28 unchanged sentences
Changes in retirement plans’ funded status 722 241 2,365
−Removed: Other comprehensive (loss) income, pretax ( 227 ) 2,088 266
−Removed: (Provision) benefit for income tax, net ( 5 ) ( 458 ) 2
−Removed: Other comprehensive (loss) income, net of tax ( 232 ) 1,630 268
+Added: Other comprehensive income (loss), pretax 1,145 ( 227 ) 2,088
+Added: Provision for income tax, net ( 152 ) ( 5 ) ( 458 )
+Added: Other comprehensive income (loss), net of tax 993 ( 232 ) 1,630
Comprehensive income $ 4,308 $ 3,158 $ 4,887
63 unchanged sentences
Dividends paid ( 1,428 ) ( 1,369 ) ( 1,315 )
−Removed: Purchases of common stock ( 1,229 ) ( 1,828 ) ( 587 )
Repayment of fixed-rate notes ( 1,250 ) ( 1,000 ) ( 2,500 )
+Added: Purchases of common stock ( 434 ) ( 1,229 ) ( 1,828 )
Proceeds from commercial paper, gross (maturities greater than 3 months) — — 1,997
2 unchanged sentences
Repayment of floating-rate notes — — ( 500 )
−Removed: Proceeds from (repayment of) credit facility, net — 6 ( 441 )
Other, net 18 127 56
Net cash used by financing activities ( 3,094 ) ( 3,471 ) ( 4,590 )
−Removed: Net cash provided (used) by discontinued operations 20 ( 20 ) ( 59 )
−Removed: Net (decrease) increase in cash and equivalents ( 361 ) ( 1,221 ) 1,922
+Added: Net cash (used) provided by discontinued operations ( 4 ) 20 ( 20 )
+Added: Net increase (decrease) increase in cash and equivalents 671 ( 361 ) ( 1,221 )
Cash and equivalents at beginning of year 1,242 1,603 2,824
12 unchanged sentences
Other comprehensive income — — — — 1,630 1,630
−Removed: Other — — ( 37 ) — — ( 37 )
December 31, 2021 482 3,278 35,420 ( 19,619 ) ( 1,920 ) 17,641
3 unchanged sentences
Shares purchased — — — ( 1,207 ) — ( 1,207 )
−Removed: Other comprehensive income — — — — 1,630 1,630
+Added: Other comprehensive loss — — — — ( 232 ) ( 232 )
+Added: Other — — ( 16 ) — — ( 16 )
December 31, 2022 482 3,556 37,403 ( 20,721 ) ( 2,152 ) 18,568
3 unchanged sentences
Shares purchased — — — ( 434 ) — ( 434 )
−Removed: Other comprehensive loss — — — — ( 232 ) ( 232 )
−Removed: Other — — ( 16 ) — — ( 16 )
+Added: Other comprehensive income — — — — 993 993
December 31, 2023 $ 482 $ 3,760 $ 39,270 $ ( 21,054 ) $ ( 1,159 ) $ 21,299
7 unchanged sentences
and technology products and services.
−Removed: The following is a discussion of certain significant accounting policies, and discussion of our other significant accounting policies is contained in the notes to these financial statements.
+Added: The following is a discussion of certain significant accounting policies, and further discussion is contained in the notes to these financial statements.
Basis of Consolidation and Classification.
32 unchanged sentences
We report our available-for-sale debt securities at fair value with unrealized gains and losses recognized as a component of other comprehensive (loss) income in the Consolidated Statement of Comprehensive Income.
−Removed: We had no trading or held-to-maturity debt securities on December 31, 2022 or 2021.
+Added: We had no material trading or held-to-maturity debt securities on December 31, 2023 or 2022.
See Note P for additional information regarding our investments in debt and equity securities.
Acquisitions.
−Removed: In the last three years, we acquired four businesses in our Aerospace segment, two businesses in our Combat Systems segment and a business in our Technologies segment.
+Added: In the last three years, we acquired a business in our Aerospace segment and a business in our Technologies segment.
The operating results of these acquisitions have been included in our reported results since their respective closing dates.
12 unchanged sentences
However, if a quantitative assessment is determined to be necessary, we compare the fair value of a reporting unit to its carrying value and, if necessary, recognize an impairment loss for the amount by which the carrying value exceeds the reporting unit’s fair value.
−Removed: Our estimate of fair value is based primarily on the discounted cash flows of the underlying operations.
−Removed: In the fourth quarter of 2022, we completed qualitative assessments for our Aerospace, Marine Systems and Combat Systems reporting units as the estimated fair values of each of the reporting units
−Removed: significantly exceeded the respective carrying values based on our most recent quantitative assessments, which were performed in the fourth quarter of 2018.
+Added: Our estimate of a reporting unit’s fair value is based primarily on the discounted cash flows of the underlying operations.
+Added: In the fourth quarter of 2023, we completed qualitative assessments for our Aerospace, Marine Systems and Combat Systems reporting units as the estimated fair values of each of the reporting units significantly exceeded the respective carrying values based on our most recent quantitative assessments, which were performed in the fourth quarter of 2018.
Our qualitative assessments did not present indicators of impairment for the reporting units.
