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ANNUAL EXHIBIT 99(e) TO
ANNUAL REPORT ON FORM 10-K
OF GENERAL DYNAMICS CORPORATION
SEC FILE NO. 1-3671
-----------------
SECURITIES AND EXCHANGE COMMISION
WASHINGTON, D.C. 20549
-----------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 19(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
A. Full title of the Plan and the address of the Plan, if different from the
issuer named below:
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES
SAVINGS AND STOCK INVESTMENT PLAN
B. Name of the issuer of the securities held pursuant to the Plan and the
address of the principal executive office:
GENERAL DYNAMICS CORPORATION
3190 FAIRVIEW PARK DRIVE
FALLS CHURCH, VIRGINIA 23042-4523
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GENERAL DYNAMICS CORPORATION
INDEX OF FINANCIAL STATEMENTS AND EXHIBITS
Pages of this
Form 11-K
(a) FINANCIAL STATEMENTS
Report of Independent Public Accountants 6
Statements of Net Assets Available for Benefits,
December 31, 1996 and 1995 7-8
Statement of Changes in Net Assets Available for Benefits,
Fiscal Year Ended December 31, 1996 9
Notes to Financial Statements 10-13
Schedule I - Combined Statement of Investments
in Master Trust Funds 14-34
(b) SIGNATURE 3
(c) EXHIBITS
Consent of Independent Public Accountants 4
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Plan Administrator has caused this Annual Report to be signed by the
undersigned thereunto duly authorized.
GENERAL DYNAMICS CORPORATION
As Plan Administrator of the General Dynamics
Corporation Savings and Stock Investment Plan
By /s/ P. A. Hesse
----------------
P. A. Hesse
Secretary
June 17, 1997
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 11-K, into General Dynamics Corporation's
previously filed Registration Statement on Form S-8, File No. 2-24270.
By /s/ Arthur Andersen LLP
------------------------
Arthur Andersen LLP
Washington, D.C.
June 17, 1997
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GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To General Dynamics Corporation:
We have audited the accompanying statements of net assets available for
benefits of the General Dynamics Corporation Hourly Employees Savings and Stock
Investment Plan as of December 31, 1996 and 1995, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1996. These financial statements and the schedule referred to below are the
responsibility of the Plan Administrator. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the General
Dynamics Corporation Hourly Employees Savings and Stock Investment Plan as of
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The Combined Statement of Investments in Master
Trust Funds (Schedule I), is presented for the purpose of additional analysis
and is not a required part of the basic financial statement but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The Fund Information in the statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to
present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedule and Fund
Information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
Washington, D.C. Arthur Andersen LLP
June 17, 1997
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GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996
FUNDS
-----------------------------------
COMPANY GOVERNMENT
TOTAL STOCK BONDS
------------- ---------------- -----------------
ASSETS:
Investment in common stock of General Dynamics Corporation,
at market value - 686,858 shares (Cost $22,002,484)
Participant-directed $ 39,427,345 $39,427,345 $ -
Non-participant-directed 9,167,893 9,167,893 -
Investments in securities of unaffiliated issuers, at
market value-
U.S. Government bonds (Cost $67,704,172) 68,889,380 - 68,889,380
Other securities (Cost $67,830,411) 82,835,470 - -
Guaranteed investment contracts, at fair value (Cost
$236,670,922) 245,666,720 - -
Loans receivable (payable) 1,271,045 (5,076) 1,455
Amounts receivable (payable) from General Dynamics
Corporation (606,271) (133,202) (86,638)
------------ ----------- -----------
Total Assets 446,651,582 48,456,960 68,804,197
------------ ----------- -----------
LIABILITIES:
Fund transfers 3,008 78,562 453,805
Administrative fees payable 116,582 9,764 15,471
Loans payable (receivable) - 1,040 8,415
------------ ----------- -----------
Total Liabilities 119,590 89,366 477,691
------------ ----------- -----------
Net Assets Available for Benefits $446,531,992 $48,367,594 $68,326,506
============ =========== ===========
FUNDS
--------------------------------------------------------------
DIVERSIFIED FIXED SPECIAL
PORTFOLIO INCOME DISTRIBUTION LOAN
---------------- ------------- ----------------- ----------
ASSETS:
Investment in common stock of General Dynamics Corporation,
at market value - 686,858 shares (Cost $22,002,484)
Participant-directed $ - $ - $ - $ -
Non-participant-directed - - - -
Investments in securities of unaffiliated issuers, at
market value-
U.S. Government bonds (Cost $67,704,172) - - - -
Other securities (Cost $67,830,411) 75,165,683 - 7,669,787 -
Guaranteed investment contracts, at fair value (Cost
$236,670,922) - 245,666,720 - -
Loans receivable (payable) 2,501 4,423 - 1,267,742
Amounts receivable (payable) from General Dynamics
Corporation (125,345) (261,086) - -
------------ ------------ ----------- ----------
Total Assets 75,042,839 245,410,057 7,669,787 1,267,742
------------ ------------ ----------- ----------
LIABILITIES:
Fund transfers (77,203) (458,792) 6,636 -
Administrative fees payable 46,605 43,824 918 -
Loans payable (receivable) 35,709 17,040 3,096 (65,300)
------------ ------------ ----------- ----------
Total Liabilities 5,111 (397,928) 10,650 (65,300)
------------ ------------ ----------- ----------
Net Assets Available for Benefits $ 75,037,728 $245,807,985 $ 7,659,137 $1,333,042
============ ============ =========== ==========
The accompanying notes are an integral part of these financial statements.
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GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1995
FUNDS
-----------------------------------------------
COMPANY GOVERNMENT DIVERSIFIED
TOTAL STOCK BONDS PORTFOLIO
----------- ------------- ---------------- ---------------
ASSETS:
Investment in common stock of General Dynamics Corporation,
at market value - 797,904 shares (Cost $24,115,605)-
Participant-directed $ 39,138,221 $39,138,221 $ - $ -
Non-participant-directed 8,037,891 8,037,891 - -
Investments in securities of unaffiliated issuers, at
market value-
U.S. Government bonds (Cost $77,327,729) 78,803,590 - 78,803,590 -
Other securities (Cost $65,641,519) 76,920,790 - - 67,704,005
Guaranteed investment contracts, at fair value
(Cost $244,292,825) 261,281,304 - - -
Loans receivable (payable) 1,612,018 (2,454) 832 1,508
Amounts receivable (payable) from General Dynamics
Corporation (35,084) 7,187 (13,302) (3,791)
------------- ----------- ----------- -----------
Total Assets 465,758,730 47,180,845 78,791,120 67,701,722
------------- ----------- ----------- -----------
LIABILITIES:
Fund transfers - 434,721 360,682 (38,289)
Administrative fees payable 99,061 8,707 17,782 24,843
Loans payable (receivable) - 9,602 26,735 23,794
------------- ----------- ----------- -----------
Total Liabilities 99,061 453,030 405,199 10,348
------------- ----------- ----------- -----------
Net Assets Available for Benefits $ 465,659,669 $46,727,815 $78,385,921 $67,691,374
============= =========== =========== ===========
FUNDS
---------------------------------------------------
FIXED SPECIAL
INCOME DISTRIBUTION LOAN
--------------- ------------------- -----------
ASSETS:
Investment in common stock of General Dynamics Corporation,
at market value - 797,904 shares (Cost $24,115,605)-
Participant-directed $ - $ - $ -
Non-participant-directed - - -
Investments in securities of unaffiliated issuers, at
market value-
U.S. Government bonds (Cost $77,327,729) - - -
Other securities (Cost $65,641,519) - 9,216,785 -
Guaranteed investment contracts, at fair value
(Cost $244,292,825) 261,281,304 - -
Loans receivable (payable) 4,797 - 1,607,335
Amounts receivable (payable) from General Dynamics
Corporation (25,178) - -
------------- ---------- ----------
Total Assets 261,260,923 9,216,785 1,607,335
------------- ---------- ----------
LIABILITIES:
Fund transfers (832,738) 75,624 -
Administrative fees payable 45,817 1,912 -
Loans payable (receivable) 32,237 7,832 (100,200)
------------- ---------- ----------
Total Liabilities (754,684) 85,368 (100,200)
------------- ---------- ----------
Net Assets Available for Benefits $ 262,015,607 $9,131,417 $1,707,535
============= ========== ==========
The accompanying notes are an integral part of these financial statements.
