General Dynamics (GD) 10-K risk factor changes: FY2020 vs FY2019

In addition, our sales to non-U.S. customers expose us to different financial and legal [removed: risks.]

The U.S. government provides a significant portion of our revenue. In [removed: 2019,] [added: 2020,] approximately [removed: 65%] [added: 70%] of our consolidated revenue was from the U.S. government.

The U.S. government also reviews the adequacy of, and compliance with, internal control systems and policies, including the contractor’s purchasing, property, [removed: estimating, material, earned value management and accounting systems.]

Our Aerospace segment is subject to changing customer demand for business aircraft. The [removed: business-jet] [added: business jet] market is driven by the demand for business-aviation products and services by corporate, individual and government customers in the United States and around the world.

[removed: | • |] [added: -] the productivity and availability of labor; [removed: |]

[removed: | • |] [added: -] the complexity of the work to be performed; [removed: |]

[removed: | • |] [added: -] the cost and availability of materials and components; and [removed: |]

[removed: | • |] [added: -] schedule requirements. [removed: |]

Earnings and margin depend in part on subcontractor and [removed: vendor] [added: supplier] performance. We rely on other companies to provide materials, components and subsystems for our products.

We depend on these subcontractors and [removed: vendors] [added: suppliers] to meet our contractual obligations in full compliance with customer requirements and applicable law.

[removed: Accordingly, our future performance depends in part on our ability to continue to develop,] manufacture and provide innovative products and services and bring those offerings to market quickly at cost-effective prices.

[added: Additionally, due] to the highly specialized nature of our business, we must hire and retain the skilled and qualified personnel necessary to perform the services required by our customers.

Our business could be negatively impacted by cybersecurity events and other disruptions. We face various cybersecurity threats, including threats to our [removed: information technology (IT)] [added: IT] infrastructure and attempts to gain access to our proprietary or classified information, denial-of-service attacks, as well as threats to the physical security of our facilities and employees, and threats from terrorist acts.

In addition, we face cyber threats from entities that may seek to target us through our customers, [removed: vendors,] [added: suppliers,] subcontractors and other third parties with whom we do business.

Due to the evolving nature of these security threats, the potential impact [added: of any future incident cannot be predicted.]

In making these [removed: statements] [added: statements,] we rely on assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances.

risks.

*Risks Relating to Our Business and Industry*

estimating, material, earned value management and accounting systems.

Accordingly, our future performance depends in part on our ability to continue to develop,

*Risks Relating to Our International Operations*

*Risks Relating to Our Acquisitions and Similar Investment Activities*

*Other Business and Operational Risks*

Our business may continue to be negatively impacted by the Coronavirus (COVID-19) pandemic or other similar outbreaks. The COVID-19 pandemic has had, and could continue to have, a negative effect on our business, results of operations and financial condition.

Effects include disruptions or restrictions on our employees’ ability to work effectively, as well as temporary closures of our facilities or the facilities of our customers or suppliers, which can affect our ability to perform on our contracts.

Resulting cost increases may not be fully recoverable on our contracts or adequately covered by insurance, which could impact our profitability.

In addition, the COVID-19 pandemic has resulted in a widespread health crisis that is adversely affecting the economies and financial markets of many countries, which could result in a prolonged economic downturn that may negatively affect demand for our products and services.

The imposition of quarantine and travel restrictions has affected and may

continue to negatively affect portions of our business, particularly our Aerospace and Technologies segments.

The extent to which COVID-19 continues to impact our business, results of operations and financial condition is highly uncertain and will depend on future developments.

Such developments may include the geographic spread and duration of the virus, the severity of the disease and the actions that may be taken by various governmental authorities and other third parties in response to the pandemic.

Other outbreaks of contagious diseases or other adverse public health developments in countries where we operate or our customers are located could similarly affect our business in the future.

| | |

| --- | --- |

Additionally, due

of any future incident cannot be predicted.

A discussion [removed: regarding] [added: of] our financial condition and results of operations for [removed: 2018] [added: 2020] compared with [removed: 2017] [added: 2019 is presented below and should be read in conjunction with our Consolidated Financial Statements included in Item 8, while a discussion of 2019 compared with 2018] can be found in Item 7 of our Annual Report on Form 10-K for the year ended December 31, [removed: 2018.][added: 2019.]

For an overview of our operating segments, including a discussion of our major products and [removed: services,] [added: services and the reorganization of our Information Technology and Mission Systems operating segments into a single Technologies segment,] see the Business discussion contained in Item 1.

With approximately [removed: 65%] [added: 70%] of our revenue from the U.S. government, government spending [removed: levels,] [added: levels —] particularly defense [removed: spending,] [added: spending —] influence our financial performance.

On December [removed: 20, 2019,] [added: 27, 2020,] the [removed: FY 2020] [added: fiscal year (FY) 2021] defense appropriations bill was signed into law.

It totaled [removed: $691 billion] [added: $696 billion, a modest increase over FY 2020,] and included [removed: $619] [added: $627] billion in the base budget in compliance with the [removed: BBA] [added: previously established] spending caps and [removed: $72] [added: $69] billion for overseas contingency [removed: operations, representing an increase of approximately 3% over the total FY 2019 spending level.][added: operations.]

International demand for military equipment and [removed: information] technologies presents opportunities for our non-U.S. operations and exports from our North American businesses.

[removed: We] [added: In our Aerospace segment, we] expect our investment in the development of new aircraft products and technologies to support the [removed: Aerospace] segment’s long-term growth.

Similarly, we believe the aircraft services business will be a source of steady revenue growth as the global [removed: business-jet] [added: business jet] fleet continues to [removed: grow.][added: grow and the impact of the pandemic subsides.]

[added: Higher or lower margins can result from a] number of factors, including contract type (e.g., fixed-price/cost-reimbursable) and type of work (e.g., development/production).

[removed: | • |] [added: -] Record-high backlog of [removed: $86.9] [added: $89.5] billion increased [removed: $19.1] [added: $2.5] billion, or [removed: 28.1%,] [added: 2.9%,] from [removed: 2018,] [added: 2019,] supporting our long-term growth expectations: [removed: |]

[removed: | ◦ | Several] [added: ◦Several] significant contract awards received in [removed: 2019] [added: 2020] in our defense segments, including [removed: $22.2] [added: $9.5] billion [removed: for Block V of] [added: from] the [removed: Virginia-class submarine program in our Marine Systems segment,] [added: U.S. Navy for] the [removed: largest shipbuilding contract in] [added: construction of] the [removed: U.S. Navy’s history. |][added: first two Columbia-class submarines.]

| Year Ended December 31 | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [added: 2019 | | | | | |] Variance | | | | | | [added: | | |]

| Operating costs and [removed: expenses | (34,702 | | ) | | (31,736 | | ) | | (2,966] [added: expenses, excluding G&A] | | [removed: )] | [added: (11,190)] | [removed: 9.3] | [removed: %] |

| Operating margin | [removed: 15.6] | | [added: 13.4 | |] % | | [removed: 17.6] | | [added: 15.6 | |] % | | | | | | | | [added: | | | | |]

| Gulfstream aircraft deliveries (in units) | [added: | | 127 | | | | | |] 147 | | | | [removed: 121] | | [added: (20)] | | [removed: 26] | | | | [removed: 21.5] [added: (13.6)] | [added: |] % |

The [removed: increase] [added: change] in the Aerospace segment’s revenue in [removed: 2019] [added: 2020] consisted of the following:

| Aircraft manufacturing | [added: | |] $ | [removed: 1,120] [added: (1,426)] | |

| Aircraft services and completions | [removed: 67] | | [added: (39)] | [added: | |]

| Total increase | [added: | |] $ | [removed: 1,346] [added: 796] | |

The [removed: increase] [added: change] in the segment’s operating earnings in [removed: 2019] [added: 2020] consisted of the following:

| Aircraft manufacturing | [added: | |] $ | [removed: 50] [added: (590)] | |

| Aircraft services and completions | [removed: 38] | | [added: (300)] | [added: | |]

| G&A/other expenses | [removed: (33] | | [removed: )] [added: 239] | [added: | |]

| Total increase | [added: | |] $ | [removed: 42] [added: 216] | |

In total, the Aerospace segment’s operating margin decreased [removed: 200] [added: 220] basis points to [removed: 15.6%.][added: 13.4%.]

We expect the [removed: Aerospace] [added: Technologies] segment’s [removed: 2020] [added: 2021] revenue to be [removed: around $10] [added: approximately $13.2] billion with operating margin [removed: in the 15.7% to 15.8% range.][added: of around 9.5%.]

| Operating earnings | [added: | | 1,041 | | | | | |] 996 | | | | [removed: 962] | | [added: 45] | | [removed: 34] | | | | [removed: 3.5] [added: 4.5] | [added: |] % |

| Operating margin | [removed: 14.2] | | [added: 14.4 | |] % | | [removed: 15.4] | | [added: 14.2 | |] % | | | | | | | | [added: | | | | |]

The increase in the Combat Systems segment’s revenue in [removed: 2019] [added: 2020] consisted of the following:

| U.S. military vehicles | [removed: $] | [removed: 480] | [added: 37] | [added: | |]

| Weapons systems and munitions | [removed: 228] | | [added: $] | [added: 125 | |]

| International military vehicles | [removed: 58] | | [added: 54] | [added: | |]

Revenue was up across the Combat Systems segment in [removed: 2019.][added: 2020 as the business overcame disruptions caused by the pandemic in the first half of the year.]

Revenue from U.S. military vehicles increased due primarily to higher volume on the [added: U.S.] Army’s Abrams [removed: M1A2 System Enhancement Package Version 3 (SEPv3)] [added: main battle] tank [removed: and new Mobile Protected Firepower (MPF) vehicle programs.][added: program.]