−Removed: In the fourth quarter of 2022, we completed a quantitative assessment for our Technologies reporting unit, and the results indicated that no impairment existed.
−Removed: The Technologies reporting unit’s estimated fair value exceeded its carrying value by approximately 25%.
−Removed: The fair value of the Technologies reporting unit decreased since our previous quantitative assessment, performed in the fourth quarter of 2020, driven by the negative impact of increased interest rates on our discounted projected cash flows.
+Added: In the fourth quarter of 2023, we also completed a qualitative assessment for our Technologies reporting unit as its estimated fair value exceeded its carrying value by approximately 25% at the time of our last quantitative assessment in the fourth quarter of 2022.
+Added: Interest rates rose over the last year, but the increase was within the tolerances established in our previous quantitative analysis.
+Added: Our qualitative assessment this year did not present any other indicators of impairment.
For a summary of our goodwill by reporting unit, see Note H.
−Removed: Accounting Standards Updates.
−Removed: There are accounting standards that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective.
−Removed: These standards are not expected to have a material impact on our results of operations, financial condition or cash flows.
+Added: Recent Accounting Pronouncements.
+Added: In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Improvements to Reportable Segment Disclosures, effective for fiscal years beginning after December 15, 2023.
+Added: The ASU adds disclosure requirements for segment expense information.
+Added: In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, effective for annual periods beginning after December 15, 2024.
+Added: The ASU requires disclosure of disaggregated income tax information, including the effective tax rate reconciliation and income taxes paid.
+Added: There are other ASUs that have been issued by the FASB but are not yet effective.
+Added: We expect to implement these new standards by their effective dates, and do not expect their adoption to have a material impact on our results of operations, financial condition or cash flows.
Performance Obligations.
10 unchanged sentences
Revenue from products and services transferred to customers over time accounted for 79 % of our revenue in 2023, 77 % in 2022 and 78 % in 2021.
−Removed: Substantially all of our revenue in the defense segments is recognized over time because control is transferred continuously to our customers.
+Added: Substantially all of our revenue in the defense segments
+Added: is recognized over time because control is transferred continuously to our customers.
Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations.
3 unchanged sentences
Most of our revenue recognized at a point in time is for the manufacture of business jet aircraft in our Aerospace segment.
−Removed: Revenue on these contracts is
−Removed: recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft.
+Added: Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the fully outfitted aircraft.
On December 31, 2023, we had $ 93.6 billion of remaining performance obligations, which we also refer to as total backlog.
3 unchanged sentences
Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs.
−Removed: For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.
+Added: We estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.
Contract estimates are based on various assumptions to project the outcome of future events that often span several years.
20 unchanged sentences
Diluted earnings per share $ 0.32 $ 1.05 $ 1.06
−Removed: While no adjustment on any one contract was material to the Consolidated Financial Statements in 2022, 2021 or 2020, our Marine Systems segment’s 2022 results were affected negatively by supply chain impacts to the Virginia-class submarine schedule, offset partially by improved performance on auxiliary and support ships.
+Added: While no adjustment on any one contract was material to the Consolidated Financial Statements in 2023, 2022 or 2021, our Marine Systems segment’s 2023 results were affected negatively by supply chain impacts to the Virginia-class submarine schedule and cost growth on the Arleigh Burke-class (DDG-51) guided-missile destroyer program, offset partially by improved performance on the John Lewis-class (T-AO-205) fleet replenishment oiler program.
+Added: We have large, long-term contracts with the U.S.
+Added: Navy for Virginia-class submarines and an international customer for tracked vehicles in which our estimates for contract revenue include variable consideration from anticipated contract modifications.
+Added: For both contracts, it is reasonably possible that the actual amount of variable consideration realized could be less than our estimate, which could have a material unfavorable impact on our results of operations.
Revenue by Category.
−Removed: Our portfolio of products and services consists of approximately 10,000 active contracts.
+Added: Our portfolio of products and services consists of more than 9,000 active contracts.
The following series of tables presents our revenue disaggregated by several categories.
37 unchanged sentences
Contracts for research, engineering, repair and maintenance, and other services are typically cost-reimbursement or time-and-materials.
−Removed: Under cost-reimbursement contracts,
−Removed: the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee.
+Added: Under cost-reimbursement contracts, the customer reimburses contract costs incurred and pays a fixed, incentive or award-based fee.
The amount for an incentive or award fee is determined by our ability to achieve targets set in the contract, such as cost, quality, schedule and performance.
6 unchanged sentences
Under time-and-materials contracts, our profit may vary if actual labor-hour rates vary significantly from the negotiated rates.
−Removed: Also, because these contracts can provide little or no fee for managing material costs, the content mix can impact profitability.
+Added: Also, because these contracts may provide little or no fee for managing material costs, the content mix can impact profitability.
Revenue by customer was as follows:
34 unchanged sentences
These deposits are liquidated when revenue is recognized.
−Removed: Changes in the contract asset and liability balances during the year ended December 31, 2022, were not materially impacted by any other factors.
+Added: Changes in the contract asset and
+Added: liability balances during the year ended December 31, 2023, were not materially impacted by any other factors.
Revenue recognized in 2023, 2022 and 2021 that was included in the contract liability balance at the beginning of each year was $ 4.2 billion, $ 4 billion and $ 3.4 billion, respectively.
