Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax Expense (Benefit)

Income tax expense consists of the following:

	Current		Deferred		Total
Year ended December 31, 2023
U.S. federal	$	6,223	$	1,280	$	7,503
State and local	2,035		(26)		2,009
Foreign	(860)		1,130		270
	$	7,398	$	2,384	$	9,782
Year ended December 31, 2022
U.S. federal	$	5,663	$	2,073	$	7,736
State and local	3,376		(136)		3,240
Foreign	5,201		1,275		6,476
	$	14,240	$	3,212	$	17,452
Year ended December 31, 2021
U.S. federal	$	4,723	$	620	$	5,343
State and local	3,958		254		4,212
Foreign	(999)		700		(299)
	$	7,682	$	1,574	$	9,256

U.S. and Foreign Components of Earnings Before Income Taxes

The U.S. and foreign components of earnings before income taxes are as follows:

	2023		2022		2021
U.S.	$	509,040	$	446,395	$	395,800
Foreign	(2,422)		9,704		1,546
Total	$	506,618	$	456,099	$	397,346

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of significant differences between the reported amount of income tax expense and the expected amount of income tax expense that would result from applying the U.S. federal statutory income tax rate of 21 percent to income before taxes for the 2023, 2022 and 2021 tax years is as follows:

	2023		2022		2021
Income tax expense at U.S. federal statutory rate	$	106,390	$	95,781	$	83,443
Tax adjustment related to REIT(a)	(101,486)		(86,793)		(83,153)
State and local income taxes, net of federal income tax benefit	2,732		2,850		2,917
Book expenses not deductible for tax purposes	2,574		3,042		1,893
Stock-based compensation	513		(3,336)		3,555
Valuation allowance(b)	875		(14,984)		(1,564)
Undistributed earnings of foreign subsidiaries(c)	(95)		(84)		292
Other differences, net(d)	(1,721)		20,976		1,873
Income tax expense	$	9,782	$	17,452	$	9,256

(a)Includes dividend paid deduction of $107,137, $106,129 and $85,087 for the tax years ended December 31, 2023, 2022 and 2021, respectively.

(b)For the years ended December 31, 2023, 2022 and 2021, a non-cash valuation allowance of $875, ($14,984) and ($1,564), respectively, was recorded to income tax expense due to our limited ability to utilize Puerto Rico and Canada deferred tax assets in future years.

(c)    Management does not assert that the undistributed earnings of our Canadian subsidiaries will be permanently reinvested. For the years ended December 31, 2023, 2022 and 2021, we recognized a deferred tax (benefit) expense of ($95), ($84) and $292, respectively, for future foreign withholding taxes related to undistributed earnings.

(d)    Under Section 1031.01(b)(10) of the 2011 Puerto Rico Code, net operating losses and the tax basis of any other assets shall be reduced for forgiveness of debt to the extent by which the taxpayer is insolvent. As a result, a non-cash expense of $15,201 was recorded to income tax expense for the reduction of Puerto Rico deferred tax assets for the year ended December 31, 2022. The Puerto Rico income tax withholding rate applicable on the accrued interest of the debt is 29%. As a result, a cash expense of $5,068 was recorded to income tax expense.

Components of Deferred Taxes

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:

	2023		2022
Deferred tax assets:
Allowance for doubtful accounts	$	211	$	423
Net operating loss carry forwards	5,261		5,068
Tax credit carry forwards	1,202		1,364
Charitable contributions carry forward	2		1
Gross deferred tax assets	6,676		6,856
Less: valuation allowance	(5,333)		(4,435)
Net deferred tax assets	1,343		2,421
Deferred tax liabilities:
Intangibles	(4,926)		(5,016)
Accrued liabilities not deducted for tax purposes	(2,133)		(2,222)
Investment in partnerships	(2,611)		(1,758)
Property, plant and equipment	(2,956)		(2,234)
Undistributed earnings of foreign subsidiaries	(764)		(842)
Gross deferred tax liabilities	(13,390)		(12,072)
Net deferred tax liabilities	$	(12,047)	$	(9,651)

Reconciliation Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance as of December 31, 2021	$	5,125
Additions for tax positions related to current year	718
Additions for tax positions related to prior years	1,142
Lapse of statute of limitations	(1,441)
Balance as of December 31, 2022	$	5,544
Additions for tax positions related to prior years	703
Lapse of statute of limitations	(1,815)
Balance as of December 31, 2023	$	4,432