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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended: December 31, 2015
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Or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or other jurisdiction of
incorporation or organization)
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81-0422894
(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Class A Common Stock, $.01 par value
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Nasdaq Global Select Market
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if
smaller reporting company)
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Smaller reporting company
o
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(1)
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For this purpose only, "non-affiliates" excludes directors and executive officers.
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Glossary of Terms
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The following terms or acronyms used in this Form 10-K are defined below:
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Term or Acronym
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Definition
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2018 Notes
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8.125% senior subordinated notes due 2018 issued by Scientific Games Corporation
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2019 Notes
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9.250% senior subordinated notes due 2019 issued by SGI
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2020 Notes
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6.250% senior subordinated notes due 2020 issued by SGI
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2021 Notes
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6.625% senior subordinated notes due 2021 issued by SGI
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ADS
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Technology and Gaming, Ltd.
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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Bally
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Bally Technologies, Inc.
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Bally acquisition
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the acquisition of Bally by the Company on November 21, 2014
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Barcrest
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Barcrest Group Limited
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Coin-in
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the amount wagered
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Company
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refers to Scientific Games Corporation and its consolidated subsidiaries, unless otherwise specified or the context otherwise dictates
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CSG
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Beijing CITIC Scientific Games Technology Co., Ltd.
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CSL
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China Sports Lottery
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CSP
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Cooperative Services Provider
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D&A
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depreciation and amortization
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ESPP
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employee stock purchase plan
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EU
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European Union
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FASB
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Financial Accounting Standards Board
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Global Draw
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The Global Draw Limited
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GLB
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Beijing Guard Libang Technology Co., Ltd.
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Hellenic Lotteries
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Hellenic Lotteries S.A.
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ITL
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International Terminal Leasing
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LAP
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local-area progressive
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LBO
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licensed betting office
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LNS
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Lotterie Nazionali S.r.l.
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Net win
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Coin-in less payouts
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Northstar Illinois
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Northstar Lottery Group, LLC
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Northstar New Jersey
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Northstar New Jersey Lottery Group, LLC
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Note
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refers to a note to our Consolidated Financial Statements in this Annual Report on Form 10-K, unless otherwise indicated
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Parspro
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PPC hf
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Participation
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with respect to our Gaming business, refers to gaming machines provided to customers through service or leasing arrangements in which our revenues are calculated based on: (1) a percentage of Net win; (2) fixed daily fees; (3) a percentage of the Coin-in; or (4) a combination of a fixed daily fee and a percentage of the Coin-in, and with respect to our Lottery business, refers to a contract or arrangement in which the Company is paid based on a percentage of retail sales
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PMA
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private management agreement
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Provoloto
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SG Provoloto, S. de R.L. de C.V.
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R&D
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research and development
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Racing Business
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racing and venue management businesses
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RCN
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Roberts Communications Network, LLC
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RFP
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request for proposal
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RMG
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real-money gaming
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RSU
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restricted stock unit
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SEC
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Securities and Exchange Commission
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Secured Notes
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7.00% senior secured notes due 2022 issued by SGI
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Securities Act
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Securities Act of 1933, as amended
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Senior Notes
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the Secured Notes and the Unsecured Notes
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SG&A
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selling, general and administrative
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SGI
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Scientific Games International, Inc., a wholly-owned subsidiary of Scientific Games Corporation
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SHFL
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SHFL entertainment, Inc.
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Shufflers
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various models of automatic card shufflers, deck checkers and roulette chip sorters
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Sportech
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Sportech plc
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Subordinated Notes
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the 2018 Notes, 2020 Notes and 2021 Notes
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Unsecured Notes
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10.00% senior unsecured notes due 2022 issued by SGI
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U.K.
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United Kingdom of Great Britain and Northern Ireland
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U.S.
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United States of America
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U.S. GAAP
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accounting principles generally accepted in the United States of America
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VLT
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video lottery terminal
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WAP
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wide-area progressive
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WMS
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WMS Industries, Inc.
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WMS acquisition
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the acquisition of WMS by the Company on October 18, 2013
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•
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competition;
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U.S. and international economic and industry conditions, including declines in or slow growth of gross gaming revenues or lottery retail sales, reductions in or constraints on capital spending by gaming or lottery operators and bankruptcies of, or credit risk relating to, customers;
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limited growth from new gaming jurisdictions, slowing additions of casinos in existing jurisdictions and declines in the replacement cycle of existing gaming machines;
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ownership changes and consolidation in the gaming industry, including by casino operators;
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opposition to legalized gaming or the expansion thereof;
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inability to adapt to, and offer products that keep pace with, evolving technology;
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inability to develop successful gaming concepts and content;
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laws and government regulations, including those relating to gaming licenses and environmental laws;
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inability to identify and capitalize on trends and changes in the gaming, lottery and interactive gaming industries;
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dependence upon key providers in our social gaming business;
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inability to retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
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level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
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inability to reduce or refinance our indebtedness;
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restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;
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protection of intellectual property, inability to license third party intellectual property and the intellectual property rights of others;
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security and integrity of our products and systems and reliance on or failures in information technology and other systems;
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natural events that disrupt our operations or those of our customers, suppliers or regulators;
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inability to benefit from, and risks associated with, strategic equity investments and relationships, including (1) the inability of our joint venture to realize the anticipated benefits under its private management agreement with the Illinois Lottery or from the disentanglement services performed in connection with the termination thereof, (2) the inability of our joint venture to meet the net income targets or other requirements under its agreement to provide marketing and sales services to the New Jersey Lottery or otherwise to realize the anticipated benefits under such agreement and (3) the failure to realize the anticipated benefits related to our consortium's instant lottery game concession in Greece;
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failure to achieve the intended benefits of the Bally acquisition, the WMS acquisition, our other recent acquisitions, or future acquisitions, including due to the inability to successfully complete or integrate such acquisitions or realize synergies in the anticipated amounts or within the contemplated time frames or cost expectations, or at all;
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disruption of current plans and operations in connection with our recent acquisitions (including in connection with the integration of Bally and WMS), including departure of key personnel or inability to recruit additional qualified personnel or maintain relationships with customers, suppliers or other third parties;
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costs, charges and expenses relating to the Bally acquisition and the WMS acquisition;
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incurrence of employee termination or restructuring costs and impairment or asset write-down charges;
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changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;
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implementation of complex revenue recognition standards;
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fluctuations in our results due to seasonality and other factors;
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dependence on suppliers and manufacturers;
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risks relating to foreign operations, including fluctuations in foreign currency exchange rates, restrictions on the payment of dividends from earnings, restrictions on the import of products and financial instability, including the potential impact to our instant lottery game concession or VLT lease arrangements resulting from the recent economic and political conditions in Greece;
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dependence on key employees;
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litigation and other liabilities relating to our business, including litigation and liabilities relating to our contracts and licenses, our products and systems, our employees (including labor disputes), intellectual property and our strategic relationships;
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influence of certain stockholders; and
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stock price volatility.
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Focus on innovation
— We place great emphasis on producing innovative and high-performing Gaming, Lottery and Interactive content, products and services that provide measurable value to our customers. Our goal is to create “must have” products and complete systems and services with unique features and functionality through our innovation-centric corporate culture. We seek to leverage our expansive content library and portfolio of proprietary and licensed intellectual property, and utilize our extensive player and customer research in order to bring innovation to our products, services and processes. Also, we intend to take advantage of our state-of-the-art operating system development and game development tools to enhance our ideation and development processes and generate greater efficiencies in game production.
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Deepen customer-centric focus
— We aim to meet the needs of our Gaming, Lottery and Interactive customers and their respective players with our expansive portfolio of Gaming, Lottery and Interactive products and services and use our extensive industry experience to provide the best solutions to our customers as their partner of choice. We place great emphasis on tailoring our extensive research and development activities to address our customers’ needs and
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Leverage our scale and scope to drive growth through nimble and flexible operations, customer service and cost synergies
— We are one company with three business lines offering our customers around the globe the broadest and most comprehensive products and services in the industry. We plan to leverage our “Company of One” strategy in areas such as research and development, global sourcing, manufacturing and logistics in order to lower our cost, accelerate our speed to market and enhance customer satisfaction. We expect to continue achieve cost synergies through disciplined balance sheet management and the continued consolidation of our company policies, business platforms and facilities, as we improve our operations and business processes to be best-in-class.
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Capitalize on growth opportunities
— We seek to leverage our diversified portfolio of Gaming, Lottery and Interactive solutions, our broad international presence and our extensive business development and government relations capabilities to extend our Gaming, Lottery and Interactive gaming businesses to new jurisdictions and to expand our presence in existing jurisdictions. We plan to pursue opportunities to cross-sell and cross-utilize the combined company’s expansive portfolio of game content, intellectual property and licensed brands across multiple distribution channels in order to grow our revenue. With continued focus on growing recurring revenue, our goal is to attain global leadership in each of our business segments while selectively pursuing new verticals, strategic alliances and acquisitions.
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Primary Business Activities
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Equity Investments
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Supplying gaming machines, VLTs, arcade and bingo machines, conversion kits, automatic card shufflers, roulette chip sorters and spare parts for all of our products to commercial, tribal and governmental gaming operators
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RCN-29.4% equity interest in a provider of communications services to racing and non-racing customers
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Leasing or otherwise providing gaming machines, VLTs, fixed odds betting terminals, automatic card shufflers, roulette chip sorters, server-based gaming systems and content and licensing proprietary table game content to commercial, tribal and governmental gaming operators
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ITL-50% equity interest in an entity from which we lease gaming machines and provide them to our customers
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Providing video lottery central monitoring and control systems and networks for gaming regulators
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Sportech-20% equity interest in an operator and supplier of sports pools and tote systems (sold on January 9, 2014)
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Selling casino-management technology solutions and systems to commercial, tribal and governmental gaming operators
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Gaming machines:
The majority of our product sales are derived from sales of gaming machines and VLTs that utilize a combination of advanced graphics, mechanical reels, digital music and sound effects and secondary bonus games. Our
Pro Series
TM
, Blade
®
and
TwinStar
TM
branded cabinets are currently available in upright, slant, curve and other models, including the
Pro Wave
®
cabinet with a unique 40-inch curved touchscreen monitor, the
Pro Jumbo V55
TM
cabinet measuring over nine feet tall and featuring a 55-inch widescreen vertical monitor and our
Dualos
TM
and
Equinox
®
branded cabinets. We also sell electronic table systems ("ETS") to either suit the needs of particular locations where live tables are not allowed or as productivity-enhancing solutions for other jurisdictions. Our ETS suite of products provides numerous efficiencies and benefits to casinos including reduced downtime, virtual elimination of errors, miss-pays and cheating and automated reporting such as wagering statistics and player tracking. Some of our ETS products enable us to offer table game content where live table games are not permitted, such as racinos (establishments that offer casino gaming in addition to race betting) and locations that provide VLTs.
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Casino-management technology solutions and systems:
We offer core slot, casino and table-management systems (collectively, "casino-management systems") that help our customers improve communication with players, add excitement to the gaming floor and enhance operating efficiencies through greater automation, reporting and business intelligence. Our comprehensive suite of technology solutions provides gaming operations of every size with a wide range of marketing, data management and analysis, accounting, player tracking, security and other applications and tools to more effectively manage their operations. We also provide technologies for deployment of networked, server-based gaming environments, with centralized management and control.
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Table products:
Our table products sales are generated primarily from the sale of products designed to enhance table game speed, productivity, profitability and security. Our product offerings include various models of automatic card shufflers to suit specific games, as well as deck checkers and roulette chip sorters.
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Parts sales, conversion kits, used gaming machines and game content:
We sell replacement parts, operating systems and content conversion kits for our gaming machines and, less frequently, used gaming machines and hardware.
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WAP Participation games:
WAP Participation games are electronically linked gaming machines that are located across multiple casinos within a single gaming jurisdiction or across Native American gaming jurisdictions. Players across linked gaming machines contribute to and compete for system-wide progressive jackpots that are designed to increase gaming machine play for participating casinos by giving the players the opportunity to win a larger jackpot than on a non-WAP gaming machine. We are responsible for funding WAP jackpots. We create WAP games using our proprietary brands and also using licensed brands. Our licensed brands include, among others;
MONOPOLY™, THE WIZARD OF OZ™, SPIDER-MAN™, THE LORD OF THE RINGS™
,
JAMES CAMERON’S TITANIC™
,
MICHAEL JACKSON KING OF POP™, MICHAEL JACKSON WANNA BE STARTIN’ SOMETHIN’™, FRIENDS™, DUCK DYNASTY™, AUSTIN POWERS™, IRON MAN™, ELVIS
TM
, THE FLINTSTONES
TM
, WILLY WONKA AND THE CHOCOLATE FACTORY™, THE JETSONS
TM
and
GREMLINS
TM
.
We operate our WAP systems in six states throughout the United States as well as in certain Native American casinos.
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Server-based gaming
: We provide wide-area gaming operators, such as LBOs, bingo halls and arcades, a comprehensive package of server-based products and services under long term contracts that typically include gaming machines, remote management of game content and management information, central computer systems, secure data communication and field support services. We are typically paid a fee based on the Net win generated by these gaming machines (subject to certain adjustments as may be specified in a particular contract, including adjustments for taxes and other fees). Our business in this category is primarily based in the U.K.
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VLTs
: Certain customers lease our multi-game and single-game VLTs, which include video gaming machines, mechanical reel gaming machines and video poker games. Our VLTs may be operated as standalone units or may interface with central monitoring systems operated by government agencies. Our VLTs are typically located in places where casino-style gaming is not the only attraction, such as racetracks, bars and restaurants.
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Class II and centrally determined systems:
We offer video and mechanical-reel gaming machines and VLTs for Class II and certain VLT jurisdictions where the game outcome is determined by a central server system that we provide. These Class II and centrally determined systems primarily operate in Native American casinos in Washington, Florida, Alabama and Oklahoma. We receive either a fixed daily fee or a percentage of the
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Customer-owned daily fee games:
This category consists of gaming machines for which the customer purchases the base gaming machine and leases the top-box and/or game theme from us at a lower fixed daily lease payment than if they were to lease the entire gaming machine. Customer-owned daily fee games typically feature a second LCD screen in the top-box that provides additional bonus experiences for the player.
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Licensing:
We derive revenue from licensing our games and intellectual property to third parties. Methods for determining our license or royalty revenue vary, but are generally based on a fixed amount for each licensed game or product using the intellectual property purchased, placed or shipped in a period, a fixed daily royalty amount or a percentage of the revenue generated by the placement of the licensed game or product using the intellectual property.
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Shuffler leasing:
We offer Shuffler products under month-to-month lease arrangements that contain Participation rates or fixed monthly lease rates. These arrangements include service of the product with back-up and replacement products available at the customer’s request.
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Proprietary table games ("PTG") licensing:
We license our PTG content to commercial, tribal and governmental casino operators typically under month to month lease arrangements based on fixed monthly rates. PTGs which are designed to enhance operators' table-game operations, include our internally developed and acquired PTGs, side bets, add-ons and progressive features. Our proprietary content and features are also added to public domain games such as poker, baccarat, pai gow poker, craps and blackjack table games and to electronic platforms
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Primary Business Activities
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Equity Investments
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Designing, printing and selling instant lottery games
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LNS-20% equity interest in the operator of the Gratta e Vinci instant ticket lottery in Italy
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Providing instant game-related services, such as game design, sales and marketing support and inventory management
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Northstar Illinois-20% equity interest in the private manager of the Illinois Lottery (contract termination agreement signed in August 2015; effective January 2017)
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Sublicensing brands for lottery products and providing lottery-related promotional products
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Northstar New Jersey-17.69% equity interest in the operating entity that provides marketing and sales services to the New Jersey Lottery
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Supplying player loyalty programs, merchandising services and interactive marketing campaigns
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Hellenic Lotteries-16.5% equity interest in the operator of the Greek state lotteries
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Providing lottery systems, including equipment, software, data communication services and support
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CSG-49% equity interest in the instant game supplier to the China Sports Lottery
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Providing instant game validation systems
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GLB-50% equity interest in a provider of lottery systems and services for the China Welfare Lottery
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Providing software, hardware and related services for sports wagering and keno systems
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Printing and selling phone cards
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Lottery/Operator
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Fiscal 2015
State Instant Game
or Lottery Systems
Retail Sales
(in millions)
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Type of
Contract
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Commencement
Date of
Current Contract
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Expiration Date of
Current Contract
(before any exercise
of remaining
renewal options)
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Current Renewal
Options
Remaining
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Florida
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$
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3,721
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Instant Games - Participation
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October 2008
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September 2018
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None
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Georgia
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$
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2,831
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Instant Games - Participation
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September 2003
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September 2018
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None
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Pennsylvania
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$
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2,608
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Instant Games - Participation
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August 2007
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August 2017
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None
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Pennsylvania
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$
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3,838
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Lottery systems
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January 2009
|
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December 2018
|
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None
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Northstar New Jersey
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$
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1,709
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|
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Instant Games - Participation
|
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October 2013
|
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June 2029
|
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N/A*
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Camelot Group plc (U.K.)
(1)
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£
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2,519
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Instant Games - Participation
|
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November 2013
|
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January 2023
|
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None
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LNS (Italy)
|
|
€
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9,022
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Instant Games - Price-per-unit
|
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October 2010
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September 2019
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1 nine-year
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(1)
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Camelot Group plc is the lottery operator of the U.K. National Lottery.
|
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Primary Business Activities
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Equity Investments
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Operating social casino-style, slot-based games through Facebook
®
, iOS, Android and various other desktop and mobile platforms
|
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None
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Provision of content, via remote game server technology, to licensed online casino operators on both desktop and mobile platforms
|
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Provision of play-for-fun and play-for-free white-label gaming for traditional land-based casinos through
SG Universe
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Provision of content and technology for on-premises mobile interactive gaming to traditional land-based casinos
|
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•
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Social Gaming:
We host
Jackpot
Party
TM
Social Casino ("JPSC"),
Gold Fish
TM
Casino Slots ("GFC"),
Quick Hit
TM
Slots (“QHS”) and
Hot
Shot Casino
TM
(“HSC”),
Dragonplay Slots
® (“DPS”), and
Dragonplay
Poker
® (“DPP”) on various platforms. Our products are available in the following formats:
|
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Facebook
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Apple
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Google Play
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Amazon Kindle
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Yahoo
|
Microsoft Windows
|
JPSC
|
X
|
X
|
X
|
X
|
X
|
X
|
GFC
|
X
|
X
|
X
|
X
|
X
|
|
QHS
|
X
|
X
|
X
|
X
|
|
X
|
HSC
|
X
|
|
|
|
|
|
DPP
|
X
|
X
|
X
|
X
|
|
|
DPS
|
X
|
X
|
X
|
X
|
|
|
•
|
RMG
: We serve online casino operators, primarily in Europe, by offering our games on a Participation basis. We host our game content on our centrally-located servers (often referred to as remote game servers) that are integrated into the online casino operators’ websites. We typically earn a percentage of the operator’s net gaming revenue generated by their players playing the games we host. We also host on-premises interactive gaming for certain customers and earn revenue based on fixed fees, a revenue share with our online casino-customer, or a mix of fixed fees and revenue share.
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•
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SG Universe
: We host play-for-fun and play-for-free services for traditional land-based casinos and earn revenue based on fixed fees, a share of the proceeds from the sale of virtual coins, or a mix of fixed fees and a share of such virtual coin proceeds. We also host on-premises interactive gaming for certain customers and earn revenue based on fixed fees, a revenue share with our online casino-customer, or a mix of fixed fees and revenue share.
|
•
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adopt additional rules and regulations under the implementing statutes;
|
•
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investigate violations of gaming regulations;
|
•
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enforce gaming regulations and impose disciplinary sanctions for violations of such laws, including fines, penalties and revocation of gaming licenses;
|
•
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review the character and fitness of manufacturers, distributors and operators of gaming products and services and make determinations regarding their suitability or qualification for licensure;
|
•
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grant licenses for the manufacture, distribution and operation of gaming products and services;
|
•
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review and approve transactions (such as acquisitions, material commercial transactions, securities offerings and debt transactions); and
|
•
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establish and collect related fees and/or taxes.
|
Name
|
|
Age
|
|
Position
|
M. Gavin Isaacs
|
|
51
|
|
President and Chief Executive Officer
|
Scott D. Schweinfurth
|
|
61
|
|
Executive Vice President, Chief Financial Officer and Corporate Secretary
|
Michael A. Quartieri *
|
|
47
|
|
Vice President and Corporate Controller
|
Derik J. Mooberry
|
|
43
|
|
Executive Vice President and Group Chief Executive, Gaming
|
James C. Kennedy
|
|
59
|
|
Executive Vice President and Group Chief Executive, Lottery
|
David W. Smail
|
|
50
|
|
Executive Vice President and Chief Legal Officer
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Larry A. Potts
|
|
68
|
|
Senior Vice President, Chief Compliance Officer and Director of Security
|
Steve W. Beason
|
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54
|
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Enterprise Chief Technology Officer
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Jeffrey B. Johnson
|
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51
|
|
Vice President, Finance and Chief Accounting Officer
|
•
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our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after they are filed electronically with the SEC;
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•
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Section 16 ownership reports filed by our executive officers, directors and 10% stockholders on Forms 3, 4 and 5 and amendments to those reports as soon as reasonably practicable after they are filed electronically with the SEC; and
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•
|
our code of business conduct, which applies to all of our officers, directors and employees.
|
•
|
be expensive and time consuming to defend or require us to pay significant amounts in damages;
|
•
|
invalidate our proprietary rights;
|
•
|
cause us to cease making, licensing or using products or services that incorporate the challenged intellectual property;
|
•
|
require us to redesign, reengineer or rebrand our products or services or limit our ability to bring new products and services to the market in the future;
|
•
|
require us to enter into costly or burdensome royalty, licensing or settlement agreements in order to obtain the right to use a product, process or component;
|
•
|
impact the commercial viability of the products and services that are the subject of the claim during the pendency of such claim; or
|
•
|
require us by way of injunction to remove products or services on lease or stop selling or leasing new products or services.
|
•
|
cause us to incur greater costs and expenses in the protection of our intellectual property;
|
•
|
potentially negatively impact our intellectual property rights;
|
•
|
cause one or more of our patents, trademarks, copyrights or other intellectual property interests to be ruled or rendered unenforceable or invalid; or
|
•
|
divert management’s attention and our resources.
|
•
|
declare dividends or redeem or repurchase capital stock;
|
•
|
prepay, redeem or purchase other debt;
|
•
|
incur liens;
|
•
|
make loans, guarantees, acquisitions and investments;
|
•
|
incur additional indebtedness;
|
•
|
engage in sale and leaseback transactions;
|
•
|
amend or otherwise alter debt and other material agreements;
|
•
|
engage in mergers, acquisitions or asset sales;
|
•
|
engage in transactions with affiliates;
|
•
|
enter into arrangements that would prohibit us from granting liens or restrict our ability to pay dividends, make loans or transfer assets among our subsidiaries; and
|
•
|
alter the business we conduct.
|
•
|
We own an approximate 483,000 square foot campus in Chicago, Illinois for R&D that supports our Gaming and Interactive business segments, of which two facilities totaling 30,000 square feet are currently held for sale.
|
•
|
We own an approximate 365,000 square foot facility in Waukegan, Illinois which is currently held for sale and is included in our Gaming business segment.
|
•
|
We own an approximate 355,000 square foot facility in Alpharetta, Georgia for administrative offices, manufacturing and warehousing that primarily supports all of our business segments.
|
•
|
We lease approximately 260,000 square feet of facilities in Las Vegas, Nevada for administrative offices and warehousing that supports our Gaming business segment.
|
•
|
We lease an approximate 199,000 square feet of land underlying our production studio in Las Vegas, Nevada that supports our Lottery business segment.
|
•
|
We lease approximately 186,000 square feet of facilities in India (Bangalore, Chennai and Pune) for R&D that supports our Gaming, Lottery and Interactive business segments.
|
•
|
We own an approximate 150,000 square foot facility in Leeds, England for administrative offices, manufacturing and warehousing that supports our Lottery business segment.
|
•
|
We own an approximate 151,000 square foot facility in Las Vegas, Nevada for manufacturing and warehousing that supports our Gaming business segment.
|
•
|
We own an approximate 128,000 square foot facility in Las Vegas, Nevada for our global headquarters that supports all of our business segments.
|
•
|
We operate an approximate 123,000 square foot facility in Milperra, Australia for administrative offices, manufacturing and warehousing that supports our Gaming business segment. We own an approximate 59,000 square feet of this facility and lease the remaining portion.
|
•
|
We own an approximate 119,000 square foot facility in Montreal, Canada for administrative offices, manufacturing and warehousing that supports our Lottery business segment.
|
•
|
We lease an approximate 89,000 square foot facility in Reno, Nevada for administrative offices and R&D that supports our Gaming business segment.
|
•
|
We lease an approximate 86,000 square foot facility in Rubi, Spain for administrative offices, manufacturing and warehousing that supports our Gaming business segment.
|
•
|
We own an approximate 47,000 square foot facility in Santiago, Chile for manufacturing and distribution that supports our Lottery business segment.
|
|
|
Sales Price of
Scientific Games
Common Stock
|
||||||
|
|
High
|
|
Low
|
||||
Fiscal Year 2015 (January 1, 2015 - December 31, 2015)
|
|
|
|
|
||||
First Quarter
|
|
$
|
14.96
|
|
|
$
|
9.96
|
|
Second Quarter
|
|
$
|
17.12
|
|
|
$
|
10.47
|
|
Third Quarter
|
|
$
|
16.78
|
|
|
$
|
9.57
|
|
Fourth Quarter
|
|
$
|
12.83
|
|
|
$
|
7.06
|
|
Fiscal Year 2014 (January 1, 2014 - December 31, 2014)
|
|
|
|
|
||||
First Quarter
|
|
$
|
17.25
|
|
|
$
|
12.80
|
|
Second Quarter
|
|
$
|
14.31
|
|
|
$
|
8.28
|
|
Third Quarter
|
|
$
|
13.61
|
|
|
$
|
6.97
|
|
Fourth Quarter
|
|
$
|
15.66
|
|
|
$
|
8.44
|
|
Equity Compensation Plans
|
|
|
||
Shares available for future issuance under the 2003 Plan
(1)
|
|
5.3
|
|
|
Unrecognized cost of outstanding awards (in millions)
|
|
$
|
61.0
|
|
Weighted average future recognition period (in years)
|
|
2
|
|
|
|
12/10
|
|
12/11
|
|
12/12
|
|
12/13
|
|
12/14
|
|
12/15
|
||||||||||||
Scientific Games Corporation
|
|
$
|
100.00
|
|
|
$
|
97.39
|
|
|
$
|
87.05
|
|
|
$
|
169.98
|
|
|
$
|
127.81
|
|
|
$
|
90.06
|
|
NASDAQ Composite
|
|
$
|
100.00
|
|
|
$
|
100.53
|
|
|
$
|
116.92
|
|
|
$
|
166.19
|
|
|
$
|
188.78
|
|
|
$
|
199.95
|
|
Peer Group
|
|
$
|
100.00
|
|
|
$
|
84.56
|
|
|
$
|
109.37
|
|
|
$
|
145.12
|
|
|
$
|
157.18
|
|
|
$
|
205.19
|
|
|
|
|
|
As of and for the Years Ended December 31,
|
||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Total revenue
|
|
$
|
2,758.8
|
|
|
$
|
1,786.4
|
|
|
$
|
1,090.9
|
|
|
$
|
928.6
|
|
|
$
|
865.9
|
|
Operating (loss) income
(1)
|
|
(1,024.6
|
)
|
|
(172.7
|
)
|
|
(18.3
|
)
|
|
62.9
|
|
|
92.2
|
|
|||||
Total other expense, net
(2)
|
|
(669.6
|
)
|
|
(322.2
|
)
|
|
(125.0
|
)
|
|
(86.1
|
)
|
|
(79.6
|
)
|
|||||
Net (loss) income from continuing operations before income taxes
|
|
(1,694.2
|
)
|
|
(494.9
|
)
|
|
(143.3
|
)
|
|
(23.2
|
)
|
|
12.6
|
|
|||||
Income tax benefit (expense)
|
|
299.9
|
|
|
260.6
|
|
|
117.7
|
|
|
(20.7
|
)
|
|
(18.4
|
)
|
|||||
Net loss from continuing operations
|
|
$
|
(1,394.3
|
)
|
|
$
|
(234.3
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(43.9
|
)
|
|
$
|
(5.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic from continuing operations
|
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.06
|
)
|
Diluted from continuing operations
|
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic shares
|
|
85.9
|
|
|
84.6
|
|
|
85.0
|
|
|
90.0
|
|
|
92.1
|
|
|||||
Diluted shares
|
|
85.9
|
|
|
84.6
|
|
|
85.0
|
|
|
90.0
|
|
|
92.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Cash Flows Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
|
$
|
414.2
|
|
|
$
|
203.5
|
|
|
$
|
171.2
|
|
|
$
|
156.8
|
|
|
$
|
171.1
|
|
Net cash used in investing activities
|
|
(263.8
|
)
|
|
(3,332.9
|
)
|
|
(1,664.7
|
)
|
|
(141.9
|
)
|
|
(161.1
|
)
|
|||||
Net cash (used in) provided by financing activities
|
|
(183.2
|
)
|
|
3,157.4
|
|
|
1,538.7
|
|
|
(10.1
|
)
|
|
(24.7
|
)
|
|||||
Effect of exchange rates changes on cash and cash equivalents
|
|
(10.3
|
)
|
|
(9.9
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(5.2
|
)
|
|||||
(Decrease) increase in cash and cash equivalents
|
|
$
|
(43.1
|
)
|
|
$
|
18.1
|
|
|
$
|
44.7
|
|
|
$
|
4.6
|
|
|
$
|
(19.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
(3)(4)
|
|
$
|
7,732.2
|
|
|
$
|
9,721.1
|
|
|
$
|
4,109.6
|
|
|
$
|
2,161.4
|
|
|
$
|
2,128.0
|
|
Total long-term debt, including current portion
(4)
|
|
$
|
8,207.0
|
|
|
$
|
8,312.9
|
|
|
$
|
3,109.2
|
|
|
$
|
1,442.7
|
|
|
$
|
1,356.8
|
|
Total stockholders' (deficit) equity
|
|
$
|
(1,495.5
|
)
|
|
$
|
3.9
|
|
|
$
|
375.0
|
|
|
$
|
364.8
|
|
|
$
|
443.7
|
|
•
|
Cost of product sales of (i) $12.3 million and $6.6 million for the write-up of finished goods inventory required under purchase accounting for the Bally acquisition in 2015 and 2014, respectively; (ii) $13.0 million for the write-up of
|
•
|
SG&A charges for legal contingencies and settlements of $2.5 million, $24.8 million and $24.5 million in 2015, 2014 and 2013, respectively. Also included in SG&A are $20.2 million and $76.6 million of acquisition-related fees and expenses related primarily to the Bally acquisition (including $41.0 million in 2014 for the acceleration of Bally equity awards at the closing of the acquisition) in 2015 and 2014, respectively, and $19.8 million of acquisition-related fees and expenses related to the WMS acquisition in 2013.
|
•
|
Stock-based compensation expense of $25.4 million, $24.1 million, $22.3 million, $24.2 million and $21.5 million in 2015, 2014, 2013, 2012 and 2011, respectively.
|
•
|
Employee termination and restructuring costs of
$21.9 million
, $30.7 million, $22.7 million, $10.6 million and $2.0 million in 2015, 2014, 2013, 2012 and 2011, respectively.
|
•
|
Goodwill impairment charges totaling
$1,002.6 million
during 2015, consisting of a
$67.6 million
non-cash impairment charge to write-off the recorded amount of our U.S. lottery systems reporting unit goodwill, and a
$935.0 million
non-cash impairment charge to reduce the carrying amount of our SG gaming reporting unit goodwill to its implied fair value.
|
•
|
Accelerated depreciation charges related to equipment or technology, the impact of any impairment charges related to long-term assets and underperforming contracts and accelerated depreciation expense related to restructuring plans of $169.7 million, $31.5 million, $22.3 million, $45.5 million and $6.4 million for 2015, 2014, 2013, 2012 and 2011, respectively. 2015 D&A reflected impairment charges of $128.6 million, with a tax benefit of $48.3 million, in accelerated D&A to reduce the carrying amounts of two trade name assets to their fair values, $11.5 million in accelerated D&A to adjust the carrying amount of our facilities to their fair value less expected selling costs, $12.9 million in accelerated D&A related to gaming operations equipment, $11.9 million in accelerated D&A of property and equipment related to our instant games business and $4.8 million of other accelerated D&A. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" in Item 7 of this Annual Report on Form 10-K for further discussion regarding these charges.
|
•
|
Interest expense of $664.9 million, $307.2 million and $119.5 million in 2015, 2014 and 2013, respectively, due primarily to the additional indebtedness that we incurred to finance the Bally acquisition and the WMS acquisition.
|
•
|
Loss on early extinguishment of debt, which includes losses that we incur when we refinance our long-term debt obligations and also includes write-offs of the associated deferred financing costs, which aggregated $0, $25.9 million, $5.9 million, $15.5 million and $4.2 million in 2015, 2014, 2013, 2012 and 2011, respectively. See Note 15 (Long-Term and Other Debt) for more information regarding our debt instruments.
|
(3)
|
Total assets as of December 31, 2012 and 2011 does not reflect the adoption of ASU No. 2015-17 described in Note 1 (Description of Business and Summary of Significant Accounting Policies).
|
(4)
|
Total assets and total long-term debt, including current portion reflects the adoption of ASU No. 2015-03 and ASU No. 2015-15 described in Note 1 (Description of Business and Summary of Significant Accounting Policies).
|
•
|
BUSINESS OVERVIEW
|
•
|
CONSOLIDATED RESULTS
|
•
|
BUSINESS SEGMENT RESULTS
|
•
|
RECENTLY ISSUED ACCOUNTING GUIDANCE
|
•
|
CRITICAL ACCOUNTING ESTIMATES
|
•
|
LIQUIDITY, CAPITAL SOURCES AND WORKING CAPITAL
|
▪
|
a full year of revenues attributable to Bally of $1,251.9 million, which was acquired on November 21, 2014;
|
▪
|
cost of product sales including a $12.3 million of additional cost related to the write-up of finished goods inventory required under purchase accounting for the Bally acquisition, and $5.9 million of inventory write-downs for discontinued product lines. Cost of instant games includes a $35.5 million charge related to other asset impairments and cancellation costs;
|
▪
|
SG&A includes charges for legal contingencies of $2.5 million and $20.2 million of acquisition-related fees and expenses primarily related to the Bally acquisition;
|
▪
|
$
21.9 million
of employee termination and restructuring costs, primarily related to employee termination costs under our Bally and WMS integration-related restructuring plan;
|
▪
|
$
448.9 million
of incremental D&A expense primarily attributable to Bally, including incremental D&A related to the write up to fair value of assets acquired in the acquisition, and impairment charges. Impairment charges
|
▪
|
$
935.0 million
for a non-cash impairment charge of our SG gaming reporting unit goodwill and a $
67.6 million
non-cash impairment charge of our U.S. lottery systems reporting unit goodwill, which resulted in a tax benefit of $24.9 million; and
|
▪
|
$357.7 million year-over-year increase in interest expense related to the incremental indebtedness that we incurred in the fourth quarter of 2014 to finance the Bally acquisition.
