11.

INCOME TAXES

The Company recognized income tax expense of $4.8 million in the first three months of 2018 compared to $8.4 million for the same period in the prior year. The effective tax rate for the first three months of 2018 and 2017 were 18.6% and 29.5%, respectively. These effective tax rates differ from the U.S. Federal statutory rate of 21% and 35% for 2018 and 2017, respectively, primarily due to the impact of state and local taxes and the recognition of excess tax benefits on share-based compensation.

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act contains numerous new and changed provisions related to the US federal taxation of domestic and foreign corporate operations. As such, for the period ended December 31, 2017, the Company remeasured certain deferred tax assets and liabilities based on the rates that are expected to be in effect at the time the tax deduction or taxable item will be reported in the Company’s tax return (i.e. when they are expected to reverse in the future), which is generally 21%, as well as assessed its ability to realize deferred income tax assets in the future under the new rules. Additionally, the Company assessed the impacts of the new provisions associated with the deductibility of executive compensation under Internal Revenue Code Section 162(m), and the associated “grandfathering” rules within the Act to provide taxpayers transition relief when applying the change in law. We are currently recognizing a deferred income tax asset associated with the future tax deductions of equity-based compensation for the executives whose compensation falls under the new limitation rules. At March 31, 2018, we have not completed our accounting for the tax effects of enactment of the Act; however, in certain cases, as described above, we have made a reasonable estimate of the effects on our existing deferred tax balances. The Company will monitor future guidance set forth by the Department of Treasury with regard new provisions under the Act, and true up provisional estimates as appropriate within the one year measurement period required under Staff Accounting Bulletin No. 118 (SAB 118) issued by the SEC.