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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Note 14—Income Taxes The following table summarizes the tax effects of temporary differences between the Consolidated Financial Statements carrying amount of assets and liabilities and their respective tax basis, which are recorded at the prevailing enacted tax rate that will be in effect when these differences are settled or realized. These temporary differences result in taxable or deductible amounts in future years. The Company assessed all available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize our existing net deferred tax assets. For the year ended December 31, 2020, the Company made a reclassification within the below table to separate the right of use asset from the financing and operating lease obligations. This reclassification change was also made to 2019 for transparency, which has no impact to the net deferred tax amount. The components of the Company’s deferred tax assets and liabilities were as follows:
| December 31,
(in millions) | 2020 |  | 2019
Deferred tax assets: |  |  |
Stock-based compensation expense | $ | 18.2 |  |  | $ | 11.7 |
Accrued expenses | 43.3 |  |  | 37.6 |
Financing and operating leasing obligations | 2,336.9 |  |  | 2,178.0 |
Unrecognized tax benefits | 7.9 |  |  | 7.7 |
Net operating losses, interest limitation and tax credit carryforwards | 153.9 |  |  | 87.6 |
Gross deferred tax assets | 2,560.2 |  |  | 2,322.6 |
Less: Valuation allowance | (101.0) |  |  | (54.2) |
Net deferred tax assets | 2,459.2 |  |  | 2,268.4 |
Deferred tax liabilities: |  |  |
Property and equipment, not subject to the Master Leases | (51.1) |  |  | (53.1) |
Property and equipment, subject to the Master Leases | (1,051.2) |  |  | (1,088.9) |
Investments in and advances to unconsolidated affiliates | (27.9) |  |  | (2.9) |
Discount on convertible notes | (20.9) |  |  | — |
Undistributed foreign earnings | (0.4) |  |  | (0.4) |
Intangible assets | (183.4) |  |  | (287.3) |
Lease right of use assets | (1,250.6) |  |  | (1,080.4) |
Net deferred tax liabilities | (2,585.5) |  |  | (2,513.0) |
Long-term deferred tax assets (liabilities), net | $ | (126.3) |  |  | $ | (244.6) |
The realizability of the net deferred tax assets is evaluated quarterly by assessing the need for a valuation allowance and by adjusting the amount of the allowance, if necessary. The Company gives appropriate consideration to all available positive and negative evidence including statutory carryback periods, projected future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The evaluation of both positive and negative evidence is a requirement pursuant to ASC 740 in determining if the net deferred tax assets will be realized. ASC 740 suggests that additional scrutiny should be given to deferred taxes of an entity with cumulative pre‑tax book losses during the three most recent years and is widely considered significant negative evidence that is objective and verifiable and therefore, difficult to overcome. Due to the financial results during the year ended December 31, 2020, the Company has a cumulative pre‑tax book loss of $658.2 million, which is significant negative evidence used in our assessment. Additionally, the Company expects to remain in a three year cumulative loss position in the near future. As a result of these facts, the Company has recorded a valuation allowance against its net deferred tax assets, excluding net operating losses ("NOLs") that can be realized based on statutory carryback periods and the reversal of net deferred taxes related to indefinite‑lived intangibles. The Company intends to continue to maintain a valuation allowance on its net deferred tax assets until there is sufficient objectively verifiable positive evidence to support the realization of all or some portion of these deferred tax assets. In the event the Company determines that the deferred income tax assets would be realized in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be recorded, which would reduce the provision for income taxes. During the year ended December 31, 2020, the Company increased the valuation allowance by $46.8 million, primarily related to federal and state NOL carryforwards, which substantially increased in the current year as a result of the global pandemic. Following the ownership changes of the Tropicana, the Company has $120.3 million of total gross federal NOL carryforwards that will expire on various dates through 2035. All acquired tax attributes are subject to limitations under the Internal Revenue Code and underlying Treasury Regulations. During the year ended December 31, 2020, the Company increased its federal NOL carryforward by $148.1 million due to the current year loss, which resulted in an indefinite federal NOL carryforward. The utilization of the indefinite federal NOL carryforward is limited to 80% of taxable income in any given year. For state income tax reporting, as of December 31, 2020, the Company had gross state NOL carryforwards aggregating $1,332.0 million available to reduce future state income taxes, primarily for the Commonwealth of Pennsylvania and the States of Colorado, Iowa, Louisiana, Missouri, New Mexico and Ohio localities. The tax benefit associated with these NOL carryforwards was $78.3 million. Due to statutorily limited NOL carryforwards and income and loss projections in the applicable jurisdictions, a valuation allowance has been recorded to reflect the NOLs which are not presently expected to be realized in the amount of $60.2 million. If not used, the majority of the carryforwards will expire at various dates from December 31, 2021 through December 31, 2040. The domestic and foreign components of income (loss) before income taxes for the years ended December 31, 2020, 2019 and 2018 were as follows:
| For the year ended December 31,
(in millions) | 2020 |  | 2019 |  | 2018
Domestic | $ | (834.0) |  |  | $ | 85.5 |  |  | $ | 89.6 |
Foreign | (0.2) |  |  | 0.6 |  |  | 0.3 |
