(7)	Income Taxes

Income tax benefit from continuing operations for the three and nine months ended September 30, 2018 was $15,406 and $872, respectively, compared to expense of $7,498 and $22,484 for the three and nine months ended September 30, 2017, respectively. The Company’s provisional accounting for TCJA’s toll charge on previously undistributed accumulated foreign earnings at December 31, 2017 has been completed in the period ending September 30, 2018, resulting in a $2,105 measurement period tax benefit. In accordance with SAB No. 118, any additional adjustment to the financial reporting impacts of TCJA will be completed by December 31, 2018.

The income tax benefit for the three and nine months ended September 30, 2018 includes the impacts of immediately recognizing certain effects of share-based compensation, acquisition and integration expenses, unrealized gain on investment in equity securities, and benefits for finalizing the TCJA toll charge and New Jersey tax reform. Excluding these items, the effective tax rate would have been 19.6% and 20.5% for the three and nine months ended September 30, 2018, respectively, compared to 33.2% and 32.1% for the three and nine months ended September 30, 2017, respectively.

The Company has determined it will elect the accounting policy to treat tax on global intangible low-taxed income (“GILTI”) inclusions under TCJA as a component of current tax expense in its estimated annual effective tax rate. This accounting policy election is now complete.

In July 2018, New Jersey enacted comprehensive corporate income tax reform legislation which includes, among other items, the imposition of a multi-year temporary surtax, mandatory combined reporting, revised net operating loss (“NOL”) and dividend exclusion rules, and decoupling from certain federal tax reform provisions. Additionally, in October 2018 New Jersey enacted legislation that included significant technical corrections and clarifications to the July law as well as other substantive changes to the State’s corporate tax regime. GAAP requires that the effects of a change in tax law be recorded in the period of enactment. Therefore, the Company has included the effects of New Jersey’s July tax law change in the results for the quarter ended September 30, 2018. This includes a discrete benefit of $11,437 to release valuation allowance against state NOLs and state net deferred tax assets against which the Company had previously maintained a full valuation allowance due to restrictive rules regarding realization, and a discrete benefit of $752 for revaluing state tax attributes and net deferred tax assets due to the New Jersey surtax. The Company currently estimates it will record a non-cash charge of approximately $1,600 in the quarter ended December 31, 2018 due to New Jersey’s October tax law change.

The Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. If, based on the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, the Company records a valuation allowance against all or a portion of the deferred tax assets to adjust the balance to the amount considered more likely than not to be realized. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified.

This assessment, which is completed on a taxing jurisdiction basis, takes into account a number of types of evidence, including the following:

•Nature, frequency, and severity of current and cumulative financial reporting losses. A pattern of objectively-measured recent financial reporting losses is heavily weighted as a source of negative evidence. The Company generally considers cumulative pre-tax losses in the current three-year period to be significant negative evidence regarding future profitability. The Company also considers the strength and trend of earnings, as well as other relevant factors. In certain circumstances, historical information may not be as relevant due to changes in the Company’s business operations;

•Sources of future taxable income. Future reversals of existing taxable temporary differences are heavily-weighted sources of objectively verifiable evidence. Projections of future taxable income exclusive of reversing temporary differences are a source of positive evidence only when the projections are combined with a history of recent profits and can be reasonably estimated; and

•Tax planning strategies. Prudent and feasible tax planning strategies that would be implemented to maximize utilization of expiring tax credit carryforwards are evaluated as a source of additional positive evidence.

New Jersey’s change to combined reporting will allow the Company to use existing state NOLs to offset a portion of the Company’s combined domestic income that will be taxed by New Jersey. On a New Jersey combined basis the Company has significant existing taxable temporary differences along with a sustained period of profitability and expectations of future profitability of sufficient amounts, therefore the Company has reversed its valuation allowance against certain state NOLs and state net deferred tax assets in the quarter ended September 31, 2018.