Tax credit carryforward, amount

CAESARS ENTERTAINMENT, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred taxes at December 31, 2021 and 2020 are as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | As of December 31, |
| (In millions) | 2021 |  | 2020 |
| Deferred tax assets: |  |  |  |
| Loss carryforwards | $ | 1,006  |  |  | $ | 1,071  |  |
| Foreign investment - held for sale | —  |  |  | 74  |  |
| Excess business interest expense | 180  |  |  | 61  |  |
| Credit carryforwards | 114  |  |  | 106  |  |
| Financing obligation | 2,517  |  |  | 2,557  |  |
| Long-term lease obligation | 161  |  |  | 187  |  |
| Other | 330  |  |  | 289  |  |
|  | 4,308  |  |  | 4,345  |  |
| Deferred tax liabilities: |  |  |  |
| Identified intangibles | (1,111) |  |  | (836) |  |
| Other debt-related items | (35) |  |  | (108) |  |
| Foreign investment - held for sale | (139) |  |  | —  |  |
| Fixed assets | (2,212) |  |  | (2,424) |  |
| Right-of-use assets | (131) |  |  | (154) |  |
| Other | (103) |  |  | (68) |  |
|  | (3,731) |  |  | (3,590) |  |
| Valuation allowance | (1,840) |  |  | (1,921) |  |
| Net deferred tax liabilities | $ | (1,263) |  |  | $ | (1,166) |  |

The net deferred tax liabilities above are presented in the Balance Sheets as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | As of December 31, |
| (In millions) | 2021 |  | 2020 |
| Deferred income taxes | $ | (1,111) |  |  | $ | (1,166) |  |
| Assets held for sale | 7  |  |  | 1  |  |
| Liabilities related to assets held for sale | (159) |  |  | (1) |  |
| Net deferred tax liabilities | $ | (1,263) |  |  | $ | (1,166) |  |

As a result of the Merger, the Company assumed $767 million of additional net deferred tax liabilities, net of valuation allowances, plus $24 million in additional accruals for uncertain tax positions including accrued interest. As a result of the William Hill Acquisition, the Company assumed $377 million of additional net deferred tax liabilities net of valuation allowances, plus $34 million in additional accruals for uncertain tax positions including accrued interest. Of the deferred tax liabilities and uncertain tax positions recorded due to the William Hill Acquisition, $132 million and $34 million, respectively, have been presented in Liabilities related to assets held for sale. A valuation allowance is recognized if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax asset will not be realized. Management must analyze all available positive and negative evidence regarding realization of the deferred tax assets and make an assessment of the likelihood of sufficient future taxable income. We have provided a valuation allowance on certain federal, state, and foreign deferred tax assets that were not deemed realizable based upon estimates of future taxable income. As of December 31, 2021, the Company had federal and state net operating loss carryforwards of $2.4 billion and $9.4 billion, respectively. The federal and state net operating loss carryforwards include $450 million and $2.2 billion, respectively, that do not expire. The remaining federal and state net operating loss carryforwards will begin to expire in 2032 and 2022, respectively. As of December 31, 2021, the Company had federal general business tax credit and research tax credit carryforwards of $116 million, which begin to expire in 2029.As of December 31, 2021, the Company had foreign net operating loss carryforwards of $60 million. The foreign net operating loss carryforwards include $58 million that do not expire. The remaining $2 million foreign net operating losses begin to expire in 2033.[Table of Contents](#i37dfc5eabc12461dbfc5ef573d80947e_7)110
