Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.24.2.u1
Income Taxes
 6 Months Ended
Jun. 30, 2024
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 year ended December 31, 2023, the Company reclassified $0.8 million from 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.
Taxable income and taxable net realized gains (losses) for the three and six months ended June 30, 2024 and 2023 appears as follows:
(in millions, except share data)
Three Months Ended June 30,
Six Months Ended June 30,
Description 2024 2023 2024 2023
Taxable income $ 75.9  $ 60.9  $ 154.2  $ 125.0 
Taxable income per share $ 0.47  $ 0.43  $ 0.97  $ 0.90 
Taxable net realized gains (losses) $ 3.5  $ 20.2  $ 9.4  $ 27.4 
Taxable net realized gains (losses) per share $ 0.02  $ 0.14  $ 0.06  $ 0.20 
Weighted average shares outstanding 160.7  141.4  159.1  138.3 
The aggregate gross unrealized appreciation of the Company’s investments over cost for U.S. federal income tax purposes appears as follows:
(in millions)
June 30, 2024 December 31, 2023
Aggregate Gross Unrealized Appreciation 119.0  118.3 
Aggregate Gross Unrealized Depreciation 158.6  115.9 
Net Unrealized Appreciation (Depreciation) over cost for U.S. federal income tax purposes (39.6) 2.4 
Aggregate cost of securities for U.S. federal income tax purposes (in billions) 3.6  3.2 
For the three and six months ended June 30, 2024, the Company paid approximately $0.3 million and $5.2 million of income tax, including excise tax, and had $3.4 million of accrued, but unpaid tax expense as of June 30, 2024. For the three and six months ended June 30, 2023, the Company paid approximately $0.4 million and $5.2 million of income tax, including excise tax, and had $3.4 million of accrued, but unpaid tax expense as of June 30, 2023.
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 met 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 2020 - 2023 federal tax years for the Company remain subject to examination by the Internal Revenue Service. The 2019 – 2023 state tax years for the Company remain subject to examination by the state taxing authorities.