Semiconductor Equipment & Materials Intl

Part X, Line 2:

“SEMI is a not-for-profit organization recognized by the IRS and FTB as exempt from federal and state income taxes in the U.S. However, certain activities of subsidiaries or branches in other countries, such as trade shows, are subject to foreign income taxes or other taxes on income generated in their respective jurisdictions. Tax expense, net of refund, was as follows (in thousands): 2024 2023 Current $2,948 $1,692 Deferred (41) (69) Total Income Taxes 2,907 1,623 Other Taxes 2,172 (5,208) Total Taxes $5,079 $3,585 Net deferred tax assets are included in prepaids and other current assets on the consolidated statements of financial position and approximated $321,000 and $270,000 as of December 31, 2024 and 2023, respectively. The sources resulting in net deferred tax assets consist principally of deferred revenues and deferred expenses related to exhibitions, accruals, and depreciation. Additionally, the Group generates unrelated business income, primarily from its advertising activities. These activities have historically generated losses and SEMI has accumulated net operating loss carryforwards (NOLs). As of December 31, 2024 and 2023, SEMI had NOLs of approximately $3,692,000 and $3,686,000, respectively. The NOLs will continue to expire after the year ending December 31, 2024. The ability to utilize the NOLs or realize any benefits is uncertain, and therefore a full valuation allowance has been applied against them. No valuation allowance other than NOLs described in the preceding paragraph was recorded as of December 31, 2024 and 2023, as the Group concluded that all of the deferred tax assets will be realized in future years. Net deferred assets are recorded as prepaids and other current assets on the consolidated statements of financial position and any change is recorded in non-operating expenses on the consolidated statements of activities and changes in net assets. The Group measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. The Group's total gross unrecognized tax benefits are classified as other long-term liabilities on the consolidated statements of financial position. As of December 31, 2024 and 2023, the total amount of gross unrecognized tax benefits was approximately $353,000 and $412,000, respectively, which results entirely from foreign taxes. The aggregate changes in the balance of gross unrecognized tax benefits, which includes interest and penalties, were as follows (in thousands): Balance as of January 1, 2023 $1,146 Decrease Related to expiry of statue of limitation (735) Increases related to tax positions taken during current period 1 Balance as of December 31, 2023 412 Decrease Related to expiry of statue of limitation (73) Increases related to tax positions taken during current period 14 Balance as of December 31, 2024 353 As of December 31, 2024, the Group has analyzed the inventory of tax positions taken with respect to all applicable income tax issues for all open tax years (in each respective jurisdiction) including tax years ended December 31, 2019 through December 31, 2024 for U.S. federal tax purposes and tax years ended December 31, 2018 through December 31, 2024 for California tax purposes (except with respect to the extent of net operating losses for which the statute is open for federal and California tax purposes from tax year December 31, 2001) and tax years ended December 31, 2013 through December 31, 2024 for foreign tax purposes. The composition of unrecognized tax benefits was as follows (in thousands): 2024 2023 Gross unrecognized tax benefits - taxes $262 $304 Gross unrecognized tax benefits - interest and penalties 91 108 Balance, December 31 $353 $412 The Group does not anticipate a material change to its accrued unrecognized tax benefits in the 12 months following December 31, 2024. South Korea Taxes Certain activities engaged by the Group in other countries, s”