Income Taxes

12 Months Ended

Dec. 31, 2023

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,
	2023		2022		2021
U.S.	$	(24,267)	$	164,623	$	468,725
Non-U.S.		(4,880)		51,697		67,588
Income (loss) before income taxes	$	(29,147)	$	216,320	$	536,313

The current and deferred components of the income tax provision for the years ended December 31, 2023, 2022 and 2021 are as follows:

	For the Year Ended December 31,
	2023		2022		2021
Current income taxes:
Federal	$	1,425	$	8,659	$	63,979
State and Local		(183)		6,290		15,875
Foreign		1,419		5,901		10,619
Deferred income taxes:
Federal	$	(2,471)	$	20,308	$	20,811
State and Local		(125)		4,788		4,295
Foreign		(1,696)		1,692		(2,244)
Total	$	(1,631)	$	47,638	$	113,335

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,
	2023		2022		2021
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	1.3	%	2.3	%	3.6	%
Rate benefit as a U.S. limited partnership/flow through	-1.8	%	-1.8	%	-2.3	%
Excess tax benefit from equity compensation delivery	9.2	%	-2.6	%	-3.4	%
Foreign taxes	3.3	%	0.8	%	1.3	%
Non-deductible expenses	-20.2	%	1.9	%	2.2	%
Regulatory settlements	-6.7	%	0.0	%	0.0	%
Return to provision	-4.0	%	1.1	%	-0.3	%
Other	3.4	%	-0.8	%	-1.0	%
Effective income tax rate	5.5	%	21.9	%	21.1	%

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 Company recorded an increase in the net deferred tax asset of $7,589 for the year ended December 31, 2023. 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,
	2023		2022
Net operating loss	$	40,140	$	8,679
Step-up in tax basis in Group LP assets		332,261		361,544
Deferred compensation		75,168		66,228
Lease liability		49,505		44,326
Other		7,869		9,467
Net deferred tax asset before valuation allowance		504,943		490,244
Valuation allowance on NOL and other		(14,870)		(11,563)
Deferred tax asset	$	490,073	$	478,681
Right-of-use asset	$	(39,409)	$	(34,972)
Other		(13,426)		(14,060)
Deferred tax liability	$	(52,835)	$	(49,032)
Net deferred tax asset	$	437,238	$	429,649

As of December 31, 2023, the Company had accumulated net operating loss carryforwards related to its operations of approximately $164,326 for which it has recorded a deferred tax asset of $40,140. Approximately $163,071 of the operating losses (or $39,814 of the deferred tax asset) has an indefinite life and $1,255 of the operating losses (or $326 of the deferred tax asset) will expire in 2031.

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.

During the year ended December 31, 2023, Group LP was selected for examination by the Internal Revenue Service for the tax year ended December 31, 2020. The Company’s tax years for 2022, 2021 and

2020 are generally subject to examination by the tax authorities. 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, 2023, 2022 and 2021.