27 unchanged sentences
The reported tax provision differs from the amounts paid because some income and expense items are recognized in different time periods for financial reporting than for income tax purposes.
−Removed: This includes the impact of the requirement, effective January 1, 2022, to capitalize and amortize over five years certain research and experimental expenditures that were previously deductible immediately for tax purposes, which contributed to increased net income tax payments and is reflected in the net deferred tax liability related to intangible assets.
+Added: This includes the impact of the requirement, effective January 1, 2022, to capitalize and amortize over five years certain research and development expenditures that were previously deductible immediately for tax purposes, which contributed to increased net income tax payments.
State and local income taxes allocable to U.S.
14 unchanged sentences
December 31 2023 2022
−Removed: Retirement benefits $ 461 $ 570
+Added: Research and development expenditures $ 670 $ 313
Lease liabilities 414 373
+Added: Retirement benefits 311 461
Tax loss and credit carryforwards 267 259
6 unchanged sentences
Intangible assets $ ( 1,057 ) $ ( 1,044 )
+Added: Contract accounting methods ( 528 ) ( 291 )
Property, plant and equipment ( 422 ) ( 444 )
Lease right-of-use assets ( 395 ) ( 356 )
−Removed: Contract accounting methods ( 291 ) ( 259 )
Capital Construction Fund qualified ships ( 57 ) ( 57 )
23 unchanged sentences
We include any interest or penalties incurred in connection with income taxes as part of income tax expense.
−Removed: Based on all known facts and circumstances and current tax law, we believe the total amount of any unrecognized tax benefits on December 31, 2022, was not material to our results of operations, financial condition or cash flows.
+Added: Based on all known facts and circumstances and applicable tax law, we believe the total amount of any unrecognized tax benefits on December 31, 2023, was not material to our results of operations, financial condition or cash flows.
In addition, there are no tax positions for which it is reasonably possible that the unrecognized tax benefits will vary significantly over the next 12 months, producing, individually or in the aggregate, a material effect on our results of operations, financial condition or cash flows.
22 unchanged sentences
Net unbilled receivables $ 7,997 $ 8,795
−Removed: On December 31, 2022 and 2021, net unbilled receivables included $ 2.7 billion and $ 3.3 billion, respectively, associated with two large international contracts in our Combat Systems segment.
−Removed: A wheeled vehicle contract, originally negotiated in 2012, was amended in 2020 to include a revised payment schedule that addressed a build-up in unbilled receivables.
−Removed: Under the amended contract, we have received progress payments in 2021 and 2022 that have reduced the program’s unbilled balance to $ 1 billion as of December 31, 2022.
−Removed: The remaining scheduled progress payments will liquidate the net unbilled receivables balance by the end of 2023.
−Removed: A separate tracked vehicle contract signed in 2010 has been experiencing an unbilled receivables build-up since 2021 resulting in a $ 1.7 billion balance as of December 31, 2022.
−Removed: Based on ongoing discussions with the customer, we expect payments to resume in the first quarter of 2023 assuming continued successful program activity.
+Added: On December 31, 2023 and 2022, net unbilled receivables included $ 1.2 billion and $ 1.7 billion, respectively, associated with a large international tracked vehicle contract in our Combat Systems segment.
+Added: The contract, signed in 2010, had been experiencing an unbilled receivables build-up since 2021.
+Added: Based on ongoing discussions with the customer and continued successful program activity, the customer resumed payments on the contract in the first quarter of 2023.
Other than the balance related to the tracked vehicle contract, we expect to bill substantially all of the remaining year-end 2023 net unbilled receivables balance during 2024, and the amount not expected to be billed in 2024 results primarily from the agreed-upon contractual billing terms.
12 unchanged sentences
Total inventories $ 8,578 $ 6,322
−Removed: The increase in total inventories during 2022 was due primarily to the ramp-up in production of new Gulfstream aircraft models announced in the last three years, as well as increased production of in-service aircraft reflecting strong customer demand.
−Removed: Customer deposits associated with firm orders for these aircraft, which are reflected in customer advances and deposits and other noncurrent liabilities on the Consolidated Balance Sheet, have correspondingly increased.
+Added: The increase in total inventories during 2023 was due to the ramp-up in production of new Gulfstream aircraft models, including the G700 in anticipation of its certification from the U.S.
+Added: Federal Aviation Administration, as well as increased production of in-service aircraft reflecting strong customer demand.
+Added: Customer deposits associated with firm orders for these aircraft, which are reported in customer advances and deposits and other noncurrent liabilities on the Consolidated Balance Sheet, have correspondingly increased.
GOODWILL AND INTANGIBLE ASSETS
2 unchanged sentences
December 31, 2021 (a) $ 3,039 $ 297 $ 2,827 $ 13,935 $ 20,098
−Removed: Acquisitions (b) 33 — 54 — 87
+Added: Acquisitions — — — 336 336
Other (c) ( 20 ) — ( 61 ) ( 19 ) ( 100 )
December 31, 2022 (a) 3,019 297 2,766 14,252 20,334
−Removed: Acquisitions — — — 336 336
+Added: Acquisitions (b) — — — 16 16
Other (c) 180 — 46 10 236
12 unchanged sentences
Total intangible assets $ 3,927 $ ( 2,271 ) $ 1,656 $ 3,871 $ ( 2,047 ) $ 1,824
−Removed: (a) Changes in gross carrying amounts consisted primarily of adjustments for write-offs of fully amortized intangible assets, acquired intangible assets and foreign currency translation.