Weapons systems and munitions revenue was up [removed: from] [added: driven by] increased [removed: volume on several products, including Hydra-70 rockets and other] [added: production of] artillery [removed: for the Army] and missile subcomponents.

We expect the Combat Systems segment’s [removed: 2020] [added: 2021] revenue to be about $7.3 billion with operating margin of approximately [removed: 14.3%.][added: 14.5%.]

The increase in the [removed: Information Technology] [added: Marine Systems] segment’s revenue in [removed: 2019] [added: 2020] consisted of the following:

The [removed: increase] [added: change] in the [removed: Mission Systems] [added: Technologies] segment’s revenue in [removed: 2019] [added: 2020] consisted of the following:

| Operating earnings | [added: | | 854 | | | | | |] 785 | | | | [removed: 761] | | [added: 69] | | [removed: 24] | | | | [removed: 3.2] [added: 8.8] | [added: |] % |

| Operating margin | [removed: 8.5] | | [added: 8.6 | |] % | | [removed: 9.0] | | [added: 8.5 | |] % | | | | | | | | [added: | | | | |]

Prior-period segment information has been restated for the reorganization.

The Technologies segment’s results of operations for 2019 compared with 2018 can be obtained from the discussions of the former Information Technology and Mission Systems operating segments.

GLOBAL PANDEMIC

The Coronavirus (COVID-19) pandemic has caused significant disruptions to national and global economies and government activities.

Our businesses have been designated as critical infrastructure by the U.S. government and many non-U.S. governments and, as such, are required to stay open.

During this time, we have continued to conduct our operations to the fullest extent possible, while responding to the pandemic with actions that include:

- implementing measures to protect the health and safety of our employees.

- modifying employee work locations and schedules where possible and permitted under our contracts.

- coordinating closely with our suppliers and customers.

- managing our cost structure in the context of current business activity.

- instituting various aspects of our business continuity programs.

- planning for and working aggressively to mitigate disruptions that may occur.

- supporting our communities and the U.S. government in addressing the challenges of the pandemic, such as the production of medical supplies and donation of personal protective equipment.

While we expect this situation to be temporary, any longer-term impact to our business is currently unknown due to the uncertainty around the pandemic’s duration and its broader impact.

See the Risk Factors in Item 1A, regarding the COVID-19 pandemic, as well as additional risks facing our business, which may be affected by the COVID-19 pandemic.

The United States and some other governments have taken steps to respond to the pandemic and to support economic activity and liquidity in the capital markets.

In the United States, the adoption of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) provides various forms of relief.

The CARES Act includes provisions that allow agencies to reimburse contractors for payments to covered workers who are prevented from working due to COVID-19 facility closures or other restrictions; however, such reimbursement is subject to the availability of funds.

These provisions of the CARES Act have been extended through March 31, 2021.

The CARES Act also allows for loans to companies.

To date, we have not sought or accepted CARES Act loans.

In addition, the U.S. Department of Defense (DoD) increased progress payment rates and reduced retention rates on certain contracts to

provide liquidity to federal contractors and their suppliers.

We in turn advanced payments across our supplier base to help maintain the health and liquidity of our supply chain.

Outside of the United States, other governments have established various government workforce programs, which can support business continuity for our foreign operations.

We continue to assess the benefits and limitations of the actions taken by the United States and other governments.

See Note A to the Consolidated Financial Statements in Item 8 for additional information about our use of estimates and other uncertainties.

Our U.S. government business experienced some disruption from the COVID-19 pandemic, including reduced activities due to select customer site closures and limited access to some customer sites, travel restrictions, slowdowns in the provision of materials from suppliers, and lower man-hours at some manufacturing sites.

Internationally, while government actions shut down some of our facilities in the second quarter, our defense business has largely returned to normal operations.

Within our Aerospace segment, pandemic-related travel limitations resulted in lower demand for aircraft services due to reduced flight activity, and disrupted the aircraft sales process by limiting our ability to arrange demonstration flights and coordinate in-person access to customers.

To de-risk elements of the supply chain and better align production with demand, we have reduced our aircraft production rate until such time that the marketplace supports future increases.

Accordingly, we have adjusted staffing levels and taken other cost control measures.

The Review of Operating Segments includes additional information on the full-year results for each of our segments.

We expect COVID-19 to continue to negatively impact our businesses, particularly Aerospace, until the large economies of the world recover from the effects of the pandemic.

As air travel resumes, we expect aircraft services volume to increase, but we could see some future aircraft deliveries delayed to the extent customers have difficulty traveling to take possession of their aircraft.

In addition, should the global economy experience a significant extended downturn from the pandemic, demand for our aerospace products and services would likely be impacted.

We believe the support by the DoD, and the U.S. government generally, of the defense industrial base has helped and will continue to help mitigate the effects of disruptions on our U.S. defense business.

Our non-U.S. defense business will be impacted to varying degrees based on the response of the countries in which they operate.

We will continue to assess further potential consequences to our employees, business, supply chain and customers, and take actions to mitigate adverse outcomes.

We took actions in 2020 to strengthen our liquidity and financial condition.

A discussion regarding our financial condition and results of operations for 2019 compared with 2018 is presented below.

The following discussion should be read in conjunction with our Consolidated Financial Statements included in Item 8.

Over the past several years, U.S. defense spending has been mandated by the Budget Control Act of 2011 (BCA).

The BCA establishes spending caps over a 10-year period through 2021, including a sequester mechanism that would impose additional defense cuts if an annual defense appropriations bill is enacted above the spending cap.

On August 2, 2019, the Bipartisan Budget Act of 2019 (BBA) was signed into law, which raised discretionary spending limits established by the BCA for fiscal year (FY) 2020 and FY 2021.

In our Aerospace segment, we continue to experience strong demand across our product portfolio.

Higher or lower margins can result from a

2019 IN REVIEW

| | |

| --- | --- |

| • | Record-high operating performance: |

| ◦ | Revenue of $39.4 billion with growth in all of our segments. |

| ◦ | Operating earnings of $4.6 billion, an increase of 4.3% from 2018. |

| ◦ | Earnings from continuing operations per diluted share of $11.98, an increase of 6.8% from 2018. |

| ◦ | Net orders for Gulfstream aircraft increased over 57% from 2018 and reflected significant demand for the new G700 aircraft. |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Revenue | $ | 39,350 | | | $ | 36,193 | | | $ | 3,157 | | | 8.7 | % |

| Operating earnings | 4,648 | | | | 4,457 | | | | 191 | | | | 4.3 | % |

| Operating margin | 11.8 | | % | | 12.3 | | % | | | | | | | |

Our consolidated revenue increased 8.7% in 2019 driven by deliveries of the new G500 and G600 aircraft in our Aerospace segment and new contracts from the U.S. government for military vehicles in our Combat Systems segment and submarines in our Marine Systems segment.

Operating margin decreased in 2019 due primarily to the transition from mature products and contracts to newer ones, which typically have lower initial margins.

| Revenue | $ | 9,801 | | | $ | 8,455 | | | $ | 1,346 | | | 15.9 | % |

| Operating earnings | 1,532 | | | | 1,490 | | | | 42 | | | | 2.8 | % |

Operating Results

| | | | |

| --- | --- | --- | --- |

| Pre-owned aircraft | 159 | | |

Aircraft manufacturing revenue increased primarily from the initial deliveries of the new large-cabin G600 aircraft, which entered into service in the third quarter of 2019, and additional deliveries of the large-cabin G500 aircraft, which entered into service in the third quarter of 2018.

The increase in aircraft services and completions revenue was driven by higher demand for maintenance work and the acquisition in the second quarter of 2018 of Hawker Pacific, a leading provider of aircraft services across the Asia-Pacific region and the Middle East.

Additionally, we had fifteen pre-owned aircraft sales in 2019 compared with seven in 2018.

| Pre-owned aircraft | (13 | | ) |

Aircraft manufacturing operating earnings were up due to additional deliveries in 2019, driven by the introduction into service of the G600 and increased production of the G500.

The growth in revenue outpaced the earnings growth due to lower margins associated with the G500, which are typical of a new aircraft model.

We expect the operating margins associated with both the G500 and G600 to increase over time as manufacturing learning curve improvements are achieved.

Net G&A/other expenses were up in 2019 due to nonrecurring costs associated with a reduction in our employee workforce in the fourth quarter of 2019 related primarily to streamlining support and administrative functions.

This increase was offset partially by lower R&D expense in 2019, which has been trending downward with the completion of the G500 and G600 aircraft test programs, offset partially by increased activities associated with the development of the new G700 aircraft model.

2020 Outlook

| Revenue | $ | 7,007 | | | $ | 6,241 | | | $ | 766 | | | 12.3 | % |

| Total increase | $ | 766 | |

We had notional forward exchange and interest rate swap contracts outstanding of [removed: $5] [added: $9.4] billion and [removed: $5.8] [added: $5] billion on December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

| (Dollars in millions) | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | [added: | 2019 | | |]

| Recognized | [added: | |] $ | [removed: 60] [added: 44] | | | [added: | |] $ | [removed: 61] [added: 60] | |

| Unrecognized | [removed: (161] | | [removed: )] [added: (344)] | | [removed: (135] | | [removed: )] | [added: | (161) | | |]

Foreign Currency Risk. Our exchange-rate sensitivity relates primarily to changes in the Canadian dollar, [removed: euro,] [added: euro and] Swiss franc [removed: and British pound] exchange rates.

Interest Rate Risk. Our financial instruments subject to interest rate risk include [removed: variable-rate commercial paper and] fixed- and floating-rate long-term debt obligations.

On December 31, [removed: 2019,] [added: 2020,] we had [removed: $10.5] [added: $12.5] billion par value of fixed-rate debt and [removed: $1 billion] [added: $500] of floating-rate notes.

On December 31, [added: 2020 and] 2019, we held [added: $2.8 billion and] $902 in cash and equivalents, [added: respectively,] but held no marketable securities other than those held in trust to meet some of our obligations under workers’ compensation and non-qualified [removed: supplemental executive retirement] [added: pension] plans.

[removed: On December 31, 2019, these] [added: These] marketable securities [removed: totaled $207 and were] [added: are] reflected at fair value on the Consolidated Balance Sheet in other current and noncurrent assets.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

While the hypothetical, incremental pretax losses in the table above have increased significantly from 2019, we do not believe this represents a meaningful increase in our risk profile as these losses and gains would be offset by corresponding gains and losses in the remeasurement of the underlying transactions being hedged.

On December 31, 2020 and 2019, we held marketable securities in trust of $211 and $207, respectively.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

These losses and gains would be offset by corresponding gains and losses in the remeasurement of the underlying transactions being hedged.

Our company consists of 10 business units, which are organized into [removed: five] [added: four] operating segments: Aerospace, [removed: Combat] [added: Marine] Systems, [removed: Information Technology, Mission] [added: Combat] Systems and [removed: Marine Systems.][added: Technologies.]

We refer to the latter [removed: four segments] [added: three] collectively as our defense segments.

[removed: Each] [added: To optimize its market focus, customer intimacy, agility and operating expertise, each] business unit is responsible for the [added: development and] execution of its strategy and [removed: operational performance.][added: operating results.]

[removed: Our] [added: This structure allows for a lean] corporate [removed: leaders set] [added: function, which sets] the overall strategy and governance for the company and [removed: are] [added: is] responsible for allocating and deploying capital.

[removed: | • |] [added: -] superior aircraft design, quality, performance, safety and reliability; [removed: |]

[removed: | • |] [added: -] technologically advanced flight deck and cabin systems; and [removed: |]

[removed: | • |] [added: -] industry-leading customer support. [removed: |]

[removed: Our] [added: We are committed to] continual investment in [removed: research and development (R&D) leads] [added: R&D] to [added: create] new aircraft that consistently broaden customer offerings while raising the bar for safety and performance.

The ultra-long-range, ultra-large-cabin G650 and G650ER continue to generate significant customer interest, with more than [removed: 400] [added: 430] aircraft of this family currently operating in [removed: 40] [added: 50] countries.

Since the first G650 entered service in 2012, its capabilities and reliability have led to significant sales and [added: expansion of our] installed base around the globe.

[removed: The G700 is designed to blend] [added: It combines] our most spacious cabin with [removed: the] [added: our] advanced Symmetry [removed: flight deck] [added: Flight Deck] and [added: the] superior [removed: high-speed performance to enable a range of 7,500 nautical miles at Mach 0.85 or 6,400 nautical miles at Mach 0.90.][added: high-]

Gulfstream designs, develops and manufactures aircraft in Savannah, Georgia, including [removed: manufacturing of] all large-cabin models.

In support of Gulfstream’s growing aircraft portfolio and customer base, we [removed: continue to invest] [added: have invested] in our [removed: facilities.][added: facilities and operations.]

At our Savannah campus, we [removed: have] added new purpose-built manufacturing facilities, increased aircraft service capacity, and opened a customer-support distribution center and a dedicated R&D [removed: center.][added: campus.]

We offer comprehensive support for the more than [removed: 2,800] [added: 2,900] Gulfstream aircraft in service around the world and operate the largest factory-owned service network in the industry.

We [added: also] operate a 24/7 year-round [removed: Customer Support Center] [added: customer support center] and offer on-call Gulfstream aircraft technicians ready to deploy around the world for customer service [removed: requirements.][added: requirements under our Field and Airborne Support Team (FAST) rapid-response unit.]

With approximately 50 [removed: airport sites] [added: locations] throughout North America, Europe, the Middle East and [removed: Asia Pacific,] [added: the Asia-Pacific region,] our offerings include maintenance, [removed: FBO,] aircraft management, charter, staffing and [removed: government fleet] [added: fixed-base operator (FBO)] services.

[removed: In addition to these capabilities,] Jet Aviation manages nearly 300 business aircraft globally on behalf of [removed: individual] [added: individuals] and corporate owners.

Revenue for the Aerospace segment was [removed: 25%] [added: 21%] of our consolidated revenue in [removed: 2019, 23%] [added: 2020, 25%] in [removed: 2018] [added: 2019] and [removed: 26%] [added: 23%] in [removed: 2017.][added: 2018.]

| Year Ended December 31 | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

| Total Aerospace | [added: | |] $ | [removed: 9,801] [added: 8,075] | | | [added: | |] $ | [removed: 8,455] [added: 9,801] | | | [added: | |] $ | [removed: 8,129] [added: 8,455] | |

Our large installed base of wheeled and tracked vehicles around the world and expertise gained from [removed: innovative] research, engineering and production programs position us well for modernization programs, support and sustainment services, and future development programs.

[removed: Our Combat Systems] [added: The] segment consists of three business [removed: units: European] [added: units —] Land Systems, [added: European] Land [removed: Systems,] [added: Systems (ELS),] and Ordnance and Tactical [removed: Systems.][added: Systems (OTS).]

| [removed: • | weapons] [added: Weapons] systems, armament and [removed: munitions; and] [added: munitions] | [added: | | 1,991 | | | | | | 1,906 | | | | | | 1,798 | | |]

The Stryker is an eight-wheeled, medium-weight combat vehicle that combines [removed: mobility] [added: lethality, mobility, survivability] and [removed: survivability.][added: stealth.]

[removed: We also] [added: As a result, we] have a market-leading position in light armored vehicles (LAVs) with [removed: more than 13,000 vehicles] [added: approximately 14,000 of the high-mobility, versatile Pandur, Piranha and other LAVs] in service [removed: around the world.][added: worldwide.]

We are maximizing the effectiveness and lethality of the [removed: U.S.] Army’s [removed: M1A2 Abrams] tank fleet with [removed: the System Enhancement Package Version 3 (SEPv3), which provides] [added: next-generation Abrams upgrades, providing] technological advancements in communications, power generation, fuel [removed: efficiency] [added: efficiency, optics] and armor.

[removed: Additionally, we] [added: We] are [added: also] upgrading Abrams tanks for several non-U.S. partners.

[removed: We are] [added: Land Systems is] producing the British Army’s AJAX armored fighting vehicle, a next-generation, medium-weight tracked combat vehicle.

[removed: *Weapons systems, armament and munitions:*] Complementing these military-vehicle offerings, [removed: the segment] [added: OTS] designs, develops and produces a comprehensive array of sophisticated weapons systems.

[removed: For airborne platforms, we] [added: We also] produce [added: next-generation] weapons [removed: such as] [added: systems for shipboard and airborne applications, including] high-speed Gatling guns for all U.S. fighter aircraft, including the [added: F-35] Joint Strike Fighter.

[removed: Our] [added: OTS’s] munitions portfolio covers the full breadth of naval, air and ground forces applications across all calibers and weapons platforms for the U.S. government and its non-U.S. partners.

We [removed: are focused] [added: maintain our market-leading position by focusing] on innovation, affordability and speed to market to deliver increased survivability, performance and lethality on the battlefield.

Revenue for the Combat Systems segment was [removed: 18%] [added: 19%] of our consolidated revenue in [removed: 2019, 17%] [added: 2020, 18%] in [removed: 2018] [added: 2019] and [removed: 19%] [added: 17%] in [removed: 2017.][added: 2018.]

| Military vehicles | [added: | |] $ | [removed: 4,620] [added: 4,687] | | | [added: | |] $ | [removed: 4,027] [added: 4,620] | | | [added: | |] $ | [removed: 3,731] [added: 4,027] | |

| Engineering and other services | [removed: 481] | | [added: 545] | | [removed: 416] | | | | [removed: 585] [added: 481] | | | [added: | | | 416 | | |]

| Total Combat Systems | [added: | |] $ | [removed: 7,007] [added: 7,223] | | | [added: | |] $ | [removed: 6,241] [added: 7,007] | | | [added: | |] $ | [removed: 5,949] [added: 6,241] | |

With a network of more than 90 global partners, [removed: we develop] [added: the segment develops] solutions that keep [removed: our] [added: its] customers at the leading edge of technology in support of their missions.

[removed: Revenue for the Information Technology segment] [added: Our U.S. commercial revenue] was [removed: $8.4] [added: $4.9] billion in [removed: 2019, $8.3] [added: 2020, $6] billion in [removed: 2018] [added: 2019] and [removed: $4.4] [added: $4.8] billion in [removed: 2017,] [added: 2018,] which represented [removed: 21%, 23%] [added: 13%, 15%] and [removed: 14%] [added: 13%] of our consolidated revenue in each of the respective years.

[removed: We offer] [added: Mission Systems offers] solutions across all domains and [removed: produce] [added: produces] a unique combination of products and capabilities that are purpose-built for essential C4ISR and cybersecurity applications.

General Dynamics is a global aerospace and defense company that specializes in high-end design, engineering and manufacturing to deliver state-of-the-art solutions to our customers.

We offer a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services.

Our leadership positions in attractive business aviation and defense markets enable us to deliver superior and enduring shareholder returns.

Our business units seek to deliver superior operating results by endeavoring to build industry-leading franchises.

To achieve this goal, we invest in advanced technologies, pursue a culture of continuous improvement, and strive to be the low-cost, high-quality provider in each of our markets.

The result is long-term value creation measured by strong earnings and cash flow and an attractive return on capital.

