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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Consolidated income (loss) before taxes for United States ("U.S.") and foreign operations consisted of the following (in thousands):
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
United States | $ | (821,012) |  |  | $ | (158,937) |  |  | $ | (491,523) |
Foreign | (941,263) |  |  | 647,155 |  |  | 797,263 |
Total | $ | (1,762,275) |  |  | $ | 488,218 |  |  | $ | 305,740 |
The income tax provision (benefit) attributable to income before income taxes is as follows (in thousands):
| December 31,
| 2020 |  | 2019 |  | 2018
Current |  |  |  |  |
U.S. Federal | $ | (2) |  |  | $ | (14) |  |  | $ | (637) |
U.S. State | 309 |  |  | 868 |  |  | 198 |
Foreign | 1,879 |  |  | 1,796 |  |  | 1,749 |
Total | 2,186 |  |  | 2,650 |  |  | 1,310 |
Deferred |  |  |  |  |
U.S. Federal | 563,658 |  |  | 170,508 |  |  | (483,681) |
U.S. State | (1,095) |  |  | 3,682 |  |  | (14,973) |
Foreign | (78) |  |  | — |  |  | — |
Total | 562,485 |  |  | 174,190 |  |  | (498,654) |
Total income tax provision (benefit) | $ | 564,671 |  |  | $ | 176,840 |  |  | $ | (497,344) |
The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is as follows:
| December 31,
| 2020 |  | 2019 |  | 2018
U.S. Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Foreign tax credits, net of valuation allowance | (31.8) | % |  | 13.1 | % |  | (154.9) | %
Non-taxable foreign income | (2.2) | % |  | (27.4) | % |  | (48.8) | %
Foreign tax rate differential | (5.3) | % |  | (10.4) | % |  | (20.8) | %
Global intangible low-taxed income | — | % |  | 10.1 | % |  | 28.3 | %
Valuation allowance, other | (11.1) | % |  | 20.6 | % |  | 9.3 | %
Other, net | (2.6) | % |  | 9.2 | % |  | 3.2 | %
Effective income tax rate | (32.0) | % |  | 36.2 | % |  | (162.7) | %
Wynn Macau SA received a five year exemption from Macau's 12% Complementary Tax on casino gaming profits through December 31, 2020. For the years ended December 31, 2019 and 2018, the Company was exempt from the payment of such taxes totaling $77.7 million and $96.8 million or $0.73 and $0.90 per diluted share, respectively. For the year ended December 31, 2020, the Company did not have any casino gaming profits in Macau. The Company's non-gaming profits remain subject to the Macau Complementary Tax and its casino winnings remain subject to the Macau special gaming tax and other levies in accordance with its concession agreement. In April 2020, Wynn Macau SA received an extension of the exemption from Macau's 12% Complementary Tax on casino gaming profits earned from January 1, 2021 to June 26, 2022, the expiration date of the gaming concession agreement. Wynn Macau SA also entered into an agreement with the Macau government that provides for an annual payment of MOP 12.8 million (approximately $1.6 million) as complementary tax otherwise due by stockholders of Wynn Macau SA on dividend distributions through 2020. As a result of the stockholder dividend tax agreements, income tax expense includes $1.6 million for each of the years ended December 31, 2020, 2019, and 2018. In March 2020, Wynn Macau SA applied for an extension of this agreement for an additional five years through 2025. The extension is subject to approval and may only extend through June 26, 2022, the expiration date of the gaming concession agreement. The Macau special gaming tax is 35% of gross gaming revenue. U.S. tax laws only allow a foreign tax credit ("FTC") up to 21% of foreign source income. In February 2010, the Company and the IRS entered into a Pre-Filing Agreement ("PFA") providing that the Macau special gaming tax qualifies as a tax paid in lieu of an income tax and could be claimed as a U.S. FTC. During the year ended December 31, 2020, the Company did not recognize any tax benefits for FTCs generated by the earnings of Wynn Macau SA. During the years ended December 31, 2019 and 2018, the Company recognized tax benefits of $32.9 million and $82.8 million, respectively (net of valuation allowance and uncertain tax positions) for FTCs generated from the earnings of Wynn Macau SA. Accounting standards require recognition of a future tax benefit to the extent that realization of such benefit is more likely than not; otherwise, a valuation allowance is applied. During the years ended December 31, 2020 and 2019, the aggregate valuation allowance for deferred tax assets increased by $227.3 million and $115.5 million, respectively. The 2020 increase