+Added: (a) Changes in gross carrying amounts consisted primarily of adjustments for foreign currency translation and write-offs of fully amortized intangible assets.
(b) Consisted of acquired backlog and probable follow-on work and associated customer relationships.
83 unchanged sentences
On December 31, 2023, we had additional future payments on leases that had not yet commenced of $ 216 .
−Removed: These leases will commence in 2023, and have lease terms ranging from one to 40 years.
+Added: These leases will commence in 2024 and 2025, and have lease terms ranging from one to 9 years.
Debt consisted of the following:
2 unchanged sentences
Interest rate:
−Removed: November 2022 2.250 % $ — $ 1,000
May 2023 3.375 % $ — $ 750
20 unchanged sentences
Long-term debt $ 8,754 $ 9,243
−Removed: In November 2022, we repaid fixed-rate notes of $ 1 billion at the scheduled maturity using cash on hand.
+Added: In May and August of 2023, we repaid fixed-rate notes of $ 750 and $ 500 , respectively, at their respective scheduled maturities using cash on hand.
Interest payments associated with our debt were $ 378 in 2023, $ 383 in 2022 and $ 433 in 2021.
17 unchanged sentences
Workers’ compensation 237 215
−Removed: Retirement benefits 38 288
Other 1,151 1,288
Total other current liabilities $ 3,266 $ 3,254
−Removed: Retirement benefits $ 2,453 $ 2,813
Customer deposits on commercial contracts $ 2,576 $ 2,175
+Added: Retirement benefits 2,219 2,453
Lease liabilities 1,497 1,330
12 unchanged sentences
In the third quarter of 2021, the court dismissed the relator’s complaint with prejudice.
−Removed: The relator appealed the dismissal of the complaint to the United States Court of Appeals.
−Removed: In the fourth quarter of 2022, the Court of Appeals heard oral
−Removed: arguments on the appeal, and thereafter took the case under submission.
+Added: The relator appealed the dismissal of the complaint to the United States Court of Appeals, which was not granted.
+Added: In the third quarter of 2023, the Court of Appeals affirmed dismissal of the relator’s complaint with prejudice.
+Added: The relator thereafter filed a
+Added: petition for rehearing with the Court of Appeals.
Given the current status of these matters, we are unable to express a view regarding the ultimate outcome or, if the outcome is adverse, to estimate an amount or range of reasonably possible loss.
Depending on the outcome of these matters, there could be a material impact on our results of operations, financial condition and cash flows.
+Added: On October 6, 2023, a putative class action lawsuit was filed in the United States District Court for the Eastern District of Virginia against General Dynamics Corporation, certain of its subsidiaries and various other companies alleging that they conspired, in violation of the Sherman Act, not to solicit naval architects and marine engineers from each other.
+Added: The named plaintiffs purport to represent a class of individuals consisting of all naval architects and marine engineers employed by the shipyard and consultancy defendants, their predecessors, their subsidiaries and/or their related entities in the United States at any time since January 1, 2000.
+Added: The plaintiffs allege that the conspiracy suppressed compensation paid to the putative class members, and the plaintiffs seek trebled monetary damages, attorneys’ fees, injunctive and other equitable relief.
+Added: We are defending the matter.
+Added: However, given the current status of this matter, we are unable to express a view regarding the ultimate outcome or, if the outcome is adverse, to estimate an amount or range of reasonably possible loss.
+Added: Depending on the outcome of this matter, there could be a material impact on our results of operations, financial condition and cash flows.
Additionally, various other claims and legal proceedings incidental to the normal course of business are pending or threatened against us.
16 unchanged sentences
As a government contractor, we are subject to U.S.
−Removed: government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and treble damages.
+Added: government audits and investigations relating to our operations, including claims for fines, penalties, and compensatory and
+Added: treble damages.
We believe the outcome of such ongoing government audits and investigations will not have a material impact on our results of operations, financial condition or cash flows.
7 unchanged sentences
In the ordinary course of business, we have entered into letters of credit, bank guarantees, surety bonds and other similar arrangements with financial institutions and insurance carriers totaling approximately $ 1.6 billion on December 31, 2023.
−Removed: In addition, from time to
−Removed: time and in the ordinary course of business, we contractually guarantee the payment or performance of our subsidiaries arising under certain contracts.
+Added: In addition, from time to time and in the ordinary course of business, we contractually guarantee the payment or performance of our subsidiaries arising under certain contracts.
Aircraft Trade-ins.
−Removed: In connection with orders for new aircraft in contract backlog, our Aerospace segment has outstanding options with some customers to trade in aircraft as partial consideration in their new-aircraft transaction.
+Added: In connection with orders for new aircraft in contract backlog, some Gulfstream customers hold options to trade in aircraft as partial consideration in their new-aircraft transaction.
These trade-in commitments are generally structured to establish the fair market value of the trade-in aircraft at a date generally 45 or fewer days preceding delivery of the new aircraft to the customer.