|
▪
|
$151.6 million of revenues attributable to Bally and a full year of revenues attributable to WMS;
|
▪
|
costs of product sales includes $6.6 million of additional cost related to the write-up of finished goods inventory required under purchase accounting for the Bally acquisition, $17.8 million of inventory write-downs for discontinued product lines and $2.1 million of inventory write-offs. Cost of instant products includes a $5.7 million charge related to the suspension of the
MONOPOLY MILLIONAIRES’ CLUB
TM
("MMC") draw lottery game and $3.1 million of inventory write-offs;
|
▪
|
SG&A includes $76.6 million of acquisition-related fees and expenses related to the Bally acquisition (including $41.0 million for the acceleration of Bally equity awards at the closing of the acquisition), $24.8 million for legal contingencies and settlements that impacted SG&A, $6.0 million impairment of intangible assets with indefinite useful lives and $4.0 million of write-downs of certain receivables from international customers;
|
▪
|
employee termination and restructuring costs of $30.7 million, comprised of $11.8 million related to WMS integration activities, $1.6 million related to the exit of an agreement following the Bally acquisition, $13.8 million related to other employee termination charges following the Bally acquisition (of which $9.1 million related to Gaming and Interactive and $3.8 million related to Lottery and corporate), $1.6 million related to the exit from our instant lottery game operations in Mexico and the exit from our paper roll conversion operations in the U.S., as well as $1.9 million of corporate costs unrelated to the Bally acquisition;
|
▪
|
$46.8 million of accelerated or incremental depreciation expense, including $4.2 million related to impairments of U.S. lottery contracts, a $9.4 million impairment of our Waukegan, Illinois manufacturing facility, $14.5 million of accelerated depreciation on certain gaming operations assets and cabinets and $3.8 million related to software in our Gaming business for a product we are discontinuing related to the Bally acquisition. In addition, includes $18.1 million of incremental D&A from the write-up of tangible and intangible assets under purchase accounting for the Bally acquisition;
|
▪
|
$187.7 million year-over-year increase in interest expense related to the incremental indebtedness that we incurred in the fourth quarter of 2013 to finance the WMS acquisition and in the fourth quarter of 2014 to finance the Bally acquisition; the increase in interest expense also included $64.7 million of debt financing fees incurred in connection with the Bally acquisition;
|
▪
|
$19.7 million non-cash impairment charge in earnings (loss) from equity investments to write down our Northstar Illinois equity investment and $11.1 million of charges we recorded related to our share of shortfall payments accrued by Northstar Illinois; and
|
▪
|
a loss on early extinguishment of debt of $25.9 million related to the tender and redemption premiums and the write-off of deferred financing costs in connection with the purchase and redemption of our 2019 Notes.
|
(in millions)
|
|
Years ended December 31,
|
|
Variance
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2015 vs 2014
|
|
2014 vs 2013
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Services
|
|
$
|
1,351.8
|
|
|
$
|
788.5
|
|
|
$
|
415.0
|
|
|
$
|
563.3
|
|
|
71
|
%
|
|
$
|
373.5
|
|
|
90
|
%
|
Product sales
|
|
863.0
|
|
|
464.9
|
|
|
159.9
|
|
|
398.1
|
|
|
86
|
%
|
|
305.0
|
|
|
191
|
%
|
|||||
Instant games
|
|
544.0
|
|
|
533.0
|
|
|
516.0
|
|
|
11.0
|
|
|
2
|
%
|
|
17.0
|
|
|
3
|
%
|
|||||
Total revenue
|
|
2,758.8
|
|
|
1,786.4
|
|
|
1,090.9
|
|
|
972.4
|
|
|
54
|
%
|
|
695.5
|
|
|
64
|
%
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services (1)
|
|
372.7
|
|
|
283.7
|
|
|
203.1
|
|
|
89.0
|
|
|
31
|
%
|
|
80.6
|
|
|
40
|
%
|
|||||
Cost of product sales (1)
|
|
405.5
|
|
|
274.3
|
|
|
103.5
|
|
|
131.2
|
|
|
48
|
%
|
|
170.8
|
|
|
165
|
%
|
|||||
Cost of instant games (1)
|
|
325.9
|
|
|
291.4
|
|
|
285.1
|
|
|
34.5
|
|
|
12
|
%
|
|
6.3
|
|
|
2
|
%
|
|||||
Selling, general and administrative
|
|
567.7
|
|
|
507.7
|
|
|
266.4
|
|
|
60.0
|
|
|
12
|
%
|
|
241.3
|
|
|
91
|
%
|
|||||
Research and development
|
|
183.9
|
|
|
117.0
|
|
|
26.0
|
|
|
66.9
|
|
|
57
|
%
|
|
91.0
|
|
|
350
|
%
|
|||||
Employee termination and restructuring
|
|
21.9
|
|
|
30.7
|
|
|
22.7
|
|
|
(8.8
|
)
|
|
(29
|
)%
|
|
8.0
|
|
|
35
|
%
|
|||||
Depreciation and amortization
|
|
903.2
|
|
|
454.3
|
|
|
202.4
|
|
|
448.9
|
|
|
99
|
%
|
|
251.9
|
|
|
124
|
%
|
|||||
Goodwill impairments
|
|
1,002.6
|
|
|
—
|
|
|
—
|
|
|
1,002.6
|
|
|
n/m
|
|
|
—
|
|
|
n/m
|
|
|||||
Operating loss
|
|
(1,024.6
|
)
|
|
(172.7
|
)
|
|
(18.3
|
)
|
|
(851.9
|
)
|
|
493
|
%
|
|
(154.4
|
)
|
|
844
|
%
|
|||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
|
(664.9
|
)
|
|
(307.2
|
)
|
|
(119.5
|
)
|
|
(357.7
|
)
|
|
116
|
%
|
|
(187.7
|
)
|
|
157
|
%
|
|||||
Earnings (loss) from equity investments
|
|
16.9
|
|
|
(7.6
|
)
|
|
1.5
|
|
|
24.5
|
|
|
n/m
|
|
|
(9.1
|
)
|
|
n/m
|
|
|||||
Loss on early extinguishment of debt
|
|
—
|
|
|
(25.9
|
)
|
|
(5.9
|
)
|
|
25.9
|
|
|
(100
|
)%
|
|
(20.0
|
)
|
|
339
|
%
|
|||||
Gain on sale of equity interest
|
|
—
|
|
|
14.5
|
|
|
—
|
|
|
(14.5
|
)
|
|
(100
|
)%
|
|
14.5
|
|
|
n/m
|
|
|||||
Other (expense) income, net
|
|
(21.6
|
)
|
|
4.0
|
|
|
(1.1
|
)
|
|
(25.6
|
)
|
|
n/m
|
|
|
5.1
|
|
|
n/m
|
|
|||||
Total other expense, net
|
|
(669.6
|
)
|
|
(322.2
|
)
|
|
(125.0
|
)
|
|
(347.4
|
)
|
|
108
|
%
|
|
(197.2
|
)
|
|
158
|
%
|
|||||
Net loss from continuing operations before income taxes
|
|
(1,694.2
|
)
|
|
(494.9
|
)
|
|
(143.3
|
)
|
|
(1,199.3
|
)
|
|
242
|
%
|
|
(351.6
|
)
|
|
245
|
%
|
|||||
Income tax benefit
|
|
299.9
|
|
|
260.6
|
|
|
117.7
|
|
|
39.3
|
|
|
15
|
%
|
|
142.9
|
|
|
121
|
%
|
|||||
Net loss from continuing operations
|
|
$
|
(1,394.3
|
)
|
|
$
|
(234.3
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(1,160.0
|
)
|
|
495
|
%
|
|
$
|
(208.7
|
)
|
|
815
|
%
|
(1)
|
Exclusive of D&A.
|
(in millions)
|
|
Years ended December 31,
|
|
Variance
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2015 vs 2014
|
|
2014 vs 2013
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Services
|
|
$
|
956.3
|
|
|
$
|
442.6
|
|
|
$
|
181.8
|
|
|
$
|
513.7
|
|
|
116
|
%
|
|
$
|
260.8
|
|
|
143
|
%
|
Product sales
|
|
817.3
|
|
|
363.8
|
|
|
88.7
|
|
|
453.5
|
|
|
125
|
%
|
|
275.1
|
|
|
310
|
%
|
|||||
Total revenue
|
|
1,773.6
|
|
|
806.4
|
|
|
270.5
|
|
|
967.2
|
|
|
120
|
%
|
|
535.9
|
|
|
198
|
%
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
(1)
|
|
190.1
|
|
|
111.0
|
|
|
77.9
|
|
|
79.1
|
|
|
71
|
%
|
|
33.1
|
|
|
42
|
%
|
|||||
Cost of product sales
(1)
|
|
370.2
|
|
|
195.5
|
|
|
56.4
|
|
|
174.7
|
|
|
89
|
%
|
|
139.1
|
|
|
247
|
%
|
|||||
Selling, general and administrative
|
|
285.1
|
|
|
235.3
|
|
|
87.1
|
|
|
49.8
|
|
|
21
|
%
|
|
148.2
|
|
|
170
|
%
|
|||||
Research and development
|
|
154.9
|
|
|
98.7
|
|
|
17.4
|
|
|
56.2
|
|
|
57
|
%
|
|
81.3
|
|
|
467
|
%
|
|||||
Employee termination and restructuring
|
|
11.2
|
|
|
15.5
|
|
|
6.7
|
|
|
(4.3
|
)
|
|
(28
|
)%
|
|
8.8
|
|
|
131
|
%
|
|||||
Depreciation and amortization
|
|
728.6
|
|
|
318.7
|
|
|
103.9
|
|
|
409.9
|
|
|
129
|
%
|
|
214.8
|
|
|
207
|
%
|
|||||
Goodwill impairment
|
|
935.0
|
|
|
—
|
|
|
—
|
|
|
935.0
|
|
|
n/m
|
|
|
—
|
|
|
—
|
|
|||||
Operating loss
|
|
$
|
(901.5
|
)
|
|
$
|
(168.3
|
)
|
|
$
|
(78.9
|
)
|
|
$
|
(733.2
|
)
|
|
436
|
%
|
|
$
|
(89.4
|
)
|
|
113
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) from equity investments
|
|
$
|
3.5
|
|
|
$
|
3.3
|
|
|
$
|
(12.1
|
)
|
|
$
|
0.2
|
|
|
6
|
%
|
|
$
|
15.4
|
|
|
n/m
|
|
(1)
|
Exclusive of D&A.
|
(in millions)
|
|
Years ended December 31,
|
|
Variance
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2015 vs 2014
|
|
2014 vs 2013
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Services
|
|
$
|
185.5
|
|
|
$
|
201.4
|
|
|
$
|
203.2
|
|
|
$
|
(15.9
|
)
|
|
(8
|
)%
|
|
$
|
(1.8
|
)
|
|
(1
|
)%
|
Product sales
|
|
45.7
|
|
|
101.1
|
|
|
71.2
|
|
|
(55.4
|
)
|
|
(55
|
)%
|
|
29.9
|
|
|
42
|
%
|
|||||
Instant games
|
|
544.0
|
|
|
533.0
|
|
|
516.0
|
|
|
11.0
|
|
|
2
|
%
|
|
17.0
|
|
|
3
|
%
|
|||||
Total revenue
|
|
775.2
|
|
|
835.5
|
|
|
790.4
|
|
|
(60.3
|
)
|
|
(7
|
)%
|
|
45.1
|
|
|
6
|
%
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
(1)
|
|
109.8
|
|
|
120.8
|
|
|
113.8
|
|
|
(11.0
|
)
|
|
(9
|
)%
|
|
7.0
|
|
|
6
|
%
|
|||||
Cost of product sales
(1)
|
|
35.3
|
|
|
78.8
|
|
|
47.1
|
|
|
(43.5
|
)
|
|
(55
|
)%
|
|
31.7
|
|
|
67
|
%
|
|||||
Cost of instant games sales
(1)
|
|
325.9
|
|
|
291.4
|
|
|
285.1
|
|
|
34.5
|
|
|
12
|
%
|
|
6.3
|
|
|
2
|
%
|
|||||
Selling, general and administrative
|
|
67.0
|
|
|
73.3
|
|
|
70.7
|
|
|
(6.3
|
)
|
|
(9
|
)%
|
|
2.6
|
|
|
4
|
%
|
|||||
Research and development
|
|
6.3
|
|
|
4.6
|
|
|
5.5
|
|
|
1.7
|
|
|
37
|
%
|
|
(0.9
|
)
|
|
(16
|
)%
|
|||||
Employee termination and restructuring
|
|
0.2
|
|
|
3.5
|
|
|
5.1
|
|
|
(3.3
|
)
|
|
(94
|
)%
|
|
(1.6
|
)
|
|
(31
|
)%
|
|||||
Depreciation and amortization
|
|
95.9
|
|
|
97.1
|
|
|
94.5
|
|
|
(1.2
|
)
|
|
(1
|
)%
|
|
2.6
|
|
|
3
|
%
|
|||||
Goodwill impairment
|
|
67.6
|
|
|
—
|
|
|
—
|
|
|
67.6
|
|
|
n/m
|
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
|
$
|
67.2
|
|
|
$
|
166.0
|
|
|
$
|
168.6
|
|
|
$
|
(98.8
|
)
|
|
(60
|
)%
|
|
$
|
(2.6
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) from equity investments
|
|
$
|
13.4
|
|
|
$
|
(10.9
|
)
|
|
$
|
13.6
|
|
|
$
|
24.3
|
|
|
n/m
|
|
|
$
|
(24.5
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Instant games by revenue type:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Participation contracts
|
|
$
|
285.5
|
|
|
$
|
277.0
|
|
|
$
|
254.7
|
|
|
$
|
8.5
|
|
|
3
|
%
|
|
$
|
22.3
|
|
|
9
|
%
|
Price-per-unit contracts
|
|
197.5
|
|
|
199.9
|
|
|
202.5
|
|
|
(2.4
|
)
|
|
(1
|
)%
|
|
(2.6
|
)
|
|
(1
|
)%
|
|||||
Licensing and player loyalty
|
|
61.0
|
|
|
56.1
|
|
|
58.8
|
|
|
4.9
|
|
|
9
|
%
|
|
(2.7
|
)
|
|
(5
|
)%
|
|||||
Total instant games revenue
|
|
$
|
544.0
|
|
|
$
|
533.0
|
|
|
$
|
516.0
|
|
|
$
|
11.0
|
|
|
2
|
%
|
|
$
|
17.0
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retail sales of instant games of U.S. instant game customers
|
|
$
|
41,793
|
|
|
$
|
38,792
|
|
|
$
|
36,747
|
|
|
$
|
3,001
|
|
|
8
|
%
|
|
$
|
2,045
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retail sales of U.S. lottery system customers
|
|
$
|
8,256
|
|
|
$
|
8,398
|
|
|
$
|
8,558
|
|
|
$
|
(142
|
)
|
|
(2
|
)%
|
|
$
|
(160
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Italy retail sales of instant games (in Euros)
|
|
€
|
9,063
|
|
|
€
|
9,442
|
|
|
€
|
9,612
|
|
|
€
|
(379
|
)
|
|
(4
|
)%
|
|
€
|
(170
|
)
|
|
(2
|
)%
|
(1)
|
Exclusive of D&A.
|
(1)
|
Exclusive of D&A.
|
(2)
|
MAU = Monthly Active Users, a count of unique visitors to our sites during a month.
|
(3)
|
DAU = Daily Active Users, a count of unique visitors to our sites during a day.
|
(4)
|
ARPDAU = Average revenue per DAU is calculated by dividing revenue for a period by the DAU for the period by the number of days for the period.
|
•
|
significant under-performance relative to historical performance or projected future operating results;
|
•
|
significant changes in the manner of use of the assets or the strategy of our overall business;
|
•
|
significant adverse changes in the legality of our business ventures or the business climate in which we operate; and
|
•
|
loss of a significant customer.
|
Reporting Unit
|
Instant Products
|
U.S. Lottery Systems
|
International Lottery Systems
|
SG Gaming
|
Legacy U.K. Gaming
|
Casino Management Systems
|
Table Products
|
Interactive
|
Total
|
Goodwill
|
$329.5
|
$—
|
$88.4
|
$1,084.6
|
$209.7
|
$557.0
|
$634.6
|
$109.9
|
$3,013.7
|
(U.S. dollars in millions)
|
|
Years ended December 31,
|
|
Variance
|
||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2015 vs 2014
|
|
2014 vs 2013
|
||||||||||
Net cash provided by operating activities
|
|
$
|
414.2
|
|
|
$
|
203.5
|
|
|
$
|
171.2
|
|
|
$
|
210.7
|
|
|
$
|
32.3
|
|
Net cash used in investing activities
|
|
(263.8
|
)
|
|
(3,332.9
|
)
|
|
(1,664.7
|
)
|
|
3,069.1
|
|
|
(1,668.2
|
)
|
|||||
Net cash (used in) provided by financing activities
|
|
(183.2
|
)
|
|
3,157.4
|
|
|
1,538.7
|
|
|
(3,340.6
|
)
|
|
1,618.7
|
|
|||||
Effect of exchange rates on cash and cash equivalents
|
|
(10.3
|
)
|
|
(9.9
|
)
|
|
(0.5
|
)
|
|
(0.4
|
)
|
|
(9.4
|
)
|
|||||
(Decrease) increase in cash and cash equivalents
|
|
$
|
(43.1
|
)
|
|
$
|
18.1
|
|
|
$
|
44.7
|
|
|
$
|
(61.2
|
)
|
|
$
|
(26.6
|
)
|
|
|
Cash Payments Due By Period
|
||||||||||||||||||
|
|
in millions
|
||||||||||||||||||
|
|
Total
|
|
Within
1 Year
|
|
Within
2 - 3 Years
|
|
Within
4 - 5 Years
|
|
After
5 Years
|
||||||||||
Revolver, varying interest rate, due 2018
(1)
|
|
$
|
95.0
|
|
|
$
|
—
|
|
|
$
|
95.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan, varying interest rate, due 2020
(1)
|
|
2,254.0
|
|
|
23.0
|
|
|
46.0
|
|
|
2,185.0
|
|
|
—
|
|
|||||
Term Loan, varying interest rate, due 2021
(1)
|
|
1,980.0
|
|
|
20.0
|
|
|
40.0
|
|
|
40.0
|
|
|
1,880.0
|
|
|||||
2018 Notes
(1)
|
|
250.0
|
|
|
—
|
|
|
250.0
|
|
|
—
|
|
|
—
|
|
|||||
2020 Notes
(1)
|
|
300.0
|
|
|
—
|
|
|
—
|
|
|
300.0
|
|
|
—
|
|
|||||
2021 Notes
(1)
|
|
350.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350.0
|
|
|||||
Secured Notes
(1)
|
|
950.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
950.0
|
|
|||||
Unsecured Notes
(1)
|
|
2,200.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,200.0
|
|
|||||
Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019
(1)
|
|
25.7
|
|
|
7.3
|
|
|
15.6
|
|
|
2.8
|
|
|
—
|
|
|||||
Interest expense
(2)
|
|
3,644.4
|
|
|
605.6
|
|
|
1,194.4
|
|
|
1,118.1
|
|
|
726.3
|
|
|||||
License royalty minimum guarantees fees
|
|
160.3
|
|
|
41.8
|
|
|
63.7
|
|
|
54.8
|
|
|
—
|
|
|||||
Purchase obligations
(3)
|
|
223.5
|
|
|
223.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
(4)
|
|
91.2
|
|
|
27.1
|
|
|
34.0
|
|
|
17.0
|
|
|
13.1
|
|
|||||
Other liabilities
(5)
|
|
48.8
|
|
|
12.0
|
|
|
5.6
|
|
|
6.9
|
|
|
24.3
|
|
|||||
Total contractual obligations
|
|
$
|
12,572.9
|
|
|
$
|
960.3
|
|
|
$
|
1,744.3
|
|
|
$
|
3,724.6
|
|
|
$
|
6,143.7
|
|
(1)
|
See Note 15 (Long-Term and Other Debt) for information regarding long-term and other debt.
|
(2)
|
Based on rates in effect on December 31, 2015.
|
(3)
|
Includes, among other contractual obligations, estimated obligations and/or capital commitments in connection with our Gaming and Lottery supply contracts.
|
(4)
|
See Note 14 (Leases) for information regarding our operating leases.
|
(5)
|
Includes certain other long term liabilities reflected in our Consolidated Balance Sheet as of December 31, 2015, including pension and employee termination and restructuring costs.
|
|
|
Twelve Months Ended December 31,
|
||||||||||||||||||||||||||||||
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
|
FMV
|
||||||||||||||||
Debt at fixed interest rates
|
|
$
|
7.3
|
|
|
$
|
7.6
|
|
|
$
|
258.0
|
|
|
$
|
2.8
|
|
|
$
|
300.0
|
|
|
$
|
3,500.0
|
|
|
$
|
4,075.7
|
|
|
$
|
2,975.1
|
|
Weighted-average interest rates
|
|
3.9
|
%
|
|
3.9
|
%
|
|
8.0
|
%
|
|
3.9
|
%
|
|
6.3
|
%
|
|
8.8
|
%
|
|
8.6
|
%
|
|
—
|
%
|
||||||||
Debt at variable interest rates
|
|
$
|
43.0
|
|
|
$
|
43.0
|
|
|
$
|
138.0
|
|
|
$
|
43.0
|
|
|
$
|
2,182.0
|
|
|
$
|
1,880.0
|
|
|
$
|
4,329.0
|
|
|
$
|
3,956.5
|
|
Weighted-average interest rates
|
|
6.0
|
%
|
|
6.0
|
%
|
|
4.2
|
%
|
|
6.0
|
%
|
|
6.0
|
%
|
|
6.0
|
%
|
|
5.9
|
%
|
|
—
|
%
|
|
Form 10-K Page
|
1. Financial Statements:
|
|
2. Financial Statement Schedule:
|
|
All other schedules have been omitted because they are inapplicable, not required, or the information is included elsewhere in the consolidated financial statements or related notes.
|
|
3.
Exhibits
|
|
The Exhibit Index attached to this report is incorporated by reference into this Item 15(a)(3) and is filed as part of this Annual Report on Form 10-K.
|
|
|
Years Ended December 31,
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||
Revenue:
|
|
|
|
|
|
|||||||
Services
|
$
|
1,351.8
|
|
|
$
|
788.5
|
|
|
$
|
415.0
|
|
|
Product sales
|
863.0
|
|
|
464.9
|
|
|
159.9
|
|
||||
Instant games
|
544.0
|
|
|
533.0
|
|
|
516.0
|
|
||||
Total revenue
|
2,758.8
|
|
|
1,786.4
|
|
|
1,090.9
|
|
||||
Operating expenses:
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
372.7
|
|
|
283.7
|
|
|
203.1
|
|
||||
Cost of product sales
(1)
|
405.5
|
|
|
274.3
|
|
|
103.5
|
|
||||
Cost of instant games
(1)
|
325.9
|
|
|
291.4
|
|
|
285.1
|
|
||||
Selling, general and administrative
|
567.7
|
|
|
507.7
|
|
|
266.4
|
|
||||
Research and development
|
183.9
|
|
|
117.0
|
|
|
26.0
|
|
||||
Employee termination and restructuring
|
21.9
|
|
|
30.7
|
|
|
22.7
|
|
||||
Depreciation and amortization
|
903.2
|
|
|
454.3
|
|
|
202.4
|
|
||||
Goodwill impairments
|
1,002.6
|
|
|
—
|
|
|
—
|
|
||||
Operating loss
|
(1,024.6
|
)
|
|
(172.7
|
)
|
|
(18.3
|
)
|
||||
Other (expense) income:
|
|
|
|
|
|
|||||||
Interest expense
|
(664.9
|
)
|
|
(307.2
|
)
|
|
(119.5
|
)
|
||||
Earnings (loss) from equity investments
|
16.9
|
|
|
(7.6
|
)
|
|
1.5
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
(25.9
|
)
|
|
(5.9
|
)
|
||||
Gain on sale of equity interest
|
—
|
|
|
14.5
|
|
|
—
|
|
||||
Other (expense) income, net
|
(21.6
|
)
|
|
4.0
|
|
|
(1.1
|
)
|
||||
Total other expense, net
|
(669.6
|
)
|
|
(322.2
|
)
|
|
(125.0
|
)
|
||||
Net loss from continuing operations before income taxes
|
(1,694.2
|
)
|
|
(494.9
|
)
|
|
(143.3
|
)
|
||||
Income tax benefit
|
299.9
|
|
|
260.6
|
|
|
117.7
|
|
||||
Net loss from continuing operations
|
$
|
(1,394.3
|
)
|
|
$
|
(234.3
|
)
|
|
$
|
(25.6
|
)
|
|
|
|
|
|
|
|
|||||||
Discontinued operations:
|
|
|
|
|
|
|||||||
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
||||
Net loss from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.6
|
)
|
|
|
|
|
|
|
|
|||||||
Net loss
|
$
|
(1,394.3
|
)
|
|
$
|
(234.3
|
)
|
|
$
|
(30.2
|
)
|
|
|
|
|
|
|
|
|||||||
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation (loss) gain
|
(136.2
|
)
|
|
(97.4
|
)
|
|
18.2
|
|
||||
Pension and post-retirement gain (loss), net of tax
|
7.0
|
|
|
(8.7
|
)
|
|
5.3
|
|
||||
Derivative financial instruments unrealized gain (loss), net of tax
|
1.4
|
|
|
(6.6
|
)
|
|
(2.2
|
)
|
||||
Other comprehensive (loss) income
|
(127.8
|
)
|
|
(112.7
|
)
|
|
21.3
|
|
||||
Comprehensive loss
|
$
|
(1,522.1
|
)
|
|
$
|
(347.0
|
)
|
|
$
|
(8.9
|
)
|
|
|
|
|
|
|
|
|||||||
Basic and diluted net loss per share:
|
|
|
|
|
|
|||||||
Basic from continuing operations
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.30
|
)
|
|
Basic from discontinued operations
|
—
|
|
|
—
|
|
|
(0.06
|
)
|
||||
Basic net loss per share
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|||||||
Diluted from continuing operations
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.30
|
)
|
|
Diluted from discontinued operations
|
—
|
|
|
—
|
|
|
(0.06
|
)
|
||||
Diluted net loss per share
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|||||||
Basic shares
|
85.9
|
|
|
84.6
|
|
|
85.0
|
|
||||
Diluted shares
|
85.9
|
|
|
84.6
|
|
|
85.0
|
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
128.7
|
|
|
$
|
171.8
|
|
Restricted cash
|
20.2
|
|
|
27.2
|
|
||
Accounts receivable, net
|
487.1
|
|
|
468.4
|
|
||
Notes receivable, net
|
167.7
|
|
|
188.7
|
|
||
Inventories
|
248.5
|
|
|
265.6
|
|
||
Prepaid expenses, deposits and other current assets
|
123.3
|
|
|
183.5
|
|
||
Total current assets
|
1,175.5
|
|
|
1,305.2
|
|
||
|
|
|
|
||||
Long-term restricted cash
|
17.9
|
|
|
16.8
|
|
||
Long-term notes receivable, net
|
51.3
|
|
|
87.5
|
|
||
Property and equipment, net
|
794.0
|
|
|
1,012.8
|
|
||
Goodwill
|
3,013.7
|
|
|
4,108.3
|
|
||
Intangible assets, net
|
1,920.0
|
|
|
2,251.6
|
|
||
Software, net
|
485.9
|
|
|
592.7
|
|
||
Equity investments
|
228.5
|
|
|
288.2
|
|
||
Other assets
|
45.4
|
|
|
58.0
|
|
||
Total assets
|
$
|
7,732.2
|
|
|
$
|
9,721.1
|
|
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
50.3
|
|
|
$
|
50.6
|
|
Accounts payable
|
159.8
|
|
|
155.8
|
|
||
Accrued liabilities
|
443.8
|
|
|
449.4
|
|
||
Total current liabilities
|
653.9
|
|
|
655.8
|
|
||
|
|
|
|
||||
Deferred income taxes
|
228.2
|
|
|
562.3
|
|
||
Other long-term liabilities
|
188.9
|
|
|
236.8
|
|
||
Long-term debt, excluding current portion
|
8,156.7
|
|
|
8,262.3
|
|
||
Total liabilities
|
9,227.7
|
|
|
9,717.2
|
|
||
Commitments and contingencies (see Note 14 and Note 22)
|
|
|
|
|
|
||
Stockholders' (deficit) equity:
|
|
|
|
||||
Class A common stock, par value $0.01 per share, 199.3 shares authorized, 103.7 and 102.3 shares issued and 86.5 and 85.1 shares outstanding as of December 31, 2015 and December 31, 2014, respectively
|
1.0
|
|
|
1.0
|
|
||
Additional paid-in capital
|
765.9
|
|
|
743.2
|
|
||
Accumulated loss
|
(1,865.0
|
)
|
|
(470.7
|
)
|
||
Treasury stock, at cost, 17.2 shares held as of December 31, 2015 and December 31, 2014, respectively
|
(175.2
|
)
|
|
(175.2
|
)
|
||
Accumulated other comprehensive loss
|
(222.2
|
)
|
|
(94.4
|
)
|
||
Total stockholders' (deficit) equity
|
(1,495.5
|
)
|
|
3.9
|
|
||
Total liabilities and stockholders' (deficit) equity
|
$
|
7,732.2
|
|
|
$
|
9,721.1
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Common stock:
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
1.0
|
|
|
$
|
1.0
|
|
|
$
|
1.0
|
|
Issuance of Class A common stock in connection with employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|||
Issuance of Class A common stock in connection with stock options, RSUs and warrants
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases of Class A common stock
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
|||
Additional paid-in capital:
|
|
|
|
|
|
||||||
Beginning balance
|
743.2
|
|
|
737.8
|
|
|
715.9
|
|
|||
Issuance of Class A common stock in connection with employee stock purchase plan
|
1.6
|
|
|
1.6
|
|
|
0.7
|
|
|||
Net redemption of Class A common stock in connection with stock options and RSUs
|
(2.5
|
)
|
|
(20.6
|
)
|
|
(0.9
|
)
|
|||
Stock-based compensation
|
25.4
|
|
|
24.1
|
|
|
21.8
|
|
|||
Tax effect from employee stock options and RSUs
|
(1.8
|
)
|
|
0.3
|
|
|
0.3
|
|
|||
Ending balance
|
765.9
|
|
|
743.2
|
|
|
737.8
|
|
|||
Accumulated losses:
|
|
|
|
|
|
||||||
Beginning balance
|
(470.7
|
)
|
|
(236.4
|
)
|
|
(206.2
|
)
|
|||
Net loss
|
(1,394.3
|
)
|
|
(234.3
|
)
|
|
(30.2
|
)
|
|||
Ending balance
|
(1,865.0
|
)
|
|
(470.7
|
)
|
|
(236.4
|
)
|
|||
Treasury stock:
|
|
|
|
|
|
||||||
Beginning balance
|
(175.2
|
)
|
|
(145.7
|
)
|
|
(142.9
|
)
|
|||
Purchase of Class A common stock
|
—
|
|
|
(29.5
|
)
|
|
(2.8
|
)
|
|||
Ending balance
|
(175.2
|
)
|
|
(175.2
|
)
|
|
(145.7
|
)
|
|||
Accumulated other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Beginning balance
|
(94.4
|
)
|
|
18.3
|
|
|
(3.0
|
)
|
|||
Other comprehensive (loss) income
|
(127.8
|
)
|
|
(112.7
|
)
|
|
21.3
|
|
|||
Ending balance
|
(222.2
|
)
|
|
(94.4
|
)
|
|
18.3
|
|
|||
Total stockholders' (deficit) equity
|
$
|
(1,495.5
|
)
|
|
$
|
3.9
|
|
|
$
|
375.0
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(1,394.3
|
)
|
|
$
|
(234.3
|
)
|
|
$
|
(30.2
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
903.2
|
|
|
454.3
|
|
|
203.0
|
|
|||
Goodwill impairments
|
1,002.6
|
|
|
—
|
|
|
—
|
|
|||
Change in deferred income taxes
|
(330.6
|
)
|
|
(264.3
|
)
|
|
(107.8
|
)
|
|||
Stock-based compensation
|
25.4
|
|
|
24.1
|
|
|
22.3
|
|
|||
Non-cash interest expense
|
40.2
|
|
|
19.4
|
|
|
8.7
|
|
|||
(Earnings) loss from equity investments, net
|
(16.9
|
)
|
|
7.6
|
|
|
(1.5
|
)
|
|||
Distributed earnings from equity investments
|
24.9
|
|
|
28.5
|
|
|
29.5
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
25.9
|
|
|
5.9
|
|
|||
Gain on sale of equity interest
|
—
|
|
|
(14.5
|
)
|
|
—
|
|
|||
Changes in current assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts and notes receivable, net
|
26.4
|
|
|
97.1
|
|
|
(7.8
|
)
|
|||
Inventories
|
29.3
|
|
|
12.4
|
|
|
13.6
|
|
|||
Other current assets and liabilities
|
101.5
|
|
|
32.2
|
|
|
(9.1
|
)
|
|||
Accounts payable
|
4.5
|
|
|
(33.4
|
)
|
|
(5.1
|
)
|
|||
Accrued liabilities
|
0.1
|
|
|
47.0
|
|
|
52.6
|
|
|||
Other, net
|
(2.1
|
)
|
|
1.5
|
|
|
(2.9
|
)
|
|||
Net cash provided by operating activities
|
414.2
|
|
|
203.5
|
|
|
171.2
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(18.8
|
)
|
|
(41.7
|
)
|
|
(29.4
|
)
|
|||
Gaming and lottery operations expenditures
|
(200.4
|
)
|
|
(107.5
|
)
|
|
(84.3
|
)
|
|||
Intangible assets and software expenditures
|
(104.4
|
)
|
|
(89.1
|
)
|
|
(52.1
|
)
|
|||
Proceeds from asset sales
|
6.7
|
|
|
0.5
|
|
|
0.9
|
|
|||
Changes in other assets and liabilities and other
|
11.2
|
|
|
0.4
|
|
|
(1.6
|
)
|
|||
Proceeds from sale of equity interest
|
—
|
|
|
44.9
|
|
|
10.0
|
|
|||
Additions to equity method investments
|
(2.7
|
)
|
|
(48.2
|
)
|
|
(86.1
|
)
|
|||
Restricted cash
|
5.9
|
|
|
(0.4
|
)
|
|
30.1
|
|
|||
Distributions of capital on equity investments
|
38.7
|
|
|
48.8
|
|
|
20.7
|
|
|||
Business acquisitions, net of cash acquired
|
—
|
|
|
(3,140.6
|
)
|
|
(1,472.9
|
)
|
|||
Net cash used in investing activities
|
(263.8
|
)
|
|
(3,332.9
|
)
|
|
(1,664.7
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings under revolving credit facility
|
170.0
|
|
|
220.0
|
|
|
—
|
|
|||
Repayments under revolving credit facility
|
(260.0
|
)
|
|
(35.0
|
)
|
|
—
|
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
5,477.3
|
|
|
2,293.7
|
|
|||
Payments on long-term debt
|
(51.3
|
)
|
|
(2,267.1
|
)
|
|
(670.4
|
)
|
|||
Payments of deferred financing fees
|
—
|
|
|
(163.1
|
)
|
|
(82.6
|
)
|
|||
Common stock repurchases
|
—
|
|
|
(29.5
|
)
|
|
(0.8
|
)
|
|||
Payments on license obligations
|
(40.5
|
)
|
|
(13.6
|
)
|
|
—
|
|
|||
Contingent earnout payments
|
(0.5
|
)
|
|
(13.2
|
)
|
|
—
|
|
|||
Excess tax effect from stock-based compensation plans
|
—
|
|
|
0.3
|
|
|
0.9
|
|
|||
Net redemptions of common stock under stock-based compensation plans
|
(0.9
|
)
|
|
(18.7
|
)
|
|
(2.1
|
)
|
|||
Net cash (used in) provided by financing activities
|
(183.2
|
)
|
|
3,157.4
|
|
|
1,538.7
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(10.3
|
)
|
|
(9.9
|
)
|
|
(0.5
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
(43.1
|
)
|
|
18.1
|
|
|
44.7
|
|
|||
Cash and cash equivalents, beginning of period
|
171.8
|
|
|
153.7
|
|
|
109.0
|
|
|||
Cash and cash equivalents, end of period
|
$
|
128.7
|
|
|
$
|
171.8
|
|
|
$
|
153.7
|
|
•
|
persuasive evidence of an agreement exists;
|
•
|
the price to the customer is fixed or determinable;
|
•
|
delivery has occurred, title has been transferred and any acceptance terms have been fulfilled; and
|
•
|
collectability is reasonably assured (or probable under ASC 985).