is primarily related to the realizability of FTCs, intangible assets, U.S. loss carryforwards and other U.S. deferred tax assets. The 2019 increase is primarily related to the realizability of deferred tax assets related to disallowed interest expense carryforwards. The Company recorded tax benefits resulting from the exercise of nonqualified stock options and the value of vested restricted stock and accrued dividends of $1.2 million, $5.7 million, and $2.0 million for the years ended December 31, 2020, 2019, and 2018, respectively, in excess of the amounts reported for such items as compensation costs under accounting standards related to stock-based compensation. The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following (in thousands):
| December 31,
| 2020 |  | 2019
Deferred tax assets—U.S.: |  |  |
Foreign tax credit carryforwards | $ | 2,540,400 |  |  | $ | 3,070,914 |
Disallowed interest expense carryforward | 138,339 |  |  | 88,319 |
Net operating loss carryforward | 45,015 |  |  | — |
Lease liability | 22,826 |  |  | 23,650 |
Property and Equipment | 3,048 |  |  | — |
Receivables, inventories, accrued liabilities and other | 25,882 |  |  | 15,279 |
Stock-based compensation | 7,528 |  |  | 6,479 |
Other tax credit carryforwards | 10,049 |  |  | 7,224 |
Intangibles and related other | 50,750 |  |  | — |
Other | 5,502 |  |  | 4,719 |
| 2,849,339 |  |  | 3,216,584 |
Less: valuation allowance | (2,812,808) |  |  | (2,604,497) |
| 36,531 |  |  | 612,087 |
Deferred tax liabilities—U.S.: |  |  |
Property and equipment | — |  |  | (8,887) |
Lease asset | (22,826) |  |  | (23,650) |
Prepaid insurance, maintenance and taxes | (13,606) |  |  | (15,956) |
Other | (400) |  |  | (1,332) |
| (36,832) |  |  | (49,825) |
Deferred tax assets—Foreign: |  |  |
Net operating loss carryforwards | 107,653 |  |  | 96,657 |
Property and equipment | 61,428 |  |  | 50,709 |
Pre-opening expenses | 3,832 |  |  | 6,126 |
Other | 6,529 |  |  | 10,114 |
| 179,442 |  |  | 163,606 |
Less: valuation allowance | (173,876) |  |  | (154,934) |
| 5,566 |  |  | 8,672 |
Deferred tax liabilities—Foreign: |  |  |
Property and equipment | (4,234) |  |  | (8,672) |
Intangibles | (2,402) |  |  | — |
| (6,636) |  |  | (8,672) |
Net deferred tax (liability) asset | $ | (1,371) |  |  | $ | 562,262 |
FTC carryforwards of $530.4 million expired on December 31, 2020. As of December 31, 2020, the Company had FTC carryforwards (net of uncertain tax positions) of $2.5 billion. Of this amount, $540.3 million will expire in 2021, $756.0 million in 2023, $710.7 million in 2024, $47.2 million in 2025 and $486.2 million in 2027. The Company has a disallowed interest carryforward of $604.2 million which does not expire. The Company has U.S. federal tax loss carryforwards of $197.2 million and state tax loss carryforwards of $51.6 million. The Company incurred foreign tax losses of $378.6 million, $376.8 million and $340.0 million during the tax years ended December 31, 2020, 2019 and 2018, respectively. The majority of foreign tax loss carryforwards expire in 2023, 2022 and 2021, respectively. The Company records valuation allowances on certain of its U.S. and foreign deferred tax assets. In assessing the need for a valuation allowance, the Company considers whether it is more likely than not that the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. In the assessment of the valuation allowance, appropriate consideration is given to all positive and negative evidence including recent operating profitability, forecast of future earnings, ability to carryback, the reversal of net taxable temporary differences, the duration of statutory carryforward periods and tax planning strategies. For the year ended December 31, 2019, the Company relied on the forecast of future taxable income and tax planning strategies in assessing the need for a valuations allowance.Due to recent tax legislation that reduces future sources of taxable income as well as the uncertainty caused by the COVID-19 pandemic, the Company relies solely on the reversal of net taxable temporary differences in assessing the need for a valuation allowance in the current year. As of December 31, 2020 and 2019, the Company had valuation allowances provided on its deferred tax assets as follows (in thousands):
| December 31,
| 2020 |  | 2019
Foreign tax credits | $ | 2,540,400 |  |  | $ | 2,509,786 |
Disallowed interest expense carryforwards | 138,339 |  |  | 88,318 |
Intangible assets | 48,395 |  |  | — |
