Discontinued Operations

9 Months Ended

Sep. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

During the second quarter of 2022, we completed the divestiture of the Lottery Business, from which we received $5.7 billion in gross cash proceeds and recorded a pre-tax gain on the sale of the Lottery Business of $4.6 billion. During the third quarter of 2022, we completed the divestiture of the Sports Betting Business and received $796 million in gross proceeds, consisting of $750 million in gross cash proceeds and $46 million in fair value of Class A common stock of Endeavor Group Holdings, Inc. (approximately 2.3 million shares). The cash proceeds are subject to working capital adjustments expected to be finalized during the fourth quarter of 2022 or the first quarter of 2023. The fair value of the Class A common stock received was included in Prepaid expenses, deposits and other current assets in our consolidated balance sheet as of September 30, 2022. We recorded a pre-tax gain on the sale of the Sports Betting Business of $362 million.

We have reflected the financial results of the Divested Businesses as discontinued operations in our consolidated statements of operations and reflected the related assets and liabilities as held for sale in our consolidated balance sheet as of December 31, 2021.

The summarized results of our discontinued operations were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Total revenue	$	32	$	285	$	371	$	860
Total cost of revenue(1)	9		148		177		431
Other operating expenses(2)	31		63		180		184



Operating (loss) income	(8)		74		14		245
Total other income, net	2		16		10		90
Net (loss) income from discontinued operations before income taxes	(6)		90		24		335
Gain on sale of discontinued operations before income taxes	362		—		4,930		—
Total net income from discontinued operations before income taxes	356		90		4,954		335
Income tax expense	(41)		(3)		(1,099)		(6)
Net income from discontinued operations, net of tax included in the consolidated statement of operations	$	315	$	87	$	3,855	$	329





(1) Excludes D&A.
(2) Includes D&A of $26 million and $79 million for the three and nine months ended September 30, 2021, respectively, along with stock-based compensation of $7 million and $18 million for the three and nine months ended September 30, 2022, respectively, and $7 million and $14 million for the three and nine months ended September 30, 2021, respectively. Due to the discontinued operations classification of the Divested Businesses as of the third quarter of 2021, D&A was ceased and none was included for the three and nine months ended September 30, 2022. The three and nine months ended September 30, 2022 also include $7 million and $85 million, respectively, related to direct transaction closing fees.

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