|
•
|
Revenue from leasing gaming machines and VLTs to casinos and other gaming operators under operating leases is based upon: (1) a percentage of the casino’s Net win; (2) fixed daily fees; (3) a percentage of the amount wagered (Coin-in); or (4) a combination of a fixed daily fee and a percentage of the Coin-in. We recognize revenue from these operating leases on a daily basis over the term of the arrangement. We do not consider these arrangements to have multiple revenue-generating activities as the services offered constitute a comprehensive solution in exchange for a daily fee and all of the products and services are delivered contemporaneously. Therefore, revenue is recognized under general revenue recognition guidance as the products and services provide the customer with the right to use the gaming machines and software that is essential to the functionality of the gaming machine.
|
•
|
Revenue from the provision of server-based gaming machines, systems and game content under arrangements with wide-area gaming operators (such as LBO operators in the U.K.) is generally recognized as a percentage of Net win generated by our gaming machines (subject to certain adjustments as may be specified in a particular contract, including adjustments for taxes and other fees) over the term of the arrangement. We do not consider these arrangements to have multiple revenue-generating activities as the services offered constitute a comprehensive solution in exchange for a percentage of Net win and all of the products and field services are delivered contemporaneously.
|
•
|
Revenue from leasing table game products, including automatic card shufflers, deck checkers and roulette chip sorters and licensing PTG content, is earned based on a fixed monthly rate. Services revenue for leased table game products and licensed PTG content is recognized under general revenue recognition guidance as the products and services provide the customer with the right to use the table product and license that is essential to the functionality of the table product.
|
•
|
Other professional services not related to system implementation are recognized as the services are provided.
|
•
|
Revenue from the sale of gaming machines, VLTs, table game products, and parts (including hardware conversion kits) to casinos and other gaming operators is recognized pursuant to the terms of the contract and based on the general revenue recognition policy stated above. These sales are recorded net of any incentive rebates, discounts and applicable sales taxes. Sales of gaming machines, VLTs and table game products are recorded pursuant to ASC 605 as the software and non-software components of our gaming machines, VLTs, and table game products function together to deliver the product's essential functionality. Game content conversion kits are considered software deliverables and are recognized in accordance with software revenue recognition guidance.
|
•
|
Revenue from casino-management systems software and maintenance and product support is recognized under software revenue recognition guidance. Although the casino-management systems software and certain systems-based hardware products function together, the functionality of casino-management systems software is primarily derived from the software. The casino-management systems software is not essential to the functionality of the systems-based hardware products and as such the revenue for systems-based hardware products is recognized based on the general revenue recognition policy stated above. Revenue from systems-based hardware products include embedded software that is essential to the functionality of the hardware. Accordingly, revenue related to all systems-based hardware sales and related maintenance and product support is recognized under general revenue recognition guidance and is generally recognized upon delivery when title and risk of loss have passed to the customer and all other revenue recognition criteria are satisfied. However, in the case of arrangements involving a systems installation, revenue on the systems-based hardware is generally not recognized until the system has been installed and the customer has accepted the system.
|
•
|
The Company licenses casino-management systems software on a perpetual basis or under time-based licenses. Revenue from perpetual license software is recognized at the inception of the license term provided all revenue recognition criteria have been satisfied. Revenue from maintenance and product support sold with perpetual licenses is recognized over the term of the support period. The Company’s time-based licenses are generally for 12-month terms and are bundled with software maintenance and product support. All revenue from such arrangements is recognized over the term of the license.
|
•
|
Revenue from the sale of instant games that are sold on a price-per-unit basis is recognized when the customer accepts the product pursuant to the terms of the contract.
|
•
|
Revenue from the sale of instant games that are sold on a Participation basis is recognized as retail sales are generated. We do not consider these arrangements to have multiple revenue-generating activities as the services offered are a comprehensive solution in exchange for Participation-based compensation and all of the products and services are delivered contemporaneously; accordingly, this revenue is recognized under general revenue recognition guidance.
|
•
|
Revenue from the sale of instant games utilizing licensed brands coupled with a service component whereby we purchase and distribute merchandise prizes to identified winners on behalf of lotteries is recognized as a multiple-deliverable arrangement. There are typically
two
deliverables in this arrangement—the brand license and the merchandising services—which are separate units of accounting. We allocate revenue to the deliverables in accordance with the relative selling price method prescribed in ASC 605. If neither VSOE nor TPE of selling price exists for a deliverable, we use an ESP for that deliverable. Revenue allocated to the brand license is determined using ESP based on the rates we charge when we license branded intellectual property on a stand-alone basis and is recognized when the use of the licensed brand is permitted, which is typically when the contract is signed by the lottery. Revenue allocated to the merchandising is determined using ESP, which is generally based on a cost-plus margin approach taking into account a variety of company-specific factors, including pricing models, internal costs and minimum operating margin requirements. Revenue from merchandising services is recognized on a percentage of completion method as this method best reflects the pattern in which the obligations of the merchandising services to the customer are fulfilled. A performance measure is used based on total estimated cost allocated to the merchandising services. By accumulating costs for services as they are incurred, and dividing such costs by the total costs of merchandising services, which is estimated based on a budget prior to contract inception, a percentage is determined. This percentage is applied to the revenue allocated to the merchandising services and that proportionate amount of revenue is recognized.
|
•
|
Revenue from the licensing of branded property with no service component is recognized when the contract is signed by the lottery.
|
•
|
Revenue from our loyalty and reward programs is typically based on a percentage of a lottery's prize payout structure calculated as a percentage of retail sales. Revenue is recognized as retail sales are generated.
|
•
|
Revenue from the provision of lottery system services provided on a Participation basis is recognized when the retail sales of draw lottery games are generated.
|
•
|
Revenue from the perpetual licensing of customized lottery software is recognized under the percentage of completion method of accounting, based on the ratio of costs incurred to estimated costs to complete.
|
•
|
Revenue derived from software maintenance on lottery software and hardware maintenance on lottery terminals is recognized ratably over the maintenance period.
|
•
|
Revenue from the sale of lottery system services is recognized under the percentage of completion method of accounting, based on the ratio of costs incurred to estimated costs to complete.
|
•
|
Revenue from the sale of lottery terminals is recognized when the customer accepts the product pursuant to the terms of the contract. Sales of lottery terminals are recorded pursuant to ASC 605 as the software and non-software components of our lottery terminals function together to deliver the product's essential functionality.
|
•
|
Revenue from the sale of prepaid phone cards is recognized when the customer accepts the product pursuant to the terms of the contract.
|
•
|
In social gaming, we earn revenue from the sale of virtual coins or chips, which is recorded when the purchased coins or chips are used by the customer. We also host play-for-fun and play-for-free services and earn revenue based on fixed fees, a share of the proceeds from the sale of virtual coins, or a mix of fixed fees and a share of such proceeds.
|
•
|
For RMG, we typically earn a percentage of the operator’s net gaming revenue generated by their players playing the games we host. We also host on-premises interactive gaming for certain customers and earn revenue based on fixed fees, a revenue share with our online casino-customer, or a mix of fixed fees and revenue share.
|
•
|
Revenue from hosting game content for RMG websites and mobile applications from our remote game servers and from our social games, as discussed above, is primarily recorded on a gross basis as, among other factors, we are the primary obligor in these arrangements. Processing fees charged by platform providers are recorded in cost of services.
|
Item
|
|
Estimated Life in Years
|
Lottery and other machinery and equipment
|
|
3 - 15
|
Gaming equipment
|
|
1 - 5
|
Transportation equipment
|
|
3 - 8
|
Furniture and fixtures
|
|
5 - 10
|
Buildings and improvements
|
|
15 - 40
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
956.3
|
|
|
$
|
185.5
|
|
|
$
|
210.0
|
|
|
$
|
1,351.8
|
|
Product sales
|
|
817.3
|
|
|
45.7
|
|
|
—
|
|
|
863.0
|
|
||||
Instant games
|
|
—
|
|
|
544.0
|
|
|
—
|
|
|
544.0
|
|
||||
Total revenue
|
|
1,773.6
|
|
|
775.2
|
|
|
210.0
|
|
|
2,758.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
|
190.1
|
|
|
109.8
|
|
|
72.8
|
|
|
372.7
|
|
||||
Cost of product sales
(1)
|
|
370.2
|
|
|
35.3
|
|
|
—
|
|
|
405.5
|
|
||||
Cost of instant games
(1)
|
|
—
|
|
|
325.9
|
|
|
—
|
|
|
325.9
|
|
||||
Selling, general and administrative
|
|
285.1
|
|
|
67.0
|
|
|
66.3
|
|
|
418.4
|
|
||||
Research and development
|
|
154.9
|
|
|
6.3
|
|
|
22.7
|
|
|
183.9
|
|
||||
Employee termination and restructuring
|
|
11.2
|
|
|
0.2
|
|
|
1.5
|
|
|
12.9
|
|
||||
Depreciation and amortization
|
|
728.6
|
|
|
95.9
|
|
|
19.6
|
|
|
844.1
|
|
||||
Goodwill impairments
|
|
935.0
|
|
|
67.6
|
|
|
—
|
|
|
1,002.6
|
|
||||
Segment operating (loss) income from continuing operations
|
|
$
|
(901.5
|
)
|
|
$
|
67.2
|
|
|
$
|
27.1
|
|
|
$
|
(807.2
|
)
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
|
|
|
(217.4
|
)
|
||||
Consolidated operating loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,024.6
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Earnings from equity investments
|
|
$
|
3.5
|
|
|
$
|
13.4
|
|
|
$
|
—
|
|
|
$
|
16.9
|
|
Assets at December 31, 2015
|
|
$
|
6,135.2
|
|
|
$
|
1,116.6
|
|
|
$
|
211.9
|
|
|
|
|
|
Unallocated assets at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
268.5
|
|
||||
Consolidated assets at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
$
|
7,732.2
|
|
|||
Gaming, lottery and interactive capital expenditures
|
|
$
|
234.8
|
|
|
$
|
43.9
|
|
|
$
|
6.7
|
|
|
|
|
|
Unallocated capital expenditures for the year ended December 31, 2015
|
|
|
|
|
|
|
|
38.2
|
|
|||||||
Consolidated capital expenditures for the year ended December 31, 2015
|
|
|
|
|
|
|
|
$
|
323.6
|
|
(1)
|
Exclusive of D&A.
|
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
442.6
|
|
|
$
|
201.4
|
|
|
$
|
144.5
|
|
|
$
|
788.5
|
|
Product sales
|
|
363.8
|
|
|
101.1
|
|
|
—
|
|
|
464.9
|
|
||||
Instant games
|
|
—
|
|
|
533.0
|
|
|
—
|
|
|
533.0
|
|
||||
Total revenue
|
|
806.4
|
|
|
835.5
|
|
|
144.5
|
|
|
1,786.4
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
|
111.0
|
|
|
120.8
|
|
|
51.9
|
|
|
283.7
|
|
||||
Cost of product sales
(1)
|
|
195.5
|
|
|
78.8
|
|
|
—
|
|
|
274.3
|
|
||||
Cost of instant games
(1)
|
|
—
|
|
|
291.4
|
|
|
—
|
|
|
291.4
|
|
||||
Selling, general and administrative
|
|
235.3
|
|
|
73.3
|
|
|
57.3
|
|
|
365.9
|
|
||||
Research and development
|
|
98.7
|
|
|
4.6
|
|
|
13.7
|
|
|
117.0
|
|
||||
Employee termination and restructuring
|
|
15.5
|
|
|
3.5
|
|
|
7.1
|
|
|
26.1
|
|
||||
Depreciation and amortization
|
|
318.7
|
|
|
97.1
|
|
|
13.3
|
|
|
429.1
|
|
||||
Segment operating (loss) income from continuing operations
|
|
$
|
(168.3
|
)
|
|
$
|
166.0
|
|
|
$
|
1.2
|
|
|
$
|
(1.1
|
)
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
|
(171.6
|
)
|
||||||
Consolidated operating loss
|
|
|
|
|
|
|
|
|
$
|
(172.7
|
)
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) from equity investments
|
|
$
|
3.3
|
|
|
$
|
(10.9
|
)
|
|
$
|
—
|
|
|
$
|
(7.6
|
)
|
Assets at December 31, 2014
|
|
$
|
7,853.0
|
|
|
$
|
1,407.2
|
|
|
$
|
185.5
|
|
|
|
|
|
Unallocated assets at December 31, 2014
|
|
|
|
|
|
|
|
|
275.4
|
|
||||||
Consolidated assets at December 31, 2014
|
|
|
|
|
|
|
|
|
$
|
9,721.1
|
|
|||||
Gaming, lottery and interactive capital expenditures
|
|
$
|
160.5
|
|
|
$
|
58.3
|
|
|
$
|
5.4
|
|
|
|
|
|
Unallocated capital expenditures for the year ended December 31, 2014
|
|
|
|
|
|
|
|
14.1
|
|
|||||||
Consolidated capital expenditures for the year ended December 31, 2014
|
|
|
|
|
|
|
|
$
|
238.3
|
|
(1)
|
Exclusive of D&A.
|
|
|
Year Ended December 31, 2013
|
||||||||||||||
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
181.8
|
|
|
$
|
203.2
|
|
|
$
|
30.0
|
|
|
$
|
415.0
|
|
Product sales
|
|
88.7
|
|
|
71.2
|
|
|
—
|
|
|
159.9
|
|
||||
Instant games
|
|
—
|
|
|
516.0
|
|
|
—
|
|
|
516.0
|
|
||||
Total revenue
|
|
270.5
|
|
|
790.4
|
|
|
30.0
|
|
|
1,090.9
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
|
77.9
|
|
|
113.8
|
|
|
11.4
|
|
|
203.1
|
|
||||
Cost of product sales
(1)
|
|
56.4
|
|
|
47.1
|
|
|
—
|
|
|
103.5
|
|
||||
Cost of instant games
(1)
|
|
—
|
|
|
285.1
|
|
|
—
|
|
|
285.1
|
|
||||
Selling, general and administrative
|
|
87.1
|
|
|
70.7
|
|
|
10.1
|
|
|
167.9
|
|
||||
Research and development
|
|
17.4
|
|
|
5.5
|
|
|
3.1
|
|
|
26.0
|
|
||||
Employee termination and restructuring
|
|
6.7
|
|
|
5.1
|
|
|
1.9
|
|
|
13.7
|
|
||||
Depreciation and amortization
|
|
103.9
|
|
|
94.5
|
|
|
2.7
|
|
|
201.1
|
|
||||
Segment operating (loss) income from continuing operations
|
|
$
|
(78.9
|
)
|
|
$
|
168.6
|
|
|
$
|
0.8
|
|
|
$
|
90.5
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
|
(108.8
|
)
|
||||||
Consolidated operating loss
|
|
|
|
|
|
|
|
|
$
|
(18.3
|
)
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings from equity investments
|
|
$
|
(12.1
|
)
|
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
Assets at December 31, 2013
|
|
$
|
2,333.6
|
|
|
$
|
1,581.1
|
|
|
$
|
84.1
|
|
|
|
|
|
Unallocated assets at December 31, 2013
|
|
|
|
|
|
|
|
|
110.8
|
|
||||||
Consolidated assets at December 31, 2013
(2)
|
|
|
|
|
|
|
|
|
$
|
4,109.6
|
|
|||||
Gaming, lottery and interactive capital expenditures
|
|
$
|
75.8
|
|
|
$
|
79.0
|
|
|
$
|
3.2
|
|
|
|
|
|
Unallocated capital expenditures for the year ended December 31, 2013
|
|
|
|
|
|
|
|
7.8
|
|
|||||||
Consolidated capital expenditures for the year ended December 31, 2013
|
|
|
|
|
|
|
|
$
|
165.8
|
|
(1)
|
Exclusive of D&A.
|
(2)
|
Includes the impact of adopting ASU 2015-03, ASU 2015-15, and ASU 2015-17.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Reported segment operating (loss) income from continuing operations
|
|
$
|
(807.2
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
90.5
|
|
Unallocated corporate costs
|
|
(217.4
|
)
|
|
(171.6
|
)
|
|
(108.8
|
)
|
|||
Consolidated operating loss
|
|
(1,024.6
|
)
|
|
(172.7
|
)
|
|
(18.3
|
)
|
|||
Interest expense
|
|
(664.9
|
)
|
|
(307.2
|
)
|
|
(119.5
|
)
|
|||
Earnings (loss) from equity investments
|
|
16.9
|
|
|
(7.6
|
)
|
|
1.5
|
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
(25.9
|
)
|
|
(5.9
|
)
|
|||
Gain on sale of equity interest
|
|
—
|
|
|
14.5
|
|
|
—
|
|
|||
Other (expense) income, net
|
|
(21.6
|
)
|
|
4.0
|
|
|
(1.1
|
)
|
|||
Net loss from continuing operations before income taxes
|
|
$
|
(1,694.2
|
)
|
|
$
|
(494.9
|
)
|
|
$
|
(143.3
|
)
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
United States
(1)
|
|
$
|
2,144.0
|
|
|
$
|
1,070.1
|
|
|
$
|
559.8
|
|
North America, other than United States
|
|
175.0
|
|
|
131.0
|
|
|
74.2
|
|
|||
United Kingdom
|
|
157.5
|
|
|
162.5
|
|
|
157.5
|
|
|||
Europe, other than the United Kingdom
|
|
182.1
|
|
|
283.6
|
|
|
213.2
|
|
|||
Other
|
|
100.2
|
|
|
139.2
|
|
|
86.2
|
|
|||
Total
(2)
|
|
$
|
2,758.8
|
|
|
$
|
1,786.4
|
|
|
$
|
1,090.9
|
|
|
|
As of December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Property and equipment, net:
|
|
|
|
|
||||
United States
|
|
$
|
606.4
|
|
|
$
|
771.1
|
|
North America, other than United States
|
|
43.4
|
|
|
59.9
|
|
||
United Kingdom
|
|
76.8
|
|
|
96.6
|
|
||
Europe, other than the United Kingdom
|
|
28.6
|
|
|
34.2
|
|
||
Other
|
|
38.8
|
|
|
51.0
|
|
||
Total
(3)
|
|
$
|
794.0
|
|
|
$
|
1,012.8
|
|
(1)
|
Sales to international customers originating from the U.S. were
$185.5
million,
$58.1
million and $
18.5
million for the years ended December 31, 2015, 2014 and 2013, respectively.
|
(2)
|
Total revenue from international customers for the years ended December 31,
2015
,
2014
and
2013
was
$614.8
million,
$716.3
, million and
$531.1
million, respectively.
|
(3)
|
Total property and equipment held outside the United States as of December 31,
2015
and
2014
was
$187.6
million and
$241.7
million, respectively.
|
At November 21, 2014
|
|
||
Cash and cash equivalents
|
$
|
59.9
|
|
Restricted cash
|
16.0
|
|
|
Accounts receivable
|
217.1
|
|
|
Notes receivable
|
22.0
|
|
|
Inventories
|
134.0
|
|
|
Deferred income taxes, current portion
(1)
|
32.4
|
|
|
Prepaid expenses, deposits and other current assets
|
71.6
|
|
|
Property and equipment
|
335.3
|
|
|
Goodwill
|
2,956.1
|
|
|
Restricted long-term cash and investments
|
19.3
|
|
|
Intangible assets
|
1,800.3
|
|
|
Software
|
308.3
|
|
|
Other assets
|
61.8
|
|
|
Total assets
|
6,034.1
|
|
|
Long-term debt, including amounts due within one year
|
(1,882.9
|
)
|
|
Accounts payable
|
(33.0
|
)
|
|
Accrued liabilities
|
(133.7
|
)
|
|
Deferred income taxes
(1)
|
(747.0
|
)
|
|
Other long-term liabilities
|
(37.0
|
)
|
|
Total liabilities
|
(2,833.6
|
)
|
|
Total equity purchase price
|
$
|
3,200.5
|
|
|
|
Fair values at November 21, 2014
|
||
Land and land improvements
|
|
$
|
18.1
|
|
Buildings and leasehold improvements
|
|
36.3
|
|
|
Furniture, fixtures, and other property, plant and equipment
|
|
33.6
|
|
|
Gaming equipment
|
|
247.3
|
|
|
Total property and equipment
|
|
$
|
335.3
|
|
|
|
|
||
|
|
Fair values at November 21, 2014
|
||
Trade names
|
|
$
|
225.0
|
|
Brand names
|
|
90.7
|
|
|
Core technology and content
|
|
734.7
|
|
|
Customer relationships
|
|
726.0
|
|
|
Long-term licenses
|
|
23.9
|
|
|
Total intangible assets
|
|
$
|
1,800.3
|
|
|
From November 21, 2014 through December 31, 2014
|
||
Revenue
|
$
|
151.6
|
|
Loss from continuing operations
|
$
|
(21.1
|
)
|
At October 18, 2013
|
|
||
Current assets
|
$
|
503.9
|
|
Long-term notes receivable
|
76.2
|
|
|
Property, plant and equipment, net
|
465.8
|
|
|
Goodwill
|
381.8
|
|
|
Intangible assets
|
325.0
|
|
|
Intellectual property
|
201.2
|
|
|
Other long-term assets
|
7.8
|
|
|
Total assets
|
1,961.7
|
|
|
Current liabilities
|
(158.9
|
)
|
|
Deferred income taxes
|
(166.6
|
)
|
|
Long-term liabilities
|
(150.3
|
)
|
|
Total liabilities
|
(475.8
|
)
|
|
Total equity purchase price
|
$
|
1,485.9
|
|
|
Fair values at October 18, 2013
|
||
Land
|
$
|
14.9
|
|
Real property
|
110.5
|
|
|
Gaming equipment
|
230.8
|
|
|
Personal property
|
109.6
|
|
|
Total property and equipment
|
$
|
465.8
|
|
|
|
||
Trade names
|
$
|
66.0
|
|
Product names
|
39.3
|
|
|
Customer relationships
|
131.5
|
|
|
Long-term licenses
|
88.2
|
|
|
Total intangible assets
|
$
|
325.0
|
|
|
From October 18, 2013 through December 31, 2013
|
||
Revenue
|
$
|
144.7
|
|
Loss from continuing operations
|
$
|
(31.4
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012**
|
||||||
Revenue from Consolidated Statements of Operations and Comprehensive Loss
|
$
|
1,786.4
|
|
|
$
|
1,090.9
|
|
|
$
|
928.6
|
|
Add: Bally revenue not reflected in Consolidated Statements of Operations and Comprehensive Loss *
|
1,159.5
|
|
|
1,358.6
|
|
|
—
|
|
|||
Add: WMS revenue not reflected in Consolidated Statements of Operations and Comprehensive Loss
|
—
|
|
|
567.4
|
|
|
688.5
|
|
|||
Unaudited pro forma revenue
|
$
|
2,945.9
|
|
|
$
|
3,016.9
|
|
|
$
|
1,617.1
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012**
|
||||||
Net loss from continuing operations from Consolidated Statements of Operations and Comprehensive Loss
|
$
|
(234.3
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(43.9
|
)
|
Add: Bally net loss from continuing operations not reflected in Consolidated Statements of Operations and Comprehensive Loss plus pro forma adjustments described below *
|
(195.4
|
)
|
|
(349.1
|
)
|
|
—
|
|
|||
Add: WMS net loss from continuing operations not reflected in Consolidated Statements of Operations and Comprehensive Loss plus pro forma adjustments described below
|
—
|
|
|
(34.7
|
)
|
|
(50.4
|
)
|
|||
Unaudited pro forma net loss from continuing operations
|
$
|
(429.7
|
)
|
|
$
|
(409.4
|
)
|
|
$
|
(94.3
|
)
|
(1)
|
An adjustment to reflect additional D&A of
$143.7 million
and
$168.2 million
for the years ended December 31, 2014 and 2013, respectively, that would have been charged assuming the fair value adjustments to intangible assets and property and equipment had been applied on January 1, 2013.
|
(2)
|
An adjustment to decrease cost of sales by
$6.6 million
for the year ended December 31, 2014 to reflect the impact of purchase accounting adjustments on the carrying amount of finished goods inventory.
|
(3)
|
An adjustment to reverse acquisition-related fees and expenses of
$100.5 million
for the year ended December 31, 2014, which includes
$41.0 million
associated with the cancellation of outstanding Bally equity awards upon the closing of the acquisition.
|
(4)
|
An adjustment to reflect the additional interest expense of
$285.7 million
and
$380.7 million
for the years ended December 31, 2014 and 2013, respectively, that would have been incurred assuming the Bally acquisition financing transactions (as well as the issuance of the 2021 Notes and subsequent purchase and redemption of the 2019 Notes) had occurred on January 1, 2013. The
$285.7
million adjustment to interest expense for the year ended December 31, 2014 is net of
$64.7
million of certain debt financing fees incurred in connection with the financing of the Bally acquisition.
|
(5)
|
An adjustment to reverse the loss on extinguishment of debt of
$25.9 million
for the year ended December 31, 2014 recorded in connection with the purchase and redemption of the 2019 Notes.
|
(6)
|
An adjustment of
$33.0 million
and
$76.6 million
for the years ended December 31, 2014 and 2013, respectively, to reflect the income tax benefit of the pro forma adjustments made to the pro forma statement of operations calculated at the statutory rates in effect in each significant jurisdiction. The pro forma adjustment to income tax (expense) benefit for the year ended December 31, 2014 also reflects the reversal of the income tax benefit of
$79.1
million resulting from the partial release of the valuation allowance on Scientific Games’ net U.S. deferred tax assets related to the net deferred tax liabilities recognized in conjunction with the Bally acquisition.
|
(1)
|
An adjustment to reflect additional D&A of
$22.2 million
and
$60.9 million
for the years ended December 31, 2013 and 2012, respectively, that would have been charged assuming the fair value adjustments to intangible assets and property and equipment had been applied on January 1, 2012.
|
(2)
|
An adjustment to decrease cost of sales by
$13.0 million
to reflect the impact of purchase accounting adjustments on the carrying amount of inventory for the year ended December 31, 2013.
|
(3)
|
An adjustment to reverse acquisition-related fees and expenses of
$74.0 million
and
$2.5 million
for the years ended December 31, 2013 and 2012, respectively, as these expenses are deemed non-recurring in nature.
|
(4)
|
An adjustment to reflect the additional interest expense of
$61.0 million
and
$83.0 million
for the years ended December 31, 2013 and 2012, respectively, that would have been charged assuming our October 18, 2013 credit facilities were in place as of January 1, 2012.
|
(5)
|
An adjustment of
$12.5 million
and
$33.3 million
for the years ended December 31, 2013 and 2012, respectively, to reverse the U.S. tax expense of WMS under the assumption that the U.S. taxable income of WMS for each period presented would have been offset by U.S. tax attributes of the Company.
|
|
|
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Services
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.8
|
|
|
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
||||||
Cost of services (1)
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|||
Selling, general and administrative
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||
|
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other income, net
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net loss from discontinued operations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4.6
|
)
|
Business Segment
|
|
|
Employee Termination Costs
|
|
Property Costs
|
|
Other
|
|
Total
|
||||||||
Gaming
(1)
|
2015
|
|
$
|
10.3
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
11.2
|
|
Cumulative
|
|
28.6
|
|
|
0.9
|
|
|
3.8
|
|
|
33.3
|
|
|||||
Expected Total
|
|
28.6
|
|
|
0.9
|
|
|
3.8
|
|
|
33.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Lottery
|
2015
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Cumulative
|
|
3.3
|
|
|
0.4
|
|
|
—
|
|
|
3.7
|
|
|||||
Expected Total
|
|
3.3
|
|
|
0.4
|
|
|
—
|
|
|
3.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Interactive
|
2015
|
|
1.4
|
|
|
—
|
|
|
0.1
|
|
|
1.5
|
|
||||
Cumulative
|
|
5.2
|
|
|
0.4
|
|
|
5.0
|
|
|
10.6
|
|
|||||
Expected Total
|
|
5.2
|
|
|
0.4
|
|
|
5.0
|
|
|
10.6
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Unallocated corporate
(2)
|
2015
|
|
5.0
|
|
|
2.0
|
|
|
2.0
|
|
|
9.0
|
|
||||
Cumulative
|
|
16.3
|
|
|
4.3
|
|
|
2.0
|
|
|
22.6
|
|
|||||
Expected Total
|
|
16.3
|
|
|
4.3
|
|
|
2.0
|
|
|
22.6
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
2015
|
|
$
|
16.9
|
|
|
$
|
2.0
|
|
|
$
|
3.0
|
|
|
$
|
21.9
|
|
Cumulative
|
|
$
|
53.4
|
|
|
$
|
6.0
|
|
|
$
|
10.8
|
|
|
$
|
70.2
|
|
|
Expected Total
|
|
$
|
53.4
|
|
|
$
|
6.0
|
|
|
$
|
10.8
|
|
|
$
|
70.2
|
|
|
|
Employee Termination Costs
|
|
Property Costs
|
|
Other
|
|
Total
|
||||||||
Balance as of December 31, 2014
|
|
$
|
17.9
|
|
|
$
|
1.7
|
|
|
$
|
3.0
|
|
|
$
|
22.6
|
|
Accrual additions
|
|
16.9
|
|
|
2.0
|
|
|
3.0
|
|
|
21.9
|
|
||||
Cash payments
|
|
(27.5
|
)
|
|
(2.9
|
)
|
|
(4.6
|
)
|
|
(35.0
|
)
|
||||
Balance as of December 31, 2015
|
|
$
|
7.3
|
|
|
$
|
0.8
|
|
|
$
|
1.4
|
|
|
$
|
9.5
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Loss (numerator)
|
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
|
$
|
(1,394.3
|
)
|
|
$
|
(234.3
|
)
|
|
$
|
(25.6
|
)
|
Net loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
(4.6
|
)
|
|||
Net loss
|
|
$
|
(1,394.3
|
)
|
|
$
|
(234.3
|
)
|
|
$
|
(30.2
|
)
|
Shares (denominator)
|
|
|
|
|
|
|
||||||
Basic weighted-average common shares outstanding
|
|
85.9
|
|
|
84.6
|
|
|
85.0
|
|
|||
Diluted weighted-average common shares outstanding
|
|
85.9
|
|
|
84.6
|
|
|
85.0
|
|
|||
Basic and diluted net loss per share amounts
|
|
|
|
|
|
|
||||||
Basic net loss per share from continuing operations
|
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.30
|
)
|
Basic net loss per share from discontinued operations
|
|
—
|
|
|
—
|
|
|
(0.06
|
)
|
|||
Total basic net loss per share
|
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.36
|
)
|
Diluted net loss per share from continuing operations
|
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.30
|
)
|
Diluted net loss per share from discontinued operations
|
|
—
|
|
|
—
|
|
|
(0.06
|
)
|
|||
Total diluted net loss per share
|
|
$
|
(16.23
|
)
|
|
$
|
(2.77
|
)
|
|
$
|
(0.36
|
)
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Current:
|
|
|
|
||||
Accounts receivable
|
$
|
497.7
|
|
|
$
|
479.5
|
|
Notes receivable
|
180.4
|
|
|
194.6
|
|
||
Allowance for doubtful accounts
|
(23.3
|
)
|
|
(17.0
|
)
|
||
Current accounts and notes receivable, net
|
$
|
654.8
|
|
|
$
|
657.1
|
|
Long-term:
|
|
|
|
||||
Notes receivable, net
|
51.3
|
|
|
87.5
|
|
||
Total accounts and notes receivable, net
|
$
|
706.1
|
|
|
$
|
744.6
|
|
|
|
|
|
|
December 31, 2015
|
|
Balances over 90 days past due
|
|
December 31, 2014
|
|
Balances over 90 days past due
|
||||||||
Notes receivable:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
62.4
|
|
|
$
|
2.6
|
|
|
$
|
95.3
|
|
|
$
|
7.9
|
|
International
|
169.8
|
|
|
26.6
|
|
|
186.8
|
|
|
12.0
|
|
||||
Total notes receivable
|
232.2
|
|
|
29.2
|
|
|
282.1
|
|
|
19.9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
(2.6
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
||||
International
|
(10.6
|
)
|
|
(9.5
|
)
|
|
(5.9
|
)
|
|
(3.5
|
)
|
||||
Total notes receivable allowance for doubtful accounts
|
(13.2
|
)
|
|
(12.0
|
)
|
|
(5.9
|
)
|
|
(3.5
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable, net
|
$
|
219.0
|
|
|
$
|
17.2
|
|
|
$
|
276.2
|
|
|
$
|
16.4
|
|
|
As of December 31, 2015
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Notes receivable:
|
|
|
|
|
|
||||||
Domestic
|
$
|
62.4
|
|
|
$
|
20.7
|
|
|
$
|
41.7
|
|
International
|
169.8
|
|
|
101.8
|
|
|
68.0
|
|
|||
Total notes receivable
|
$
|
232.2
|
|
|
$
|
122.5
|
|
|
$
|
109.7
|
|
|
As of December 31, 2014
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Notes receivable:
|
|
|
|
|
|
||||||
Domestic
|
$
|
95.3
|
|
|
$
|
36.1
|
|
|
$
|
59.2
|
|
International
|
186.8
|
|
|
121.0
|
|
|
65.8
|
|
|||
Total notes receivable
|
$
|
282.1
|
|
|
$
|
157.1
|
|
|
$
|
125.0
|
|
|
Total
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Beginning balance at December 31, 2014
|
$
|
5.9
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
Charge-offs
|
(0.8
|
)
|
|
(0.8
|
)
|
|
—
|
|
|||
Recoveries
|
(1.0
|
)
|
|
(0.9
|
)
|
|
(0.1
|
)
|
|||
Provision
|
9.1
|
|
|
8.7
|
|
|
0.4
|
|
|||
Ending balance at December 31, 2015
|
$
|
13.2
|
|
|
$
|
12.9
|
|
|
$
|
0.3
|
|
|
|
Twelve Months Ended December 31, 2014
|
||||||||||
|
# of Customers
|
# of Notes
|
|
Pre-Modification Investment
|
|
Post-Modification Investment
|
||||||
Financing term modifications:
|
|
|
|
|
|
|
||||||
International (1)
|
11
|
|
34
|
|
|
$
|
17.1
|
|
|
$
|
17.1
|
|
Total financing term modifications
|
11
|
|
34
|
|
|
$
|
17.1
|
|
|
$
|
17.1
|
|
•
|
One
customer for which
12
notes were consolidated into one note aggregating
$4.0 million
, with an average
28
-month payment extension;
|
•
|
One
customer for which
three
notes were consolidated into one note aggregating
$3.1 million
, with an average
four
-month payment extension;
|
•
|
One
customer for which
five
notes were consolidated into one note aggregating
$2.5 million
, with an average
24
-month payment extension;
|
•
|
One
customer with a note for
$2.3 million
for which original payment terms were extended by
nine
months;
|
•
|
One
customer with a note for
$1.8 million
for which original payment terms were extended by
34
months;
|
•
|
One
customer for which
four
notes were consolidated into one note aggregating
$1.4 million
, with an average
five
-month extension and another note for
$0.2 million
for which original payment terms were extended by
seven
months;
|
•
|
One
customer for which
two
notes were consolidated into one note aggregating
$0.7 million
, with an average
15
-month payment extension;
|
•
|
One
customer with a note for
$0.5
million for which original payment terms were extended by
21
months;
|
•
|
One
customer with a note for
$0.3 million
for which original payment terms were extended by
27
months;
|
•
|
One
customer for which
two
notes were consolidated into one note aggregating
$0.2 million
, with an average
14
-month payment extension; and
|
•
|
One
customer with a note for
$0.1 million
for which original payment terms were extended by
21
months.
