Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income tax expense

Federal and foreign income tax expense consisted of the following:

	Year Ended December 31
$ in millions	2015			2014		2013
Federal income tax expense:
Current	$	310		$	701	$	803
Deferred	472			155		84
Total federal income tax expense	782			856		887
Foreign income tax expense:
Current	21			10		28
Deferred	(3		)	2		(4		)
Total foreign income tax expense	18			12		24
Total federal and foreign income tax expense	$	800		$	868	$	911

Income tax reconciliation

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

	Year Ended December 31
$ in millions	2015			2014			2013
Income tax expense at statutory rate	$	976		$	1,028		$	1,002
Research tax credit	(119		)	(43		)	(37		)
Manufacturing deduction	(31		)	(48		)	(63		)
Settlements with taxing authorities	—			(51		)	—
Other, net	(26		)	(18		)	9
Total federal and foreign income taxes	$	800		$	868		$	911

Unrecognized tax benefit rollforward

The change in unrecognized tax benefits during 2015, 2014 and 2013, excluding interest, is as follows:

	December 31
$ in millions	2015			2014			2013
Unrecognized tax benefits at beginning of the year	$	210		$	241		$	156
Additions based on tax positions related to the current year	52			62			56
Additions for tax positions of prior years	17			9			44
Settlements with taxing authorities	(10		)	(61		)	(1		)
Other, net	(46		)	(41		)	(14		)
Net change in unrecognized tax benefits	13			(31		)	85
Unrecognized tax benefits at end of the year	$	223		$	210		$	241

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	2015			2014
Deferred Tax Assets
Retiree benefits	$	2,549		$	2,745
Accrued employee compensation	316			311
Provisions for accrued liabilities	347			392
Inventory	227			—
Stock-based compensation	76			91
Other	68			104
Gross deferred tax assets	3,583			3,643
Less valuation allowance	(34		)	(53		)
Net deferred tax assets	3,549			3,590
Deferred Tax Liabilities
Goodwill	788			787
Property, plant and equipment, net	297			315
Contract accounting differences	976			332
Other	79			130
Deferred tax liabilities	2,140			1,564
Total net deferred tax assets	$	1,409		$	2,026