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GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
FUNDS
-------------------------------------------------
COMPANY STOCK
---------------------------------
NON-
PARTICIPANT- PARTICIPANT- GOVERNMENT
TOTAL DIRECTED DIRECTED BONDS
--------------- -------------- ---------------- -------------
INVESTMENT INCOME:
Dividends $ 2,455,081 $ 978,787 $ 193,167 $ -
Interest 23,681,855 21,806 4,304 4,402,174
-------------- ----------- ----------- --------------
26,136,936 1,000,593 197,471 4,402,174
ADD (DEDUCT)-
NET REALIZED AND UNREALIZED GAIN (LOSS) ON ASSETS 13,751,377 6,886,898 1,359,156 (936,531)
ROLLOVER CONTRIBUTIONS 1,076 - - 359
DEPOSITS BY PARTICIPANTS 11,603,913 1,430,776 - 1,488,586
CONTRIBUTIONS BY GENERAL DYNAMICS CORPORATION 5,472,494 325,787 978,234 610,554
LOAN REPAYMENTS 87,276 315,606 - 97,430
LOANS ISSUED - (38,143) - (103,415)
TRANSFER BETWEEN INVESTMENT FUNDS (3,008) (691,567) - (1,556,797)
DISTRIBUTIONS TO WITHDRAWN PARTICIPANTS (75,161,832) (9,044,473) (987,307) (13,913,150)
PLAN EXPENSES (1,015,909) (93,252) - (148,625)
-------------- ----------- ----------- --------------
Net increase (decrease) (19,127,677) 92,225 1,547,554 (10,059,415)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 465,659,669 39,092,868 7,634,947 78,385,921
-------------- ----------- ----------- --------------
End of year $ 446,531,992 $39,185,093 $ 9,182,501 $ 68,326,506
============== =========== =========== ==============
FUNDS
-----------------------------------------------------------------
DIVERSIFIED FIXED SPECIAL
PORTFOLIO INCOME DISTRIBUTION LOAN
----------------- ------------ ---------------- --------
INVESTMENT INCOME:
Dividends $ 1,283,127 $ - $ - $ -
Interest 52,636 18,750,309 450,626 -
------------ ------------ ----------- ----------
1,335,763 18,750,309 450,626 -
ADD (DEDUCT)-
NET REALIZED AND UNREALIZED GAIN (LOSS) ON ASSETS 14,183,487 (7,741,633) - -
ROLLOVER CONTRIBUTIONS 717 - - -
DEPOSITS BY PARTICIPANTS 2,353,561 6,330,990 - -
CONTRIBUTIONS BY GENERAL DYNAMICS CORPORATION 943,929 2,613,990 - -
LOAN REPAYMENTS 147,424 269,309 - (742,493)
LOANS ISSUED (226,393) (371,089) (38,160) 777,200
TRANSFER BETWEEN INVESTMENT FUNDS 349,505 2,008,744 (112,893) -
DISTRIBUTIONS TO WITHDRAWN PARTICIPANTS (11,442,850) (37,608,844) (1,756,008) (409,200)
PLAN EXPENSES (298,789) (459,398) (15,845) -
------------ ------------ ----------- ----------
Net increase (decrease) 7,346,354 (16,207,622) (1,472,280) (374,493)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 67,691,374 262,015,607 9,131,417 1,707,535
------------ ------------ ----------- ----------
End of year $ 75,037,728 $245,807,985 $ 7,659,137 $1,333,042
============ ============ =========== ==========
The accompanying notes are an integral part of these financial statements.
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GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
1. The General Dynamics Corporation Hourly Employees Savings and Stock
Investment Plan (the "Plan") is a contributory defined contribution plan
covering eligible hourly employees of General Dynamics Corporation (the
"Company") that have completed one year of continuous service. The
following is a brief description of the Plan provided for general
information purposes. Participants should refer to the Plan agreement for
more complete information.
A member may contribute from 2% to 10% of base earnings up to $12.01 per
hour and 2% - 6% of base earnings in excess of $12.01 per hour up to
$16.01 per hour. Maximum contributions for represented employees are
determined by the applicable collective bargaining agreements. In
addition, members at some locations may contribute another 1% - 4% of base
earnings up to $16.01 per hour on an unmatched basis.
Each member shall direct his contributions to be invested in accordance
with any one of the following options:
1) 33-1/3% Government Bonds Fund, 33-1/3% Diversified Portfolio Fund and
33-1/3% Company Stock Fund,
2) 33-1/3% Government Bonds Fund and 66-2/3% Company Stock Fund,
3) 33-1/3% Government Bonds Fund and 66-2/3% Diversified Portfolio Fund,
4) 100% Government Bonds Fund,
5) 33-1/3% Fixed Income Fund and 66-2/3% Diversified Portfolio Fund,
6) 33-1/3% Fixed Income Fund and 66-2/3% Company Stock Fund,
7) 100% Fixed Income Fund, or
8) 100% Company Stock Fund.
Certain plan members not covered by collective bargaining agreements are
allowed to select investment Option 8, under which 100% of their contributions
to the Plan are invested in Company common stock. Participants selecting Option
8 receive a higher Company matching contribution of 100%. The nonrepresented
plan members who do not elect Option 8, receive a 50% Company matching
contribution in Company common stock. Contributions invested in the Company
Stock Fund must be held in that fund for five years before becoming eligible
for withdrawal or transfer to any other fund.
Also, with respect to participants who are eligible for selection of investment
Option 8, another series of plan provisions has been added:
Investment fund transfer rules allow all plan members to elect one fund
transfer per calendar year. Participants may transfer both their
contributions and the Company's contributions invested in any fund to any
other investment fund, except as follows:
- transfers may not be made from the Fixed Income Fund,
- funds may not be transferred into and out of the same investment fund
during a transfer, and
- all investments in Company common stock must be held for five plan
years before they may be transferred.
All Company matching contributions to the Plan after January 1, 1992 for
non-union participants and union participants who are members of unions that
have adopted the Option 8 provisions pursuant to collective bargaining
agreements are classified as non-participant-directed investments in the
financial statements. All participant contributions to the Company Stock Fund
and Company matching contributions to the Company Stock Fund for union
participants who are members of unions that have not adopted the Option 8
provisions pursuant to collective
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bargaining agreements are reflected as participant-directed investments. With
the exception of the Company Stock Fund, all other investment funds are
completely participant-directed.
