XML 42 R21.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes The income (loss) before provision for income taxes consists of the following:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Dollars in millions)
U.S. domestic income (loss) | $(857.6) |  | $1,402.9 |  | $3,816.2
Foreign income | 256.7 |  | 169.6 |  | 211.3
Total income (loss) before provision for income taxes | $(600.9) |  | $1,572.5 |  | $4,027.5
The provision for income taxes consists of the following:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Dollars in millions)
Current |  |  |  |  |
Federal income tax | $186.0 |  | $263.6 |  | $351.3
State and local income tax | 29.1 |  | 30.4 |  | 59.6
Foreign income tax | 46.2 |  | 55.6 |  | 56.5
Total current | 261.3 |  | 349.6 |  | 467.4
Deferred |  |  |  |  |
Federal income tax | (333.4) |  | (25.1) |  | 450.7
State and local income tax | (26.0) |  | (3.3) |  | 48.9
Foreign income tax | (6.1) |  | (33.4) |  | 15.3
Total deferred | (365.5) |  | (61.8) |  | 514.9
Total provision (benefit) for income taxes | $(104.2) |  | $287.8 |  | $982.3
The following table summarizes the effective income tax rate:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Dollars in millions)
Income (loss) before provision for income taxes | $(600.9) |  | $1,572.5 |  | $4,027.5
Provision (benefit) for income taxes | $(104.2) |  | $287.8 |  | $982.3
Effective income tax rate | 17.34% |  | 18.30% |  | 24.39%
The effective tax rate is impacted by a variety of factors, including, but not limited to, changes in the sources of income or loss during the period and whether such income or loss is taxable to the Company and its subsidiaries. The following table reconciles the effective income tax rate to the U.S. federal statutory tax rate:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Statutory U.S. federal income tax rate | 21.00% |  | 21.00% |  | 21.00%
State and local income taxes | 1.55% |  | 0.83% |  | 2.35%
Foreign income taxes(1) | (1.19)% |  | (1.75)% |  | 0.64%
Income passed through to common unitholders and non-controlling interest holders(2) | 3.17% |  | (0.67)% |  | (0.07)%
Equity-based compensation | (2.76)% |  | (0.67)% |  | (0.60)%
Valuation allowance(3) | (1.02)% |  | 0.30% |  | 0.79%
Unrecognized tax benefits | (1.13)% |  | 0.01% |  | 0.02%
Other adjustments(3) | (2.28)% |  | (0.75)% |  | 0.26%
Effective income tax rate | 17.34% |  | 18.30% |  | 24.39%
(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. (2)Includes income that is not taxable to the Company and its subsidiaries. (3)2023 includes updates to the current and/or deferred tax balances related to the filing of the Company’s 2022 tax returns. The gross impact of these changes in estimates to Valuation allowance and Other adjustments was 1.36% and (0.86)%, respectively. Deferred income taxes reflect the net tax effects of temporary differences that may exist between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. The following table summarizes the tax effects of the temporary differences:
| As of December 31,
| 2023 |  | 2022
| (Dollars in millions)
Deferred tax assets |  |  |
Federal foreign tax credit carryforward | $46.8 |  | $37.3
State net operating loss carryforwards | 5.7 |  | 5.9
Tax basis goodwill and intangibles | 240.3 |  | 259.8
Depreciation and amortization | 61.7 |  | 25.4
Deferred restricted common unit compensation | 36.5 |  | 24.7
Lease liabilities | 116.1 |  | 119.0
Accrued compensation | 926.2 |  | 781.3
Other | 109.8 |  | 140.4
Deferred tax assets before valuation allowance | 1,543.1 |  | 1,393.8
Valuation allowance | (62.8) |  | (56.7)
Total deferred tax assets | $1,480.3 |  | $1,337.1
Deferred tax liabilities(1) |  |  |
Unrealized appreciation on investments | $1,333.8 |  | $1,558.0
Lease right-of-use assets | 87.7 |  | 89.2
Basis difference in investments | 48.8 |  | 47.9
Other | 38.8 |  | 28.9
Total deferred tax liabilities | $1,509.1 |  | $1,724.0
Net deferred tax assets (liabilities) | $(28.8) |  | $(386.9)
(1)As of December 31, 2023 and 2022, $1,463.8 million and $1,321.3 million 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. The Company had $16.5 million and $15.8 million in deferred tax assets as of December 31, 2023 and 2022, respectively, which are offset with deferred tax liabilities where those assets and liabilities relate to the same tax jurisdiction. In both years, the deferred tax assets resulted primarily from the carryforward of federal and state tax attributes, partially offset by a valuation allowance, and temporary differences between the financial statement and tax bases of assets and liabilities at the Company’s foreign sub-advisor entities. The realization of the deferred tax assets is dependent on the Company’s future taxable income before deductions related to the establishment of its deferred tax assets. The deferred tax asset balance comprises a portion that would be realized in connection with future ordinary income and a portion that would be realized in connection with future capital gains. The Company evaluated various sources of evidence in determining the ultimate realizability of its deferred tax assets including the character and timing of projected future taxable income and the Company’s ability to claim a foreign tax credit (“FTC”). The Company continues to maintain a