|
|
|
As of December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Parts and work-in-process
|
|
$
|
118.3
|
|
|
$
|
105.7
|
|
Finished goods
|
|
130.2
|
|
|
159.9
|
|
||
Total inventories
|
|
$
|
248.5
|
|
|
$
|
265.6
|
|
|
|
As of December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Gaming equipment
|
|
$
|
770.8
|
|
|
$
|
799.9
|
|
Less: accumulated depreciation
|
|
(274.0
|
)
|
|
(279.1
|
)
|
||
Gaming equipment, net
|
|
496.8
|
|
|
520.8
|
|
||
|
|
|
|
|
||||
Lottery machinery and equipment
|
|
313.8
|
|
|
311.7
|
|
||
Less: accumulated depreciation
|
|
(238.3
|
)
|
|
(207.4
|
)
|
||
Lottery machinery and equipment, net
|
|
75.5
|
|
|
104.3
|
|
||
|
|
|
|
|
||||
Total gaming and lottery machinery and equipment, net
|
|
$
|
572.3
|
|
|
$
|
625.1
|
|
|
|
As of December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Land
|
|
$
|
38.5
|
|
|
$
|
43.0
|
|
Buildings and leasehold improvements
|
|
185.2
|
|
|
206.3
|
|
||
Furniture and fixtures
|
|
36.0
|
|
|
36.2
|
|
||
Construction in progress
|
|
25.5
|
|
|
11.7
|
|
||
Other property and equipment, at cost
|
|
271.0
|
|
|
297.8
|
|
||
Less: accumulated depreciation
|
|
(334.5
|
)
|
|
(207.3
|
)
|
||
Property and equipment, net
|
|
$
|
221.7
|
|
|
$
|
387.7
|
|
|
|
|
|
|
||||
Total property and equipment, net
|
|
$
|
794.0
|
|
|
$
|
1,012.8
|
|
Intangible Assets
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Impairment Charges
|
|
Net Balance
|
|
Weighted Average Life
|
|||||||||
Balance as of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Patents
|
|
$
|
26.8
|
|
|
$
|
12.5
|
|
|
$
|
—
|
|
|
$
|
14.3
|
|
|
11.9
|
|
Customer relationships
|
|
877.7
|
|
|
109.1
|
|
|
—
|
|
|
768.6
|
|
|
13.7
|
|
||||
Licenses
|
|
326.1
|
|
|
91.6
|
|
|
—
|
|
|
234.5
|
|
|
4.8
|
|
||||
Intellectual property (1)
|
|
731.1
|
|
|
124.5
|
|
|
—
|
|
|
606.6
|
|
|
6.1
|
|
||||
Trade names
|
|
226.1
|
|
|
1.9
|
|
|
128.6
|
|
|
95.6
|
|
|
14.7
|
|
||||
Brand names
|
|
124.0
|
|
|
18.9
|
|
|
—
|
|
|
105.1
|
|
|
7.9
|
|
||||
Non-compete agreements
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
2,312.1
|
|
|
358.8
|
|
|
128.6
|
|
|
1,824.7
|
|
|
8.1
|
|
||||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Trade names
|
|
97.4
|
|
|
2.1
|
|
|
—
|
|
|
95.3
|
|
|
indefinite
|
|
||||
Total intangible assets
|
|
$
|
2,409.5
|
|
|
$
|
360.9
|
|
|
$
|
128.6
|
|
|
$
|
1,920.0
|
|
|
|
|
Balance as of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Patents
|
|
$
|
17.9
|
|
|
$
|
8.4
|
|
|
$
|
—
|
|
|
$
|
9.5
|
|
|
8.7
|
|
Customer relationships
|
|
883.2
|
|
|
46.7
|
|
|
—
|
|
|
836.5
|
|
|
13.5
|
|
||||
Licenses
|
|
332.8
|
|
|
88.5
|
|
|
—
|
|
|
244.3
|
|
|
5.0
|
|
||||
Intellectual property (1)
|
|
736.3
|
|
|
19.5
|
|
|
—
|
|
|
716.8
|
|
|
8.6
|
|
||||
Brand names
|
|
128.2
|
|
|
5.3
|
|
|
—
|
|
|
122.9
|
|
|
9.2
|
|
||||
Non-compete agreements
|
|
0.3
|
|
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Lottery contracts
|
|
1.5
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
2,100.2
|
|
|
170.1
|
|
|
—
|
|
|
1,930.1
|
|
|
9.3
|
|
||||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Trade names
|
|
329.6
|
|
|
2.1
|
|
|
6.0
|
|
|
321.5
|
|
|
indefinite
|
|
||||
Total intangible assets
|
|
$
|
2,429.8
|
|
|
$
|
172.2
|
|
|
$
|
6.0
|
|
|
$
|
2,251.6
|
|
|
|
•
|
Royalty rates between
0.5%
and
1.0%
based on market-observed royalty rates; and
|
•
|
A discount rate of
9.0%
based on the required rate of return for the trade name assets.
|
•
|
A terminal revenue growth rate of
2.0%
based on long term nominal growth rate potential;
|
•
|
A terminal profit margin percentage reflecting our historical and forecasted profit margins;
|
•
|
Assumptions regarding future capital expenditures reflective of maintaining our installed base of leased gaming machines and facilities under normalized operations; and
|
•
|
An overall discount rate of
9%
based on our weighted average cost of capital for the SG gaming reporting unit.
|
•
|
A terminal revenue growth rate of
2.0%
based on long term nominal growth rate potential;
|
•
|
A terminal profit margin percentage reflecting our historical and forecasted profit margins;
|
•
|
Assumptions regarding future capital expenditures reflective of maintaining and renewing our current customer contracts under normalized operations; and
|
•
|
An overall discount rate of
8%
based on our weighted average cost of capital for the U.S. lottery systems reporting unit.
|
Goodwill
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Totals
|
||||||||
Balance as of December 31, 2013
|
|
$
|
612.7
|
|
|
$
|
513.9
|
|
|
$
|
56.5
|
|
|
$
|
1,183.1
|
|
Acquisitions
|
|
2,902.8
|
|
|
—
|
|
|
53.3
|
|
|
2,956.1
|
|
||||
Foreign currency adjustments
|
|
(15.8
|
)
|
|
(15.1
|
)
|
|
—
|
|
|
(30.9
|
)
|
||||
Balance as of December 31, 2014
|
|
3,499.7
|
|
|
498.8
|
|
|
109.8
|
|
|
4,108.3
|
|
||||
Foreign currency adjustments
|
|
(78.7
|
)
|
|
(13.3
|
)
|
|
—
|
|
|
(92.0
|
)
|
||||
Impairment charges
|
|
(935.0
|
)
|
|
(67.6
|
)
|
|
—
|
|
|
(1,002.6
|
)
|
||||
Balance as of December 31, 2015
|
|
$
|
2,486.0
|
|
|
$
|
417.9
|
|
|
$
|
109.8
|
|
|
$
|
3,013.7
|
|
|
|
As of December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Software
|
|
$
|
854.2
|
|
|
$
|
812.1
|
|
Accumulated amortization
|
|
(368.3
|
)
|
|
(219.4
|
)
|
||
Software, net
|
|
$
|
485.9
|
|
|
$
|
592.7
|
|
|
|
As of December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Deferred financing costs
|
|
$
|
12.7
|
|
|
$
|
16.8
|
|
Deferred tax assets
|
|
20.7
|
|
|
20.4
|
|
||
Other assets
|
|
12.0
|
|
|
20.8
|
|
||
|
|
$
|
45.4
|
|
|
$
|
58.0
|
|
|
|
As of December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Accrued interest
|
|
$
|
97.4
|
|
|
$
|
70.5
|
|
Compensation and benefits
|
|
80.1
|
|
|
106.4
|
|
||
Deferred revenue
|
|
47.5
|
|
|
45.2
|
|
||
Taxes, other than income
|
|
28.0
|
|
|
35.7
|
|
||
Legal accruals
|
|
26.5
|
|
|
60.0
|
|
||
Accrued licenses
|
|
19.4
|
|
|
11.4
|
|
||
Customer advances
|
|
16.3
|
|
|
10.7
|
|
||
WAP Jackpot
|
|
12.4
|
|
|
14.4
|
|
||
Accrued contract costs
|
|
12.2
|
|
|
13.1
|
|
||
Short-term hedge liability
|
|
7.9
|
|
|
—
|
|
||
Sales incentive
|
|
7.6
|
|
|
5.8
|
|
||
Accrued rent
|
|
3.6
|
|
|
3.7
|
|
||
Liabilities assumed in business combinations
|
|
2.2
|
|
|
6.6
|
|
||
Other
|
|
82.7
|
|
|
65.9
|
|
||
|
|
$
|
443.8
|
|
|
$
|
449.4
|
|
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||
Future minimum lease payments
|
|
$
|
27.1
|
|
|
$
|
20.0
|
|
|
$
|
14.0
|
|
|
$
|
9.2
|
|
|
$
|
7.8
|
|
|
$
|
13.1
|
|
|
|
|
|
|
|
Unamortized
|
|
Book value
|
||||||||
|
|
|
|
Unamortized
|
|
deferred
|
|
December 31,
|
||||||||
|
|
Principal
|
|
debt discount
|
|
financing costs
|
|
2015
|
||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
||||||||
Revolver, varying interest rate, due 2018 (1)
|
|
$
|
95.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95.0
|
|
Term Loan, varying interest rate, due 2020
|
|
2,254.0
|
|
|
(7.8
|
)
|
|
(52.5
|
)
|
|
2,193.7
|
|
||||
Term Loan, varying interest rate, due 2021
|
|
1,980.0
|
|
|
(16.7
|
)
|
|
(49.2
|
)
|
|
1,914.1
|
|
||||
2018 Notes
|
|
250.0
|
|
|
—
|
|
|
(2.0
|
)
|
|
248.0
|
|
||||
2020 Notes
|
|
300.0
|
|
|
—
|
|
|
(3.6
|
)
|
|
296.4
|
|
||||
2021 Notes
|
|
350.0
|
|
|
(1.8
|
)
|
|
(5.6
|
)
|
|
342.6
|
|
||||
Secured Notes
|
|
950.0
|
|
|
—
|
|
|
(16.4
|
)
|
|
933.6
|
|
||||
Unsecured Notes
|
|
2,200.0
|
|
|
—
|
|
|
(42.1
|
)
|
|
2,157.9
|
|
||||
Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019
|
|
25.7
|
|
|
—
|
|
|
—
|
|
|
25.7
|
|
||||
Total long-term debt outstanding
|
|
$
|
8,404.7
|
|
|
$
|
(26.3
|
)
|
|
$
|
(171.4
|
)
|
|
$
|
8,207.0
|
|
Less: current portion of long-term debt
|
|
|
|
|
|
|
|
(50.3
|
)
|
|||||||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
|
|
$
|
8,156.7
|
|
(1)
|
Unamortized deferred financing costs related to the revolving credit facility are included in Other assets. See additional information included in Note 12 (Other Assets).
|
|
|
|
|
|
|
Unamortized
|
|
Book value
|
||||||||
|
|
|
|
Unamortized
|
|
deferred
|
|
December 31,
|
||||||||
|
|
Principal
|
|
debt discount
|
|
financing costs
|
|
2014
|
||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
||||||||
Revolver, varying interest rate, due 2018 (1)
|
|
$
|
185.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
185.0
|
|
Term Loan, varying interest rate, due 2020
|
|
2,277.0
|
|
|
(9.4
|
)
|
|
(63.9
|
)
|
|
2,203.7
|
|
||||
Term Loan, varying interest rate, due 2021
|
|
2,000.0
|
|
|
(19.7
|
)
|
|
(58.0
|
)
|
|
1,922.3
|
|
||||
2018 Notes
|
|
250.0
|
|
|
—
|
|
|
(2.7
|
)
|
|
247.3
|
|
||||
2020 Notes
|
|
300.0
|
|
|
—
|
|
|
(4.4
|
)
|
|
295.6
|
|
||||
2021 Notes
|
|
350.0
|
|
|
(2.2
|
)
|
|
(6.7
|
)
|
|
341.1
|
|
||||
Secured Notes
|
|
950.0
|
|
|
—
|
|
|
(19.2
|
)
|
|
930.8
|
|
||||
Unsecured Notes
|
|
2,200.0
|
|
|
—
|
|
|
(48.2
|
)
|
|
2,151.8
|
|
||||
Capital lease obligations, 3.9% interest as of December 31, 2014 payable monthly through 2019
|
|
35.3
|
|
|
—
|
|
|
—
|
|
|
35.3
|
|
||||
Total long-term debt outstanding
|
|
$
|
8,547.3
|
|
|
$
|
(31.3
|
)
|
|
$
|
(203.1
|
)
|
|
$
|
8,312.9
|
|
Less: current portion of long-term debt
|
|
|
|
|
|
|
|
(50.6
|
)
|
|||||||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
|
|
$
|
8,262.3
|
|
(1)
|
Unamortized deferred financing costs related to the revolving credit facility are included in Other assets. See additional information included in Note 12 (Other Assets).
|
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||
|
|
Total
|
|
Within
1 Year
|
|
In
2 Years
|
|
In
3 Years
|
|
In
4 Years
|
|
In
5 Years
|
|
After
5 Years
|
||||||||||||||
Revolver, varying interest rate, due 2018
|
|
$
|
95.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan, varying interest rate, due 2020
|
|
2,254.0
|
|
|
23.0
|
|
|
23.0
|
|
|
23.0
|
|
|
23.0
|
|
|
2,162.0
|
|
|
—
|
|
|||||||
Term Loan, varying interest rate, due 2021
|
|
1,980.0
|
|
|
20.0
|
|
|
20.0
|
|
|
20.0
|
|
|
20.0
|
|
|
20.0
|
|
|
1,880.0
|
|
|||||||
2018 Notes
|
|
250.0
|
|
|
—
|
|
|
—
|
|
|
250.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
2020 Notes
|
|
300.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300.0
|
|
|
—
|
|
|||||||
2021 Notes
|
|
350.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350.0
|
|
|||||||
Secured Notes
|
|
950.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
950.0
|
|
|||||||
Unsecured Notes
|
|
2,200.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,200.0
|
|
|||||||
Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019
|
|
25.7
|
|
|
7.3
|
|
|
7.6
|
|
|
8.0
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|||||||
Total long-term debt outstanding
|
|
$
|
8,404.7
|
|
|
$
|
50.3
|
|
|
$
|
50.6
|
|
|
$
|
396.0
|
|
|
$
|
45.8
|
|
|
$
|
2,482.0
|
|
|
$
|
5,380.0
|
|
Unamortized discount
|
|
(26.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Unamortized deferred financing costs
|
|
$
|
(171.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
$
|
8,207.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Book Value as of December 31, 2015
|
|
Total Loss
|
|
Valuation Technique
|
|
Weighted-Average Discount Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment - Waukegan facility (1)
|
|
$—
|
|
$—
|
|
$15.0
|
|
$14.5
|
|
$(6.6)
|
|
Market Approach
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill - SG gaming reporting unit
|
|
$—
|
|
$—
|
|
$1,084.6
|
|
$1,084.6
|
|
$(935.0)
|
|
Discounted Cash Flow/Market Approach
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill - U.S. lottery systems reporting unit
|
|
$—
|
|
$—
|
|
$—
|
|
$—
|
|
$(67.6)
|
|
Discounted Cash Flow/Market Approach
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles - Trade Names (2)
|
|
$—
|
|
$—
|
|
$97.5
|
|
$95.6
|
|
$(128.6)
|
|
Relief-From-Royalty Method
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In accordance with ASC 360, the book value of the Waukegan facility as of December 31, 2015 is reduced by estimated selling costs of
$0.5 million
.
|
(2)
|
The book value of the trade name assets as of December 31, 2015 includes additional amortization of
$1.9 million
recorded after the fair value measurement date.
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Book Value as of December 31, 2014
|
|
Total Loss
|
|
Valuation Technique
|
|
Weighted-Average Discount Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment - Maryland Contract
|
|
$—
|
|
$—
|
|
$3.3
|
|
$3.3
|
|
$(3.1)
|
|
Discounted Cash Flow
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment - Waukegan facility
|
|
$—
|
|
$—
|
|
$21.1
|
|
$21.1
|
|
$(9.4)
|
|
Market Approach
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Investment in Northstar Illinois
|
|
$—
|
|
$—
|
|
$—
|
|
$—
|
|
$(19.7)
|
|
Discounted Cash Flow
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles - Trade Names
|
|
$—
|
|
$—
|
|
$51.0
|
|
$51.0
|
|
$(6.0)
|
|
Relief-From-Royalty Method
|
|
8.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||
|
|
2015
|
|
2014
|
||
Shares outstanding as of beginning of period
|
|
85.1
|
|
|
85.2
|
|
Shares issued as part of equity-based compensation plans and the ESPP, net of shares surrendered
|
|
1.4
|
|
|
1.9
|
|
Shares repurchased into treasury stock
|
|
—
|
|
|
(2.0
|
)
|
Shares outstanding as of end of period
|
|
86.5
|
|
|
85.1
|
|
|
|
Number of
Options
|
|
Weighted
Average
Remaining
Contract
Term (Years)
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|||||
Options outstanding as of December 31, 2014
|
|
1.6
|
|
|
6.3
|
|
$
|
11.61
|
|
|
$
|
4.0
|
|
Granted
|
|
0.8
|
|
|
|
|
$
|
12.76
|
|
|
$
|
—
|
|
Exercised
|
|
(0.3
|
)
|
|
|
|
$
|
9.68
|
|
|
$
|
1.2
|
|
Cancelled
|
|
(0.3
|
)
|
|
|
|
$
|
14.52
|
|
|
$
|
—
|
|
Options outstanding as of December 31, 2015
|
|
1.8
|
|
|
7.5
|
|
$
|
12.04
|
|
|
$
|
0.1
|
|
Options exercisable as of December 31, 2015
|
|
0.7
|
|
|
5.6
|
|
$
|
10.54
|
|
|
$
|
0.1
|
|
Options expected to vest after December 31, 2015
|
|
1.1
|
|
|
8.8
|
|
$
|
13.00
|
|
|
$
|
—
|
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Assumptions:
|
|
|
|
|
|
|
|||
Expected volatility
|
|
52
|
%
|
|
57
|
%
|
|
60
|
%
|
Risk-free interest rate
|
|
1.7
|
%
|
|
2.3
|
%
|
|
2.2
|
%
|
Dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected life (in years)
|
|
6
|
|
|
6
|
|
|
6
|
|
|
|
Number of
Restricted
Stock
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Unvested RSUs as of December 31, 2014
|
|
5.0
|
|
|
$
|
13.12
|
|
Granted
|
|
2.9
|
|
|
$
|
12.95
|
|
Vested
|
|
(1.5
|
)
|
|
$
|
13.12
|
|
Cancelled
|
|
(0.8
|
)
|
|
$
|
14.32
|
|
Unvested RSUs as of December 31, 2015
|
|
5.6
|
|
|
$
|
13.05
|
|
|
|
December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Change in benefit obligation:
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
126.6
|
|
|
$
|
113.3
|
|
Service cost
|
|
2.5
|
|
|
2.2
|
|
||
Interest cost
|
|
4.3
|
|
|
4.9
|
|
||
Participant contributions
|
|
1.0
|
|
|
1.0
|
|
||
Curtailments
|
|
—
|
|
|
0.2
|
|
||
Actuarial (gain) loss
|
|
(6.0
|
)
|
|
15.5
|
|
||
Benefits paid
|
|
(2.1
|
)
|
|
(2.7
|
)
|
||
Other, principally foreign exchange
|
|
(11.2
|
)
|
|
(7.8
|
)
|
||
Benefit obligation at end of year
|
|
$
|
115.1
|
|
|
$
|
126.6
|
|
Change in plan assets:
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
|
$
|
106.4
|
|
|
$
|
103.3
|
|
Actual gain on plan assets
|
|
6.3
|
|
|
9.9
|
|
||
Employer contributions
|
|
2.6
|
|
|
2.1
|
|
||
Participant contributions
|
|
1.0
|
|
|
1.0
|
|
||
Benefits paid
|
|
(2.1
|
)
|
|
(2.7
|
)
|
||
Other, principally foreign exchange
|
|
(9.7
|
)
|
|
(7.2
|
)
|
||
Fair value of assets at end of year
|
|
$
|
104.5
|
|
|
$
|
106.4
|
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
||||
Funded status (current)
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status (non-current)
|
|
(10.5
|
)
|
|
(20.2
|
)
|
||
Accumulated other comprehensive loss:
|
|
|
|
|
||||
Unrecognized actuarial loss
|
|
13.9
|
|
|
23.3
|
|
||
Unrecognized prior service cost
|
|
(2.2
|
)
|
|
(2.5
|
)
|
||
Deferred taxes
|
|
$
|
(1.7
|
)
|
|
$
|
(3.8
|
)
|
Net amount recognized
|
|
$
|
(0.5
|
)
|
|
$
|
(3.2
|
)
|
|
|
December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Components of net periodic pension benefit cost:
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
2.5
|
|
|
$
|
2.2
|
|
|
$
|
2.5
|
|
Interest cost
|
|
4.3
|
|
|
4.9
|
|
|
4.7
|
|
|||
Expected return on plan assets
|
|
(5.9
|
)
|
|
(6.6
|
)
|
|
(5.5
|
)
|
|||
Amortization of actuarial losses
|
|
1.3
|
|
|
0.6
|
|
|
1.0
|
|
|||
Curtailments
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Amortization of unrecognized prior service cost
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|||
Net periodic cost
|
|
$
|
2.0
|
|
|
$
|
1.0
|
|
|
$
|
2.5
|
|
|
|
|
||
Net gain
|
|
$
|
0.6
|
|
Net prior service cost
|
|
(0.2
|
)
|
|
Net amount expected to be recognized
|
|
$
|
0.4
|
|
Asset Category
|
|
Market
Value at
December 31, 2015
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets (Level 1)
|
|
Significant
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
Equity securities in U.K. companies (a)
|
|
$
|
15.8
|
|
|
$
|
—
|
|
|
$
|
15.8
|
|
|
$
|
—
|
|
Equity securities in non-U.K. companies (a)
|
|
10.4
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
||||
Global return fund (a)
|
|
19.3
|
|
|
—
|
|
|
19.4
|
|
|
—
|
|
||||
Corporate bonds (a)
|
|
6.1
|
|
|
—
|
|
|
6.1
|
|
|
—
|
|
||||
Real estate
|
|
12.9
|
|
|
—
|
|
|
—
|
|
|
12.9
|
|
||||
Cash (b)
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Total pension assets
|
|
$
|
64.7
|
|
|
$
|
0.2
|
|
|
$
|
51.7
|
|
|
$
|
12.9
|
|
(a)
|
The assets are invested through managed funds that are valued using inputs derived principally from quoted prices in active markets for the underlying assets in the fund.
|
(b)
|
The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments.
|
|
|
||
|
General Account
|
||
Beginning balance at December 31, 2014
|
$
|
12.5
|
|
Purchases
|
—
|
|
|
Unrealized gain on asset still held at December 31, 2015
|
0.4
|
|
|
|
|
|
|
Ending balance at December 31, 2015
|
$
|
12.9
|
|
|
|
|
Asset Category
|
|
Market
Value at
December 31, 2014
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets (Level 1)
|
|
Significant
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
Equity securities in U.K. companies (a)
|
|
$
|
15.2
|
|
|
$
|
—
|
|
|
$
|
15.2
|
|
|
$
|
—
|
|
Equity securities in non-U.K. companies (a)
|
|
10.3
|
|
|
—
|
|
|
10.3
|
|
|
—
|
|
||||
Global return fund (a)
|
|
19.3
|
|
|
—
|
|
|
19.3
|
|
|
—
|
|
||||
Corporate bonds (a)
|
|
6.1
|
|
|
—
|
|
|
6.1
|
|
|
—
|
|
||||
Real estate
|
|
12.5
|
|
|
—
|
|
|
—
|
|
|
12.5
|
|
||||
Cash (b)
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total pension assets
|
|
$
|
63.7
|
|
|
$
|
0.3
|
|
|
$
|
50.9
|
|
|
$
|
12.5
|
|
(a)
|
The assets are invested through managed funds that are valued using inputs derived principally from quoted prices in active markets for the underlying assets in the fund.
|
(b)
|
The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments.
|
|
|
||
|
General Account
|
||
Beginning balance at December 31, 2013
|
$
|
11.8
|
|
Purchases
|
0.1
|
|
|
Unrealized gain on asset still held at December 31, 2014
|
0.6
|
|
|
|
|
|
|
Ending balance at December 31, 2014
|
$
|
12.5
|
|
Asset Category
|
|
Market
Value at
December 31, 2015
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets (Level 1)
|
|
Significant
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
Equity securities in Canadian companies (a)
|
|
$
|
7.0
|
|
|
$
|
6.3
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
Equity securities in non-Canadian companies (a)
|
|
18.1
|
|
|
18.1
|
|
|
—
|
|
|
—
|
|
||||
Government bonds
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
||||
Corporate bonds in Canadian companies
|
|
7.6
|
|
|
—
|
|
|
7.6
|
|
|
—
|
|
||||
Other short-term investment (b)
|
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
|
|
||||
Cash and cash equivalents (c)
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Total pension assets
|
|
$
|
39.8
|
|
|
$
|
25.8
|
|
|
$
|
14.0
|
|
|
$
|
—
|
|
(a)
|
Direct investments in equity securities are valued at quoted prices in active markets for identical assets. Equity securities invested through pooled funds are valued using inputs derived principally from the quoted prices in active markets for the underlying assets in the pool.
|
(b)
|
Other short-term investments are investments in pooled money market funds that are valued using inputs derived principally from the quoted prices in active markets for the underlying assets in the pool.
|
(c)
|
The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments.
|
Asset Category
|
|
Market
Value at
December 31, 2014
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets (Level 1)
|
|
Significant
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||
Equity securities in Canadian companies (a)
|
|
$
|
7.9
|
|
|
$
|
7.3
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
Equity securities in non-Canadian companies (a)
|
|
18.7
|
|
|
18.7
|
|
|
—
|
|
|
—
|
|
||||
Government bonds
|
|
6.5
|
|
|
—
|
|
|
6.5
|
|
|
—
|
|
||||
Corporate bonds in Canadian companies
|
|
9.1
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
||||
Other short-term investment (b)
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|
|
|
||||
Cash and cash equivalents (c)
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total pension assets
|
|
$
|
42.9
|
|
|
$
|
26.7
|
|
|
$
|
16.2
|
|
|
$
|
—
|
|
(a)
|
Direct investments in equity securities are valued at quoted prices in active markets for identical assets. Equity securities invested through pooled funds are valued using inputs derived principally from the quoted prices in active markets for the underlying assets in the pool.
|
(b)
|
Other short-term investments are investments in pooled money market funds that are valued using inputs derived principally from the quoted prices in active markets for the underlying assets in the pool.
|
(c)
|
The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments.
|
|
|
U.K. Plan
|
|
Canadian Plan
|
||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||
Discount rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Benefit obligation
|
|
4.00
|
%
|
|
3.70
|
%
|
|
4.40
|
%
|
|
4.15
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
Net periodic pension cost
|
|
3.65
|
%
|
|
4.40
|
%
|
|
4.50
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
|
4.50
|
%
|
Rate of compensation increase
|
|
2.00
|
%
|
|
2.00
|
%
|
|
2.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
Expected return on assets
|
|
6.30
|
%
|
|
7.50
|
%
|
|
6.70
|
%
|
|
6.25
|
%
|
|
6.50
|
%
|
|
6.50
|
%
|
Year
|
|
U.K.
Plan
|
|
Canadian
Plan
|
||||
2016
|
|
$
|
1.3
|
|
|
$
|
1.2
|
|
2017
|
|
1.4
|
|
|
1.3
|
|
||
2018
|
|
1.4
|
|
|
1.5
|
|
||
2019
|
|
1.6
|
|
|
1.6
|
|
||
2020
|
|
1.9
|
|
|
1.8
|
|
||
2021 - 2025
|
|
12.3
|
|
|
12.0
|
|
|
|
Foreign
Currency
Items
|
|
Derivative
Financial
Instruments (1)
|
|
Unrecognized
pension
benefit costs,
net of taxes (2)
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
||||||||
Balance at January 1, 2013
|
|
$
|
9.8
|
|
|
$
|
0.8
|
|
|
$
|
(13.6
|
)
|
|
$
|
(3.0
|
)
|
Change during period
|
|
18.2
|
|
|
(2.1
|
)
|
|
5.5
|
|
|
21.6
|
|
||||
Change in LNS derivative financial instrument
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
Reclassified into operations
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Balance at December 31, 2013
|
|
$
|
28.0
|
|
|
$
|
(1.4
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
18.3
|
|
Change during period
|
|
(97.4
|
)
|
|
(6.1
|
)
|
|
(8.5
|
)
|
|
(112.0
|
)
|
||||
Change in LNS derivative financial instrument
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||
Reclassified into operations
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Balance at December 31, 2014
|
|
$
|
(69.4
|
)
|
|
$
|
(8.0
|
)
|
|
$
|
(17.0
|
)
|
|
$
|
(94.4
|
)
|
Change during period
|
|
(136.2
|
)
|
|
(3.6
|
)
|
|
5.9
|
|
|
(133.9
|
)
|
||||
Change in LNS derivative financial instrument
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||
Reclassified into operations
|
|
—
|
|
|
5.2
|
|
|
1.1
|
|
|
6.3
|
|
||||
Balance at December 31, 2015
|
|
$
|
(205.6
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
(222.2
|
)
|
(1)
|
The change during the period is net of income taxes of
$4.6
million,
$0.0
million and
$(1.0)
million in 2015, 2014 and 2013, respectively. We have recorded $
0.2
million representing our share of the derivative instrument held by LNS.
