Delaware
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81-0422894
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Page
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Item 1.
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Notes to Condensed Consolidated Financial Statements
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information
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Item 6.
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Exhibits
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Glossary of Terms
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The following terms or acronyms used in this Quarterly Report on Form 10-Q are defined below:
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|
Term or Acronym
|
Definition
|
2016 10-K
|
2016 Annual Report on Form 10-K filed with the SEC on March 3, 2017
|
2018 Notes
|
8.125% senior subordinated notes due 2018 issued by SGC
|
2020 Notes
|
6.250% senior subordinated notes due 2020 issued by SGI
|
2021 Notes
|
6.625% senior subordinated notes due 2021 issued by SGI
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
B2C
|
business to consumer model
|
Barcrest
|
Barcrest Group Limited
|
CSG
|
Beijing CITIC Scientific Games Technology Co., Ltd.
|
D&A
|
depreciation, amortization and impairments (excluding goodwill)
|
ESPP
|
employee stock purchase plan
|
FASB
|
Financial Accounting Standards Board
|
F/X
|
foreign currency exchange
|
GLB
|
Beijing Guard Libang Technology Co., Ltd.
|
Guarantor Subsidiaries
|
substantially all of SGC’s 100%-owned U.S. subsidiaries other than SGC’s 100%-owned U.S. Interactive social gaming subsidiaries
|
Hellenic Lotteries
|
Hellenic Lotteries S.A.
|
Junior Preferred Stock
|
SGC's Series C Junior Participating Preferred Stock, par value $1.00 per share
|
LBO
|
licensed betting office
|
LNS
|
Lotterie Nazionali S.r.l.
|
Non-Guarantor Subsidiaries
|
SGC’s U.S. subsidiaries that are not Guarantor Subsidiaries and SGC’s foreign subsidiaries
|
Northstar Illinois
|
Northstar Lottery Group, LLC
|
Northstar New Jersey
|
Northstar New Jersey Lottery Group, LLC
|
Note
|
a note in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, unless otherwise indicated
|
Participation
|
with respect to our Gaming business, refers to gaming machines provided to customers through service or leasing arrangements in which we earn revenues and are paid based on: (1) a percentage of the amount wagered less payouts; (2) fixed daily-fees; (3) a percentage of the amount wagered; or (4) a combination of (2) and (3), and with respect to our Lottery business, refers to a contract or arrangement in which we earn revenues and are paid based on a percentage of retail sales
|
PPU
|
price-per-unit
|
PTG
|
proprietary table games
|
R&D
|
research and development
|
RFP
|
request for proposal
|
RMG
|
real-money gaming
|
RSU
|
restricted stock unit
|
SEC
|
Securities and Exchange Commission
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Secured Notes
|
7.000% senior secured notes due 2022 issued by SGI
|
SG&A
|
selling, general and administrative
|
SGC
|
Scientific Games Corporation
|
SGI
|
Scientific Games International, Inc., a wholly-owned subsidiary of SGC
|
Shufflers
|
various models of automatic card shufflers, deck checkers and roulette chip sorters
|
Unsecured Notes
|
10.000% senior unsecured notes due 2022 issued by SGI
|
U.S. GAAP
|
accounting principles generally accepted in the U.S.
