11. Income Taxes

Informa TechTarget recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amount and the tax basis of assets and liabilities by applying tax rates that are expected to be in effect when the differences reverse. Significant components of deferred taxes are as follows:

A valuation allowance has been provided where it is more likely than not that the deferred tax assets related to those operating loss carryforwards will not be realized.

As of December 31, 2024, the Company maintained a valuation allowance against a portion of its state net operating loss carryforwards in the United States due to the uncertainty of future profitability in the state.

As of December 31, 2023, Informa TechTarget’s operating loss carryforwards and other attributes reflect the amounts that would exist had separate tax returns been filed in all periods and may not reflect actual positions taken or to be taken on the tax returns. Some of these attributes have been utilized by Informa or remained with Informa. As of the close of the Transaction, the Company recorded an adjustment of $0.8 million to net parent investment for those tax attributes remaining with or used by Parent.

As of December 31, 2023 and 2022, Informa TechTarget asserted indefinite reinvestment on certain foreign earnings. Determination of the unrecognized deferred tax liability is not practicable.

The decrease in the valuation allowance for the period ended December 31, 2024 is due to a decrease of net operating losses reported in the United Kingdom which were shared through group relief.

Compliance with ASC 740 requires Informa TechTarget to periodically evaluate the necessity of establishing or adjusting a valuation allowance for deferred tax assets depending on whether it is more likely than not that a related tax benefit will be realized in future periods. In evaluating the ability to realize the net deferred tax asset, the Company considers all available evidence, both positive and negative, including past operating results, the existence of cumulative losses in the most recent fiscal years, tax planning strategies that are prudent and feasible, and forecasts of future taxable income. In considering sources of future taxable income, the Company makes certain assumptions and judgments which are based on the plans and estimates used to manage the underlying business. Changes in the Company's assumptions and estimates, as well as changes in tax rates, may materially impact income tax expense for the period.

As of December 31, 2024 and December 31, 2023, Informa TechTarget had federal gross net operating loss carryforwards of $4.7 million and $1.9 million, respectively state net operating loss carryforwards of $1.1 million and $0.1 million respectively, and foreign net operating loss carryforwards of $5.6 million and $37.6 million respectively, which will begin to expire in 2029. The state net operating loss carryforwards of $1.1 million will begin to expire in 2034. The federal net operating loss carryforwards of $4.7 million can be carried forward indefinitely. As of December 31, 2024, Informa TechTarget had a federal tax credit carryforward of $0.2 million. The research and development tax credit carryforward begins to expire in 2044. The utilization of this tax attribute is limited to future taxable income.

Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income and tax.

At December 31, 2024, the Company had approximately $1.7 million of unremitted foreign earnings held by non-U.S. subsidiaries and has recorded a deferred tax liability of $0.2 million primarily in respect of non-U.S. withholding taxes that it anticipates will be incurred upon repatriation of such earnings to the U.S.

The Company's portion of income taxes for U.S. and certain foreign jurisdictions prior to the Transactions were deemed settled at the date of the Transaction. Cash paid directly to tax authorities for income taxes was $4.0 million in 2024 and was not significant in 2023 and 2022.

Unrecognized tax benefits

Informa TechTarget conducts operations globally, and, as part of the global business, it files numerous income tax returns. These returns are routinely examined by various taxing authorities. The Company's global tax positions are reviewed on a quarterly basis. Based on these reviews, the results of discussions and resolutions of matters with certain taxing authorities, tax rulings and court decisions and the expiration of statutes of limitations, unrecognized tax benefits are adjusted as necessary.

Informa TechTarget remain subject to U.S. federal income tax examinations for the tax years 2019 through 2024, and to non-U.S. income tax examinations for the tax years 2015 through 2024. In addition, the Company remains subject to state and local income tax examinations in the United States for the tax years 2003 through 2024.

As of December 31, 2024 and December 31, 2023, management accrued interest related to unrecognized tax benefits of $0.7 million and $0.5 million, respectively. Interest and penalties associated with the unrecognized tax benefits are classified as components of income tax expense. It is reasonably possible that Informa TechTarget's existing unrecognized tax benefits may increase or decrease in the next 12 months, however Informa TechTarget cannot reasonably estimate a range of potential changes in its existing liabilities for unrecognized tax benefits due to various uncertainties.