Note

oss) before income taxes for each of the years in the period ended was subject to taxation under United States jurisdictions only. The provision for income taxes consists of the following (in thousands):

December 22, 2017,

Tax Act” or the “Act”), was signed in to law. The Tax Act, among other changes, reduces the U.S. federal corporate tax rate from to repeals the Alternative Minimum Tax, eliminates certain deductions, requires taxpayers to pay a -time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, creates new taxes on certain foreign sourced earnings and changes the carryforward period and utilization of Net Operating Losses generated after On Avalon did have any foreign subsidiaries and the international aspects of the Tax Act are applicable.

the initial analysis of the impact of the Tax Act, Avalon remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally   The Company has calculated it’s best estimate resulting from the impact of the Act in our year end income tax provision in accordance with our understanding of the Act and guidance available as of the date of this filing. The Company has recognized a provisional expense for the tax impacts of Tax Act in its consolidated financial statements for the year ended The remeasurement of the deferred tax balance was primarily offset by application of the valuation allowance. The majority of the provisional expense is related to the revaluation of deferred tax assets and liabilities at as a result of Tax Act. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered that is different from our interpretation.  As we complete our analysis of the Tax Act, collect and prepare necessary data, and interpret any additional guidance, we make adjustments to provisional amounts that we have recorded that materially impact our provision for income taxes in the period in which the adjustments are made

.

ons of the deferred tax assets and liabilities at and are as follows (in thousands):

of deferred tax liabilities will reverse in the same period and jurisdiction and is of the same character as the temporary differences giving rise to the of deferred tax assets. Avalon has provided a valuation allowance on the amount of deferred tax assets that it estimates will be utilized. If future taxable income is less than the amount that has been assumed in assessing the recoverability of the deferred tax assets, then an increase in the valuation allowance will be required, with a corresponding increase to income tax expense. Likewise, should Avalon ascertain in the future that it is more likely than that deferred tax assets will be realized in excess of the net deferred tax assets, all or a portion of the valuation allowance as of would be reversed as a benefit to the provision for income taxes in the period such determination was made.

no

rities for the years before Avalon recognizes any interest and penalty assessed by taxing authorities as a component of interest expense and other expense, respectively. There were accruals for the payment of interest and penalties for and

approximately and in and respectively. At Avalon has taxable loss carryforwards for federal income tax purposes aggregating approximately which are available to offset future federal taxable income. These carryforwards expire in through In addition, at certain subsidiaries of Avalon have net operating loss carryforwards for state purposes of approximately which are available to offset future state taxable income. These carryforwards expire at various dates through A valuation allowance has been provided because it is more likely than that the deferred tax assets relating to certain of the federal and state loss carryforwards will be realized.