Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Earning before Income Tax, Domestic and Foreign

Earnings before taxes consists of the following:


	Year Ended December 31,
(Dollars in millions)	2023		2022		2021
Earnings before taxes
Domestic	$	197	$	531	$	203
Foreign	(5)		(6)		(3)
Total	$	192	$	525	$	200

Schedule of Income Tax Provision

Income tax provision consists of the following:


	Year Ended December 31,
(Dollars in millions)	2023		2022		2021
Current:
Federal	$	61	$	93	$	(1)
State	14		24		—
Foreign	1		—		1
Total current	76		117		—
Deferred:
Federal	(44)		5		43
State	(7)		(6)		5
Foreign	(1)		4		(2)
Total deferred	(52)		3		46
Total	$	24	$	120	$	46

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation from the statutory federal income tax rate to our effective income tax rate follows:


	Year Ended December 31,
	2023		2022		2021
Statutory federal rate	21.0	%	21.0	%	21.0	%
State rate, net of federal benefit	2.5	%	2.8	%	3.6	%
Foreign rate differential	0.1	%	(0.3)	%	(0.2)	%
Research & development credit, net of reserves	(18.0)	%	(0.5)	%	(0.2)	%
Nondeductible expenses	(0.1)	%	0.2	%	0.9	%
Global intangible low taxed income	0.2	%	0.2	%	—	%
Change in valuation allowance	1.0	%	1.5	%	(1.4)	%
Change in tax reserves	1.1	%	—	%	(0.4)	%
Divestiture impact	4.7	%	(1.9)	%	—	%
Other	—	%	(0.1)	%	(0.3)	%
Effective tax rate	12.5	%	22.9	%	23.0	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022 are as follows:


	December 31,
(Dollars in millions)	2023		2022
Deferred tax assets:
Federal net operating loss	$	3	$	4
State net operating loss	8		14
Foreign net operating loss	7		10
Tax credit carryforwards	13		4
Lease liabilities	54		61
Capitalized R&D, net of amortization	88		32
Accrued compensation and benefits	25		23
Contract liabilities	20		23
Accrued expenses	3		6
Pension and post-retirement plans	13		15
Inventory capitalization	8		7
Disallowed interest	1		1
Other	15		8
Total gross deferred tax assets	258		208
Less valuation allowance	21		17
Deferred tax assets	237		191
Deferred tax liabilities:
Right-of-use assets	$	(50)	$	(57)
Intangible assets	(41)		(45)
Fixed assets	(25)		(21)
Other	(2)		(2)
Deferred tax liabilities	(118)		(125)
Net deferred tax asset	$	119	$	66

Schedule of Unrecognized Tax Benefits

The table below summarizes the activity associated with our unrecognized tax benefits:


(Dollars in millions)	2023		2022		2021
Balance at January 1,	$	24	$	22	$	25
Increase related to prior year tax positions	11		1		—
Increase related to current year tax positions	6		2		1
Decreases related to prior year tax positions	(1)		—		(4)
Lapse of statute of limitations	—		(1)		—
Settlements with taxing authorities	—		—		—
Balance at December 31,	$	40	$	24	$	22