Company: CZR
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001590895-25-000068
Chunk: 262

Company: Caesars Entertainment, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 262
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Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets. During the second quarter of 2023, the Company evaluated its forecasted adjusted taxable income and objectively verifiable evidence and placed substantial weight on its 2022 and 2023 quarterly earnings, adjusted for non-recurring items, including the interest expense disallowed under current tax law. Accordingly, the Company determined it was more likely than not that a portion of the federal and state deferred tax assets will be realized and, as a result, during the second quarter of 2023, the Company reversed the valuation allowance related to these deferred tax assets and recorded an income tax benefit of $940 million. The Company is still carrying a valuation allowance on certain federal and state deferred tax assets that are not more likely than not to be realized in the future. The Company has assessed the changes to the valuation allowance, including realization of the disallowed interest expense deferred tax asset, using the integrated approach. As of December 31, 2024, the Company had federal and state net operating loss carryforwards of $52 million and $9.1 billion, respectively, and federal general business tax credit and research tax credit carryforwards of $89 million, which will expire on various dates as follows:Year of ExpirationNet Operating LossesTax Credits(In millions)FederalStatesFederal2025-2029$— $955 $— 2030-203433 2,571 — 2035-2044— 3,173 89 Do not expire19 2,391 — $52 $9,090 $89 In general, Section 382 of the Internal Revenue Code provides an annual limitation with respect to the ability of a corporation to utilize its net operating loss carryovers, as well as certain built-in losses, against future taxable income in the event of a change in ownership. It is unlikely that the limitation will adversely affect the Company’s ability to utilize its net operating loss carryovers against its future taxable income.

Table of Contents94

CAESARS ENTERTAINMENT, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Reconciliation of Unrecognized Tax BenefitsYears Ended December 31,(In millions)202420232022Balance as of beginning of year$124 $128 $157 Sale of William Hill International— — (24)Additions based on tax positions related to the