Income Taxes (Unaudited)

3 Months Ended

Mar. 31, 2016



	Three Months Ended March 31
$ in millions	2016			2015
Federal and foreign income tax expense	$	120		$	220
Effective income tax rate	17.8		%	31.3		%

The company’s effective tax rate for the three months ended March 31, 2016 was lower than the comparable 2015 period principally due to an $80 million benefit recognized in the first quarter of 2016 resulting from the adoption of ASU No. 2016-09 described in Note 1 and extension of the research tax credit, partially offset by the absence of refund claims filed in 2015.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Our 2007-2013 tax returns are currently either under Internal Revenue Service examination or appeals. The company believes it is reasonably possible that within the next twelve months, we may resolve certain matters related to the years under examination or appeals, resulting in a reduction of our unrecognized tax benefits up to $175 million and a reduction of our income tax expense up to $45 million.