|
(2)
|
The change during the period is net of income taxes of
$(2.1)
million,
$(2.6)
million and
$(2.0)
million in 2015, 2014 and 2013, respectively.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
|
$
|
(1,662.5
|
)
|
|
$
|
(595.1
|
)
|
|
$
|
(170.3
|
)
|
Foreign
|
|
(31.7
|
)
|
|
100.2
|
|
|
27.0
|
|
|||
Net loss from continuing operations before income tax benefit
|
|
$
|
(1,694.2
|
)
|
|
$
|
(494.9
|
)
|
|
$
|
(143.3
|
)
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
|
|
|
|
|
|
||||||
U.S. Federal
|
|
$
|
(24.6
|
)
|
|
$
|
(14.4
|
)
|
|
$
|
—
|
|
U.S. State
|
|
(0.8
|
)
|
|
0.3
|
|
|
(0.6
|
)
|
|||
Foreign
|
|
36.4
|
|
|
17.8
|
|
|
13.6
|
|
|||
Total
|
|
11.0
|
|
|
3.7
|
|
|
13.0
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
U.S. Federal
|
|
(287.4
|
)
|
|
(234.6
|
)
|
|
(119.1
|
)
|
|||
U.S. State
|
|
(22.0
|
)
|
|
(21.2
|
)
|
|
(9.4
|
)
|
|||
Foreign
|
|
(1.5
|
)
|
|
(8.5
|
)
|
|
(2.2
|
)
|
|||
Total
|
|
(310.9
|
)
|
|
(264.3
|
)
|
|
(130.7
|
)
|
|||
Total income tax benefit
|
|
$
|
(299.9
|
)
|
|
$
|
(260.6
|
)
|
|
$
|
(117.7
|
)
|
|
|
Years Ended December 31,
|
|||||||
|
|
2015
|
|
2014
|
|
2013
|
|||
Statutory U.S. federal income tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
U.S. state income taxes, net of federal benefit
|
|
1.4
|
%
|
|
4.3
|
%
|
|
6.9
|
%
|
Federal benefit of R&D and AMT credits, net
|
|
0.1
|
%
|
|
2.0
|
%
|
|
0.5
|
%
|
Foreign earnings at lower rates than U.S. federal rate
|
|
0.2
|
%
|
|
(0.5
|
)%
|
|
(1.4
|
)%
|
Federal impact of U.S. permanent differences
|
|
(0.1
|
)%
|
|
(3.2
|
)%
|
|
(8.8
|
)%
|
Impact of goodwill impairments
|
|
(19.4
|
)%
|
|
—
|
%
|
|
—
|
%
|
Valuation allowance adjustments
|
|
0.7
|
%
|
|
13.2
|
%
|
|
47.7
|
%
|
Other
|
|
(0.2
|
)%
|
|
1.8
|
%
|
|
2.2
|
%
|
Effective income tax rate
|
|
17.7
|
%
|
|
52.6
|
%
|
|
82.1
|
%
|
|
|
December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Inventory valuation
|
|
$
|
17.6
|
|
|
$
|
25.2
|
|
Reserves and other accrued expenses
|
|
61.4
|
|
|
70.1
|
|
||
Compensation not currently deductible
|
|
3.9
|
|
|
15.2
|
|
||
Employee pension benefit included in other comprehensive (loss) income
|
|
3.2
|
|
|
5.6
|
|
||
Unrealized losses and income from derivative financial instruments included in other comprehensive (loss) income
|
|
4.6
|
|
|
0.6
|
|
||
Stock-based compensation
|
|
7.7
|
|
|
10.5
|
|
||
Net operating loss carry forwards
|
|
494.6
|
|
|
403.3
|
|
||
Tax credit carry forwards
|
|
45.0
|
|
|
40.4
|
|
||
Valuation allowance
|
|
(95.6
|
)
|
|
(107.3
|
)
|
||
Realizable deferred tax assets
|
|
542.4
|
|
|
463.6
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Deferred costs and prepaid expenses
|
|
(31.9
|
)
|
|
(41.1
|
)
|
||
Differences in financial reporting and tax basis for:
|
|
|
|
|
||||
Property and equipment
|
|
(8.2
|
)
|
|
(84.3
|
)
|
||
Identifiable intangible assets
|
|
(709.8
|
)
|
|
(880.1
|
)
|
||
Total deferred tax liabilities
|
|
(749.9
|
)
|
|
(1,005.5
|
)
|
||
Net deferred tax liabilities on balance sheet
|
|
(207.5
|
)
|
|
(541.9
|
)
|
||
Reported As:
|
|
|
|
|
||||
Current deferred tax assets
|
|
—
|
|
|
—
|
|
||
Non-current deferred tax assets
|
|
20.7
|
|
|
20.4
|
|
||
Current deferred tax liabilities
|
|
—
|
|
|
—
|
|
||
Non-current deferred tax liabilities
|
|
(228.2
|
)
|
|
(562.3
|
)
|
||
Net deferred tax liabilities on the balance sheet
|
|
$
|
(207.5
|
)
|
|
$
|
(541.9
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of period
|
|
$
|
13.9
|
|
|
$
|
8.1
|
|
|
$
|
1.8
|
|
Tax positions related to current year additions
|
|
2.0
|
|
|
0.5
|
|
|
—
|
|
|||
Additions for tax positions of prior years
|
|
2.4
|
|
|
—
|
|
|
7.2
|
|
|||
Tax positions related to prior years reductions
|
|
(3.0
|
)
|
|
(3.5
|
)
|
|
(0.8
|
)
|
|||
Reductions due to lapse of statute of limitations on tax positions
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Current year acquisitions
|
|
—
|
|
|
9.8
|
|
|
—
|
|
|||
Settlements
|
|
(4.4
|
)
|
|
(1.0
|
)
|
|
—
|
|
|||
Balance at end of period
|
|
$
|
10.8
|
|
|
$
|
13.9
|
|
|
$
|
8.1
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Interest paid
|
$
|
596.3
|
|
|
$
|
185.3
|
|
|
$
|
101.8
|
|
Income taxes (received)/paid
|
$
|
(34.1
|
)
|
|
$
|
(24.7
|
)
|
|
$
|
14.9
|
|
|
|
Parent Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
43.2
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
80.8
|
|
|
$
|
—
|
|
|
$
|
128.7
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
0.2
|
|
|
—
|
|
|
20.2
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
94.6
|
|
|
233.6
|
|
|
158.9
|
|
|
—
|
|
|
487.1
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
114.2
|
|
|
53.5
|
|
|
—
|
|
|
167.7
|
|
||||||
Inventories
|
|
—
|
|
|
36.9
|
|
|
104.2
|
|
|
119.6
|
|
|
(12.2
|
)
|
|
248.5
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
26.8
|
|
|
7.0
|
|
|
52.1
|
|
|
37.4
|
|
|
—
|
|
|
123.3
|
|
||||||
Property and equipment, net
|
|
8.2
|
|
|
106.4
|
|
|
502.2
|
|
|
188.7
|
|
|
(11.5
|
)
|
|
794.0
|
|
||||||
Investment in subsidiaries
|
|
3,280.9
|
|
|
838.1
|
|
|
648.3
|
|
|
—
|
|
|
(4,767.3
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
186.0
|
|
|
1,990.5
|
|
|
837.2
|
|
|
—
|
|
|
3,013.7
|
|
||||||
Intangible assets, net
|
|
138.3
|
|
|
39.8
|
|
|
1,505.8
|
|
|
236.1
|
|
|
—
|
|
|
1,920.0
|
|
||||||
Intercompany balances
|
|
—
|
|
|
6,511.1
|
|
|
—
|
|
|
—
|
|
|
(6,511.1
|
)
|
|
—
|
|
||||||
Software, net
|
|
35.6
|
|
|
32.7
|
|
|
359.8
|
|
|
57.8
|
|
|
—
|
|
|
485.9
|
|
||||||
Other assets
|
|
232.5
|
|
|
123.4
|
|
|
51.7
|
|
|
241.7
|
|
|
(306.2
|
)
|
|
343.1
|
|
||||||
Total assets
|
|
$
|
3,765.5
|
|
|
$
|
7,976.0
|
|
|
$
|
5,587.1
|
|
|
$
|
2,011.9
|
|
|
$
|
(11,608.3
|
)
|
|
$
|
7,732.2
|
|
Liabilities and stockholders’ (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
$
|
7.3
|
|
|
$
|
—
|
|
|
$
|
50.3
|
|
Other current liabilities
|
|
63.7
|
|
|
150.5
|
|
|
245.4
|
|
|
144.0
|
|
|
—
|
|
|
603.6
|
|
||||||
Long-term debt, excluding current portion
|
|
248.0
|
|
|
7,890.3
|
|
|
—
|
|
|
18.4
|
|
|
—
|
|
|
8,156.7
|
|
||||||
Other long-term liabilities
|
|
119.1
|
|
|
14.5
|
|
|
502.1
|
|
|
87.7
|
|
|
(306.3
|
)
|
|
417.1
|
|
||||||
Intercompany balances
|
|
4,830.2
|
|
|
—
|
|
|
1,558.2
|
|
|
122.6
|
|
|
(6,511.0
|
)
|
|
—
|
|
||||||
Stockholders’ (deficit) equity
|
|
(1,495.5
|
)
|
|
(122.3
|
)
|
|
3,281.4
|
|
|
1,631.9
|
|
|
(4,791.0
|
)
|
|
(1,495.5
|
)
|
||||||
Total liabilities and stockholders’ (deficit) equity
|
|
$
|
3,765.5
|
|
|
$
|
7,976.0
|
|
|
$
|
5,587.1
|
|
|
$
|
2,011.9
|
|
|
$
|
(11,608.3
|
)
|
|
$
|
7,732.2
|
|
|
|
Parent Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
37.9
|
|
|
$
|
0.1
|
|
|
$
|
28.8
|
|
|
$
|
105.0
|
|
|
$
|
—
|
|
|
$
|
171.8
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
27.1
|
|
|
0.1
|
|
|
—
|
|
|
27.2
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
61.8
|
|
|
212.9
|
|
|
193.7
|
|
|
—
|
|
|
468.4
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
136.6
|
|
|
52.1
|
|
|
—
|
|
|
188.7
|
|
||||||
Inventories
|
|
—
|
|
|
35.2
|
|
|
133.8
|
|
|
124.4
|
|
|
(27.8
|
)
|
|
265.6
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
56.4
|
|
|
3.4
|
|
|
80.6
|
|
|
43.1
|
|
|
—
|
|
|
183.5
|
|
||||||
Property and equipment, net
|
|
0.5
|
|
|
119.5
|
|
|
660.4
|
|
|
241.7
|
|
|
(9.3
|
)
|
|
1,012.8
|
|
||||||
Investment in subsidiaries
|
|
4,730.7
|
|
|
953.4
|
|
|
975.2
|
|
|
—
|
|
|
(6,659.3
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
253.6
|
|
|
2,781.6
|
|
|
1,073.1
|
|
|
—
|
|
|
4,108.3
|
|
||||||
Intangible assets, net
|
|
162.0
|
|
|
42.2
|
|
|
1,761.8
|
|
|
285.6
|
|
|
—
|
|
|
2,251.6
|
|
||||||
Intercompany balances
|
|
—
|
|
|
6,580.0
|
|
|
—
|
|
|
—
|
|
|
(6,580.0
|
)
|
|
—
|
|
||||||
Software, net
|
|
15.6
|
|
|
32.9
|
|
|
467.3
|
|
|
76.9
|
|
|
—
|
|
|
592.7
|
|
||||||
Other assets
|
|
8.3
|
|
|
55.2
|
|
|
78.2
|
|
|
296.8
|
|
|
12.0
|
|
|
450.5
|
|
||||||
Total assets
|
|
$
|
5,011.4
|
|
|
$
|
8,137.3
|
|
|
$
|
7,344.3
|
|
|
$
|
2,492.5
|
|
|
$
|
(13,264.4
|
)
|
|
$
|
9,721.1
|
|
Liabilities and stockholders’ (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
$
|
7.6
|
|
|
$
|
—
|
|
|
$
|
50.6
|
|
Other current liabilities
|
|
68.2
|
|
|
118.0
|
|
|
245.2
|
|
|
173.8
|
|
|
—
|
|
|
605.2
|
|
||||||
Long-term debt, excluding current portion
|
|
247.2
|
|
|
7,987.4
|
|
|
—
|
|
|
27.7
|
|
|
—
|
|
|
8,262.3
|
|
||||||
Other long-term liabilities
|
|
136.2
|
|
|
59.1
|
|
|
543.0
|
|
|
48.8
|
|
|
12.0
|
|
|
799.1
|
|
||||||
Intercompany balances
|
|
4,555.9
|
|
|
(0.1
|
)
|
|
1,637.9
|
|
|
386.3
|
|
|
(6,580.0
|
)
|
|
—
|
|
||||||
Stockholders’ (deficit) equity
|
|
3.9
|
|
|
(70.1
|
)
|
|
4,918.2
|
|
|
1,848.3
|
|
|
(6,696.4
|
)
|
|
3.9
|
|
||||||
Total liabilities and stockholders’ (deficit) equity
|
|
$
|
5,011.4
|
|
|
$
|
8,137.3
|
|
|
$
|
7,344.3
|
|
|
$
|
2,492.5
|
|
|
$
|
(13,264.4
|
)
|
|
$
|
9,721.1
|
|
|
|
Parent
Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
446.9
|
|
|
$
|
1,683.9
|
|
|
$
|
966.6
|
|
|
$
|
(338.6
|
)
|
|
$
|
2,758.8
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
322.1
|
|
|
576.8
|
|
|
543.8
|
|
|
(338.6
|
)
|
|
1,104.1
|
|
||||||
Selling, general and administrative
|
|
62.0
|
|
|
67.6
|
|
|
282.2
|
|
|
155.9
|
|
|
—
|
|
|
567.7
|
|
||||||
Research and development
|
|
—
|
|
|
5.5
|
|
|
148.8
|
|
|
29.6
|
|
|
—
|
|
|
183.9
|
|
||||||
Employee termination and restructuring
|
|
6.1
|
|
|
1.3
|
|
|
11.2
|
|
|
3.3
|
|
|
—
|
|
|
21.9
|
|
||||||
Depreciation and amortization
|
|
33.7
|
|
|
40.4
|
|
|
689.0
|
|
|
140.1
|
|
|
—
|
|
|
903.2
|
|
||||||
Goodwill impairments
|
|
—
|
|
|
67.6
|
|
|
802.9
|
|
|
132.1
|
|
|
—
|
|
|
1,002.6
|
|
||||||
Operating (loss) income
|
|
(101.8
|
)
|
|
(57.6
|
)
|
|
(827.0
|
)
|
|
(38.2
|
)
|
|
—
|
|
|
(1,024.6
|
)
|
||||||
Interest expense
|
|
(0.3
|
)
|
|
(128.3
|
)
|
|
(535.6
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
(664.9
|
)
|
||||||
Other (expense) income, net
|
|
(21.0
|
)
|
|
204.9
|
|
|
(173.6
|
)
|
|
(15.0
|
)
|
|
—
|
|
|
(4.7
|
)
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(123.1
|
)
|
|
19.0
|
|
|
(1,536.2
|
)
|
|
(53.9
|
)
|
|
—
|
|
|
(1,694.2
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(1,309.0
|
)
|
|
6.5
|
|
|
(174.3
|
)
|
|
—
|
|
|
1,476.8
|
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
37.8
|
|
|
16.6
|
|
|
299.5
|
|
|
(54.0
|
)
|
|
|
|
|
299.9
|
|
||||||
Net (loss) income from continuing operations
|
|
$
|
(1,394.3
|
)
|
|
$
|
42.1
|
|
|
$
|
(1,411.0
|
)
|
|
$
|
(107.9
|
)
|
|
$
|
1,476.8
|
|
|
$
|
(1,394.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
$
|
(1,394.3
|
)
|
|
$
|
42.1
|
|
|
$
|
(1,411.0
|
)
|
|
$
|
(107.9
|
)
|
|
$
|
1,476.8
|
|
|
$
|
(1,394.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other comprehensive (loss) income
|
|
(127.8
|
)
|
|
(11.0
|
)
|
|
(4.4
|
)
|
|
(131.0
|
)
|
|
146.4
|
|
|
(127.8
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(1,522.1
|
)
|
|
$
|
31.1
|
|
|
$
|
(1,415.4
|
)
|
|
$
|
(238.9
|
)
|
|
$
|
1,623.2
|
|
|
$
|
(1,522.1
|
)
|
(1)
|
Exclusive of D&A.
|
|
|
Parent
Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
432.0
|
|
|
$
|
973.4
|
|
|
$
|
640.9
|
|
|
$
|
(259.9
|
)
|
|
$
|
1,786.4
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
325.5
|
|
|
405.4
|
|
|
378.3
|
|
|
(259.8
|
)
|
|
849.4
|
|
||||||
Selling, general and administrative
|
|
86.7
|
|
|
67.0
|
|
|
234.2
|
|
|
119.8
|
|
|
—
|
|
|
507.7
|
|
||||||
Research and development
|
|
—
|
|
|
4.0
|
|
|
95.0
|
|
|
18.0
|
|
|
—
|
|
|
117.0
|
|
||||||
Employee termination and restructuring
|
|
3.5
|
|
|
1.8
|
|
|
17.5
|
|
|
7.9
|
|
|
—
|
|
|
30.7
|
|
||||||
Depreciation and amortization
|
|
7.9
|
|
|
46.9
|
|
|
303.3
|
|
|
96.2
|
|
|
|
|
|
454.3
|
|
||||||
Operating (loss) income
|
|
(98.1
|
)
|
|
(13.2
|
)
|
|
(82.0
|
)
|
|
20.7
|
|
|
(0.1
|
)
|
|
(172.7
|
)
|
||||||
Interest expense
|
|
(2.8
|
)
|
|
(146.7
|
)
|
|
(156.9
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(307.2
|
)
|
||||||
Other (expense) income, net
|
|
(57.9
|
)
|
|
4.3
|
|
|
(14.2
|
)
|
|
52.8
|
|
|
—
|
|
|
(15.0
|
)
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(158.8
|
)
|
|
(155.6
|
)
|
|
(253.1
|
)
|
|
72.7
|
|
|
(0.1
|
)
|
|
(494.9
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(330.3
|
)
|
|
55.9
|
|
|
(19.0
|
)
|
|
—
|
|
|
293.4
|
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
254.8
|
|
|
(0.3
|
)
|
|
19.7
|
|
|
(13.6
|
)
|
|
—
|
|
|
260.6
|
|
||||||
Net (loss) income from continuing operations
|
|
(234.3
|
)
|
|
(100.0
|
)
|
|
(252.4
|
)
|
|
59.1
|
|
|
293.3
|
|
|
(234.3
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
$
|
(234.3
|
)
|
|
$
|
(100.0
|
)
|
|
$
|
(252.4
|
)
|
|
$
|
59.1
|
|
|
$
|
293.3
|
|
|
$
|
(234.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(112.7
|
)
|
|
(7.5
|
)
|
|
6.5
|
|
|
(111.2
|
)
|
|
112.2
|
|
|
(112.7
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(347.0
|
)
|
|
$
|
(107.5
|
)
|
|
$
|
(245.9
|
)
|
|
$
|
(52.1
|
)
|
|
$
|
405.5
|
|
|
$
|
(347.0
|
)
|
(1)
|
Exclusive of D&A.
|
|
|
Parent
Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
413.1
|
|
|
$
|
164.9
|
|
|
$
|
516.8
|
|
|
$
|
(3.9
|
)
|
|
$
|
1,090.9
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
129.1
|
|
|
183.8
|
|
|
287.3
|
|
|
(8.5
|
)
|
|
591.7
|
|
||||||
Selling, general and administrative
|
|
77.2
|
|
|
52.7
|
|
|
50.3
|
|
|
87.8
|
|
|
(1.6
|
)
|
|
266.4
|
|
||||||
Research and development
|
|
—
|
|
|
4.6
|
|
|
17.4
|
|
|
4.0
|
|
|
—
|
|
|
26.0
|
|
||||||
Employee termination and restructuring
|
|
8.9
|
|
|
2.8
|
|
|
3.5
|
|
|
7.5
|
|
|
—
|
|
|
22.7
|
|
||||||
Depreciation and amortization
|
|
1.2
|
|
|
46.1
|
|
|
61.4
|
|
|
93.7
|
|
|
—
|
|
|
202.4
|
|
||||||
Operating (loss) income
|
|
(87.3
|
)
|
|
177.8
|
|
|
(151.5
|
)
|
|
36.5
|
|
|
6.2
|
|
|
(18.3
|
)
|
||||||
Interest expense
|
|
(21.3
|
)
|
|
(97.2
|
)
|
|
(0.2
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(119.5
|
)
|
||||||
Other income (expense), net
|
|
16.3
|
|
|
(190.5
|
)
|
|
181.2
|
|
|
(6.3
|
)
|
|
(6.2
|
)
|
|
(5.5
|
)
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(92.3
|
)
|
|
(109.9
|
)
|
|
29.5
|
|
|
29.4
|
|
|
—
|
|
|
(143.3
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(61.8
|
)
|
|
29.4
|
|
|
—
|
|
|
—
|
|
|
32.4
|
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
128.5
|
|
|
(0.3
|
)
|
|
—
|
|
|
(10.5
|
)
|
|
—
|
|
|
117.7
|
|
||||||
Net (loss) income from continuing operations
|
|
(25.6
|
)
|
|
(80.8
|
)
|
|
29.5
|
|
|
18.9
|
|
|
32.4
|
|
|
(25.6
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss from discontinued operations
|
|
(4.6
|
)
|
|
—
|
|
|
—
|
|
|
(4.6
|
)
|
|
4.6
|
|
|
(4.6
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
$
|
(30.2
|
)
|
|
$
|
(80.8
|
)
|
|
$
|
29.5
|
|
|
$
|
14.3
|
|
|
$
|
37.0
|
|
|
$
|
(30.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
21.3
|
|
|
(1.8
|
)
|
|
—
|
|
|
1.1
|
|
|
0.7
|
|
|
21.3
|
|
||||||
Comprehensive (loss) income
|
|
$
|
(8.9
|
)
|
|
$
|
(82.6
|
)
|
|
$
|
29.5
|
|
|
$
|
15.4
|
|
|
$
|
37.7
|
|
|
$
|
(8.9
|
)
|
(1)
|
Exclusive of D&A.
|
|
|
Parent
Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(91.5
|
)
|
|
$
|
164.5
|
|
|
$
|
104.2
|
|
|
$
|
237.0
|
|
|
$
|
—
|
|
|
$
|
414.2
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
(36.6
|
)
|
|
(24.0
|
)
|
|
(228.5
|
)
|
|
(34.5
|
)
|
|
—
|
|
|
(323.6
|
)
|
||||||
Additions to equity method investments
|
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
||||||
Distributions of capital on equity investments
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
37.7
|
|
|
—
|
|
|
38.7
|
|
||||||
Restricted cash
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
(0.6
|
)
|
|
—
|
|
|
5.9
|
|
||||||
Proceeds from asset sales
|
|
—
|
|
|
—
|
|
|
6.9
|
|
|
(0.2
|
)
|
|
—
|
|
|
6.7
|
|
||||||
Changes in other assets and liabilities and other
|
|
—
|
|
|
(0.2
|
)
|
|
5.9
|
|
|
5.5
|
|
|
—
|
|
|
11.2
|
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(36.6
|
)
|
|
(31.1
|
)
|
|
(209.2
|
)
|
|
7.9
|
|
|
5.2
|
|
|
(263.8
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net payments of long-term debt
|
|
—
|
|
|
(133.0
|
)
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
|
(141.3
|
)
|
||||||
Net (redemptions) issuances of common stock under stock-based compensation plans
|
|
(0.8
|
)
|
|
—
|
|
|
(35.6
|
)
|
|
23.7
|
|
|
11.8
|
|
|
(0.9
|
)
|
||||||
Contingent earnout payments
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
||||||
Payments on license obligations
|
|
(26.0
|
)
|
|
—
|
|
|
(14.5
|
)
|
|
—
|
|
|
—
|
|
|
(40.5
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
160.2
|
|
|
—
|
|
|
128.1
|
|
|
(271.3
|
)
|
|
(17.0
|
)
|
|
—
|
|
||||||
Net cash (used in) provided by financing activities
|
|
133.4
|
|
|
(133.0
|
)
|
|
77.5
|
|
|
(255.9
|
)
|
|
(5.2
|
)
|
|
(183.2
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
(0.5
|
)
|
|
3.4
|
|
|
(13.2
|
)
|
|
—
|
|
|
(10.3
|
)
|
||||||
Increase (decrease) in cash and cash equivalents
|
|
5.3
|
|
|
(0.1
|
)
|
|
(24.1
|
)
|
|
(24.2
|
)
|
|
—
|
|
|
(43.1
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
37.9
|
|
|
0.1
|
|
|
28.8
|
|
|
105.0
|
|
|
—
|
|
|
171.8
|
|
||||||
Cash and cash equivalents, end of year
|
|
$
|
43.2
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
80.8
|
|
|
$
|
—
|
|
|
128.7
|
|
|
|
Parent
Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Net cash provided by operating activities
|
|
$
|
110.5
|
|
|
$
|
35.3
|
|
|
$
|
10.3
|
|
|
$
|
47.4
|
|
|
$
|
—
|
|
|
$
|
203.5
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
(12.9
|
)
|
|
(30.1
|
)
|
|
(156.4
|
)
|
|
(38.9
|
)
|
|
—
|
|
|
(238.3
|
)
|
||||||
Additions to equity method investments
|
|
—
|
|
|
(7.6
|
)
|
|
—
|
|
|
(40.6
|
)
|
|
—
|
|
|
(48.2
|
)
|
||||||
Distributions of capital on equity investments
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
47.2
|
|
|
—
|
|
|
48.8
|
|
||||||
Proceeds on sale of equity interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44.9
|
|
|
—
|
|
|
44.9
|
|
||||||
Restricted cash
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
||||||
Business acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(3,140.6
|
)
|
|
—
|
|
|
—
|
|
|
(3,140.6
|
)
|
||||||
Changes in other assets and liabilities and other
|
|
(3,210.2
|
)
|
|
29.3
|
|
|
4.3
|
|
|
49.3
|
|
|
3,128.2
|
|
|
0.9
|
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
(5,155.1
|
)
|
|
296.3
|
|
|
—
|
|
|
4,858.8
|
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(3,223.1
|
)
|
|
(5,161.9
|
)
|
|
(2,996.8
|
)
|
|
61.9
|
|
|
7,987.0
|
|
|
(3,332.9
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net proceeds (payments) of long-term debt
|
|
—
|
|
|
5,289.2
|
|
|
(1,882.9
|
)
|
|
(11.1
|
)
|
|
—
|
|
|
3,395.2
|
|
||||||
Excess tax effect from stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||
Payments of deferred financing fees
|
|
—
|
|
|
(163.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(163.1
|
)
|
||||||
Net (redemptions) issuances of common stock under stock-based compensation plans
|
|
(18.7
|
)
|
|
—
|
|
|
3,195.4
|
|
|
(67.2
|
)
|
|
(3,128.2
|
)
|
|
(18.7
|
)
|
||||||
Common stock repurchases
|
|
(29.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.5
|
)
|
||||||
Contingent earnout payments
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(13.2
|
)
|
||||||
Payments on license obligations
|
|
—
|
|
|
—
|
|
|
(13.6
|
)
|
|
—
|
|
|
—
|
|
|
(13.6
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
3,141.4
|
|
|
—
|
|
|
1,699.2
|
|
|
18.2
|
|
|
(4,858.8
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
3,093.2
|
|
|
5,126.1
|
|
|
2,988.1
|
|
|
(63.0
|
)
|
|
(7,987.0
|
)
|
|
3,157.4
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
0.6
|
|
|
0.4
|
|
|
(10.9
|
)
|
|
—
|
|
|
(9.9
|
)
|
||||||
(Decrease) increase in cash and cash equivalents
|
|
(19.4
|
)
|
|
0.1
|
|
|
2.0
|
|
|
35.4
|
|
|
—
|
|
|
18.1
|
|
||||||
Cash and cash equivalents, beginning of period
|
|
57.3
|
|
|
—
|
|
|
26.8
|
|
|
69.6
|
|
|
—
|
|
|
153.7
|
|
||||||
Cash and cash equivalents, end of year
|
|
$
|
37.9
|
|
|
$
|
0.1
|
|
|
$
|
28.8
|
|
|
$
|
105.0
|
|
|
$
|
—
|
|
|
$
|
171.8
|
|
|
|
Parent
Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
60.4
|
|
|
$
|
(43.3
|
)
|
|
$
|
21.3
|
|
|
$
|
132.8
|
|
|
$
|
—
|
|
|
$
|
171.2
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
(6.9
|
)
|
|
(30.3
|
)
|
|
(49.8
|
)
|
|
(78.8
|
)
|
|
—
|
|
|
(165.8
|
)
|
||||||
Investments in subsidiaries
|
|
(1,485.9
|
)
|
|
35.9
|
|
|
—
|
|
|
28.5
|
|
|
1,421.5
|
|
|
—
|
|
||||||
Additions to equity method investments
|
|
—
|
|
|
(43.3
|
)
|
|
—
|
|
|
(42.8
|
)
|
|
—
|
|
|
(86.1
|
)
|
||||||
Distribution of capital on equity investments
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
17.7
|
|
|
—
|
|
|
20.7
|
|
||||||
Restricted cash
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
30.8
|
|
|
—
|
|
|
30.1
|
|
||||||
Proceeds from sale of equity interest
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
||||||
Business acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(1,489.1
|
)
|
|
16.2
|
|
|
—
|
|
|
(1,472.9
|
)
|
||||||
Changes in other assets and liabilities and other
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||||
Other, principally change in intercompany investing activities
|
|
79.7
|
|
|
(1,430.1
|
)
|
|
166.5
|
|
|
—
|
|
|
1,183.9
|
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(1,403.1
|
)
|
|
(1,464.8
|
)
|
|
(1,373.4
|
)
|
|
(28.8
|
)
|
|
2,605.4
|
|
|
(1,664.7
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net proceeds (payments) of long-term debt
|
|
—
|
|
|
1,728.7
|
|
|
(100.0
|
)
|
|
(5.4
|
)
|
|
—
|
|
|
1,623.3
|
|
||||||
Excess tax effect from stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||
Payments of deferred financing fees
|
|
—
|
|
|
(82.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(82.6
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans
|
|
(2.1
|
)
|
|
—
|
|
|
1,476.5
|
|
|
(55.0
|
)
|
|
(1,421.5
|
)
|
|
(2.1
|
)
|
||||||
Common stock repurchases
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
1,375.8
|
|
|
(138.7
|
)
|
|
—
|
|
|
(53.2
|
)
|
|
(1,183.9
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
1,372.9
|
|
|
1,507.4
|
|
|
1,376.5
|
|
|
(112.7
|
)
|
|
(2,605.4
|
)
|
|
1,538.7
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||||
Increase (decrease) in cash and cash equivalents
|
|
30.2
|
|
|
(0.4
|
)
|
|
24.4
|
|
|
(9.5
|
)
|
|
—
|
|
|
44.7
|
|
||||||
Cash and cash equivalents, beginning of period
|
|
27.1
|
|
|
0.4
|
|
|
2.4
|
|
|
79.1
|
|
|
—
|
|
|
109.0
|
|
||||||
Cash and cash equivalents, end of year
|
|
$
|
57.3
|
|
|
$
|
—
|
|
|
$
|
26.8
|
|
|
$
|
69.6
|
|
|
$
|
—
|
|
|
$
|
153.7
|
|
|
|
Quarter Ended 2015
|
||||||||||||||
|
|
March 31 (a)
|
|
June 30 (b)
|
|
September 30 (c)
|
|
December 31 (d)
|
||||||||
Total operating revenues
|
|
$
|
658.7
|
|
|
$
|
691.5
|
|
|
$
|
671.6
|
|
|
$
|
737.0
|
|
Total cost of revenues
(1)
|
|
255.4
|
|
|
275.3
|
|
|
250.0
|
|
|
323.4
|
|
||||
Selling, general and administrative
|
|
145.9
|
|
|
140.9
|
|
|
136.8
|
|
|
144.1
|
|
||||
Research and development
|
|
46.9
|
|
|
48.0
|
|
|
45.9
|
|
|
43.1
|
|
||||
Employee termination and restructuring
|
|
8.2
|
|
|
5.2
|
|
|
5.6
|
|
|
2.9
|
|
||||
Depreciation and amortization
|
|
184.2
|
|
|
222.2
|
|
|
286.5
|
|
|
210.3
|
|
||||
Goodwill impairments
|
|
—
|
|
|
—
|
|
|
935.0
|
|
|
67.6
|
|
||||
Operating income (loss)
|
|
18.1
|
|
|
(0.1
|
)
|
|
(988.2
|
)
|
|
(54.4
|
)
|
||||
Net loss
|
|
$
|
(86.4
|
)
|
|
$
|
(102.2
|
)
|
|
$
|
(1,078.2
|
)
|
|
$
|
(127.5
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Total basic net loss per share
|
|
$
|
(1.01
|
)
|
|
$
|
(1.19
|
)
|
|
$
|
(12.52
|
)
|
|
$
|
(1.48
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Total diluted net loss per share
|
|
$
|
(1.01
|
)
|
|
$
|
(1.19
|
)
|
|
$
|
(12.52
|
)
|
|
$
|
(1.48
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
|
85.3
|
|
|
85.9
|
|
|
86.1
|
|
|
86.3
|
|
||||
Diluted shares
|
|
85.3
|
|
|
85.9
|
|
|
86.1
|
|
|
86.3
|
|
(a)
|
Includes accelerated D&A charges of
$4.6 million
related to long term asset impairments and write-downs.
|
(b)
|
Includes inventory write-downs for discontinued product lines of
$5.9 million
and accelerated D&A charges of
$35.1 million
related to long-term asset impairments and write-downs, including
$25.0 million
of trade name assets.
|
(c)
|
Includes an impairment charge of
$935.0 million
to reduce the carrying amount of our SG gaming reporting unit goodwill and accelerated D&A charges of
$103.6 million
related to long-term asset impairments and write-downs of trade name assets.
|
(d)
|
Includes an impairment charge of
$67.6 million
, which resulted in a tax benefit of
$24.9 million
, to write-off our U.S. lottery systems reporting unit goodwill, legal contingencies and settlements of
$2.5 million
, a
$35.5 million
charge related to other asset impairments and contract cancellation costs included in cost of instant games sales and accelerated D&A charges of
$26.4 million
related to long-term asset impairments and write-downs.
|
|
Three Months Ended September 30, 2015
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||
|
Previously Reported
|
|
Adjustment
|
|
As Revised
|
|
Previously Reported
|
|
Adjustment
|
|
As Revised
|
||||||||||||
Goodwill impairment
|
$
|
535.0
|
|
|
$
|
400.0
|
|
|
$
|
935.0
|
|
|
$
|
535.0
|
|
|
$
|
400.0
|
|
|
$
|
935.0
|
|
Operating loss
|
588.2
|
|
|
400.0
|
|
|
988.2
|
|
|
570.2
|
|
|
400.0
|
|
|
970.2
|
|
||||||
Net loss
|
678.2
|
|
|
400.0
|
|
|
1,078.2
|
|
|
866.8
|
|
|
400.0
|
|
|
1,266.8
|
|
||||||
Comprehensive loss
|
727.2
|
|
|
400.0
|
|
|
1,127.2
|
|
|
1,002.9
|
|
|
400.0
|
|
|
1,402.9
|
|
||||||
Basic net loss per share
|
7.88
|
|
|
4.64
|
|
|
12.52
|
|
|
10.10
|
|
|
4.66
|
|
|
14.76
|
|
||||||
Diluted net loss per share
|
7.88
|
|
|
4.64
|
|
|
12.52
|
|
|
10.10
|
|
|
4.66
|
|
|
14.76
|
|
|
As of September 30, 2015
|
||||||||||
|
Previously Reported
|
|
Adjustment
|
|
As Revised
|
||||||
Goodwill
|
$
|
3,485.2
|
|
|
$
|
(400.0
|
)
|
|
$
|
3,085.2
|
|
Total assets
|
8,615.1
|
|
|
(400.0
|
)
|
|
8,215.1
|
|
|||
Total stockholder's deficit
|
(980.8
|
)
|
|
(400.0
|
)
|
|
(1,380.8
|
)
|
|||
Total liabilities and stockholders’ (deficit) equity
|
8,615.1
|
|
|
(400.0
|
)
|
|
8,215.1
|
|
|
|
Quarter Ended 2014
|
||||||||||||||
|
|
March 31 (a)
|
|
June 30 (b)
|
|
September 30 (c)
|
|
December 31 (d)
|
||||||||
Total operating revenues
|
|
$
|
388.1
|
|
|
$
|
416.9
|
|
|
$
|
415.6
|
|
|
$
|
565.8
|
|
Total cost of revenues
(1)
|
|
182.8
|
|
|
192.4
|
|
|
199.2
|
|
|
275.0
|
|
||||
Selling, general and administrative
|
|
91.8
|
|
|
95.2
|
|
|
95.6
|
|
|
225.1
|
|
||||
Research and development
|
|
25.9
|
|
|
24.8
|
|
|
26.3
|
|
|
40.0
|
|
||||
Employee termination and restructuring
|
|
5.6
|
|
|
4.9
|
|
|
1.9
|
|
|
18.3
|
|
||||
Depreciation and amortization
|
|
94.1
|
|
|
96.0
|
|
|
100.4
|
|
|
163.8
|
|
||||
Operating (loss) income
|
|
(12.1
|
)
|
|
3.6
|
|
|
(7.8
|
)
|
|
(156.4
|
)
|
||||
Net loss
|
|
$
|
(45.0
|
)
|
|
$
|
(72.4
|
)
|
|
$
|
(69.8
|
)
|
|
$
|
(47.1
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Total basic net loss per share
|
|
$
|
(0.53
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
(0.82
|
)
|
|
$
|
(0.55
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Total diluted net loss per share
|
|
$
|
(0.53
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
(0.82
|
)
|
|
$
|
(0.55
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
|
84.3
|
|
|
84.4
|
|
|
84.7
|
|
|
84.9
|
|
||||
Diluted shares
|
|
84.3
|
|
|
84.4
|
|
|
84.7
|
|
|
84.9
|
|
(a)
|
Includes
$14.5
million gain for the sale of our
20.0%
equity interest in Sportech.
|
(b)
|
Includes
$25.9
million loss on extinguishment of debt primarily related to the tender and redemption premiums and the write-off of deferred financing costs in connection with the purchase and redemption of our 2019 Notes. Also includes
$8.0
million charge we recorded related to our share of an estimated net shortfall payment accrued by Northstar Illinois.
|
(c)
|
Includes
$19.7
million non-cash impairment charge we recorded to write down our Northstar Illinois equity investment.
|
(d)
|
Reflects operating results of Bally from the acquisition date to December 31, 2014 including
$151.6
million of revenue
,
$52.9 million
of costs of services and product sales,
$81.2
million of SG&A,
$13.0 million
of R&D,
$3.9 million
of employee termination and restructuring costs, and
$36.9
million of D&A. Results from the three months ended December 31, 2014 also included an additional
$13.6
million of employee termination and restructuring costs which are described in Note 4 (Employee Termination and Restructuring Plans),
$6.2 million
of impairment charges associated with the MMC game,
$5.2 million
of impairment charges related to inventory obsolescence,
$4.0 million
write-down of certain receivables from international customers and a
$3.1 million
charge in earnings (loss) from equity investments related to the additional shortfall payment booked by the Northstar Illinois joint venture for the lottery's fiscal year ended June 30, 2014.
|
Allowance for doubtful accounts
|
|
Balance at
Beginning of
Period
|
|
Additions
|
|
Other
|
|
Deductions (1)
|
|
Balance at End
of Period
|
|||||||
Year ended December 31, 2015
|
|
$
|
17.0
|
|
|
9.1
|
|
|
—
|
|
|
(2.3
|
)
|
|
$
|
23.8
|
|
Year ended December 31, 2014
|
|
$
|
20.0
|
|
|
6.4
|
|
|
(0.4
|
)
|
|
(9.0
|
)
|
|
$
|
17.0
|
|
Year ended December 31, 2013
|
|
$
|
11.2
|
|
|
9.3
|
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
$
|
20.0
|
|
Tax-related valuation allowance
|
|
Balance at
Beginning of
Period
|
|
Charged to
Tax Benefit
|
|
Balance at End
of Period
|
|||||
Year ended December 31, 2015
|
|
$
|
107.3
|
|
|
(11.7
|
)
|
|
$
|
95.6
|
|
Year ended December 31, 2014
|
|
$
|
178.7
|
|
|
(71.4
|
)
|
|
$
|
107.3
|
|
Year ended December 31, 2013
|
|
$
|
241.2
|
|
|
(62.5
|
)
|
|
$
|
178.7
|
|
(1)
|
Amounts written off, net of recovery, and related impact of foreign currency exchange.
|
|
|
|
|
|
February 29, 2016
|
|
SCIENTIFIC GAMES CORPORATION
|
||
|
|
By:
|
|
/s/ Scott D. Schweinfurth
|
Scott D. Schweinfurth,
Chief Financial Officer
|
||||
|
|
|
|
|
|
|
By:
|
|
/s/ Jeffrey B. Johnson
|
Jeffrey B. Johnson,
Chief Accounting Officer
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ Ronald O. Perelman
|
|
Chairman of the Board
|
Ronald O. Perelman
|
||
|
|
|
/s/ M. Gavin Isaacs
|
|
President and Chief Executive Officer (principal executive officer)
|
M. Gavin Isaacs
|
||
|
|
|
/s/ Scott D. Schweinfurth
|
|
Executive Vice President, Chief Financial Officer and Corporate Secretary (principal financial officer)
|
Scott D. Schweinfurth
|
||
|
|
|
/s/ Jeffrey B. Johnson
|
|
Vice President, Finance, and Chief Accounting Officer (principal accounting officer)
|
Jeffrey B. Johnson
|
||
|
|
|
/s/ David L. Kennedy
|
|
Vice Chairman of the Board
|
David L. Kennedy
|
||
|
|
|
/s/ Peter A. Cohen
|
|
Vice Chairman of the Board
|
Peter A. Cohen
|
||
|
|
|
/s/ Richard M. Haddrill
|
|
Executive Vice Chairman of the Board
|
Richard M. Haddrill
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ Gerald J. Ford
|
|
Director
|
Gerald J. Ford
|
||
|
|
|
/s/ Barry F. Schwartz
|
|
Director
|
Barry F. Schwartz
|
|
|
|
|
|
/s/ Michael J. Regan
|
|
Director
|
Michael J. Regan
|
||
|
|
|
/s/ Frances F. Townsend
|
|
Director
|
Frances F. Townsend
|
||
|
|
|
/s/ Paul M. Meister
|
|
Director
|
Paul M. Meister
|
||
|
|
|
/s/ Gabrielle K. McDonald
|
|
Director
|
Gabrielle K. McDonald
|
|
Exhibit Number
|
Description
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of January 30, 2013, entered into by and among Scientific Games Corporation, Scientific Games International, Inc., SG California Merger Sub, Inc. and WMS Industries Inc. (incorporated by reference to Exhibit 2.1 to Scientific Games Corporation's Current Report on Form 8-K filed on February 5, 2013).
|
|
|
|
2.2
|
|
Agreement and Plan of Merger, dated as of August 1, 2014, by and among the Scientific Games Corporation, Scientific Games International, Inc., Scientific Games Nevada, Inc. and Bally Technologies, Inc. (incorporated by reference to Exhibit 2.1 to Scientific Games Corporation’s Current Report on Form 8-K filed on August 4, 2014).
