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Goodwill and Intangible Assets, net
 12 Months Ended
Dec. 31, 2021
Other And Intangible Assets Net Disclosure [Abstract]  
Goodwill and Intangible Assets, net Goodwill and Intangible Assets, net
The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. The Company determines the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices, and estimates made by management. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is recorded as goodwill.
Goodwill and indefinite-lived intangible assets must be reviewed for impairment at least annually and between annual test dates in certain circumstances. The Company performs its annual impairment tests as of October 1 of each fiscal year. The Company performs this assessment more frequently if impairment indicators exist. We utilized an income approach using a discounted cash flow method to determine the fair value of our goodwill. The Company performed the annual goodwill impairment test by comparing the fair value of each reporting unit with its carrying amount. The Company determines the estimated 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, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. The Company also evaluates the aggregate fair value of all of its reporting units and other non-operating assets in comparison to its aggregate debt and equity market capitalization at the test date. EBITDA multiples and discounted cash flows are common measures used to value businesses in the industry.
Indefinite-lived intangible assets consist primarily of trademarks and expenditures associated with obtaining racing and gaming licenses. Indefinite-lived intangible assets are not subject to amortization but are subject to an annual impairment test. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess amount.
Gaming rights represent intangible assets acquired from the purchase of a gaming entity located in a gaming jurisdiction where competition is limited, such as when only a limited number of gaming operators are allowed to operate in the jurisdiction. These gaming license rights are not subject to amortization as the Company has determined that they have indefinite useful lives. For gaming jurisdictions with high barriers of renewal of the gaming rights, such as material costs of renewal, the gaming rights are deemed to have a finite useful life and are amortized over the expected useful life. We used the Excess Earnings Method and a Cost Approach for estimating fair value for these gaming rights.
Finite-lived intangible assets consist of trade names and customer relationships acquired in business combinations. Amortization is recorded using the straight-line method over the estimated useful life of the asset. The Company evaluates for impairment whenever indicators of impairment exist. When indicators are noted, the Company then compares estimated future cash flows, undiscounted, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is recorded.
In December 2021, the Company approved a capital plan which included the planned rebranding of certain of our properties, which is expected to be substantially complete by December 31, 2022. The Company utilized an income approach to determine the fair value of the trademarks subject to rebranding based on their expected future cash flows, which resulted in an impairment charge of $102 million. The adjusted carrying values of these trademarks, previously considered to have indefinite lives, have begun to be amortized over their respective remaining useful lives.
During 2020, the Company recognized impairment charges in our Regional segment related to goodwill and trade names totaling $100 million and $16 million, respectively, due to declines in recent performance and the expected impact on future cash flows as a result of COVID-19.
When assets are deemed to be held for sale, any associated intangible assets, including goodwill, are reclassified to Assets held for sale on our Balance Sheets (see Note 4).
Changes in Carrying Value of Goodwill by Segment
(In millions)Las VegasRegionalCaesars DigitalManaged and BrandedCEI Total
Gross Goodwill:
Balance as of January 1, 2020
$— $922 $— $— $922 
Transferred to assets held for sale— (18)— — (18)
Acquired (a)
6,873 2,141 50 — 9,064 
Balance as of December 31, 2020
6,873 3,045 50 — 9,968 
Accumulated Impairment:
Balance as of January 1, 2020
— (12)— — (12)
Impairment— (100)— — (100)
Transferred to assets held for sale— 8 — — 8 
Balance as of December 31, 2020
— (104)— — (104)
Net carrying value, as of December 31, 2020
$6,873 $2,941 $50 $— $9,864 
Gross Goodwill:
Balance as of January 1, 2021
$6,873 $3,045 $50 $— $9,968 
Acquired (a)
— 63 1,148 — 1,211 
Other 16 (15)— — 1 
Balance as of December 31, 2021
6,889 3,093 1,198 — 11,180 
Accumulated Impairment:
Balance as of January 1, 2021
— (104)— — (104)
Balance as of December 31, 2021
— (104)— — (104)
Net carrying value, as of December 31, 2021 (b)
$6,889 $2,989 $1,198 $— $11,076 
____________________
(a)See Note 3 for further detail.
(b)$352 million of goodwill within our Regional segment is associated with reporting units with zero or negative carrying value.
Changes in Carrying Value of Intangible Assets Other than Goodwill
AmortizingNon-AmortizingTotal
(In millions)202120202021202020212020
Balance as of January 1$501 $53 $3,782 $1,058 $4,283 $1,111 
Impairment— — (102)(22)(102)(22)
Amortization expense(139)(56)— — (139)(56)
Transferred to assets held for sale— (5)— (174)— (179)
Acquired (a)
575 489 43 2,905 618 3,394 
Acquisition of gaming rights and trademarks (b)
253 20 50 15 303 35 
Other19 — (62)— (43)— 
Balance as of December 31$1,209 $501 $3,711 $3,782 $4,920 $4,283 
____________________
(a)See Note 3 for further detail.
(b)Includes acquired royalty-free license of Planet Hollywood Trademark with an estimated useful life of 15 years and other gaming rights.
Gross Carrying Value and Accumulated Amortization of Intangible Assets Other Than Goodwill
December 31, 2021December 31, 2020
(Dollars in millions)Useful LifeGross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortizing intangible assets
Customer relationships
3 - 7 years
$587 $(187)$400 $510 $(92)$418 
Gaming rights and others
20 - 34 years
174 (7)167 84 (1)83 
Trademarks15 years322 (21)301 — — — 
Reacquired rights24 years250 (7)243 — — — 
Technology6 years110 (12)98 — — — 
$1,443 $(234)1,209 $594 $(93)501 
Non-amortizing intangible assets
Trademarks1,998 2,161 
Gaming rights1,190 1,098 
Caesars Rewards523 523 
3,711 3,782 
Total amortizing and non-amortizing intangible assets, net$4,920 $4,283 
Amortization expense with respect to intangible assets for the years ended December 31, 2021, 2020 and 2019 totaled $139 million, $56 million and $30 million, respectively, which is included in depreciation and amortization in the Statements of Operations.
Estimated Five-Year Amortization
Years Ended December 31,
(In millions)20222023202420252026
Estimated annual amortization expense$184 $138 $123 $116 $116