26 unchanged sentences
Our authorized capital stock consists of 500 million shares of $ 1 per share par value common stock and 50 million shares of $ 1 per share par value preferred stock.
−Removed: The preferred stock is issuable in series, with the rights, preferences and limitations of each series to be determined by our board of directors.
+Added: The preferred stock is issuable in series, with the rights, preferences and limitations of each series to be determined by our board of directors (Board).
Shares Issued and Outstanding.
5 unchanged sentences
Share Repurchases.
−Removed: Our board of directors, from time to time, authorizes management to repurchase outstanding shares of our common stock on the open market.
−Removed: In 2022, we repurchased 5.3 million of our outstanding shares for $ 1.2 billion.
−Removed: On December 31, 2022, 6.7 million shares remained authorized by our board of directors for repurchase, representing 2.4 % of our total shares outstanding.
−Removed: We repurchased 10.3 million shares for $ 1.8 billion in 2021 and 4.1 million shares for $ 602 in 2020.
+Added: Our Board, from time to time, authorizes management to repurchase outstanding shares of our common stock on the open market.
+Added: In 2023, we repurchased 2 million of our outstanding shares for $ 434 .
+Added: On December 31, 2023, 4.7 million shares remained authorized by our Board for repurchase, representing 1.7 % of our total shares outstanding.
+Added: We repurchased 5.3 million shares for $ 1.2 billion in 2022 and 10.3 million shares for $ 1.8 billion in 2021.
Dividends per Share.
−Removed: Our board of directors declared dividends per share of $ 5.04 in 2022 , $ 4.76 in 2021 and $ 4.40 in 2020.
−Removed: We paid cash dividends of $ 1.4 billion in 2022 , $ 1.3 billion in 2021 and $ 1.2 billion in 2020.
+Added: Our Board declared dividends per share of $ 5.28 in 2023 , $ 5.04 in 2022 and $ 4.76 in 2021.
+Added: We paid cash dividends of $ 1.4 billion in 2023 and 2022, and $ 1.3 billion in 2021.
Accumulated Other Comprehensive Loss.
4 unchanged sentences
Other comprehensive income, pretax ( 174 ) ( 103 ) 2,365 2,088
−Removed: Benefit from income tax, net ( 96 ) — 98 2
−Removed: Other comprehensive income, net of tax 270 353 ( 355 ) 268
−Removed: December 31, 2020 272 641 ( 4,463 ) ( 3,550 )
−Removed: Other comprehensive income, pretax ( 174 ) ( 103 ) 2,365 2,088
−Removed: Provision for income tax, net 46 — ( 504 ) ( 458 )
+Added: Provision from income tax, net 46 — ( 504 ) ( 458 )
Other comprehensive income, net of tax ( 128 ) ( 103 ) 1,861 1,630
4 unchanged sentences
December 31, 2022 4 260 ( 2,416 ) ( 2,152 )
+Added: Other comprehensive income, pretax 10 413 722 1,145
+Added: Provision for income tax, net ( 3 ) — ( 149 ) ( 152 )
+Added: Other comprehensive income, net of tax 7 413 573 993
+Added: December 31, 2023 $ 11 $ 673 $ ( 1,843 ) $ ( 1,159 )
Amounts reclassified out of AOCL related primarily to changes in our retirement plans’ funded status and included pretax recognized net actuarial losses and amortization of prior service credit.
−Removed: See Note S for these amounts, which are included in our net annual pension and other post-retirement benefit (credit) cost.
+Added: See Note S for these amounts, which are included in our net annual pension and other post-retirement benefit cost (credit).
SEGMENT INFORMATION
48 unchanged sentences
The carrying values of cash and equivalents and accounts receivable and payable on the Consolidated Balance Sheet approximate their fair value.
−Removed: The following tables present the fair values of our other financial assets and liabilities on December 31, 2022 and 2021, and the basis for determining their fair values:
+Added: The following tables present the fair values of
+Added: our other financial assets and liabilities on December 31, 2023 and 2022, and the basis for determining their fair values:
Value Quoted Prices in Active Markets for Identical Assets
18 unchanged sentences
Available-for-sale debt securities 107 107 — 107 —
−Removed: Equity securities 62 62 62 — —
+Added: Commingled equity funds 42 42 42 — —
+Added: Commingled fixed-income funds 6 6 6 — —
Other investments 17 17 — — 17
14 unchanged sentences
To the extent possible, we include terms in our contracts that are designed to protect us from this risk.
−Removed: Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale
−Removed: contracts, designed to offset and minimize our risk.
−Removed: The dollar-weighted two-year average maturity of these instruments generally matches the duration of the activities that are at risk.
+Added: Otherwise, we enter into derivative financial instruments, principally foreign currency forward purchase and sale contracts, designed to offset and minimize our risk.
+Added: The dollar-weighted one-year average maturity of these instruments generally matches the duration of the activities that are at risk.
Commodity Price Risk.
6 unchanged sentences
Our investment policy allows for purchases of fixed-income securities with an investment-grade rating and a maximum maturity of up to five years .
−Removed: On December 31, 2022 and 2021, we held $ 1.2 billion and $ 1.6 billion in cash and equivalents, respectively, but held no marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified pension plans.