|
U.S. jurisdictions
|
the 50 states in the U.S. plus the District of Columbia and Puerto Rico
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VGT
|
video gaming terminal
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VLT
|
video lottery terminal
|
WAP
|
wide-area progressive
|
•
|
competition;
|
•
|
U.S. and international economic and industry conditions;
|
•
|
slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines;
|
•
|
ownership changes and consolidation in the gaming industry;
|
•
|
opposition to legalized gaming or the expansion thereof;
|
•
|
inability to adapt to, and offer products that keep pace with, evolving technology, including any failure of our investment of significant resources in our R&D efforts;
|
•
|
inability to develop successful products and services and capitalize on trends and changes in our industries, including the expansion of internet and other forms of interactive gaming;
|
•
|
laws and government regulations, including those relating to gaming licenses and environmental laws;
|
•
|
dependence upon key providers in our social gaming business;
|
•
|
inability to retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
|
•
|
protection of our intellectual property, inability to license third party intellectual property and the intellectual property rights of others;
|
•
|
security and integrity of our products and systems and reliance on or failures in information technology and other systems;
|
•
|
challenges or disruptions relating to the implementation of a new global enterprise resource planning system;
|
•
|
failure to maintain adequate internal control over financial reporting;
|
•
|
natural events that disrupt our operations or those of our customers, suppliers or regulators;
|
•
|
inability to benefit from, and risks associated with, strategic equity investments and relationships;
|
•
|
failure to achieve the intended benefits of our acquisitions;
|
•
|
incurrence of restructuring costs;
|
•
|
implementation of complex revenue recognition standards or other new accounting standards;
|
•
|
changes in estimates or judgments related to our impairment analysis of goodwill or other long-lived assets;
|
•
|
fluctuations in our results due to seasonality and other factors;
|
•
|
dependence on suppliers and manufacturers;
|
•
|
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 business resulting from the affirmative vote in the U.K. to withdraw from the EU, and the potential impact to our instant lottery game concession or VLT lease arrangements resulting from the recent economic and political conditions in Greece;
|
•
|
changes in tax laws or tax rulings, or the examination of our tax positions;
|
•
|
dependence on key employees;
|
•
|
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, environmental laws and our strategic relationships;
|
•
|
level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
|
•
|
inability to reduce or refinance our indebtedness;
|
•
|
restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;
|
•
|
influence of certain stockholders, including decisions that may conflict with the interests of other stockholders; and
|
•
|
stock price volatility.
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Three Months Ended
