Income Taxes (Unaudited)

9 Months Ended

Sep. 30, 2015



	Three Months Ended September 30						Nine Months Ended September 30
$ in millions	2015			2014			2015			2014
Federal and foreign income tax expense	$	213		$	221		$	638		$	673
Effective income tax rate	29.2		%	31.8		%	29.4		%	30.1		%

Current Quarter

The company's effective tax rate for the three months ended September 30, 2015 was lower than the comparable 2014 period primarily due to a $21 million benefit recognized in 2015 for additional research credits claimed on our prior year tax return.

Year to Date

The company's effective tax rate for the nine months ended September 30, 2015 was comparable with the same period in 2014 and reflects a $59 million benefit recognized in 2015 for additional research credits and a $51 million benefit recorded in 2014 for the partial resolution of the Internal Revenue Service (IRS) examination of our 2007-2009 tax returns.

The company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. Certain matters related to our 2007-2011 tax returns are currently before the IRS Office of Appeals. The company believes it is reasonably possible that within the next twelve months we may settle certain matters on these open tax years. 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.

Open tax years related to state and foreign jurisdictions remain subject to examination, but are not considered material.