<SEC-DOCUMENT>0001193125-17-278933.txt : 20171205
<SEC-HEADER>0001193125-17-278933.hdr.sgml : 20171205
<ACCEPTANCE-DATETIME>20170907130403
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-17-278933
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20170907

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GENERAL DYNAMICS CORP
		CENTRAL INDEX KEY:			0000040533
		STANDARD INDUSTRIAL CLASSIFICATION:	SHIP & BOAT BUILDING & REPAIRING [3730]
		IRS NUMBER:				131673581
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2941 FAIRVIEW PARK DRIVE
		STREET 2:		SUITE 100
		CITY:			FALLS CHURCH
		STATE:			VA
		ZIP:			22042-4513
		BUSINESS PHONE:		7038763000

	MAIL ADDRESS:	
		STREET 1:		2941 FAIRVIEW PARK DRIVE
		STREET 2:		SUITE 100
		CITY:			FALLS CHURCH
		STATE:			VA
		ZIP:			22042-4513
</SEC-HEADER>
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<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Jason W. Aiken </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Senior Vice President </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Chief
Financial Officer </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September 7, 2017 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ms.&nbsp;Melissa
Raminpour </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Branch Chief, Office of Transportation and Leisure </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">U.S. Securities and Exchange
Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, NE </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, DC 20549 </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">Re:</TD>
<TD ALIGN="left" VALIGN="top"><B>General Dynamics Corporation</B> </TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B><FONT STYLE="white-space:nowrap">Form&nbsp;10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2016 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Filed February&nbsp;6, 2017 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B><FONT STYLE="white-space:nowrap">Form&nbsp;10-Q</FONT> for the Quarterly Period Ended July&nbsp;2, 2017 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Filed July&nbsp;26, 2017 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>File No.&nbsp;001-03671 </B></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Via Overnight Delivery and EDGAR </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Raminpour: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On behalf of General Dynamics
Corporation, please note the company&#146;s responses to comments addressed in your letter dated August&nbsp;18, 2017. We respectfully submit to the staff that any changes in response to these comments will be made only in our future filings. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Set forth below are our responses to your comments. To assist you in the review process, we have reproduced the comments in bold type. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Note&nbsp;B. Revenue, page&nbsp;10 </U></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>General </U></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment </I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>1.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Please tell us and disclose, if material, how the adoption of ASC Topic 606 has impacted your accounting for costs to obtain or fulfill a contract, including commissions, bidding cost, and/or <FONT
STYLE="white-space:nowrap">pre-production</FONT> costs. We refer you to the disclosure requirements on ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">340-40-50-1</FONT></FONT></FONT> through <FONT
STYLE="white-space:nowrap">50-5.</FONT> </B></TD></TR></TABLE> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>General Dynamics&#146; Response </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The adoption of ASC Topic 606 did not impact our accounting for costs to obtain or fulfill contracts. However, ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">340-40-25-1</FONT></FONT></FONT> through 25 did impact the presentation of these costs on the consolidated balance sheet. We reclassified amounts on the consolidated balance sheet
previously included in unbilled receivables (contracts in process) in accordance with ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">605-35-25-39.</FONT></FONT></FONT> </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">2941 Fairview Park Drive </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Suite 100 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Falls Church, VA 22042-4513 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Tel:&nbsp;&nbsp;&nbsp;&nbsp;703 876 3777 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">jaiken@generaldynamics.com </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September&nbsp;7, 2017 </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Assets representing the costs to obtain or fulfill contracts with customers were 0.5 percent and 0.3 percent
of current assets and total assets, respectively, on December&nbsp;31, 2016, and July&nbsp;2, 2017. Because the asset balances for these costs are not material, we omitted the disclosures in ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">340-40-50-1</FONT></FONT></FONT> through <FONT STYLE="white-space:nowrap">50-5,</FONT> including the closing balance of these assets by category. The relevant disclosures for these balances
will be included in our future filings if the balances become material. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Performance Obligations, page&nbsp;10 </U></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment </I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>2.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>We note some of your contracts have multiple performance obligations. Please tell us and revise to disclose the nature of these performance obligations pursuant to ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-50-12(c).</FONT></FONT></FONT> For maintenance, support, and warranty services, please provide us with your analysis as to why these services were not separately identifiable in
accordance with the guidance of ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-25-21,</FONT></FONT></FONT> as applicable. </B></TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>General Dynamics&#146; Response </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Our contracts with