|
|
|
|
3.1(a)
|
|
Restated Certificate of Incorporation of Scientific Games Corporation, filed with the Secretary of State of the State of Delaware on March 20, 2003 (incorporated by reference to Exhibit 3(i) to Scientific Games Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).
|
|
|
|
3.1(b)
|
|
Certificate of Amendment of the Restated Certificate of Incorporation of Scientific Games Corporation, filed with the Secretary of State of the State of Delaware on June 7, 2007 (incorporated by reference to Exhibit 3.1(b) to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Scientific Games Corporation (incorporated by reference to Exhibit 3.1 to Scientific Games Corporation's Current Report on Form 8-K filed on November 1, 2010).
|
|
|
|
4.1
|
|
Indenture, dated as of September 22, 2010, among Scientific Games Corporation, as issuer, the guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibit 4.1 to Scientific Games Corporation's Current Report on Form 8-K filed on September 23, 2010).
|
|
|
|
4.2
|
|
Form of 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibits 4.3(a) and 4.3(b) to Scientific Games Corporation's Registration Statement on Form S-4 (No. 333-172600) filed on March 3, 2011 and included in Exhibit 4.1 above).
|
|
|
|
4.3
|
|
Supplemental Indenture, dated as of August 20, 2012, among Scientific Games Corporation, as issuer, Sciplay Inc. and the other guarantors party thereto, and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture, dated as of September 22, 2010, by and among Scientific Games Corporation, as issuer, the guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibit 4.2 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).
|
|
|
|
4.4
|
|
Supplemental Indenture, dated as of April 16, 2013, among Scientific Games Corporation, as issuer, SG California Merger Sub, Inc., Scientific Games New Jersey, LLC and the other guarantors party thereto, and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture, dated as of September 22, 2010, by and among Scientific Games Corporation, as issuer, the guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibit 4.3 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).
|
|
|
4.5
|
|
Supplemental Indenture, dated as of October 18, 2013, among Scientific Games Corporation, as issuer, WMS Industries Inc., WMS Gaming Inc., WMS International Holdings Inc., Phantom EFX, LLC, Lenc-Smith Inc., Williams Electronics Games, Inc., WMS Finance Inc., Lenc Software Holdings LLC, Williams Interactive LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of September 22, 2010, by and among Scientific Games Corporation, as issuer, the guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibit 4.2 to Scientific Games Corporation's Current Report on Form 8-K filed on October 18, 2013).
|
|
|
|
4.6
|
|
Supplemental Indenture, dated as of September 15, 2014, among Scientific Games Corporation, as issuer, Scientific Games Productions, LLC, Scientific Games Distribution, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as successor trustee, relating to the Indenture, dated as of September 22, 2010, by and among Scientific Games Corporation, as issuer, the guarantors party thereto and Deutsche Bank Trust Company Americas, as successor trustee, relating to the 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibit 4.1 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).
|
|
|
|
4.7
|
|
Supplemental Indenture, dated as of November 21, 2014, among Scientific Games Corporation, as issuer, Bally Technologies, Inc., Casino Electronics, Inc., Alliance Holding Company, Bally Gaming International, Inc., Bally Gaming, Inc., Bally Gaming GP, LLC, Bally Gaming LP, LLC, Bally Properties East, LLC, Bally Properties West, LLC, Compudigm Services, Inc., SHFL Properties, LLC, Sierra Design Group, Arcade Planet, Inc. and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as successor trustee, relating to the Indenture, dated as of September 22, 2010, by and among Scientific Games Corporation, as issuer, the guarantors party thereto and Deutsche Bank Trust Company Americas, as successor trustee, relating to the 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibit 4.6 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
|
|
|
|
4.8
|
|
Supplemental Indenture, dated as of October 2, 2015, among Scientific Games Corporation, as issuer, Go For A Million Productions, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as successor trustee, relating to the Indenture, dated as of September 22, 2010, by and among Scientific Games Corporation, as issuer, the guarantors party thereto and Deutsche Bank Trust Company Americas, as successor trustee, relating to the 8.125% Senior Subordinated Notes due 2018 (incorporated by reference to Exhibit 4.1 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).
|
|
|
|
4.9
|
|
Indenture, dated as of August 20, 2012, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantor party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the 6.250% Senior Subordinated Notes due 2020 (incorporated by reference to Exhibit 4.1 to Scientific Games Corporation's Current Report on Form 8-K filed on August 21, 2012).
|
|
|
|
4.10
|
|
Form of 6.250% Senior Subordinated Notes due 2020 (incorporated by reference to Exhibits 4.3(a) and 4.3(b) to Scientific Games Corporation's Registration Statement on Form S-4 (No. 333-184835) filed on November 8, 2012 and included in Exhibit 4.9 above).
|
|
|
|
4.11
|
|
Supplemental Indenture, dated as of April 16, 2013, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, SG California Merger Sub, Inc., Scientific Games New Jersey, LLC and the other guarantors party thereto, and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture, dated as of August 20, 2012, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the 6.250% Senior Subordinated Notes due 2020 (incorporated by reference to Exhibit 4.5 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).
|
|
|
4.12
|
|
Supplemental Indenture, dated as of October 18 2013, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, WMS Industries Inc., WMS Gaming Inc., WMS International Holdings Inc., Phantom EFX, LLC, Lenc-Smith Inc., Williams Electronics Games, Inc., WMS Finance Inc., Lenc Software Holdings LLC, Williams Interactive LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of August 20, 2012, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the 6.250% Senior Subordinated Notes due 2020 (incorporated by reference to Exhibit 4.3 to Scientific Games Corporation's Current Report on Form 8-K filed on October 18, 2013).
|
|
|
|
4.13
|
|
Supplemental Indenture, dated as of September 15, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Scientific Games Productions, LLC, Scientific Games Distribution, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of August 20, 2012, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as successor trustee, relating to the 6.250% Senior Subordinated Notes due 2020 (incorporated by reference to Exhibit 4.2 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).
|
|
|
|
4.14
|
|
Supplemental Indenture, dated as of November 21, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Bally Technologies, Inc., Casino Electronics, Inc., Alliance Holding Company, Bally Gaming International, Inc., Bally Gaming, Inc., Bally Gaming GP, LLC, Bally Gaming LP, LLC, Bally Properties East, LLC, Bally Properties West, LLC, Compudigm Services, Inc., SHFL Properties, LLC, Sierra Design Group, Arcade Planet, Inc. and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as successor trustee, relating to the Indenture, dated as of August 20, 2012, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as successor trustee, relating to the 6.250% Senior Subordinated Notes due 2020 (incorporated by reference to Exhibit 4.7 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
|
|
|
|
4.15
|
|
Supplemental Indenture, dated as of October 2, 2015, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Go For A Million Productions, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of August 20, 2012, by and among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as successor trustee, relating to the 6.250% Senior Subordinated Notes due 2020 (incorporated by reference to Exhibit 4.2 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).
|
|
|
|
4.16
|
|
Indenture, dated as of June 4, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the 6.625% Senior Subordinated Notes due 2021 (incorporated by reference to Exhibit 4.1 to Scientific Games Corporation's Current Report on Form 8-K filed on June 6, 2014).
|
|
|
|
4.17
|
|
Supplemental Indenture, dated as of September 15, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Scientific Games Productions, LLC, Scientific Games Distribution, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of June 4, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the 6.625% Senior Subordinated Notes due 2021 (incorporated by reference to Exhibit 4.3 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).
|
|
|
4.18
|
|
Supplemental Indenture, dated as of November 21, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Bally Technologies, Inc., Casino Electronics, Inc., Alliance Holding Company, Bally Gaming International, Inc., Bally Gaming, Inc., Bally Gaming GP, LLC, Bally Gaming LP, LLC, Bally Properties East, LLC, Bally Properties West, LLC, Compudigm Services, Inc., SHFL Properties, LLC, Sierra Design Group, Arcade Planet, Inc. and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as successor trustee, relating to the Indenture, dated as of June 4, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the 6.625% Senior Subordinated Notes due 2021 (incorporated by reference to Exhibit 4.8 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
|
|
|
|
4.19
|
|
Supplemental Indenture, dated as of October 2, 2015, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Go For A Million Productions, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of June 4, 2014, by and among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the 6.625% Senior Subordinated Notes due 2021 (incorporated by reference to Exhibit 4.3 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).
|
|
|
|
4.20
|
|
Indenture, dated as of November 21, 2014, between SGMS Escrow Corp., as issuer, and Deutsche Bank Trust Company Americas, as trustee, relating to the 10.000% Senior Unsecured Notes due 2022 (incorporated by reference to Exhibit 4.1 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
|
|
|
|
4.21
|
|
Supplemental Indenture, dated as of November 21, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of November 21, 2014, between SGMS Escrow Corp., as issuer, and Deutsche Bank Trust Company Americas, as trustee, relating to the 10.000% Senior Unsecured Notes due 2022 (incorporated by reference to Exhibit 4.2 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
|
|
|
|
4.22
|
|
Supplemental Indenture, dated as of October 2, 2015, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Go For A Million Productions, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of November 21, 2014, between SGMS Escrow Corp., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the 10.000% Senior Unsecured Notes due 2022 (incorporated by reference to Exhibit 4.4 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).
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|
|
|
4.23
|
|
Indenture, dated as of November 21, 2014, between SGMS Escrow Corp., as issuer, and Deutsche Bank Trust Company Americas, as collateral agent and trustee, related to the 7.000% Senior Secured Notes due 2022 (incorporated by reference to Exhibit 4.3 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
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|
|
|
4.24
|
|
Supplemental Indenture, dated as of November 21, 2014, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture dated as of November 21, 2014, between SGMS Escrow Corp., as escrow issuer, and Deutsche Bank Trust Company relating to the 7.000% Senior Secured Notes due 2022 (incorporated by reference to Exhibit 4.4 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
|
|
|
4.25
|
|
Supplemental Indenture, dated as of October 2, 2015, among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Go For A Million Productions, LLC and the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture, dated as of November 21, 2014, between SGMS Escrow Corp., as issuer, Scientific Games Corporation and the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, relating to the 7.000% Senior Secured Notes due 2022 (incorporated by reference to Exhibit 4.5 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).
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|
|
|
10.1
|
|
Credit Agreement, dated as of October 18, 2013, among Scientific Games International, Inc., as the borrower, Scientific Games Corporation, the lenders and other agents party thereto from time to time, Bank of America, N.A., as administrative agent, collateral agent, issuing lender and swingline lender, JPMorgan Chase Bank, N.A., as issuing lender, Bank of America, N.A., Credit Suisse Securities (USA) LLC and UBS Securities LLC, as joint lead arrangers, Bank of America, N.A., Credit Suisse Securities (USA) LLC, UBS Securities LLC, J.P. Morgan Securities LLC, RBS Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs Bank USA and HSBC Securities (USA) Inc., as joint bookrunners, Credit Suisse Securities (USA) LLC and UBS Securities LLC, as co-syndication agents, and J.P. Morgan Securities LLC, The Royal Bank of Scotland plc, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and HSBC Securities (USA) Inc., as co-documentation agents (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on October 18, 2013).
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|
|
|
10.2
|
|
Amendment No. 1 to Credit Agreement, dated as of October 1, 2014, by and among Scientific Games International, Inc., as the borrower, Scientific Games Corporation, the lenders and other agents from time to time party thereto, and Bank of America, N.A., as administrative agent, collateral agent, issuing lender and swingline lender, which amended and restated the Credit Agreement, dated as of October 18, 2013 among such parties, as set forth in Exhibit A and Exhibit B to such Amendment No. 1. to Credit Agreement (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on October 7, 2014).
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|
|
|
10.3
|
|
Escrow Credit Agreement, dated as of October 1, 2014, among SGMS Escrow Corp., the lenders and other agents from time to time party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to Scientific Games Corporation's Current Report on Form 8-K filed on October 7, 2014).
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|
|
|
10.4
|
|
Guarantee and Collateral Agreement, dated as of October 18, 2013, by and among Scientific Games Corporation, Scientific Games International, Inc., the guarantor parties named therein and Bank of America, N.A. as collateral agent (incorporated by reference to Exhibit 10.2 to Scientific Games Corporation's Current Report on Form 8-K filed on October 18, 2013).
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|
|
|
10.5
|
|
Collateral Agreement, dated as of November 21, 2014, among Scientific Games International, Inc., as grantor. Scientific Games Corporation, as guarantor, the subsidiary guarantors party thereto and Deutsche Bank Trust Company Americas, as collateral agent, related to the 7.000% Senior Secured Notes due 2022 (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on November 26, 2014).
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|
|
|
10.6
|
|
Stockholders' Agreement, dated as of September 6, 2000, among Scientific Games Corporation, MacAndrews & Forbes Holdings Inc. (formerly known as Mafco Holdings Inc.) ("MacAndrews") (as successor-in-interest under the agreement to Cirmatica Gaming S.A.) and Ramius Securities, LLC (incorporated by reference to Exhibit 10.38 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended July 31, 2000).
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|
|
|
10.7
|
|
Supplemental Stockholders' Agreement, dated as of June 26, 2002, among Scientific Games Corporation and MacAndrews (as successor-in-interest to Cirmatica Gaming S.A.) (incorporated by reference to Exhibit 4.2 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
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|
|
10.8
|
|
Letter Agreement, dated as of October 10, 2003, by and between Scientific Games Corporation and MacAndrews further supplementing the Stockholders' Agreement (incorporated by reference to Exhibit 3 to the Schedule 13D jointly filed by MacAndrews and SGMS Acquisition Corporation on November 26, 2003).
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|
|
|
10.9
|
|
Letter Agreement dated February 15, 2007 between Scientific Games Corporation and MacAndrews (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on February 16, 2007).
|
|
|
|
10.10
|
|
Share Purchase Agreement, dated as of April 26, 2011, by and among Scientific Games Corporation, Global Draw Limited, IGT-UK Group Limited, Cyberview International, Inc. and International Game Technology (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011).
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|
|
|
10.11
|
|
2003 Incentive Compensation Plan, as amended and restated (incorporated by reference to Appendix A to Scientific Games Corporation’s Proxy Statement on Schedule 14A filed on April 30, 2015).*
|
|
|
|
10.12
|
|
1995 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.14 to Scientific Games Corporation’s Annual Report on Form 10-K for the fiscal year ended October 31, 1997).*
|
|
|
|
10.13
|
|
Scientific Games Corporation Nonqualified Deferred Compensation Plan, as amended and restated (incorporated by reference to Exhibit 10.15 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
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|
|
|
10.14
|
|
Asia-Pacific Business Incentive Compensation Program (incorporated by reference to Exhibit 10.4 to Scientific Games Corporation's Current Report on Form 8-K filed on December 3, 2010).*
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|
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|
10.15
|
|
Employment Agreement dated as of December 18, 2012 (effective as of January 1, 2013) by and between Scientific Games International, Inc. and James C. Kennedy (incorporated by reference to Exhibit 10.20 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
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|
|
|
10.16
|
|
Employment Agreement dated as of August 28, 2014 between Scientific Games Corporation and Steven W. Beason (incorporated by reference to Exhibit 10.7 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).*
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|
|
|
10.17
|
|
Employment Agreement dated as of January 1, 2006 by and between Scientific Games Corporation and Larry A. Potts (executed on August 2, 2006) (incorporated by reference to Exhibit 10.4 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006).*
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|
|
|
10.18
|
|
Letter Agreement dated as of October 2, 2008 by and between Scientific Games Corporation and Larry A. Potts, which amended Mr. Potts' Employment Agreement dated as of January 1, 2006 (incorporated by reference to Exhibit 10.36 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2008).*
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|
|
|
10.19
|
|
Amendment to Employment Agreement dated as of December 30, 2008 by and between Scientific Games Corporation and Larry A. Potts, which amended Mr. Potts' Employment Agreement dated as of January 1, 2006, as amended by the Letter Agreement dated as of October 2, 2008 (incorporated by reference to Exhibit 10.37 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2008).*
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|
|
|
10.20
|
|
Letter Agreement, dated as of September 28, 2011, by and between Scientific Games Corporation and Larry A. Potts, which amended Mr. Potts' Employment Agreement dated as of January 1, 2006, as amended by the Letter Agreement dated as of October 2, 2008 and the Amendment dated as of December 30, 2008 (incorporated by reference to Exhibit 10.2 to Scientific Games Corporation's Current Report on Form 8-K filed on October 3, 2011).*
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|
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10.21
|
|
Letter Agreement, dated as of April 30, 2014, by and between Scientific Games Corporation and Larry A. Potts, which amended Mr. Potts' Employment Agreement dated as of January 1, 2006, as amended by the Letter Agreement dated as of October 2, 2008, the Amendment dated as of December 30, 2008 and the Letter Agreement dated as of September 28, 2011(incorporated by reference to Exhibit 10.26 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
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|
|
|
10.22
|
|
Employment Agreement made as of August 1, 2011 by and between Scientific Games Corporation and Jeffrey Johnson (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on July 26, 2011).*
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|
|
|
10.23
|
|
Employment Agreement dated as of January 5, 2015 by and between Scientific Games Corporation and Derik Mooberry (incorporated by reference to Exhibit 10.28 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
|
|
|
|
10.24
|
|
Employment Agreement dated as of December 8, 2014 between Scientific Games Corporation and Richard Haddrill (incorporated by reference to Exhibit 10.15 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
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|
|
|
10.25
|
|
Agreement and General Release dated as of December 30, 2014 between Scientific Games Corporation and William J. Huntley (incorporated by reference to Exhibit 10.32 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
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|
|
|
10.26
|
|
Agreement and General Release dated as of September 30, 2014 between Scientific Games Corporation and Andrew E. Tomback (incorporated by reference to Exhibit 10.4 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).*
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|
|
|
10.27
|
|
Employment Agreement dated as of December 5, 2013 by and between Scientific Games Corporation and David L. Kennedy (incorporated by reference to Exhibit 10.43 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2013).*
|
|
|
|
10.28
|
|
Employment Agreement, dated as of June 9, 2014, by and between Scientific Games Corporation and David L. Kennedy (incorporated by reference to Exhibit 10.2 to Scientific Games Corporation's Current Report on Form 8-K filed on June 10, 2014).*
|
|
|
|
10.29
|
|
Letter Agreement dated as of July 31, 2014 between Scientific Games Corporation and David L. Kennedy (incorporated by reference to Exhibit 10.3 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).*
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|
|
|
10.30
|
|
Employment Agreement dated as of January 1, 2006 by and between Scientific Games Corporation and A. Lorne Weil (executed on August 8, 2006) (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006).*
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|
|
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10.31
|
|
Letter dated August 2, 2007 between A. Lorne Weil and Scientific Games Corporation with respect to payment of Mr. Weil's deferred compensation upon a termination of employment under Mr. Weil's Employment Agreement dated as of January 1, 2006 (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).*
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|
|
|
10.32
|
|
Amendment to Employment Agreement dated as of May 1, 2008 by and between Scientific Games Corporation and A. Lorne Weil (executed on May 12, 2008), which amended Mr. Weil's Employment Agreement dated as of January 1, 2006, as amended by the Letter dated August 2, 2007 (incorporated by reference to Exhibit 10.2 to Scientific Games Corporation's Current Report on Form 8-K filed on May 14, 2008).*
|
|
|
10.33
|
|
Amendment to Employment Agreement dated as of December 30, 2008 by and between Scientific Games Corporation and A. Lorne Weil, which amended Mr. Weil's Employment Agreement dated as of January 1, 2006, as amended by the Letter dated August 2, 2007 and the Amendment dated as of May 1, 2008 (incorporated by reference to Exhibit 10.20 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2008).*
|
|
|
|
10.34
|
|
Third Amendment to Employment Agreement dated as of May 29, 2009 by and between Scientific Games Corporation and A. Lorne Weil, which amended Mr. Weil's Employment Agreement dated as of January 1, 2006, as amended by the Letter dated August 2, 2007 and the Amendments dated as of May 1, 2008 and December 30, 2008 (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on June 2, 2009).*
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|
|
|
10.35
|
|
Amendment to Employment Agreement dated as of December 2, 2010 by and between Scientific Games Corporation and A. Lorne Weil, which amended Mr. Weil's Employment Agreement dated as of January 1, 2006, as amended by the Letter dated August 2, 2007 and the Amendments dated as of May 1, 2008, December 30, 2008 and May 29, 2009 (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on December 3, 2010).*
|
|
|
|
10.36
|
|
Amendment to Employment Agreement dated as of August 18, 2011 by and between A. Lorne Weil and Scientific Games Corporation, which amended Mr. Weil's Employment Agreement dated as of January 1, 2006, as amended by the Letter dated August 2, 2007 and the Amendments dated as of May 1, 2008, December 30, 2008, May 29, 2009 and December 2, 2010 (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on August 18, 2011).*
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|
|
|
10.37
|
|
Agreement and General Release dated as of December 30, 2013 by and between A. Lorne Weil and Scientific Games Corporation (incorporated by reference to Exhibit 10.17 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2013).*
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|
|
|
10.38
|
|
Amended and Restated Executive Employment Agreement, dated April 1, 2014, by and between Scientific Games Corporation and Scott D. Schweinfurth (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).*
|
|
|
|
10.39
|
|
Employment Agreement, dated as of June 9, 2014, by and between Scientific Games Corporation and M. Gavin Isaacs (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on June 10, 2014).*
|
|
|
|
10.40
|
|
Form of Inducement Equity Award Agreement between Scientific Games Corporation and M. Gavin Isaacs (incorporated by reference to Exhibit 4.4 to Scientific Games Corporation's Registration Statement on Form S-8 (No. 333-197948) filed on August 7, 2014).*
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|
|
|
10.41
|
|
Amendment to Employment Agreement, dated as of May 28, 2015, by and between Scientific Games Corporation and Jeffrey Johnson, which amended Mr. Johnson’s Employment Agreement dated as of August 1, 2011 (incorporated by reference to Exhibit 10.3 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).*
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|
|
|
10.42
|
|
Letter Agreement, dated as of May 1, 2015, by and between Scientific Games Corporation and Larry A. Potts, which amended Mr. Potts' Employment Agreement dated as of January 1, 2006, as amended by the Letter Agreement dated as of October 2, 2008, the Amendment dated as of December 30, 2008, the Letter Agreement dated as of September 28, 2011, and the Letter Agreement dated as of April 30, 2014 (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Current Report on Form 8-K filed on May 6, 2015).*
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|
|
|
10.43
|
|
Employment Agreement dated as of July 14, 2015 by and between Scientific Games Corporation and David W. Smail (incorporated by reference to Exhibit 10.1 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).*
|
|
|
|
10.44
|
|
Letter Agreement, dated as of October 29, 2015, by and between Scientific Games Corporation and Richard Haddrill, which amended Mr. Haddrill's Employment Agreement dated as of December 8, 2014 (incorporated by reference to Exhibit 10.2 to Scientific Games Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).*
|
|
|
|
10.45
|
|
Amendment to Employment Agreement dated as of October 29, 2015 by and between Scientific Games Corporation and M. Gavin Isaacs, which amended Mr. Isaacs Employment Agreement dated as of June 9, 2014.* (†)
|
|
|
|
10.46
|
|
Separation Agreement dated as of November 12, 2015 by and between Scientific Games Corporation Bally Gaming, Inc. and Scott D. Schweinfurth.*(†)
|
|
|
|
10.47
|
|
Amended and Restated Employment Agreement dated as of December 15, 2015 by and between Scientific Games Corporation and Michael Quartieri.* (†)
|
|
|
|
10.48
|
|
Amendment to Employment Agreement dated as of January 14, 2016 by and between Scientific Games Corporation and James C. Kennedy, which amended Mr. Kennedy’s Employment Agreement dated as of December 18, 2012.* (†)
|
|
|
|
10.49
|
|
Agreement and General Release dated as of August 28, 2015 by and between Bally Gaming, Inc., Scientific Games Corporation and Kathryn Lever.*(†)
|
|
|
|
10.50
|
|
Written Summary of Amendments 1 through 5, by and between Bally Gaming, Inc., Scientific Games Corporation and Kathryn Lever and entered into via electronic mail, to the Agreement and General Release dated as of August 28, 2015 by and between the same parties.*(†)
|
|
|
|
10.51
|
|
Sixth Amendment to Agreement and General Release dated as of November 3, 2015 by and between Bally Gaming, Inc., Scientific Games Corporation and Kathryn Lever.*(†)
|
|
|
|
12
|
|
Computation of Ratio of Earnings to Fixed Charges.(†)
|
|
|
|
21
|
|
List of Subsidiaries.(†)
|
|
|
|
23.1
|
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.(†)
|
|
|
|
23.2
|
|
Consent of Reconta Ernst & Young S.p.A., Independent Registered Public Accounting Firm.(†)
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.(†)
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.(†)
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(†)
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(†)
|
|
|
|
99.1
|
|
Report of Reconta Ernst & Young S.p.A., Independent Registered Public Accounting Firm.(†)
|
|
|
|
99.2
|
|
Financial Statements of Lotterie Nazionali S.r.l.(†)
|
|
|
99.3
|
|
Form of Equity Awards Notice-RSUs-Employees under the Scientific Games Corporation 2003 Incentive Compensation Plan (incorporated by reference to Exhibit 99.(d)(2) to Scientific Games Corporation's Schedule TO filed on July 19, 2011).*
|
|
|
|
99.4
|
|
Form of Equity Awards Notice-RSUs-Non-Employee Directors under the Scientific Games Corporation 2003 Incentive Compensation Plan (incorporated by reference to Exhibit 99.(d)(3) to Scientific Games Corporation's Schedule TO filed on July 19, 2011).*
|
|
|
|
99.5
|
|
Terms and Conditions of Equity Awards to Key Employees under the Scientific Games Corporation 2003 Incentive Compensation Plan (incorporated by reference to Exhibit 99.(d)(4) to Scientific Games Corporation's Schedule TO filed on July 19, 2011).*
|
|
|
|
99.6
|
|
Terms and Conditions of Equity Awards to Non-Employee Directors under the Scientific Games Corporation 2003 Incentive Compensation Plan (incorporated by reference to Exhibit 99.(d)(5) to Scientific Games Corporation's Schedule TO filed on July 19, 2011).*
|
|
|
|
99.7
|
|
Terms and Conditions of Special Performance-Conditioned Restricted Stock Units under the Scientific Games Corporation 2003 Incentive Compensation Plan (incorporated by reference to Exhibit 99.8 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2012).*
|
|
|
|
99.8
|
|
Form of Equity Awards Notice (Stock Options, Restricted Stock Units and Performance-Conditioned Restricted Stock Units) under the Scientific Games Corporation 2003 Incentive Compensation Plan (as amended and restated June 11, 2014)(incorporated by reference to Exhibit 99.8 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
|
|
|
|
99.9
|
|
Terms and Conditions of Equity Awards to Employees under the Scientific Games Corporation 2003 Incentive Compensation Plan (as amended and restated June 11, 2014)(incorporated by reference to Exhibit 99.9 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
|
|
|
|
99.10
|
|
Terms and Conditions of Equity Awards to Non-Employee Directors under the Scientific Games Corporation 2003 Incentive Compensation Plan (as amended and restated June 11, 2014)(incorporated by reference to Exhibit 99.10 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
|
|
|
|
99.11
|
|
Terms and Conditions of Equity Awards to Consultants under the Scientific Games Corporation 2003 Incentive Compensation Plan (as amended and restated June 11, 2014) )(incorporated by reference to Exhibit 99.11 to Scientific Games Corporation's Annual Report on Form 10-K for the year ended December 31, 2014).*
|
|
|
|
99.12
|
|
Gaming Regulations.(†)
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Definition Label Linkbase
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
1.
|
The Agreement is hereby amended by deleting the second sentence of Section 1 thereof and replacing it with the following:
|
(a)
|
Separation Benefits
. In return for your signing this Agreement, complying with the promises made by you in this Agreement and the Employment Agreement and remaining continuously employed through the Separation Date, the Company will provide you with the following separation benefits (the “
Separation Benefits
”) described below in subsections (i)-(v). You acknowledge and agree that the Separation Benefits are separate from and in addition to what you are already
entitled to receive from the Company. Furthermore, if you are rehired by the Company or hired by any affiliate of the Company, all Separation Benefits will terminate as of the commencement date of such employment.
The Separation Benefits are:
|
(i)
|
A cash amount of One Million One Hundred Thousand U.S. Dollars (USD$1,100,000) in the aggregate, less required and/or authorized deductions and withholdings, as separation pay (the “
Separation Pay
”), payable as follows:
|
(ii)
|
No later than March 15, 2016, payment of a lump sum amount, subject to applicable withholdings, equal to any annual bonus payable to you for Fiscal Year 2015 pursuant to the 2015 MICP Cash Bonus Plan
calculated and
as approved by the
Compensation Committee of the Board of Directors of the Company (the "
Compensation Committee
") in a manner no less favorable to you than for the Company’s other senior executive officers whose bonuses are based on the Company’s consolidated corporate results.
|
(iii)
|
If you choose to elect continuation coverage by properly and timely electing COBRA coverage under and pursuant to COBRA, 29 U.S.C. § 1161 et seq., the Company will pay the employer and employee shares of the COBRA premiums (based on your current coverage elections) for twelve (12) months commencing on the first full month following the Separation Date. After twelve (12) months, you will be responsible for paying the entire COBRA premium. You will receive information on your opportunity to elect COBRA coverage under separate cover. Notwithstanding the foregoing, if the payment by the Company of such COBRA premium payments will subject or expose the Company to taxes or penalties, you and the Company shall enter into a substitute arrangement pursuant to which the Company will not be subjected or exposed to taxes or penalties and you will be provided with payments or benefits with an equivalent economic value, after tax.
|
(iv)
|
Subject to Section 5.6 of the Employment Agreement and subject to the terms of any equity award made to you that contain performance criteria as described in more detail below, accelerated vesting as of the Release Agreement Effective Date of all unvested stock options
|
(v)
|
The Company agrees to pay your outstanding NRI open relocation program items up to $160,000 in the aggregate, which includes home sale assistance to cover realtor commission and normal seller’s closing costs and transportation of household goods. Any payments due will be made by the Company to NRI and will follow the relocation program guidelines established between NRI and the Company.
|
(b)
|
Additional Obligations
. Additionally, the Company acknowledges the following obligations to you:
|
(i)
|
The Company shall pay you your regular base salary, accrued and unpaid up to and including the Separation Date pursuant to applicable law, less required and/or authorized deductions and withholdings, and payable in accordance with Company’s regular payroll practices;
|
(ii)
|
The Company shall pay you any accrued and unused vacation time as of the Separation Date pursuant to applicable law and payable in accordance with the Company’s standard payroll practice;
|
(iii)
|
The Company agrees to reimburse you for all reasonable and necessary out-of-pocket business related expenses you incurred prior to the Separation Date, provided that you shall submit reasonable documentation of such expenses prior to the Release Agreement Effective Date and in accordance with the applicable Company policy;
|
(iv)
|
Following the Separation Date, you shall be entitled to any amount arising from your participation in, or benefits under, any employee benefit plans, programs or arrangements that become payable as a result of your separation from the Company, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements and pursuant to applicable law.
|
(c)
|
No Other Benefits
. Except as provided in this Agreement, you shall not be entitled to receive any other payment, benefit or other form of compensation as a result of your employment or the termination thereof.
|
(d)
|
Tax Withholding
. All payments made by the Company to you hereunder except for COBRA payments, expense reimbursements and expenses incurred by the Company pursuant to Section 2, if any, shall be subject to all applicable withholding deductions.
|
(a)
|
“
Confidential Information
” shall mean any and all proprietary and confidential data or information belonging to the Company which is of tangible or intangible value to Company and is not public information or is not generally known or available to Company’s competitors but is known only to Company and its employees, independent contractors or agents to whom it must be confided in order to apply it to the uses intended. Assuming the foregoing criteria are met, Confidential Information includes, without limitation, information with respect to the operations, customers, customer lists, products, proposals, marketing strategy and services of Company and its affiliates and further includes, but is not limited to: (i) formulas, research and development techniques, processes, computer programs, software, electronic codes, mask works, inventions, innovations, patents, patent applications, discoveries, improvements, data, know-how, formats, test results, and research projects; (ii) information about costs, profits, markets, sales, contracts, lists of actual or potential customers and distributors, and information contained in proposals that are under development or have been made to actual or potential customers; (iii) business, marketing, strategic plans, know-how, including without limitation the unique manner in which the Company conducts its business; (iv) forecasts, unpublished financial information, budgets, projections, and customer identities, characteristics
|
(b)
|
You acknowledge that as a result of your activities as an employee of the Company, you had access to the Confidential Information which you acknowledge as information that Company has legitimate interests in protecting and keeping confidential. In recognition of Company’s need to protect its legitimate business interests, you hereby covenant and agree that you will treat and regard each item constituting Confidential Information as strictly confidential and wholly owned by Company and will not, without the prior written consent of Company, for any reason, in any fashion, either directly or indirectly, communicate to any third party, use, sell, lend, distribute, license, give, show, disclose, reproduce, copy or misappropriate, or permit any of your agents to do any of the above with respect to all or any part of the Confidential Information or any physical embodiments thereof, and may in no event take any action causing, or fail to take action necessary in order to prevent, any Confidential Information disclosed to you or developed by you to lose its character or cease to qualify as Confidential Information, except as required by judicial and governmental action and as permitted hereunder.
|
(c)
|
You acknowledge the highly competitive nature of the Company’s business and that access to the Company’s Confidential Information rendered you special and unique within the Company’s industries. In addition to the protection of Confidential Information covered in Sections 7(a) and (b), the provisions set forth in Sections 7(c)-(h) are necessary in order to protect the goodwill of the Company and the relationships developed by the Company with employees, customers and suppliers. In consideration of the amounts that shall hereafter be paid to you pursuant to this Agreement, you agree that for twelve (12) months following the Separation Date (the “
Covered Time
”), unless you receive written approval from the CEO of the Company, you, alone or with others, will not, directly or indirectly, on behalf of a Competing Business (defined below), perform job duties of the type conducted, authorized, offered, or provided by you within two (2) years prior to the Separation Date. You acknowledge that Company has gaming and lottery customers in almost every state in the United States as well as the District of Columbia and Puerto Rico and you have global responsibilities. Therefore, this restriction covers anywhere you provided services to the Company during your employment. For purposes of this Section 10(c), “
Competing Business
” shall mean any business or operations that competes with the Company: (i) (A) related to design, development, manufacturing, production, sales, leasing, licensing, provisioning, operational or management activities (as the case may be) related to the (1) lottery industry, (2) land-based gaming industry, (3) interactive gaming industry, and (4) social gaming industry; or (B) in which the Company was within the previous 12 months engaged or
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i.
|
In further consideration of the amounts that may hereafter be paid to you pursuant to this Agreement, you agree that, during, the Covered Time, unless you receive written approval from the CEO, you shall not, directly or indirectly: (i) solicit or attempt to induce any of the employees, agents, consultants or representatives of the Company to terminate his, her, or its relationship with the Company; (ii) solicit or attempt to induce any of the employees, agents, consultants or representatives of the Company to become employees, agents, consultants or representatives of any other person or entity; or (iii) solicit or attempt to induce any customer, vendor or distributor of the Company to curtail or cancel any business with the Company. Sections (i) and (ii) are limited to employees, agents, consultants and representatives with whom you had material contact for the purpose of performing your job duties or about whom you obtained Confidential Information during your employment. Section (iii) is limited to customers, vendors and distributors with whom you had material contact for the purpose of performing your job duties, or about whom you obtained confidential information during your employment.
|
ii.
|
During the Covered Time, you agree that upon the earlier of your (i) negotiating with any Competitor (as defined below) concerning the possible employment of you by the Competitor, (ii) responding to (other than for the purpose of declining) an offer of employment from a Competitor, or (iii) becoming employed by a Competitor, (A) you will provide copies of Section 7 of this Agreement to the Competitor, and (B) in the case of any circumstance described above occurring during the Covered Time, you will promptly provide notice to the Company of such circumstance. You further agree that the Company may provide notice to a Competitor of your obligations under Section 7 of this Agreement. For purposes of this Agreement, “
Competitor
” shall mean any person or entity (other than the Company, its subsidiaries or affiliates) that engages, directly or indirectly, in the United States or any other geographic area in any Competing Business.
