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,
	2016			2015		2014
Current expense (benefit):
Federal	$	8		$	21	$	258
State	—			—		32
Total	8			21		290
Deferred expense (benefit):
Federal	$	(11	)	$	17	$	(130	)
State	(10		)	14		22
Total	(21		)	31		(108		)
Total income tax expense	$	(13	)	$	52	$	182

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,
	2016			2015			2014
Computed statutory income tax expense (benefit) at 35%	$	(231	)	$	55		$	50
Changes in income taxes resulting from:
Premium on debt retirement	—			—			(10		)
State income taxes, net of federal income tax benefit	(6		)	9			36
Non-deductible goodwill impairment	223			—			—
Non-deductible goodwill included in the Lake Charles LNG Transaction	—			—			105
Audit settlements	—			(7		)	—
Other	1			(5		)	1
Income tax expense	$	(13	)	$	52		$	182

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,
	2016			2015
Deferred income tax assets:
Other postretirement benefits	$	4		$	5
Debt amortization	30			57
Other	37			32
Total deferred income tax assets	71			94
Valuation allowance	(2		)	(2		)
Net deferred income tax assets (included within other non-current assets, net)	$	69		$	92

Deferred income tax liabilities:
Property, plant and equipment	$	(770	)	$	(796	)
Investment in unconsolidated affiliates	(6		)	(20		)
Other	(4		)	(1		)
Total deferred income tax liabilities	(780		)	(817		)
Net deferred income tax liability	$	(711	)	$	(725	)

As of December 31, 2016, the Company has $11 million ($6 million, net of federal tax) of unrecognized tax benefits, all of which would impact the Company’s effective income tax rate if recognized.

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 taxable periods prior to 2013. However, the Company and Southern Union are subject to Louisiana audits for taxable years 2013 and 2014. The issue under audit is whether to allocate or apportion the taxable gain from sale of two local distribution companies in 2013