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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2023

Income Taxes [Abstract]

Federal and State Income Tax Provision

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,
		2023				2022				2023				2022
Current portion of income tax provision:
Federal		$	(1	)		$	(1	)		$	(11	)		$	(1	)
State			(8	)			(9	)			(29	)			(26	)
Foreign			–				–				–				(3	)
Total current portion			(9	)			(10	)			(40	)			(30	)
Deferred portion of income tax provision:
Federal			(4	)			(6	)			–				(19	)
State			(9	)			(2	)			(5	)			(5	)
Total deferred portion			(13	)			(8	)			(5	)			(24	)
Total provision for income taxes		$	(22	)		$	(18	)		$	(45	)		$	(54	)

Reconciliation of Provision for Income Taxes

A reconciliation of the 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,
		2023				2022				2023				2022
Pre-Tax Net Book Income (“NBI”)		$	1,372			$	1,410			$	4,100			$	4,217
Texas Margin Tax (1)			(17	)			(10	)			(33	)			(29	)
State income tax provision, net of federal benefit			–				–				(1	)			(1	)
Federal income tax provision computed by applying      the federal statutory rate to NBI of corporate entities			(5	)			(4	)			(11	)			(11	)
Other			–				(4	)			–				(13	)
Provision for income taxes		$	(22	)		$	(18	)		$	(45	)		$	(54	)
Effective income tax rate			(1.6	)%			(1.3	)%			(1.1	)%			(1.3	)%

(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.

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:

		September 30,				December 31,
		2023				2022
Deferred tax liabilities:
Attributable to investment in OTA		$	432			$	406
Attributable to property, plant and equipment			137				133
Attributable to investments in other entities			5				5
Other			59				60
Total deferred tax liabilities			633				604
Deferred tax assets:
Net operating loss carryovers (1)			46				22
Temporary differences related to Texas Margin Tax			4				4
Total deferred tax assets			50				26
Valuation allowance			22				22
Total deferred tax assets, net of valuation allowance			28				4
Total net deferred tax liabilities		$	605			$	600

(1) The loss amount presented as of September 30, 2023 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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