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Income Taxes (Tables) | 9 Months Ended
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Sep. 30, 2024
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, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Current portion of income tax provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (1 | ) |  | $ | (1 | ) |  | $ | (1 | ) |  | $ | (11 | )
State |  |  | (9 | ) |  |  | (8 | ) |  |  | (31 | ) |  |  | (29 | )
Total current portion |  |  | (10 | ) |  |  | (9 | ) |  |  | (32 | ) |  |  | (40 | )
Deferred portion of income tax provision: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (4 | ) |  |  | (4 | ) |  |  | (12 | ) |  |  | – |
State |  |  | (4 | ) |  |  | (9 | ) |  |  | (10 | ) |  |  | (5 | )
Foreign |  |  | (1 | ) |  |  | – |  |  |  | (1 | ) |  |  | – |
Total deferred portion |  |  | (9 | ) |  |  | (13 | ) |  |  | (23 | ) |  |  | (5 | )
Total provision for income taxes |  | $ | (19 | ) |  | $ | (22 | ) |  | $ | (55 | ) |  | $ | (45 | )
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, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Pre-Tax Net Book Income (“NBI”) |  | $ | 1,451 |  |  | $ | 1,372 |  |  | $ | 4,392 |  |  | $ | 4,100 |
Texas Margin Tax (1) |  |  | (13 | ) |  |  | (17 | ) |  |  | (40 | ) |  |  | (33 | )
State income tax provision, net of federal benefit |  |  | (1 | ) |  |  | – |  |  |  | (1 | ) |  |  | (1 | )
Federal income tax provision computed by applying the federal statutory rate to NBI of corporate entities |  |  | (4 | ) |  |  | (5 | ) |  |  | (12 | ) |  |  | (11 | )
Other |  |  | (1 | ) |  |  | – |  |  |  | (2 | ) |  |  | – |
Provision for income taxes |  | $ | (19 | ) |  | $ | (22 | ) |  | $ | (55 | ) |  | $ | (45 | )
Effective income tax rate |  |  | (1.3 | )% |  |  | (1.6 | )% |  |  | (1.3 | )% |  |  | (1.1 | )%
(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.
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, |
|  | 2024 |  |  | 2023 |
Deferred tax liabilities: |  |  |  |  |  |
Attributable to investment in OTA (1) |  | $ | 456 |  |  | $ | 436 |
Attributable to property, plant and equipment |  |  | 148 |  |  |  | 138 |
Attributable to investments in other entities |  |  | 5 |  |  |  | 4 |
Other |  |  | 83 |  |  |  | 83 |
Total deferred tax liabilities |  |  | 692 |  |  |  | 661 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryovers (2) |  |  | 55 |  |  |  | 46 |
Temporary differences related to Texas Margin Tax |  |  | 3 |  |  |  | 4 |
Total deferred tax assets |  |  | 58 |  |  |  | 50 |
Total net deferred tax liabilities |  | $ | 634 |  |  | $ | 611 |
(1) | Represents the deferred tax liability balance held by our wholly owned subsidiary, OTA Holdings, Inc. ("OTA"), which we acquired in March 2020.
(2) | The loss amount presented as of September 30, 2024 has an indefinite carryover period. All losses are subject to limitations on their utilization.

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