5. Income taxes:

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the "Act"). The Act amends the Internal Revenue Code and reduces the corporate tax rate from a maximum of 35% to a flat 21% rate. The rate reduction is effective on January 1, 2018. The Company's net deferred tax assets represent a decrease in corporate taxes expected to be paid in the future. Under generally accepted accounting principles deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company's net deferred tax asset was determined based on the current enacted federal tax rate of 35% prior to the passage of the Act. As a result of the reduction in the corporate income tax rate from 35% to 21% and other provisions under the Act, the Company has made reasonable estimates of the effects of the Act and revalued its net deferred tax asset on a provisional basis at December 31, 2017 resulting in a reduction in the value of its net deferred tax asset of approximately $9.0 million and recorded at transition tax of $2.3 million related to its foreign operations for a total of $11.3 million, which was recorded as additional noncash income tax expense in the three months and year ended December 31, 2017. Although the tax rate reduction is known, the Company has not collected all of the necessary data to complete its analysis of the effect of the Tax Act on the underlying deferred taxes and as such, the amounts recorded as of December 31, 2017 are provisional. The actual impact on the Company's net deferred tax asset may vary from this amount from certain changes in interpretations of the Act, additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, additional data collected and assumptions that the Company has made. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018.

The components of income (loss) before income taxes consist of the following (in thousands):

	Years Ended December 31,
	2017			2016			2015
Domestic	$	52,250		$	41,759		$	21,972
Foreign		(21,132	)		(17,499	)		(9,260	)

Total income before income taxes	$	31,118		$	24,260		$	12,712

The income tax expense is comprised of the following (in thousands):

	Years Ended December 31,
	2017			2016			2015
Current:
Federal	$	—		$	135		$	(9	)
State		(353	)		(188	)		4
Foreign		(209	)		(202	)		(96	)
Deferred:
Federal		(24,150	)		(8,175	)		(5,867	)
State		(430	)		(1,047	)		(1,959	)
Foreign		(100	)		146			111

Total income tax expense	$	(25,242	)	$	(9,331	)	$	(7,816	)

Our consolidated temporary differences comprising our net deferred tax assets are as follows (in thousands):

	December 31,
	2017			2016
Deferred Tax Assets:
Net operating loss carry-forwards	$	271,219		$	273,509
Tax credits		2,771			2,237
Equity-based compensation		2,327			2,279

Total gross deferred tax assets		276,317			278,025

Deferred Tax Liabilities:
Depreciation and amortization		22,777			29,984
Accrued liabilities and other		106,251			95,606

Total gross deferred tax liabilities		129,028			125,590

Net deferred tax assets before valuation allowance		147,289			152,435
Valuation allowance		(129,673	)		(110,194	)

Net deferred tax assets	$	17,616		$	42,241

At each balance sheet date, the Company assesses the likelihood that it will be able to realize its deferred tax assets. The Company considers all available positive and negative evidence in assessing the need for a valuation allowance. The Company maintains a full valuation allowance against certain of its deferred tax assets consisting primarily of net operating loss carryforwards related to its foreign operations in Canada, Europe and Asia and net operating losses in the United States that are limited for use under Section 382 of the Internal Revenue Code.

As of December 31, 2017, the Company has combined net operating loss carry-forwards of $1.0 billion. This amount includes federal net operating loss carry-forwards in the United States of $150.9 million, net operating loss carry-forwards related to its European, Mexican, Asian and Canadian operations of $868.6 million, $5.3 million, $2.1 million and $1.0 million, respectively. Section 382 of the Internal Revenue Code in the United States limits the utilization of net operating losses when ownership changes, as defined by that section, occur. The Company has performed an analysis of its Section 382 ownership changes and has determined that the utilization of certain of its net operating loss carryforwards in the United States is limited based on the annual Section 382 limitation and remaining carryforward period. Of the $150.9 million of net operating losses available at December 31, 2017 in the United States $60.1 million are limited for use under Section 382. Net operating loss carryforwards outside of the United States totaling $877.0 million are not subject to limitations similar to Section 382. The net operating loss carryforwards in the United States will expire, if unused, between 2025 and 2037. The net operating loss carry-forwards related to the Company's Mexican, Asian and Canadian operations will expire if unused, between 2019 and 2027. The net operating loss carry-forwards related to the Company's European operations include $722.9 million that do not expire and $145.7 million that expire between 2018 and 2032.

Other than the $2.3 million transition tax recorded in the year ended December 31, 2017 as a result of its foreign earnings the Company has not provided for United States deferred income taxes or foreign withholding taxes on its undistributed earnings for certain non-US subsidiaries earnings or cumulative translation adjustments because these earnings and adjustments are intended to be permanently reinvested in operations outside the United States. It is not practical to determine the amount of the unrecognized deferred tax liability on such undistributed earnings or cumulative translation adjustments.

In the normal course of business the Company takes positions on its tax returns that may be challenged by taxing authorities. The Company evaluates all uncertain tax positions to assess whether the position will more likely than not be sustained upon examination. If the Company determines that the tax position is not more likely than not to be sustained, the Company records a liability for the amount of the benefit that is not more likely than not to be realized when the tax position is settled. The Company does not expect that its liability for uncertain tax positions will increase during the twelve months ended December 31, 2018, however, actual changes in the liability for uncertain tax positions could be different than currently expected. If recognized, changes in the Company's total unrecognized tax benefits would impact the Company's effective income tax rate. The roll-forward of the liability for uncertain tax positions is below and excludes interest and penalties.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	Years Ended December 31,
	2017		2016			2015
Beginning balance of unrecognized tax benefits	$	—	$	776		$	866
Decrease attributable to settlements with taxing authorities		—		(776	)		—
Decrease attributable to lapses of statutes of limitation		—		—			(90	)

Ending balance of unrecognized tax benefits	$	—	$	—		$	776

The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. The Company is subject to US federal tax and state tax examinations for years 2004 to 2017. The Company is subject to tax examinations in its foreign jurisdictions generally for years 2005 to 2017.

The following is a reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements (in thousands).

	Years Ended December 31,
	2017			2016			2015
Federal income tax expense at statutory rates	$	(10,892	)	$	(8,492	)	$	(4,450	)
Effect of:
State income taxes, net of federal benefit		(2,244	)		(1,080	)		(1,710	)
Impact of foreign operations		74			138			(179	)
Non-deductible expenses		(1,350	)		(590	)		(1,253	)
Changes in tax reserves		—			175			128
Federal tax rate change		(9,046	)		—			—
Transition tax on foreign earnings		(2,296	)		—			—
Other		239			98			(16	)
Changes in valuation allowance		273			420			(336	)

Income tax expense	$	(25,242	)	$	(9,331	)	$	(7,816	)