Over the past eight years, we have invested nearly $20 billion to create, renew or expand our portfolio of products and services across our businesses to drive long-term growth and shareholder value creation.

This includes product development investments in Aerospace to bring to market an all-new lineup of business jet aircraft, capital investments in Marine Systems to support significant growth in U.S. Navy ship and submarine construction plans over the next two decades, development of next-generation platforms and technologies to meet customers’ emerging requirements in Combat Systems, and strategic acquisitions to achieve critical mass and build out a complete spectrum of solutions for our Technologies customers.

Our Aerospace segment is recognized as a leading producer of business jets and the standard bearer in aircraft repair, support and completion services.

We believe the key to long-term value creation in the business jet industry is steady investment in new aircraft models and technologies and in customer service capabilities.

As a result, since we acquired Gulfstream over 20 years ago, we have made significant investments in research and development (R&D), state-of-the-art manufacturing facilities, and maintenance and support through a combination of product development efforts, capital expansion and the acquisition of Jet Aviation’s global support network.

The result is the unprecedented development of an all-new lineup of the most technologically advanced business jet aircraft in the world.

These aircraft offer industry-leading cabin, cockpit and safety technologies and the longest ranges at the fastest speeds in their respective classes.

The following represents Gulfstream’s current product line, along with the maximum range, maximum speed and cabin length (excluding baggage) for each aircraft:


The most recent additions to the Gulfstream fleet are two new large-cabin aircraft, the G500 and G600, which entered service in 2018 and 2019, respectively.

These clean-sheet (i.e., all-new) aircraft replace the G450 and G550 models, which have a combined installed base of more than 1,650 aircraft around the world.

Our investment included development of a new wing, new avionics, new fuselage and new ergonomically designed larger interiors, as well as systems and technologies to improve the manufacturing process and quality of the platform.

As a result, the G500 and G600 are faster, more fuel efficient and have greater cabin volume, more range and improved flight controls compared with the aircraft they are replacing.

At year-end 2020, cumulative deliveries for the two new aircraft totaled almost 100.

The next model to join the Gulfstream lineup is the ultra-long-range, ultra-large-cabin G700.

speed performance of all-new engines to create best-in-class capabilities.

Gulfstream is in the process of flight testing and certification of the G700, which we expect to enter service in the fourth quarter of 2022.

Gulfstream’s current product line holds more than 300 city-pair speed records, more than any other business jet manufacturer, led by the G650ER, which holds the National Aeronautic Association’s polar and westbound around-the-world speed records.

We continue to invest in these maintenance, repair and overhaul (MRO) facilities and inventory to accommodate fleet growth.

In addition to expanding the reach of Gulfstream’s aircraft maintenance network outside the United States, Jet Aviation provides a comprehensive suite of innovative aircraft services for aircraft owners and operators around the world.

We operate a leading global FBO network and support all aircraft types with the full-range of maintenance services, including 24/7 global aircraft-on-ground support.

We also operate one of the world’s largest custom completion and refurbishment centers for both narrow- and wide-body aircraft and perform modifications, upgrades and lifecycle sustainment support for various government fleets.

We continue to grow our global footprint through acquisitions, expansions and significant renovations in key business-aviation markets.

The following map demonstrates the broad reach of our combined Gulfstream and Jet Aviation services network, including authorized service centers:


The Aerospace segment is committed to sustainability and the reduction of aviation’s carbon footprint.

In support of this strategy, Gulfstream and Jet Aviation offer sustainable aviation fuel through our combined services network and lead the industry in total gallons supplied to the business jet market.

Furthermore, we offer carbon offset credits to our customers, enabling them to operate aircraft on a carbon-neutral basis.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Aircraft manufacturing | | | $ | 6,115 | | | | | $ | 7,541 | | | | | $ | 6,262 | |

| Aircraft services and completions | | | 1,960 | | | | | | 2,260 | | | | | | 2,193 | | |

| | | | | | | | | | | | | | | | | | |

In addition to Navy ships, we design and build ocean-going Jones

General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; information technology (IT) services; command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) solutions; and shipbuilding and ship repair.

General Dynamics was incorporated in Delaware in 1952.

We took actions beginning in the mid-1990s that laid the foundation for modern-day General Dynamics, including acquiring Gulfstream Aerospace Corporation, combat-vehicle businesses, IT services and C4ISR solutions companies, and additional shipyards.

In 2018, we continued to position our company for future growth and superior profitability through the acquisition of CSRA, our largest acquisition to date.

We have a balanced business model which gives each business unit the flexibility to stay agile and maintain an intimate understanding of customer requirements.

Our ethos — based on honesty, transparency, trust and alignment — undergirds our culture, our business model and our decision-making.

This unique model keeps us focused on our priorities: exceeding customer expectations; executing on backlog; managing costs; implementing continuous improvement; and maximizing earnings, cash and return on invested capital.

Our Aerospace segment is at the forefront of the business-jet industry.

We offer a family of Gulfstream aircraft and provide a full range of services for business aircraft produced by Gulfstream and other original equipment manufacturers.

| | |

| --- | --- |

Gulfstream designs, manufactures and supports the world’s most technologically advanced business-jet aircraft.

Our product line encompasses aircraft across a variety of price and performance options from mid- to ultra-large-cabin business jets.

The many combinations of range, speed, size and cabin customization generate aircraft best suited for each customer’s unique requirements.

As part of its sustainability strategy, Gulfstream, in 2019, made its first customer sales of sustainable aviation fuel.

In 2019, the all-new G600 earned both its type and production certificates from the U.S. Federal Aviation Administration (FAA), and we delivered the first aircraft to customers.

The G600 has a range of 6,500 nautical miles at a cruise speed of Mach 0.85 and a maximum operating speed of Mach 0.925.

The aircraft has earned 11 city-pair speed records and has low cabin altitude air pressure to reduce travel fatigue.

The G600 joins the G500, which achieved its certifications and first customer deliveries in 2018.

Both aircraft reflect our consistent, long-term investment in R&D, and both have seen strong customer interest.

The G500 and G600 received Aviation Week’s 2020 Platform Laureate Award for extraordinary achievement in business aviation.

In 2019, the G650ER continued to demonstrate superior speed and range capabilities, conducting a record-setting flight from Singapore to Tucson, Arizona, over a distance of 8,379 nautical miles at an average speed of 597 miles per hour (Mach 0.85).

In October, we announced the launch of the ultra-long-range G700, which we expect will enter service in 2022.

There is already significant customer interest in this new product in both the domestic and international markets.

In 2019, we opened a new maintenance, repair and overhaul (MRO) facility in Savannah to accommodate fleet growth, giving Gulfstream more than one-million square feet of dedicated MRO hangar, office and shop space in Savannah.

We also significantly expanded our MRO service center in Appleton, Wisconsin, which now has more than 100,000 square feet of hangar space, enough to accommodate 12 G650ER aircraft.

In 2019, Gulfstream and Jet Aviation opened a new 10,000-square-foot terminal and 43,000-square-foot hangar at Van Nuys, the primary business-aviation airport servicing the Los Angeles area.

Gulfstream utilizes the space as an MRO service center, its second in the area complementing its Long Beach facility.

Van Nuys will serve as the operating base for Gulfstream’s local Field and Airborne Support Team (FAST), a rapid-response unit that specializes in troubleshooting grounded aircraft.

Jet Aviation uses the space as a fixed-base operator (FBO) facility and became the first FBO at Van Nuys to offer sustainable aviation fuel.

Jet Aviation has been a global leader in business-aviation services for over 50 years, providing comprehensive services and an extensive network of locations for aircraft owners and operators.

In 2019, we continued to grow our global footprint, conducting acquisitions, expansions or significant renovations in key business-aviation markets including Teterboro, New Jersey; Dallas, Texas; Scottsdale, Arizona; San Juan, Puerto Rico; West Palm Beach, Florida; and the Middle East.

With its relentless devotion to customer service, Jet Aviation was named Fixed Base Operator of the Year at the 2019 Aviation Business Awards.

Jet Aviation also offers custom completions for narrow- and wide-body aircraft.

We increased the capacity of Jet Aviation’s wide-body hangar in Basel, Switzerland, to 94,000 square feet, to fulfill the demand for completions and refurbishments.

As a market leader in the business-aviation industry, the Aerospace segment is focused on developing innovative first-to-market technologies and products; providing exemplary service to customers globally; and driving efficiencies in aircraft production, completions and services.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Aircraft manufacturing and completions | $ | 7,355 | | | $ | 6,226 | | | $ | 6,320 | |

| Aircraft services | 2,154 | | | | 2,096 | | | | 1,743 | | |

[removed: ][added: ]

[removed: FORM 10-K][added: FORM 10-K]

[removed: \[☒\]] [added: \[☑\]] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

| Delaware | | | | [added: | | | | | | | | | | |] 13-1673581 | [added: | |]

| *State or other jurisdiction of incorporation or organization* | | | | [removed: *IRS] [added: | | | | | | | | | | | *I.R.S.] Employer Identification No.* | [added: | |]

| 11011 Sunset Hills Road | [added: | |] Reston, | [added: | |] Virginia | | [added: | | | | | | |] 20190 | [added: | |]

| *Address of principal executive offices* | | | | [added: | | | | | | | | | | |] *Zip code* | [added: | |]

[removed: Registrant’s] [added: *Registrant’s] telephone number, including area [removed: code:][added: code*]

| (703) | [added: | |] 876-3000 | [added: | |]

| Title of each class | [added: | |] Trading Symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| [removed: Common stock] [added: Common Stock] | [removed: GD] | [removed: New] [added: | GD | | | New] York Stock [removed: Exchange] [added: Exchange] | [added: | |]

| None | [added: | |]

Yes [removed: ü] [added: _ü_] No ___

Yes ___ No [removed: ü][added: _ü_]

Large accelerated filer [removed: ü] [added: _ü_] Accelerated filer [removed: __] [added: ___] Non-accelerated filer [removed: __] [added: ___] Smaller reporting company [removed: __ ☐] [added: ___☐] Emerging growth company [removed: __☐][added: ___☐]

Yes [removed: ☐] [added: _ü_] No [removed: ü][added: ___]

The aggregate market value of the voting common equity held by non-affiliates of the registrant was [removed: $48,851,568,997] [added: $36,917,915,083] as of June [removed: 30, 2019] [added: 28, 2020] (based on the closing price of the shares on the New York Stock Exchange).