All non-union plan members and certain members covered by collective bargaining
agreements with the Company become fully vested in all investments purchased
with Company contributions upon the earlier of completion of five years of
continuous service with the Company or death, retirement, layoff (for four
consecutive weeks), permanent or total disability or involuntary entry into
military service.
Certain plan members covered by various collective bargaining agreements are
eligible to make additional matched and unmatched contributions to the Plan.
These additional contributions may not exceed the maximum percentages of base
earnings specified in the collective bargaining agreements.
The Plan provides that any special distributions payable to non-union members
with respect to Company Stock allocated to participant accounts would be
credited to the participants' Special Distribution Fund, rather than being
automatically reinvested in additional shares of Company Stock. Participants
are entitled to transfer amounts credited to their accounts in the Special
Distribution Fund to other investment funds. Special distributions include all
proceeds received from tenders or sales of Company Stock and other
distributions, except regular quarterly dividends which would continue to be
invested in Company Stock. Funds credited to these accounts in the Special
Distribution Fund would be invested in high quality securities. The Company has
negotiated similar changes in the Plan as applicable to unionized employees
with those employees' collective bargaining units.
In addition, the Plan was amended to permit non-union participants who have
shares of Company Stock allocated to their accounts to direct the trustee with
respect to tender of shares pursuant to any Company Stock repurchase program or
tender offer. Any proceeds realized from such share repurchase will be treated
as a Special Distribution. Similar changes have been negotiated with respect to
unionized employees in the Plan.
Nonunion hourly and union hourly active or employed inactive participants who
are members of unions that have adopted the loan provisions pursuant to
collective bargaining agreements are permitted to borrow up to 50% of the
vested amount in their accounts in accordance with the specific provisions of
the Plan. Participants may repay the loan by regular payroll deductions over a
period of up to five years.
2. According to the Plan Document, the five plan funds may hold the following
types of investments:
a) Government Bonds Fund - includes only direct obligations of the
United States Government and its agencies or obligations guaranteed
as to the payment of interest and principal by the United States
Government and may also include other investments of a short-term
nature as provided in the trust agreement.
b) Diversified Portfolio Fund - includes only common or capital stocks
of issuers other than the Company, bonds or debentures or preferred
stocks convertible into common or capital stocks of issuers other
than the Company, and other similar types of equity investments, and
may also include other investments of a short-term nature as provided
in the trust agreement.
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c) Company Stock Fund - includes only common stock of the Company.
d) Fixed Income Fund - includes investments in fixed income and other
investment contracts with insurance companies designated by the
Company and may also include other investments of a short-term nature
as provided in the trust agreement.
e) Special Distribution Fund - includes obligations issued or fully
guaranteed as to payment of principal and interest by the United
States of America or its agencies, high quality commercial paper,
certificates of deposit, short-term investment vehicles or any high
quality securities selected by the Company or any investment manager
of the fund.
All of the above Funds may hold a small cash balance for purpose of
liquidity and expense control.
During June 1997, the Company extended the investment options for plan
participants. Two of the options offered in 1996 will remain available to
participants: the Company Stock Fund and the Fixed Income Fund. The new
options include: Bond Index Fund, Balanced Fund, S&P 500 Stock Index Fund,
International Index Fund and Small Cap Index Fund. These investment
options will offer participants the opportunity to invest in a broader
range of the risk/return spectrum for actively traded securities.
Description of the new options include:
a) Bond Index Fund - Includes investments in government, mortgage-backed
and asset-backed securities. The Fund also invests in high quality
bonds.
b) Balanced Fund - The Fund is mixed portfolio of commingled stocks and
bond funds. The Fund is made up of international equities, U.S.
large cap equities, fixed income securities, U.S. small cap
equities, and a small cash balance.
c) S&P 500 Stock Index Fund - The Fund invests in 500 U.S. common stocks
constructed by Standard & Poor's. It may also hold 2%-5% of its
value in S&P 500 futures contracts.
d) International Index Fund - The Fund invests in over 1,000 stocks in
major markets outside the United States and Canada. Investments are
made in all stocks in the MSCI EAFE Index in approximate proportion
to the weighing in the Index.
e) Small Cap Index Fund - The Fund invests in all 2,000 stocks in the
Russell 2000 Index in proportion to their weighing in the Index.
The Russell Index represents the smallest two-thirds of the 3,000
largest U.S. companies.
3. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions and deductions
from net assets available for benefits during the reporting period. Actual
results could differ from those estimates.
4. The accompanying financial statements are prepared on the accrual basis of
accounting.
5. The Company has received a determination from the Internal Revenue Service
that the Plan, including all amendments through June 20, 1994, is a
qualified profit sharing plan under Section 401 (a) of the Internal
Revenue Code. The trust formed thereunder is exempt from Federal income
tax under Section 501 (a). The Plan Administrator and Plan's tax counsel
believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, they believe that the Plan was qualified and the related trust
was tax exempt as of the financial statement date.
6. In the event the Plan is terminated, each member will automatically be
vested in the undistributed Company contributions. Each member will
receive payments based on the specific dollar amounts and shares of
Company stock in his account.
7. The assets of the Plan are combined in a Master Trust Fund for investment
purposes with the assets of the General Dynamics Corporation Savings and
Stock Investment Plan. The value shown in the accompanying financial
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statements represents the Plan's proportionate interest in the reported
market value of the assets in the Master Trust Fund. Investment income and
net realized and unrealized gains or losses are allocated to the
respective plans based on their proportionate interest, at market value,
in the Master Trust Fund.
Administrative expenses are primarily paid by the Plan although certain
administrative functions are performed by employees of the Company.
Although no costs were reimbursed by the Company in 1996, the Plan
document provides that these costs may be reimbursed by the Company.
8. In accordance with generally accepted accounting principles, amounts
allocated to accounts of participants who have elected to withdraw from
the Plan but have not yet been paid as of year end are not reported as
liabilities on the Statements of Net Assets Available for Benefits.
However, the Department of Labor requires that these amounts be reported
as liabilities on Form 5500. At December 31, 1996 and 1995, amounts
payable on withdrawals and distributions were $8,898,407 and $14,257,541,
respectively. In addition, on the Statement of Changes in Net Assets
Available for Benefits, 1996 distributions to withdrawn participants would
have been $69,802,698 instead of $75,161,832 if the December 31 amounts
payable on withdrawals and distributions had been included.
9. Most investments held by the Plan are recorded at quoted market value as
stated on public exchanges as of December 31, 1996 and 1995. The Company
values its guaranteed investment contracts in accordance with AICPA
Statement of Position No. 94-4, "Reporting of Investment Contracts Held by
Health and Welfare Benefit Plans and Defined Contribution Pension Plans."
The statement requires that investment contracts be reported at fair value
at either the quoted market price from reliable third-party evidence or
determined by discounting the future cash flows by an appropriate discount
rate. Previously, the Plan accounted for these investments at contract
value. The effects of recognizing the fair values based on the discounted
cash flow method resulted in a net realized and unrealized loss of
approximately $7 million during 1996 and a gain of approximately $16
million in 1995.
