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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Federal and State Income Tax Provision

The following table presents the components of our consolidated benefit from (provision for) income taxes for the years indicated:

		For the Year Ended December 31,
		2021				2020				2019
Deferred tax benefit (provision) attributable to OTA		$	(27.6	)		$	155.3			$	–
Texas Margin Tax			(41.9	)			(32.1	)			(44.2	)
Other			(0.5	)			1.1				(1.4	)
Benefit from (provision for) income taxes		$	(70.0	)		$	124.3			$	(45.6	)

Our federal, state and foreign income tax benefit (provision) is summarized below:

		For the Year Ended December 31,
		2021				2020				2019
Current portion of income tax benefit (provision):
Federal		$	2.0			$	2.9			$	1.3
State			(31.1	)			(25.6	)			(25.7	)
Foreign			(1.1	)			(0.6	)			(1.2	)
Total current portion			(30.2	)			(23.3	)			(25.6	)
Deferred portion of income tax benefit (provision):
Federal			(26.9	)			142.0				(1.6	)
State			(12.9	)			5.6				(18.5	)
Foreign			–				–				0.1
Total deferred portion			(39.8	)			147.6				(20.0	)
Total benefit from (provision for) income taxes		$	(70.0	)		$	124.3			$	(45.6	)

Reconciliation of Provision for Income Taxes

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 Year Ended December 31,
		2021				2020				2019
Pre-Tax Net Book Income (“NBI”)		$	4,825.3			$	3,761.4			$	4,732.7
Texas Margin Tax (1)			(41.9	)			(32.1	)			(44.2	)
State income tax benefit (provision), net of federal benefit (2)			(1.3	)			9.2				(0.5	)
Federal income tax benefit (provision) computed by applying the federal statutory rate to NBI of corporate entities			(13.1	)			80.1				(0.9	)
Federal benefit attributable to settlement of Liquidity Option Agreement (2)			–				67.8				–
Valuation allowance (3)			(14.2	)			–				–
Other			0.5				(0.7	)			–
Benefit from (provision for) income taxes		$	(70.0	)		$	124.3			$	(45.6	)
Effective income tax rate			(1.5	)%			3.3	%			(1.0	)%

(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.

Components of Deferred Tax Assets and Liabilities

The following table presents the significant components of deferred tax assets and deferred tax liabilities at the dates indicated:

		December 31,
		2021				2020
Deferred tax liabilities:
Attributable to investment in OTA		$	384.2			$	356.6
Attributable to property, plant and equipment			118.0				106.4
Attributable to investments in other entities			5.2				4.1
Other			13.5				–
Total deferred tax liabilities			520.9				467.1
Deferred tax assets:
Net operating loss carryovers (1)			14.3				0.1
Temporary differences related to Texas Margin Tax			2.8				2.3
Total deferred tax assets			17.1				2.4
Valuation allowance			14.2				–
Total deferred tax assets, net of valuation allowance			2.9				2.4
Total net deferred tax liabilities		$	518.0			$	464.7

(1) Of the loss amount presented as of December 31, 2021, $0.1 million expires in various years between 2022 and 2037.  The remaining $14.2 million has an indefinite carryover period.  All losses are subject to limitations on their utilization.

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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