Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Provision for Federal & Foreign Income Tax Expense

Our provision for federal and foreign income tax expense for continuing operations consisted of the following (in millions):


	2021		2020		2019
Federal income tax expense (benefit):
Current	$	1,325	$	1,292	$	698

Deferred	(194)		21		235
Total federal income tax expense	1,131		1,313		933
Foreign income tax expense (benefit):
Current	93		50		91
Deferred	11		(16)		(13)
Total foreign income tax expense	104		34		78
Total federal and foreign income tax expense	$	1,235	$	1,347	$	1,011

Reconciliation of Income Tax Expense Computed Using U.S. Statutory Federal Tax Rate to Actual Income Tax Expense

A reconciliation of the U.S. federal statutory income tax expense to actual income tax expense for continuing operations is as follows (dollars in millions):


	2021				2020				2019
	Amount		Rate		Amount		Rate		Amount		Rate
Income tax expense at the U.S. federal statutory tax rate	$	1,585	21.0	%	$	1,729	21.0	%	$	1,521	21.0	%
Foreign derived intangible income deduction	(170)		(2.3)		(170)		(2.1)		(122)		(1.7)
Research and development tax credit	(118)		(1.6)		(97)		(1.2)		(148)		(2.0)
Tax deductible dividends	(65)		(0.9)		(64)		(0.8)		(62)		(0.9)
Excess tax benefits for stock-based payment awards	(28)		(0.4)		(52)		(0.6)		(63)		(0.9)
Other, net (a)	31		0.6		1		0.1		(115)		(1.5)
Income tax expense	$	1,235	16.4	%	$	1,347	16.4	%	$	1,011	14.0	%

(a)Includes additional $98 million deduction for foreign derived intangible income related to 2018 recognized in 2019 reflecting proposed tax regulations released on March 4, 2019.

Components of Federal and Foreign Deferred Tax Assets and Liabilities

The primary components of our federal and foreign deferred income tax assets and liabilities at December 31 were as follows (in millions):


	2021		2020
Deferred tax assets related to:
Pensions	$	1,985	$	2,994
Accrued compensation and benefits	957		926
Contract accounting methods	470		392
Foreign company operating losses and credits	40		51
Other (a)	473		509
Valuation allowance	(15)		(13)
Deferred tax assets, net	3,910		4,859
Deferred tax liabilities related to:
Goodwill and intangible assets	401		363
Property, plant and equipment	518		481
Exchanged debt securities and other (a)	709		547
Deferred tax liabilities	1,628		1,391
Net deferred tax assets	$	2,282	$	3,468

(a)Includes deferred tax assets and liabilities related to lease liability and ROU asset.