(11) Income Taxes

We are subject to taxation in the U.S. federal jurisdiction, as well as various U.S. state and foreign jurisdictions. We have identified our U.S. federal tax return as our “major” tax jurisdiction. As of September 30, 2018, we are no longer subject to examination by U.S. federal tax authorities for years prior to 2014, to examination for any U.S. state taxing authority prior to 2012, or to examination for any foreign jurisdictions prior to 2013. All subsequent periods remain open to examination.

Our effective income tax rate decreased to 33.4% for the nine months ended September 30, 2018, compared to 35.1% for the prior-year period. The current period effective tax rate was affected by the reduction of the U.S. federal tax rate from 35% to 21%, which was partially offset by the increase in disallowed deductions for officers’ compensation, both of which are a result of the Tax Cuts and Jobs Act (the “Tax Act”) enacted on December 22, 2017. Additionally, income tax benefits were recognized due to state tax rate changes enacted in the third quarter and for adjustments made to provisional amounts related to repatriation of foreign earnings, which had the effect of increasing the effective tax rate due to the $33.5 million pre-tax loss recognized during the nine month period.

In December 2017, we recorded $3.1 million of provisional tax expense related to the repatriation of foreign earnings attributable to the impact of the Tax Act. We have not yet finalized these calculations, however an adjustment to the provisional amount has been made in the current nine-month period of a $2.9 million benefit, reducing this provisional amount to $0.2 million. The adjustment was primarily due to additional analysis of historical ownership and financial information, including depreciation estimates, as well as state responses to tax reform enacted in the period. We continue to obtain and analyze information related to the depreciation estimates impacting the deemed repatriation of foreign earnings and will finalize the provisional amounts within one year from the date of enactment.

Our policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties and associated interest costs, if any, are recorded in rental, selling and general expenses in our condensed consolidated statements of operations.

As of September 30, 2018, we no longer have unrecognized tax benefits. The reduction to our unrecognized tax benefits in the period had no effect on our effective tax rate. A reconciliation of the beginning and ending balance of our unrecognized tax position is as follows (in thousands):

	Gross Position			Tax Effect
Balance as of January 1, 2018	$	14,140		$	3,521
Additions based on tax positions related to the current year		—			—
Additions for tax positions of prior years		—			—
Reduction for settlements		(14,140	)		(3,521	)
Balance as of September 30, 2018	$	—		$	—