Tax Credit Carryforward, Valuation Allowance

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

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | December 31 |
| ($ in millions) |  | 2021 |  | 2020 |
| Deferred Tax Assets |  |  |  |  |
| Retirement benefits |  | $ | 170  |  |  | $ | 389  |  |
| Workers' compensation |  | 174  |  |  | 167  |  |
| Operating lease liabilities |  | 63  |  |  | 52  |  |
| Reserves not currently deductible for tax purposes |  | 75  |  |  | 90  |  |
| Stock compensation |  | 7  |  |  | 6  |  |
| Net operating losses, tax credit and other carry-forwards |  | 55  |  |  | 26  |  |
| Other |  | 6  |  |  | 9  |  |
| Gross deferred tax assets |  | 550  |  |  | 739  |  |
| Less valuation allowance |  | 22  |  |  | 22  |  |
| Net deferred tax assets |  | 528  |  |  | 717  |  |
| Deferred Tax Liabilities |  |  |  |  |
| Depreciation and amortization |  | 423  |  |  | 364  |  |
| Contract accounting differences |  | 81  |  |  | 77  |  |
| Purchased intangibles |  | 275  |  |  | 92  |  |
| Operating lease assets |  | 62  |  |  | 51  |  |
|  |  |  |  |  |
| Gross deferred tax liabilities |  | 841  |  |  | 584  |  |
| Total net deferred tax assets (liabilities) |  | $ | (313) |  |  | $ | 133  |  |

  
As of December 31, 2021, the Company had state income tax credit carry-forwards of approximately $20 million, which expire from 2022 through 2025. A deferred tax asset of approximately $16 million (net of federal benefit) has been established related to these state income tax credit carry-forwards, with a valuation allowance of $10 million against such deferred tax asset as of December 31, 2021. The Company also had a federal net operating loss carry-forward of $27 million from the Alion acquisition, of which $19 million expires in 2034, $5 million expires in 2035, and $3 million expires in 2036. State net operating loss carry-forwards are individually and cumulatively immaterial to the Company’s deferred tax balances.  
13. DEBT  
Long-term debt consisted of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | December 31 |
| ($ in millions) |  | 2021 |  | 2020 |
| Senior notes due December 1, 2027, 3.483% |  | $ | 600  |  |  | $ | 600  |  |
| Senior notes due May 1, 2025, 3.844% |  | 500  |  |  | 500  |  |
| Senior notes due May 1, 2030, 4.200% |  | 500  |  |  | 500  |  |
| Senior notes due August 16, 2023, 0.670% |  | 400  |  |  | —  |  |
| Senior notes due August 16, 2028, 2.043% |  | 600  |  |  | —  |  |
| Term loan due August 19, 2024 |  | 625  |  |  | —  |  |
| Mississippi economic development revenue bonds due May 1, 2024, 7.81% |  | 84  |  |  | 84  |  |
| Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55% |  | 21  |  |  | 21  |  |
|  |  |  |  |  |
| Less unamortized debt issuance costs |  | (32) |  |  | (19) |  |
| Total long-term debt |  | $ | 3,298  |  |  | $ | 1,686  |  |
|  |  |  |  |  |
|  |  |  |  |  |

  
Credit Facility - In August 2021, the Company amended and restated its existing $1.25 billion credit facility, increasing the capacity thereunder to $1.5 billion and extending the maturity date to five years from signing (the "Revolving Credit Facility"). The Revolving Credit Facility includes a letter of credit subfacility of $300 million. The 88
