Company: CZR
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001590895-25-000068
Chunk: 595

Company: Caesars Entertainment, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 595
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 the second quarter of 2023, we evaluated our forecasted adjusted taxable income and objectively verifiable evidence and placed substantial weight on our 2022 and 2023 quarterly earnings, adjusted for non-recurring items, including the interest expense disallowed under current tax law. Accordingly, we 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, we reversed the valuation allowance related to these deferred tax assets and recorded an income tax benefit of $940 million. We are 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. We have 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 

Under the applicable accounting standards, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The accounting standards also provide guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions.

Goodwill and Other Indefinite-lived Intangible Assets

Assessing goodwill and indefinite-lived intangible assets for impairment is a process that requires significant judgment and involves detailed qualitative and quantitative business-specific analysis and many individual assumptions which fluctuate between assessments.

We determine the estimated fair value of each reporting unit based on a combination of EBITDA, valuation multiples, and estimated future cash flows discounted at rates commensurate with