The Company is taxed as a corporation for income tax purposes and is subject to federal, state, and local taxes with respect to its allocable share of any net taxable income from the LLC. The LLC is a limited liability company taxed as a partnership for income tax purposes, and its taxable income or loss is passed through to its members, including the Company. The LLC is subject to income taxes on its taxable income in certain foreign countries, in certain state and local jurisdictions that impose income taxes on partnerships, and on the taxable income of its U.S. corporate subsidiaries. For the periods presented prior to the Organizational Transactions and IPO, the reported income taxes represent those of the LLC.

The effective tax rates are significantly different from the 21.0% U.S. federal statutory tax rate primarily because the Company was taxed as an LLC pre-IPO and is not liable for income taxes on the portion of earnings that is attributable to the non-controlling interests in the post-IPO period. For the year ended December 31, 2022, the effective tax rate was also impacted by the change in deferred income tax rates, state and local taxes, nondeductible expenses, and equity-based compensation.

As of December 31, 2022, the Company had $2.8 million of federal net operating loss ("NOL") carryforwards with an indefinite carryforward period, $2.9 million of state NOL carryforwards that will begin to expire in 2037, and $1.4 million in U.K. NOL carryforwards with an indefinite carryforward period. The company has recorded a full valuation allowance against the U.K. NOL. As of December 31, 2022, the Company had $2.3 million in foreign tax credit carryforwards that will begin to expire in 2031 and $0.9 million in charitable contribution carryforwards that will begin to expire in 2026.

Uncertain Tax Positions

The Company does not believe it has any significant uncertain tax positions and therefore has no unrecognized tax benefits as of December 31, 2022, that if recognized, would affect the annual effective tax rate. The Company’s 2021 tax year is considered open for federal examination purposes. The 2019 through 2021 tax years are considered open for purposes of federal examination under the statutes of limitations for the LLC, which continues to file an annual U.S. Return of Partnership Income, and our C-Corporation subsidiaries. One of the Company’s subsidiaries is currently under U.S. federal and state examination as of the date of this Form 10-K for the 2020 tax year. There are no other on-going U.S. federal, state, or foreign tax audits or examinations as of the date of issuance of this Form 10-K.

Deferred Taxes

As a result of the Organizational Transactions and the IPO, the Company acquired an interest in the LLC and has recognized a deferred tax asset for the difference between the financial reporting and tax basis of its investment in the LLC and for start-up costs incurred. During the year ended December 31, 2022, the Company recognized an increase in its investment in the LLC’s deferred tax asset of $27.7 million due to exchanges of LLC Common Units for Class A common stock.

As of December 31, 2022, the Company concluded that, based on the weight of all available positive and negative evidence, the deferred tax assets with respect to the Company’s basis difference in its investment in the LLC, start-up costs, tax credits and U.S. net operating losses are more likely than not to be realized. As such, no valuation allowance has been recognized against those deferred tax assets. The Company has recorded a full valuation allowance against the U.K. NOL. The valuation allowance will be maintained until there is sufficient evidence to support the reversal of all or some portion of this allowance.

Tax Receivable Agreement (TRA)

The Company recognizes a liability on the Consolidated Balance Sheets based on the undiscounted estimated future payments under the TRA. The amounts payable under the TRA will vary depending upon a number of factors, including the amount, character, and timing of the taxable income of the Company in the future.

Based on current projections, the Company anticipates having sufficient taxable income to be able to realize the benefits and has recorded Tax Receivable Agreement liabilities of $295.3 million related to these benefits on the Consolidated Balance Sheets as of December 31, 2022. The following summarizes activity related to the Tax Receivable Agreement liabilities:

During the year ended December 31, 2022, the TRA liabilities increased $26.0 million due to exchanges of LLC Common Units for Class A common stock, which was recognized in Additional paid-in capital on the Consolidated

Statements of Mezzanine Equity and Stockholders’/Members’ Equity. During the same period, the Company remeasured the TRA liabilities due to changes in state tax rates resulting in a $5.4 million expense as the Company increased its estimated cash tax savings rate from 25.12% to 25.53%. The change was recognized in Other non-operating loss on the Consolidated Statements of Income. Total realized tax savings for the year ended December 31, 2021 from each of the tax attributes associated with the TRA were $9.6 million; $8.2 million, exclusive of the related accrued interest, was paid to current and certain former LLC unitholders, representing 85% of the realized tax savings. The remaining 15%, or $1.4 million, of the realized tax savings was retained by the Company.

Members' Tax Distributions

The Company declared Members' Tax Distributions of $28.7 million, $34.9 million, and $63.4 million during the years ended December 31, 2022, 2021, and 2020, respectively. Members' Tax Distributions for quarterly estimates are generally paid throughout the year they relate to, and a final payment is made in the first half of the subsequent year.

Other Comprehensive Income (Loss)

The tax effects on the components of Other comprehensive income (loss) for the year ended December 31, 2022 were $(0.5) million for Foreign currency translation adjustments, $(0.7) million for Change in share of equity method investment in related party other comprehensive loss, and $2.7 million for Gain on interest rate cap. The tax effects on the components of Other comprehensive income (loss) were de minimis for the years ended December 31, 2021 and 2020.