Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The determination of taxable income pursuant to U.S. federal income tax regulations differs from U.S. GAAP. As a result, permanent differences are reclassified among capital accounts in the financial statements to reflect their appropriate tax character.
During the years ended December 31, 2025, 2024 and 2023, the Company reclassified accumulated net realized gains (losses) to additional paid-in capital for book purposes primarily related to net realized gains from portfolio companies which are held in taxable subsidiaries and are not consolidated with the Company for income tax purposes, as follows:
(in millions)
 Year Ended December 31,
2025 2024 2023
Reclassified accumulated net realized gains (losses) $ 0.5  $ (1.3) $ 0.8 
During the years ended December 31, 2025, 2024 and 2023, the Company reclassified amounts from undistributed ordinary income or accumulated realized gains (losses) to additional paid-in capital for book purposes, as follows:
(in thousands) Year Ended December 31,
2025 2024 2023
Undistributed net investment income (distributions in excess of investment income) $ (20,516) $ (25,064) $ (18,396)
Accumulated realized gains (losses) 28,273  23,249  39,317 
Additional paid-in capital $ (7,757) $ 1,815  $ (20,921)
For income tax purposes, distributions paid to stockholders are reported as ordinary income, capital gains, return of capital, or a combination thereof. The tax character of distributions paid are as follows for each of the years ended:
(in millions) Year Ended December 31,
  2025 2024 2023
Ordinary income $ 321.5  $ 286.1  $ 275.5 
Capital gains
 11.1  23.4  — 
As of December 31, 2025, 2024 and 2023, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Consolidated Statements of Assets and Liabilities by temporary book or tax differences primarily arising from the treatment of loan related yield enhancements.
(in thousands) Year Ended December 31,
2025 2024 2023
Accumulated capital gains $ (6,521) $ 11,137  $ (8,190)
Other temporary differences (26,657) (25,107) (18,609)
Undistributed ordinary income 149,894  152,436  133,783 
Unrealized appreciation (depreciation) (15,565) (49,546) 33,029 
Components of distributable earnings $ 101,151  $ 88,920  $ 140,013 
Taxable income and taxable net realized gains (losses) for the year ended December 31, 2025, 2024 and 2023 appears as follows:
(in millions, except per share data)
 Year Ended December 31,
2025 2024 2023
Taxable income
 $ 318.90  $ 305.00  $ 283.00 
Taxable income per share
 $ 1.80  $ 1.89  $ 1.96 
Taxable net realized gains (losses)
 $ (6.5) $ 34.5  $ (8.2)
Taxable net realized gains (losses) per share
 $ (0.04) $ 0.21  $ (0.06)
Weighted average shares outstanding 177.4  161.1  144.1 
The aggregate gross unrealized appreciation and depreciation of the Company's investment over cost for U.S. federal income tax purposes appears as follows:
(in millions)
 Year Ended December 31,
2025 2024 2023
Aggregate gross unrealized appreciation
 $ 107.0  $ 108.4  $ 118.3 
Aggregate gross unrealized depreciation
 109.4  156.5  115.9 
Net unrealized appreciation (depreciation) over cost for U.S. federal income tax purposes
 (2.4) (48.1) 2.4 
Aggregate cost of securities for U.S. federal income tax purposes (in billions) 4.5  3.7  3.2 
Cash paid for income taxes (net of refunds) consisted of the following:
(in thousands) Year Ended December 31,
2025
Federal
Excise Tax $ 6,028 
Income Tax 148
Total Federal $ 6,176 
State
Franchise Tax 125
Income Tax 107
Total State
 $ 232 
Foreign
Value-Added Tax — 
Total Foreign $ — 
Cash paid for income taxes (net of refunds) $ 6,408 
For the year ended December 31, 2025, the Company paid approximately $6.4 million of income tax, including excise tax, and had $6.1 million of accrued, but unpaid tax expense as of December 31, 2025. For the year ended December 31, 2024, the Company paid approximately $5.3 million of income tax, including excise tax, and had $6.7 million of accrued, but unpaid tax expense as of December 31, 2024.
Additionally, the Company has taxable subsidiaries which hold certain portfolio investments in an effort to limit potential legal liability and/or comply with source-income type requirements contained in the RIC tax provisions of the Code. These taxable subsidiaries are consolidated for U.S. GAAP and the portfolio investments held by the taxable subsidiaries are included in the Company’s consolidated financial statements and are recorded at fair value. These taxable subsidiaries are not consolidated with the Company for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities as a result of their ownership of certain portfolio investments. Any income generated by these taxable subsidiaries generally would be subject to tax at normal U.S. federal tax rates based on its taxable income.
In accordance with ASC 740, the Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as a tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties, if any, related to unrecognized tax benefits as a component of provision for income taxes. Based on an analysis of the Company’s tax position, there are no uncertain tax positions that meet the recognition or measurement criteria. The Company is currently not undergoing any tax examinations. The Company does not anticipate any significant increase or decrease in unrecognized tax benefits for the next twelve months. The 2022 – 2024 federal tax years for the Company remain subject to examination by the Internal Revenue Service. The 2020 – 2024 state tax years for the Company remain subject to examination by the state taxing authorities.