Note - Income Taxes

December 22, 2017,

other things, lowering the federal corporate income tax rate from to effective implementing a territorial tax system and imposing a -time toll charge on deemed repatriated earnings of foreign subsidiaries. In addition, there are many new provisions, including changes to expensing of qualified tangible property, the deductions for executive compensation and interest expense, a global intangible low-tax income provision, the base erosion anti-abuse tax, and a deduction for foreign-derived intangible income. The Company's consolidated financial statements for the year ended were impacted by the corporate income tax rate reduction going from to This rate reduction required the revaluation of the Company's deferred tax assets and liabilities as of the U.S. Tax Reform enactment date. The revaluation reflects an assumption that the new federal corporate income tax rate will remain in place for the years in which temporary differences are expected to reverse. The Company estimates that the reduction in the federal tax rate applicable to deferred tax balances will reduce the net deferred tax asset balance, before valuation allowance, by approximately million, with a corresponding reduction in the recorded valuation allowance by approximately million. As a result of the change in the federal income tax rate, the Company recorded an income tax benefit of approximately million during the quarter of

.

December 22, 2017,

No.

118

118"

118

one

impacts of U.S. Tax Reform. During the year period in which the initial accounting for U.S. Tax Reform impacts is incomplete, a registrant include a provisional amount when reasonable estimates can be made or continue to apply the prior tax law if a reasonable estimate cannot be made. As discussed above, the Company has estimated the provisional tax impacts related to the corporate income tax rate reduction and the impact on its deferred tax assets and liabilities, after corresponding adjustments to the reported valuation allowance. The deferred tax assets and liabilities table below includes the adjustments from the revaluation of deferred tax balances to reflect the rate reduction for the year ended Before U.S. Tax Reform adjustments, the ending net deferred tax liability would have been million compared to the reflected ending net deferred tax liability of million as of The ultimate impact of remeasuring the deferred tax assets and liabilities differ from the provisional amounts due to gathering additional information to more precisely compute the amount of tax, changes in interpretations and assumptions, additional regulatory guidance that be issued, and actions the Company take. The Company expects to finalize accounting for the impacts of U.S. Tax Reform when the U.S. corporate income tax return is filed in

’s effective tax rate:

’s deferred tax assets and liabilities consisted of the following (in thousands):

$1.1

NOLs”) which, if utilized, will begin to expire in the year and state NOLs of approximately million which, if utilized, will expire in various years between and Additionally, the Company has approximately million of NOLs in other jurisdictions which, if utilized, will expire in various years between and As of the Company has recorded a deferred tax asset of approximately million relating to NOLs, and an offsetting valuation allowance has been provided for these NOLs due to uncertainty regarding the ultimate realization of the deferred tax assets associated with the NOL carryforwards prior to expiration. Additionally, the Company has foreign operating loss carryforwards of approximately million for which the realization of a tax benefit is considered remote. Due to the remote likelihood of utilizing these NOLs, neither the deferred tax asset nor the offsetting valuation allowance has been recorded, and neither is presented in the table above.

income tax liability is subject to certain requirements and restrictions. In general, under Section of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. An ownership change generally occurs if or more shareholders (or groups of shareholders) who are each deemed to own at least of the Company's stock have aggregate increases in their ownership of

such stock of more than percentage points over such stockholders’ lowest ownership percentage during the testing period (generally a rolling year period). The Company believes it experienced an ownership change in as a result of the implementation of the Restructuring Plan and a subsequent ownership change also occurred on or about As a result, the Company's pre-change NOLs are subject to limitation under Section of the Code. Such limitation cause U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitation were in effect. The Company does believe either ownership change created a restriction, which, by itself, could cause its pre-change NOLs to expire unused. As of management’s assessment that a full valuation allowance is appropriate due to uncertainty about ultimate realization of the deferred tax assets was determined before consideration of a Section limitation. Similar rules and limitations apply for state income tax purposes. The Company remains subject to ongoing testing for future ownership changes based on shareholder ownership that create a more restrictive Section limitation on the NOLs in subsequent reporting periods

.

’s U.S. federal income tax returns for the tax years through remain open to examination by the Internal Revenue Service under the applicable U.S. federal statute of limitations provisions. The various states in which the Company is subject to income tax are generally open to examination for the tax years after

December 31, 2017,

no

.

no

interest and penalties in the provision for income taxes for each of the years ended and

.