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SCHEDULE I
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
COMBINED STATEMENT OF INVESTMENTS IN
MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
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SCHEDULE I
PAGE 1 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
COMPANY STOCK FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
COMPANY STOCK FUND:
Investment in common stock of
General Dynamics Corporation 5,923,123 $ 168,743,683 $ 419,069,977
=================== ==================
PROPORTIONATE INTEREST 686,858 $ 22,002,484 $ 48,595,238
=================== ==================
LOANS RECEIVABLE (prime rate, December 31,
1996 - 8.25%): N/A $ 16,401,791 $ 16,401,791
=================== ==================
PROPORTIONATE INTEREST N/A $ 1,271,045 $ 1,271,045
=================== ==================
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SCHEDULE I
PAGE 2 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
GOVERNMENT BONDS FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
GOVERNMENT BONDS FUND:
U.S. Treasury Notes
U.S. Treasury Notes 5.875% due April 30, 1998 30,000,000 $ 30,103,125 $ 30,046,800
U.S. Treasury Notes 4.75% due August 31, 1998 26,600,000 25,877,533 26,147,002
U.S. Treasury Notes 4.75% due October 31, 1998 3,400,000 3,337,313 3,335,196
U.S. Treasury Notes 5.875% due October 31, 1998 30,000,000 30,024,937 29,995,200
U.S. Treasury Notes 5.50% due November 15, 1998 30,000,000 29,948,438 29,798,400
U.S. Treasury Notes 8.875% due November 15, 1998 30,000,000 31,589,063 31,565,700
U.S. Treasury Notes 7.50% due October 31, 1999 12,100,000 12,565,092 12,549,999
------------------- ------------------
Total U.S. Treasury Notes 163,445,501 163,438,297
------------------- ------------------
Temporary Investments
The Northern Trust Company
Collective Short-Term Investment Fund 548,050 548,050 548,050
Income Receivable 2,606,926 2,606,926
------------------- ------------------
TOTAL GOVERNMENT BONDS FUND $ 166,600,477 $ 166,593,273
=================== ==================
PROPORTIONATE INTEREST $ 67,704,172 $ 68,889,380
=================== ==================
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SCHEDULE I
PAGE 3 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
COMMON STOCKS:
Aerospace:
Allied Signal Incorporated 20,800 $ 664,108 $ 1,393,600
Boeing Company 42,200 3,560,371 4,494,300
Coltec Industries Incorporated 2,200 39,994 41,525
Lockheed Martin Corporation 14,300 1,083,329 1,308,450
McDonnell Douglas Corporation 18,300 744,471 1,200,937
Northrop Gruman Corporation 2,300 164,356 190,325
Precision Castparts Corporation 100 4,934 4,963
Raytheon Company 5,200 116,862 250,250
Sundstrand Corporation 1,000 38,040 42,500
Textron, Incorporated 4,000 326,794 377,000
United Technologies Corporation 30,000 1,781,555 1,987,500
------------------- ------------------
Total 8,524,814 11,291,350
------------------- ------------------
Airlines:
AMR Corporation 2,900 250,091 255,563
KLM Royal Dutch Airlines 77,615 2,373,917 2,163,517
Northwest Airlines Corporation 100,800 3,388,771 3,943,800
Southwest Airlines Corporation 4,600 128,522 101,200
UAL Corporation 92,800 2,689,490 5,800,000
U.S. Air Group 4,000 82,540 93,500
------------------- ------------------
Total 8,913,331 12,357,580
------------------- ------------------
Automotive:
Arvin Industries, Incorporated 25,000 593,475 618,750
Chrysler Corporation 161,300 5,159,221 5,322,900
Ford Motor Company 35,900 1,022,744 1,157,774
General Motors Corporation 64,400 3,241,310 3,590,300
General Motors Corporation, Class H 21,000 1,158,997 1,181,250
Illinois Tool Works Incorporated 1,000 71,665 79,875
Lear Corporation 1,900 64,876 64,838
Modine Manufacturing Company 1,700 46,137 45,475
Snap-On Incorporated 2,000 62,140 71,250
------------------- ------------------
Total 11,420,565 12,132,412
------------------- ------------------
- 17 -
18
SCHEDULE I
PAGE 4 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Building:
Centex Corporation 25,000 $ 822,671 $ 940,625
Fleetwood Enterprises, Incorporated 12,000 392,415 330,000
Johnson Controls, Incorporated 4,100 287,600 339,787
Louisiana-Pacific Corporation 5,100 118,881 107,738
Owens Corning 3,800 155,633 161,975
USG Corporation 2,300 60,326 77,913
------------------- ------------------
Total 1,837,526 1,958,038
------------------- ------------------
Chemicals:
Air Products and Chemicals, Incorporated 3,500 197,960 241,937
Albermarle Corporation 3,700 65,153 67,063
Avery Dennison Corporation 18,000 537,590 636,750
Crompton & Knowles Corporation 2,400 37,944 46,200
Dow Chemical Company 29,400 2,412,080 2,304,225
DuPont, (E.I) DeNemours & Company 39,900 2,919,457 3,755,587
Eastman Kodak Company 10,000 730,274 802,500
Ecolab Incorporated 2,100 68,368 79,013
Georgia Gulf Corporation 1,100 33,341 29,563
Lyondell Petrochemical Company 2,600 62,881 57,525
Monsanto Company 2,000 83,030 77,750
Praxair Incorporated 1,000 47,135 46,125
Rohm & Haas Company 11,000 758,335 897,875
Tyco International Limited 24,700 1,027,780 1,306,012
Union Carbide Corporation 4,800 206,112 196,200
Wellman Incorporated 1,400 36,496 23,975
------------------- ------------------
Total 9,223,936 10,568,300
------------------- ------------------
- 18 -
19
SCHEDULE I
PAGE 5 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Consumer Goods:
ADR Unilever NV 15,500 $ 2,394,161 $ 2,716,375
Anheuser-Busch Companies Incorporated 8,300 316,896 332,000
Avon Products, Incorporated 17,100 816,160 976,838
Black & Decker Corporation 6,400 225,757 192,800
Campbell Soup Company 24,100 1,880,521 1,934,024
Coca Cola Company 107,200 5,258,999 5,641,400
Colgate-Palmolive Company 3,100 251,796 285,975
Conagra Incorporated 8,000 372,080 398,000
CPC International Incorporated 5,800 308,593 449,500
Darden Restaurants Incorporated 20,000 172,309 175,000
Dean Foods Company 10,000 298,850 322,500
Emerson Electric Company 14,000 1,359,337 1,356,250
General Electric Company 78,100 5,752,942 7,722,137
General Mills, Incorporated 17,400 1,073,317 1,107,075
Gillette Company 3,000 165,591 233,250
Hershey Foods Corporation 3,000 127,902 131,250
International Flavors & Fragrances Incorporated 5,200 249,093 234,000
Kellogg Company 8,900 629,932 584,063
Maytag Corporation 12,000 253,456 237,000
McDonalds Corporation 5,700 196,283 258,638
Nabisco Holdings Corporation 3,000 110,465 116,625
Pepsico, Incorporated 124,200 3,210,397 3,632,850