[removed: 289,627,333] [added: 286,264,679] shares of the registrant’s common stock, $1 par value per share, were outstanding on January [removed: 26, 2020.][added: 31, 2021.]

Part III incorporates by reference information from certain portions of the registrant’s definitive proxy statement for the [removed: 2020] [added: 2021] annual meeting of shareholders to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year.

| PART I | | [added: | | | |] PAGE | [added: | |]

| Item 1. | [removed: [Business](#sE4342BDA9C6D5AB79AB29675657D644E)] | [removed: [3](#sE4342BDA9C6D5AB79AB29675657D644E)] | [added: [Business](#ied635d0931314f2cb66bccd3ac61c814_13) | | | [3](#ied635d0931314f2cb66bccd3ac61c814_13) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#s0F4432263EE55891BE9D0F65B3B0304C)] [added: Factors](#ied635d0931314f2cb66bccd3ac61c814_16)] | [removed: [19](#s0F4432263EE55891BE9D0F65B3B0304C)] | [added: | [18](#ied635d0931314f2cb66bccd3ac61c814_16) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s46740A554A0A547FAC0789083FAFACEC)] [added: Comments](#ied635d0931314f2cb66bccd3ac61c814_22)] | [removed: [23](#s46740A554A0A547FAC0789083FAFACEC)] | [added: | [23](#ied635d0931314f2cb66bccd3ac61c814_22) | | |]

| Item 2. | [removed: [Properties](#s5147E5C8D2A75EFC8236BC62ED19632A)] | [removed: [23](#s5147E5C8D2A75EFC8236BC62ED19632A)] | [added: [Properties](#ied635d0931314f2cb66bccd3ac61c814_25) | | | [23](#ied635d0931314f2cb66bccd3ac61c814_25) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#s460D32566DA75CF1B21634942550A83E)] [added: Proceedings](#ied635d0931314f2cb66bccd3ac61c814_28)] | [removed: [24](#s460D32566DA75CF1B21634942550A83E)] | [added: | [24](#ied635d0931314f2cb66bccd3ac61c814_28) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#sDDD62F1CBE9157AC9FAABDCD8486AFA6)] [added: Disclosures](#ied635d0931314f2cb66bccd3ac61c814_31)] | [removed: [24](#sDDD62F1CBE9157AC9FAABDCD8486AFA6)] | [added: | [24](#ied635d0931314f2cb66bccd3ac61c814_31) | | |]

| | [added: | |] [Executive Officers of the [removed: Company](#sD56D4B0AEA4852329091D3B8DD912719)] [added: Company](#ied635d0931314f2cb66bccd3ac61c814_34)] | [removed: [24](#sD56D4B0AEA4852329091D3B8DD912719)] | [added: | [25](#ied635d0931314f2cb66bccd3ac61c814_34) | | |]

| PART II | | | [added: | | | | | |]

| Item 5. | [added: | |] [Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sEE8D184B7375515490A08DD12192AEFC)] [added: Securities](#ied635d0931314f2cb66bccd3ac61c814_40)] | [removed: [25](#sEE8D184B7375515490A08DD12192AEFC)] | [added: | [26](#ied635d0931314f2cb66bccd3ac61c814_40) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#s384F0F2B651E508B907C128173F97B63)] [added: Data](#ied635d0931314f2cb66bccd3ac61c814_43)] | [removed: [27](#s384F0F2B651E508B907C128173F97B63)] | [added: | [28](#ied635d0931314f2cb66bccd3ac61c814_43) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sB6D9F8A9819A55BDB64C2EE9D2DD0591)] [added: Operations](#ied635d0931314f2cb66bccd3ac61c814_46)] | [removed: [28](#sB6D9F8A9819A55BDB64C2EE9D2DD0591)] | [added: | [29](#ied635d0931314f2cb66bccd3ac61c814_46) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures about Market [removed: Risk](#s280296D2C1795171ADE582937EE24155)] [added: Risk](#ied635d0931314f2cb66bccd3ac61c814_76)] | [removed: [50](#s280296D2C1795171ADE582937EE24155)] | [added: | [51](#ied635d0931314f2cb66bccd3ac61c814_76) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#s85E2A78AB1FE56C19ABDFAC4F0D6CAB6)] [added: Data](#ied635d0931314f2cb66bccd3ac61c814_79)] | [removed: [52](#s85E2A78AB1FE56C19ABDFAC4F0D6CAB6)] | [added: | [53](#ied635d0931314f2cb66bccd3ac61c814_79) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s6939BD5DD27E53DB92AABDD10626C329)] [added: Disclosure](#ied635d0931314f2cb66bccd3ac61c814_217)] | [removed: [106](#s6939BD5DD27E53DB92AABDD10626C329)] | [added: | [104](#ied635d0931314f2cb66bccd3ac61c814_217) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#s6168992B08D6509889CBB4469AADF404)] [added: Procedures](#ied635d0931314f2cb66bccd3ac61c814_220)] | [removed: [106](#s6168992B08D6509889CBB4469AADF404)] | [added: | [104](#ied635d0931314f2cb66bccd3ac61c814_220) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#s777782EE40435CC2AE5C1681FC865B99)] [added: Information](#ied635d0931314f2cb66bccd3ac61c814_232)] | [removed: [109](#s777782EE40435CC2AE5C1681FC865B99)] | [added: | [107](#ied635d0931314f2cb66bccd3ac61c814_232) | | |]

| PART III | | | [added: | | | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s07336C600DD95370991D524BDC0B81B0)] [added: Governance](#ied635d0931314f2cb66bccd3ac61c814_238)] | [removed: [109](#s07336C600DD95370991D524BDC0B81B0)] | [added: | [107](#ied635d0931314f2cb66bccd3ac61c814_238) | | |]

| Item 11. | [added: | |] [Executive [removed: Compensation](#sD15A3BFC84335BCB84D48012766F4878)] [added: Compensation](#ied635d0931314f2cb66bccd3ac61c814_241)] | [removed: [109](#sD15A3BFC84335BCB84D48012766F4878)] | [added: | [107](#ied635d0931314f2cb66bccd3ac61c814_241) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes _ü_ ☑ No ___

Yes ___ No _ü_☐☑

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| | | | [Signatures](#ied635d0931314f2cb66bccd3ac61c814_262) | | | [114](#ied635d0931314f2cb66bccd3ac61c814_262) | | |

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| | [Signatures](#s4491C545AB8A5C3E8A4DA7F8C5D9587E) | [115](#s4491C545AB8A5C3E8A4DA7F8C5D9587E) |

On December 31, [removed: 2019,] [added: 2020,] our segments had [removed: primary] [added: material] operations at the following locations:

[removed: | • | Combat] [added: - Combat] Systems – Anniston, Alabama; East [removed: Camden and Hampton,] [added: Camden,] Arkansas; [added: Healdsburg, California;] Crawfordsville, St. Petersburg and Tallahassee, Florida; Marion, Illinois; Saco, Maine; Sterling Heights, Michigan; [removed: Joplin, Missouri; Lincoln, Nebraska;] Lima, Ohio; [removed: Eynon, Red Lion] [added: Eynon] and Scranton, Pennsylvania; [removed: Ladson, South Carolina;] Garland, Texas; [removed: Williston, Vermont; Auburn and Sumner,] [added: Joint Base Lewis-McChord,] Washington; Vienna, Austria; La Gardeur, [removed: London, St. Augustin] [added: London] and Valleyfield, Canada; [removed: Berlin,] Kaiserslautern, [removed: Neubrandenburg and Woldegk,] Germany; [removed: Granada,] Madrid, Sevilla and Trubia, Spain; Kreuzlingen and Tägerwilen, Switzerland; Merthyr [removed: Tydfil and Oakdale,] [added: Tydfil,] United Kingdom. [removed: |]

[removed: | • | Mission Systems] [added: - Technologies] – [removed: Cullman,] [added: Daleville,] Alabama; Scottsdale, Arizona; [removed: San Jose, California;] Orlando, Florida; [added: Bossier City, Louisiana;] Annapolis Junction, Maryland; Dedham, Pittsfield and Taunton, Massachusetts; Bloomington, Minnesota; [removed: Florham Park,] [added: Rensselaer,] New [removed: Jersey; Catawba, Conover and] [added: York;] Greensboro, North Carolina; [removed: Kilgore, Plano and Wortham, Texas; Fairfax] [added: Chesapeake] and Marion, Virginia; [removed: Calgary, Halifax and] [added: multiple locations in Northern Virginia;] Ottawa, Canada; [removed: Tallinn, Estonia;] Oakdale and St. Leonards, United Kingdom. [removed: |]

[removed: | • | Marine] [added: - Marine] Systems – San Diego, California; [removed: Groton, New London] [added: Groton] and [removed: Stonington,] [added: New London,] Connecticut; Jacksonville, Florida; [added: Honolulu, Hawaii;] Bath and Brunswick, Maine; [added: Middletown and] North Kingstown, Rhode Island; Norfolk and Portsmouth, Virginia; Bremerton, Washington; Mexicali, Mexico. [removed: |]

