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:

	Fiscal Years Ended April 30,
($ in thousands)	2018			2017			2016
Current tax expense:
Federal	$	3,853		$	6,360		$	3,799
State and local		365			469			219
Current tax expense		4,218			6,829			4,018
Deferred tax expense (benefit):
Federal		(7,021	)		(1,299	)		(839	)
State and local		(37	)		(412	)		(462	)
Deferred tax expense (benefit):		(7,058	)		(1,711	)		(1,301	)
Income tax provision	$	(2,840	)	$	5,118		$	2,717

December 22, 2017

H.R.

originally known as the Tax Cuts and Jobs Act, (the "Tax Act") was enacted. The Tax Act lowers the U.S. federal income tax rate ("Federal Tax Rate") from

35%

21%

effective

January 1, 2018.

Accordingly, the Company computes its income tax expense for the fiscal year ending

April 30, 2018

using a blended Federal Tax Rate of

30.33%.

The

21%

Federal Tax Rate will apply to fiscal year ending

April 30, 2019

and each year thereafter.

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

twelve

months ended

April 30, 2018,

2017

and

2016

were (

23.87%

33.05%

and

27.15%,

respectively. In fiscal

2018

the U.S. statutory federal corporate income tax rate was reduced from

35%

21%

on the Company’s long-term deferred tax liabilities, resulting in a tax benefit of

54.51%

of pre-tax income for the

twelve

months ended

April 30, 2018,

primarily attributable to the effect on the long-term deferred tax liability. The Company re-calculated its net deferred tax assets and liabilities using the Federal Tax Rate under the Tax Act. The effect of the re-calculation was reflected entirely in the

third

quarter ended

January 31, 2018 (

the period that included the enactment date) and was allocated directly to both current and deferred income tax expenses from continuing operations. The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to the new tax law, 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 interpretations of existing tax laws and rulings and settlements with tax authorities.

The fluctuation in the effective income tax rate during fiscal

2017

is primarily attributable to the attribution of

100%

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

one

tax jurisdiction. The fluctuation in the effective income tax rate during fiscal

2016

is primarily attributable to the effect of the reduction in the allocation factors on the state and local deferred tax liability (primarily the gain on deconsolidation of EAM), reversal of excess income tax accruals established in past years that were resolved upon completion of the prior NYC and IRS audits and an increase in the domestic production tax credits.

Deferred income taxes, a liability, 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:

	Fiscal Years Ended April 30,
($ in thousands)	2018			2017
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	10,658		$	17,742
Deferred non-cash post-employment compensation		(372	)		(619	)
Depreciation and amortization		119			454
Unrealized loss (gain) on securities held for sale		208			249
Deferred charges		(331	)		(415	)
Other		210			(200	)
Total federal tax liability		10,492			17,211

State and local tax liabilities (benefits):
Deferred gain on deconsolidation of EAM		1,299			1,206
Deferred non-cash post-employment compensation		(45	)		(42	)
Depreciation and amortization		15			31
Other		(47	)		(29	)
Total state and local tax liabilities		1,222			1,166
Deferred tax liability, long-term	$	11,714		$	18,377

The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability is primarily a result of the federal, state, and local taxes related to the

$50,510,000

gain from deconsolidation of the Company's asset management and mutual fund distribution subsidiaries, partially offset by the long-term tax benefit related to the non-cash post-employment compensation of

$1,770,000

granted to VLI's former employee.

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 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:

	Fiscal Years Ended April 30,
	2018			2017			2016
U.S. statutory federal tax rate		30.33	%		35.00	%		35.00	%
Increase (decrease) in tax rate from:
Effect on deferred tax liabilities from federal tax rate reduction to 21%		-54.51	%		-			-
State and local income taxes, net of federal income tax benefit		0.70	%		-0.88	%		-3.39	%
Effect of dividends received deductions		-0.49	%		-0.33	%		-0.41	%
Domestic production tax credit		-			-0.17	%		-0.33	%
Other, net		0.10	%		-0.57	%		-3.72	%
Effective income tax rate		-23.87	%		33.05	%		27.15	%

The Company believes that, as of

April 30, 2018,

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 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.