5.	Income Taxes

For the

three

and

nine

months ended

September 29, 2018,

we used the estimated effective tax rate (“ETR”) expected to be applicable for the full fiscal year in computing our tax provision. The ETR on income from continuing operations for the

three

months ended

September 29, 2018

and

September 30, 2017,

was

32.4%

and

17.3%,

respectively, and

21.9%

and

14.0%

for the

nine

months ended

September 29, 2018

and

September 30, 2017,

respectively. Our ETR for the

three

and

nine

months ended

September 29, 2018

was impacted by approximately

0.6

million of foreign withholding tax that we accrued in the event we repatriate funds from certain of our foreign subsidiaries. The tax provision on income from continuing operations in

2018

and

2017

differs from the U.S. federal statutory rate primarily due to the lack of a benefit on our domestic losses as a result of our valuation allowance on deferred tax assets, foreign income taxed at different rates, changes in our deferred tax asset valuation allowance, state taxes and interest related to unrecognized tax benefits.

We have

not

adjusted our provisional tax estimates related to the U.S. Tax Cuts and Jobs Act (“Tax Act”) that we recorded in the

fourth

quarter of

2017.

Our accounting remains incomplete as of

September 29, 2018

and will be refined and, if necessary, adjusted throughout

2018

as required by SEC Staff Accounting Bulletin

No.

118

(“SAB

118”

) based on our ongoing analysis of data and tax positions along with new guidance from regulators and interpretations of the law.

Due to the complexity of the Tax Act’s global intangible low-taxed income (“GILTI”) tax rules, we are continuing to evaluate this provision and the application of ASC Topic

740,

Income Taxes, (“ASC

740”

). Under GAAP, we are allowed to make an accounting policy election to either (i) treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred or (ii) factor such amounts into a company’s measurement of its deferred taxes. We have

not

yet decided on an accounting policy with respect to the new GILTI tax rules. Our net tax provision for the quarter and

nine

months ended

September 29, 2018

did

not

include any incremental amount of GILTI tax as we expect to utilize existing net operating losses and tax credits, that have a full valuation allowance, to offset the impact of the GILTI inclusion.

Our German subsidiaries income tax returns for

2012

2016

are currently under routine examination by tax authorities in Germany. We believe our financial statement accruals for income taxes are appropriate.

Other than for foreign currency exchange rate changes and the Kita acquisition, there was

material change to our unrecognized tax benefits and related accrued interest and penalties during the

three

- and

nine

-month periods ended

September 29, 2018

and

September 30, 2017.