Discontinued Operations

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

During the second quarter of 2022, we completed the sale of the Lottery Business, from which we received $5.7 billion in gross cash proceeds and recorded a pre-tax gain of $4.6 billion. During the third quarter of 2022, we completed the sale of the Sports Betting Business, from which we received $793 million in gross proceeds, consisting of $747 million in gross cash proceeds (adjusted for final closing statement adjustments of $3 million in the fourth quarter of 2022) and $46 million in fair value of Class A common stock of Endeavor (approximately 2.3 million shares), and recorded a pre-tax gain of $359 million. The Endeavor stock was sold in the fourth quarter of 2022 for $48 million. We have reflected the financial results of the Divested Businesses as discontinued operations in our consolidated statements of operations for all periods presented and the assets and liabilities of these businesses as held for sale in our consolidated balance sheets as of December 31, 2021.

The summarized results of our discontinued operations were as follows:

	Years Ended December 31,
	2022		2021		2020
Total revenue	$	371	$	1,157	$	1,025
Total cost of revenue(1)	177		587		550
Other operating expenses(2)	182		233		208
Operating income	12		337		267
Total other income (expense), net	9		101		(7)
Net income from discontinued operations before income taxes	21		438		260
Gain on sale of discontinued operations before income taxes	4,927		—		—
Total net income from discontinued operations before income taxes	4,948		438		260
Income tax expense	(1,075)		(72)		(7)
Net income from discontinued operations, net of tax included in the consolidated statement of operations	$	3,873	$	366	$	253
(1) Excludes D&A.
(2) Includes D&A of $79 million and $105 million for the years ended December 31, 2021 and 2020, respectively, stock-based compensation of $18 million, $24 million and $5 million for the years ended December 31, 2022, 2021 and 2020, respectively, and direct transaction closing fees of $87 million for the year ended December 31, 2022. Due to the discontinued operations classification of the Divested Businesses as of the third quarter of 2021, D&A ceased and is not included for the year ended December 31, 2022.

The following table summarizes the major classes of assets and liabilities of businesses held for sale.

	As of December 31, 2021
ASSETS
Cash and cash equivalents	$	44
Restricted cash	22
Receivables, net	214
Inventories	94
Prepaid expenses deposits and other current assets	123
Total current assets of businesses held for sale	497
Property and equipment, net	217
Intangible assets and software, net	304
Goodwill	623
Equity investments	251
Other assets	82
Total non-current assets of businesses held for sale	1,477
Total assets of businesses held for sale	$	1,974
LIABILITIES
Accounts payable	$	95
Accrued liabilities and other	187
Total current liabilities of businesses held for sale	282
Operating lease liabilities	34
Other	90
Total non-current liabilities of businesses held for sale	124
Total liabilities of businesses held for sale	$	406