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Six Months Ended
|
||||||||||
|
June 30,
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|
June 30,
|
||||||||||
|
2017
|
2016
|
|
2017
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
||||||||
Services
|
$
|
385.8
|
|
$
|
363.5
|
|
|
$
|
748.3
|
|
$
|
713.8
|
|
Product sales
|
231.1
|
|
214.8
|
|
|
453.8
|
|
412.4
|
|
||||
Instant games
|
149.4
|
|
150.9
|
|
|
289.6
|
|
285.0
|
|
||||
Total revenue
|
766.3
|
|
729.2
|
|
|
1,491.7
|
|
1,411.2
|
|
||||
Operating expenses:
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
98.9
|
|
101.4
|
|
|
202.2
|
|
196.3
|
|
||||
Cost of product sales
(1)
|
108.7
|
|
100.7
|
|
|
215.3
|
|
195.1
|
|
||||
Cost of instant games
(1)
|
71.3
|
|
74.1
|
|
|
141.4
|
|
141.1
|
|
||||
Selling, general and administrative
|
145.9
|
|
144.9
|
|
|
286.6
|
|
287.2
|
|
||||
Research and development
|
48.1
|
|
51.7
|
|
|
90.5
|
|
101.5
|
|
||||
Depreciation, amortization and impairments
|
175.0
|
|
193.1
|
|
|
340.1
|
|
373.7
|
|
||||
Restructuring and other
|
1.1
|
|
4.2
|
|
|
10.3
|
|
6.9
|
|
||||
Operating income
|
117.3
|
|
59.1
|
|
|
205.3
|
|
109.4
|
|
||||
Other (expense) income:
|
|
|
|
|
|
||||||||
Interest expense
|
(151.2
|
)
|
(165.3
|
)
|
|
(310.6
|
)
|
(331.0
|
)
|
||||
Earnings from equity investments
|
3.1
|
|
8.0
|
|
|
12.6
|
|
11.2
|
|
||||
Gain (loss) on extinguishment and modification of debt
|
—
|
|
25.2
|
|
|
(29.7
|
)
|
25.2
|
|
||||
Other (expense) income, net
|
(1.9
|
)
|
1.7
|
|
|
5.6
|
|
2.4
|
|
||||
Total other expense, net
|
(150.0
|
)
|
(130.4
|
)
|
|
(322.1
|
)
|
(292.2
|
)
|
||||
Net loss before income taxes
|
(32.7
|
)
|
(71.3
|
)
|
|
(116.8
|
)
|
(182.8
|
)
|
||||
Income tax (expense) benefit
|
(6.4
|
)
|
19.6
|
|
|
(23.1
|
)
|
38.8
|
|
||||
Net loss
|
$
|
(39.1
|
)
|
$
|
(51.7
|
)
|
|
$
|
(139.9
|
)
|
$
|
(144.0
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss)
|
32.1
|
|
(35.1
|
)
|
|
65.7
|
|
(36.7
|
)
|
||||
Pension and post-retirement (loss) gain, net of tax
|
(0.4
|
)
|
0.3
|
|
|
(0.7
|
)
|
0.5
|
|
||||
Derivative financial instruments unrealized gain, net of tax
|
—
|
|
4.6
|
|
|
2.8
|
|
3.6
|
|
||||
Other comprehensive income (loss)
|
31.7
|
|
(30.2
|
)
|
|
67.8
|
|
(32.6
|
)
|
||||
Comprehensive loss
|
$
|
(7.4
|
)
|
$
|
(81.9
|
)
|
|
$
|
(72.1
|
)
|
$
|
(176.6
|
)
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(0.44
|
)
|
$
|
(0.59
|
)
|
|
$
|
(1.58
|
)
|
$
|
(1.66
|
)
|
Diluted
|
$
|
(0.44
|
)
|
$
|
(0.59
|
)
|
|
$
|
(1.58
|
)
|
$
|
(1.66
|
)
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
||||
Basic shares
|
89.1
|
|
87.3
|
|
|
88.6
|
|
86.9
|
|
||||
Diluted shares
|
89.1
|
|
87.3
|
|
|
88.6
|
|
86.9
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
198.2
|
|
|
$
|
115.1
|
|
Restricted cash
|
26.0
|
|
|
24.7
|
|
||
Accounts receivable, net
|
479.3
|
|
|
495.0
|
|
||
Notes receivable, net
|
123.3
|
|
|
125.4
|
|
||
Inventories
|
252.7
|
|
|
242.3
|
|
||
Prepaid expenses, deposits and other current assets
|
117.6
|
|
|
114.1
|
|
||
Total current assets
|
1,197.1
|
|
|
1,116.6
|
|
||
Non-current assets:
|
|
|
|
||||
Restricted cash
|
16.6
|
|
|
17.1
|
|
||
Notes receivable, net
|
50.8
|
|
|
48.1
|
|
||
Property and equipment, net
|
574.8
|
|
|
612.2
|
|
||
Goodwill
|
2,930.7
|
|
|
2,888.4
|
|
||
Intangible assets, net
