INCOME TAXES

The Company’s effective income tax rate is dependent on many factors, including the estimated nature of many amounts and the mix of revenues and expenses between U.S. corporate subsidiaries that are subject to income taxes and those subsidiaries that are not. Additionally, the Company’s effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment entities that are consolidated in these financial statements. Consequently, the effective income tax rate is subject to significant variation from period to period.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, local and foreign tax regulators. With limited exceptions, the Company is no longer subject to income tax audits by taxing authorities for any years before 2012. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s consolidated financial statements.

The provision for income taxes attributable to the Company and the Consolidated Funds, consisted of the following for the years ended December 31, 2016, 2015 and 2014:



	Year Ended December 31,
Provision for Income Taxes - The Company	2016			2015			2014
Current:
U.S. federal income tax	$	19,419		$	12,064		$	12,801
State and local income tax	3,706			4,839			1,719
Foreign income tax	8,458			1,509			1,613
	31,583			18,412			16,133
Deferred:
U.S. federal income tax (benefit)	(14,247		)	356			123
State and local income tax (benefit)	(1,400		)	306			210
Foreign income tax (benefit)	(4,180		)	(14		)	70
	(19,827		)	648			403
Total:
U.S. federal income tax	5,172			12,420			12,924
State and local income tax	2,306			5,145			1,929
Foreign income tax	4,278			1,495			1,683
Income tax expense	11,756			19,060			16,536

Provision for Income Taxes - Consolidated Funds
Current:
U.S. federal income tax	—			—			6,807
State and local income tax	—			—			1,564
Foreign income tax (benefit)	(737		)	4			36
	(737		)	4			8,407
Deferred:
U.S. federal income benefit	—			—			(9,958		)
State and local income benefit	—			—			(2,832		)
Foreign income benefit	—			—			(900		)
	—			—			(13,690		)
Total:
U.S. federal income benefit	—			—			(3,151		)
State and local income benefit	—			—			(1,268		)
Foreign income tax (benefit)	(737		)	4			(864		)
Income tax expense (benefit)	(737		)	4			(5,283		)

Total Provision for Income Taxes
Total current income tax expense	30,846			18,416			24,540
Total deferred income tax expense (benefit)	(19,827		)	648			(13,287		)
Total income tax expense	$	11,019		$	19,064		$	11,253

The effective income tax rate differed from the federal statutory rate for the following reasons for the years ended December 31, 2016, 2015 and 2014:



	Year Ended December 31,
	2016		2015		2014
Income tax expense at federal statutory rate	35.0	%	35.0	%	35.0	%
Income passed through to non-controlling interests	(27.6	)	(24.2	)	(34.9	)
State and local taxes, net of federal benefit	0.9		5.6		0.4
Foreign taxes	(0.9	)	1.4		0.1
Permanent items	(2.2	)	6.0		2.2
Other, net	(1.7	)	0.9		(1.1	)
Valuation allowance	0.2		(1.3	)	0.3
Total effective rate	3.7	%	23.4	%	2.0	%

Deferred Taxes

The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows as of December 31, 2016 and 2015:



	As of December 31,
Deferred Tax Assets and Liabilities of the Company	2016			2015
Deferred tax assets
Net operating losses	$	99		$	1,623
Investment in partnerships	3,774			—
Other, net	2,897			1,330
Total gross deferred tax assets	6,770			2,953
Valuation allowance	(39		)	(2,953		)
Total deferred tax assets, net	6,731			—
Deferred tax liabilities
Investment in partnerships	—			(13,846		)
Other, net	—			(7,442		)
Total deferred tax liabilities	—			(21,288		)
Net deferred tax assets (liabilities)	$	6,731		$	(21,288	)



	As of December 31,
Deferred Tax Assets and Liabilities of the Consolidated Funds	2016			2015
Deferred tax assets
Net operating loss	$	4,951		$	1,538
Other, net	53			102
Total gross deferred tax assets	5,004			1,640
Valuation allowance	(5,004		)	(1,640		)
Total deferred tax assets, net	$	—		$	—

In assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred taxes are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. Valuation allowances are provided to reduce the amounts of deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts.

The valuation allowance for deferred tax assets increased by $0.5 million in 2016 due to additional net valuation allowances recorded related to operating losses incurred in various jurisdictions in which the Company operates, offset by the reduction of valuation allowances recorded in prior years for which the Company is able to conclude that the realization of the related deferred tax asset is more likely than not as of December 31, 2016. The valuation allowance for deferred tax assets decreased by $1.4 million in 2015 as a result of the utilization of operating losses in various jurisdictions in which the Company operates in addition to a decrease in the valuation allowance associated with funds no longer presented in the consolidated financial statements in 2015.

At December 31, 2016, the Company had $25.0 million of net operating loss ("NOL") carryforwards available to reduce future foreign income taxes for which a full valuation allowance has been provided. The majority of the foreign NOLs have no expiry. The Company also has approximately $0.8 million of NOL carryforwards available to reduce state income taxes that begin to expire in 2026. The Company does not have any U.S. federal NOL carryforwards.

As of, and for the three years ended December 31, 2016, 2015 and 2014, the Company had no significant uncertain tax positions.