Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Components of Income Tax Expense (Benefit)

Income tax expense (benefit) consists of the following for the years ended December 31 (in millions):



	2014			2013			2012

Current – Federal	$	—		$	(1	)	$	(12	)
Deferred – Federal	131			96			151
Investment tax credits	(1		)	(1		)	(1		)
Total income tax expense	$	130		$	94		$	138

Effective Income Tax Rate Reconciliation

A reconciliation of the federal statutory income rate to the effective income tax rate applicable to income before income tax expense is as follows for the years ended December 31:



	2014		2013		2012

Federal statutory income tax rate	35	%	35	%	35	%
Non-deductible BHE Merger related expenses	—		3		—
Effects of ratemaking	1		1		1
Other	—		—		(1	)
Effective income tax rate	36	%	39	%	35	%

Components of Net Deferred Income Tax Liability

The net deferred income tax liability consists of the following as of December 31 (in millions):



	2014			2013
Deferred income tax assets:
Federal net operating loss and credit carryforwards	$	158		$	265
Capital and financial leases	178			177
Employee benefits	22			11
Regulatory liabilities	37			4
Other	57			85
Total deferred income tax assets	452			542
Valuation allowance	(2		)	(2		)
Total deferred income tax assets, net	450			540

Deferred income tax liabilities:
Property related items	(1,175		)	(1,145		)
Regulatory assets	(341		)	(314		)
Capital and financial leases	(174		)	(189		)
Other	(29		)	(38		)
Total deferred income tax liabilities	(1,719		)	(1,686		)
Net deferred income tax liability	$	(1,269	)	$	(1,146	)

Reflected as:
Deferred income taxes - current asset	$	145		$	152
Deferred income taxes - long-term liability	(1,414		)	(1,298		)
Net deferred income tax liability	$	(1,269	)	$	(1,146	)

Summary of Operating Loss Carryforwards

The following table provides the Company's federal net operating loss and tax credit carryforwards and expiration dates as of December 31, 2014 (in millions):



Net operating loss carryforwards	$	420
Deferred income taxes on federal net operating loss carryforwards	$	147
Expiration dates	2030-2034

Other tax credits	$	11
Expiration dates	2015-2033

Net Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending balances of the Company's net unrecognized tax benefits is as follows for the years ended December 31 (in millions):



	2014		2013

Beginning balance	$	3	$	4
Additions for tax positions of prior years	—		—
Reductions for tax positions of prior years	—		(1		)
Ending balance	$	3	$	3