Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of income before provision of taxes

The income before provision for income taxes consists of the following:

	Year Ended December 31,
	2022		2021		2020
	(Dollars in millions)
U.S. domestic income	$	1,402.9	$	3,816.2	$	439.5
Foreign income	169.6		211.3		140.5
Total income before provision for income taxes	$	1,572.5	$	4,027.5	$	580.0

Schedule of provision for income taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
	2022		2021		2020
	(Dollars in millions)
Current
Federal income tax	$	263.6	$	351.3	$	0.3
State and local income tax	30.4		59.6		3.6
Foreign income tax	55.6		56.5		50.2
Total current	349.6		467.4		54.1
Deferred
Federal income tax	(25.1)		450.7		127.2
State and local income tax	(3.3)		48.9		15.8
Foreign income tax	(33.4)		15.3		0.1
Total deferred	(61.8)		514.9		143.1
Total provision for income taxes	$	287.8	$	982.3	$	197.2

Schedule of effective income tax rate

The following table summarizes the effective income tax rate:

	Year Ended December 31,
	2022			2021			2020
	(Dollars in millions)
Income before provision for income taxes	$	1,572.5		$	4,027.5		$	580.0
Provision for income taxes	$	287.8		$	982.3		$	197.2
Effective income tax rate	18.30		%	24.39		%	34.00		%

Schedule of reconciliation of provision for income taxes to U.S Federal statutory tax rate

The following table reconciles the effective income tax rate to the U.S. federal statutory tax rate:

	Year Ended December 31,
	2022		2021		2020
Statutory U.S. federal income tax rate	21.00	%	21.00	%	21.00	%
State and local income taxes	0.83	%	2.35	%	2.08	%
Foreign income taxes(1)	(1.75)	%	0.64	%	4.76	%
Income passed through to common unitholders and non-controlling interest holders(2)	(0.67)	%	(0.07)	%	(2.02)	%
Equity-based compensation	(0.67)	%	(0.60)	%	(3.09)	%
Valuation allowance	0.30	%	0.79	%	(2.25)	%
Impact of change in tax status due to Conversion(3)	—	%	—	%	14.59	%
Unrecognized tax benefits	0.01	%	0.02	%	1.64	%
Other adjustments(4)	(0.75)	%	0.26	%	(2.71)	%
Effective income tax rate	18.30	%	24.39	%	34.00	%

(1)2022 includes a tax benefit due to restructuring the ownership of its foreign Global Investment Solutions business and the impact of amending the Company's 2020 tax return to claim a foreign tax credit rather than the original filing position claiming a foreign tax deduction. In addition, 2022 and 2021 include the impact of claiming foreign tax credits while 2020 includes the deduction of foreign taxes.

(2)Includes income that is not taxable to the Company and its subsidiaries.

(3)Refer to Note 11 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 for more information on the tax impacts of the Company's Corporate Conversion completed January 1, 2020.

(4)2020 includes a benefit of (2.64)% related to the disposal of certain foreign subsidiaries, which resulted in the recognition of long-term capital losses.

Schedule of tax effects of temporary differences

The following table summarizes the tax effects of the temporary differences:

	As of December 31,
	2022		2021
	(Dollars in millions)
Deferred tax assets
Federal foreign tax credit carryforward	$	37.3	$	22.0
State net operating loss carryforwards	5.9		5.9
Tax basis goodwill and intangibles	259.8		290.9
Depreciation and amortization	25.4		18.9
Deferred restricted stock unit compensation	24.7		31.4
Lease liabilities	119.0		113.4
Accrued compensation	781.3		883.6
Basis difference in investments	—		22.9
Other	140.4		118.2
Deferred tax assets before valuation allowance	1,393.8		1,507.2
Valuation allowance	(56.7)		(46.8)
Total deferred tax assets	$	1,337.1	$	1,460.4
Deferred tax liabilities(1)
Unrealized appreciation on investments	$	1,558.0	$	1,804.9
Lease right-of-use assets	89.2		85.0
Basis difference in investments	47.9		—
Other	28.9		43.1
Total deferred tax liabilities	$	1,724.0	$	1,933.0
Net deferred tax assets (liabilities)	$	(386.9)	$	(472.6)

(1)As of December 31, 2022 and 2021, $1,321.3 million and $1,445.9 million, respectively, of deferred tax assets were offset and presented as a single deferred tax liability amount on the Company’s consolidated balance sheet as these deferred tax assets and liabilities relate to the same jurisdiction.

Schedule of reconciliation on the beginning and ending amount of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of penalties and interest, is as follows:

	As of December 31,
	2022		2021		2020
	(Dollars in millions)
Balance at January 1	$	20.6	$	17.2	$	10.1
Additions based on tax positions related to current year	2.4		1.3		8.7
Additions for tax positions of prior years	5.3		2.6		—
Reductions for tax positions of prior years	(1.6)		(0.5)		(0.1)
Reductions due to lapse of statute of limitations	(0.5)		—		(0.6)
Reductions due to settlements	—		—		(0.9)
Balance at December 31	$	26.2	$	20.6	$	17.2