Less: Deferred tax liabilities included in liabilities related to assets held for sale

[Table of Contents](#ifb4765332bfb410ba6ce53d196f7d99d_7)Presented in the table below are the components of the net deferred tax liability as of December 31:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|   | 2021 |  | 2020 |
| Deferred tax assets: |   |  |   |
| Advances and contributions | $ | 439  |  |  | $ | 424  |  |
| Tax losses and credits | 10  |  |  | 65  |  |
| Regulatory income tax assets | 301  |  |  | 329  |  |
| Pension and other postretirement benefits | 50  |  |  | 100  |  |
| Other | 144  |  |  | 165  |  |
| Total deferred tax assets | 944  |  |  | 1,083  |  |
| Valuation allowance | (10) |  |  | (19) |  |
| Total deferred tax assets, net of allowance | $ | 934  |  |  | $ | 1,064  |  |
| Deferred tax liabilities: |   |  |   |
| Property, plant and equipment | $ | 3,087  |  |  | $ | 2,913  |  |
| Deferred pension and other postretirement benefits | 69  |  |  | 97  |  |
| Other | 180  |  |  | 216  |  |
| Total deferred tax liabilities | 3,336  |  |  | 3,226  |  |
| Less: Deferred tax liabilities included in liabilities related to assets held for sale (a) | —  |  |  | 69  |  |
| Total deferred tax liabilities, net of deferred tax assets | $ | (2,402) |  |  | $ | (2,093) |  |

(a)These deferred tax liabilities are related to the sale of the Company’s New York subsidiary, which was completed on January 1, 2022, and are included in liabilities related to assets held for sale on the Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020. See Note 6—Acquisitions and Divestitures for additional information.The Company recognized no federal net operating loss (“NOL”) carryforwards as of December 31, 2021 and $366 million as of December 31, 2020. The Company fully utilized its federal NOL carryforwards in 2021 due to the sale of HOS, and therefore, no valuation allowance is required.As of December 31, 2021 and 2020, the Company had state NOLs of $123 million and $357 million, respectively, a portion of which are offset by a valuation allowance as the Company does not believe these NOLs are more likely than not to be realized. The state NOL carryforwards expire in 2021 through 2041.The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local or non-U.S. income tax examinations by tax authorities for years on or before 2012. The Company has state income tax examinations in progress and does not expect material adjustments to result.Presented in the table below are the changes in gross liability, excluding interest and penalties, for unrecognized tax benefits:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | Amount |
| Balance as of January 1, 2020 | $ | 110  |  |
| Increases in current period tax positions | 18  |  |
| Decreases in prior period measurement of tax positions | (6) |  |
| Balance as of December 31, 2020 | $ | 122  |  |
| Increases in current period tax positions | 23  |  |
| Decreases in prior period measurement of tax positions | (5) |  |
| Balance as of December 31, 2021 | $ | 140  |  |

The Company’s tax positions relate primarily to the deductions claimed for repair and maintenance costs on its utility plant. The Company does not anticipate material changes to its unrecognized tax benefits within the next year. As discussed above, the Company utilized its remaining federal NOLs in 2021, and therefore this federal tax attribute will not be available to reduce the federal liabilities for uncertain tax positions or interest accrued as presented on the Company’s Consolidated Financial Statements.117
