Taxable Income

6 Months Ended

Jun. 30, 2011

Taxable Income (Loss) [Abstract]

Taxable Income

Note 10. Taxable Income

Taxable Income

     The Company has elected to be taxed as a REIT, as defined under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its annual taxable income to its stockholders.

     As a REIT, the Company generally will not be subject to federal income tax on taxable income it distributes currently to its stockholders. Accordingly, no provision for federal income taxes has been made in the accompanying Condensed Consolidated Financial Statements. If the Company fails to qualify as a REIT for any taxable year, then it will be subject to federal income taxes at regular corporate rates, including any applicable alternative minimum tax, and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies as a REIT, it may be subject to certain state and local taxes on its income and property and to federal income and excise tax on its undistributed taxable income.

     Earnings and profits, the current and accumulated amounts of which determine the taxability of distributions to stockholders, vary from net income (loss) attributable to common stockholders and taxable income because of different depreciation recovery periods and methods, and other items.

     The following table reconciles the Company’s consolidated net income (loss) attributable to common stockholders to taxable income for the three and six months ended June 30, 2011 and 2010.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2011			2010			2011			2010
Net income (loss) attributable to common stockholders	$	2,011		$	6,474		$	(3,778	)	$	11,068
Reconciling items to taxable income:
Depreciation and amortization		4,194			5,088			9,519			10,140
Gain or loss on disposition of depreciable assets		78			809			(2,098	)		7,084
Straight-line rent		(1,009	)		(631	)		(2,149	)		(1,112	)
Receivable allowances		324			61			720			(594	)
Stock-based compensation		1,298			184			2,684			1,359
Other		5,955			(1,787	)		7,044			(1,062	)
Taxable income (1)	$	12,851		$	10,198		$	11,942		$	26,883
Dividends paid	$	22,325		$	18,953		$	42,570		$	37,370

(1) Before REIT dividend paid deduction.

State Income Taxes

     State income tax expense and state income tax payments for the three and six months ended June 30, 2011 and 2010 are detailed in the table below.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Dollars in thousands)	2011			2010		2011			2010
State income tax expense:
Texas gross margin tax	$	108		$	117	$	227		$	228
Other		(126	)		48		(83	)		96
Total state income tax expense	$	(18	)	$	165	$	144		$	324
State income tax payments, net of refunds	$	481		$	497	$	503		$	491

     The Texas gross margin tax is a tax on gross receipts from operations in Texas. The Company understands that the Securities and Exchange Commission views this tax as an income tax. As such, the Company has disclosed the Texas gross margin tax in the table above. The Company does not necessarily agree with the Securities and Exchange Commission’s position concerning the Texas gross margin tax.

     On May 25, 2011, the Michigan Business Tax was replaced with a flat corporate income tax effective for January 1, 2012. Management believes that the new tax will incorporate the dividends paid deduction and thus is expected to eliminate its tax liability in Michigan effective for 2012. Additionally, this legislation repeals the tax associated with the Company’s deferred tax liability previously recorded, resulting in a reduction of state income tax expense reflected in the table above of approximately $0.2 million in the second quarter of 2011.