Discontinued Operations and Assets Held for Sale

3 Months Ended

Jul. 02, 2021

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Assets Held for Sale

Discontinued Operations and Assets Held for Sale

Discontinued operations

On November 4, 2019, we completed the sale of certain of our Enterprise Security assets and certain liabilities to Broadcom Inc. (the Broadcom sale). Certain costs associated with the divestiture of our Enterprise Security business are classified as discontinued operations in our Condensed Consolidated Statements of Operations. During the three months ended July 3, 2020, costs primarily consisted of severance and termination benefits as part of our November 2019 restructuring plan. These activities were completed during fiscal 2021. See Note 12 for information associated with our restructuring activities.

In connection with the Broadcom sale, we entered into a transition services agreement under which we provided assistance to Broadcom including, but not limited to, business support services and information technology services. During fiscal 2021, the transition services were completed. Dedicated direct costs, net of charges to Broadcom, for these transition services were $8 million during the three months ended July 3, 2020. These direct costs were presented as part of Other income (expense), net in the Condensed Consolidated Statements of Operations.

The following table presents information regarding certain components of income (loss) from discontinued operations, net of income taxes during the three months ended July 3, 2020. There was no discontinued operations activity during the three months ended July 2, 2021.

	Three Months Ended
(In millions)	July 3, 2020
Net revenues	$	—
Gross profit	$	—
Operating income (loss)	$	(42)
Income (loss) before income taxes	$	(41)
Income tax expense (benefit)	$	(10)
Income (loss) from discontinued operations	$	(31)

Assets held for sale

During fiscal 2020, we reclassified certain land and buildings previously reported as property and equipment to assets held for sale when the properties were approved for immediate sale in their present condition and the sale was expected to be completed within one year.

We continue to actively market the properties for sale; however, during fiscal 2022, the commercial real estate market continues to be adversely affected by the COVID-19 pandemic, which has delayed the expected timing of sale. We have taken into consideration the current real estate values and demand, and continue to execute plans to sell these properties. As of July 2, 2021, these assets are classified as assets held for sale. During the three months ended July 2, 2021, there were no impairments because the fair value of the properties less costs to sell either equals or exceeds their carrying value.On July 14, 2021, we completed the sale of certain land and buildings in Mountain View, which were previously classified as held for sale as of July 2, 2021, for cash consideration of $358 million. We will recognize a gain on sale of $176 million.