Company: CZR
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001590895-25-000068
Chunk: 208

Company: Caesars Entertainment, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 208
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 basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill – Refer to Note 5 to the Financial Statements

Critical Audit Matter Description

The Company reviews goodwill for impairment at least annually and between annual test dates in certain circumstances. The Company performs its impairment test by comparing the fair value of each reporting unit to the carrying amount. The Company determines the established fair value of each reporting unit based on a combination of earnings before interest, taxes, depreciation, and amortization (“EBITDA”), valuation multiples, and estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, considering the prevailing borrowing rates within the casino industry in general, and expected sales proceeds. The Company further evaluates the aggregate fair value of all reporting units and other non-operating assets in comparison to its aggregate debt and equity market capitalization at the test date.

The Company performed its annual impairment assessment as of October 1, 2024. The Company’s goodwill balance was $10,601 million as of December 31, 2024 of which: (1) $1.1 billion and $71 million was related to three reporting units in the Regional segment and one reporting unit in the Las Vegas segment, respectively, had estimated fair values that did not significantly exceed their carrying values.

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The determination of the Company’s reporting units’ fair value requires management to make significant assumptions and estimates around forecasts and the selection of discount rates. Therefore, our audit procedures to evaluate the reasonableness of management’s forecasts required a higher degree of auditor judgement, increased level of audit effort, and use of more experienced audit professionals, as well as the involvement of valuation specialists. 

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s forecasts and the selection of discount rates used by management to determine the fair value of the Company’s reporting units included the following, among others:

•We tested