Income Taxes (Unaudited)

3 Months Ended

Mar. 31, 2015



	Three Months Ended March 31
$ in millions	2015			2014
Federal and foreign income tax expense	$	220		$	207
Effective income tax rate	31.3		%	26.3		%

The company's higher effective tax rate for the three months ended March 31, 2015, reflects the absence of a $51 million benefit for the partial resolution of the Internal Revenue Service (IRS) examination of our 2007-2009 tax returns recognized in the first quarter of 2014. The remaining matters related to our 2007 - 2009 tax returns and issues related to our 2010 - 2011 tax returns are currently before the IRS Office of Appeals. The company believes it is reasonably possible that within the next 12 months we will resolve the remaining matters on our 2007-2011 tax returns. The combined resolution of these items, excluding interest, could result in a reduction of our unrecognized tax benefits up to $75 million and a reduction of our income tax expense up to $40 million.

The company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. The IRS is conducting an examination of the company's tax returns for the years 2012 and 2013. Open tax years related to state and foreign jurisdictions remain subject to examination, but are not expected to have a material effect on the company’s unaudited condensed consolidated financial statements.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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