Item 6. Selected Financial Data

(a)Our operating profit and net earnings from continuing operations and earnings per share from continuing operations in 2022 were affected by $100 million ($79 million, or $0.31 per share, after-tax) of certain severance and other charges that relate to actions at our RMS business segment, which include severance costs for reduction of positions and asset impairment charges; severance and restructuring charges of $36 million ($28 million, or $0.10 per share, after-tax) in 2021; severance charges of $27 million ($21 million, or $0.08 per share, after-tax) in 2020; and severance and restructuring charges of $96 million ($76 million, or $0.26 per share, after-tax) in 2018. See “Note 16 – Severance and Other Charges” included in our Notes to Consolidated Financial Statements for more information.

(b)The impact of our postretirement benefit plans can cause our operating profit, net earnings, cash flows and certain amounts recorded on our consolidated balance sheets to fluctuate. Accordingly, our net earnings were affected by a FAS/CAS pension adjustment of $738 million in 2022, $668 million in 2021, $2.1 billion in 2020, $1.5 billion in 2019, and $1.0 billion in 2018. We made no pension contributions in both 2022 and 2021, $1.0 billion in both 2020 and 2019, and $5.0 billion in 2018. These contributions caused fluctuations in our operating cash flows and cash balance between each of those years. See “Critical Accounting Policies - Postretirement Benefit Plans” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information.

(c)Net earnings include a noncash, non-operating pension settlement charge of $1.5 billion ($1.2 billion, or $4.33 per share, after-tax) in 2022, and $1.7 billion ($1.3 billion, or $4.72 per share, after-tax) in 2021, related to the purchase of group annuity contracts to transfer $4.3 billion and $4.9 billion of gross pension obligations and related plan assets to an insurance company.

(d)Net earnings in 2022 and 2021 include net losses of $114 million ($86 million, or 0.33 per share, after-tax) and net gains of $265 million ($199 million, or $0.72 per share, after-tax) due to changes in the fair value of certain mark-to-market investments.

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(e)We recognized net losses of $176 million ($132 million, or $0.50 per share, after-tax) in 2022 and net gains of $42 million ($32 million, or $0.11 per share, after-tax) in 2021, $98 million ($74 million, or $0.26 per share, after-tax) in 2020, and $20 million ($15 million, or $0.05 per share, after-tax) in 2019, and net losses of $11 million ($8 million, or $0.03 per share, after-tax) in 2018 due to changes in the fair value of investments and liabilities for deferred compensation plans.

(f)For the years ended December 31, 2020 and 2018, operating profit includes noncash asset impairment charges of $128 million ($96 million, or $0.34 per share, after-tax) and $110 million ($83 million, or $0.29 per share, after-tax) related to our equity method investee, Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC). See “Note 1 – Organization and Significant Accounting Policies” included in our Notes to Consolidated Financial Statements for more information.

(g)In 2019, we recorded previously deferred noncash gains of $51 million ($38 million, or $0.13 per share, after-tax) related to properties sold in 2015 as a result of completing our remaining obligations.

(h)Net earnings for the year ended December 31, 2019 include benefits of $127 million ($0.45 per share) for additional tax deductions for the prior year, primarily attributable to foreign derived intangible income treatment based on proposed tax regulations released on March 4, 2019 and a change in our tax accounting method. Net earnings for the year ended December 31, 2018 include benefits of $146 million ($0.51 per share) for additional tax deductions for the prior year, primarily attributable to true-ups to the net one-time charges related to the Tax Cuts and Jobs Act enacted on December 22, 2017 and our change in tax accounting method.

(i)Effective January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). Upon adoption, we recorded right-of-use operating lease assets of $1.0 billion and operating lease liabilities of $1.1 billion, approximately $855 million of which were classified as noncurrent. There was no impact to our consolidated statements of earnings or cash flows as a result of adopting this standard. Prior periods were not restated for the adoption of ASU 2016-02.

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