A summary of floor space by segment on December 31, [removed: 2019,] [added: 2020,] follows:

| (Square feet in millions) | [added: | |] Company-owned Facilities | | | [added: | | |] Leased Facilities | | | [added: | | |] Government-owned Facilities | | | [added: | | |] Total | | [added: |]

- Aerospace – Van Nuys, California; West Palm Beach, Florida; Brunswick and Savannah, Georgia; Cahokia, Illinois; Westfield, Massachusetts; Teterboro, New Jersey; New York, New York; Tulsa,

Oklahoma; Dallas, Texas; Dulles, Virginia; Appleton, Wisconsin; Sydney, Australia; Beijing and Shanghai, China; Mexicali, Mexico; Singapore; Basel, Switzerland; Farnborough, United Kingdom.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Aerospace | | | 6.6 | | | | | | 8.9 | | | | | | 0.5 | | | | | | 16.0 | | |

| Marine Systems | | | 8.3 | | | | | | 4.3 | | | | | | — | | | | | | 12.6 | | |

| Combat Systems | | | 6.5 | | | | | | 4.6 | | | | | | 5.2 | | | | | | 16.3 | | |

| Technologies | | | 3.1 | | | | | | 7.8 | | | | | | 0.9 | | | | | | 11.8 | | |

| Total square feet | | | 24.5 | | | | | | 25.6 | | | | | | 6.6 | | | | | | 56.7 | | |

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| • | Aerospace – Scottsdale, Arizona; Burbank, Lincoln, Long Beach and Van Nuys, California; West Palm Beach, Florida; Brunswick, Pooler and Savannah, Georgia; Cahokia, Illinois; Bedford and Westfield, Massachusetts; Las Vegas, Nevada; Teterboro, New Jersey; New York, New York; Tulsa, Oklahoma; San Juan, Puerto Rico; Dallas and Houston, Texas; Dulles, Virginia; Appleton, Wisconsin; Brisbane, Cairns, Darwin, Perth and Sydney, Australia; Vienna, Austria; Beijing, Hong Kong and Shanghai, China; Berlin, Dusseldorf and Munich, Germany; Jakarta, Indonesia; Kuala Lumpur, Malaysia; Valetta, Malta; Mexicali, Mexico; Amsterdam and Rotterdam, the Netherlands; Manila, Philippines; Singapore; Basel, |

Geneva and Zurich, Switzerland; Bangkok, Thailand; Dubai and Fujairah, United Arab Emirates; Farnborough and Luton, United Kingdom.

| • | Information Technology – Daleville, Alabama; Pawcatuck, Connecticut; Bossier City, Louisiana; Annapolis Junction and Columbia, Maryland; Westwood, Massachusetts; Rensselaer, New York; Fayetteville, North Carolina; Arlington, Chesapeake, Sterling and several locations in Fairfax County, Virginia. |

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| Aerospace | 6.3 | | | 8.9 | | | — | | | 15.2 | |

| Combat Systems | 6.1 | | | 4.3 | | | 5.5 | | | 15.9 | |

| Information Technology | 0.2 | | | 4.7 | | | — | | | 4.9 | |

| Mission Systems | 3.5 | | | 3.7 | | | 0.9 | | | 8.1 | |

| Marine Systems | 8.2 | | | 3.8 | | | — | | | 12.0 | |

| Total square feet | 24.3 | | | 25.4 | | | 6.4 | | | 56.1 | |

The name, age, offices and positions of our executives held for at least the past five years as of February [removed: 10, 2020,] [added: 9, 2021,] were as follows (references are to positions with General Dynamics Corporation, unless otherwise noted):

| Name, Position and Office | [added: | |] Age | [added: | |]

| Jason W. Aiken - Senior Vice President and Chief Financial Officer since January 2014; Vice President of the company and Chief Financial Officer of Gulfstream Aerospace Corporation, September 2011 - December 2013; Vice President and Controller, April 2010 - August 2011; Staff Vice President, Accounting, July 2006 - March 2010 | [removed: 47] | [added: | 48 | | |]

| Christopher J. Brady - Vice President of the company and President of General Dynamics Mission Systems since January 2019; Vice President, Engineering of General Dynamics Mission Systems, January 2015 - December 2018; Vice President, Engineering of General Dynamics C4 Systems, May 2013 - December 2014; Vice President, Assured Communications Systems of General Dynamics C4 Systems, August 2004 - May 2013 | [removed: 57] | [added: | 58 | | |]

| Mark L. Burns - Vice President of the company and President of Gulfstream Aerospace Corporation since July 2015; Vice President of the company since February 2014; President, Product Support of Gulfstream Aerospace Corporation, June 2008 - June 2015 | [removed: 60] | [added: | 61 | | |]

| Gregory S. Gallopoulos - Senior Vice President, General Counsel and Secretary since January 2010; Vice President and Deputy General Counsel, July 2008 - January 2010; Managing Partner of Jenner & Block LLP, January 2005 - June 2008 | [removed: 60] | [added: | 61 | | |]

| M. Amy Gilliland - Senior Vice President of the company since April 2015; President of General Dynamics Information Technology since September 2017; Deputy for Operations of General Dynamics Information Technology, April 2017 - September 2017; Senior Vice President, Human Resources and Administration, April 2015 - March 2017; Vice President, Human Resources, February 2014 - March 2015; Staff Vice President, Strategic Planning, January 2013 - February 2014; Staff Vice President, Investor Relations, June 2008 - January 2013 | [removed: 45] | [added: | 46 | | |]

| Kevin M. Graney - Vice President of the company and President of Electric Boat Corporation since October 2019; Vice President of the company and President of NASSCO, January 2017 - October 2019; Vice President and General Manager of NASSCO, November 2013 - January 2017 | [removed: 55] | [added: | 56 | | |]

| Kimberly A. Kuryea - Senior Vice President, Human Resources and Administration since April 2017; Vice President and Controller, September 2011 - March 2017; Chief Financial Officer of General Dynamics Advanced Information Systems, November 2007 - August 2011; Staff Vice President, Internal Audit, March 2004 - October 2007 | [removed: 52] | [added: | 53 | | |]

| Christopher Marzilli - Executive Vice President, [added: Technologies since December 2020; Executive Vice President,] Information Technology and Mission [removed: Systems since] [added: Systems,] January [removed: 2019;] [added: 2019 - December 2020;] Vice President of the company and President of General Dynamics Mission Systems, January 2015 - December 2018; Vice President of the company and President of General Dynamics C4 Systems, January 2006 - December 2014; Senior Vice President and Deputy General Manager of General Dynamics C4 Systems, November 2003 - January 2006 | [removed: 60] | [added: | 61 | | |]

| William A. Moss - Vice President and Controller since April 2017; Staff Vice President, Internal Audit, May 2015 - March 2017; Staff Vice President, Accounting, August 2010 - May 2015 | [removed: 56] | [added: | 57 | | |]

| Phebe N. Novakovic - Chairman and Chief Executive Officer since January 2013; President and Chief Operating Officer, May 2012 - December 2012; Executive Vice President, Marine Systems, May 2010 - May 2012; Senior Vice President, Planning and Development, July 2005 - May 2010; Vice President, Strategic Planning, October 2002 - July 2005 | [removed: 62] | [added: | 63 | | |]

| Mark C. Roualet - Executive Vice President, Combat Systems, since March 2013; Vice President of the company and President of General Dynamics Land Systems, October 2008 - March 2013; Senior Vice President and Chief Operating Officer of General Dynamics Land Systems, July 2007 - October 2008 | [removed: 61] | [added: | 62 | | |]

| Robert E. Smith - Executive Vice President, Marine Systems, since July 2019; Vice President of the company and President of Jet Aviation, January 2014 - July 2019; Vice President and Chief Financial Officer of Jet Aviation, July 2012 - January 2014 | [removed: 52] | [added: | 53 | | |]

| [removed: Gary L. Whited] [added: Danny Deep] - Vice President of the company and President of General Dynamics Land Systems since [removed: March 2013; Senior Vice President] [added: April 2020; Chief Operating Officer] of General Dynamics Land Systems, September [removed: 2011] [added: 2018] - [removed: March 2013;] [added: April 2020;] Vice President [removed: and Chief Financial Officer] of General Dynamics Land [removed: Systems, June 2006] [added: Systems – Canada, January 2011] - September [removed: 2011] [added: 2018] | [removed: 59] | [added: | 51 | | |]

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On January [removed: 26, 2020,] [added: 31, 2021,] there were approximately 10,000 holders of record of our common stock.

We did not make any unregistered sales of equity securities in [removed: 2019.][added: 2020.]

| Period | | [added: | | | |] Total Number of Shares | | | [added: | | |] Average Price per Share | | | [added: | | | | | | | | | | | |]

| *Shares Delivered or Withheld Pursuant to Restricted Stock Vesting | | | | | | | | [added: | | | | | | | | | | | | | | | | | | |]

[removed: * Represents] [added: *Represents] shares withheld by, or delivered to, us pursuant to provisions in agreements with recipients of restricted stock granted under our equity compensation plans that allow us to withhold, or the recipient to deliver to us, the number of shares with a fair value equal to the statutory tax withholding due upon vesting of the restricted shares.

On [removed: December 5, 2018,] [added: March 4, 2020,] the board of directors authorized management to repurchase up to 10 million additional shares of the company’s outstanding common stock on the open market.

On December 31, [removed: 2019, 6.4] [added: 2020, 12.3] million shares remained authorized by our board of directors for repurchase.