|
1,710.3
|
|
|
1,768.3
|
|
||
Software, net
|
378.7
|
|
|
409.1
|
|
||
Equity investments
|
157.1
|
|
|
179.9
|
|
||
Other assets
|
49.9
|
|
|
47.7
|
|
||
Total assets
|
$
|
7,066.0
|
|
|
$
|
7,087.4
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
39.5
|
|
|
$
|
49.3
|
|
Accounts payable
|
213.0
|
|
|
188.9
|
|
||
Accrued liabilities
|
434.4
|
|
|
454.2
|
|
||
Total current liabilities
|
686.9
|
|
|
692.4
|
|
||
Deferred income taxes
|
78.2
|
|
|
70.2
|
|
||
Other long-term liabilities
|
236.3
|
|
|
235.6
|
|
||
Long-term debt, excluding current portion
|
8,062.7
|
|
|
8,024.9
|
|
||
Total liabilities
|
9,064.1
|
|
|
9,023.1
|
|
||
Commitments and contingencies (see Note 14)
|
|
|
|
|
|
||
Stockholders' deficit:
|
|
|
|
||||
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 106.6 and 105.2 shares issued and 89.4 and 88.0 shares outstanding, respectively
|
1.0
|
|
|
1.0
|
|
||
Additional paid-in capital
|
800.5
|
|
|
790.8
|
|
||
Accumulated loss
|
(2,358.6
|
)
|
|
(2,218.7
|
)
|
||
Treasury stock, at cost, 17.2 shares
|
(175.2
|
)
|
|
(175.2
|
)
|
||
Accumulated other comprehensive loss
|
(265.8
|
)
|
|
(333.6
|
)
|
||
Total stockholders' deficit
|
(1,998.1
|
)
|
|
(1,935.7
|
)
|
||
Total liabilities and stockholders' deficit
|
$
|
7,066.0
|
|
|
$
|
7,087.4
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(139.9
|
)
|
|
$
|
(144.0
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities
|
402.1
|
|
|
386.3
|
|
||
Changes in working capital accounts
|
12.6
|
|
|
7.8
|
|
||
Changes in deferred income taxes and other
|
4.7
|
|
|
(58.2
|
)
|
||
Net cash provided by operating activities
|
279.5
|
|
|
191.9
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(140.2
|
)
|
|
(132.6
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
(52.1
|
)
|
|
—
|
|
||
Proceeds from asset sales
|
7.5
|
|
|
3.1
|
|
||
Distributions of capital from equity investments
|
22.4
|
|
|
22.5
|
|
||
Other
|
2.5
|
|
|
3.0
|
|
||
Net cash used in
investing activities
|
(159.9
|
)
|
|
(104.0
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under revolving credit facility
|
125.0
|
|
|
160.0
|
|
||
Repayments under revolving credit facility
|
(170.0
|
)
|
|
(175.0
|
)
|
||
Proceeds from issuance of senior notes and term loans
|
1,762.4
|
|
|
—
|
|
||
Repayment of senior notes and term loans
|
(1,693.4
|
)
|
|
(39.9
|
)
|
||
Payments of debt issuance and deferred financing costs
|
(27.7
|
)
|
|
—
|
|
||
Payments on long-term debt
|
(11.4
|
)
|
|
(25.2
|
)
|
||
Payments on license obligations
|
(19.5
|
)
|
|
(25.0
|
)
|
||
Net redemptions of common stock under stock-based compensation plans and other
|
(3.9
|
)
|
|
(4.4
|
)
|
||
Net cash used in financing activities
|
(38.5
|
)
|
|
(109.5
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
2.8
|
|
|
(1.9
|
)
|
||
Increase (decrease) in cash, cash equivalents and restricted cash
|
83.9
|
|
|
(23.5
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
156.9
|
|
|
166.8
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
240.8
|
|
|
$
|
143.3
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
284.9
|
|
|
$
|
313.6
|
|
Income taxes paid
|
18.7
|
|
|
6.6
|
|
||
Supplemental non-cash transactions:
|
|
|
|
||||
Non-cash rollover of Term loans (see Note 10)
|
2,747.6
|
|
|
—
|
|
