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Income Taxes
 12 Months Ended
Dec. 31, 2023
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):
Year Ended December 31,
202320222021
United States $142,775 $339,513 $(264,323)
Foreign142,608 (1,039,549)(747,193)
Total$285,383 $(700,036)$(1,011,516)

The income tax provision (benefit) attributable to income before income taxes is as follows (in thousands):
December 31,
202320222021
Current
U.S. Federal$(248)$825 $— 
U.S. State6,337 2,882 — 
Foreign(194)2,510 2,746 
Total5,895 6,217 2,746 
Deferred
U.S. Federal(483,786)1,450 (176)
U.S. State(20,310)1,674 (20)
Foreign1,367 (9)(2,076)
Total(502,729)3,115 (2,272)
Total income tax provision (benefit)$(496,834)$9,332 $474 

The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is as follows:
December 31,
202320222021
U.S. Federal statutory rate21.0 %21.0 %21.0 %
State tax(2.8)%0.3 %1.6 %
Foreign tax credits, net of valuation allowance(139.8)%12.5 %0.7 %
Non-taxable foreign income(9.6)%(5.7)%(3.0)%
Foreign tax rate differential0.4 %(17.0)%(9.4)%
Valuation allowance, other(43.8)%(3.1)%(6.8)%
Other, net0.5 %(9.3)%(4.1)%
Effective income tax rate(174.1)%(1.3)%— %

In 2024, Wynn Macau SA received an exemption from Macau's 12% Complementary Tax on casino gaming profits from January 1, 2023 through December 31, 2027. For the year ended December 31, 2022, the Company did not have any casino gaming profits exempt from the Macau Complementary Tax. For the year ended December 31, 2023, the Company was exempt from the payment of Macau Complementary Tax totaling $77.4 million or $0.69 per diluted share. 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 2024, Wynn Macau SA renewed its agreement with the Macau government that provides for a payment in lieu of complementary tax on dividend distributions which would otherwise be borne by stockholders of Wynn Macau SA from January 1, 2023 through December 31, 2025. The payment is $5.5 million for the year ended December 31, 2023.

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, 2023 and 2022, the aggregate
valuation allowance for deferred tax assets decreased $1.10 billion and $64.1 million, respectively. The 2023 decrease is primarily related to the release of valuation allowance on foreign tax credits ("FTCs") and certain deferred tax assets as a result of achieving sustained profitability in the U.S. The 2022 decrease is primarily related to utilization of FTCs and expiration of NOL 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 $2.3 million, $0.7 million, and $1.9 million for the years ended December 31, 2023, 2022, and 2021, 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,
20232022
Deferred tax assets—U.S.:
Foreign tax credit carryforwards$1,244,149 $1,917,822 
Disallowed interest expense carryforward156,224 164,676 
Net operating loss carryforward160,778 107,407 
Lease liability371,032 366,519 
Property and equipment50,903 15,220 
Receivables, inventories, accrued liabilities and other21,854 16,610 
Stock-based compensation9,984 8,332 
Other tax credit carryforwards19,813 11,289 
Intangibles and related other41,914 25,423 
Other— 5,849 
2,076,651 2,639,147 
Less: valuation allowance (1,172,982)(2,253,912)
903,669 385,235 
Deferred tax liabilities—U.S.:
Leased asset(371,032)(366,519)
Prepaid insurance, maintenance and taxes(16,186)(14,138)
Property and equipment— (194)
Other(15,584)(7,612)
(402,802)(388,463)
Deferred tax assets—Foreign:
Net operating loss carryforwards78,842 109,114 
Property and equipment87,849 74,439 
Other 3,275 3,688 
169,966 187,241 
Less: valuation allowance (167,599)(183,290)
2,367 3,951 
Deferred tax liabilities—Foreign:
Property and equipment(2,357)(2,628)
(2,357)(2,628)
Net deferred tax asset (liability) $500,877 $(1,905)

As of December 31, 2023, the Company had FTC carryforwards (net of uncertain tax positions) of $1.2 billion. Of this amount, $710.7 million will expire in 2024, $47.2 million in 2025, and $486.2 million in 2027. The Company has a disallowed
interest carryforward of $682.3 million which does not expire. As of December 31, 2023, the Company had U.S. federal and state tax loss carryforwards of $624.6 million. As of December 31, 2022, the Company had U.S. federal and state tax loss carryforwards of $417.3 million. U.S. federal tax loss carryforwards do not expire. The Company incurred foreign tax losses of $55.1 million, $424.2 million and $394.1 million during the tax years ended December 31, 2023, 2022 and 2021, respectively. The majority of foreign tax loss carryforwards expire in 2026, 2025 and 2024, 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.

In 2023, the Company considered both the achievement of sustained profitability and cumulative income as well as forecasted income and tax planning strategies to be significant forms of positive evidence. The Company determined that the positive evidence outweighed the negative evidence and supported a release of a portion of the valuation allowance. Therefore, the Company recorded a $1.10 billion net decrease to valuation allowances, including a $971.7 million decrease to valuation allowance on FTC carryforwards. Of the $971.7 million decrease, $97.5 million relates to current year utilization and $572.6 million relates to expirations of FTCs in 2023. The remaining $301.6 million represents FTCs more likely than not to be realized based on future taxable income and tax planning strategies. The Company also recorded a $158.0 million decrease in valuation allowance on disallowed interest expense carryforward. The need for valuation allowances against deferred tax assets will be reassessed on a continuous basis in future periods and, as a result, the allowance may increase or decrease based on changes in facts and circumstances.

The Company relied solely on the reversal of net taxable temporary differences in assessing the need for a valuation allowance in the year ended December 31, 2022.

As of December 31, 2023 and 2022, the Company had valuation allowances provided on its deferred tax assets as follows (in thousands):
December 31,
20232022
Foreign tax credits$941,249 $1,912,955 
Disallowed interest expense carryforwards— 157,990 
Intangible assets46,084 27,164 
U.S. loss carryforwards160,778 107,407 
Other U.S. deferred tax assets24,872 48,396 
Foreign loss carryforwards80,569 109,283 
Other foreign deferred tax assets87,029 74,007 
Total$1,340,581 $2,437,202 

The Company had the following activity for unrecognized tax benefits as follows (in thousands):
December 31,
202320222021
Balance at beginning of period$135,979 $141,515 $107,661 
Increases based on tax positions of the current year15,818 12,068 14,079 
Increases based on tax positions of prior years— — 66,043 
Reductions based on tax positions of prior years— (2,637)(35,633)
Reductions due to lapse in statutes of limitations(16,126)(14,967)(10,635)
Balance at end of period$135,671 $135,979 $141,515 
As of December 31, 2023, 2022 and 2021, unrecognized tax benefits of $135.7 million, $135.9 million and $141.5 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, 2023, 2022 and 2021.

As of December 31, 2023, 2022 and 2021, $69.0 million, $69.0 million and $74.3 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 each of the years ended December 31, 2023, 2022 and 2021, the Company recognized no interest and penalties.

The Company anticipates that the 2019 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 decrease up to $1.5 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 2019 domestic income tax returns remain subject to examination by the IRS to the extent tax attributes carryforward to future years. The Company's 2020 to 2022 domestic income tax returns also remain subject to examination by the IRS. The Company's 2019 to 2022 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 2023 tax years and will continue to participate in the IRS CAP for the 2024 tax year.

On December 31, 2023, 2022 and 2021, the statute of limitations for the 2018, 2017, and 2016 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 $16.1 million, $15.0 million, and $10.6 million, respectively.