Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income Tax Expense (Benefit)

The components of current and deferred tax benefit (expense) are as follows.


	Year Ended December 31,
(In thousands)	2023		2022		2021
Current
Federal	$	167	$	3,986	$	3,369
State and local	1,058		(786)		(19)
Foreign	(1,252)		(1,163)		—
Total current tax benefit (expense)	(27)		2,037		3,350
Deferred
Federal	(1,004)		(13,850)		15,615
State and local	124		(2,419)		2,498
Foreign	901		1,100		—
Total deferred tax benefit (expense)	21		(15,169)		18,113
Income tax benefit (expense) on continuing operations	$	(6)	$	(13,132)	$	21,463

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax asset and deferred tax liability are as follows.


(In thousands)	December 31, 2023		December 31, 2022
Deferred tax asset
Capital losses (1)	$	366,083	$	252,904
Net operating losses (2)	146,537		92,224
Investment in partnerships	131,828		317,048
Equity-based compensation	15,104		11,856
Intangible assets	5,013		5,959


Deferred income	2,576		2,086
Deferred interest expense	6,050		5,556
Lease liability—corporate offices	12,507		9,341
Lease liability—investment properties	—		6,789
Other	4,487		5,847
Gross deferred tax asset	690,185		709,610
Valuation allowance	(664,397)		(679,057)
Deferred tax asset, net of valuation allowance	25,788		30,553
Deferred tax liability


Intangible assets	23,382		13,725
ROU lease asset—corporate offices	8,527		5,350

ROU lease asset—investment properties	—		6,026
Other	1,909		3,408
Gross deferred tax liability	33,818		28,509
Net deferred tax asset (liability)	$	(8,030)	$	2,044

__________

(1) At December 31, 2023, deferred tax asset was recognized on capital losses of $1.38 billion, which expire between 2024 and 2028, with full valuation allowance established.

(2) At December 31, 2023 and 2022, deferred tax asset was recognized on NOL of $589.7 million and $378.7 million, respectively, for which full valuation allowance was established in both years. NOL, which is largely attributable to U.S. federal losses incurred after December 31, 2017, can be carried forward indefinitely.

Schedule of Valuation Allowance

Changes in the deferred tax asset valuation allowance are presented below:


	Year Ended December 31,
(In thousands)	2023		2022		2021
Beginning balance	$	679,057	$	12,766	$	1,852
Addition	19,483		666,291		33,756


Utilization and/or reversal	(34,143)		—		(22,842)
Ending balance	664,397		$	679,057	$	12,766

Schedule of Effective Income Tax Rate Reconciliation

The following table presents a reconciliation of the statutory U.S. income tax to the Company's effective income tax attributable to continuing operations:


	Year Ended December 31,
(In thousands)	2023		2022		2021
Income (Loss) from continuing operations before income taxes	$	365,629	$	(46,681)	$	(55,999)
Income (Loss) from continuing operations before income taxes attributable to pass-through subsidiaries	NA		NA		(5,905)
Income (Loss) from continuing operations before income taxes attributable to taxable subsidiaries	365,629		(46,681)		(61,904)
Federal income tax benefit (expense) at statutory tax rate (21%)	(76,782)		9,802		13,000
State and local income taxes, net of federal income tax benefit	(21,970)		5,559		1,930
Foreign income tax differential	36		782		—
Effect of change in income tax rate	34,684		—		—

Noncontrolling interests	(27,699)		(44,014)		—
Separately taxable subsidiaries of OP	15,213		21,226		—
Change in ownership of OP, including equity reallocation (Note 2)	—		(2,838)		—
Equity-based compensation	682		1,971		1,814
Valuation allowance (1)	76,087		(784)		1,852
Other, net	(257)		(4,836)		2,867
Income tax benefit (expense) on continuing operations	$	(6)	$	(13,132)	$	21,463

__________

(1) 2022 excludes changes in valuation allowance related to the Company's transition to taxable C Corporation as of January 1, 2022, outside basis difference in changes in DBRG’s interest in the OP that were treated as equity transactions, and other activities associated with discontinued operations.