Income Taxes (Tables)

3 Months Ended

Mar. 31, 2023

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

	For the Three Months Ended March 31,
	2023			2022
Current portion of income tax benefit (provision):
Federal	$	4		$	–
State		(11	)		(10	)
Total current portion		(7	)		(10	)
Deferred portion of income tax benefit (provision):
Federal		(7	)		(7	)
State		4			(2	)
Total deferred portion		(3	)		(9	)
Total provision for income taxes	$	(10	)	$	(19	)

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 March 31,
	2023			2022
Pre-Tax Net Book Income (“NBI”)	$	1,432		$	1,350

Texas Margin Tax (1)		(6	)		(12	)
State income tax provision, net of federal benefit		(1	)		–
Federal income tax provision computed by applying the federal statutory rate to NBI of corporate entities		(3	)		(3	)
Other		–			(4	)
Provision for income taxes	$	(10	)	$	(19	)

Effective income tax rate		(0.7	)%		(1.4	)%

(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:

	March 31,		December 31,
	2023		2022
Deferred tax liabilities:
Attributable to investment in OTA	$	415	$	406
Attributable to property, plant and equipment		127		133
Attributable to investments in other entities		5		5
Other		60		60
Total deferred tax liabilities		607		604
Deferred tax assets:
Net operating loss carryovers (1)		22		22
Temporary differences related to Texas Margin Tax		4		4
Total deferred tax assets		26		26
Valuation allowance		22		22
Total deferred tax assets, net of valuation allowance		4		4
Total net deferred tax liabilities	$	603	$	600

(1)	The loss amount presented as of March 31, 2023 has an indefinite carryover period. All losses are subject to limitations on their utilization.