General Dynamics Corporation and Subsidiaries - Page 11

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          1976, Lachmar entered into a contract with an affiliate of Morgas           
          to oversee the construction and then to maintain and operate the            
          LNG tankers.                                                                
               Bonds, guaranteed by the U.S. Government, were issued by               
          Lachmar to finance the construction of the tankers, and the                 
          Federal Government also subsidized the construction of the                  
          tankers.  A portion of the subsidy was eventually repaid to the             
          Federal Government because one of the tankers was used for                  
          domestic transportation.  The tankers were delivered and                    
          transferred to Lachmar on May 15 and September 25, 1980.  Morgas’           
          affiliate was prepared to begin transportation of LNG at the time           
          of the tankers’ delivery.                                                   
               To satisfy its obligations under the LNG contract, the                 
          Algerian national LNG company was to construct a terminal                   
          facility for the tankers.  For technical, financial, and                    
          political reasons, the facility was not completed until the fall            
          of 1982, and the Algerian company could not deliver sufficient              
          quantities of LNG to fulfill its obligations to Trunkline.                  
          Accordingly, the initial uses of the LNG tankers outside the                
          United States were on September 3 and November 16, 1982,                    
          respectively.  Prior to that time, Lachmar bore the expense of              
          storing the tankers at various locations.                                   
               During 1980 through 1982, there was overcapacity in the                
          world market for LNG tankers, and Lachmar was able to find only             
          limited use for the tankers prior to their use under the                    

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