Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income tax expense

The following table presents the impact of the 2017 Tax Act as an increase (decrease) reflected in the noted line items in the Consolidated Statements of Earnings and Comprehensive Income and Consolidated Statements of Financial Position:

	Year Ended December 31, 2017
($ in millions)	Reduction of U.S. Corporate Income Tax Rate			Transition Tax on Foreign Earnings			Acceleration of Depreciation			Other			Total
Income tax expense	$	280		$	13		$	5		$	2		$	300
Effective tax rate	9.1		%	0.4		%	0.2		%	0.1		%	9.8		%
	As of December 31, 2017
($ in millions)	Reduction of U.S. Corporate Income Tax Rate			Transition Tax on Foreign Earnings			Acceleration of Depreciation			Other			Total
Deferred tax assets	$	(280	)	$	(13	)	$	(80	)	$	—		$	(373	)
Other current liabilities	—			—			(75		)	2			(73		)

Federal and foreign income tax expense consisted of the following:

	Year Ended December 31
$ in millions	2017			2016			2015
Federal income tax expense:
Current	$	449		$	661		$	310
Deferred	581			49			472
Total federal income tax expense	1,030			710			782
Foreign income tax expense:
Current	8			14			21
Deferred	(4		)	(1		)	(3		)
Total foreign income tax expense	4			13			18
Total federal and foreign income tax expense	$	1,034		$	723		$	800

Income tax reconciliation

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

	Year Ended December 31
$ in millions	2017					2016					2015
Income tax expense at statutory rate	$	1,067		35.0	%	$	1,023		35.0	%	$	976		35.0	%
Stock compensation - excess tax benefits	(48		)	(1.6	)	(85		)	(2.9	)	—			—
Research credit	(130		)	(4.2	)	(61		)	(2.1	)	(119		)	(4.3	)
Manufacturing deduction	(97		)	(3.2	)	(58		)	(2.0	)	(31		)	(1.1	)
Settlements with taxing authorities	(42		)	(1.4	)	(40		)	(1.4	)	—			—
Repatriation of non-U.S. earnings	—			—		(33		)	(1.1	)	—			—
Impacts related to the 2017 Tax Act	300			9.8		—			—		—			—
Other, net	(16		)	(0.5	)	(23		)	(0.8	)	(26		)	(0.9	)
Total federal and foreign income taxes	$	1,034		33.9	%	$	723		24.7	%	$	800		28.7	%

Unrecognized tax benefit rollforward

The change in unrecognized tax benefits during 2017, 2016 and 2015, excluding interest, is as follows:

	December 31
$ in millions	2017			2016			2015
Unrecognized tax benefits at beginning of the year	$	135		$	223		$	210
Additions based on tax positions related to the current year	102			35			52
Additions for tax positions of prior years	110			2			17
Reductions for tax positions of prior years	(44		)	(40		)	(10		)
Settlements with taxing authorities	(20		)	(84		)	—
Other, net	—			(1		)	(46		)
Net change in unrecognized tax benefits	148			(88		)	13
Unrecognized tax benefits at end of the year	$	283		$	135		$	223

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	2017			2016
Deferred Tax Assets
Retiree benefits	$	1,477		$	2,814
Accrued employee compensation	263			349
Provisions for accrued liabilities	193			295
Inventory	191			287
Stock-based compensation	46			72
Other	39			72
Gross deferred tax assets	2,209			3,889
Less valuation allowance	(26		)	(31		)
Net deferred tax assets	2,183			3,858
Deferred Tax Liabilities
Goodwill	511			798
Property, plant and equipment, net	256			321
Contract accounting differences	898			1,200
Other	43			77
Deferred tax liabilities	1,708			2,396
Total net deferred tax assets	$	475		$	1,462