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The Company accounts for income taxes under the liability method. Accordingly, deferred income taxes have been provided for temporary differences between the recognition of revenue and expenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements.

On the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of (the "Tax Act"). The Tax Act significantly modifies the U.S. corporate income tax system by, among other things, reducing the federal income tax rate from to limiting certain deductions, including limiting the deductibility of interest expense to of U.S. Earnings Before Interest, Taxes, Depreciation and Amortization, imposing a mandatory -time deemed repatriation tax on accumulated foreign earnings and creating a territorial tax system that changes the manner in which future foreign earnings are subject to U.S. tax.

The components of income (loss) before taxes are as follows (in thousands):

The components of income tax (benefit) expense are as follows (in thousands):

Income tax (benefit) expense for each year is allocated to continuing operations, discontinued operations, extraordinary items, other comprehensive income, the cumulative effects of accounting changes, and other charges or credits recorded directly to shareholders’ equity. ASC -- includes an exception to the general principle of intraperiod tax allocations. The codification source states that the tax effect of pretax income or loss from continuing operations generally should be determined by a computation that considers only the tax effects of items that are included in continuing operations. The exception to that incremental approach is that all items (i.e. other comprehensive income, discontinued operations, etc.) be considered in determining the amount of tax benefit that results from a loss from continuing operations and that benefit should be allocated to continuing operations. That is, when a company has a current period loss from continuing operations, management must consider income recorded in other categories in determining the tax benefit that is allocated to continuing operations. This includes situations in which a company has recorded a full valuation allowance at the beginning and end of the period, and the overall tax provision for the year is zero. The intraperiod tax allocation is performed once the overall tax provision has been computed and allocates that provision to various income statement (continuing operations, discontinued operations), other comprehensive income and balance sheet captions. While the intraperiod tax allocation does change the overall tax provision, it results in a gross-up of the individual components. Additionally, tax jurisdictions must be considered separately; therefore the allocation to the U.S. and Mexico must be looked at separately.

As the Company experienced a net loss from operations in the U.S. for the year ended   and other comprehensive income from employee benefit and foreign currency translation adjustments, the Company has allocated income tax expense against the components of other comprehensive income in using a effective tax rate. Income tax benefit for the year ended   includes a benefit of due to the required intraperiod tax allocation. Conversely, other comprehensive income for the year ended   includes income tax expense of

domestic subsidiaries. State income taxes paid in the U.S. during and totaled and respectively. State income tax refunds received in the U.S. during totaled There were state income tax refunds in Foreign income taxes paid during and totaled and respectively. There were foreign refunds received in and There were federal taxes paid in and and there were federal refunds received in and At   the Company had of federal net operating loss carryforwards available to offset future federal taxable income, which will expire in various amounts from to

At the Company had of state net operating loss carryforwards available to offset future state taxable income, the majority of which relates to Florida and Kentucky. These carryforwards expire in various amounts from to

The following is a reconciliation of income tax (benefit) expense to that computed by applying the federal statutory rate to income (loss) before income taxes (in thousands):

740,

requires that a valuation allowance be established when it is more likely than that all or a portion of a deferred tax asset will be realized. The net cumulative domestic and foreign losses for the current and prior years represents negative evidence under the provisions of ASC requiring the Company to establish a valuation allowance against all deferred tax assets. Until an appropriate level and characterization of profitability is attained, the Company expects to continue to maintain a valuation allowance on its net deferred tax assets related to future U.S. and non-U.S. tax benefits.

liabilities based on the tax rates at which they are expected to reverse in the future. The estimated total impact upon enactment of the Tax Act is however, this impact has been offset due to our valuation allowance. Our analysis could affect the measurement of these balances and give rise to new deferred and other tax assets and liabilities. Since the Tax Act was passed late in the quarter of and further guidance and accounting interpretation is expected over the next months, our review is still pending. We expect to complete our analysis of the amounts recorded upon enactment of the Tax Act within the measurement period of year.

ax Act also provides that undistributed and previously untaxed post- foreign earnings will be deemed distributed in and be subject to tax at reduced effective rates (Transition Tax). The Company estimates it has a net cumulative deficit in E&P from its foreign subsidiaries and, consequently, will be subject to the Transition Tax. In the event that a final calculation were to result in a nominal Transition Tax, the Company has an NOL in excess of the accumulated E&P of its Mexican subsidiaries as of   therefore it will incur a liability for the deemed repatriation of foreign earnings. Additionally, as of   the Company’s U.S. deferred liability for cumulative undistributed earnings has been eliminated.

’s Mexican subsidiaries was and as of and respectively.

(in thousands):

the accounting for uncertainty in income taxes recognized in an enterprise’s financials. Specifically, the guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The total amount of gross unrecognized tax benefits as of and was There were changes to the unrecognized tax benefit balance during the years ended and

’s positions are sustained by the taxing authority, the entire balance at   would reduce the Company’s effective tax rate. The Company does expect its unrecognized tax benefits to change significantly over the next  months. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. As of   and the Company does have an accrual for the payment of tax-related interest and penalties.

not

’s U.S. income tax returns for through for which the statute has yet to expire. In addition, open tax years related to state and foreign jurisdictions remain subject to examination.