Income Taxes (Tables)

6 Months Ended

Jun. 30, 2023

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

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Current portion of income tax benefit (provision):
Federal	$	(14	)	$	–		$	(10	)	$	–
State		(10	)		(7	)		(21	)		(17	)
Foreign		–			(3	)		–			(3	)
Total current portion		(24	)		(10	)		(31	)		(20	)
Deferred portion of income tax benefit (provision):
Federal		11			(6	)		4			(13	)
State		–			(1	)		4			(3	)
Total deferred portion		11			(7	)		8			(16	)
Total provision for income taxes	$	(13	)	$	(17	)	$	(23	)	$	(36	)

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 June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Pre-Tax Net Book Income (“NBI”)	$	1,296		$	1,457		$	2,728		$	2,807

Texas Margin Tax (1)		(10	)		(7	)		(16	)		(19	)
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		(3	)		(4	)		(6	)		(7	)
Other		–			(5	)		–			(9	)
Provision for income taxes	$	(13	)	$	(17	)	$	(23	)	$	(36	)

Effective income tax rate		(1.0	)%		(1.2	)%		(0.8	)%		(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:

	June 30,		December 31,
	2023		2022
Deferred tax liabilities:
Attributable to investment in OTA	$	423	$	406
Attributable to property, plant and equipment		127		133
Attributable to investments in other entities		5		5
Other		60		60
Total deferred tax liabilities		615		604
Deferred tax assets:
Net operating loss carryovers (1)		42		22
Temporary differences related to Texas Margin Tax		4		4
Total deferred tax assets		46		26
Valuation allowance		22		22
Total deferred tax assets, net of valuation allowance		24		4
Total net deferred tax liabilities	$	591	$	600

(1)	The loss amount presented as of June 30, 2023 has an indefinite carryover period. All losses are subject to limitations on their utilization.