multiple performance obligations are generally in our defense businesses. For production programs in these businesses, the product lifecycle generally spans from development to production to post-delivery maintenance and support. In most instances,
these services are not contained in the same contract, as it is typical to have separate contracts for various phases of the product lifecycle. However, one or more phases of the product lifecycle are sometimes contained in a single contract. For
these contracts, the discrete phases are often assessed as separate performance obligations. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We provide warranties to our customers associated with
certain product sales in our defense and Aerospace groups. These warranty services are typically not priced or negotiated separately (there is no option to separately purchase the warranty) or the warranty does not provide customers with a service
in addition to the assurance that the product complies with agreed-upon specifications. As we do not account for the warranty services as a separate performance obligation in accordance with ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-55-31</FONT></FONT></FONT> and ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-55-34,</FONT></FONT> no further disclosure of the warranty services is
necessary. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To better assist investors in understanding the performance obligations in our contracts, we propose to augment our future filings to include
the following disclosures (additional language in <B><I>italics</I></B>): </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">A performance obligation is a promise in a contract to transfer
a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract&#146;s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is
satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. <B><I>Some of
our contracts have multiple </I></B> </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September&nbsp;7, 2017 </P>
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<B><I>performance obligations, most commonly due to the contract covering multiple phases of the product lifecycle (development, production, maintenance and support). </I></B>For contracts with
multiple performance obligations, we allocate the contract&#146;s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to
estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment </I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>3.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Given that the majority of your revenue is generated from long-term contracts, please provide us with your analysis on if they contain a significant financing component. If a material portion of your contracts
contain a significant financing component, please revise to disclose this information pursuant to ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-50-12(b).</FONT></FONT></FONT> If you
relied upon the practical expedient based pursuant to ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-32-18,</FONT></FONT></FONT> disclose this pursuant to ASC <FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-50-22</FONT></FONT></FONT> and confirm the timing between progress payments and transfer of control and payment was not expected to exceed one year.
</B></TD></TR></TABLE> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>General Dynamics&#146; Response </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Our analysis concluded that our contracts do not contain a significant financing component and, therefore, no further disclosure is necessary. Our analysis was
completed based on the following three contract types: U.S. government contracts, <FONT STYLE="white-space:nowrap">non-U.S.</FONT> government contracts and commercial contracts. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Under the typical payment terms of our U.S. government contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms,
either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. These contract assets are not considered a significant
financing component because the intent is to protect the U.S. government customer in the event we do not perform on our obligations under the contract. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The payment terms for our <FONT STYLE="white-space:nowrap">non-U.S.</FONT> government contracts are similar to our U.S. government contracts. However, we
sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities. These advances or deposits are not considered a significant financing component because they are used to provide us with some
measure of assurance that the customer will perform on its obligations under the contract. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The majority of our commercial contracts are for <FONT
STYLE="white-space:nowrap">business-jet</FONT> aircraft. Standard payment terms for our contracts for <FONT STYLE="white-space:nowrap">business-jet</FONT> aircraft generally require deposits to be paid upon contract execution, and then at periodic
intervals until final payment at delivery. The initial payment is intended to represent an amount to hold the aircraft manufacturing position and cover liquidated damages, while the payments that follow represent an increasing level of customer
commitment to their aircraft and are typical in the Aerospace industry. Therefore, these standard payments are not considered to contain a significant </P>

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financing component. In certain instances, we enter into contracts that deviate from our standard payment terms. We evaluated these contracts and calculated the impact of the financing component,
concluding that the impact was not significant. This evaluation and calculation will be assessed on future contacts with <FONT STYLE="white-space:nowrap">non-standard</FONT> payment terms, and the amount of consideration will be adjusted if the
amount is deemed significant. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Because we assessed all of our contracts for a significant financing component, we did not rely upon the practical
