11. Income Taxes

For the three months ended September 30, 2014, the Company recognized income tax expense of $2,763 on pre-tax earnings of $7,850 compared to $2,448 income tax expense on pre-tax earnings of $6,913 for the three months ended September 30, 2013. For the nine months ended September 30, 2014, the Company recognized income tax benefit of $421 on pre-tax earnings of $15,653 compared to $4,359 income tax expense on pre-tax earnings of $13,357 for the nine months ended September 30, 2013. The effective tax rate for the nine months ended September 30, 2014 was a benefit of 2.7%, primarily as a result of recognizing a $6,359 discrete benefit for the reversal of a valuation allowance for a deferred tax asset established for historical net operating losses attributable to the State of New York. The valuation allowance was reversed in the first quarter of 2014 due to the New York tax law changes effective March 31, 2014, which resulted in the Company determining that the future benefit of net operating loss carryforwards was more likely than not to be realized.

As of September 30, 2014, the Company has not identified any uncertain tax positions that would have a material impact on the Company’s financial position. The Company recognizes potential interest and penalties related to uncertain tax positions, if any, in income tax expense.

The tax years that remain subject to examination for the Company’s major tax jurisdictions at September 30, 2014 are shown below:

2011 – 2013		United States — federal income tax
2008 – 2013		United States — state and local income tax
2011 – 2013		Canada and Puerto Rico