|
(f)
|
Despite the restrictions in this Section 7, you acknowledge that you are not precluded from meaningful opportunities for employment where your skills can be utilized gainfully and you acknowledge that the consideration provided under this Agreement is sufficient to justify such restrictions. In consideration thereof and in light of your education, skills and abilities, you agree that you will not assert in any forum that such restrictions prevent you from earning a living or otherwise should be held void or unenforceable.
|
(g)
|
In the event that a court of competent jurisdiction or arbitrator(s), as the case may be, determine that the provisions of Sections 7(c)-(i) are unenforceable for any reason, the parties acknowledge and agree that the court or arbitrator(s) is expressly empowered to reform any provision of Sections 7(c)-(i) so as to make them enforceable.
|
(h)
|
For purposes of this Section 7, references to the “Company” shall include the Company and each subsidiary and/or affiliate of the Company (and each of their respective joint ventures and equity method investees).
|
(i)
|
You acknowledge and agree that, by virtue of your position with the Company, services and access to and use of Confidential Information, any violation by you of any of the undertakings contained in this Section 7 would cause the Company immediate, substantial and irreparable injury for which it has no adequate remedy at law. Accordingly, you agree and consent to the entry of an injunction or other equitable relief by a court of competent jurisdiction restraining any violation or threatened violation of any undertaking contained in this Section 7. You waive posting of any bond otherwise necessary to secure such injunction or other equitable relief. Rights and remedies provided for in this Section 7 are cumulative and shall be in addition to rights and remedies otherwise available to the parties hereunder or under any other agreement or applicable law.
|
(a)
|
Any dispute, controversy or claim not resolved by the parties arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration and administered in accordance with the Rules of the American Arbitration Association. Venue for the conduct of the arbitration shall be Las Vegas, Nevada, except that, at the direction of the arbitral tribunal or with the consent of the parties, particular hearings in aid of such arbitration may be held in other places. The arbitral tribunal shall render its reasoned award on any claims and counterclaims within six months after the filing of a demand for arbitration. Judgment upon the award rendered by the Arbitrator(s) may be entered in any Court having jurisdiction there. The parties
|
(b)
|
The remedies expressly provided in this Agreement for breach thereof by the Company or you shall constitute the sole and exclusive remedies to the aggrieved party, and all other remedies which might be otherwise available under the law of any jurisdiction are hereby waived by both Company and you, except the Company’s right to enforce the “Confidentiality,” “Return of Property” and “Non-Disclosure of Confidential Information; Non-Competition and Non-Solicitation” provisions of this Agreement for which the Company specifically reserves and you specifically acknowledge the right of the Company to enforce by all legal and equitable remedies available, including specific performance and injunction. Should any provision of this Agreement be declared illegal or unenforceable and cannot be modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.
|
2.
|
Additional Agreements by Employee.
|
3.
|
Affirmations
. In signing this Release Agreement, you are affirming that:
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
||
|
|
By:
|
/s/ Gary L. Melampy
|
|
|
Gary L. Melampy
VP, Chief Human Resources Officer |
|||
|
|
|
|
|
|
|
EXECUTIVE
|
||
|
|
|
/s/ Michael Quartieri
|
|
|
Michael Quartieri
|
1.
|
Extension of Agreement Term
. The Agreement is hereby amended by deleting the second sentence of Section 1 thereof and replacing it with the following:
|
2.
|
Increase in Base Salary
. The Agreement is hereby amended by adding the following sentence to the end of Section 3(a):
|
3.
|
Special Equity Award
. As of the Amendment Effective Date, Executive shall receive a special equity award of seventy thousand (70,000) restricted stock units (the “
Special Equity Award
”), under the Plan, pursuant to an equity award agreement to be provided by the Company and entered into by and between SGC and Executive (the “
Special Equity Award Agreement
”). The Special Equity Award Agreement shall provide that the Special Equity Award shall vest with respect to twenty-five percent (25%) of the shares of SGC common stock subject to such Special Equity Award on each of the first four anniversaries of the Special Equity Award grant date, subject to any applicable provisions relating to accelerated vesting and forfeiture as described in the Agreement, the Special Equity Award Agreement or the Plan.
|
1.
|
Severance Benefits
. In return for your signing this Agreement and complying with the promises made by you in this Agreement, the Company will provide you with the following severance benefits (the “
Severance Benefits
”) described below in subsections (i)-(iv). You acknowledge and agree that the Severance Benefits are separate from and in addition to what you are already entitled to receive from the Company. Furthermore, if you are rehired by the Company or hired by any affiliate of the Company, all Severance Benefits will terminate as of the commencement date of such employment. The Severance Benefits are:
|
(i)
|
a cash severance amount of Seven Hundred Eighty-Seven Thousand Five Hundred U.S. Dollars (USD$787,500), which is equal to twelve (12) months of your current base salary plus your target bonus of 75 percent of your base salary, less required and/or authorized deductions and withholdings, as severance pay (the “
Severance Pay
”), payable in bi-weekly installments and on the Company’s regular pay days and in accordance with the Company’s
|
(ii)
|
no later than March 15, 2016, in lieu of any annual bonus for Fiscal Year 2015, payment of a lump sum amount equal to (i) the annual bonus (if any) that would have been payable to you for Fiscal Year 2015 pursuant to that certain 2015 MICP Cash Bonus Plan Participation Memo, dated June 12, 2015, had you remained in employment with the Company through December 31, 2015, multiplied by (ii) a fraction, the numerator of which is the number of days you were employed in 2015, and the denominator of which is 365 (subject to applicable withholdings);
|
(iii)
|
if you choose to elect continuation coverage by properly and timely electing COBRA coverage under and pursuant to COBRA, 29 U.S.C. § 1161 et seq., the Company will pay the employer and employee shares of the COBRA premiums (based on your current coverage elections) for twelve (12) months commencing on the first full month following the Separation Date. After twelve (12) months, you will be responsible for paying the entire COBRA premium. You will receive information on your opportunity to elect COBRA coverage under separate cover. Notwithstanding the foregoing, if the payment by the Company of such COBRA premium payments will subject or expose the Company to taxes or penalties, you and the Company shall enter into a substitute arrangement pursuant to which the Company will not be subjected or exposed to taxes or penalties and you will be provided with payments or benefits with an equivalent economic value, after tax.
|
(iv)
|
you will be offered a career transition program for up to three (3) month(s) commencing with the Effective Date. The terms of such program will be determined by the Company and separately provided to you.
|
(v)
|
in addition to all other payments set forth in this Section 2(a), a consulting payment in the amount of Fifteen Thousand Dollars ($15,000), less required and/or authorized deductions and withholdings, to be paid within 30 days after the Effective Date.
|
(b)
|
Additional Obligations
. Additionally, the Company acknowledges the following obligations to you:
|
(i)
|
Effective on the Separation Date, 14,247 shares of Scientific Games’ Restricted Stock Units (the “
Merger Equity
”) awarded to you pursuant to that certain Amended and Restated Bally Technologies, Inc. 2010 Long Term Incentive Plan Notice of Restricted Stock Unit
|
(ii)
|
Continued vesting for 12 months after the Separation Date of (1) 7,124 shares of Scientific Games’ Restricted Stock Units under the 2014 BYI Grant, and (2) 5,480 shares of Scientific Games’ Restricted Stock Units and the option to acquire 10,936 shares of Scientific Games shares of Class A common stock awarded under the 10the April 27, 2015 Equity Award Notice made pursuant to that certain Equity Award to Key Employee Agreement, Scientific Games Corporation 2003 Incentive Compensation Plan as Amended and Restated June 11, 2014.
|
(iii)
|
The Company shall pay you your regular base salary, accrued and unpaid up to and including the Separation Date pursuant to applicable law, less required and/or authorized deductions and withholdings, and payable in accordance with Company’s regular payroll practices.
|
(iv)
|
The Company shall pay you the any accrued and unused vacation time as of the Separation Date pursuant to applicable law and payable in accordance with the Company’s standard payroll practice.
|
(v)
|
The Company agrees to reimburse you for all reasonable and necessary out-of-pocket business related expenses you incurred prior to the Separation Date, provided that you shall submit reasonable documentation of such expenses prior to the Effective Date and in accordance with the applicable Company policy.
|
(vi)
|
Following the Separation Date, you shall be entitled to any amount arising from your participation in, or benefits under, any employee benefit plans, programs or arrangements that become payable as a result of your separation from the Company, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements and pursuant to applicable law.
|
(c)
|
No Other Benefits
. Except as provided in this Agreement, you shall not be entitled to receive any other payment, benefit or other form of compensation as a result of your employment or the termination thereof.
|
(d)
|
Tax Withholding
. All payments made by the Company to you hereunder except for COBRA payments, expense reimbursements and expenses incurred by the Company pursuant to Section 2(a)( v), if any, shall be subject to all applicable withholding deductions.
|
(a)
|
salary and other wages, including, but not limited to, overtime if applicable, incentive compensation and other bonuses, severance pay, paid time off, or any benefits under the Employee Retirement Income Security Act of 1974, as amended or any other applicable local, state or federal law;
|
(b)
|
discrimination, harassment or retaliation based upon race, color, national origin, ancestry, religion, marital status, sex, sexual orientation, citizenship status, pregnancy or any pregnancy related disability, family status, leave of absence (including but not limited to the Family Medical Leave Act or any other federal, state or local leave laws), handicap (including but not limited to The Rehabilitation Act of 1973), medical condition or disability, or any other characteristic covered by law under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Americans with Disabilities Act, as amended, Sections 1981 through 1988 of the Civil Rights Act of 1866, and any other federal, state, or local law prohibiting discrimination in employment, the Worker Adjustment and Retraining
|
(c)
|
discrimination, harassment or retaliation based upon age under the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act of 1990 and as further amended (the “
ADEA
”), or under any other federal, state, or local law prohibiting age discrimination;
|
(d)
|
breach of implied or express contract (whether written or oral), breach of promise, misrepresentation, fraud, estoppel, waiver or breach of any covenant of good faith and fair dealing, including without limitation breach of any express or implied covenants of any employment agreement that may be applicable to you;
|
(e)
|
defamation, negligence, infliction of emotional distress, violation of public policy, wrongful or constructive discharge, or any employment-related tort recognized under any applicable local, state, or federal law;
|
(f)
|
any violation of any Fair Employment Practices Act, Equal Rights Act; Civil Rights Act; Minimum Fair Wages Act; Equal Pay Act; or Payment of Wages Act; or any comparable federal, state or local law;
|
(g)
|
any violation of the Immigration Reform and Control Act, or any comparable federal, state or local law;
|
(h)
|
any violation of the Fair Credit Reporting Act, or any comparable federal, state or local law;
|
(i)
|
any violation of the Family and Medical Leave Act;
|
(j)
|
any violation of the Nevada Fair Employment Practices Act (Nev. Rev. Stat. §613.310 et seq.), any Nevada wage and hour law (Nev. Rev. Stat. §608.016 et seq.), or any comparable federal, state or local law and any violation of any comparable statute, regulation, or law of any country or nation;
|
(k)
|
costs, fees, or other expenses, including attorneys’ fees; and
|
(l)
|
any other claim, charge, complaint, lien, demand, cause of action, obligation, damages, liabilities or the like of any kind whatsoever, whether under U.S. law or the law of another nation, including, without limitation, any claim that this Agreement was induced or resulted from any fraud or misrepresentation by Company.
|
(a)
|
BY SIGNING THIS AGREEMENT YOU ARE KNOWINGLY AND VOLUNTARILY WAIVING ANY RIGHTS (KNOWN OR UNKNOWN) TO BRING OR PROSECUTE A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST THE RELEASED PARTIES WITH RESPECT TO ANY OF THE CLAIMS DESCRIBED ABOVE IN SECTION 4. You agree that the release set forth above will bar all claims or demands of every kind, known or unknown, referred to above in Section 4 and further agree that no non-governmental person, organization or other entity acting on your behalf has in the past or will in the future file any lawsuit, arbitration or proceeding asserting any claim that is waived or released under this Agreement. If you break this promise and file a lawsuit, arbitration or other proceeding asserting any Claim waived in this Agreement, (i) you will pay for all costs, including reasonable attorneys’ fees, incurred by the Released Parties in defending against such Claim (unless such Claim is a charge with the Equal Employment Opportunity Commission or the National Labor Relations Board); (ii) you give up any right to individual damages in connection with any administrative, arbitration or court proceeding with respect to your employment with and/or termination from employment with the Company, including damages, reinstatement or attorneys' fees; and (iii) if you are awarded money damages, you will assign to the Released Parties your right and interest to all such money damages. If any claim is not subject to release, to the extent permitted by law, you waive any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which Company or any other Released Party is a party. Furthermore, if you are made a member of a class or collective action in any proceeding without your prior knowledge or consent, you agree to take reasonable steps without incurring unreasonable expense, to opt out of the class or collective action at the first opportunity. Notwithstanding the foregoing, this Section 5 does not limit your right to challenge the validity of this Agreement in a legal proceeding under the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), with respect to claims under the ADEA. This Section also is not intended to and shall not limit the right of a court to determine, in its discretion, that the Company is entitled to restitution, recoupment or setoff of any payments made to you by the Company should this Agreement be found to be invalid as to the release of claims under the ADEA.
|
(b)
|
You agree that you shall not solicit, encourage, assist or participate (directly or indirectly) in bringing any Claims or actions against any of the Released Parties by other current or former employees, officers or third parties, except as compelled by subpoena or other court order or legal process, and only after providing the Company with prior notice of any such subpoena, order or legal process and an opportunity to timely contest such process. Notwithstanding the foregoing, nothing in this Agreement shall preclude you from making truthful statements that are required by applicable law, regulation or legal process.
|
(c)
|
You represent and warrant that you have not filed any administrative, judicial or other form of complaint or initiated any claim, charge, complaint or formal legal proceeding, nor are you a party to any such claim, against any of the Released Parties, and that you will not make such a filing at any time hereafter based on any events or omissions occurring prior to the date of execution of this Agreement. You understand and agree that this Agreement will be pleaded as a full and complete defense to any action, suit or proceeding which is or may be instituted, prosecuted or maintained by you, your agents, assignees, attorneys, heirs, executors, administrators and anyone else claiming by or through you.
|
(d)
|
You agree that you will reasonably cooperate with the Company, its parents, subsidiaries or affiliates with respect to matters or issues which took place or arose during your tenure with the Company, specifically including, without limitation, any attorney retained by any of them, in connection with any pending or future internal investigation or judicial, administrative or regulatory matter, proceeding or investigation. The parties acknowledge and agree that such reasonable cooperation may include, but shall not be limited to, your making yourself available for meetings, interviews, depositions, statements, testimony or the signing of affidavits, and providing to the Company any documents or information in your possession or under your control relating to any such internal investigation or judicial, administrative or regulatory matter, proceeding or or investigation, provided that any such meetings, interviews, depositions, statements or testimony do not unduly interfere with your work schedule, or other post-Company duties or require extensive time or travel commitments. The Company shall reimburse you promptly after you submit receipts or other documents reasonably acceptable to the Company for your actual out-of-pocket expenses reasonably incurred and approved by the Company in connection with your performance under this subpart (d); provided, however, without limiting the provisions of any statutory or other contractual indemnification obligations owed to you, you shall not be entitled to any expense reimbursement for time spent testifying or otherwise cooperating in any matter in which you are a defendant in the proceeding or a named subject or target of the litigation, regulatory matter or investigation. You represent and warrant that you have and will accurately, completely and truthfully disclose to the Company any and all materials and information requested in connection with any pending or future internal
|
(e)
|
You agree to cooperate with Company and take all necessary steps to effectuate this Agreement, each of its terms and the intent of the parties.
|
(a)
|
Other than as described in Section 2 of this Agreement, you have been paid and/or have received all compensation, wages, bonuses, commissions, overtime and/or benefits to which you may be entitled. You affirm that you have been granted or not been denied any leave to which you were entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws;
|
(b)
|
Other than as described in Section 2 of this Agreement, you are not eligible to receive payments or benefits under any other Company and/or other Released Party’s severance pay policy, plan, practice or arrangement;
|
(c)
|
You have no known workplace injuries or occupational diseases;
|
(d)
|
You have not complained of and you are not aware of any fraudulent activity or any act(s) which would form the basis of a claim of fraudulent or illegal activity by the Company or any other Released Party that you have not reported to the Company in writing. You also affirm that you have not been retaliated against for reporting any allegations of wrongdoing by any Released Party, including any allegations of corporate fraud. Both parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or to participate in an investigative proceeding of any federal, state or local governmental agency. To the extent permitted by law, you agree that if such an administrative claim is made, you shall not be entitled to recover any individual monetary relief or other individual remedies;
|
(f)
|
On or about the Separation Date, or within a reasonable time thereafter, if requested, you will provide a separate affirmation, if applicable, that the Company provided you with timely and adequate notice of your right to continue group insurance benefits under COBRA (unless such notice was not required to be given because, on the day before termination, you did not receive group health insurance benefits through the Company and thus are not a qualified beneficiary within the meaning of COBRA);
|
(g)
|
You acknowledge and agree that if you breach the provisions of this Agreement (including, but not limited to, Sections 7, 9 and 10), that the Company will have the right to seek an appropriate remedy against you, which may include, but not be limited to, injunctive relief, the return of the Severance Benefits, other monetary damages, and the payment of the Company’s attorneys’ fees. Additionally, if you breach this Agreement, Company shall have the right, without waiving any other remedies in law or equity, to cease any further payments of the Severance Benefits. Notwithstanding such cessation of payments, all of your obligations hereunder shall be continuing and enforceable including but not limited to your release of claims, and the Company shall be entitled to pursue all remedies against you available at law or in equity for such breach; and
|
(a)
|
“
Confidential Information
” shall mean any and all proprietary and confidential data or information belonging to the Company which is of tangible or intangible value to Company and is not public information or is not generally known or available to Company’s competitors but is known only to Company and its employees, independent contractors or agents to whom it must be confided in order to apply it to the uses intended. Assuming the foregoing criteria are met, Confidential Information includes, without limitation, information with respect to the operations, customers, customer lists, products, proposals, marketing strategy and services of Company and its affiliates and further includes, but is not limited to: (i) formulas, research and development techniques, processes, computer programs, software, electronic codes, mask works, inventions, innovations, patents, patent applications, discoveries, improvements, data, know-how, formats, test results, and research projects; (ii) information about costs, profits, markets, sales, contracts, lists of actual or potential customers and distributors, and information contained in proposals that are under development or have been made to actual or potential customers; (iii) business, marketing, strategic plans, know-how, including without limitation the unique manner in which the Company conducts its business; (iv) forecasts, unpublished financial information, budgets, projections, and customer identities, characteristics and agreements; and (v) employee personnel files and compensation information. Nothing herein shall be interpreted as a limitation or restriction on the provisions of the trade secrets laws or any legal rights or remedies granted thereunder.
|
(b)
|
You acknowledge that as a result of your activities as an employee of the Company, you had access to the Confidential Information which you acknowledge as information that Company has legitimate interests in protecting and keeping confidential. In recognition of Company’s need to protect its legitimate business interests, you hereby covenant and agree that you will treat and regard each item constituting Confidential Information as strictly confidential and wholly owned by Company and will not, without the prior written consent of Company, for any reason, in any fashion, either directly or indirectly, communicate to any third party, use, sell, lend, distribute, license, give, show, disclose, reproduce, copy or misappropriate, or permit any of your agents to do any of the above with respect to all or any part of the Confidential Information or any physical embodiments thereof, and may in no event take any action causing, or fail to take action necessary in order to prevent, any Confidential Information disclosed to you or developed by you to lose its character or cease to qualify as Confidential Information, except as required by judicial and governmental action and as permitted hereunder.
|
(c)
|
You acknowledge the highly competitive nature of the Company’s business and that access to the Company’s Confidential Information rendered you special and unique within the Company’s industries. In addition to the protection of Confidential Information covered in Sections 10(a) and (b), the provisions set forth in Sections 10(c)-(h) are necessary in order to protect the goodwill of the Company and the relationships developed by the Company with employees, customers and suppliers. In consideration of the amounts that shall hereafter be paid to you pursuant to this Agreement, you agree that for twelve (12) months following the Transition Date(the “
Covered Time
”), unless you receive written approval from the CEO of the Company, you, alone or with others, will not, directly or indirectly, on behalf of a Competing Business (defined below), perform job duties of the type conducted, authorized, offered, or provided by you within two (2) years prior to the Separation Date. You acknowledge that Company has gaming and lottery customers in almost every state in the United States as well as the District of Columbia and Puerto Rico and you have global responsibilities. Therefore, this restriction covers anywhere you provided services to the Company during your employment. For purposes of this Section 10(c), “
Competing Business
” shall mean any business or operations that competes with the Company: (i) (A) related to design, development, manufacturing, production, sales, leasing, licensing, provisioning, operational or management activities (as the case may be) related to the (1) lottery industry, (2) land-based gaming industry, (3) interactive gaming industry, and (4) social gaming industry; or (B) in which the Company was within the previous 12 months engaged or in which the Company, to your knowledge, currently contemplates engaging in during the next 12 months, (ii) in which you were engaged or involved on behalf of the Company or with respect to which you have obtained proprietary or confidential information with respect to the Company’s business; and (iii) which were conducted anywhere in the United States or in any other geographic area in which such business was conducted or the Company contemplates conducting such business. Notwithstanding the foregoing, it is understood and agreed that you may have a beneficial ownership of not more than one (1) percent of the outstanding shares of a corporation with capital stock listed on any national or regional securities exchange or quoted in the daily listing of over-the-counter market securities and in which you do not undertake a management, operational, or advisory role.
|
i.
|
In further consideration of the amounts that may hereafter be paid to you pursuant to this Agreement, you agree that, during, the Covered Time, unless you receive written approval from the CEO, you shall not, directly or indirectly: (i) solicit or attempt to induce any of the employees, agents, consultants or representatives of the Company to terminate his, her, or its relationship with the Company; (ii) solicit or attempt to induce any of the employees, agents, consultants or representatives of the Company to become employees, agents, consultants or representatives of any other person or entity; or (iii) solicit or attempt to induce any customer, vendor or distributor
|
ii.
|
During the Covered Time, you agree that upon the earlier of your (i) negotiating with any Competitor (as defined below) concerning the possible employment of you by the Competitor during the Covered Time, (ii) responding to (other than for the purpose of declining) an offer of employment from a Competitor, or (iii) becoming employed by a Competitor during the Covered Time, you will provide copies of Section 10 of this Agreement to the Competitor. You further agree that the Company may provide notice to a Competitor of your obligations under Section 10 of this Agreement. For purposes of this Agreement, “
Competitor
” shall mean any person or entity (other than the Company, its subsidiaries or affiliates) that engages, directly or indirectly, in the United States or any other geographic area in any Competing Business.
|
(f)
|
Despite the restrictions in this Section 10, you acknowledge that you are not precluded from meaningful opportunities for employment where your skills can be utilized gainfully and you acknowledge that the consideration provided under this Agreement is sufficient to justify such restrictions. In consideration thereof and in light of your education, skills and abilities, you agree that you will not assert in any forum that such restrictions prevent you from earning a living.
|
(g)
|
In the event that a court of competent jurisdiction or arbitrator(s), as the case may be, determine that the provisions of Sections 10(c)-(h) are unenforceable for any reason, the parties acknowledge and agree that the court or arbitrator(s) is expressly empowered to reform any provision of Sections 10(c)-(h) so as to make them enforceable.
|
(h)
|
For purposes of this Section 10, references to the “Company” shall include the Company and each subsidiary and/or affiliate of the Company (and each of their respective joint ventures and equity method investees).
|
(i)
|
You acknowledge and agree that, by virtue of your position with the Company, services and access to and use of Confidential Information, any violation by you of any of the undertakings contained in this Section 10 may cause the Company immediate, substantial and irreparable injury for which it has no adequate remedy at law. Accordingly, you agree and consent to the entry of an injunction or other equitable relief by a court of competent jurisdiction restraining any violation or threatened violation of any
|
(a)
|
Any dispute, controversy or claim not resolved by the parties arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration and administered in accordance with the Rules of the American Arbitration Association. Venue for the conduct of the arbitration shall be Las Vegas, Nevada, except that, at the direction of the arbitral tribunal or with the consent of the parties, particular hearings in aid of such arbitration may be held in other places. The arbitral tribunal shall render its reasoned award on any claims and counterclaims within six months after the filing of a demand for arbitration. Judgment upon the award rendered by the Arbitrator(s) may be entered in any Court having jurisdiction there. The parties expressly agree as a term of their agreement to arbitrate that the factual findings of the arbitral tribunal shall be final absent manifest or material error and rulings on questions of law or mixed questions of fact and law shall be reviewed under the “clearly erroneous” standard of review and not under a “manifest disregard of the law” or other standard, notwithstanding federal, state, commonwealth decisional or other law concerning such standard to the contrary.
|
(b)
|
The remedies expressly provided in this Agreement for breach thereof by the Company or you shall constitute the sole and exclusive remedies to the aggrieved party, and all other remedies which might be otherwise available under the law of any jurisdiction are hereby waived by both Company and you, except the Company’s right to enforce the “Confidentiality,” “Return of Property” and “Non-Disclosure of Confidential Information; Non-Competition and Non-Solicitation” provisions of this Agreement for which the Company specifically reserves and you specifically acknowledge the right of the Company to enforce by all legal and equitable remedies available, including specific performance and injunction. Should any provision of this Agreement, excluding the general release in Section 4 above, be declared illegal or unenforceable and cannot be modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.
|
(a)
|
You are specifically advised to consult with an attorney of your own choosing before you sign this Agreement, as it waives and releases rights you have or may have under federal, state and local law, including but not limited to the Age Discrimination in Employment Act.
You acknowledge that you will bear all expenses incurred by you in the negotiation and preparation of this Agreement, and the Company will bear all fees incurred by it.
|
(b)
|
You will have up to twenty-one (21) calendar days from the date the Company provides you this Agreement which you acknowledge to have been on August 18, 2015 to decide whether to accept and sign this Agreement. In the event you do sign this Agreement, you may revoke or rescind your acceptance within seven (7) calendar days of signing it, and it will not become effective
|
(c)
|
Any and all questions regarding the terms of this Agreement have been asked and answered to your complete satisfaction.
|
(d)
|
You acknowledge that the consideration provided for hereunder is in addition to anything of value to which you already are entitled and the consideration provided for herein is good and valuable.
|
(e)
|
You are entering into this Agreement voluntarily, of your own free will, and without any coercion or undue influence of any kind or type whatsoever.
|
(f)
|
Any modifications of or revisions to this Agreement do not re-start the consideration period, described in paragraph (b) of this Section 15.
|
(g)
|
You understand that the releases contained in this Agreement do not extend to any rights or claims that you have under the Age Discrimination in Employment Act that first arise after execution of this Agreement.
|
|
Ratio of Earnings to Fixed Charges (in millions)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
2011
|
2012
|
2013
|
2014
|
2015
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
Net loss before income tax expense and earnings from equity investments
|
|
(25.8
|
)
|
(75.7
|
)
|
(153.5
|
)
|
(507.1
|
)
|
(1,711.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Add fixed charges:
|
|
|
|
|
|
|
|
|||||
|
|
Interest expense including amortization of debt issuance costs
|
|
104.7
|
|
100.0
|
|
119.5
|
|
307.2
|
|
664.9
|
|
|
|
Estimate of interest within rental expense
|
|
5.3
|
|
5.4
|
|
5.6
|
|
14.8
|
|
15.7
|
|
|
|
Total fixed charges
|
|
110.0
|
|
105.4
|
|
125.1
|
|
322.0
|
|
680.6
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Distributed earnings from equity investments
|
|
35.2
|
|
38.1
|
|
29.5
|
|
28.5
|
|
24.9
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Adjusted earnings
|
|
119.4
|
|
67.8
|
|
1.1
|
|
(156.6
|
)
|
(1,005.8
|
)
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of earnings to fixed charges (1)
|
|
|
1.1
|
|
0.6
|
|
—
|
|
(0.5
|
)
|
(1.5
|
)
|
|
|
|
|
|
|
|
|
|
|||||
|
(1) The ratio of earnings to fixed charges is computed by dividing adjusted earnings by fixed charges.
|
||||||||||||
|
|
|
|
|
|
|
|
|
(1)
|
The ratio of earnings to fixed charges is computed by dividing adjusted earnings by fixed charges. Earnings before fixed charges were inadequate to cover total fixed charges by $37.6 million, $124.0 million, $478.6 million and $1,686.3 million for years ended 2012, 2013, 2014 and 2015, respectively.