+Added: On December 31, 2023 and 2022, we held $ 1.9 billion and $ 1.2 billion in cash and equivalents, respectively, but held no material marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified pension plans.
On December 31, 2023 and 2022, we held marketable securities in trust of $ 191 and $ 162 , respectively.
23 unchanged sentences
Equity Compensation Overview.
−Removed: We have equity compensation plans for employees, as well as for non-employee members of our board of directors.
+Added: We have equity compensation plans for employees, as well as for non-employee members of our Board.
The equity compensation plans seek to provide an effective means of attracting and retaining directors, officers and key employees, and to provide them with incentives to enhance our growth and profitability.
26 unchanged sentences
We determine the above assumptions based on the following:
−Removed: • Expected volatility is based on the historical volatility of our common stock over a period equal to the expected term of the option
+Added: • Expected volatility is based on the historical volatility of our common stock
• Expected term is based on assumptions used by a set of comparable peer companies
27 unchanged sentences
The fair value of restricted stock and RSUs equals the average of the high and low market prices of our common stock as listed on the NYSE on the date of grant.
−Removed: Participants generally vest in restricted stock and RSUs, over a three-year restriction period after the grant date, during which recipients may not sell, transfer, pledge, assign or otherwise convey their
−Removed: restricted shares to another party.
+Added: Participants generally vest in restricted stock and RSUs, over a three-year restriction period after the grant date, during which recipients may not sell, transfer, pledge, assign or otherwise convey their restricted shares to another party.
During this period, restricted stock recipients receive cash dividends on their restricted shares and are entitled to vote those shares, while RSU recipients receive dividend-equivalent units instead of cash dividends and are not entitled to vote their RSUs or dividend-equivalent units.
−Removed: We grant RSUs with one or more performance measures (performance stock units or PSUs) determined by the compensation committee of the board of directors as described in our proxy statement.
+Added: We grant RSUs with one or more performance measures (performance stock units or PSUs) determined by the compensation committee of the Board as described in our proxy statement.
Depending on the company’s performance, the number of PSUs earned may be less than, equal to or greater than the original number of PSUs awarded subject to a payout range.
25 unchanged sentences
Our contributions to these plans totaled $ 462 in 2023, $ 415 in 2022 and $ 398 in 2021.
−Removed: The defined-contribution plans held approximately 16 million and 17 million shares of our common stock, representing approximately 6 % of our outstanding shares, on December 31, 2022 and 2021.
+Added: The defined-contribution plans held approximately 16 million shares of our common stock, representing approximately 6 % of our outstanding shares, on December 31, 2023 and 2022.
Defined Benefit Plans
18 unchanged sentences
In 2024, our required contributions are $ 73 .
−Removed: In the first quarter of 2023, we also made a discretionary contribution of $ 92 , resulting in total expected pension plan contributions of $ 206 in 2023.
We maintain several tax-advantaged accounts, primarily Voluntary Employees’ Beneficiary Association (VEBA) trusts, to fund the obligations for some of our other post-retirement benefit plans.
3 unchanged sentences
We expect the following benefits to be paid from our defined benefit plans over the next 10 years:
−Removed: Benefits Other Post-retirement
+Added: Benefits Other
+Added: Post-Retirement
2024 $ 953 $ 50
16 unchanged sentences
For non-qualified pension plans, we recognize actuarial gains and losses immediately.
−Removed: Net annual benefit (credit) cost consisted of the following:
+Added: Net annual benefit cost (credit) consisted of the following:
Pension Benefits
6 unchanged sentences
Settlement/curtailment/other 3 4 70
−Removed: Net annual benefit (credit) cost $ ( 250 ) $ ( 82 ) $ 49
+Added: Net annual benefit cost (credit) $ 629 $ ( 250 ) $ ( 82 )
Other Post-Retirement Benefits
4 unchanged sentences
Net actuarial gain ( 30 ) ( 16 ) —
−Removed: Prior service cost (credit) 1 — ( 1 )
+Added: Prior service cost 2 1 —
Settlement/curtailment/other 5 ( 11 ) —
3 unchanged sentences
The amount allocated to U.S.
−Removed: government contracts is determined in accordance with the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS), which may result in a timing difference with
−Removed: the amount determined under GAAP.
+Added: government contracts is determined in accordance with the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS), which may result in a timing difference with the amount determined under GAAP.
We defer this difference on the Consolidated Balance Sheet.
−Removed: At this time, the amount allocated to contracts exceeds cumulative benefit costs, resulting in a deferred credit that is reported in other noncurrent liabilities.
−Removed: To the extent there is a non-service component of net annual benefit (credit) cost for our defined benefit plans, it is reported in other income (expense) in the Consolidated Statement of Earnings.
+Added: At this time, cumulative benefit costs exceed the amount allocated to contracts, and the difference is reported in other current assets.
+Added: To the extent there is a non-service component of net annual benefit cost (credit) for our defined benefit plans, it is reported in other income (expense) in the Consolidated Statement of Earnings.
Funded Status.