||
Non-cash interest expense
|
13.3
|
|
|
20.2
|
|
||
Non-cash additions to intangible assets related to license agreements
|
28.1
|
|
|
86.9
|
|
|
Total
Consideration |
Cash paid, net
of cash acquired |
Contingent Consideration
1
|
Allocation of
purchase price to Intangible assets, net 2 |
Weighted
average useful life of acquired intangible assets |
Excess purchase
price allocated to Goodwill |
||||||||||
Aggregate total
|
$
|
57.8
|
|
$
|
52.1
|
|
$
|
4.9
|
|
$
|
46.0
|
|
9.2
|
$
|
14.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Gaming
|
|
|
|
|
|
|
|
||||||||
Gaming operations
|
$
|
178.4
|
|
|
$
|
186.0
|
|
|
$
|
350.8
|
|
|
$
|
370.4
|
|
Gaming machine sales
|
163.3
|
|
|
154.4
|
|
|
319.5
|
|
|
288.9
|
|
||||
Gaming systems
|
67.1
|
|
|
59.5
|
|
|
128.6
|
|
|
119.2
|
|
||||
Table products
|
48.4
|
|
|
42.0
|
|
|
98.3
|
|
|
85.1
|
|
||||
Total
|
$
|
457.2
|
|
|
$
|
441.9
|
|
|
$
|
897.2
|
|
|
$
|
863.6
|
|
|
|
|
|
|
|
|
|
||||||||
Lottery
|
|
|
|
|
|
|
|
||||||||
Instant products
|
$
|
151.3
|
|
|
$
|
153.7
|
|
|
$
|
293.0
|
|
|
$
|
291.0
|
|
Lottery systems
|
51.0
|
|
|
50.2
|
|
|
98.4
|
|
|
100.6
|
|
||||
Total
|
$
|
202.3
|
|
|
$
|
203.9
|
|
|
$
|
391.4
|
|
|
$
|
391.6
|
|
|
|
|
|
|
|
|
|
||||||||
Interactive
|
|
|
|
|
|
|
|
||||||||
Social Gaming - B2C
|
$
|
91.1
|
|
|
$
|
69.1
|
|
|
$
|
171.3
|
|
|
$
|
129.2
|
|
Other
|
15.7
|
|
|
14.3
|
|
|
31.8
|
|
|
26.8
|
|
||||
Total
|
$
|
106.8
|
|
|
$
|
83.4
|
|
|
$
|
203.1
|
|
|
$
|
156.0
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Deferred revenue balance, beginning of period
|
$
|
67.4
|
|
|
$
|
57.8
|
|
New deferrals
|
111.1
|
|
|
145.8
|
|
||
Amounts recognized in revenue
|
(119.3
|
)
|
|
(143.2
|
)
|
||
Deferred revenue balance, end of period
|
$
|
59.2
|
|
|
$
|
60.4
|
|
Business Segment
|
Revenue Type
|
Anticipated Impact
|
Gaming
|
Gaming operations
Gaming machine sales
Gaming systems
Table products
|
We anticipate the following impact on the net amount of revenue for WAP jackpot payments, which will no longer be treated as an expense but rather as a reduction to revenue: WAP jackpot expense of $5.3 million and $12.4 million for the three and six months ended June 30, 2017, respectively, and $8.1 million and $16.7 million for the three and six months ended June 30, 2016, respectively, recognized as cost of services.
We continue to evaluate the impact on timing and amount of revenue.
We do not anticipate a material impact on timing or amount of revenue.
We continue to evaluate the impact on timing and amount of revenue.
We continue to evaluate the impact on timing and amount of revenue.
We are currently assessing the adoption impact on our U.K. gaming operations, which includes gaming operations, machine sales and to a lesser extent gaming system revenue streams.
|
Lottery
|
Instant products
Lottery systems
|
We do not anticipate a material impact on timing or amount of revenue for our PPU instant products arrangements.
We continue to evaluate the impact on timing and amount of revenue on our participation based instant products arrangements as well as licensing and player loyalty arrangements.
We continue to evaluate the impact on timing and amount of revenue.
|
Interactive
|
All
|
We do not anticipate a material impact on timing or amount of revenue.