Philip Morris Companies Incorporated 139,700 10,570,257 15,786,100
Pioneer Hi-Bred International, Incorporated 3,000 193,155 210,000
Procter & Gamble Company 54,700 4,239,327 5,887,087
Ralston-Ralston Purina Group 25,700 1,645,427 1,885,737
Rubbermaid Incorporated 10,900 256,272 246,613
Ruby Tuesday Incorporated 10,000 200,593 187,500
Sara Lee Corporation 2,900 94,069 108,025
Sensormatic Electronics Corporation 2,900 51,634 48,575
TSL Holdings Incorporated 330 - 1
W.W. Grainger, Incorporated 2,600 165,835 208,650
Whirlpool Corporation 5,400 263,253 251,775
------------------- ------------------
Total 43,104,659 53,857,613
------------------- ------------------
Energy:
ADR British Petroleum 2,100 275,772 296,888
Amerada Hess Corporation 5,000 276,925 289,375
Amoco Corporation 400 29,174 32,250
- 19 -
20
SCHEDULE I
PAGE 6 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Anadarko Petroleum Corporation 1,700 $ 77,823 $ 110,075
Ashland Incorporated 1,700 59,860 74,588
Atlantic Richfield Company 13,000 1,584,755 1,722,500
Baker Hughes Incorporated 28,900 907,292 997,050
Burlington Resources Incorporated 17,000 889,670 856,375
Chevron Corporation 36,200 2,115,962 2,353,000
Cooper Cameron Corporation 700 13,284 53,550
Dresser Industries Incorporated 1,000 29,268 31,000
Enron Corporation 12,300 391,152 530,437
Exxon Corporation 63,300 5,408,083 6,203,400
Halliburton Company 5,000 306,925 301,250
Input/Output Incorporated 1,300 47,203 24,050
Kerr-McGee Corporation 10,000 652,600 720,000
Mobil Corporation 11,600 1,331,783 1,418,100
Murphy Oil Corporation 8,000 384,455 447,856
Oryx Energy Company 8,000 161,830 198,000
Phillips Petroleum Company 16,500 691,470 730,125
Pogo Producing Company 900 30,767 42,525
Ranger Oil Limited 8,000 66,080 79,000
Royal Dutch Petroleum Company 28,100 3,737,958 4,798,074
Schlumberger Limited 14,900 1,398,753 1,488,137
Smith International, Incorporated 1,100 32,241 49,363
Texaco, Incorporated 30,900 2,613,051 3,032,062
Tidewater, Incorporated 5,000 206,985 226,250
Tosco Corporation 1,200 61,794 94,950
Ultramar-Diamond Shamrock Corporation 2,000 51,356 63,250
Union Pacific Resources Group Incorporated 5,700 124,478 165,300
Union Tex Pete Holdings Incorporated 12,000 226,620 268,500
Western Atlas Incorporated 3,000 198,780 212,625
------------------- ------------------
Total 24,384,149 27,909,905
------------------- ------------------
- 20 -
21
SCHEDULE I
PAGE 7 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Financial Services & Insurance:
A.G. Edwards Incorporated 2,200 $ 52,681 $ 73,975
Advanta Corporation 900 40,611 36,788
AMBAC Incorporated 7,700 395,421 511,088
Allstate Corporation 13,000 668,076 752,375
American General Corporation 11,500 427,211 470,063
American International Group, Incorporated 35,650 3,329,013 3,859,112
American Express Company 18,000 969,930 1,017,000
Banc One Corporation 24,300 916,498 1,044,900
Bancorporation Hawaii Incorporated 5,500 201,374 231,000
Bank of Boston Corporation 1,000 55,727 64,250
Bankamerica Corporation 27,000 1,881,577 2,693,250
Barnett Banks Incorporated 11,800 458,739 485,275
Bear Stearns & Companies, Incorporated 4,400 101,884 122,650
Beneficial Corporation 2,000 113,270 126,750
Boatmen's Bancshares, Incorporated 7,300 443,808 470,850
Case Corporation 5,000 222,491 272,500
Central Fidelity Banks, Incorporated 2,200 50,977 56,650
Charter One Financial Incorporated 1,800 62,548 75,600
Chubb Corporation 10,400 498,918 559,000
CIGNA Corporation 15,500 1,885,778 2,117,687
Citicorp 47,300 4,115,583 4,871,900
Comerica, Incorporated 10,000 427,700 523,750
Contifinancial Corporation 1,700 52,031 61,413
Corestates Financial Corporation 8,300 325,596 430,563
Countrywide Credit Industries, Incorporated 1,000 27,510 28,625
Credit Acceptance Corporation 1,500 35,425 35,250
Crestar Financial Corporation 1,500 83,009 111,563
Crown Northcorp Incorporated 849 - 535
Dean Witter Discover & Company 14,100 692,196 934,125
Dime Bancorp Incorporated 4,000 54,916 59,000
Equifax Incorporated 10,000 289,350 306,250
FHLMC 24,900 1,643,219 2,748,338
Federal National Mortgage Association 138,100 4,149,752 5,196,012
Finova Group Incorporated 900 44,379 57,825
First Hawaiian Incorporated 1,000 35,217 35,000
First Chicago NBD Corporation 11,800 482,239 634,250
First of America Bank Corporation 13,000 703,005 781,625
First Tennessee National Corporation 2,400 73,332 90,000
First USA Incorporated 4,600 126,382 159,275
First Union Corporation 29,700 1,775,971 2,197,800
- 21 -
22
SCHEDULE I
PAGE 8 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
First Virginia Banks Incorporated 1,100 $ 44,479 $ 52,662
Firstar Corporation 2,800 123,774 147,000
Fleet Financial Group Incorporated 9,800 401,334 488,775
General Re Corporation 7,500 1,127,970 1,183,125
Golden West Financial Corporation 2,100 115,829 132,563
Great Western Financial Corporation 4,900 113,268 142,100
Greenpoint Financial Corporation 500 14,280 23,750
Greentree Financial Corporation 17,800 573,593 687,524
H.F. Ahmanson & Company 4,000 95,276 130,000
Hormel Foods Corporation 28,000 756,134 752,500
Household International Incorporated 24,600 2,050,656 2,269,350
ITT Hartford Group Incorporated 7,000 318,701 472,500
J.P. Morgan & Company, Incorporated 10,000 858,961 976,250
Keycorp 51,000 2,567,539 2,575,500
Lehman Brothers Holdings Incorporated 15,600 385,616 489,450
Lincoln National Corporation 5,500 256,783 288,750
Loews Corporation 9,000 791,130 848,250
MBIA Incorporated 2,600 194,221 263,250
MBNA Corporation 171,200 3,975,670 7,029,900
MGIC Investment Corporation 9,300 660,902 706,800
Mark Twain Bancshares 2,400 113,338 117,000
Marsh & McLennan Company's, Incorporated 3,000 280,837 312,000
Mellon Bank Corporation 2,000 135,580 142,000
Mercantile Bankshares Corporation 1,800 47,528 57,600
Mercury Financial Company 6,200 73,583 75,950
Merrill Lynch & Company, Incorporated 70,600 4,028,466 5,753,900
Money Store Incorporated 1,900 51,705 52,487
Morgan Stanley Group Incorporated 68,700 3,185,165 3,924,487
National City Corporation 6,000 247,560 269,250
NationsBank Corporation 17,500 1,227,889 1,710,624
Norwest Corporation 50,400 1,330,578 2,192,400
Ohio Casualty Corporation 2,100 71,528 74,550
PNC Bank Corporation 12,100 373,869 455,262
PMI Group Incorporated 1,900 104,667 105,213
Paine Webber Group Incorporated \12,500 292,379 351,563
Progressive Corporation 15,000 858,969 1,010,625
Providian Corporation 5,700 224,490 292,837