9 unchanged sentences
Amendments 1 6 ( 5 ) ( 1 )
−Removed: Actuarial gain 3,884 955 185 187
+Added: Actuarial (loss) gain ( 377 ) 3,884 8 185
Settlement/curtailment/other ( 52 ) 36 ( 3 ) 9
9 unchanged sentences
Funded status at end of year $ ( 1,850 ) $ ( 2,070 ) $ 51 $ 9
+Added: The overall increase in our pension benefit obligation for the year ended December 31, 2023, was due primarily to actuarial loss created by the change in the weighted-average discount rate, which decreased from 5.08 % at December 31, 2022, to 4.83 % at December 31, 2023.
The overall decrease in our pension benefit obligation for the year ended December 31, 2022, was due primarily to actuarial gains created by the change in the weighted-average discount rate, which increased from 2.84 % at December 31, 2021, to 5.08 % at December 31, 2022.
−Removed: The overall decrease in our pension benefit obligation for the year ended December 31, 2021, was due primarily to the settlement resulting from the 2021 purchase of an irrevocable group annuity contract to transfer certain pension obligations to an insurance company, and actuarial gains created by the change in the weighted-average discount rate, which increased from 2.54 % at December 31, 2020, to 2.84 % at December 31, 2021.
Amounts recognized on the Consolidated Balance Sheet consisted of the following:
14 unchanged sentences
Year Ended December 31 2023 2022 2023 2022
−Removed: Net actuarial gain $ ( 61 ) $ ( 1,684 ) $ ( 39 ) $ ( 265 )
+Added: Net actuarial loss (gain) $ 29 $ ( 61 ) $ ( 33 ) $ ( 39 )
Prior service (credit) cost ( 1 ) ( 5 ) 5 2
56 unchanged sentences
Therefore, the impact of annual changes in financial reporting assumptions on the cost for these plans does not immediately affect our operating results.
−Removed: A committee of our board of directors is responsible for the strategic oversight of our defined benefit plan assets held in trust.
+Added: A committee of our Board is responsible for the strategic oversight of our defined benefit plan assets held in trust.
Management develops investment policies and provides oversight of a third-party investment manager who reports to the committee on a regular basis.
The outsourced third-party investment manager develops investment strategies and makes all day-to-day investment decisions related to defined benefit plan assets in accordance with our investment policy and target allocation percentages with the objective of generating future returns at or above our assumed long-term rates of return used to determine net annual benefit cost.
−Removed: In 2022, we selected a new outsourced third-party investment manager that has implemented an investment strategy utilizing primarily commingled funds versus the former outsourced third-party investment manager’s strategy that utilized primarily investments in individually held equity and fixed-income securities.
Our investment policy endeavors to strike the appropriate balance between asset growth and funded status protection.
17 unchanged sentences
The fair value of plan assets invested in fixed-income securities is generally determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets.
−Removed: Our plan assets invested in Level 2 commingled funds are valued using a unit price or NAV obtained from the fund’s transfer agent or
−Removed: investment manager that is based on the underlying, observable investments of the fund.
+Added: Our plan assets invested in Level 2 commingled funds are valued using a unit price or NAV obtained from the fund’s transfer agent or investment manager that is based on the underlying, observable investments of the fund.
Our Level 3 assets consist of insurance deposit contracts, retirement annuity contracts and real estate funds.
−Removed: Certain investments valued using NAV as a practical expedient are excluded from the fair value hierarchy.
+Added: Certain investments valued using NAV as a practical expedient are excluded from the fair value hierarchy but are included in the tables below to permit reconciliation to total plan assets.
These investments are redeemable at NAV generally on a monthly or quarterly basis, and most have redemption notice periods of up to 90 days.
16 unchanged sentences
Real estate funds 581
−Removed: Hedge funds 141
Equity funds 42
+Added: Hedge funds 10
Total pension plan assets $ 11,886
−Removed: * Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy.
−Removed: The fair value amounts presented in this table for these investments are included to permit reconciliation of the fair value hierarchy to the total plan assets.
Value Quoted Prices
7 unchanged sentences
Real estate funds 12 — — 12
−Removed: Equity securities (a):
−Removed: companies 1,143 1,143 — —
−Removed: companies 151 151 — —
−Removed: Fixed-income securities:
−Removed: Corporate bonds (b) 4,090 — 4,090 —
−Removed: Treasury securities 1,495 — 1,495 —
Other investments:
2 unchanged sentences
Total plan assets in fair value hierarchy $ 10,523 $ 762 $ 9,565 $ 196
−Removed: Plan assets measured using NAV as a practical expedient (c):
+Added: Plan assets measured using NAV as a practical expedient:
Real estate funds 733
2 unchanged sentences
Total pension plan assets $ 11,435
−Removed: (a) No single equity holding amounted to more than 1 % of the total fair value.
−Removed: (b) Our corporate bond investments had an average rating of A.
−Removed: (c) Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy.
−Removed: The fair value amounts presented in this table for these investments are included to permit reconciliation of the fair value hierarchy to the total plan assets.
The fair value of our other post-retirement benefit plan assets by category and the corresponding level within the fair value hierarchy were as follows:
9 unchanged sentences
Total plan assets in fair value hierarchy $ 642 $ 81 $ 561
−Removed: Plan assets measured using NAV as a practical expedient (b):
+Added: Plan assets measured using NAV as a practical expedient:
Real estate funds 7
2 unchanged sentences
(a) We had no Level 3 investments on December 31, 2023.