Based on Investments of $100 Beginning December 31, [removed: 2014][added: 2015]

[removed: ][added: ]

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| | | | | | | | | | | | | | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Program | | | | | | Maximum Number of Shares That May Yet Be Purchased Under the Program | | |

| *Shares Purchased Pursuant to Share Buyback Program* | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 9/28/20-10/25/20 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 13,022,968 | | |

| 10/26/20-11/22/20 | | | | | | 450,000 | | | | | | 141.31 | | | | | | 450,000 | | | | | | 12,572,968 | | |

| 11/23/20-12/31/20 | | | | | | 250,000 | | | | | | 148.27 | | | | | | 250,000 | | | | | | 12,322,968 | | |

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| 9/28/20-10/25/20 | | | | | | — | | | | | | — | | | | | | | | | | | | | | |

| 10/26/20-11/22/20 | | | | | | 1,018 | | | | | | 134.55 | | | | | | | | | | | | | | |

| 11/23/20-12/31/20 | | | | | | 90 | | | | | | 151.38 | | | | | | | | | | | | | | |

| | | | | | | 701,108 | | | | | | $ | 143.79 | | | | | | | | | | | | | |

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| 9/30/19-10/27/19 | | 36 | | | $ | 184.36 | |

| 10/28/19-11/24/19 | | 412 | | | 183.36 | | |

| 11/25/19-12/31/19 | | — | | | — | | |

| | | 448 | | | $ | 183.44 | |

We did not repurchase any shares in the fourth quarter of 2019.

| (Dollars and shares in millions, except per-share and employee amounts) | | | | | | [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | | [added: | | | 2017 | | | | | | 2016 | | |]

| Summary of Operations | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Revenue | | [added: | | | |] $ | [removed: 39,350] [added: 37,925] | | | [added: | |] $ | [removed: 36,193] [added: 39,350] | | | [added: | |] $ | [removed: 30,973] [added: 36,193] | | | [added: | |] $ | [removed: 30,561] [added: 30,973] | | | [added: | |] $ | [removed: 31,781] [added: 30,561] | |

| Interest, net | | [removed: (460] | | [removed: )] | | [removed: (356] [added: (477)] | | [removed: )] | | [removed: (103] | | [removed: )] [added: (460)] | | [removed: (91] | | [removed: )] | | [removed: (83] [added: (356)] | | [removed: )] | [added: | | | (103) | | | | | | (91) | | |]

| Provision for income tax, net | | [removed: (718] | | [removed: )] | | [removed: (727] [added: (571)] | | [removed: )] | | [removed: (1,165] | | [removed: )] [added: (718)] | | [removed: (977] | | [removed: )] | | [removed: (1,183] [added: (727)] | | [removed: )] | [added: | | | (1,100) | | | | | | (977) | | |]

| Earnings from continuing operations | | [added: | | | | 3,167 | | | | | |] 3,484 | | | | [added: | |] 3,358 | | | | [removed: 2,912] | | [added: 2,977] | | [removed: 2,679] | | | | [removed: 3,036] [added: 2,679] | | |

| Return on sales (a) | | [removed: 8.9] | | [removed: %] | | [removed: 9.3] [added: 8.4] | | % | | [removed: 9.4] | | [added: 8.9 | |] % | | [removed: 8.8] | | [added: 9.3 | |] % | | [added: | |] 9.6 | | % | [added: | | | 8.8 | | % |]

| Discontinued operations, net of tax | | [removed: —] | | | | [removed: (13] [added: —] | | [removed: )] | | [added: | |] — | | | | [removed: (107] | | [removed: )] [added: (13)] | | [added: | | | |] — | | | [added: | | | (107) | | |]

| Net earnings | | [added: | | | | 3,167 | | | | | |] 3,484 | | | | [added: | |] 3,345 | | | | [removed: 2,912] | | [added: 2,977] | | [removed: 2,572] | | | | [removed: 3,036] [added: 2,572] | | |

| Diluted earnings per share: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Continuing operations | | [added: | | | | 11.00 | | | | | |] 11.98 | | | | [added: | |] 11.22 | | | | [removed: 9.56] | | [added: 9.77] | | [removed: 8.64] | | | | [removed: 9.29] [added: 8.64] | | |

| Net earnings | | [added: | | | | 11.00 | | | | | |] 11.98 | | | | [added: | |] 11.18 | | | | [removed: 9.56] | | [added: 9.77] | | [removed: 8.29] | | | | [removed: 9.29] [added: 8.29] | | |

| Cash Flows | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Net cash provided by operating activities | | [added: | | | |] $ | [removed: 2,981] [added: 3,858] | | | [added: | |] $ | [removed: 3,148] [added: 2,981] | | | [added: | |] $ | [removed: 3,876] [added: 3,148] | | | [added: | |] $ | [removed: 2,163] [added: 3,876] | | | [added: | |] $ | [removed: 2,607] [added: 2,163] | |

| Net cash [removed: (used) provided] [added: used] by investing activities | | [removed: (994] | | [removed: )] | | [removed: (10,234] [added: (974)] | | [removed: )] | | [removed: (788] | | [removed: )] [added: (994)] | | [removed: (391] | | [removed: )] | | [removed: 200] [added: (10,234)] | | | [added: | | | (788) | | | | | | (391) | | |]

| Net cash (used) provided by financing activities | | [removed: (1,997] | | [removed: )] | | [added: (903) | | | | | | (1,997) | | | | | |] 5,086 | | | | [removed: (2,399] | | [removed: )] [added: (2,399)] | | [removed: (2,169] | | [removed: )] | | [removed: (4,367] [added: (2,169)] | | [removed: )] |

| Net cash used by discontinued operations | | [removed: (51] | | [removed: )] | | [removed: (20] [added: (59)] | | [removed: )] | | [removed: (40] | | [removed: )] [added: (51)] | | [removed: (54] | | [removed: )] | | [removed: (43] [added: (20)] | | [removed: )] | [added: | | | (40) | | | | | | (54) | | |]

| Cash dividends declared per common share | | [added: | | | | 4.40 | | | | | |] 4.08 | | | | [added: | |] 3.72 | | | | [removed: 3.36] | | [added: 3.36] | | [removed: 3.04] | | | | [removed: 2.76] [added: 3.04] | | |

| Financial Position | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Cash and equivalents | | [added: | | | |] $ | [removed: 902] [added: 2,824] | | | [added: | |] $ | [removed: 963] [added: 902] | | | [added: | |] $ | [removed: 2,983] [added: 963] | | | [added: | |] $ | [removed: 2,334] [added: 2,983] | | | [added: | |] $ | [removed: 2,785] [added: 2,334] | |

| Short- and long-term debt | | [added: | | | | 12,998 | | | | | |] 11,930 | | | | [added: | |] 12,417 | | | | [removed: 3,982] | | [added: 3,982] | | [removed: 3,888] | | | | [removed: 3,399] [added: 3,888] | | |

| Other Information | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Free cash flow from operations (e) | | [added: | | | |] $ | [removed: 1,994] [added: 2,891] | | | [added: | |] $ | [removed: 2,458] [added: 1,994] | | | [added: | |] $ | [removed: 3,448] [added: 2,458] | | | [added: | |] $ | [removed: 1,771] [added: 3,448] | | | [added: | |] $ | [removed: 2,038] [added: 1,771] | |

| Return on invested capital (e) | | [removed: 14.0] | | [added: | | 11.8 | |] % | | [removed: 15.4] | | [added: 14.0 | |] % | | [removed: 16.8] | | [added: 15.4 | |] % | | [removed: 16.3] | | [added: 16.8 | |] % | | [removed: 18.1] | | [added: 16.3 | |] % |

| Funded backlog | | [added: | | | | 58,783 | | | | | |] 57,530 | | | | [added: | |] 55,826 | | | | [removed: 52,031] | | [added: 52,031] | | [removed: 51,783] | | | | [removed: 53,449] [added: 51,783] | | |

| Total backlog | | [added: | | | | 89,489 | | | | | |] 86,945 | | | | [added: | |] 67,871 | | | | [removed: 63,175] | | [added: 63,175] | | [removed: 62,206] | | | | [removed: 67,786] [added: 62,206] | | |

| Shares outstanding | | [added: | | | | 286.5 | | | | | |] 289.6 | | | | [added: | |] 288.7 | | | | [removed: 296.9] | | [added: 296.9] | | [removed: 302.4] | | | | [removed: 313.0] [added: 302.4] | | |

| Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Basic | | [added: | | | | 286.9 | | | | | |] 288.3 | | | | [added: | |] 295.3 | | | | [removed: 299.2] | | [added: 299.2] | | [removed: 304.7] | | | | [removed: 321.3] [added: 304.7] | | |

| Diluted | | [added: | | | | 287.9 | | | | | |] 290.8 | | | | [added: | |] 299.2 | | | | [removed: 304.6] | | [added: 304.6] | | [removed: 310.4] | | | | [removed: 326.7] [added: 310.4] | | |

| Employees | | [added: | | | | 100,700 | | | | | |] 102,900 | | | | [added: | |] 105,600 | | | | [removed: 98,600] | | [added: 98,600] | | [removed: 98,800] | | | | [removed: 99,900] [added: 98,800] | | |

[removed: | (a) | Return] [added: (a)Return] on sales is calculated as earnings from continuing operations divided by revenue. [removed: |]

[removed: | (b) | Debt-to-equity] [added: (b)Debt-to-equity] ratio is calculated as total debt divided by total equity as of year end. [removed: |]

[removed: | (c) | Debt-to-capital] [added: (c)Debt-to-capital] ratio is calculated as total debt divided by the sum of total debt plus total equity as of year end. [removed: |]

[removed: | (d) | Book] [added: (d)Book] value per share is calculated as total equity divided by total outstanding shares as of year end. [removed: |]

