Annual report pursuant to Section 13 and 15(d)

DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Tables)

v3.22.4
DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Distribution To Shareholder The tax character of distributions paid for the years ended December 31, 2022, 2021 and 2020 was as follows:
Year Ended December 31,
2022 2021 2020
(dollars in thousands)
Ordinary income (1) $ 195,238  $ 129,625  $ 135,128 
Qualified dividends 22,991  47,202  12,398 
Distributions on tax basis $ 218,229  $ 176,827  $ 147,526 
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(1)The years ended December 31, 2022, 2021 and 2020 include $2.3 million, $1.8 million and $1.5 million, respectively, that was reported for tax purposes as compensation for services in accordance with Section 83 of the Code.
Schedule of Taxable Income and To Total Distributions Declared to Common Stock Reconciliation
Listed below is a reconciliation of “Net increase in net assets resulting from operations” to taxable income and to total distributions declared to common stockholders for the years ended December 31, 2022, 2021 and 2020.
Year Ended December 31,
2022 2021 2020
(estimated, dollars in thousands)
Net increase in net assets resulting from operations $ 241,606  $ 330,762  $ 29,383 
Book-tax difference from share-based compensation expense 142  (3,213) 5,139 
Net unrealized (appreciation) depreciation (24,816) (135,624) 5,622 
Income tax provision (benefit) 23,325  32,863  (13,541)
Pre-tax book (income) loss not consolidated for tax purposes (37,630) (59,634) 37,420 
Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates 17,043  39,819  93,025 
Estimated taxable income (1) 219,670  204,973  157,048 
Taxable income earned in prior year and carried forward for distribution in current year 50,834  24,359  29,107 
Taxable income earned prior to period end and carried forward for distribution next period (66,892) (65,994) (38,248)
Dividend payable as of period end and paid in the following period 17,676  15,159  13,889 
Total distributions accrued or paid to common stockholders $ 221,288  $ 178,497  $ 161,796 
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(1)MSCC’s taxable income for each period is an estimate and will not be finally determined until MSCC files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate.
Schedule of Components of Income Tax Expense (Benefit) Main Street’s Consolidated Statements of Operations. Main Street’s provision for income taxes was comprised of the following for the years ended December 31, 2022, 2021 and 2020:
Year Ended December 31,
2022 2021 2020
(dollars in thousands)
Current tax expense (benefit):
Federal $ 516  $ (235) $ 497 
State 1,845  3,377  (1,554)
Excise 2,838  2,590  1,647 
Total current tax expense 5,199  5,732  590 
Deferred tax expense (benefit):
Federal 13,176  23,205  (13,082)
State 4,950  3,926  (1,049)
Total deferred tax expense (benefit) 18,126  27,131  (14,131)
Total income tax provision (benefit) $ 23,325  $ 32,863  $ (13,541)
Schedule of Deferred Tax Assets and Liabilities The following table sets forth the significant components of net deferred tax assets and liabilities as of December 31, 2022 and 2021:
Year Ended December 31,
2022 2021
(dollars in thousands)
Deferred tax assets:
Net operating loss carryforwards $ 35,043  $ 34,102 
Interest expense carryforwards 6,171  11,283 
Other 3,401  2,809 
Total deferred tax assets 44,615  48,194 
Deferred tax liabilities:
Net unrealized appreciation of portfolio investments (64,219) (49,658)
Net basis differences in portfolio investments (28,245) (28,259)
Total deferred tax liabilities (92,464) (77,917)
Total deferred tax liabilities, net $ (47,849) $ (29,723)