Raytheon 2013 Annual Report Download - page 122

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
112
VEBA Trust Asset Information Percent of Plan Assets at Dec 31:
Asset category 2013 2012
Fixed-income securities 34% 35%
U.S. equities 41% 41%
International equities 21% 20%
Cash and cash equivalents 4% 4%
Total 100% 100%
Note 14: Income Taxes
The provision for federal and foreign income taxes consisted of the following:
(In millions) 2013 2012 2011
Current income tax expense
Federal $ 723 $ 753 $ 360
Foreign 17 32 46
Deferred income tax expense (benefit)
Federal 36 74 387
Foreign 32 19 (11)
Total $ 808 $ 878 $ 782
The expense for income taxes differs from the U.S. statutory rate due to the following:
2013 2012 2011
Statutory tax rate 35.0% 35.0% 35.0%
Research and development (R&D) tax credit (1.8) —(1.0)
Tax settlements and refund claims (0.8) (0.8)(2.6)
Domestic manufacturing deduction benefit (2.1) (1.9)(1.8)
Other, net (1.0) (0.7)(0.2)
Effective tax rate 29.3% 31.6% 29.4%
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. During 2013, the IRS completed its examination
of our 2009 and 2010 tax years and we received final approval from the U.S. Congressional Joint Committee on Taxation
(JCT) of a refund claim related to the 2011 tax year which completed IRS examinations through 2011. As a result of closing
the federal audit examinations, our unrecognized tax benefits decreased by approximately $70 million, inclusive of interest,
the majority of which did not impact our income from continuing operations. During 2012, we received final approval from
the IRS and the U.S. Congressional Joint Committee on Taxation of an IRS Appeals Division settlement for the 2006–2008
IRS examination cycle (2012 Tax Settlement). As a result, our unrecognized tax benefits decreased by approximately $24
million, inclusive of interest, all of which increased our income from continuing operations. In 2011, we received final approval
from the IRS and the U.S. Congressional Joint Committee on Taxation of a Minimum Tax Refund claim for the 2006–2008
IRS examination cycle. As a result, our unrecognized tax benefits decreased by approximately $60 million, inclusive of
interest, all of which increased our income from continuing operations. We are participating in the IRS Compliance Assurance
Process (CAP) program for the 2012 and 2013 tax years. We are also under audit by multiple state and foreign tax authorities.
(In millions) 2013 2012 2011
Domestic income from continuing operations before taxes $ 2,612 $ 2,630 $ 2,574
Foreign income from continuing operations before taxes 145 149 86