Company: CZR
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001590895-25-000068
Chunk: 596

Company: Caesars Entertainment, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 596
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 the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. We also evaluate the aggregate fair value of all of our reporting units and other non-operating assets in comparison to our aggregate debt and equity market capitalization at the test date. EBITDA multiples and discounted cash flows are common measures used to value businesses in our industry.

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We determine the fair value of our indefinite-lived intangible assets using either the relief from royalty method or the excess earnings method under the income approach or a replacement cost market approach. The determination of fair value of our reporting units and indefinite-lived intangible assets requires management to make significant assumptions and estimates around the forecasts as well as the selection of discount rates and valuation multiples. Changes in these estimates could have a significant impact on the fair value of our reporting units, intangible assets and result in potential impairment.

Forecasts and the determination of appropriate discount rates and valuation multiples used to determine the fair value of our reporting units and indefinite-lived intangible assets involves significant assumptions and estimates. Assumptions include those used to assess effects of changes in the competitive environment, capital projects and new developments which may not be realized at the projected rate.

We completed our annual impairment tests as of October 1, 2024. As a result, we recognized impairment charges in our Regional and Las Vegas segments. Our Regional segment’s impairments were due to a decrease in projected future cash flows at certain regional properties primarily due to localized competition within certain markets. We identified six reporting units in the Regional segment with estimated fair values associated with trademarks, gaming rights and goodwill below their respective carrying values and recorded impairments. This resulted in trademark impairment of $15 million, gaming rights impairment of $73 million and goodwill impairment of $182 million within the segment. Impairment charges of $32 million to a trademark were also recorded due to the performance of our smallest brand in the Las Vegas segment. 

As of October 1, 2024, four reporting units in the Regional segment and one reporting unit in the Las Vegas segment with goodwill totaling $1.2 billion had fair values that did not significantly exceed their respective carrying values. In addition, we identified one trademark totaling $22 million in the Regional segment that did not significantly exceed its carrying value. The reporting units and indefinite lived intangible assets with carrying values that do not significantly exceed their estimated fair values are primarily assets acquired in the Merger when our discount rate was