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Corporate
(1)
|
|
Total
|
||||||||||
Total revenue
|
$
|
457.2
|
|
|
$
|
202.3
|
|
|
$
|
106.8
|
|
|
$
|
—
|
|
|
$
|
766.3
|
|
Depreciation, amortization and impairments
|
136.0
|
|
|
13.3
|
|
|
4.4
|
|
|
21.3
|
|
|
175.0
|
|
|||||
Restructuring and other
|
0.3
|
|
|
(1.1
|
)
|
|
0.3
|
|
|
1.6
|
|
|
1.1
|
|
|||||
Operating income (loss)
|
85.9
|
|
|
70.3
|
|
|
18.8
|
|
|
(57.7
|
)
|
|
117.3
|
|
|||||
Interest expense
|
|
|
|
|
|
|
|
|
(151.2
|
)
|
|||||||||
Earnings from equity investments
|
|
|
|
|
|
|
|
|
3.1
|
|
|||||||||
Other income (expense), net
|
|
|
|
|
|
|
|
|
(1.9
|
)
|
|||||||||
Net loss before income taxes
|
|
|
|
|
|
|
|
|
(32.7
|
)
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Corporate
(1)
|
|
Total
|
||||||||||
Total revenue
|
$
|
441.9
|
|
|
$
|
203.9
|
|
|
$
|
83.4
|
|
|
$
|
—
|
|
|
$
|
729.2
|
|
Depreciation, amortization and impairments
|
154.3
|
|
|
17.2
|
|
|
3.8
|
|
|
17.8
|
|
|
193.1
|
|
|||||
Restructuring and other
|
3.4
|
|
|
0.2
|
|
|
0.5
|
|
|
0.1
|
|
|
4.2
|
|
|||||
Operating income (loss)
|
46.7
|
|
|
57.9
|
|
|
13.7
|
|
|
(59.2
|
)
|
|
59.1
|
|
|||||
Interest expense
|
|
|
|
|
|
|
|
|
(165.3
|
)
|
|||||||||
Earnings from equity investments
|
|
|
|
|
|
|
|
|
8.0
|
|
|||||||||
Gain on extinguishment and modification of debt
|
|
|
|
|
|
|
|
|
25.2
|
|
|||||||||
Other income (expense), net
|
|
|
|
|
|
|
|
|
1.7
|
|
|||||||||
Net loss before income taxes
|
|
|
|
|
|
|
|
|
(71.3
|
)
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Corporate
(1)
|
|
Total
|
||||||||||
Total revenue
|
$
|
897.2
|
|
|
$
|
391.4
|
|
|
$
|
203.1
|
|
|
$
|
—
|
|
|
$
|
1,491.7
|
|
Depreciation, amortization and impairments
|
259.3
|
|
|
27.2
|
|
|
8.4
|
|
|
45.2
|
|
|
340.1
|
|
|||||
Restructuring and other
|
4.5
|
|
|
(0.8
|
)
|
|
1.1
|
|
|
5.5
|
|
|
10.3
|
|
|||||
Operating income (loss)
|
163.4
|
|
|
126.4
|
|
|
36.0
|
|
|
(120.5
|
)
|
|
205.3
|
|
|||||
Interest expense
|
|
|
|
|
|
|
|
|
(310.6
|
)
|
|||||||||
Earnings from equity investments
|
|
|
|
|
|
|
|
|
12.6
|
|
|||||||||
Loss on extinguishment and modification of debt
|
|
|
|
|
|
|
|
|
(29.7
|
)
|
|||||||||
Other income (expense), net
|
|
|
|
|
|
|
|
|
5.6
|
|
|||||||||
Net loss before income taxes
|
|
|
|
|
|
|
|
|
(116.8
|
)
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Corporate
(1)
|
|
Total
|
||||||||||
Total revenue
|
$
|
863.6
|
|
|
$
|
391.6
|
|
|
$
|
156.0
|
|
|
$
|
—
|
|
|
$
|
1,411.2
|
|