Regions Financial Corporation 2,200 101,902 113,711
Republic New York Corporation 5,100 334,471 416,288
Safeco Corporation 5,900 199,050 232,678
Salomon Incorporated 3,900 167,885 183,788
Charles Schwab Corporation 2,000 49,270 64,000
- 22 -
23
SCHEDULE I
PAGE 9 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Signet Banking Corporation 2,200 $ 63,826 $ 67,650
Southtrust Corporation 3,500 99,791 122,062
St. Paul Companies, Incorporated 5,000 264,213 293,125
Standard Federal Bancorporation Incorporated 1,100 42,691 62,563
TCF Financial Corporation 1,300 42,584 56,550
Torchmark Corporation 3,300 141,031 166,650
Transamerica Corporation 4,100 287,485 323,900
Travelers Group Incorporated 26,000 794,330 1,179,750
U.S. Bancorp 10,000 398,585 449,370
US Life Corporation 2,100 61,104 69,825
Union Planters Corporation 800 24,048 31,200
Wachovia Corporation 10,000 550,662 565,000
Washington Federal Incorporated 1,500 32,050 39,750
Washington Mutual Incorporated 2,600 76,143 112,610
Wilmington Trust Corporation 1,300 43,914 51,350
------------------- ------------------
Total 59,762,626 75,463,429
------------------- ------------------
Health Care:
ADR Astra AB 19,200 377,864 940,800
Amgen Incorporated 76,300 4,219,882 4,148,812
Bausch & Lomb, Incorporated 4,800 198,286 168,000
C.R. Bard Incorporated 4,800 146,871 134,400
Centocor 5,000 155,050 178,750
Columbia/HCA Healthcare Corporation 161,800 5,190,872 6,593,350
Health Management Associates Incorporated 8,700 196,513 195,750
Humana Incorporated 15,100 366,167 286,900
Johnson & Johnson 71,200 3,531,276 3,542,200
Manor Care, Incorporated 5,300 104,002 143,100
Medtronic, Incorporated 22,800 1,436,664 1,550,400
Novacare Incorporated 20,000 185,111 220,000
Tenet Healthcare Corporation 17,700 379,347 387,187
Transitional Hospitals Corporation 21 - 202
United Healthcare Corporation 29,100 1,373,716 1,309,500
United States Surgical Corporation 9,000 325,626 354,375
Vencor Incorporated 18,000 567,930 569,250
Vivra Incorporated 3,800 105,741 104,975
------------------- ------------------
Total 18,860,918 20,827,951
------------------- ------------------
- 23 -
24
SCHEDULE I
PAGE 10 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Leisure Time and Communications:
Boyd Gaming Corporation 2,700 $ 39,869 $ 22,275
Carnival Corporation 8,700 220,352 287,100
Circus Circus Enterprises Incorporated 5,300 175,098 182,187
Extended Stay American Incorporated 2,300 33,925 46,288
Harrah's Entertainment Incorporated 5,300 135,825 105,338
Hilton Hotels Corporation 13,900 367,994 364,875
ITT Corporation 5,900 258,946 255,913
International Game Technology 6,300 96,341 114,975
Frontier Corporation 2,100 57,450 47,513
King World Productions Incorporated 27,000 993,127 995,624
MFS Communications Company 20,900 1,043,891 1,139,050
MGM Grand Incorporated 3,000 109,597 104,625
Marriott International 18,100 994,047 1,000,024
Mattel Incorporated 10,000 282,393 277,500
Mirage Resorts Incorporated 7,000 177,246 151,375
Promus Hotel Corporation 7,000 206,570 207,374
TCI Satellite Entertainment Incorporated 2,300 37,028 22,713
Telephone Communications Incorporated 40,525 846,859 1,157,475
Telephone Communications Incorporated 80,800 1,239,459 1,055,410
Time Warner Incorporated 18,300 643,709 686,250
Tribune Company 4,000 332,090 315,500
Walt Disney Company 78,100 5,058,849 5,447,474
------------------- ------------------
Total 13,350,665 13,986,858
------------------- ------------------
Machinery:
Caterpillar Incorporated 21,900 1,506,045 1,647,974
Cincinnati Milacron Incorporated 1,900 44,764 41,563
Crane Company 8,000 230,993 232,000
Cummins Engine Company 6,900 289,167 317,400
Deere & Company 6,000 251,841 243,000
Foster Wheeler Corporation 2,000 81,473 74,250
Ingersoll-Rand Company 20,100 886,094 894,450
PACCAR Incorporated 600 28,998 40,800
Parker-Hannifin Corporation 3,400 135,099 131,750
Trinova Corporation 1,500 50,153 54,563
------------------- ------------------
Total 3,504,627 3,677,750
------------------- ------------------
- 24 -
25
SCHEDULE I
PAGE 11 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Merchandising:
Albertson's Incorporated 8,400 $ 298,023 $ 299,250
American Greetings Corporation 14,000 394,433 397,250
American Stores Company 17,000 687,844 694,875
Autozone Incorporated 5,900 159,206 162,250
Best Buy, Incorporated 1,700 38,989 18,063
Borders Group Incorporated 1,300 45,127 46,638
Circuit City Stores, Incorporated 3,900 117,593 117,487
Dayton-Hudson Corporation 29,000 1,123,450 1,138,250
Dollar General Corporation 5,000 163,800 160,000
Federated Department Stores Incorporated 8,400 278,754 286,650
Fruit of the Loom 5,100 131,235 193,163
Gap Incorporated 3,000 91,655 90,375
General Nutrition Companies 3,400 57,879 57,375
Great Atlantic & Pacific Tea Company, Incorporated 33,000 981,795 1,051,875
Home Depot Incorporated 52,000 2,618,233 2,606,500
Kimberly-Clark Corporation 20,000 1,813,212 1,905,000
K-mart Corporation 10,000 106,802 103,750
Kohls Corporation 33,500 1,338,924 1,314,874
J.C. Penney Company, Incorporated 9,100 431,545 443,625
Lands End Incorporated 13,000 344,435 344,500
Limited Incorporated 9,900 201,918 181,912
Lowes Companies Incorporated 16,000 619,952 570,000
Neiman Marcus Group Incorporated 3,000 93,360 76,500
Nine West Group Incorporated 1,500 56,633 69,563
Nordstrom, Incorporated 4,600 191,721 163,010
Safeway Incorporated 4,000 170,048 171,000
Sears, Roebuck and Company 138,200 6,567,875 6,357,200
Tiffany & Company 7,000 248,570 256,375
Toys "R" Us, Incorporated 26,000 764,443 776,750
Wal-Mart Stores, Incorporated 197,000 5,033,955 4,481,750
Woolworth Corporation 39,000 821,827 858,000
------------------- ------------------
Total 25,993,236 25,393,810
------------------- ------------------
- 25 -
26
SCHEDULE I
PAGE 12 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Metals:
Allegheny Teledyne Incorporated 8,900 $ 179,505 $ 204,700
Aluminum Company of American 9,300 541,121 592,875
Bethlehem Steel Corporation 5,800 68,499 51,475
Coeur D Alene Mines Corporation 23,000 365,426 347,875
Freeport McMoran Cooper & Gold Incorporated 700 19,661 19,688
Inco Limited 600 19,618 19,125
Inland Steel Industries Incorporated 2,600 51,181 52,000
Nucor Corporation 3,900 195,980 198,900
Phelps Dodge Corporation 3,400 221,629 229,500
Reynolds Metals Company 3,500 194,098 197,312
USX-US Steel Group 6,800 199,221 213,350
Worthington Industries, Incorporated 1,200 23,049 21,750
------------------- ------------------
