Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

We consider new evidence (both positive and negative) at each reporting date that could affect our view of the future realization of deferred tax assets. We evaluate information such as historical financial results, historical taxable income, projected future taxable income, expected timing of the reversals of existing temporary differences and available prudent and feasible tax planning strategies in our analysis. Based on the available evidence, valuation allowances in certain U.S. and non-U.S. jurisdictions remain consistent as of September 30, 2022.

Our income tax expense (including discrete items) was $4 million and $8 million for the three and nine months ended September 30, 2022, respectively, and income tax benefit was $172 million and $164 million for the three and nine months ended September 30, 2021, respectively. In 2022, our effective tax rate differs from the U.S. statutory rate of 21% primarily as a result of not benefiting year to date losses in continuing operations in accordance with the intra-period tax expense/benefit allocation rules as generally prescribed under ASC 740-20. In all periods, we recorded tax expense relative to pre-tax earnings in jurisdictions without valuation allowances, including our 19% noncontrolling interest in SciPlay.

The Divestitures are estimated to generate approximately $685 million of net cash taxes, after usage of tax attributes. Of this amount, $465 million was paid in the three months ended September 30, 2022 with the remainder expected to be paid in December 2022 and April 2023.