b'KOSMOS ENERGY LTD.Notes to Consolidated Financial Statements (Continued)12. Equity-based Compensation (Continued)As of December 31, 2018, total equity-based compensation to be recognized on unvested restrictedstock units is $33.9 million over a weighted average period of 2.0 years.For restricted stock units with a combination of market and service vesting criteria, the number ofshares of common stock to be issued is determined by comparing the Companys total shareholderreturn with the total shareholder return of a predetermined group of peer companies over theperformance period and can vest up to 200% of the awards granted. The grant date fair value rangedfrom $4.83 to $15.71 per award. The Monte Carlo simulation model utilizes multiple input variablesthat determine the probability of satisfying the market condition stipulated in the award grant andcalculates the fair value of the award. The expected volatility utilized in the model was estimated usingour historical volatility and the historical volatilities of our peer companies and ranged from 44.0% to53.0%. The risk-free interest rate was based on the U.S. treasury rate for a term commensurate withthe expected life of the grant ranged from 0.7% to 2.2% for restricted stock units.In January 2019, we granted 2.6 million service vesting restricted stock units and 2.8 million marketand service vesting restricted stock units to our employees under our long-term incentive plan. Weexpect to recognize approximately $32.0 million of non-cash compensation expense related to thesegrants over the next three years.13. Income TaxesKosmos Energy Ltd. changed its jurisdiction of incorporation from Bermuda to the State ofDelaware in December 2018. The company was not subject to taxation at the parent company level forthe years ended December 31, 2017 and 2016. We provide for income taxes based on the laws and ratesin effect in the countries in which our operations are conducted. The relationship between our pre-taxincome or loss from continuing operations and our income tax expense or benefit varies from period toperiod as a result of various factors which include changes in total pre-tax income or loss, thejurisdictions in which our income (loss) is earned and the tax laws in those jurisdictions.On December 22, 2017, the President of the United States signed P.L. 115-97, the Tax Cut andJobs Act (the Tax Reform Act), into law. Many of the provisions of the Tax Reform Act are effectivebeginning January 1, 2018, most notable of which is the reduction in the U.S. corporate income tax ratefrom 35% to 21%. Accounting Standards Codification Topic 740 requires deferred tax assets andliabilities be adjusted for the effect of changes in tax laws or tax rates during the period that includesthe date of enactment. Accordingly, we have recorded a $16.7 million charge to deferred tax expense inDecember 2017 as a result of reducing our net deferred tax assets.SAB 118 was issued in January 2018 to address situations where certain aspects of the Tax ReformAct are unclear at issuance of the registrants financial statements for the reporting period in which theJobs Act became law. SAB 118 allowed us to record provisional amounts during a one-yearmeasurement period that ended in December 2018. As of December 31, 2018, there are no provisionaltax amounts recorded in our financial statements.140'