Total 2,078,988 2,148,550
------------------- ------------------
Miscellaneous:
Anixter International Incorporated 1,900 33,002 30,638
Bemis Company, Incorporated 2,000 67,520 73,750
Caliber Systems Incorporated 1,100 38,428 21,175
Commercial Intertec Corporation 11,000 119,623 149,875
Consolidated Freightways Incorporated 1,300 25,260 28,925
Consolidated Freightways Corporation 700 4,441 6,213
Cooper Industries, Incorporated 9,400 399,588 395,974
Cooper Tire & Rubber Company 2,400 58,007 47,400
Cytec Industries 1,500 38,558 60,938
Eaton Corporation 3,800 221,578 265,050
ITT Industries Incorporated 4,300 89,425 105,350
Jacobs Engineering Group, Incorporated 10,000 235,725 236,250
Minnesota Mining and Manufacturing Company 6,000 393,993 498,000
Newport News Shipbuilding Incorporated 2,300 35,932 34,500
Rockwell International Corporation 8,000 458,698 487,000
Shaw Industries, Incorporated 7,000 107,188 83,125
Tenneco Incorporated 11,500 501,124 518,938
UCAR International Incorporated 300 10,897 11,288
V.F. Corporation 2,700 163,457 182,250
WMX Technology Incorporated 37,700 1,254,643 1,225,250
------------------- ------------------
Total 4,257,087 4,461,889
------------------- ------------------
- 26 -
27
SCHEDULE I
PAGE 13 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Office Equipment:
Amdahl Corporation 20,000 $ 219,002 $ 242,500
Apple Computer, Incorporated 10,000 249,344 208,750
Applied Magnetics Corporation 4,000 111,160 120,000
Bay Networks Incorporated 4,100 89,023 86,100
Compaq Computer Corporation 86,800 4,519,199 6,455,750
Data General Corporation 2,000 29,020 29,000
Dell Computer Corporation 42,200 2,037,691 2,241,875
EMC Corporation 9,100 180,825 301,437
Gateway 2000 Incorporated 1,000 50,528 53,562
Hewlett-Packard Company 89,100 3,901,228 4,477,275
Honeywell Incorporated 6,000 314,169 394,500
International Business Machines Corporation 29,200 3,653,916 4,423,800
Quantum Corporation 2,200 40,633 62,975
Sterling Software Incorporated 5,000 162,550 158,125
Sun Microsystems Incorporated 44,600 1,124,559 1,145,640
Tandem Computers, Incorporated 14,000 194,390 192,500
------------------- ------------------
Total 16,877,237 20,593,789
------------------- ------------------
Pharmaceuticals:
ALZA Corporation 5,300 138,159 137,138
American Home Products Corporation 27,900 1,306,632 1,635,638
Biogen Incorporated 4,000 163,074 155,000
Bristol Myers Squibb Company 39,000 3,735,868 4,251,000
Forest Laboratories, Incorporated 2,600 112,395 85,150
Merck & Company Incorporated 90,800 6,073,203 7,229,950
Pfizer Incorporated 95,600 6,461,815 7,934,800
Schering-Plough Corporation 17,800 1,113,258 1,152,550
Warner Lambert Company 19,300 1,077,844 1,447,500
Watson Pharmaceuticals Incorporated 400 16,119 17,975
------------------- ------------------
Total 20,198,367 24,046,701
------------------- ------------------
- 27 -
28
SCHEDULE I
PAGE 14 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Printing, Publishing and Paper:
Boise Cascade Corporation 3,200 $ 102,377 $ 101,600
Bowater Incorporated 2,600 102,531 97,825
Champion International Corporation 6,500 287,202 281,125
James River Corporation 7,000 214,981 231,875
Longview Fibre Company 7,000 131,320 128,624
Mead Corporation 3,700 197,167 215,062
Potlatch Corporation 9,000 365,715 387,000
Temple Inland Incorporated 3,800 185,862 205,675
Washington Post Company 1,000 322,470 335,124
Weyerhaeuser Company 3,200 146,252 151,600
------------------- ------------------
Total 2,055,877 2,135,510
------------------- ------------------
Railroads:
Burlington Northern Santa Fe Corporation 27,800 2,343,607 2,401,224
CSX Corporation 10,900 525,928 460,524
Norfolk Southern Corporation 13,500 1,205,986 1,188,000
Union Pacific Corporation 6,800 259,823 408,850
------------------- ------------------
Total 4,335,344 4,458,598
------------------- ------------------
- 28 -
29
SCHEDULE I
PAGE 15 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Service Industries:
ADR Reuters Holdings PLC 16,100 $ 1,180,844 $ 1,231,650
Cox Communications Incorporated 60,200 1,161,762 1,392,124
Federal Express Corporation 2,000 80,667 89,000
First Data Corporation 56,300 2,190,820 2,054,950
Gannett Company Incorporated 4,000 277,138 299,500
Health Care & Retirement Corporation 3,900 69,626 111,637
Interpublic Group of Companies, Incorporated 10,000 445,100 475,000
John H. Harland Company 2,000 61,698 66,000
Learning Company Incorporated 900 20,037 12,938
Meredith Corporation 10,000 467,725 527,500
Moore Corporation, Limited 10,000 176,350 205,000
National Service Industries, Incorporated 9,000 355,534 336,374
Oxford Health Plans Incorporated 16,100 714,197 942,847
R.R. Donnelley & Sons Company 5,700 198,059 178,837
Ryder System, Incorporated 2,600 73,923 73,125
Service Corporation International 9,000 129,714 252,000
Thermo Instrument Systems, Incorporated 2,000 62,520 66,250
------------------- ------------------
Total 7,665,714 8,314,732
------------------- ------------------
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30
SCHEDULE I
PAGE 16 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Technology:
360 Communications Company 700 $ 16,404 $ 16,275
ADR Ericsson L.M. Telephone Company 55,330 1,180,205 1,670,246
Applied Materials, Incorporated 5,500 175,372 197,654
Ascend Communications Incorporated 7,900 569,875 490,787
Autodesk Incorporated 1,300 40,880 36,400
BMC Software Incorporated 2,000 81,603 82,750
CISCO Systems Incorporated 138,600 6,272,571 8,818,424
Computer Associates International, Incorporated 6,400 333,373 318,400
Electronic Data Systems Corporation 19,400 904,525 839,050
Gartner Group Incorporated 10,000 345,575 389,370
General Instrument Corporation 6,900 170,085 150,074
Harris Corporation 1,500 92,373 102,938
Intel Corporation 136,700 10,163,581 17,899,087
Lucent Technologies Incorporated 40,600 1,922,369 1,877,750
Microsoft Corporation 102,800 4,900,365 8,493,850
National Semiconductor Corporation 4,800 77,088 117,600
Netscape Communications Corporation 18,700 918,643 1,063,562
Molex Incorporated 1,700 50,464 60,562
Northern Telecom Limited 10,000 556,940 618,750
Oracle Corporation 42,100 1,580,555 1,757,674
Paging Network Incorporated 4,600 92,138 70,150
Parametric Technology Corporation 2,000 103,895 102,750
Perkin-Elmer Corporation 4,100 217,067 241,387
Scientific-Atlanta, Incorporated 300 4,480 4,500
Stratus Computer Incorporated 8,000 194,080 218,000