[removed: | (e) | See] [added: (e)See] Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for a reconciliation of net cash provided by operating activities to free cash flow from operations and the calculation of return on invested capital (ROIC), both of which are non-GAAP management metrics. [removed: |]

[removed: | (f) | Return] [added: (f)Return] on equity is calculated by dividing earnings from continuing operations by our average equity during the year. [removed: |]

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| Operating earnings | | | | | | 4,133 | | | | | | 4,570 | | | | | | 4,394 | | | | | | 4,168 | | | | | | 3,725 | | |

| Operating margin | | | | | | 10.9 | | % | | | | 11.6 | | % | | | | 12.1 | | % | | | | 13.5 | | % | | | | 12.2 | | % |

| Total assets | | | | | | 51,308 | | | | | | 49,349 | | | | | | 45,887 | | | | | | 35,469 | | | | | | 33,380 | | |

| Shareholders’ equity | | | | | | 15,661 | | | | | | 13,978 | | | | | | 12,110 | | | | | | 11,801 | | | | | | 10,509 | | |

| Debt-to-equity (b) | | | | | | 83.0 | | % | | | | 85.3 | | % | | | | 102.5 | | % | | | | 33.7 | | % | | | | 37.0 | | % |

| Debt-to-capital (c) | | | | | | 45.4 | | % | | | | 46.0 | | % | | | | 50.6 | | % | | | | 25.2 | | % | | | | 27.0 | | % |

| Book value per share (d) | | | | | | 54.67 | | | | | | 48.26 | | | | | | 41.95 | | | | | | 39.75 | | | | | | 34.75 | | |

| Return on equity (f) | | | | | | 21.8 | | % | | | | 26.4 | | % | | | | 27.3 | | % | | | | 26.5 | | % | | | | 25.1 | | % |

Note: Prior-period information has been restated for the retrospective application of a change in accounting principle related to the amortization of actuarial gains and losses for our qualified U.S. government pension plans, which we adopted in the fourth quarter of 2020.

For further discussion of this change in accounting principle, see Note T to the Consolidated Financial Statements in Item 8.

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| | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | | |

| Operating earnings | | 4,648 | | | | 4,457 | | | | 4,236 | | | | 3,744 | | | | 4,494 | | |

| Operating margin | | 11.8 | | % | | 12.3 | | % | | 13.7 | | % | | 12.3 | | % | | 14.1 | | % |

| Total assets | | 48,841 | | | | 45,408 | | | | 35,046 | | | | 33,172 | | | | 32,538 | | |

| Shareholders’ equity | | 13,577 | | | | 11,732 | | | | 11,435 | | | | 10,301 | | | | 10,440 | | |

| Debt-to-equity (b) | | 87.9 | | % | | 105.8 | | % | | 34.8 | | % | | 37.7 | | % | | 32.6 | | % |

| Debt-to-capital (c) | | 46.8 | | % | | 51.4 | | % | | 25.8 | | % | | 27.4 | | % | | 24.6 | | % |

| Book value per share (d) | | 46.88 | | | | 40.64 | | | | 38.52 | | | | 34.06 | | | | 33.36 | | |

| Return on equity (f) | | 27.2 | | % | | 28.1 | | % | | 26.6 | | % | | 25.6 | | % | | 27.7 | | % |

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| | [added: | |] Year Ended December 31 | | | | | | | | | | | [added: | | | |]

| (Dollars in millions, except per-share amounts) | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019*] | | | [added: | | | 2018* | | |]

| Revenue: | | | | | | | | | | | | [added: | | | | | |]

| Products | [added: | |] $ | [removed: 23,130] [added: 22,188] | | | [added: | |] $ | [removed: 20,149] [added: 23,130] | | | [added: | |] $ | [removed: 19,016] [added: 20,149] | |

| Services | [removed: 16,220] | | [added: 15,737] | | [removed: 16,044] | | | | [removed: 11,957] [added: 16,220] | | | [added: | | | 16,044 | | |]

| | [removed: 39,350] | | [added: 37,925] | | [removed: 36,193] | | | | [removed: 30,973] [added: 39,350] | | | [added: | | | 36,193 | | |]

| Operating costs and expenses: | | | | | | | | | | | | [added: | | | | | |]

| Interest, net | [removed: (460] | | [removed: )] [added: (477)] | | [removed: (356] | | [removed: )] | | [removed: (103] [added: (460)] | | [removed: )] | [added: | | | (356) | | |]

| Other, net | [removed: 14] | | [added: 82] | | [removed: (16] | | [removed: )] | | [removed: (56] [added: 92] | | [removed: )] | [added: | | | 47 | | |]

| Earnings from continuing operations before income tax | [removed: 4,202] | | [added: 3,738] | | [removed: 4,085] | | | | [removed: 4,077] [added: 4,202] | | | [added: | | | 4,085 | | |]

| Provision for income tax, net | [removed: (718] | | [removed: )] [added: (571)] | | [removed: (727] | | [removed: )] | | [removed: (1,165] [added: (718)] | | [removed: )] | [added: | | | (727) | | |]

| Earnings from continuing operations | [removed: 3,484] | | [added: 3,167] | | [removed: 3,358] | | | | [removed: 2,912] [added: 3,484] | | | [added: | | | 3,358 | | |]

| Discontinued operations, net of tax provision of $13 in 2018 | [removed: —] | | [added: —] | | [removed: (13] | | [removed: )] | | — | | | [added: | | | (13) | | |]

| Net earnings | [added: | |] $ | [removed: 3,484] [added: 3,167] | | | [added: | |] $ | [removed: 3,345] [added: 3,484] | | | [added: | |] $ | [removed: 2,912] [added: 3,345] | |

| Earnings per share | | | | | | | | | | | | [added: | | | | | |]

| Basic: | | | | | | | | | | | | [added: | | | | | |]

| Continuing operations | [added: | |] $ | [removed: 12.09] [added: 11.04] | | | [added: | |] $ | [removed: 11.37] [added: 12.09] | | | [added: | |] $ | [removed: 9.73] [added: 11.37] | |

| Discontinued operations | [removed: —] | | [added: —] | | [removed: (0.04] | | [removed: )] | | — | | | [added: | | | (0.04) | | |]

| Net earnings | [added: | |] $ | [removed: 12.09] [added: 11.04] | | | [added: | |] $ | [removed: 11.33] [added: 12.09] | | | [added: | |] $ | [removed: 9.73] [added: 11.33] | |

| Diluted: | | | | | | | | | | | | [added: | | | | | |]

| Continuing operations | [added: | |] $ | [removed: 11.98] [added: 11.00] | | | [added: | |] $ | [removed: 11.22] [added: 11.98] | | | [added: | |] $ | [removed: 9.56] [added: 11.22] | |

| Net earnings | [added: | |] $ | [removed: 11.98] [added: 11.00] | | | [added: | |] $ | [removed: 11.18] [added: 11.98] | | | [added: | |] $ | [removed: 9.56] [added: 11.18] | |

| | [added: | |] Year Ended December 31 | | | | | | | | | | | | [added: | | | | | |]

| (Dollars in millions) | | [removed: 2019] | | | | [removed: 2018] [added: 2020] | | | | [removed: 2017] | | [added: 2019*] | [added: | | | | | 2018* | | |]

| Net earnings | | [added: | | | |] $ | [removed: 3,484] [added: 3,167] | | | [added: | |] $ | [removed: 3,345] [added: 3,484] | | | [added: | |] $ | [removed: 2,912] [added: 3,345] | |

| Gains on cash flow hedges | | [removed: 97] | | | | [removed: 36] [added: 366] | | | | [removed: 341] | | [added: 97] | [added: | | | | | 36 | | |]

| Unrealized [removed: gains on marketable securities] [added: gains, net] | | [removed: —] | [added: 5] | | | [added: | | | 6 | | | | | | 6 | | | | | |] — | | | | [removed: 9] | | [added: 17] | [added: | |]

| Foreign currency translation adjustments | | [removed: 186] | | | | [removed: (300] [added: 353] | | [removed: )] | | [removed: 348] | | [added: 186] | [added: | | | | | (300) | | |]

| Change in retirement plans’ funded status | | [removed: (886] | [added: $] | [removed: )] [added: (886)] | | [removed: (61] | | [removed: )] | [added: $] | [removed: 20] [added: 29] | | | [added: | | $ | (857) | |]

| Other comprehensive [removed: (loss) income,] [added: income (loss),] pretax | | [removed: (603] | | [removed: )] | | [removed: (325] [added: 266] | | [removed: )] | | [removed: 718] | | [added: (574)] | [added: | | | | | (309) | | |]

| Benefit [removed: (provision)] for income tax, net | | [removed: 162] | | | | [removed: 5] [added: 2] | | | | [removed: (151] | | [removed: )] [added: 156] | [added: | | | | | 1 | | |]

| Other comprehensive [removed: (loss) income,] [added: loss,] net of tax | | [removed: (441] | [added: (441)] | [removed: )] | | [removed: (320] | | [removed: )] | [added: 23] | [removed: 567] | | | [added: | | (418) | | |]

| Comprehensive income | | [removed: $] | 3,043 | | | [removed: $] | [removed: 3,025] | | [added: 23] | [removed: $] | [removed: 3,479] | | [added: | | 3,066 | | |]

| | [added: | |] December 31 | | | | | | | [added: | |]

| (Dollars in millions) | [removed: 2019] | | [added: 2020] | | [added: | | | | 2019 | | | | | |] 2018 | | |

| ASSETS | | | | | | | | [added: | | | |]

| Current assets: | | | | | | | | [added: | | | |]

| Cash and equivalents | [added: | |] $ | [removed: 902] [added: 2,824] | | | [added: | |] $ | [removed: 963] [added: 902] | |