INCOME TAXES:

The following table provides a summary of the current and deferred components of income tax expense (benefit) from continuing operations:



	Years Ended December 31,
	2015		2014			2013
	(Restated)		(Restated)
Current expense (benefit):
Federal	$	21	$	258		$	(52	)
State	—		32			(7		)
Total	21		290			(59		)
Deferred expense (benefit):
Federal	$	17	$	(130	)	$	119
State	14		22			38
Total	31		(108		)	157
Total income tax expense	$	52	$	182		$	98

The differences between the Company’s effective income tax rate and the U.S. federal income tax statutory rate were as follows:



	Years Ended December 31,
	2015			2014			2013
	(Restated)			(Restated)
Computed statutory income tax expense (benefit) at 35%	$	55		$	50		$	(165	)
Changes in income taxes resulting from:
Premium on debt retirement	—			(10		)	—
State income taxes, net of federal income tax benefit	9			36			21
Non-deductible goodwill impairment	—			—			241
Non-deductible goodwill included in the Lake Charles LNG Transaction	—			105			—
Audit settlements	(7		)	—			—
Other	(5		)	1			1
Income tax expense	$	52		$	182		$	98

Deferred income taxes result from temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The table below summarizes the principal components of the Company’s deferred tax assets (liabilities) as follows:



	December 31,
	2015			2014
	(Restated)			(Restated)
Deferred income tax assets:
Other postretirement benefits	$	5		$	5
Debt amortization	57			41
Other	32			27
Total deferred income tax assets	94			73
Valuation allowance	(2		)	(2		)
Net deferred income tax assets (included within other non-current assets, net)	$	92		$	71

Deferred income tax liabilities:
Property, plant and equipment	$	(796	)	$	(794	)
Investment in unconsolidated affiliates	(20		)	(810		)
Other	(1		)	(6		)
Total deferred income tax liabilities	(817		)	(1,610		)
Net deferred income tax liability	$	(725	)	$	(1,539	)

As of December 31, 2015, the Company has $15 million ($10 million, net of federal tax) of unrecognized tax benefits, $9 million of which would impact the Company’s effective income tax rate if recognized. The Company expects that its unrecognized tax benefits will be reduced by $2 million within the next 12 months.

The Company’s policy is to classify and accrue interest expense and penalties on income tax underpayments (overpayments) as a component of income tax expense in its consolidated statement of operations, which is consistent with the recognition of these items in prior reporting periods.

The Company and Southern Union are no longer subject to U.S. federal, state or local examinations for the tax periods prior to 2012. The Company was under examination by the Internal Revenue Service (IRS) for the tax years 2004 through 2009. In July of 2015, the Company and the IRS settled all issues related to the IRS examination of the 2004 through 2009 tax years. As a result of the settlement, the Company recognized a net tax benefit of $7 million.