Note

- Federal, State and Local Income Taxes:

In accordance with the requirements of the Income Tax Topic of the FASB's ASC, the Company's provision for income taxes includes the following:

	Three Months Ended October 31,						Six Months Ended October 31,
($ in thousands)	2017			2016			2017			2016
Current tax expense:
Federal	$	1,140		$	996		$	2,459		$	4,573
State and local		169			15			248			340
Current tax expense		1,309			1,011			2,707			4,913
Deferred tax expense (benefit):
Federal		(126	)		(399	)		(312	)		(588	)
State and local		(119	)		(76	)		(149	)		(61	)
Deferred tax expense (benefit):		(245	)		(475	)		(461	)		(649	)
Income tax provision	$	1,064		$	536		$	2,246		$	4,264

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability are as follows:

	October 31,			April 30,
($ in thousands)	2017			2017
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	17,753		$	17,742
Deferred non-cash post-employment compensation		(619	)		(619	)
Depreciation and amortization		358			454
Other		(124	)		(366	)
Total federal tax liability		17,368			17,211

State and local tax liabilities (benefits):
Deferred gain on deconsolidation of EAM		1,161			1,206
Deferred non-cash post-employment compensation		(41	)		(42	)
Depreciation and amortization		23			31
Other		(40	)		(29	)
Total state and local tax liabilities		1,103			1,166
Deferred tax liability, long term	$	18,471		$	18,377

November 2015,

the FASB issued ASU

2015

17,

Income taxes (Topic

740

): Balance Sheet Classification of Deferred Taxes which requires that all deferred tax assets and liabilities, along with related valuation allowances, be classified as long-term on the balance sheet. As a result, each tax-paying jurisdiction will now only have

one

net long-term asset or liability. The new guidance does

not

change the existing requirement that prohibits offsetting deferred tax liabilities from

one

jurisdiction against deferred tax assets of another jurisdiction. The Company implemented ASU

2015

in the

first

quarter of fiscal

2018

retroactively to include the results as of

April 30, 2017

for comparative purposes. The adoption of ASU

2015

does

not

have a material impact on our consolidated condensed financial statements and related disclosures.

At the end of each interim reporting period, the Company estimates the effective income tax rate to apply for the full fiscal year. The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflects the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the

six

months ended

October 31, 2017

and

October 31, 2016

were

34.40%

and

35.23%,

respectively. The Company's annual effective tax rate will change due to a number of factors including but

not

limited to an increase or decrease in the ratio of items that do

not

have tax consequences to pre-tax income, the Company's geographic profit mix between tax jurisdictions, taxation method adopted by each locality, new tax laws, new interpretations of existing tax laws and rulings and settlements with tax authorities. The fluctuation in the effective income tax rate during fiscal

2018

is primarily attributable to lower state and local income taxes as a result of the attribution of

100%

of the gain on the sale of the Company's operating facility to

one

tax jurisdiction in fiscal

2017

and by the effect of the scheduled reduction in the allocation factors mandated by the local government on the state and local current and deferred tax liability (primarily associated with the gain on deconsolidation of EAM), the dividend received deduction, and domestic production tax deduction.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

	Six Months Ended October 31,
	2017			2016
U.S. statutory federal tax rate		35.00	%		35.00	%
Increase (decrease) in tax rate from:
State and local income taxes, net of federal income tax benefit		0.17	%		1.15	%
Effect of dividends received deductions		-0.39	%		-0.15	%
Domestic production tax credit		-0.51	%		0.00	%
Other, net		0.13	%		-0.77	%
Effective income tax rate		34.40	%		35.23	%

The Company believes that, as of

October 31, 2017,

there were

material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company's liability/(benefit) as if it filed a separate return. Beginning with the fiscal year ended

April 30, 2017,

the Company files combined income tax returns with the Parent on a unitary basis in certain states as a result of changes in state tax regulations. The Company does

not

anticipate any significant tax implications from the change to unitary state tax filing.

The Company

’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years ended

2014

through

2017,

are subject to examination by the tax authorities, generally for

three

years after they are filed with the tax authorities. The Company favorably concluded certain tax audits during the

third

quarter of fiscal

2016

that provided the recognition of tax benefits resulting from a favorable outcome. The Company is presently engaged in a federal tax audit for the fiscal year ended

April 30, 2015

and does

not

expect it to have a material effect on the financial statements.