Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Summary of income before income taxes

Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2019, 2018 and 2017:

	For the Year Ended December 31,
	2019			2018		2017
(in thousands)
U.S. operations	$	(103,080	)	$	659,937	$	70,484
Non-U.S. operations	(12,902		)	36,426		42,680
	$	(115,982	)	$	696,363	$	113,164

Summary of provision for income taxes

The provision for income taxes consists of the following for the years ended December 31, 2019, 2018 and 2017:

	For the Year Ended December 31,
(in thousands)	2019			2018			2017
Current provision (benefit)
Federal	$	(1,861	)	$	49,047		$	(9,991	)
State and Local	4,362			18,697			65
Foreign	3,675			4,276			1,219
Deferred provision (benefit)
Federal	(13,422		)	4,986			106,415
State and Local	(1,455		)	(1,599		)	(3,380		)
Foreign	(3,576		)	764			(62		)
Provision for income taxes	$	(12,277	)	$	76,171		$	94,266

Schedule of reconciliation of the tax provision at U.S. Federal Statutory Rate to the provision for income taxes

The reconciliation of the tax provision at the U.S. Federal Statutory Rate to the provision for income taxes for the

years ended December 31, 2019, 2018 and 2017:

	For the Year Ended December 31,
	2019		2018		2017
(in thousands, except percentages)
Tax provision at the U.S. federal statutory rate	21.0	%	21.0	%	35.0	%
Less: rate attributable to noncontrolling interest	(8.1	)%	(10.2	)%	(19.1	)%
State and local taxes, net of federal benefit	2.4	%	1.9	%	(1.9	)%
Impact of 2017 Tax Act on deferred tax assets	—	%	—	%	80.1	%
Impact of 2017 Tax Act on tax receivable agreement obligation	—	%	—	%	(12.9	)%
Non-deductible expenses, net	(3.7	)%	(0.3	)%	1.9	%
Other, net	(1.0	)%	(1.5	)%	0.2	%
Effective tax rate	10.6	%	10.9	%	83.3	%

Schedule of components of deferred tax assets and liabilities

The components of the deferred tax assets and liabilities as of December 31, 2019, and 2018 are as follows:

	December 31,
(in thousands)	2019			2018
Deferred income tax assets
Tax Receivable Agreement	$	197,598		$	167,117
Share-based compensation	15,572			9,419
Intangibles	2,467			12,738
Fixed assets and other	44,908			21,088
Tax credits and net operating loss carryforwards	86,420			44,972
Less: Valuation allowance on net operating loss carryforwards and tax credits	(60,594		)	(44,947		)
Total deferred income tax assets	$	286,371		$	210,387
Deferred income tax liabilities
Intangibles	71,700			10,028
Total deferred income tax liabilities	$	71,700		$	10,028

Summary of reconciliation of the beginning and ending amount of unrecognized tax benefits

The table below presents the changes in the liability for unrecognized tax benefits. This liability is included in Accounts payable and accrued expenses and other liabilities on the Consolidated Statement of Financial Condition.

(in thousands)
Balance at December 31, 2016	$	—
Increase from Acquisition of KCG	7,232
Decreases based on tax positions related to prior period	—
Increase based on tax positions related to current period	68
Balance at December 31, 2017	7,300
Decreases based on tax positions related to prior period	(840		)
Increase based on tax positions related to current period	868
Balance at December 31, 2018	7,328
Increase from ITG Acquisition	2,713
Decreases based on tax positions related to prior period	(1,263		)
Increase based on tax positions related to current period	—
Balance at December 31, 2019	$	8,778