valuation allowance of $2.3 million on certain state net operating losses for a corporate subsidiary with entity level state net operating losses that cannot be utilized by other group members. In addition, the Company continues to maintain a valuation allowance of $45.1 million on certain FTC carryforwards generated in 2020 and forward that are not expected to be realized due to federal limitations on its utilization. As of December 31, 2023 and 2022, the Company established a total valuation allowance of $62.8 million and $56.7 million, respectively, with the net increase primarily due to the FTC carryforward and related deferred tax assets and certain foreign net operating losses that are not expected to be realized offset by a release of the valuation allowance on tax attribute carryforwards that were determined to be realizable in future periods. For all other deferred tax assets, the Company has concluded it is more likely than not that they will be realized and that a valuation allowance is not needed at December 31, 2023. The Company has deferred tax liabilities of $45.3 million and $402.7 million as of December 31, 2023 and 2022, respectively, which are offset with deferred tax assets where those assets and liabilities relate to the same tax jurisdiction. These deferred tax liabilities primarily resulted from temporary differences between the financial statement and tax bases of accrued performance allocations. These deferred tax liabilities are net of related compensation and offset by step-up in tax basis resulting from the Conversion and future amortization of tax basis intangible assets generated from exchanges covered by the Tax Receivable Agreement (see Note 2). As of December 31, 2023, the Company has cumulative state pre-tax net operating loss carryforwards of approximately $65.3 million ($5.7 million tax-effected), which will be available to offset future taxable income. If unused, a portion of the state carryforwards will begin to expire in 2025. In addition, the Company has a FTC carryforward of $46.8 million, which relates to taxes paid in foreign jurisdictions. If unused, a portion will expire in 2025 and years forward, which is considered in the valuation allowance evaluation referenced above. In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. With a few exceptions, as of December 31, 2023, the Company’s U.S. federal income tax returns for the years 2020 through 2022 are open under the normal three-year statute of limitations and therefore subject to examination. State and local tax returns are generally subject to audit from 2018 to 2022. Foreign tax returns are generally subject to audit from 2011 to 2022. Certain of the Company’s affiliates are currently under audit by federal, state and foreign tax authorities. The Company does not believe that the outcome of the audits will require it to record material reserves for uncertain tax positions or that the outcome will have a material impact on the consolidated financial statements. Under U.S. GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more likely than not” to be sustained upon examination. The Company has recorded unrecognized tax benefits of $42.3 million and $39.3 million as of December 31, 2023 and 2022, respectively, which is reflected in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets. These balances include $17.8 million and $13.1 million related to interest and penalties associated with uncertain tax positions as of December 31, 2023 and 2022, respectively. If recognized, $31.2 million of uncertain tax positions would be recorded as a reduction in the provision for income taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of penalties and interest, is as follows:
| As of December 31,
| 2023 |  | 2022 |  | 2021
| (Dollars in millions)
Balance at January 1 | $26.2 |  | $20.6 |  | $17.2
Additions based on tax positions related to current year | 1.5 |  | 2.4 |  | 1.3
Additions for tax positions of prior years | 1.6 |  | 5.3 |  | 2.6
Reductions for tax position of prior years | (0.2) |  | (1.6) |  | (0.5)
Reductions due to lapse of statute of limitations | (4.6) |  | (0.5) |  | —
Balance at December 31 | $24.5 |  | $26.2 |  | $20.6
The Company does not believe that it has any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law. The IRA enacted a 15% corporate alternative minimum tax (“CAMT”) on the “adjusted financial statement income” of certain large corporations, which became effective on January 1, 2023. The Company does not expect the IRA to have a material impact to its provision for income taxes given that any current year payments that would be made under CAMT would be permitted to be carried forward and used as credits in future years resulting in a deferred tax benefit. The Company will continue to monitor as additional guidance is released by Treasury, the IRS, and other standard-setting bodies. On December 27, 2023, the State of New York issued final regulations that implements comprehensive franchise tax reform for corporations, banks, and insurance companies. This did not have a material impact to the Company’s consolidated financial statements. The Company will continue to monitor as additional guidance is released by the State of New York.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration