INCOME TAXES

The Company's earnings are principally domestic and its effective tax rates on earnings from operations for the three months ended June 30, 2015 and 2014, were 36.1% and 34.2%, respectively. For the six months ended June 30, 2015 and 2014, the Company's effective tax rates were 35.5% and 33.1%, respectively. The higher effective tax rate for the three months ended June 30, 2015, was primarily attributable to the amount of the goodwill impairment that is not amortizable for income tax purposes. The higher effective tax rate for the six months ended June 30, 2015, was primarily attributable to the amount of the goodwill impairment that is not amortizable for income tax purposes and a non-recurring tax benefit in 2014 resulting from the release of uncertain tax positions due to expiration of the statute of limitations.

For the three and six months ended June 30, 2015, the Company's effective tax rate differed from the federal statutory rate primarily as a result of the amount of the goodwill impairment that is not amortizable for tax purposes, partially offset by the domestic manufacturing deduction. For the three and six months ended June 30, 2014, the Company's effective tax rate differed from the federal statutory rate primarily as a result of the domestic manufacturing deduction and a non-recurring tax benefit resulting from the release of uncertain tax positions due to expiration of the statute of limitations.

Deferred state income taxes reflect the change in deferred state tax assets and liabilities in the relevant period. These amounts are recorded within operating income, while the current period state income tax expense is charged to contract costs and included in cost of sales and service revenues in segment operating income.

Net deferred tax assets (liabilities) as presented in the unaudited condensed consolidated statements of financial position were as follows:



($ in millions)	June 30 2015		December 31 2014
Net current deferred tax assets	$	132	$	129
Net non-current deferred tax assets	204		212
Total net deferred tax assets	$	336	$	341