expedient in ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-32-18.</FONT></FONT></FONT><B> </B> </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment </I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>4.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>You disclose you recognize revenue over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion). Revise to disclose why this method is a faithful depiction of the
transfer of goods or services pursuant to ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-50-18(b).</FONT></FONT></FONT> </B></TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>General Dynamics&#146; Response </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Because of the
continuous transfer of control to our customers in our defense groups, we primarily recognize revenue over time. Revenue that is recognized over time is typically recognized using an input measure (e.g., costs incurred to date relative to total
estimated costs at completion). This method is a faithful depiction of the transfer of goods or services pursuant to ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-50-18(b)</FONT></FONT></FONT> because it results in the recognition of revenue on the basis of our
<FONT STYLE="white-space:nowrap">to-date</FONT> efforts in the satisfaction of a performance obligation relative to the total expected efforts in the satisfaction of that performance obligation. We believe that the use of an input measure best
depicts the transfer of control to the customer, which occurs as we incur costs on our contracts. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To assist in a better understanding of our use of the
input measure, we propose to augment our future filings to include the following disclosures (additional language in <B><I>italics</I></B>): </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Substantially all of our revenue in the defense groups is recognized over time <B><I>because control is transferred continuously to our
customers. Typically, revenue is recognized over time using </I></B>costs incurred to date relative to total estimated costs at completion to measure progress<B><I> toward satisfying our performance obligations. Incurred cost represents work
performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. </I></B>Contract costs include labor, material, overhead and, when appropriate, G&amp;A expenses. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment </I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>5.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><B>We note that you recognize revenue at a point in time for the manufacture of
<FONT STYLE="white-space:nowrap">business-jet</FONT> aircraft in your Aerospace group, which is generally when the customer accepts the fully outfitted aircraft. Please tell us, and revise to disclose, what significant judgments were evaluated in
determining that this was the appropriate point to recognize revenue. Refer to ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-25-30</FONT></FONT></FONT> and <FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-50-19.</FONT></FONT></FONT> In addition, please provide us with your analysis
</B></P></TD></TR></TABLE>

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<TD ALIGN="left" VALIGN="top"><B>
regarding whether revenue for your <FONT STYLE="white-space:nowrap">business-jet</FONT> aircraft should be recognized over time in accordance with ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-25-2</FONT></FONT></FONT> through 29. In this regard, please specifically address your consideration of customer deposits and customer specific specifications. </B></TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>General Dynamics&#146; Response </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We do not recognize
revenue over time for our <FONT STYLE="white-space:nowrap">business-jet</FONT> aircraft because none of the criteria outlined in ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-25-27</FONT></FONT></FONT> are met: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The customer does not simultaneously receive and consume the benefits provided by our performance. The customer cannot utilize the aircraft for its intended purpose during any phase of the manufacturing process.
</TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Our performance does not create or enhance an asset that the customer controls as the asset is created or enhanced. The customer does not control the asset (the customer cannot direct the use of the asset, sell or
exchange the aircraft, etc.). </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Our performance creates an asset with an alternative use, and we do not have an enforceable right to payment for performance completed to date. Contracts for new aircraft have two major manufacturing phases: the
manufacture of the &#147;green&#148; aircraft and the aircraft&#146;s outfitting, which includes exterior painting and installation of customer-selected interiors. Prior to green aircraft completion, the aircraft are entirely fungible among any
existing or new customer. Subsequent to green aircraft completion, the aircraft is outfitted based on the customer&#146;s selection of company-offered options (exterior painting, interiors, etc.). Fully-outfitted aircraft can be sold to a variety of
customers or can be further modified and, therefore, also have an alternative use. Contracts for new aircraft require customer deposits upon contract execution and periodically throughout the production of the aircraft. These deposits are generally
refundable. Typically, our contracts contain default remedies, including liquidated damages provisions (for a portion of the total contract price) or cover clauses, which require the customer to cover lost costs and profit when the aircraft is
subsequently <FONT STYLE="white-space:nowrap">re-sold</FONT> to a new customer. Neither the deposits nor the default remedies provide an enforceable right to payment for performance completed to date. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Because revenue for our <FONT STYLE="white-space:nowrap">business-jet</FONT> aircraft is not recognized over time, revenue is recognized at a point in time.
