Dividends and Income Taxes
For fiscal years 2015 and 2014, we had estimated taxable income available to common stockholders of $431 million and $439 million (or $1.24 and $1.24 per common share), respectively.
As a REIT, we are required to distribute annually 90% of our ordinary taxable income to maintain our status as a REIT and all of our taxable income to avoid federal and state corporate income taxes. We can treat dividends declared by September 15 and paid by December 31 as having been a distribution of our taxable income for our prior tax year ("spill-back provision"). Income as determined under GAAP differs from income as determined under tax rules because of both temporary and permanent differences in income and expense recognition. The primary differences are (i) unrealized gains and losses associated with interest rate swaps and other derivatives and securities marked-to-market in current income for GAAP purposes, but excluded from taxable income until realized or settled, (ii) timing differences, both temporary and potentially permanent, in the recognition of certain realized gains and losses and (iii) temporary differences related to the amortization of premiums and discounts on investments. Furthermore, our estimated taxable income is subject to potential adjustments up to the time of filing our appropriate tax returns, which occurs after the end of our fiscal year.
The following is a reconciliation of our GAAP net income to our estimated taxable income for fiscal years 2015 and 2014 (dollars in millions):
Net income (loss)
Estimated book to tax differences:
Premium amortization, net
Realized gain/loss, net
Net capital loss/(utilization of net capital loss carryforward)
Unrealized gain/loss, net
Total book to tax differences
Estimated REIT taxable income
Dividend on preferred stock
Estimated REIT taxable income available to common stockholders
Weighted average number of common shares outstanding - basic and diluted
Estimated REIT taxable income per common share - basic and diluted
Beginning cumulative non-deductible net capital loss
Utilization of net capital loss carryforward
Ending cumulative non-deductible net capital loss
Ending cumulative non-deductible net capital loss per ending common share
As of December 31, 2015, we had $684 million (or $2.03 per common share) of net capital loss carryforwards, which can be carried forward and applied against future net capital gains through fiscal year 2018.
As of December 31, 2015 and 2014, we had distributed all of our estimated taxable income for fiscal years 2015 and 2014, respectively. Accordingly, we do not expect to incur an income tax or excise tax liability on our 2015 taxable income, nor did we incur such liabilities on our 2014 taxable income.