11. Income taxes

        The income tax (benefit) expense by jurisdiction consists of the following for the years ended December 31:

                                                                                                                                                                                    

        Income taxes differ from the amounts computed by applying the U.S. federal income tax rate to pretax income before income taxes as a result of the following for the years ended December 31:

                                                                                                                                                                                    

        We have a foreign subsidiary in the United Kingdom, which has generated losses since inception resulting in a $1,856 deferred tax asset with a corresponding valuation allowance as of December 31, 2017. We also have a majority owned foreign subsidiary in Brazil, which has generated losses since inception resulting in a $521 deferred tax asset with a corresponding valuation allowance as of December 31, 2017. Foreign loss before income taxes was $1,268, $856, and $1,381 for 2017, 2016, and 2015, respectively.

        Deferred income tax reflects the tax effects of temporary differences that gave rise to significant portions of our deferred tax assets and liabilities and consisted of the following for the years ended December 31:

                                                                                                                                                                                    

        In December 2017, the Tax Cuts and Jobs Act ("TCJA") was enacted in the U.S. TCJA amended the Internal Revenue Code of 1986 and included the following key provisions, which are generally effective for tax years beginning after December 31, 2017, that are determined to have a significant impact on our effective tax rate:

 

•          Reduction of the corporate federal tax rate to 21%;

•          Permanent repeal of the alternative minimum tax regime with refunds of excess carryforwards;

•          For any net operating losses ("NOLs") generated in tax years beginning after December 31, 2017, repeals carryback ability but permits indefinite carryforward subject to a limitation of utilization to 80% of taxable income;

•          For executive compensation in excess of $1 million, changes covered employees to principal executive officer, principal financial officer, and three other highest paid officers; eliminates the "last day of the tax year" language for determination of a covered employee; removes exceptions for commissions and performance-based compensation; and employees that are covered persons remain covered persons for all future years;

•          Permits 100% bonus depreciation for eligible property placed in-service after September 27, 2017 and before January 1, 2023;

•          Disallows interest expense in excess of 30% of adjusted taxable income, which excludes deductions for depreciation, amortization, or depletion for taxable years beginning after December 31, 2017 and before January 1, 2022 only, but permits indefinite carryforward; and

•          Expands income exclusions and/or deduction limitations for certain fringe benefits that we may offer to our employees.

        We have completed our assessment of the impact of TCJA on our consolidated financial statements as of December 31, 2017 and have recorded the impact of the enactment of TCJA in our consolidated financial statements for the year ended December 31, 2017. In 2017, we recorded a $1,274 income tax benefit resulting from the reduction of the corporate federal tax rate as well as a $1,766 income tax benefit provided by the indefinite carryforward of NOLs, which are expected to be available to recover our deferred tax liabilities that have an indefinite reversal pattern.

        As noted above, we adopted ASU 2016-09 as of January 1, 2016. As a result of the adoption of ASU 2016-09, excess windfall tax benefits and tax deficiencies related to our stock option exercises and RSU vestings are recognized as an income tax benefit or expense in our consolidated statements of operations in the period they are deducted on the income tax return. Prior to January 1, 2016, excess windfall tax benefits were not included as components of gross deferred tax assets and corresponding valuation allowance disclosures, as tax attributes related to those windfall tax benefits were not recognized until they resulted in a reduction of taxes payable.

        In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2017 and 2016, we had federal net operating loss carryforwards of approximately $82,461 and $55,780, respectively, state net operating loss carryforwards of approximately $73,934 and $56,006, respectively, and foreign net operating loss carryforwards of $10,811 and $9,672, respectively. The federal net operating loss carryforwards will begin to expire in 2025, and our foreign net operating loss carryforwards have an indefinite life. Our state net operating loss carryforwards will begin to expire in 2032. Our ability to utilize certain of our net operating loss carryforwards may be limited in the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future.

        The following table sets forth the changes in the valuation allowance, for all periods presented:

                                                                                                                                                                                    

        In reaching the determination of the valuation allowance, we have evaluated all significant available positive and negative evidence including, but not limited to, our three year cumulative results, trends in our business, expected future results and the character, amount and expiration periods of our net deferred tax assets. The underlying assumptions we used in forecasting future income required significant judgment and took into account our recent performance.

        We recognized interest and penalties related to income tax matters in income taxes. Interest and penalties were not material during the years ended December 31, 2017, 2016, and 2015.

        We identify, evaluate and measure all uncertain tax positions taken or to be taken on tax returns and record liabilities for the amount of these positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities. Although we believe that our estimates and judgments were reasonable, actual results may differ from these estimates. Some or all of these judgments are subject to review by the taxing authorities. As of December 31, 2017, we had $0 in uncertain tax positions. As of December 31, 2016, we had $380 in uncertain tax positions, $84 of which is a reduction to deferred tax assets, which is presented net of uncertain tax positions, in the accompanying consolidated balance sheets. We accrue interest and penalties related to unrecognized tax benefits as a component of income taxes. As of December 31, 2016, we had accrued $67 for related interest, net of federal income tax benefits, and penalties recorded in income tax expense on our consolidated statements of operations.

        A reconciliation of our unrecognized tax benefits, excluding interest and penalties, is as follows:

                                                                                                                                                                                    

        Our annual income taxes and the determination of the resulting deferred tax assets and liabilities involve a significant amount of judgment. Our judgments, assumptions and estimates relative to current income taxes take into account current tax laws, their interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. We operate within federal, state and international taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues which may require an extended period of time to resolve. We are subject to taxation in the United States and in various states. Our tax years 2014 and forward are subject to examination by the IRS and our tax years 2013 and forward are subject to examination by material state jurisdictions. However, due to prior year loss carryovers, the IRS and state tax authorities may examine any tax years for which the carryovers are used to offset future taxable income. We are currently subject to examination by the IRS for our 2015 tax year. Although the ultimate outcome is unknown, we believe that any adjustments that may result from examination is not likely to have a material adverse effect on our consolidated results of operations, financial position or cash flows.