Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

6.INCOME TAXES

The following table presents the U.S. and non‑U.S. components of income (loss) before income tax expense:

	For the Year Ended December 31,
	2022		2021		2020
U.S.	$	164,623	$	468,725	$	264,047
Non-U.S.		51,697		67,588		6,066
Income (loss) before income taxes	$	216,320	$	536,313	$	270,113

The current and deferred components of the income tax provision for the years ended December 31, 2022, 2021 and 2020 are as follows:

	For the Year Ended December 31,
	2022		2021		2020
Current income taxes:
Federal	$	8,659	$	63,979	$	8,207
State and Local		6,290		15,875		2,955
Foreign		5,901		10,619		1,517
	$	20,850	$	90,473	$	12,679
Deferred income taxes:
Federal	$	20,308	$	20,811	$	31,773
State and Local		4,788		4,295		7,122
Foreign		1,692		(2,244)		101
Total	$	47,638	$	113,335	$	51,675

The total provision for income taxes differs from the amount which would be computed by applying the appropriate statutory rate to income before income taxes as follows:

	For the Year Ended December 31,
	2022		2021		2020
Reconciliation of federal statutory tax rates
U.S. statutory tax rate	21.0	%	21.0	%	21.0	%
Increase (decrease) due to state and local taxes	2.3	%	3.6	%	3.7	%
Rate benefit as a U.S. limited partnership/flow through	-1.8	%	-2.3	%	-3.1	%
Excess tax benefit from equity compensation delivery	-2.6	%	-3.4	%	-2.6	%
Foreign taxes	0.8	%	1.3	%	0.0	%
Non-deductible expenses	1.9	%	2.2	%	1.1	%
Return to provision	1.1	%	-0.3	%	-0.2	%
Other	-0.8	%	-1.0	%	-0.8	%
Effective income tax rate	21.9	%	21.1	%	19.1	%

Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount in the Company’s consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years.

The significant components of deferred tax assets and liabilities included on the Company’s consolidated statements of financial condition are as follows:

	For the Year Ended December 31,
	2022		2021
Net operating loss	$	8,679	$	9,867
Step-up in tax basis in Group LP assets		361,544		384,080
Deferred compensation		66,228		63,778
Lease liability		44,326		43,479
Other		9,467		12,631
		490,244		513,835
Valuation allowance on NOL and other		(11,563)		(18,368)
Deferred tax asset	$	478,681	$	495,467
Right-of-use asset	$	(34,972)	$	(37,117)
Other		(14,060)		(10,227)
Deferred tax liability	$	(49,032)	$	(47,344)
Net deferred tax asset	$	429,649	$	448,123

The Company recorded a decrease in the net deferred tax asset of $18,474 for the year ended December 31, 2022, which was primarily attributable to current year amortization of the tax basis in Group LP assets, partially offset by an increase in the step-up in tax basis in Group LP assets in connection with the exchanges of Group LP partnership units for Class A common stock during 2022.

As of December 31, 2022, the Company had accumulated net foreign operating loss carryforwards related to its international operations of approximately $36,455 for which it has recorded a deferred tax asset of $8,679. Approximately $36,157 of the operating losses (or $8,607 of the deferred tax asset) has an indefinite life and $298 of the operating losses (or $72 of the deferred tax asset) will expire in 2028.

The Company’s operations are generally comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities generally represent obligations of their interest holders. The Company is subject to certain foreign, state and local entity-level taxes (for example, the New York City Unincorporated Business Tax ("UBT")). In addition, the Company is subject to U.S. corporate federal, state and local income tax on its allocable share of results of operations from Group LP.

The Company’s tax years for 2021, 2020 and 2019 are generally subject to examination by the tax authorities as of December 31, 2022. The Company does not expect any material changes in its tax provision related to any outstanding current examinations as of December 31, 2022. Tax examinations are monitored on an ongoing basis and adjustments to tax liabilities are made as appropriate.

The Company has no unrecognized tax benefits for the periods ended December 31, 2022, 2021 and 2020.