Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income tax expense

Federal and foreign income tax expense consisted of the following:

	Year Ended December 31
$ in millions	2022		2021		2020
Federal income tax expense:
Current	$	1,289	$	1,398	$	246
Deferred	(353)		518		288
Total federal income tax expense	936		1,916		534
Foreign income tax expense:
Current	3		6		3
Deferred	1		11		2
Total foreign income tax expense	4		17		5
Total federal and foreign income tax expense	$	940	$	1,933	$	539

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	2022				2021				2020
Income tax expense at statutory rate	$	1,226	21.0	%	$	1,877	21.0	%	$	783	21.0	%
Research credit	(177)		(3.0)		(192)		(2.2)		(206)		(5.5)
Foreign derived intangible income	(66)		(1.1)		(50)		(0.6)		(55)		(1.5)
IT services divestiture nondeductible goodwill	—		—		250		2.8		—		—
Settlements with taxing authorities	(86)		(1.5)		—		—		—		—
Other, net	43		0.7		48		0.6		17		0.5
Total federal and foreign income taxes	$	940	16.1	%	$	1,933	21.6	%	$	539	14.5	%

Unrecognized tax benefit rollforward

The change in unrecognized tax benefits during 2022, 2021 and 2020, excluding interest, is as follows:

	December 31
$ in millions	2022		2021		2020
Unrecognized tax benefits at beginning of the year	$	1,630	$	1,481	$	1,223
Additions based on tax positions related to the current year	262		355		187
Additions for tax positions of prior years	6		47		270
Reductions for tax positions of prior years	(124)		(251)		(190)
Settlements with taxing authorities	(110)		(1)		(7)
Other, net	(1)		(1)		(2)
Net change in unrecognized tax benefits	33		149		258
Unrecognized tax benefits at end of the year	$	1,663	$	1,630	$	1,481

Components of deferred tax assets and liabilities

The tax effects of 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	2022		2021
Deferred Tax Assets
Retiree benefits	$	117	$	804
Capitalized research and experimental expenditures	1,671		—
Accrued employee compensation	378		371
Provisions for accrued liabilities	65		156
Inventory	484		649
Stock-based compensation	37		39
Operating lease liabilities	556		493
Tax credits	464		431
Other	144		135
Gross deferred tax assets	3,916		3,078
Less: valuation allowance	(428)		(349)
Net deferred tax assets	3,488		2,729
Deferred Tax Liabilities
Goodwill	534		533
Purchased intangibles	98		148
Property, plant and equipment, net	854		755
Operating lease right-of-use assets	545		444
Contract accounting differences	1,348		1,036
Other	79		103
Deferred tax liabilities	3,458		3,019
Total net deferred tax assets (liabilities)	$	30	$	(290)