U.S. loss carryforwards | 45,015 |  |  | — |
Other U.S. deferred tax assets | 40,659 |  |  | 6,393 |
Foreign loss carryforwards | 106,737 |  |  | 96,657 |
Other foreign deferred tax assets | 67,139 |  |  | 58,277 |
Total | $ | 2,986,684 |  |  | $ | 2,759,431 |
The Company had the following activity for unrecognized tax benefits as follows (in thousands):
| December 31,
| 2020 |  | 2019 |  | 2018
Balance at beginning of period | $ | 104,295 |  |  | $ | 99,470 |  |  | $ | 95,236 |
Increases based on tax positions of the current year | 7,061 |  |  | 8,986 |  |  | 8,926 |
Reductions due to lapse in statutes of limitations | (3,695) |  |  | (4,161) |  |  | (4,692) |
Balance at end of period | $ | 107,661 |  |  | $ | 104,295 |  |  | $ | 99,470 |
As of December 31, 2020, 2019 and 2018, unrecognized tax benefits of $107.7 million, $104.3 million and $99.5 million, respectively, were recorded as reductions in deferred income taxes, net. The Company had no unrecognized tax benefits recorded in other long-term liabilities as of December 31, 2020, 2019 and 2018. As of December 31, 2020, 2019 and 2018, $40.2 million, $36.6 million and $31.0 million, respectively, of unrecognized tax benefits would, if recognized, impact the effective tax rate. The Company recognizes penalties and interest related to unrecognized tax benefits in the provision for income taxes. During the each of the years ended December 31, 2020, 2019 and 2018, the Company recognized no interest and penalties. The Company anticipates that the 2016 statute of limitations will expire in the next 12 months for certain foreign tax jurisdictions. Also, the Company's unrecognized tax benefits include certain income tax accounting methods, which govern the timing and deductibility of income tax deductions. As a result, the Company's unrecognized tax benefits could increase up to $1.4 million over the next 12 months. The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company's income tax returns are subject to examination by the IRS and other tax authorities in the locations where it operates. The Company's 2002 to 2016 domestic income tax returns remain subject to examination by the IRS to the extent tax attributes carryforward to future years. The Company's 2017 to 2019 domestic income tax returns also remain subject to examination by the IRS. The Company's 2016 to 2019 Macau income tax returns remain subject to examination by the Financial Services Bureau. The Company has participated in the IRS Compliance Assurance Program ("CAP") for the 2012 through 2020 tax years and will continue to participate in the IRS CAP for the 2021 tax year. In February 2018, May 2019, and July 2020, the Company received notification that the IRS completed its examination of the Company's 2016, 2017, and 2018 U.S. income tax returns, respectively. In February 2021, the Company received notification that the IRS completed its examination of the Company's 2019 U.S. income tax return. There were no changes in its unrecognized tax benefits as a result of the completion of these examinations. On December 31, 2018, 2019 and 2020, the statute of limitations for the 2013, 2014, and 2015 Macau Complementary tax return expired, respectively. As a result of the expiration of the statute of limitations for the Macau Complementary Tax return, the total amount of unrecognized tax benefits decreased by $4.7 million, $4.2 million, and $3.7 million, respectively. In July 2018, the Financial Services Bureau issued final tax assessments for the Company's Macau income tax returns of Wynn Macau SA for the years 2013 and 2014. While no additional tax was due, adjustments were made to the Company's tax loss carryforwards. In February 2018, the Financial Services Bureau concluded its examination of the 2013 and 2014 Macau income tax returns of Palo with no changes. In January of 2020, the Financial Services Bureau commenced an examination of the 2015 and 2016 Macau income tax returns of Palo. In July 2020, the Financial Services Bureau issued final tax assessments for Palo for the years 2015 and 2016 and the examination resulted in no change to the tax returns. In July 2020, the Financial Services Bureau issued final tax assessments for the Company's Macau income tax returns of Wynn Macau SA for the years 2015 and 2016, while no additional tax was due, adjustments were made to the Company's tax loss carryforwards.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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