7. INCOME TAXES

The effective income tax rates for the third quarters and nine months ended September 30, 2018 and 2017 were as follows:

Quarter Ended						Nine Months Ended
September 30,						September 30,
2018			2017			2018			2017
	21	%		38	%		26	%		30	%

The effective income tax rate for the quarter and nine months ended September 30, 2018 reflects the impact of the U.S. Tax Cut and Jobs Act (the “Tax Reform Act”) that was passed into legislation in December 2017. The Tax Reform Act reduces the U.S. maximum rate of income taxation from 35% to 21% applicable to taxable years beginning after December 31, 2017. In December 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As of September 30, 2018, we have not completed our accounting for the tax effects of the enactment of the Tax Reform Act; however, in certain cases, specifically as follows, we made a reasonable estimate of: (i) the effects on its existing deferred tax balances; and (ii) the effects of the one-time mandatory repatriation tax. We recognized a provisional tax expense of $2.3 million in the year ended December 31, 2017 associated with the items we could reasonably estimate. Due to the timing of the release of the Tax Reform Act, the complexity of the Tax Reform Act, and regulatory guidance that has recently been released and additional guidance expected to be released, we are still analyzing the Tax Reform Act and refining its calculations, which could potentially impact the measurement of our income tax balances. We expect to complete our analysis within the measurement period in accordance with SAB 118.

During the third quarter of 2018, our estimated full-year 2018 effective income tax rate was reduced from 29% to 27% primarily due to a change in the estimate of research and development credits. The lower effective tax rate for the third quarter of 2018 reflects the full year-to-date impact of this reduction.

The lower effective income tax rate for the nine months ended September 30, 2017 reflects: (i) an approximately $5 million net benefit resulting from Comcast Corporation’s (“Comcast”) exercise of 1.4 million vested stock warrants in January 2017, as the stock warrants appreciated in value since their vesting, resulting in an income tax benefit to us when exercised; and (ii) an approximately $2 million benefit related to the adoption of ASU 2016-09, Compensation – Stock Compensation (Topic 718).