
	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)


	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.

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.

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.


	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.


	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


	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.

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.

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 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.