Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Federal and State Income Tax Provision

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

	For the Year Ended December 31,
	2023			2022			2021
Current portion of income tax provision:
Federal	$	(12	)	$	(2	)	$	2
State		(20	)		(18	)		(31	)
Foreign		–			(2	)		(1	)
Total current portion		(32	)		(22	)		(30	)
Deferred portion of income tax provision:
Federal		17			(20	)		(27	)
State		(29	)		(40	)		(13	)
Foreign		–			–			–
Total deferred portion		(12	)		(60	)		(40	)
Total provision for income taxes	$	(44	)	$	(82	)	$	(70	)

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 Year Ended December 31,
	2023			2022			2021
Pre-Tax Net Book Income (“NBI”)	$	5,701		$	5,697		$	4,825
Texas Margin Tax (1)		(49	)		(56	)		(42	)
State income tax provision, net of federal benefit		(2	)		(1	)		(1	)
Federal income tax provision computed by applying the       federal statutory rate to NBI of corporate entities		(16	)		(15	)		(13	)
Change in valuation allowance (2)		22			(8	)		(14	)
Other		1			(2	)		–
Provision for income taxes	$	(44	)	$	(82	)	$	(70	)
Effective income tax rate		(0.8	)%		(1.4	)%		(1.5	)%

(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)	During 2023, management concluded that it is more likely than not that the deferred tax assets attributable to OTA will be fully realizable.  As a result, for the year-end December 31, 2023, we recorded a full release of the valuation allowance against OTA’s deferred tax assets.

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,
	2023		2022
Deferred tax liabilities:
Attributable to investment in OTA (1)	$	436	$	406
Attributable to property, plant and equipment		138		133
Attributable to investments in other entities		4		5
Other		83		60
Total deferred tax liabilities		661		604
Deferred tax assets:
Net operating loss carryovers (2)		46		22
Temporary differences related to Texas Margin Tax		4		4
Total deferred tax assets		50		26
Valuation allowance		–		22
Total deferred tax assets, net of valuation allowance		50		4
Total net deferred tax liabilities	$	611	$	600

(1)	Represents the deferred tax liability balance held by our wholly owned subsidiary, OTA, which we acquired in March 2020.
(2)	The loss amount presented as of December 31, 2023 has an indefinite carryover period.  All losses are subject to limitations on their utilization.