Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income tax expense

Federal and foreign income tax expense consisted of the following:

	Year Ended December 31
$ in millions	2013		2012		2011
Income Taxes on Continuing Operations
Currently payable
Federal income taxes		$803		$912		$592
Foreign income taxes	28		15		18
Total federal and foreign income taxes currently payable	831		927		610
Deferred federal and foreign income taxes	80		60		387
Total federal and foreign income taxes		$911		$987		$997

Income tax reconciliation

Income tax expense differs from the amount computed by multiplying the statutory federal income tax rate times the earnings from continuing operations before income taxes due to the following:

	Year Ended December 31
$ in millions	2013			2012			2011
Income tax expense on continuing operations at statutory rate		$1,002			$1,038			$1,079
Manufacturing deduction	(63		)	(42		)	(32		)
Research tax credit	(37		)	—			(17		)
Other, net	9			(9		)	(33		)
Total federal and foreign income taxes		$ 911			$ 987			$ 997

Unrecognized tax benefit rollforward

The change in unrecognized tax benefits during 2013, 2012 and 2011, excluding interest, is as follows:

	December 31
$ in millions	2013			2012			2011
Unrecognized tax benefits at beginning of the year		$156			$118			$126
Additions based on tax positions related to the current year	56			12			11
Additions for tax positions of prior years	44			28			31
Other, net	(15		)	(2		)	(50		)
Net change in unrecognized tax benefits	85			38			(8		)
Unrecognized tax benefits at end of the year		$241			$156			$118

Components of deferred tax assets and liabilities

The tax effects of significant temporary differences and carryforwards that gave rise to year-end deferred federal, state and foreign tax balances, as presented in the consolidated statements of financial position, are as follows:

	December 31
$ in millions	2013			2012
Deferred Tax Assets
Retirement benefits		$1,308			$2,710
Provisions for accrued liabilities	646			675
Stock-based compensation	109			146
Other	144			151
Gross deferred tax assets	2,207			3,682
Less valuation allowance	(55		)	(52		)
Net deferred tax assets	2,152			3,630
Deferred Tax Liabilities
Goodwill	806			804
Property, plant, and equipment, net	348			376
Contract accounting differences	134			199
Other	50			135
Gross deferred tax liabilities	1,338			1,514
Total net deferred tax assets		$ 814			$2,116