Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's Provision for Income Taxes was $15,677 and $51,042 for the three and nine months ended September 30, 2020, respectively, and $20,402 and $60,253 for the three and nine months ended September 30, 2019, respectively. The effective tax rate was 23.5% and 24.5% for the three and nine months ended September 30, 2020, respectively, and 28.0% and 20.9% for the three and nine months ended September 30, 2019, respectively. The effective tax rate reflects net excess tax benefits and deficiencies associated with the appreciation or depreciation in the Company's share price upon vesting of employee share-based awards above or below the original grant price. The Company's Provision for Income Taxes for the nine months ended September 30, 2020 reflects an additional tax expense of $100 and resulted in an increase in the effective tax rate of 0.05 percentage points, and for the nine months ended September 30, 2019 an additional deduction of $12,176 and resulted in a reduction in the effective tax rate of 4 percentage points related to the effect of share price changes upon the vesting of share-based awards. The effective tax rate for 2020 and 2019 also reflects the effect of certain nondeductible expenses, including expenses related to Class J LP Units and Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments.

Additionally, the Company is subject to the income tax effects associated with the new global intangible low-taxed income ("GILTI") provisions in the period incurred. For the three and nine months ended September 30, 2020 and 2019, no additional income tax expense associated with the GILTI provisions has been reported and it is not expected to be material to the Company’s effective tax rate for the year.

The Company reported an increase in deferred tax assets of $525 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $1,244 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 30, 2020. The Company reported an increase in deferred tax assets of $219 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $1,333 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 30, 2019.

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. As of September 30, 2020, there were $376 of unrecognized tax benefits that, if recognized, $306 would affect the effective tax rate. Related to the unrecognized tax benefits, the Company accrued interest and penalties of $15 and $1, respectively, during the three months ended September 30, 2020. During the three months ended September 30, 2020, $118 of unrecognized tax benefits were recognized by the Company as a result of a lapse in the statute of limitations, of which $96 affected the effective tax rate. In addition, the Company also recognized a tax benefit for accrued interest and penalties of $42 and $3, respectively, associated with the lapse in the statute of limitations.