Total | $ | (834.2) |  |  | $ | 86.1 |  |  | $ | 89.9 |
The components of income tax benefit (expense) for the years ended December 31, 2020, 2019 and 2018 were as follows:
| For the year ended December 31,
(in millions) | 2020 |  | 2019 |  | 2018
Current tax benefit (expense) |  |  |  |  |
Federal | $ | 47.0 |  |  | $ | (12.5) |  |  | $ | (15.3) |
State | 0.2 |  |  | (9.2) |  |  | (6.4) |
Foreign | (0.4) |  |  | (0.2) |  |  | (1.4) |
Total current | 46.8 |  |  | (21.9) |  |  | (23.1) |
Deferred tax benefit (expense) |  |  |  |  |
Federal | 103.6 |  |  | (16.7) |  |  | 14.6 |
State | 14.7 |  |  | (4.4) |  |  | 10.9 |
Foreign | — |  |  | — |  |  | 1.2 |
Total deferred | 118.3 |  |  | (21.1) |  |  | 26.7 |
Total income tax benefit (expense) | $ | 165.1 |  |  | $ | (43.0) |  |  | $ | 3.6 |
The following table reconciles the statutory federal income tax rate to the actual effective income tax rate, and related amounts of income tax benefit (expense), for the years ended December 31, 2020, 2019 and 2018:
| For the year ended December 31,
| 2020 |  | 2019 |  | 2018
(in millions, except tax rates) | Percent |  | Amount |  | Percent |  | Amount |  | Percent |  | Amount
Percent and amount of pretax income |  |  |  |  |  |  |  |  |  |  |
Federal statutory rate | 21.0 | % |  | $ | 175.2 |  |  | 21.0 | % |  | $ | (18.1) |  |  | 21.0 | % |  | $ | (18.9) |
State and local income taxes, net of federal benefits | 1.4 |  |  | 12.1 |  |  | 9.9 |  |  | (8.5) |  |  | (6.2) |  |  | 5.6 |
Nondeductible expenses | (0.3) |  |  | (2.6) |  |  | 4.0 |  |  | (3.5) |  |  | 6.9 |  |  | (6.2) |
Goodwill impairment losses | (2.3) |  |  | (19.0) |  |  | 14.4 |  |  | (12.4) |  |  | — |  |  | — |
Compensation | 2.5 |  |  | 20.5 |  |  | 0.3 |  |  | (0.3) |  |  | (3.8) |  |  | 3.4 |
Foreign | — |  |  | (0.4) |  |  | 0.1 |  |  | (0.1) |  |  | (0.1) |  |  | 0.1 |
Federal valuation allowance | (3.9) |  |  | (32.7) |  |  | — |  |  | — |  |  | (20.3) |  |  | 18.3 |
Tax credits | 1.2 |  |  | 10.0 |  |  | — |  |  | — |  |  | — |  |  | — |
Other | 0.2 |  |  | 2.0 |  |  | 0.2 |  |  | (0.1) |  |  | (1.5) |  |  | 1.3 |
Total effective tax rate and income tax benefit (expense) | 19.8 | % |  | $ | 165.1 |  |  | 49.9 | % |  | $ | (43.0) |  |  | (4.0) | % |  | $ | 3.6 |
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
(in millions) | Unrecognized tax benefits
Unrecognized tax benefits as of January 1, 2018 | $ | 30.9 |
Additions based on prior year positions | 0.8 |
Decreases due to settlements and/or reduction in reserves | (2.0) |
Unrecognized tax benefits as of December 31, 2018 | 29.7 |
Additions based on prior year positions | 6.5 |
Decreases due to settlements and/or reduction in reserves | (0.2) |
Unrecognized tax benefits as of December 31, 2019 | 36.0 |
Additions based on prior year positions | 1.2 |
Decreases due to settlements and/or reduction in reserves | (0.9) |
Unrecognized tax benefits as of December 31, 2020 | $ | 36.3 |
During the year ended December 31, 2020, we did not record any new tax reserves, and accrued interest or penalties related to current year uncertain tax positions. Regarding prior year tax positions, we recorded $1.9 million of tax reserves and accrued interest and reversed $1.0 million of previously recorded tax reserves and accrued interest for uncertain tax positions. As of December 31, 2020 and 2019, unrecognized tax benefits, inclusive of accruals for income tax related penalties and interest, of $38.2 million and $37.2 million, respectively, were included in “Other long-term liabilities” within the Company’s Consolidated Balance Sheets. Overall, the Company recorded a net tax expense of $0.9 million in connection with its uncertain tax positions for the year ended December 31, 2020. The liability for unrecognized tax benefits as of December 31, 2020 and 2019 included $30.2 million and $29.4 million, respectively, of tax positions that, if reversed, would affect the effective tax rate. During the years ended December 31, 2020, 2019 and 2018, we recognized $0.5 million, $0.1 million and $0.5 million, respectively, of interest and penalties, net of deferred taxes. In addition, due to settlements and/or reductions in previously recorded liabilities, the Company had reductions in previously accrued interest and penalties of $0.1 million, net of deferred taxes. The Company had no reductions in previously accrued interest and penalties for the year ended December 31, 2019. We classify any income tax related penalties and interest accrued related to unrecognized tax benefits in “Income tax benefit (expense)” within the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company is currently in various stages of the examination process in connection with its open audits. Generally, it is difficult to determine when these examinations will be closed, but the Company reasonably expects that its ASC 740 liabilities will not significantly change over the next twelve months. As of December 31, 2020, the Company has open tax years 2017 through 2019 that could be subject to examination for U.S. federal income taxes. In addition, we are subject to state and local income tax examinations for various tax years in the taxing jurisdictions in which we operate. Such audits could result in increased tax liabilities, interest and penalties. While the Company believes its tax positions are appropriate, we cannot assure the outcome will remain consistent with our expectation. The Company believes we have adequately reserved for potential audit exposures of uncertain tax positions. In the event the final outcome of these matters is different than the amounts recorded, such differences will impact our income tax provision in the period in which the determination is made. As of December 31, 2020 and 2019, prepaid income taxes of $52.7 million and $22.2 million, respectively, were included in “Prepaid expenses” within the Company’s Consolidated Balance Sheets.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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