(11) Income Taxes:

The following is a reconciliation of the provision for income taxes computed at the federal statutory rate to income taxes computed at the effective rate:



	For the three months ended				For the nine months ended
	September 30,				September 30,

	2018		2017		2018		2017

Consolidated tax provision at federal statutory rate	21.0	%	35.0	%	21.0	%	35.0	%
State income tax provisions, net of federal income
tax benefit	0.8		2.8		0.4		1.7
Remeasurement of certain deferred tax balances	-		-		0.9		-
Tax reserve adjustment	0.5		(1.0)		0.5		(0.2)
Changes in certain deferred tax balances	(10.4)		7.1		(8.6)		0.2
Goodwill impairment	(10.4)		-		(10.3)		(10.2)
Shared-based payments	-		0.1		(0.8)		(0.2)
Federal research and development tax credit	(1.0)		1.5		(1.0)		0.3
All other, net	0.4		0.1		0.4		(0.1)
Effective tax rate	0.9	%	45.6	%	2.5	%	26.5	%

Under ASC 605, income tax benefit would have been $3 million more for the nine months ended September 30, 2018, as a result of changes in pre-tax income as discussed in Note 3.

Amounts pertaining to income tax related accounts of $2 million and $0 million are included in “Income taxes and other current assets” in the consolidated balance sheets as of September 30, 2018 and December 31, 2017, respectively.

Frontier considered positive and negative evidence in regard to evaluating certain state net operating loss carryforwards during the third quarter of 2018, including the development of recent years of pre-tax book losses. On the basis of this evaluation, a valuation allowance of $55 million ($44 million net of federal benefit) has been recorded on the deferred tax assets related to these state NOL carryforwards and reflected in “Changes in certain deferred tax balances”. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.