Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Federal and foreign income tax expense for the years ended December 31, 2024, 2023, and 2022, consisted of the following:


	Year Ended December 31
($ in millions)	2024		2023		2022
Income Taxes on Operations
Federal and foreign income taxes currently payable (receivable)	$	193	$	273	$	138
Change in deferred federal and foreign income taxes	(100)		(101)		2
Total federal and foreign income taxes	$	93	$	172	$	140

Reconciliation of Income Tax Expense to Federal Statutory Rate

The following table reconciles the Company's actual income tax expense to income tax expense based on the statutory federal corporate income tax rate:


	Year Ended December 31
	2024				2023				2022
($ in millions)	Dollars		Percent		Dollars		Percent		Dollars		Percent
U.S. federal statutory tax rate	$	135	21.0	%	$	179	21.0	%	$	151	21.0	%

Foreign tax effects	2		0.3	%	—		—	%	—		—	%

Effect of cross-border tax laws	(3)		(0.5)	%	(1)		(0.1)	%	—		—	%
Tax credits:
Research and development tax credit	(49)		(7.6)	%	(22)		(2.6)	%	(22)		(3.1)	%
Other	(2)		(0.3)	%	(2)		(0.2)	%	(1)		(0.1)	%

Nontaxable or nondeductible items	1		0.2	%	6		0.7	%	6		0.8	%
Changes in unrecognized tax benefits	18		2.8	%	10		1.2	%	8		1.1	%
Interest accrual on tax refunds	(8)		(1.2)	%	(6)		(0.7)	%	(3)		(0.4)	%
Other adjustments	(1)		(0.2)	%	8		0.9	%	1		0.2	%
Effective income tax rate	$	93	14.5	%	$	172	20.2	%	$	140	19.5	%

Schedule of Income Taxes Paid (Refunded)

Cash paid for income taxes (net of refunds) consisted of the following:


	December 31
($ in millions)	2024		2023		2022
Federal	$	182	$	273	$	96
State:
Virginia	56		30		13
Mississippi	(a)		(a)		8
Other	17		26		10
Total state	73		56		31
Foreign	—		1		—
Cash paid for income taxes (net of refunds)	$	255	$	330	$	127

(a) The amount of income taxes paid during the year does not meet the 5% disaggregation threshold and is included in 'Other.'

Change in Unrecognized Tax Benefits

The changes in unrecognized tax benefits (exclusive of interest and penalties) for the years ended December 31, 2024, 2023, and 2022 are summarized in the following table:


	December 31
($ in millions)	2024		2023		2022
Unrecognized tax benefits at beginning of the year	$	98	$	90	$	81
Additions based on tax positions related to the current year	13		11		8
Additions based on tax positions related to prior years	4		—		3



Lapse of statute of limitations	(5)		(3)		(2)

Net change in unrecognized tax benefits	12		8		9
Unrecognized tax benefits at end of the year	$	110	$	98	90

Summary of Income Tax Examinations

The following table summarizes the tax years that are either currently under examination or remain open under the applicable statute of limitations and subject to examination by the major tax jurisdictions in which the Company operates:


Jurisdiction	Years
United States - Federal(1)	2016	-	2023


Connecticut	2021	-	2023
Mississippi	2018	-	2023
Virginia	2021	-	2023

(1) Returns for the 2016, 2018, 2019, 2021, and 2022 tax years were filed under the Compliance Assurance Process ("CAP") program and accepted by the IRS with the exception of the research and development tax credit. The 2017 tax year was also filed under the CAP program and was accepted by the IRS with the exception of the manufacturing deduction and the research and development tax credit. The statute of limitations for the 2020 tax year has been extended to October 8, 2025.

Net Deferred Tax Assets

The tax effects of significant temporary differences and carry-forwards that resulted in year-end deferred tax balances, as presented in the consolidated statements of financial position, were as follows:


	December 31
($ in millions)	2024		2023
Deferred Tax Assets

Workers' compensation	$	150	$	157
Operating lease liabilities	67		77
Reserves not currently deductible for tax purposes	71		61
Stock compensation	8		7
Net operating losses, tax credit and other carry-forwards	33		35
Capitalized research and development expenses	315		200
Other	11		10
Gross deferred tax assets	655		547
Less valuation allowance	26		29
Net deferred tax assets	629		518
Deferred Tax Liabilities
Depreciation and amortization	457		447
Contract accounting differences	47		78
Purchased intangibles	212		234
Operating lease assets	62		72
Retirement benefits	216		54
Other	13		—
Gross deferred tax liabilities	1,007		885
Total net deferred tax liabilities	$	(378)	$	(367)