Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

Note 18 – Income Taxes

The Company's Provision for Income Taxes was $10,626 and $20,861 for the three and nine months ended September 30, 2011, respectively, and $8,547 and $11,508 for the three and nine months ended September 30, 2010, respectively. The effective tax rate was 89% and 60% for the three and nine months ended September 30, 2011, respectively, and 49% and 46% for the three and nine months ended September 30, 2010, respectively. The effective tax rate for 2011 and 2010 reflects the effect of certain compensation transactions, as well as the noncontrolling interest associated with LP Units. The effective tax rate for 2010 also reflected the effect of losses in certain foreign jurisdictions for which no income tax benefits are anticipated.

The Company reported an increase in deferred tax assets of $4,159 associated with changes in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 30, 2011.

As of September 30, 2011, there was $1,981 of unrecognized tax benefits that, if recognized, would affect the effective tax rate. The Company does not anticipate a significant change in unrecognized tax positions as a result of the settlement of income tax audits for examining the Company's income tax returns during the upcoming year.

The Company classifies interest relating to tax matters and tax penalties as a component of income tax expense in its Unaudited Condensed Consolidated Statements of Operations. Related to the unrecognized tax benefits, the Company accrued interest of $36 and $108 during the three and nine months ended September 30, 2011, respectively, and had recognized a liability for penalties of $561 and interest of $825 at September 30, 2011.

As a result of the Company's offering of common stock which occurred during the second quarter of 2011, Deferred Tax Assets – Non-Current and Amounts Due Pursuant to Tax Receivable Agreements increased $47,481 and $40,360, respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2011. See Note 12 for further information.