In determining at what point in time to recognize revenue, we evaluated when the customer controls the promised assets, specifically considering the following indicators in ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">606-10-25-30:</FONT></FONT></FONT> </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">We have a present right to payment for the asset. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The customer has legal title to the asset. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">We have transferred physical possession of the asset. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The customer has significant risks and rewards of ownership of the asset. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The customer has accepted the asset. </TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The customer controls the asset when the customer accepts the asset. We
have determined that this is the appropriate point in time to recognize revenue because the customer acknowledges that the aircraft meets the contractual specifications and is acceptable to the customer through the execution of a memorandum of
delivery. This acceptance generally occurs at the final delivery of the fully outfitted aircraft, which is also typically the date when legal title of the asset is transferred to the customer and the customer obtains physical possession of the
asset. </P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September&nbsp;7, 2017 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page&nbsp;
 6
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To clarify the timing of revenue recognition in our Aerospace group, we propose to enhance our future filings
to include the following disclosures (additional language in <B><I>italics</I></B>): </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">The majority of our revenue recognized at a point in
time is for the manufacture of <FONT STYLE="white-space:nowrap">business-jet</FONT> aircraft in our Aerospace group. Revenue on these contracts is recognized when the customer <B><I>obtains control of the asset, which is generally upon</I></B>
<B><I>delivery and acceptance by the customer of</I></B> the fully outfitted aircraft. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Contract Estimates, page&nbsp;11 </U></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>6.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>With a view towards future disclosures, please help us better understand the general nature of your contract modifications and whether modifications typically add distinct goods or services. Reference is made to ASC <FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">605-10-25-10</FONT></FONT></FONT> and ASC
<FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-50-12(c).</FONT></FONT></FONT> </B></TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>General Dynamics&#146; Response </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Contract modifications
are routine in the performance of our contracts, particularly in our defense groups. Contracts are often modified to account for changes in the contract specifications or requirements. Pursuant to ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">606-10-25-10,</FONT></FONT></FONT> we consider contract modifications to exist when the parties to the contract approve a modification that either creates new enforceable rights or changes
existing enforceable rights and obligations. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In accordance with the guidance of ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">606-10-25-12,</FONT></FONT></FONT> we evaluate whether contract modifications should be accounted for as separate contracts. In most instances, contract modifications are for goods or services that are not distinct from
the existing contract due to the significant integration services we perform. The modifications are, therefore, accounted for as if they were part of the existing contract. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We propose to add the following disclosure in the performance obligations <FONT STYLE="white-space:nowrap">sub-section</FONT> of the note discussing revenue
recognition in our future <FONT STYLE="white-space:nowrap">Form&nbsp;10-Q</FONT> and <FONT STYLE="white-space:nowrap">Form&nbsp;10-K</FONT> filings: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract
specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp; * </P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September&nbsp;7, 2017 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page&nbsp;
 7
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We would welcome the opportunity to discuss these comments with you further. In the meantime, please do not
hesitate to contact me at <FONT STYLE="white-space:nowrap">(703)&nbsp;876-3777</FONT> with any questions about these matters. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt">


<TR>
<TD WIDTH="100%"></TD></TR>


<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Sincerely,</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Jason W. Aiken</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom">Jason W. Aiken</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom">Senior Vice President and Chief Financial Officer</TD></TR>
</TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">Cc:</TD>
<TD ALIGN="left" VALIGN="top">David M. Lynn </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Jenner&nbsp;&amp; Block, LLP </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">1099 New York Avenue, NW </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Suite 900 </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Washington, DC 20001 </TD></TR></TABLE>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