Symbol Technologies, Incorporated 2,000 85,570 88,500
Tektronix, Incorporated 4,000 165,040 205,000
Texas Instruments Incorporated 13,400 803,504 854,250
Thermo Electron Corporation 2,000 79,723 82,500
Three Com Corporation 21,100 1,113,318 1,548,213
Universal Corporation 8,000 218,080 257,000
VLSI Technology, Incorporated 7,000 130,004 167,125
Xerox Corporation 29,700 1,499,735 1,562,992
------------------- ------------------
Total 35,059,480 50,403,570
------------------- ------------------
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31
SCHEDULE I
PAGE 17 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Utilities:
ADR British Telecommunications 7,000 $ 416,740 $ 480,374
Airtouch Communications Incorporated 281,000 7,798,453 7,095,250
Allegheny Power System, Incorporated 3,200 94,992 97,200
American Electric Power Company, Incorporated 56,000 2,355,562 2,303,000
American Water Works Company, Incorporated 2,000 39,520 41,250
Ameritech Corporation 33,600 1,881,626 2,037,000
AT&T Corporation 81,000 3,057,537 3,562,733
Baltimore Gas and Electric Company 3,400 92,750 90,950
Bell Atlantic Corporation 10,800 665,440 699,300
BellSouth Corporation 86,000 3,434,396 3,483,000
Carolina Power & Light Company 2,000 70,423 73,000
Cascade Communications Corporation 22,500 1,607,313 1,240,312
Century Telephone Enterprises, Incorporated 1,000 33,010 30,875
Cinergy Corporation 4,100 138,668 136,837
Columbia Gas System, Incorporated 2,400 113,844 152,700
Comcast Corporation 16,700 294,051 297,460
Consolidated Edison Company of New York, Incorporated 7,900 226,301 230,087
Consolidated Natural Gas Company 1,400 79,484 77,350
Dominion Resources Incorporated 5,200 190,535 200,200
DTE Energy Company 3,900 112,365 126,262
Edison International 64,000 1,097,782 1,272,000
El Paso Natural Gas Company 1 22 25
GTE Corporation 65,200 2,703,569 2,958,450
Idaho Power Company 4,000 120,160 124,500
Illinova Corporation 10,000 265,100 275,000
MCI Communications Corporation 20,300 456,041 663,545
New England Electric System 1,900 64,518 66,263
Nipsco Industry Incorporated 3,000 112,960 118,874
Northeast Utilities 3,900 38,834 51,187
Northern States Power Company 4,000 184,287 183,500
Nynex Corporation 11,000 506,869 529,374
P P & L Res Incorporated 1,500 35,941 34,500
Pacific Gas & Electric 12,500 299,879 262,500
Panenergy Corporation 10,500 383,469 472,500
Pinnacle West Capital Corporation 2,600 72,778 82,550
Portland General Corporation 2,500 84,234 105,000
Potomac Electric Power Company 1,200 29,656 30,900
Puget Sound Power and Light Company 3,000 70,185 72,000
SBC Communications Incorporated 10,900 533,851 565,437
Seagull Energy Corporation 4,000 86,980 88,000
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32
SCHEDULE I
PAGE 18 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
DIVERSIFIED PORTFOLIO FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------- ------------------
Southern Company 18,600 $ 423,256 $ 420,825
Sprint Corporation 10,900 446,394 434,638
Texas Utilities Company 23,000 938,375 937,250
Tuscon Electric Power Company 10,000 195,100 165,000
U.S. West Incorporated-COM-MEDIA Group 22,900 409,454 420,787
U.S. West Communications Group 14,400 434,418 464,400
Unicom Corporation 54,000 1,466,328 1,464,750
Union Electric Company 1,000 37,510 38,500
Viacom 13,300 524,284 463,838
Worldcom Incorporated 57,100 1,395,042 1,488,139
------------------- ------------------
Total 36,120,286 36,709,372
------------------- ------------------
Total Common Stocks 357,529,432 422,697,707
------------------- ------------------
PREFERRED STOCK
MLP Lakehead Pipe Line Partners L.P. 4,000 121,539 138,000
TEMPORARY INVESTMENTS
The Northern Trust Company
Collective Short-Term Investment Fund 3,575,191 3,575,191 3,575,191
INCOME RECEIVABLE 904,060 904,060
------------------- ------------------
TOTAL DIVERSIFIED PORTFOLIO FUND $ 362,130,222 $ 427,314,958
=================== ==================
PROPORTIONATE INTEREST $ 60,160,624 $ 75,165,683
=================== ==================
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33
SCHEDULE I
PAGE 19 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
FIXED INCOME FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
INTEREST RATE
AS OF
DECEMBER 31, MATURITY CURRENT
1996 DATE COST VALUE
----------- -------------- ------------------ ------------------
GUARANTEED INVESTMENT CONTRACTS:
Aetna Life Insurance Company 10.00% 1/3/00 $ 84,966,893 $ 90,651,000
The Prudential Insurance Company of America 10.25% 7/5/99 55,597,953 59,828,000
The Prudential Insurance Company of America 9.92% 5/1/98 83,091,023 87,082,000
The Prudential Insurance Company of America 9.65% 8/31/00 41,250,835 45,953,000
The Prudential Insurance Company of America 9.80% 8/31/00 61,904,532 69,248,000
The Travelers Insurance Company 8.15% 2/1/98 1,793,847 2,270,000
The Travelers Insurance Company 9.26% 2/1/98 1,260,529 1,600,000
Aetna Life and Casualty Company 7.10% Open 280,696,038 291,300,000
Metropolitan Life Insurance Company 7.33% Open 272,766,951 284,900,000
Metropolitan Life Insurance Company 6.91% Open 279,597,276 283,800,000
The Prudential Insurance Company of America 6.84% Open 276,963,064 279,600,000
------------------ ------------------
Total Guaranteed Investment Contracts 1,439,888,941 1,496,232,000
------------------ ------------------
TEMPORARY INVESTMENTS
The Northern Trust Company
Collective Short-Term Investment Fund 4,765,949 4,765,949
INCOME RECEIVABLE 16,785 16,785
------------------ ------------------
TOTAL FIXED INCOME FUND $ 1,444,671,675 $ 1,501,014,734
================== ==================
PROPORTIONATE INTEREST $ 236,670,922 $ 245,666,720
================== ==================
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34
SCHEDULE I
PAGE 20 OF 20
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
SPECIAL DISTRIBUTION FUND
COMBINED STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1996
NUMBER OF
SHARES OR QUOTED
PRINCIPAL MARKET
AMOUNT COST VALUE
-------------- ------------------ ------------------
SPECIAL DISTRIBUTION FUND:
The Northern Trust Company
Collective Short-Term Investment Fund 27,930,447 $ 27,930,447 $ 27,930,447
INCOME RECEIVABLE 127,149 127,149
------------------ ------------------
TOTAL SPECIAL DISTRIBUTION FUND $ 28,057,596 $ 28,057,596
================== ==================
PROPORTIONATE INTEREST $ 7,669,787 $ 7,669,787
================== ==================
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