9. Income Taxes

The provision for income taxes from continuing operations for the years ended December 31, 2018, 2017 and 2016 consists of the following:


	2018		2017	2016
	(in thousands)
Current taxes:
Federal	$	54,071	73,167	72,711
State		625	7,720	7,174
Foreign		1	—	17
		54,697	80,887	79,902
Deferred taxes		783	20,481	1,982
Provision for income taxes	$	55,480	101,368	81,884

The following table reconciles the statutory federal income tax rate with our effective income tax rate from continuing operations for the years ended December 31, 2018, 2017 and 2016:


	2018		2017		2016
Statutory federal income tax rate	21.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	2.4		2.2		2.0
Share-based compensation	1.8		3.4		—
Effects of U.S. tax rate decrease	(0.4)		2.2		—
Uncertain tax positions	(2.2)		(0.2)		(0.1)
Valuation allowance on losses capital in nature	—		(1.0)		(3.2)
Other items	0.7		(0.3)		0.4
Effective income tax rate	23.3	%	41.3	%	34.1	%

The tax effect of temporary differences that give rise to significant portions of deferred tax liabilities and deferred tax assets at December 31, 2018 and 2017 are as follows:


	2018		2017
	(in thousands)
Deferred tax assets:
Benefit plans	$	—	3,381
Accrued compensation and related costs		5,868	5,558
Other accrued expenses		3,861	4,094
Unrealized losses on investment securities and partnerships		6,272	—
Share-based compensation		10,300	15,047
Unused state tax credits		2,618	2,788
State net operating loss carryforwards		7,266	7,235
Other		1,171	2,874
Total gross deferred assets		37,356	40,977
Deferred tax liabilities:
Property and equipment	$	(3,700)	(7,301)
Benefit plans		(1,872)	—
Identifiable intangible assets		(9,206)	(7,419)
Unrealized gains on investments securities and partnerships		—	(3,554)
Prepaid expenses		(2,478)	(1,679)
Other		(513)	(481)
Total gross deferred liabilities		(17,769)	(20,434)
Valuation allowance		(7,266)	(7,235)
Net deferred tax asset	$	12,321	13,308

Certain subsidiaries of the Company have net operating loss carryforwards in certain states in which these companies file on a separate company basis. The deferred tax asset, net of federal tax effect, relating to these carryforwards as of December 31, 2018 and 2017 is approximately $7.3 million and $7.2 million, respectively. The carryforwards, if not utilized, will expire between 2019 and 2038. Management believes it is not more likely than not that these subsidiaries will generate sufficient future taxable income in these states to realize the benefit of the net operating loss carryforwards and, accordingly, a valuation allowance in the amount of $7.3 million and $7.2 million has been recorded at December 31, 2018 and 2017, respectively.

The Company has state tax credit carryforwards of $2.6 million and $2.8 million as of December 31, 2018 and 2017, respectively. Of these state tax credit carryforwards, $2.3 million will expire between 2024 and 2034 if not utilized, $0.2 million will expire in 2026 if not utilized, and $0.1 million can be carried forward indefinitely. The Company anticipates these credits will be fully utilized prior to their expiration date.

In the accompanying consolidated balance sheet, unrecognized tax benefits that are not expected to be settled within the next 12 months are included in other liabilities; unrecognized tax benefits that are expected to be settled within the next 12 months are included as a reduction to income taxes receivable; unrecognized tax benefits that reduce a net operating loss, similar tax loss, or tax credit carryforward are presented as a reduction to non-current deferred income taxes. As of December 31, 2018 and December 31, 2017, the Company’s consolidated balance sheet included unrecognized tax benefits, including penalties and interest, of $2.7 million ($2.4 million net of federal benefit) and $10.9 million ($8.9 million net of federal benefit), respectively, that if recognized, would impact the Company’s effective tax rate. The Company finalized a voluntary disclosure agreement with a state tax jurisdiction in June 2018, which reduced unrecognized tax benefits by $9.3 million ($7.6 million net of federal benefit).

The Company’s accounting policy with respect to interest and penalties related to income tax uncertainties is to classify these amounts as income taxes. As of December 31, 2018, and December 31, 2017, the total amount of accrued interest and penalties related to uncertain tax positions recognized in the consolidated balance sheet was $0.7 million ($0.6 million net of federal benefit) and $4.0 million ($3.5 million net of federal benefit), respectively. The total amount of penalties and interest, net of federal expense, related to tax uncertainties recognized in the statement of income for the period ended December 31, 2018 was a benefit of $2.8 million, which was comprised of a $3.0 million benefit related to settlement of the previously mentioned voluntary disclosure agreement and offset by the accrual of $0.2 million additional penalties and interest on outstanding uncertain tax positions.

The following table summarizes the Company's reconciliation of unrecognized tax benefits, excluding penalties and interest, for the years ended December 31, 2018, 2017 and 2016:


	2018		2017	2016
	(in thousands)
Balance at beginning of year	$	6,843	7,734	8,448
Increases during the year:
Gross increases - tax positions in prior period		712	244	465
Gross increases - current-period tax positions		331	97	494
Decreases during the year:
Gross decreases - tax positions in prior period		(4,219)	(56)	(167)
Decreases due to settlements with taxing authorities		(1,385)	(178)	(21)
Decreases due to lapse of statute of limitations		(212)	(998)	(1,485)
Balance at end of year	$	2,070	6,843	7,734

In the ordinary course of business, many transactions occur for which the ultimate tax outcome is uncertain. In addition, respective tax authorities periodically audit our income tax returns. These audits examine our significant tax filing positions, including the timing and amounts of deductions and the allocation of income among tax jurisdictions. The Company is currently under audit in one state jurisdiction in which the Company operates. During 2017, the Company closed an Internal Revenue Service audit of the 2014 tax year. This audit was settled with no significant adjustments. During 2016, the Company settled two open tax years that were undergoing audit by a state jurisdiction in which the Company operates. The 2015, 2016, 2017 and 2018 federal income tax returns are open tax years that remain subject to potential future audit. State income tax returns for all years after 2014 and, in certain states, income tax returns for 2014, are subject to potential future audit by tax authorities in the Company’s major state tax jurisdictions.