitalized
tooling increased $1.6 million.
     
     During the nine months ended September 30, 1996, the Company
repurchased approximately four shares of 7% Cumulative Preferred
Stock at their stated value of $18.9 million, and paid
accumulated dividends of $104.0 million out of excess cash flow.
     
     At September 30, 1996, borrowings under the Company's pre-
existing bank credit facilities were $106.5 million.  The Company
made scheduled principal payments of $39.8 million during the
nine months ended September 30, 1996.
     
     On October 16, 1996, Gulfstream Delaware Corporation, a
wholly owned subsidiary of the Company, entered into a new $650
million credit facility with Chase, as Administrative Agent (the
"Credit Agreement").  The Credit Agreement consists of a $400
million term loan facility and a $250 million revolving credit
facility.  The Credit Agreement contains customary affirmative
and negative covenants including restrictions on the ability of
the Company and its subsidiaries to pay cash dividends, as well
as financial covenants, under which the Company must operate.
Scheduled repayments under the new term loan facility of $20
million in 1997, $75 million in each of the years 1998 through
2001, and $80 million in 2002 are expected to be repaid from cash
generated from operations.
     
     On October 16, 1996, the Company completed an initial public
offering from which the Company received net proceeds of
approximately $100 million after deducting underwriting discounts
and other expenses.  The Company used the net proceeds of the
Offering, together with the $400 million term loan under the new
Credit Agreement, to repurchase the 7% Cumulative Preferred Stock
and repay all the outstanding indebtedness under the Company's
pre-existing credit facilities and to pay fees and expenses
incurred in connection with the Offering and the refinancing of
the Company's indebtedness.  See "Note 5. Subsequent Events"
included on page 8 of "Notes to Consolidated Financial
Statements".
     
     The Company believes that the net proceeds of the Offering,
together with cash generated from operating activities, including
customer progress payments and deposits on new aircraft orders,
and borrowings available under the Credit Agreement, are
sufficient for the Company to meet its anticipated working
capital needs and planned capital expenditures.
     
     In connection with orders for 28 Gulfstream V aircraft in
the backlog, the Company has offered customers trade-in options
(which may or may not be exercised) under which the Company will
accept trade-in aircraft, primarily Gulfstream IVs and Gulfstream
IV-SPs, at a guaranteed minimum trade-in price.  In light of the
current market for pre-owned Gulfstream aircraft, management
believes that the fair market value of such aircraft will exceed
the specified trade-in values.  As such, Gulfstream does not
believe the existence of such commitments will have a material
adverse effect on its results of operations, cash flow or
financial position.
     
     On October 10, 1996, the Company reached an agreement in
principal with the Pension Benefit Guaranty Corporation (the
"PBGC") concerning funding of the Company's defined benefit
pension plans.  Pursuant to this agreement, the Company has
agreed to contribute an additional $20 million in 1996 and a
total of $25 million annually in 1997 through 2000 to its pension
plans, which payments are expected to result in such plans being
fully funded.  The payments to be made under this agreement were
already part of the Company's overall financial planning, and;
therefore, are not expected to have a material effect on the
Company's financial statements.
     
     At September 30, 1996, Gulfstream had a firm contract
backlog of approximately $3.0 billion of revenues.  This excludes
executed contracts with financing contingencies and letters of
intent with deposits.

                   PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS
          
          Not Applicable.

Item 2.   CHANGES IN SECURITIES
          
          Not Applicable.

Item 3.   DEFAULTS UPON SENIOR SECURITIES
          
          Not Applicable.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          
          Prior to the closing of the Company's initial public
          offering, the Company's authorized capital stock
          consisted of (a) preferred stock, $0.01 par value per
          share ("Preferred Stock"), (b) Class A Common Stock,
          Series A-1, $0.01 par value per share ("Series A-1
          Stock"), (c) Class A Common Stock, Series A-2, $0.01
          par value per share, and (d) Class B Common Stock,
          $0.01 par value per share ("Class B Stock").  Effective
          August 30, 1996, all holders of Preferred Stock, Series
          A-1 Stock, Series A-2 Stock and Class B Stock executed
          a written consent approving (i) the amendment and
          restatement of the Company's amended and restated
          certificate of incorporation to provide that the
          authorized capital stock of the Company would consist
          of preferred stock and a single class of common stock,
          (ii) the classification of the board of directors and
          (iii) the entry of the Company into indemnification
          agreements with its directors and certain of its
          officers.  These amendments became effective prior to
          the closing of the Company's initial public offering.

Item 5.   OTHER INFORMATION
          
          From time to time, the Company may make certain oral
          and written statements that contain forward looking
          information and involve uncertainty.  The Private
          Securities Litigation Reform Act of 1995 provides a
          "safe harbor" for certain statements containing forward
          looking information.  The Company is filing with this
          report a cautionary statement identifying important
          factors which could cause actual results to differ
          materially from statements contained in this report,
          future filings by the Company with the Securities and
          Exchange Commission, the Company's press releases and
          oral statements made by or on behalf of the Company.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K
      
      (a) Exhibits
          Exhibit 3.1      Restated Certificate of Incorporation
                           of the Company.
          Exhibit 3.2      Restated By-Laws of the Company.
          Exhibit 10.1     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).
          Exhibit 11.1     Computation of Pro Forma Earnings per
                           Common Share.
          Exhibit 27.1     Financial Data Schedule
          Exhibit 99.1     Cautionary Statement for Purposes of
                           the "Safe Harbor" Provisions of The
                           Private Securities Litigation Reform
                           Act of 1995.
      (b) Report on Form   No reports on Form 8-K were filed
          8-K              during the quarter ended September
                           30, 1996,as the Company was not
                           subject to the filing requirements
                           under Form 8-K prior to October 9,
                           1996.


                          SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

DATED: November 13, 1996

                           GULFSTREAM AEROSPACE CORPORATION
                           
                           /s/ Chris A. Davis
                           -------------------------------------
                           Chris A. Davis
                           Executive Vice President and
                           Chief Financial Officer
                           (Principal Financial and Accounting
                           Officer)

                          EXHIBIT INDEX
                         ---------------

    EXHIBIT NO.             EXHIBIT                     PAGE NO.
    -----------             -------                     --------

        3.1             Restated Certificate of Incorporation of the Company.

        3.2             Restated By-Laws of the Company.

        10.1		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).

        11.1            Computation of Pro Forma Earnings per Common Share.

        27.1            Financial Data Schedule.

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