Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's Provision for Income Taxes was $40,790 and $114,134 for the three and nine months ended September 30, 2022, respectively, and $59,712 and $137,871 for the three and nine months ended September 30, 2021, respectively. The effective tax rate was 30.8% and 23.2% for the three and nine months ended September 30, 2022, respectively, and 24.0% and 21.0% for the three and nine months ended September 30, 2021, respectively. The effective tax rate reflects net excess tax benefits associated with the appreciation in the Company's share price upon vesting of employee share-based awards above the original grant price of $19,657 and $17,422 being recognized in the Company's Provision for Income Taxes for the nine months ended September 30, 2022 and 2021, respectively, and resulted in a reduction in the effective tax rate of 4.0 and 2.7 percentage points for the nine months ended September 30, 2022 and 2021, respectively. The effective tax rate for 2022 and 2021 also reflects the effect of certain nondeductible expenses, including expenses related to 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 global intangible low-taxed income ("GILTI") provisions in the period incurred. For the three and nine months ended September 30, 2022 and 2021, no additional income tax expense associated with the GILTI provisions has been recognized and it is not expected to be material to the Company's effective tax rate for the year.

The Company recorded a decrease in deferred tax assets of $485 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $14,722 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 30, 2022. The Company recorded an increase in deferred tax assets of $111 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $1,345 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 30, 2021.

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, 2022, there were $254 of unrecognized tax benefits that, if recognized, $206 would affect the effective tax rate. Related to the unrecognized tax benefits, the Company accrued interest and penalties of $10 and $1, respectively, during the three months ended September 30, 2022.