|
/s/ M. Gavin Isaacs
|
M. Gavin Isaacs
|
Chief Executive Officer
|
/s/ Scott D. Schweinfurth
|
Scott D. Schweinfurth
|
Chief Financial Officer
|
|
/s/ M. Gavin Isaacs
|
|
M. Gavin Isaacs
|
|
Chief Executive Officer
|
|
February 29, 2016
|
|
/s/ Scott D. Schweinfurth
|
|
Scott D. Schweinfurth
|
|
Chief Financial Officer
|
|
February 29, 2016
|
|
|
Page
|
Statements of Financial Position as of December 31, 2014 and 2013
|
|
F- 2
|
|
|
|
Statements of Comprehensive Income for the Years Ended December 31, 2014, 2013and 2012
|
|
F- 3
|
|
|
|
Statements of Changes in Equity for the Years Ended December 31, 2014, 2013 and 2012
|
|
F- 4
|
|
|
|
Cash Flow Statements for the Years Ended December 31, 2014, 2013 and 2012
|
|
F- 5
|
|
|
|
Notes to Financial Statements
|
|
F- 6
|
|
|
|
December 31,
|
|||
|
|
|
2014
|
2013
|
||
|
Notes
|
|
||||
ASSETS
|
|
|
|
|
||
Non-current assets
|
|
|
|
|
||
Equipment, net
|
3
|
|
5,204
|
|
6,678
|
|
Intangible assets, net
|
4
|
|
426,400
|
|
514,720
|
|
Deferred income taxes
|
15
|
|
1,802
|
|
4,146
|
|
Total non-current assets
|
|
|
433,406
|
|
525,544
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
||
Inventories
|
5
|
|
18,042
|
|
16,285
|
|
Trade and other receivables
|
6
|
|
325,847
|
|
462,692
|
|
Current financial assets from parent company
|
17/18
|
|
169,963
|
|
—
|
|
Foreign currency forward contracts
|
18
|
|
1,645
|
|
—
|
|
Other current assets
|
|
|
2,176
|
|
395
|
|
Income taxes receivable
|
7
|
|
3,149
|
|
619
|
|
Cash and cash equivalents
|
8
|
|
16
|
|
17
|
|
Total current assets
|
|
|
520,839
|
|
480,008
|
|
|
|
|
|
|
||
TOTAL ASSETS
|
|
|
954,246
|
|
1,005,552
|
|
|
|
|
|
|
||
EQUITY AND LIABILITIES
|
|
|
|
|
||
Equity
|
|
|
|
|
||
Issued capital
|
9
|
|
31,000
|
|
31,000
|
|
Legal reserve
|
|
|
6,200
|
|
6,200
|
|
Share premium reserve
|
|
|
438,597
|
|
556,005
|
|
Cash flow hedge reserve
|
|
|
791
|
|
(1,204
|
)
|
Retained earnings
|
|
|
286
|
|
—
|
|
Net income for the period
|
|
|
65,201
|
|
67,348
|
|
Total equity
|
|
|
542,075
|
|
659,349
|
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
||
Accounts payable
|
10
|
|
363,485
|
|
296,733
|
|
Foreign currency forward contracts
|
18
|
|
—
|
|
2,215
|
|
Current financial payables to parent company
|
17/18
|
|
47,989
|
|
40,288
|
|
Other current liabilities
|
11
|
|
697
|
|
6,967
|
|
Total current liabilities
|
|
|
412,171
|
|
346,203
|
|
|
|
|
|
|
||
TOTAL EQUITY AND LIABILITIES
|
|
|
954,246
|
|
1,005,552
|
|
|
|
For the year ended
December 31, |
|||||||
|
|
||||||||
|
Notes
|
2014
|
|
2013
|
|
2012
|
|||
|
|
|
|||||||
Service revenues
|
12
|
368,352
|
|
|
374,992
|
|
|
380,868
|
|
Other revenue
|
|
1,671
|
|
|
2,300
|
|
|
1,301
|
|
Total Revenue
|
|
370,023
|
|
|
377,292
|
|
|
382,169
|
|
|
|
|
|
|
|
|
|||
Cost of tickets
|
17
|
52,814
|
|
|
57,433
|
|
|
56,883
|
|
Service costs
|
13
|
126,098
|
|
|
119,378
|
|
|
121,591
|
|
Depreciation, amortization and write-downs
|
|
94,545
|
|
|
94,688
|
|
|
94,931
|
|
Other operating costs
|
|
(5,922
|
)
|
|
1,872
|
|
|
321
|
|
Total Costs
|
|
267,536
|
|
|
273,371
|
|
|
273,726
|
|
|
|
|
|
|
|
|
|||
Operating Income
|
|
102,488
|
|
|
103,921
|
|
|
108,443
|
|
|
|
|
|
|
|
|
|||
Financial income
|
14
|
948
|
|
|
1,021
|
|
|
839
|
|
Financial expenses
|
14
|
(6,130
|
)
|
|
(4,851
|
)
|
|
(6,958
|
)
|
|
|
|
|
|
|
|
|||
Net income before income tax
|
15
|
97,306
|
|
|
100,091
|
|
|
102,324
|
|
|
|
|
|
|
|
|
|||
Income tax expense
|
15
|
32,105
|
|
|
32,743
|
|
|
33,633
|
|
Net income for the year
|
|
65,201
|
|
|
67,348
|
|
|
68,691
|
|
|
|
|
|
|
|
|
|||
Other comprehensive income:
|
|
|
|
|
|
|
|||
Other comprehensive income to be reclassified to profit or loss in subsequent periods
|
|
|
|
|
|
|
|||
Components of other comprehensive income
|
18
|
2,961
|
|
|
(758
|
)
|
|
(3,107
|
)
|
Income tax relating to components of other comprehensive income
|
15
|
(966
|
)
|
|
299
|
|
|
855
|
|
Net other comprehensive income to be reclassified to profit or loss in subsequent periods
|
|
1,995
|
|
|
(459
|
)
|
|
(2,252
|
)
|
|
|
|
|
|
|
|
|||
Total comprehensive income for the year
|
|
67,196
|
|
|
66,889
|
|
|
66,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Issued
|
|
Legal
|
|
Share
|
|
Cash Flow
|
|
Retained
|
|
Net
|
|
|
|||||||
For the year ended December 31, 2014
|
|
Capital
|
|
Reserve
|
|
Premium Reserve
|
|
Hedge Reserve
|
|
Earnings
|
|
Income
|
|
Total
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at January 1, 2014
|
|
31,000
|
|
|
6,200
|
|
|
556,005
|
|
|
(1,204
|
)
|
|
—
|
|
|
67,348
|
|
|
659,349
|
|
Net income for the year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,201
|
|
|
65,201
|
|
Components of other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|
—
|
|
|
—
|
|
|
0.252
|
|
Other comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,743
|
|
|
—
|
|
|
—
|
|
|
1,743
|
|
Total comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,995
|
|
|
—
|
|
|
65,201
|
|
|
67.196
|
|
Share Premium Distribution
|
|
—
|
|
|
—
|
|
|
(117,408
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(117,408)
|
|
Dividend distribution
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67,062
|
)
|
|
(67,062)
|
|
Retained Earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|
(286
|
)
|
|
—
|
|
Balance at December 31, 2014
|
|
31,000
|
|
|
6,200
|
|
|
438,597
|
|
|
791
|
|
|
286
|
|
|
65,201
|
|
|
542,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Issued
|
|
Legal
|
|
Share
|
|
Cash Flow
|
|
Retained
|
|
Net
|
|
|
|||||||
For the year ended December 31, 2013
|
|
Capital
|
|
Reserve
|
|
Premium Reserve
|
|
Hedge Reserve
|
|
Earnings
|
|
Income
|
|
Total
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at January 1, 2013
|
|
31,000
|
|
|
6,200
|
|
|
617,680
|
|
|
(745
|
)
|
|
—
|
|
|
68,691
|
|
|
722,826
|
|
Net income for the year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,348
|
|
|
67,348
|
|
Components of other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
615
|
|
|
—
|
|
|
—
|
|
|
0.615
|
|
Other comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,074
|
)
|
|
—
|
|
|
—
|
|
|
(1,074)
|
|
Total comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(459
|
)
|
|
—
|
|
|
67,348
|
|
|
66.889
|
|
Share Premium Distribution
|
|
—
|
|
|
—
|
|
|
(61,675
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61,675)
|
|
Dividend distribution
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68,691
|
)
|
|
(68,691)
|
|
Balance at December 31, 2013
|
|
31,000
|
|
|
6,200
|
|
|
556,005
|
|
|
(1,204
|
)
|
|
—
|
|
|
67,348
|
|
|
659,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Issued
|
|
Legal
|
|
Share
|
|
Cash Flow
|
|
Retained
|
|
Net
|
|
|
|||||||
For the year ended December 31, 2012
|
|
Capital
|
|
Reserve
|
|
Premium Reserve
|
|
Hedge Reserve
|
|
Earnings
|
|
Income
|
|
Total
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at January 1, 2012
|
|
31,000
|
|
|
6,200
|
|
|
696,931
|
|
|
1,507
|
|
|
—
|
|
|
66,682
|
|
|
802,320
|
|
Net income for the year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,691
|
|
|
68,691
|
|
Components of other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,507
|
)
|
|
—
|
|
|
—
|
|
|
(1,507)
|
|
Other comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(745
|
)
|
|
—
|
|
|
—
|
|
|
(745)
|
|
Total comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,252
|
)
|
|
—
|
|
|
68,691
|
|
|
66.439
|
|
Share Premium Distribution
|
|
—
|
|
|
—
|
|
|
(79,251
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79,251)
|
|
Dividend distribution
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,682
|
)
|
|
(66,682)
|
|
Balance at December 31, 2012
|
|
31,000
|
|
|
6,200
|
|
|
617,680
|
|
|
(745
|
)
|
|
—
|
|
|
68,691
|
|
|
722,826
|
|
|
|
|
|
Year ended December 31,
|
|||||||
|
|
Notes
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
|
|
|
|
|
|
|
|||
Operating activities:
|
|
|
|
|
|
|
|
|
|||
Profit before income tax
|
|
15
|
|
97,306
|
|
|
100,091
|
|
|
102,324
|
|
Adjustments to reconcile profit before income tax to net cash flow
|
|
|
|
|
|
|
|
|
|||
Depreciation
|
|
3
|
|
1,474
|
|
|
1,330
|
|
|
2,200
|
|
Intangible asset amortization
|
|
4
|
|
90,195
|
|
|
89,538
|
|
|
89,564
|
|
Interest income
|
|
18
|
|
(2
|
)
|
|
(5
|
)
|
|
(8
|
)
|
Interest on intercompany loan
|
|
18
|
|
—
|
|
|
—
|
|
|
(277
|
)
|
Total accrued interest income
|
|
|
|
(2
|
)
|
|
(5
|
)
|
|
(285
|
)
|
Bank interest charges and commissions
|
|
18
|
|
34
|
|
|
23
|
|
|
27
|
|
Other intercompany interest expense
|
|
18
|
|
502
|
|
|
505
|
|
|
194
|
|
Interest expense on Factoring of trade receivables
|
|
18
|
|
3,731
|
|
|
3,628
|
|
|
6,051
|
|
Interest expense to AAMS and other interest expense
|
|
18
|
|
101
|
|
|
10
|
|
|
285
|
|
Total accrued interest expense
|
|
|
|
4,368
|
|
|
4,166
|
|
|
6,557
|
|
Other non-monetary items:
|
|
|
|
|
|
|
|
|
|||
Unrealized foreign exchange (gains)/losses, net
|
|
|
|
423
|
|
|
(162
|
)
|
|
(255
|
)
|
Unrealized exchange (gains)/losses on derivatives, net
|
|
18
|
|
(246
|
)
|
|
(124
|
)
|
|
(223
|
)
|
Realized exchange (gains)/losses on derivatives, net
|
|
|
|
(536
|
)
|
|
390
|
|
|
(166
|
)
|
Realized foreign exchange (gains)/losses, net
|
|
|
|
1,174
|
|
|
(434
|
)
|
|
(285
|
)
|
Total non-monetary items
|
|
|
|
194,156
|
|
|
194,790
|
|
|
199,431
|
|
Income taxes paid
|
|
|
|
(33,351
|
)
|
|
(29,635
|
)
|
|
(67,319
|
)
|
Cash flows before changes in working capital
|
|
|
|
160,805
|
|
|
165,155
|
|
|
132,112
|
|
Change in net working capital:
|
|
|
|
|
|
|
|
|
|||
Inventories
|
|
|
|
(1,757
|
)
|
|
(1,823
|
)
|
|
(2,724
|
)
|
Foreign currency forward contracts
|
|
|
|
(3,860
|
)
|
|
898
|
|
|
3,754
|
|
Trade and other receivables:
|
|
|
|
|
|
|
|
|
|||
- Trade and other receivables
|
|
|
|
(1,527
|
)
|
|
(1,784
|
)
|
|
(3,114
|
)
|
- Receivables from PoS (retailers)
|
|
|
|
144,832
|
|
|
(164,506
|
)
|
|
(112,169
|
)
|
- Related party receivables
|
|
|
|
(6,460
|
)
|
|
6,851
|
|
|
(8,883
|
)
|
Accounts payable:
|
|
|
|
|
|
|
|
|
|||
- Payables to AAMS
|
|
|
|
(45
|
)
|
|
1,156
|
|
|
75,440
|
|
- Payables to others
|
|
|
|
62,212
|
|
|
30,192
|
|
|
(6,248
|
)
|
- Payables to suppliers including related parties
|
|
|
|
4,585
|
|
|
2,605
|
|
|
8,516
|
|
Income taxes receivables
|
|
|
|
2,344
|
|
|
(786
|
)
|
|
78
|
|
Other tax receivables
|
|
|
|
(2,530
|
)
|
|
3,592
|
|
|
(4,211
|
)
|
VAT payables, taxes other than income taxes and other liabilities
|
|
|
|
(6,262
|
)
|
|
(346
|
)
|
|
123
|
|
Cash flows from operating activities
|
|
|
|
352,336
|
|
|
41,204
|
|
|
82,674
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|||
Purchase of equipment
|
|
|
|
—
|
|
|
—
|
|
|
(571
|
)
|
Transfers of equipment
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Purchase of intangible assets
|
|
4
|
|
(1,875
|
)
|
|
(1,962
|
)
|
|
(1,696
|
)
|
Transfers/disposals of intangible assets
|
|
|
|
—
|
|
|
—
|
|
|
14
|
|
Cash flows from investing activities
|
|
|
|
(1,875
|
)
|
|
(1,962
|
)
|
|
(2,253
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
|
|
|
—
|
|
|
(33
|
)
|
|
(312
|
)
|
Interest received
|
|
|
|
—
|
|
|
5
|
|
|
8
|
|
Dividends paid
|
|
|
|
(67,062
|
)
|
|
(68,691
|
)
|
|
(66,682
|
)
|
Share premium reserve distribution
|
|
|
|
(117,408
|
)
|
|
(61,675
|
)
|
|
(79,251
|
)
|
Net change in financial receivables from/payables to parent company
|
|
|
|
(162,262
|
)
|
|
94,781
|
|
|
71,868
|
|
Interest expense paid on Factoring of trade receivables
|
|
|
|
(3,731
|
)
|
|
(3,628
|
)
|
|
(6,051
|
)
|
Cash flows from financing activities
|
|
|
|
(350,463
|
)
|
|
(39,241
|
)
|
|
(80,420
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
|
17
|
|
|
16
|
|
|
15
|
|
Cash and cash equivalents at the end of the period
|
|
8
|
|
16
|
|
|
17
|
|
|
16
|
|
•
|
GTECH S.p.A., directly and indirectly through Scratch & Win Holding S.p.A., (the parent of the Company and formerly Lottomatica Group S.p.A.): its role includes the design and coordination of the Company’s overall operations including management of the marketing and accounting functions, collection of wagers from Points of Sales, administration of periodic drawings, and procurement of software and hardware for Points of Sale;
|
•
|
Scientific Games International: its role includes design and production of instant lottery tickets;
|
•
|
Arianna 2001 S.p.A.: its role includes serving as the secure depository and manager of the instant lottery tickets inventory;
|
•
|
Servizi Base 2001 S.p.A.: its role includes management of the instant lottery ticket distribution to the Points of Sale.
|
•
|
IFRS 10, IFRS 12 and IAS 27 Investment Entities - Amendments to IFRS 10, IFRS 12 and IAS 27
|
•
|
IAS 32 Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32
|
•
|
IAS 36 Recoverable Amount Disclosures for Non-Financial Assets - Amendments to IAS 36
|
•
|
IAS 39 Novation of Derivatives and Continuation of Hedge Accounting - Amendments to IAS 39
|
•
|
IFRIC 21 Levies
|
•
|
AIP IFRS 1 First-time Adoption of International Financial Reporting Standards - Meaning of ‘effective IFRSs’
|
•
|
AIP IFRS 13 Fair Value Measurement - Short-term receivables and payables
|
•
|
Investment entity is defined in IFRS 10 Consolidated Financial Statements;
|
•
|
An entity must meet all three elements of the definition and consider whether it has four typical characteristics, in order to qualify as an investment entity;
|
•
|
An entity must consider all facts and circumstances, including its purpose and design, in making its assessment;
|
•
|
An investment entity accounts for its investments in subsidiaries at fair value through profit or loss in;
|
•
|
accordance with IFRS 9 (or IAS 39, as applicable), except for investments in subsidiaries that provide services that relate to the investment entity’s investment activities, which must be consolidated;
|
•
|
An investment entity must measure its investment in another controlled investment entity at fair value;
|
•
|
A non-investment entity parent of an investment entity is not permitted to retain the fair value accounting that the investment entity subsidiary applies to its controlled investees;
|
•
|
For venture capital organisations, mutual funds, unit trusts and others that do not qualify as investment entities, the existing option in IAS 28 Investments in Associates and Joint Ventures, to measure investments in associates and joint ventures at fair value through profit or loss, is retained.
|
•
|
Additional information about the fair value measurement of impaired assets when the recoverable amount is based on fair value less costs of disposal.
|
•
|
Information about the discount rates that have been used when the recoverable amount is based on fair value less costs of disposal using a present value technique. The amendments harmonise disclosure requirements between value in use and fair value less costs of disposal.
|
•
|
That arise as a consequence of laws or regulations, or the introduction of laws or regulations
|
•
|
In which the parties to the hedging instrument agree that one or more clearing counterparties replace the original counterparty to become the new counterparty to each of the parties
|
•
|
That did not result in changes to the terms of the original derivative other than changes directly attributable to the change in counterparty to achieve clearing
|
•
|
T
he materiality requirements in IAS 1
|
•
|
That specific line items in the statement(s) of profit or loss and OCI and the statement of financial position may be disaggregated
|
•
|
That entities have flexibility as to the order in which they present the notes to financial statements
|
•
|
That the share of OCI of associates and joint ventures accounted for using the equity method must be presented in
|
•
|
aggregate as a single line item, and classified between those items that will or will not be subsequently reclassified to profit or loss.
|
•
|
IFRS 2 Definitions relating to vesting conditions - This amendment clarifies various issues related to the definition of performance condition and service condition, including the following:
|
◦
|
A performance condition must contain a service condition
|
◦
|
A performance target must be met while the counterparty is rendering service
|
◦
|
A performance target may relate to the operations or activities of an entity, or to those of another entity in the same group
|
◦
|
A performance condition may be a market or non-market condition
|
◦
|
If the counterparty, regardless of the reason, ceases to provide service during the vesting period, the service condition is not satisfied.
|
•
|
IFRS 3 Accounting for contingent consideration in a business combination - This amendment clarifies that contingent consideration in a business acquisition that is not classified as equity is subsequently measured at fair value through profit or loss whether or not it falls within the scope of IFRS 9
Financial Instruments
. The amendment is effective for business combinations prospectively.
|
•
|
IFRS 8 Aggregation of operating segments - This amendment clarifies that operating segments may be combined/aggregated if they are consistent with the core principle of the standard, if the segments have similar economic characteristics and if they are similar in other qualitative respects. If they are combined, the entity must disclose the economic characteristics (e.g., sales and gross margins) used to assess whether the segments are ‘similar’. The amendment is effective retrospectively.
|
•
|
IFRS 13 Short-term receivables and payables - The IASB clarified in the Basis for Conclusions that short-term receivables and payables with no stated interest rates can be held at invoice amounts when the effect of discounting is immaterial. The amendment is effective immediately.
|
•
|
IAS 16 and IAS 38 Revaluation method proportionate restatement of accumulated depreciation
|
◦
|
Adjust the gross carrying amount of the asset to market value; or
|
◦
|
Determine the market value of the carrying amount and adjust the gross carrying amount proportionately so that the resulting carrying amount equals the market value
|
•
|
IAS 24 Key management personnel - The amendment clarifies that a management entity - an entity that provides key management personnel services - is a related party subject to the related party disclosures. In addition, an entity that uses a management entity is required to disclose the expenses incurred for management services. The amendment is effective retrospectively.
|
•
|
IFRS 1 Meaning of effective IFRSs - The amendment clarifies that an entity may choose to apply either a current standard or a new standard that is not yet mandatory, but that permits early application, provided either standard is applied consistently throughout the periods presented in the entity’s first IFRS financial statements. The amendment is effective immediately.
|
•
|
IFRS 3 Scope exceptions for joint ventures - The amendment clarifies that:
|
◦
|
Joint arrangements are outside the scope of IFRS 3, not just joint ventures;
|
◦
|
The scope exception applies only to the accounting in the financial statements of the joint arrangement itself.
|
•
|
IFRS 13 Scope paragraph 52 (portfolio exception)
|
•
|
IAS 40 Clarifying the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property. - The amendment clarifies the description of ancillary services in IAS 40 differentiates between investment property and owner-occupied property. IFRS 3 is used to determine if the transaction is the purchase of an asset or a business combination. The amendment is effective prospectively.
|
•
|
IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations - The amendment clarifies that:
|
◦
|
Assets (or disposal groups) are generally disposed of either through sale or distribution to owners. The amendment clarifies that changing from one of these disposal methods to the other would not be considered a new plan of disposal, rather it is a continuation of the original plan. There is, therefore, no interruption of the application of the requirements in IFRS 5.
|
◦
|
The amendment must be applied prospectively.
|
•
|
IFRS 7 Financial Instruments: Disclosures - The amendment clarifies that:
|
◦
|
A servicing contract that includes a fee can constitute continuing involvement in a financial asset. An entity must assess the nature of the fee and the arrangement against the guidance for continuing involvement in IFRS 7.B30 and IFRS 7.42C in order to assess whether the disclosures are required.
|
◦
|
The assessment of which servicing contracts constitute continuing involvement must be done retrospectively. However, the required disclosures would not need to be provided for any period beginning before the annual period in which the entity first applies the amendments.
|
◦
|
The offsetting disclosure requirements do not apply to condensed interim financial statements, unless such disclosures provide a significant update to the information reported in the most recent annual report.
|
◦
|
The amendment must be applied prospectively.
|
•
|
IAS 19 Employee Benefits - The amendment clarifies that:
|
◦
|
The amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, government bond rates must be used.
|
◦
|
The amendment must be applied prospectively.
|
•
|
IAS 34 Interim Financial Reporting - The amendment clarifies that:
|
◦
|
The amendment clarifies that the required interim disclosures must either be in the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever they are included within the interim financial report (e.g., in the management commentary or risk report).
|
◦
|
The other information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time.
|
◦
|
The amendment must be applied retrospectively.
|
•
|
the rights to receive cash flows from the asset have expired;
|
•
|
the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or
|
•
|
the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
|
•
|
Persuasive evidence of an arrangement exists, which is typically when a customer contract has been signed;
|
•
|
Services have been rendered;
|
•
|
The fee is deemed to be fixed or determinable and free of contingencies or significant uncertainties; and
|
•
|
Collectability is reasonably assured.
|
|
|
|
Furniture
|
|
|
|
Contract
|
|
Freely
|
|
|
||||||
|
Leasehold
|
|
and
|
|
Other
|
|
in
|
|
Distributed
|
|
|
||||||
Balance at December 31, 2014
|
Improvements
|
|
Equipment
|
|
Assets
|
|
Progress
|
|
Assets
|
|
Total
|
||||||
Gross
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2014
|
230
|
|
|
8,241
|
|
366
|
|
|
96
|
|
|
6,270
|
|
|
15,203
|
|
|
Additions
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Disposal
|
(122
|
)
|
|
(303
|
)
|
|
|
|
|
|
|
|
(425
|
)
|
|||
Transfers
|
|
|
7
|
|
|
|
|
(7
|
)
|
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2014
|
108
|
|
|
7,945
|
|
|
366
|
|
|
89
|
|
|
6,270
|
|
|
14,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2014
|
(230
|
)
|
|
(5,785
|
)
|
|
(218
|
)
|
|
—
|
|
|
(2,292
|
)
|
|
(8,525
|
)
|
Depreciation charge for the year
|
|
|
(669
|
)
|
|
(26
|
)
|
|
|
|
(767
|
)
|
|
(1,462
|
)
|
||
Disposal
|
122
|
|
|
303
|
|
|
|
|
|
|
|
|
425
|
|
|||
Depreciation
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
(12
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2014
|
(108
|
)
|
|
(6,164
|
)
|
|
(244
|
)
|
|
—
|
|
|
(3,059
|
)
|
|
(9,574
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net book value
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2014
|
—
|
|
|
1,782
|
|
|
122
|
|
|
89
|
|
|
3,211
|
|
|
5,204
|
|
|
|
|
Furniture
|
|
|
|
Contract
|
|
Freely
|
|
|
||||||
|
Leasehold
|
|
and
|
|
Other
|
|
in
|
|
Distributed
|
|
|
||||||
Balance at December 31, 2013
|
Improvements
|
|
Equipment
|
|
Assets
|
|
Progress
|
|
Assets
|
|
Total
|
||||||
Gross
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2013
|
230
|
|
|
7,805
|
|
366
|
|
|
678
|
|
|
6,270
|
|
|
15,349
|
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Disposal
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
Transfers
|
—
|
|
|
582
|
|
|
—
|
|
|
(582
|
)
|
|
—
|
|
|
—
|
|
Transfers to Non Current Assets classified as held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Balance at December 31, 2013
|
230
|
|
|
8,241
|
|
|
366
|
|
|
96
|
|
|
6,270
|
|
|
15,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2013
|
(230
|
)
|
|
(5,300
|
)
|
|
(191
|
)
|
|
—
|
|
|
(1,620
|
)
|
|
(7,341
|
)
|
Depreciation charge for the year
|
—
|
|
|
(631
|
)
|
|
(27
|
)
|
|
—
|
|
|
(672
|
)
|
|
(1,330
|
)
|
Disposal
|
—
|
|
|
146
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146
|
|
Transfers to Non Current Assets classified as held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Balance at December 31, 2013
|
(230
|
)
|
|
(5,785
|
)
|
|
(218
|
)
|
|
—
|
|
|
(2,292
|
)
|
|
(8,525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net book value
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2013
|
—
|
|
|
2,456
|
|
|
148
|
|
|
96
|
|
|
3,978
|
|
|
6,678
|
|
|
|
|
|
|
|
|
Contract
|
|
|
|||||
|
|
|
|
|
SW
|
|
in
|
|
|
|||||
Balance at December 31, 2014
|
Software
|
|
Licenses
|
|
concession
|
|
Progress
|
|
Total
|
|||||
Gross
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2014
|
9,905
|
|
|
1,179
|
|
800,062
|
|
|
—
|
|
|
811,146
|
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
1,875
|
|
|
1,875
|
|
Disposal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Transfers
|
1,875
|
|
|
—
|
|
|
—
|
|
|
(1,875
|
)
|
|
—
|
|
Balance at December 31, 2014
|
11,780
|
|
|
1,179
|
|
|
800,062
|
|
|
—
|
|
|
813,021
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2014
|
(6,519
|
)
|
|
(999
|
)
|
|
(288,908
|
)
|
|
—
|
|
|
(296,426)
|
|
Amortization for the year
|
(692
|
)
|
|
(49
|
)
|
|
(88,896
|
)
|
|
—
|
|
|
(89,637)
|
|
Disposal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation
|
(558
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(558)
|
|
Balance at December 31, 2014
|
(7,768
|
)
|
|
(1,048
|
)
|
|
(377,804
|
)
|
|
—
|
|
|
(386,621)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net book value
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Balance at December 31, 2014
|
4,012
|
|
|
131
|
|
|
422,258
|
|
|
—
|
|
|
426,400
|
|
|
|
|
|
|
|
|
Contract
|
|
|
|||||
|
|
|
|
|
SW
|
|
in
|
|
|
|||||
Balance at December 31, 2013
|
Software
|
|
Licenses
|
|
concession
|
|
Progress
|
|
Total
|
|||||
Gross
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2013
|
7,981
|
|
|
1,141
|
|
800,062
|
|
|
—
|
|
|
809,184
|
|
|
Additions
|
—
|
|
|
38
|
|
|
—
|
|
|
1,924
|
|
|
1,962
|
|
Disposal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Transfers
|
1,924
|
|
|
—
|
|
|
—
|
|
|
(1,924
|
)
|
|
—
|
|
Balance at December 31, 2013
|
9,905
|
|
|
1,179
|
|
|
800,062
|
|
|
—
|
|
|
811,146
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2013
|
(5,925
|
)
|
|
(951
|
)
|
|
(200,012
|
)
|
|
—
|
|
|
(206,888
|
)
|
Amortization for the year
|
(491
|
)
|
|
(48
|
)
|
|
(88,896
|
)
|
|
—
|
|
|
(89,435
|
)
|
Disposal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation
|
(103
|
)
|
|
|
|
|
|
|
|
(103
|
)
|
|||
Balance at December 31, 2013
|
(6,519
|
)
|
|
(999
|
)
|
|
(288,908
|
)
|
|
—
|
|
|
(296,426
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
Net book value
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Balance at December 31, 2013
|
3,386
|
|
|
180
|
|
|
511,154
|
|
|
—
|
|
|
514,720
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
|
|
|
|
||
Instant Lottery Tickets (at cost)
|
18,907
|
|
|
16,808
|
|
Inventory Write-Down
|
(865
|
)
|
|
(523
|
)
|
|
18,042
|
|
|
16,285
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
|
|
|
|
||
Trade receivables
|
36,691
|
|
|
35,164
|
|
Receivables from retailers
|
267,372
|
|
|
412,204
|
|
Related party receivables
|
21,784
|
|
|
15,324
|
|
|
325,847
|
|
|
462,692
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
|
|
|
|
||
Income tax receivables
|
3,149
|
|
|
619
|
|
|
3,149
|
|
|
619
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
|
|
|
|
||
Cash and cash equivalents
|
16
|
|
|
17
|
|
|
16
|
|
|
17
|
|
Equity holders
|
Percent of issued capital
|
Issued capital
|
||
GTECH S.p.A.
|
64
|
%
|
19,840
|
|
Scientific Games Italy Investments Srl
|
19
|
%
|
5,890
|
|
Arianna 2001 S.p.A.
|
15
|
%
|
4,650
|
|
Scientific Games International Inc.
|
1
|
%
|
310
|
|
Servizi Base 2001 S.p.A.
|
1
|
%
|
310
|
|
Total
|
100
|
%
|
31,000
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
|
|
|
|
||
Account payables
|
4,580
|
|
|
4,625
|
|
Other liabilities to AAMS
|
296,085
|
|
|
233,873
|
|
Related party payables
|
62,820
|
|
|
58,235
|
|
|
363,485
|
|
|
296,733
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
|
|
|
|
||
Taxes other than income taxes
|
462
|
|
|
—
|
|
Other liabilities
|
235
|
|
|
6,967
|
|
|
697
|
|
|
6,967
|
|
|
December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Instant lotteries
|
366,717
|
|
|
373,364
|
|
|
379,384
|
|
Traditional lotteries
|
1,608
|
|
|
1,612
|
|
|
1,464
|
|
Other service revenues
|
27
|
|
|
16
|
|
|
20
|
|
|
368,352
|
|
|
374,992
|
|
|
380,868
|
|
|
December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Service costs from GTECH S.p.A.
|
87,262
|
|
|
78,015
|
|
|
82,871
|
|
Point of sales assistance
|
30,668
|
|
|
31,424
|
|
|
29,449
|
|
Consulting fees
|
1,661
|
|
|
2,312
|
|
|
2,561
|
|
Maintanance fees
|
1,642
|
|
|
1,628
|
|
|
1,247
|
|
Advertising costs
|
3,402
|
|
|
4,548
|
|
|
3,803
|
|
Other costs
|
1,463
|
|
|
1,451
|
|
|
1,660
|
|
|
126,098
|
|
|
119,378
|
|
|
121,591
|
|
|
|
December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
Interest income
|
|
2
|
|
|
5
|
|
|
285
|
|
Foreign currency forward contracts
|
|
782
|
|
|
155
|
|
|
—
|
|
Exchange gains
|
|
164
|
|
|
861
|
|
|
554
|
|
Financial income
|
|
948
|
|
|
1,021
|
|
|
839
|
|
|
|
|
|
|
|
|
|||
Interest expenses
|
|
638
|
|
|
538
|
|
|
506
|
|
Foreign currency forward contracts
|
|
—
|
|
|
421
|
|
|
389
|
|
Factoring of trade receivables
|
|
3,731
|
|
|
3,628
|
|
|
6,051
|
|
Exchange losses
|
|
1,761
|
|
|
264
|
|
|
12
|
|
Financial expense
|
|
6,130
|
|
|
4,851
|
|
|
6,958
|
|
|
December 31,
|
|||||
|
2014
|
2013
|
2012
|
|||
Current
|
|
|
|
|||
National (IRES)
|
25,332
|
|
27,877
|
|
27,747
|
|
Regional (IRAP)
|
5,385
|
|
5,571
|
|
5,708
|
|
Current income tax recovered
|
10
|
|
(219
|
)
|
(260
|
)
|
Total Current
|
30,727
|
|
33,229
|
|
33,195
|
|
|
|
|
|
|||
Deferred
|
|
|
|
|||
Deferred income tax (benefit)/expense
|
1,378
|
|
(486
|
)
|
438
|
|
Other adjustments
|
—
|
|
—
|
|
—
|
|
Total Deferred
|
1,378
|
|
(486
|
)
|
438
|
|
Total income tax expense
|
32,105
|
|
32,743
|
|
33,633
|
|
EFFECTIVE TAX RATE RECONCILIATION
|
December 31,
|
|||||
|
2014
|
2013
|
2012
|
|||
€/000
|
|
|
|
|||
|
|
|
|
|||
Net income before tax
|
97,306
|
|
100,091
|
|
102,324
|
|
|
|
|
|
|||
Italian Statutory tax rate (IRES)
|
27.5
|
%
|
27.5
|
%
|
27.5
|
%
|
|
|
|
|
|||
Theorical provision for income taxes based on Italian statutory tax rate
|
26,759
|
|
27,525
|
|
28,139
|
|
|
|
|
|
|||
Reconciliation of the theorical and effective provision for income taxes:
|
|
|
|
|||
|
|
|
|
|||
Permanent differences
|
|
|
|
|||
|
|
|
|
|||
Italian local tax (IRAP)
|
5,385
|
|
5,125
|
|
5,239
|
|
|
|
|
|
|||
Non-deductible expense
|
100
|
|
64
|
|
51
|
|
|
|
|
|
|||
Other
|
(139
|
)
|
29
|
|
204
|
|
|
|
|
|
|||
Total tax provision
|
32,105
|
|
32,743
|
|
33,633
|
|
|
|
|
|
|||
Effective tax rate
|
33
|
%
|
33
|
%
|
33
|
%
|
|
|
|
December 31,
|
|
|
|||
Statements of comprehensive income
|
|
|
|
|
|
|||
|
2014
|
|
2013
|
|
2012
|
|||
Cost of tickets
|
|
|
|
|
|
|||
Scientific Games Int.
|
42,352
|
|
|
46,492
|
|
|
46,797
|
|
Gtech Corp.
|
10,462
|
|
|
10,947
|
|
|
10,086
|
|
|
52,814
|
|
|
57,439
|
|
|
56,883
|
|
|
|
|
|
|
|
|||
Service costs
|
|
|
|
|
|
|||
GTECH S.p.A.
|
87,231
|
|
|
77,895
|
|
|
82,871
|
|
Arianna 2001
|
30,364
|
|
|
31,108
|
|
|
29,114
|
|
Scientific Games Inc.
|
1,123
|
|
|
1,090
|
|
|
1,261
|
|
Servizi in Rete
|
390
|
|
|
365
|
|
|
329
|
|
GTECH Corp.
|
322
|
|
|
285
|
|
|
—
|
|
Lottomatica Scommesse S.r.l.
|
285
|
|
|
595
|
|
|
—
|
|
PCC Giochi e Servizi
|
169
|
|
|
2
|
|
|
22
|
|
|
119,885
|
|
|
111,341
|
|
|
113,597
|
|
|
|
|
|
|
|
|||
Financial income
|
|
|
|
|
|
|||
GTECH S.p.A.
|
2
|
|
|
—
|
|
|
277
|
|
|
2
|
|
|
—
|
|
|
277
|
|
|
|
|
|
|
|
|||
Financial expenses
|
|
|
|
|
|
|||
GTECH S.p.A.
|
502
|
|
|
505
|
|
|
194
|
|
|
502
|
|
|
505
|
|
|
194
|
|
|
|
December 31, 2014
|
December 31, 2013
|
||||||||
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||||
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Carrying
|
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Fair
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Carrying
|
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Fair
|
||||
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Amount
|
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Value
|
Amount
|
|
Value
|
||||
Financial assets
|
|
|
|
|
|
|
|
||||
Trade and other receivables
|
|
325,847
|
|
|
325,847
|
|
462,692
|
|
|
462,692
|
|
Current financial assets from parent company
|
169,963
|
|
|
169,963
|
|
—
|
|
|
—
|
|
|
Foreign currency contracts
|
|
1,645
|
|
|
1,645
|
|
—
|
|
|
—
|
|
Other current assets
|
|
2,176
|
|
|
2,176
|
|
395
|
|
|
395
|
|
Cash and cash equivalents
|
|
16
|
|
|
16
|
|
17
|
|
|
17
|
|
|
|
499,647
|
|
|
499,647
|
|
463,104
|
|
|
463,104
|
|
|
|
|
|
|
|
|
|
||||
Financial liabilities at amortised costs
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
363,485
|
|
|
363,485
|
|
296,733
|
|
|
296,733
|
|
Foreign currency contracts
|
|
—
|
|
|
—
|
|
2,215
|
|
|
2,215
|
|
Current financial liabilities to parent company
|
47,989
|
|
|
47,989
|
|
40,288
|
|
|
40,288
|
|
|
Other current liabilities
|
|
697
|
|
|
697
|
|
6,967
|
|
|
6,967
|
|
|
|
412,171
|
|
|
412,171
|
|
346,203
|
|
|
346,203
|
|
•
|
Trade and other receivables, current financial assets from parent, other current assets, cash and cash equivalents, accounts payable, current financial liabilities to parent and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
|
•
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The Company executed foreign currency forward contracts with various counterparties, principally financial institutions with investment grade credit ratings. The fair value of these contracts was calculated principally by reference to forward exchange rates for contracts with similar maturity profiles. The valuation techniques incorporated various inputs including the credit quality of the counterparty in a net liability position.
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Interest income
|
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Interest expense
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||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current financial assets from parent company
|
|
—
|
|
|
—
|
|
|
277
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other current assets
|
|
2
|
|
|
5
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Foreign currency contracts
|
|
—
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|
160
|
|
|
285
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities at amortised costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current financial liabilities to parent company
|
|
—
|
|
|
—
|
|
|
—
|
|
|
502
|
|
|
505
|
|
|
194
|
|
Foreign currency contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
246
|
|
|
31
|
|
|
223
|
|
Other current liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
|
10
|
|
|
285
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
849
|
|
|
546
|
|
|
702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank overdrafts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
23
|
|
|
27
|
|
Factoring of trade receivables contract
|
—
|
|
|
—
|
|
|
—
|
|
|
3,731
|
|
|
3,628
|
|
|
6,051
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,765
|
|
|
3,651
|
|
|
6,078
|
|
Year ended December 31, 2014
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|
|
|
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|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
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|
|
|
1-30
|
|
31-60
|
|
61-90
|
|
over 90
|
||||||
|
Total
|
|
Current
|
|
days
|
|
days
|
|
days
|
|
days
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade receivables
|
36,691
|
|
|
36,691
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
100
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Year ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
1-30
|
|
31-60
|
|
61-90
|
|
over 90
|
||||||
|
Total
|
|
Current
|
|
days
|
|
days
|
|
days
|
|
days
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade receivables
|
35,164
|
|
|
35,164
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
100
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
1-30
|
|
31-60
|
|
61-90
|
|
over 90
|
||||||
|
|
Total
|
|
Current
|
|
days
|
|
days
|
|
days
|
|
days
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Receivables from retailers
|
|
267,372
|
|
|
258,688
|
|
|
4,806
|
|
|
1,361
|
|
|
1,312
|
|
|
1,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
98.8
|
%
|
|
0.6
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
1-30
|
|
31-60
|
|
61-90
|
|
over 90
|
||||||
|
|
Total
|
|
Current
|
|
days
|
|
days
|
|
days
|
|
days
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Receivables from retailers
|
|
412,204
|
|
|
407,112
|
|
|
2,511
|
|
|
1,083
|
|
|
986
|
|
|
512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
98.8
|
%
|
|
0.6
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
Bad debt reserve
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||
|
|
|
|
|
||
Balance at the beginning of the period
|
14,305
|
|
|
13,685
|
|
|
Provisions
|
|
2,534
|
|
|
4,122
|
|
Utilization
|
|
(7,398
|
)
|
|
(3,502
|
)
|
Balance at the end of the period
|
9,441
|
|
|
14,305
|
|
|
|
|
|
|
|
|
Increase
/decrease in US Dollar rate |
Effect on net income before tax
|
Effect on equity
|
|||
|
|
|
|
|||
2014
|
10
|
%
|
251
|
|
169
|
|
|
(10
|
)%
|
(307
|
)
|
(207
|
)
|
|
|
|
|
|||
2013
|
10
|
%
|
131
|
|
88
|
|
|
(10
|
)%
|
(161
|
)
|
(108
|
)
|
|
|
|
|
|||
2012
|
10
|
%
|
125
|
|
84
|
|
|
(10
|
)%
|
(220
|
)
|
(148
|
)
|
Components of other comprehensive income
|
|
December 31,
|
|||||||
|
|
2,014
|
|
2,013
|
|
2,012
|
|||
|
|
|
|
|
|
|
|||
Cash flow hedges:
|
|
|
|
|
|
|
|||
Gains(/losses) arising during the year
|
|
2,627
|
|
|
(1,575
|
)
|
|
(1,028
|
)
|
Reclassification adjustments for gain (losses) included in the income statement
|
334
|
|
|
817
|
|
|
(2,079
|
)
|
|
|
|
2,961
|
|
|
(758
|
)
|
|
(3,107
|
)
|
|
|
|
|
|
|
|
•
|
pay that person any dividend or interest upon our voting securities;
|
•
|
allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person;
|
•
|
pay remuneration in any form to that person for services rendered or otherwise;
|
•
|
make any payment to the unsuitable person by way of principal, redemption, conversation, exchange, liquidation or similar transaction; or
|
•
|
fail to pursue all lawful efforts to terminate our relationship with that person, including, if necessary, the immediate purchase of said voting securities for cash at fair market value.
|
•
|
material loans, leases, sales of securities and similar financing transactions;
|
•
|
a public offering of our securities (or those of our subsidiaries) if the securities or their proceeds are intended to be used for certain gaming expenditures;
|
•
|
repurchases of our voting securities (such as repurchases that treat security holders differently) above the current market price; and
|
•
|
recapitalizations proposed in response to tender offers.
|