come Taxes

The components of “Income from Continuing Operations Before Income Taxes” are as follows (in millions):



	Year Ended December 31,
	2013		2012		2011
U.S.	$	3,147	$	2,076	$	1,033
Foreign	338		33		79
Total Income from Continuing Operations Before Income Taxes.	$	3,485	$	2,109	$	1,112

Components of the income tax provision applicable to continuing operations for federal, foreign and state taxes are as follows (in millions):



	Year Ended December 31,
	2013			2012			2011
Taxes current expense:
Federal	$	100		$	31		$	13
State	26			10			16
Foreign	5			9			3
Total	131			50			32
Taxes deferred expense:
Federal	5			—			(7		)
State	1			—			(1		)
Foreign	27			(11		)	21
Total	33			(11		)	13
Total tax provision	$	164		$	39		$	45
Effective tax rate	4.7		%	1.8		%	4.0		%

The difference between the statutory federal income tax rate and our effective income tax rate is summarized as follows:



	Year Ended December 31,
	2013		2012		2011
Federal income tax rate	35.0	%	35.0	%	35.0	%
Increase (decrease) as a result of:
Partnership earnings not subject to tax	(35.0	)%	(35.0	)%	(35.0	)%
Corporate subsidiary earnings subject to tax	0.2	%	0.3	%	(0.8	)%
Income tax expense attributable to corporate equity earnings	0.6	%	0.9	%	1.5	%
Income tax expense attributable to foreign corporate earnings	0.8	%	0.1	%	2.1	%
Tax effect of Express pipeline system sale	2.4	%	—	%	—	%
State taxes	0.7	%	0.5	%	1.2	%
Effective tax rate	4.7	%	1.8	%	4.0	%

Our deferred tax assets and liabilities as of December 31, 2013 and 2012 resulted from the following (in millions):



	December 31,
	2013			2012
Deferred tax assets:
Book accruals	$	1		$	2
Net Operating Loss/Tax credits	42			42
Other	21			18
Total deferred tax assets	64			62
Deferred tax liabilities:
Property, plant and equipment	325			303
Other	11			8
Total deferred tax liabilities	336			311
Net deferred tax liabilities	$	272		$	249

Current deferred tax (asset) liability	(13		)	—
Non-current deferred tax liability	285			249
Net deferred tax liabilities	$	272		$	249

We account for uncertainty in income taxes in accordance with the “Income Taxes” Topic of the Codification. Pursuant to these provisions, we must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based not only on the technical merits of the tax position based on tax law, but also on the past administrative practices and precedents of the taxing authority. The tax benefits recognized in our financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.

A reconciliation of our beginning and ending gross unrecognized tax benefits (excluding interest and penalties) for each of the years ended December 31, 2013 and 2012 is as follows (in millions):



	Year Ended December 31,
	2013			2012
Balance at beginning of period	$	52		$	41
Additions based on current year tax positions	7			17
Additions based on prior year tax positions	—			—
Reductions based on settlements with taxing authority	(2		)	—
Reductions due to lapse in statute of limitations	—			(6		)
Balance at end of period	$	57		$	52

Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. During each of the years ended December 31, 2013, 2012 and 2011, we recognized interest expense of approximately $3 million, $2 million and $1 million, respectively.

As of December 31, 2013, (i) we had $7 million of accrued interest and no accrued penalties; (ii) we believe it is reasonably possible that our $57 million liability for unrecognized tax benefits will increase by approximately $8 million during the next twelve months; and (iii) we believe the full amount of $57 million of unrecognized tax benefits, if recognized, would favorably affect our effective income tax rate in future periods. As of December 31, 2012, we had $5 million of accrued interest and no accrued penalties. In addition, we have U.S. and state tax years open to examination for the periods 2007 through 2013.