XML 34 R22.htm IDEA: XBRL DOCUMENT
v3.21.2

Income Taxes | 9 Months Ended
--- | ---
Sep. 30, 2021
Income Taxes [Abstract] |
Income Taxes | Note 15. Income Taxes The following table presents the components of our consolidated benefit from (provision for) income taxes for the periods indicated (dollars in millions):
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Deferred tax benefit (expense) attributable to OTA Holdings, Inc. (“OTA”) |  | $ | (6.8 | ) |  | $ | 21.3 |  |  | $ | (20.1 | ) |  | $ | 158.0 |
Revised Texas Franchise Tax (“Texas Margin Tax”) |  |  | (9.6 | ) |  |  | (7.2 | ) |  |  | (37.0 | ) |  |  | (21.9 | )
Other |  |  | 0.3 |  |  |  | 5.0 |  |  |  | (0.2 | ) |  |  | 2.5 |
Benefit from (provision for) income taxes |  | $ | (16.1 | ) |  | $ | 19.1 |  |  | $ | (57.3 | ) |  | $ | 138.6 |
Our federal, state and foreign income tax benefit (provision) is summarized below:
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Current portion of income tax benefit (provision): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1.0 |  |  | $ | 5.3 |  |  | $ | 1.6 |  |  | $ | 3.0 |
State |  |  | (8.2 | ) |  |  | (4.7 | ) |  |  | (24.8 | ) |  |  | (13.4 | )
Foreign |  |  | 0.1 |  |  |  | 0.2 |  |  |  | (1.0 | ) |  |  | – |
Total current portion |  |  | (7.1 | ) |  |  | 0.8 |  |  |  | (24.2 | ) |  |  | (10.4 | )
Deferred portion of income tax benefit (provision): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (7.1 | ) |  |  | 18.7 |  |  |  | (19.3 | ) |  |  | 145.1 |
State |  |  | (1.9 | ) |  |  | (0.4 | ) |  |  | (13.8 | ) |  |  | 3.9 |
Foreign |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Total deferred portion |  |  | (9.0 | ) |  |  | 18.3 |  |  |  | (33.1 | ) |  |  | 149.0 |
Total benefit from (provision for) income taxes |  | $ | (16.1 | ) |  | $ | 19.1 |  |  | $ | (57.3 | ) |  | $ | 138.6 |
A reconciliation of the benefit from (provision for) income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows:
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Pre-Tax Net Book Income (“NBI”) |  | $ | 1,198.2 |  |  | $ | 1,064.9 |  |  | $ | 3,748.0 |  |  | $ | 3,381.2 |
Texas Margin Tax (1) |  |  | (9.6 | ) |  |  | (7.2 | ) |  |  | (37.0 | ) |  |  | (21.9 | )
State income tax benefit (provision), net of federal benefit (2) |  |  | (0.1 | ) |  |  | 1.6 |  |  |  | (1.0 | ) |  |  | 9.7 |
Federal income tax benefit (provision) computed by applying the federal statutory rate to NBI of corporate entities |  |  | (3.3 | ) |  |  | 25.1 |  |  |  | (9.8 | ) |  |  | 83.4 |
Federal benefit attributable to settlement of Liquidity Option Agreement (2) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 67.8 |
Valuation allowance (3) |  |  | (3.1 | ) |  |  | – |  |  |  | (9.3 | ) |  |  | – |
Other |  |  | – |  |  |  | (0.4 | ) |  |  | (0.2 | ) |  |  | (0.4 | )
Benefit from (provision for) income taxes |  | $ | (16.1 | ) |  | $ | 19.1 |  |  | $ | (57.3 | ) |  | $ | 138.6 |
Effective income tax rate |  |  | (1.3 | )% |  |  | 1.8 | % |  |  | (1.5 | )% |  |  | 4.1 | %
(1) | Although the Texas Margin Tax is not considered a state income tax, it has the characteristics of an income tax since it is determined by applying a tax rate to a base that considers our Texas-sourced revenues and expenses.
(2) | The total benefit recognized in income tax expense on March 5, 2020 from settlement of the Liquidity Option was $72.2 million, which is comprised of $4.4 million of state income tax benefit and $67.8 million of federal income tax benefit.
(3) | Management believes that it is more likely than not that the net deferred tax assets attributable to OTA will not be fully realizable; therefore, we have provided for a valuation allowance.
The following table presents the significant components of deferred tax assets and deferred tax liabilities at the dates indicated:
|  | September 30, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax liabilities: |  |  |  |  |  |
Attributable to investment in OTA |  | $ | 376.7 |  |  | $ | 356.6 |
Attributable to property, plant and equipment |  |  | 119.8 |  |  |  | 106.4 |
Attributable to investments in other entities |  |  | 4.4 |  |  |  | 4.1 |
Other |  |  | 13.5 |  |  |  | – |
Total deferred tax liabilities |  |  | 514.4 |  |  |  | 467.1 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryovers (1) |  |  | 9.4 |  |  |  | 0.1 |
Temporary differences related to Texas Margin Tax |  |  | 3.0 |  |  |  | 2.3 |
Total deferred tax assets |  |  | 12.4 |  |  |  | 2.4 |
Valuation allowance |  |  | 9.3 |  |  |  | – |
Total deferred tax assets, net of valuation allowance |  |  | 3.1 |  |  |  | 2.4 |
Total net deferred tax liabilities |  | $ | 511.3 |  |  | $ | 464.7 |
(1) | Of the loss amount presented for September 30, 2021, $0.1 million expires in various years between 2021 and 2037. The remaining $9.3 million has an indefinite carryover period. All losses are subject to limitations on their utilization.
OTA Deferred Tax Liability On March 5, 2020, the Partnership settled its obligations under a put option agreement (the “Liquidity Option Agreement” or “Liquidity Option”) with OTA and Marquard & Bahls AG, and became the owner of OTA and indirectly assumed its deferred tax liability, which reflects OTA’s outside basis difference in the limited partner interests it received from the Partnership in October 2014. Upon settlement of the Liquidity Option, the Liquidity Option liability recorded by the Partnership was effectively replaced by the deferred tax liability of OTA calculated in accordance with ASC 740, Income Taxes. At March 5, 2020, the Liquidity Option liability amount was $511.9 million. Since the book value of the Liquidity Option liability exceeded OTA’s estimated deferred tax liability of $439.7 million on that date, we recognized a non-cash benefit in earnings of $72.2 million, which is reflected in the “Benefit from (provision for) income taxes” line on our Unaudited Condensed Statement of Consolidated Operations for the nine months ended September 30, 2020. OTA recognized an additional net, non-cash deferred income tax benefit of $85.8 million at September 30, 2020 primarily due to a decrease in the outside basis difference of its investment in the Partnership attributable to a decline in the market price of the Partnership’s common units subsequent to March 5, 2020 through September 30, 2020. In total, our earnings for the nine months ended September 30, 2020 reflect $158.0 million of net deferred income tax benefit attributable to OTA.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration