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Discontinued Operations (Tables) | 9 Months Ended
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Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract] |
Financial results of discontinued operations | The financial results of Classifieds and StubHub are presented as income from discontinued operations, net of income taxes in our condensed consolidated statement of income. The following table presents financial results from discontinued operations (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2020 |  | 2019 |  | 2020 (1) |  | 2019 |  |  |  |
Classifieds income from discontinued operations, net of income taxes | $ | 47 |  |  | $ | 81 |  |  | $ | 132 |  |  | $ | 160 |  |  |  |  |
StubHub income (loss) from discontinued operations, net of income taxes | (4) |  |  | 19 |  |  | 2,931 |  |  | 27 |  |  |  |  |
PayPal and Enterprise (loss) from discontinued operations, net of income taxes | — |  |  | — |  |  | (2) |  |  | (4) |  |  |  |  |
Income from discontinued operations, net of income taxes | $ | 43 |  |  | $ | 100 |  |  | $ | 3,061 |  |  | $ | 183 |  |  |  |  |
(1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, and includes the gain on sale recorded for the StubHub transaction. The following table presents cash flows for Classifieds and StubHub (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2020 |  | 2019 |  | 2020 (1) |  | 2019 |  |  |  |
Classifieds net cash provided by discontinued operating activities | $ | 137 |  |  | $ | 130 |  |  | $ | 256 |  |  | $ | 309 |  |  |  |  |
StubHub net cash provided by (used in) discontinued operating activities | (748) |  |  | 78 |  |  | (858) |  |  | 105 |  |  |  |  |
Net cash provided by (used in) discontinued operating activities | $ | (611) |  |  | $ | 208 |  |  | $ | (602) |  |  | $ | 414 |  |  |  |  |
Classifieds net cash (used in) discontinued investing activities | $ | (7) |  |  | $ | (2) |  |  | $ | (51) |  |  | $ | (106) |  |  |  |  |
StubHub net cash provided by (used in) discontinued investing activities | — |  |  | (2) |  |  | 4,075 |  |  | (19) |  |  |  |  |
Net cash provided by (used in) discontinued investing activities | $ | (7) |  |  | $ | (4) |  |  | $ | 4,024 |  |  | $ | (125) |  |  |  |  |
Classifieds net cash (used in) discontinued financing activities | $ | — |  |  | $ | — |  |  | $ | (2) |  |  | $ | — |  |  |  |  |
Net cash (used in) discontinued financing activities | $ | — |  |  | $ | — |  |  | $ | (2) |  |  | $ | — |  |  |  |  |
(1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, and includes the gain on sale recorded for the StubHub transaction. The financial results of StubHub are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. The following table presents the financial results of StubHub (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2020 |  | 2019 |  | 2020(1) |  | 2019 |  |  |  |
Net revenues | $ | — |  |  | $ | 306 |  |  | $ | 100 |  |  | $ | 800 |  |  |  |  |
Cost of net revenues | — |  |  | 76 |  |  | 31 |  |  | 215 |  |  |  |  |
Gross profit | — |  |  | 230 |  |  | 69 |  |  | 585 |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Sales and marketing | — |  |  | 148 |  |  | 51 |  |  | 372 |  |  |  |  |
Product development | (2) |  |  | 33 |  |  | 27 |  |  | 85 |  |  |  |  |
General and administrative | — |  |  | 22 |  |  | 33 |  |  | 65 |  |  |  |  |
Provision for transaction losses | — |  |  | 4 |  |  | 3 |  |  | 17 |  |  |  |  |
Amortization of acquired intangible assets | — |  |  | 3 |  |  | 1 |  |  | 7 |  |  |  |  |
Total operating expenses | (2) |  |  | 210 |  |  | 115 |  |  | 546 |  |  |  |  |
Income (loss) from operations of discontinued operations | 2 |  |  | 20 |  |  | (46) |  |  | 39 |  |  |  |  |
Pre-tax gain (loss) on sale | (8) |  |  | — |  |  | 3,868 |  |  | — |  |  |  |  |
Income (loss) from discontinued operations before income taxes | (6) |  |  | 20 |  |  | 3,822 |  |  | 39 |  |  |  |  |
Income tax benefit (provision) | 2 |  |  | (1) |  |  | (891) |  |  | (12) |  |  |  |  |
Income (loss) from discontinued operations, net of income taxes | $ | (4) |  |  | $ | 19 |  |  | $ | 2,931 |  |  | $ | 27 |  |  |  |  |