−Removed: (b) Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy.
−Removed: The fair value amounts presented in this table for these investments are included to permit reconciliation of the fair value hierarchy to the total plan assets.
Value Quoted Prices
6 unchanged sentences
Fixed-income funds 75 10 65
−Removed: Real estate funds 2 2 —
−Removed: Equity securities 105 105 —
Fixed-income securities 413 — 413
Total plan assets in fair value hierarchy $ 616 $ 75 $ 541
−Removed: Plan assets measured using NAV as a practical expedient (b):
+Added: Plan assets measured using NAV as a practical expedient:
Real estate funds 8
2 unchanged sentences
(a) We had no Level 3 investments on December 31, 2022.
−Removed: (b) Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy.
−Removed: The fair value amounts presented in this table for these investments are included to permit reconciliation of the fair value hierarchy to the total plan assets.
Changes in our Level 3 defined benefit plan assets during 2023 and 2022 were as follows:
−Removed: Insurance Deposits Contracts Retirement Annuity Contracts Private Equity Investments Real Estate Funds Total
+Added: Insurance Deposits Contracts Retirement Annuity Contracts Real Estate Funds Total
Level 3 Assets
December 31, 2021 $ 163 $ 35 $ 8 $ 206
−Removed: Transfers out of Level 3 — — ( 33 ) ( 82 ) ( 115 )
Actual return on plan assets:
−Removed: Unrealized gains (losses), net 9 ( 3 ) — — 6
+Added: Unrealized losses, net ( 10 ) ( 12 ) — ( 22 )
+Added: Realized losses, net — — ( 1 ) ( 1 )
Purchases, sales and settlements, net 8 — 5 13
1 unchanged sentence
Actual return on plan assets:
−Removed: Unrealized losses, net ( 10 ) ( 12 ) — — ( 22 )
−Removed: Realized losses, net — — — ( 1 ) ( 1 )
+Added: Unrealized gains (losses), net 23 2 ( 1 ) 24
+Added: Realized gains, net — — 3 3
Purchases, sales and settlements, net — — ( 1 ) ( 1 )
24 unchanged sentences
Estimates used to recognize revenue for select long-term contracts
−Removed: As discussed in Note B to the consolidated financial statements, accounting for long-term contracts involves the use of various techniques to estimate total contract revenue and costs.
+Added: As discussed in Note B to the consolidated financial statements, accounting for long-term contracts involves estimating total contract revenue and costs.
Revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying performance obligations.
9 unchanged sentences
– reading the underlying contract and any related amendments to obtain an understanding of the contractual requirements and related performance obligations
+Added: – assessing the enforceable rights and obligations of the underlying contractual terms when changes to price or scope, or both, are not yet agreed
– assessing costs incurred to date and the relative progress toward satisfying the performance obligation(s) of the contract
−Removed: – assessing, if relevant, the estimated costs at completion on similar or predecessor contracts and programs
+Added: – assessing, if relevant, the estimated costs at completion by considering similar or predecessor contracts and programs
– inquiring of financial and operational personnel of the Company to identify factors that should be considered within the estimated costs at completion or indications of potential management bias
– inspecting correspondence, if any, between the Company and the customer regarding actual to date and expected performance
−Removed: – assessing the enforceable rights and obligations of the underlying contractual terms when changes to price or scope, or both, are not yet agreed
– analyzing the sufficiency of the Company’s assessment of contract performance risks included within the estimated costs at completion.
1 unchanged sentence
As discussed in Note S to the consolidated financial statements, t he Company’s pension benefit obligation and the associated plan assets were $13.7 billion and $11.9 billion, respectively, on December 31, 2023.
−Removed: These balances resulted in a net liability of $2.1 billion.
−Removed: The weighted average discount rate assumption used in estimating the pension benefit obligation as of December 31, 2022, of 5.08% was based on a current yield curve developed from a portfolio of
−Removed: high-quality, fixed-income investments with maturities consistent with the projected benefit payout period.
+Added: The weighted-average discount rate assumption used in estimating the pension benefit obligation as of December 31, 2023, of 4.83% was based on a current yield curve developed from a portfolio of high-quality, fixed-income investments with maturities consistent
+Added: with the projected benefit payout period.
The selected discount rates have a significant effect on the measurement of the pension benefit obligation.
−Removed: We identified the evaluation of the discount rates for certain plans’ pension benefit obligations to be a critical audit matter.
−Removed: This is due to the specialized skills required to assess the discount rate assumption used to discount estimated future benefit payments.
+Added: We identified the evaluation of the discount rates for certain plans’ pension benefit obligations to be a critical audit matter, due to the extent of specialized skills required to assess the discount rate assumption used to discount estimated future benefit payments.
In addition, certain plans’ pension benefit obligations were sensitive to changes in this assumption.
4 unchanged sentences
– evaluating the Company’s methodology used to develop the discount rates
−Removed: – recalculating discount rates using the cash flows and spot rates provided by the Company
+Added: – checking the accuracy of the discount rates using the cash flows and spot rates provided by the Company
– evaluating the Company’s determination of the discount rates by comparing changes in the discount rates from the prior year against changes in published indices using publicly available market data.
4 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.