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Discontinued Operations | 12 Months Ended
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Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations Zillow Offers Wind Down In November 2021, the Board of Directors of Zillow Group made the determination to wind down Zillow Offers operations. This decision was made in light of home pricing unpredictability, capacity constraints and other operational challenges faced by Zillow Offers that were exacerbated by an unprecedented housing market, a global pandemic and a difficult labor and supply chain environment, all of which led us to conclude that, despite its initial promise in earlier quarters, Zillow Offers was unlikely to be a sufficiently stable line of business to meet our goals going forward. Historically Zillow Offers has been reported within our Homes segment. The wind down of Zillow Offers was completed in the third quarter of 2022, at which time Zillow Offers met the criteria for discontinued operations. Accordingly, we have presented the assets and liabilities and results of operations, excluding allocation of any general corporate expenses, of Zillow Offers for all periods presented as discontinued operations in our consolidated financial statements. No assets or liabilities were classified as discontinued operations as of December 31, 2022. The following table presents the major classes of assets and liabilities of discontinued operations as of December 31, 2021 (in millions):
Assets |
Current assets: |
Cash and cash equivalents | $ | 296 |
Accounts receivable, net | 78 |
Inventory | 3,913 |
Prepaid expenses and other current assets | 13 |
Restricted cash | 226 |
Total current assets of discontinued operations | 4,526 |
Intangible assets, net | 4 |
Other assets | 78 |
Total assets of discontinued operations | $ | 4,608 |
Liabilities |
Current liabilities: |
Accounts payable | $ | 6 |
Accrued expenses and other current liabilities | 72 |
Accrued compensation and benefits | 47 |
Borrowings under credit facilities | 2,199 |
Securitization term loans | 1,209 |
Total current liabilities of discontinued operations | $ | 3,533 |
The following table presents the major classes of line items of the discontinued operations included in the consolidated statements of operations for the periods presented (in millions):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Revenue | $ | 4,249 |  |  | $ | 6,015 |  |  | $ | 1,716 |
Cost of revenue | 4,023 |  |  | 6,071 |  |  | 1,611 |
Gross profit (loss) | 226 |  |  | (56) |  |  | 105 |
Operating expenses: |  |  |  |  |
Sales and marketing | 153 |  |  | 361 |  |  | 156 |
Technology and development | 6 |  |  | 53 |  |  | 66 |
General and administrative | 10 |  |  | 35 |  |  | 33 |
Impairment and restructuring costs | 25 |  |  | 62 |  |  | — |
Total operating expenses | 194 |  |  | 511 |  |  | 255 |
Income (loss) from discontinued operations | 32 |  |  | (567) |  |  | (150) |
Loss on extinguishment of debt | (21) |  |  | — |  |  | — |
Other income, net | 13 |  |  | 3 |  |  | — |
Interest expense | (36) |  |  | (64) |  |  | (17) |
Loss from discontinued operations before income taxes | (12) |  |  | (628) |  |  | (167) |
Income tax benefit (expense) | (1) |  |  | (2) |  |  | — |
Net loss from discontinued operations | $ | (13) |  |  | $ | (630) |  |  | $ | (167) |
Net loss from discontinued operations per share: |  |  |  |  |
Basic | $ | (0.05) |  |  | $ | (2.52) |  |  | $ | (0.75) |
Diluted | $ | (0.05) |  |  | $ | (2.41) |  |  | $ | (0.72) |
The following table presents significant non-cash items and capital expenditures of the discontinued operations for the periods presented (in millions):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Amortization of debt discount and debt issuance costs | $ | 21 |  |  | $ | 11 |  |  | $ | — |
Loss on debt extinguishment | 21 |  |  | — |  |  | — |
Share-based compensation | 16 |  |  | 40 |  |  | 27 |
Inventory valuation adjustment | 9 |  |  | 408 |  |  | — |
Depreciation and amortization | 7 |  |  | 10 |  |  | 6 |
Capital expenditures | 1 |  |  | 6 |  |  | 8 |
Issuance (settlement) of beneficial interests in securitizations | (79) |  |  | 63 |  |  | — |
Restructuring The following table presents a summary of restructuring charges attributable to discontinued operations for the periods presented (in millions):
|  |  | Year Ended December 31, |  |
| Line Item of Discontinued Operations |  | 2022 |  | 2021 |  | Cumulative Amount Recognized
Inventory write-down | Cost of revenue |  | $ | 9 |  |  | $ | 408 |  |  | N/A
Other charges: |  |  |  |  |  |  |
Employee termination costs | Impairment and restructuring costs |  | $ | 20 |  |  | $ | 52 |  |  | $ | 72 |
Financing-related charges | Interest expense and Loss on debt extinguishment |  | 37 |  |  | 6 |  |  | 43 |
Contract termination costs | Impairment and restructuring costs |  | 4 |  |  | 10 |  |  | 14 |
Accelerated depreciation and amortization | Cost of revenue |  | 14 |  |  | 5 |  |  | 19 |
Asset write-offs | Impairment and restructuring costs |  | — |  |  | 1 |  |  | 1 |
Other charges | Impairment and restructuring costs |  | 1 |  |  | — |  |  | 1 |
Total other charges |  |  | 76 |  |  | 74 |  |  | 150 |
Total |  |  | $ | 85 |  |  | $ | 482 |  |  | $ | 567 |
Restructuring charges attributable to continued operations relate to employee termination costs within our IMT and Mortgages segments and certain indirect costs of the Homes segment that do not qualify as discontinued operations. These costs totaled $12 million, $4 million and $8 million, respectively, for the year ended December 31, 2022. Cumulative restructuring charges attributable to continued operations as of December 31, 2022 totaled $33 million, $10 million of which pertained to employee cost actions that occurred during the fourth quarter of 2022 that did not relate to the Zillow Offers wind down. The remaining liability balance associated with such restructuring charges as of December 31, 2022 is not material.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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