(1) Includes StubHub financial results from January 1, 2020 to February 13, 2020, and includes the gain on sale recorded for the StubHub transaction. The financial results of Classifieds are presented as income from discontinued operations, net of income taxes on our condensed consolidated statement of income. Each period presented below includes the impact of intercompany revenue agreements that will continue with eBay subsequent to the completion of the transfer of the Classifieds business. The impact of these intercompany revenue agreements to net revenues and cost of net revenues were $2 million and $4 million for the three months ended September 30, 2020 and 2019, respectively, and $9 million and $13 million for the nine months ended September 30, 2020 and 2019, respectively. The expected continuing cash flows are not considered to be significant. The following table presents the financial results of Classifieds (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2020 |  | 2019 |  | 2020 |  | 2019 |  |  |  |
Net revenues | $ | 263 |  |  | $ | 260 |  |  | $ | 705 |  |  | $ | 779 |  |  |  |  |
Cost of net revenues | 27 |  |  | 21 |  |  | 76 |  |  | 63 |  |  |  |  |
Gross profit | 236 |  |  | 239 |  |  | 629 |  |  | 716 |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Sales and marketing | 72 |  |  | 81 |  |  | 220 |  |  | 262 |  |  |  |  |
Product development | 44 |  |  | 37 |  |  | 118 |  |  | 112 |  |  |  |  |
General and administrative | 36 |  |  | 11 |  |  | 98 |  |  | 45 |  |  |  |  |
Provision for transaction losses | 3 |  |  | 4 |  |  | 13 |  |  | 8 |  |  |  |  |
Amortization of acquired intangible assets | 2 |  |  | 2 |  |  | 6 |  |  | 9 |  |  |  |  |
Total operating expenses | 157 |  |  | 135 |  |  | 455 |  |  | 436 |  |  |  |  |
Income from operations of discontinued operations | 79 |  |  | 104 |  |  | 174 |  |  | 280 |  |  |  |  |
Interest and other, net | (1) |  |  | — |  |  | 1 |  |  | (1) |  |  |  |  |
Income from discontinued operations before income taxes | 78 |  |  | 104 |  |  | 175 |  |  | 279 |  |  |  |  |
Income tax provision | (31) |  |  | (23) |  |  | (43) |  |  | (119) |  |  |  |  |
Income from discontinued operations, net of income taxes | $ | 47 |  |  | $ | 81 |  |  | $ | 132 |  |  | $ | 160 |  |  |  |  |
The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations for StubHub in the condensed consolidated balance sheet (in millions):
|  | December 31, 2019 |  |
Carrying amounts of assets included as part of discontinued operations: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 52 |  |  |  |  |
Accounts receivable, net |  | 9 |  |  |  |  |
Other current assets |  | 80 |  |  |  |  |
Total current assets of discontinued operations |  | $ | 141 |  |  |  |  |
Long-term investments |  | 11 |  |  |  |  |
Property and equipment, net |  | 26 |  |  |  |  |
Goodwill |  | 224 |  |  |  |  |
Intangible assets, net |  | 5 |  |  |  |  |
Operating lease right-of-use assets |  | 29 |  |  |  |  |
Deferred tax assets |  | 8 |  |  |  |  |
Other assets |  | 3 |  |  |  |  |
Total long-term assets of discontinued operations |  | $ | 306 |  |  |  |  |
Carrying amounts of liabilities included as part of discontinued operations: |  |  |  |  |  |
Accounts payable |  | $ | 19 |  |  |  |  |
Accrued expenses and other current liabilities |  | 215 |  |  |  |  |
Deferred revenue |  | 23 |  |  |  |  |
Income taxes payable |  | 2 |  |  |  |  |
Total current liabilities of discontinued operations |  | $ | 259 |  |  |  |  |
Operating lease liabilities |  | 20 |  |  |  |  |
Other liabilities |  | 6 |  |  |  |  |
Total long-term liabilities of discontinued operations |  | $ | 26 |  |  |  |  |
The following table presents the aggregate carrying amounts of held for sale assets and liabilities related to Classifieds in the condensed consolidated balance sheet (in millions):
| September 30, 2020 |  | December 31, 2019
Carrying amounts of assets included as part of held for sale: |  |  |
Cash and cash equivalents | $ | 30 |  |  | $ | 22 |
Accounts receivable, net | 116 |  |  | 136 |
Other current assets | 31 |  |  | 37 |
Long-term investments | 30 |  |  | 30 |
Property and equipment, net | 27 |  |  | 24 |
Goodwill | 443 |  |  | 396 |
Intangible assets, net | 33 |  |  | 23 |
Operating lease right-of-use assets | 18 |  |  | 16 |
Deferred tax assets | 388 |  |  | 389 |
Total assets classified as held for sale in the condensed consolidated balance sheet | $ | 1,116 |  |  | $ | 1,073 |
Carrying amounts of liabilities included as part of held for sale: |  |  |
Short-term debt | $ | — |  |  | $ | 2 |
Accounts payable | 23 |  |  | 22 |
Accrued expenses and other current liabilities | 109 |  |  | 92 |
Deferred revenue | 6 |  |  | 6 |
Income taxes payable | 43 |  |  | 41 |
Operating lease liabilities | 12 |  |  | 11 |
Deferred tax liabilities | 300 |  |  | 291 |
Other liabilities | 3 |  |  | 3 |
Total liabilities classified as held for sale in the condensed consolidated balance sheet | $ | 496 |  |  | $ | 468 |

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