Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income tax expense

Federal and foreign income tax expense consisted of the following:

	Year Ended December 31
$ in millions	2021		2020		2019
Federal income tax expense:
Current	$	1,398	$	246	$	758
Deferred	518		288		(474)
Total federal income tax expense	1,916		534		284
Foreign income tax expense:
Current	6		3		10
Deferred	11		2		6
Total foreign income tax expense	17		5		16
Total federal and foreign income tax expense	$	1,933	$	539	$	300

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	2021				2020				2019
Income tax expense at statutory rate	$	1,877	21.0	%	$	783	21.0	%	$	535	21.0	%
Research credit	(192)		(2.2)		(206)		(5.5)		(216)		(8.5)
Foreign derived intangible income	(50)		(0.6)		(55)		(1.5)		(28)		(1.1)
IT services divestiture nondeductible goodwill	250		2.8		—		—		—		—
Other, net	48		0.6		17		0.5		9		0.4
Total federal and foreign income taxes	$	1,933	21.6	%	$	539	14.5	%	$	300	11.8	%

Unrecognized tax benefit rollforward

The change in unrecognized tax benefits during 2021, 2020 and 2019, excluding interest, is as follows:

	December 31
$ in millions	2021		2020		2019
Unrecognized tax benefits at beginning of the year	$	1,481	$	1,223	$	748
Additions based on tax positions related to the current year	355		187		158
Additions for tax positions of prior years	47		270		400
Reductions for tax positions of prior years	(251)		(190)		(65)
Settlements with taxing authorities	(1)		(7)		(15)
Other, net	(1)		(2)		(3)
Net change in unrecognized tax benefits	149		258		475
Unrecognized tax benefits at end of the year	$	1,630	$	1,481	$	1,223

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	2021		2020
Deferred Tax Assets
Retiree benefits	$	804	$	1,738
Accrued employee compensation	371		360
Provisions for accrued liabilities	156		232
Inventory	649		849
Stock-based compensation	39		40
Operating lease liabilities	493		435
Tax credits	431		343
Other	135		112
Gross deferred tax assets	3,078		4,109
Less: valuation allowance	(349)		(307)
Net deferred tax assets	2,729		3,802
Deferred Tax Liabilities
Goodwill	533		533
Purchased intangibles	148		201
Property, plant and equipment, net	755		737
Operating lease right-of-use assets	444		423
Contract accounting differences	1,036		1,513
Other	103		84
Deferred tax liabilities	3,019		3,491
Total net deferred tax (liabilities) assets	$	(290)	$	311