Depreciation, amortization and impairments
|
295.8
|
|
|
35.0
|
|
|
7.5
|
|
|
35.4
|
|
|
373.7
|
|
|||||
Restructuring and other
|
5.0
|
|
|
1.3
|
|
|
0.5
|
|
|
0.1
|
|
|
6.9
|
|
|||||
Operating income (loss)
|
90.1
|
|
|
105.9
|
|
|
25.2
|
|
|
(111.8
|
)
|
|
109.4
|
|
|||||
Interest expense
|
|
|
|
|
|
|
|
|
(331.0
|
)
|
|||||||||
Earnings from equity investments
|
|
|
|
|
|
|
|
|
11.2
|
|
|||||||||
Gain on extinguishment and modification of debt
|
|
|
|
|
|
|
|
|
25.2
|
|
|||||||||
Other income (expense), net
|
|
|
|
|
|
|
|
|
2.4
|
|
|||||||||
Net loss before income taxes
|
|
|
|
|
|
|
|
|
(182.8
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Employee severance
(1)
|
|
$
|
—
|
|
|
$
|
2.5
|
|
|
$
|
2.7
|
|
|
$
|
4.8
|
|
Acquisitions and related costs
|
|
0.8
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
||||
Restructuring, integration and other
|
|
0.3
|
|
|
1.7
|
|
|
3.4
|
|
|
2.1
|
|
||||
Total
|
|
$
|
1.1
|
|
|
$
|
4.2
|
|
|
$
|
10.3
|
|
|
$
|
6.9
|
|
|
|
Restructuring Accrual
|
||
Balance as of January 1, 2017
|
|
$
|
16.4
|
|
Accrual additions
|
|
2.2
|
|
|
Cash payments and other
|
|
(18.6
|
)
|
|
Balance as of June 30, 2017
|
|
$
|
—
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Current:
|
|
|
|
||||
Accounts receivable
|
$
|
488.4
|
|
|
$
|
508.1
|
|
Notes receivable
|
141.1
|
|
|
140.0
|
|
||
Allowance for doubtful accounts and notes
|
(26.9
|
)
|
|
(27.7
|
)
|
||
Current accounts and notes receivable, net
|
$
|
602.6
|
|
|
$
|
620.4
|
|
Long-term:
|
|
|
|
||||
Notes receivable, net of allowance of $0.5 and $0.4
|
50.8
|
|
|
48.1
|
|
||
Total accounts and notes receivable, net
|
$
|
653.4
|
|
|
$
|
668.5
|
|
•
|
Mexico - Our notes receivable, net, from certain customers in Mexico at
June 30, 2017
was
$29.6
million. We collected
$17.3
million of outstanding receivables from these customers during the six months ended
June 30, 2017
.
|
•
|
Peru - Our notes receivable, net, from certain customers in Peru at
June 30, 2017
was
$22.9 million
. We collected
$8.9 million
of outstanding receivables from these customers during the six months ended
June 30, 2017
.
|
•
|
Argentina - Our notes receivable, net, from customers in Argentina at
June 30, 2017
was
$15.8 million
denominated in USD. Our customers are required to, and have continued to, pay us in pesos at the spot exchange rate on the date of payment. We collected
$11.8 million
of outstanding receivables from customers in Argentina during the six months ended
June 30, 2017
.
|
|
June 30, 2017
|
|
Balances over 90 days past due
|
|
December 31, 2016
|
|
Balances over 90 days past due
|
||||||||
Notes receivable:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
66.4
|
|
|
$
|
9.1
|
|
|
$
|
45.1
|
|
|
$
|
1.1
|
|
International
|
126.0
|
|
|
31.1
|
|
|
143.0
|
|
|
38.7
|
|
||||
Total notes receivable
|
192.4
|
|
|
40.2
|
|
|
188.1
|
|
|
39.8
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable allowance
|
|
|
|
|
|
|
|
||||||||
Domestic
|
(3.5
|
)
|
|
(3.5
|
)
|
|
(1.0
|
)
|
|
(0.9
|
)
|
||||
International
|
(14.8
|
)
|
|
(14.8
|
)
|
|
(14.0
|
)
|
|
(14.0
|
)
|
||||
Total notes receivable allowance
|
(18.3
|
)
|
|
(18.3
|
)
|
|
(15.0
|
)
|
|
(14.9
|
)
|
||||
Notes receivable, net
|
$
|
174.1
|
|
|
$
|
21.9
|
|
|
$
|
173.1
|
|
|
$
|
24.9
|
|
|
|
For the Six Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Beginning allowance for notes receivable
|
|
$
|
15.0
|
|
|
$
|
13.2
|
|
Provision
|
|
4.4
|
|
|
3.1
|
|
||
Charge-offs and recoveries
|
|
(1.1
|
)
|
|
(1.5
|
)
|
||
Ending allowance for notes receivable
|
|
$
|
18.3
|
|
|
$
|
14.8
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Parts and work-in-process
|
|
$
|
120.4
|
|
|
$
|
110.5
|
|
Finished goods
|
|
132.3
|
|
|
131.8
|
|
||
Total inventories
|
|
$
|
252.7
|
|
|
$
|
242.3
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Land
|
|
$
|
35.4
|
|
|
$
|
36.5
|
|
Buildings and leasehold improvements
|
|
177.8
|
|
|
182.2
|
|
||
Gaming and lottery machinery and equipment
|
|
986.8
|
|
|
993.3
|
|
||
Furniture and fixtures
|
|
30.3
|
|
|
28.6
|
|
||
Construction in progress
|
|
24.4
|
|
|
21.2
|
|
||
Other property and equipment
|
|
240.3
|
|
|
239.3
|
|
||
Less: accumulated depreciation
|
|
(920.2
|
)
|
|
(888.9
|
)
|
||
Total property and equipment, net
|
|
$
|
574.8
|
|
|
$
|
612.2
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
June 30,
|
|
June 30
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Depreciation expense
|
$
|
70.0
|
|
|
$
|
86.8
|
|
|
$
|
136.9
|
|
|
$
|
167.4
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Balance
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
880.0
|
|
|
$
|
(185.7
|
)
|
|
$
|
694.3
|
|
|
$
|
875.8
|
|
|
$
|
(163.9
|
)
|
|
$
|
711.9
|
|
Intellectual property
|
767.5
|
|
|
(271.0
|
)
|
|
496.5
|
|
|
726.0
|
|
|
(218.2
|
)
|
|
507.8
|
|
||||||
Licenses
|
425.6
|
|
|
(185.4
|
)
|
|
240.2
|
|
|
413.2
|
|
|
(153.5
|
)
|
|
259.7
|
|
||||||
Brand names
|
125.0
|
|
|
(39.0
|
)
|
|
86.0
|
|
|
123.7
|
|
|
(32.1
|
)
|
|
91.6
|
|
||||||
Trade names
|
98.5
|
|
|
(11.4
|
)
|
|
87.1
|
|
|
97.4
|
|
|
(8.1
|
)
|
|
89.3
|
|
||||||
Patents and other
|
26.4
|
|
|
(14.4
|
)
|
|
12.0
|
|
|
28.0
|
|
|
(14.2
|
)
|
|
13.8
|
|
||||||
|
2,323.0
|
|
|
(706.9
|
)
|
|
1,616.1
|
|
|
2,264.1
|
|
|
(590.0
|
)
|
|
1,674.1
|
|
||||||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
96.3
|
|
|
(2.1
|
)
|
|
94.2
|
|
|
96.3
|
|
|
(2.1
|
)
|
|
94.2
|
|
||||||
Total intangible assets
|
$
|
2,419.3
|
|
|
$
|
(709.0
|
)
|
|
$
|
1,710.3
|
|
|
$
|
2,360.4
|
|
|
$
|
(592.1
|
)
|
|
$
|
1,768.3
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
June 30,
|
|
June 30.
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amortization expense
|
$
|
68.9
|
|
|
$
|
62.3
|
|
|
$
|
130.8
|
|
|
$
|
127.9
|
|
Goodwill
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Totals
|
||||||||
Balance as of December 31, 2016
|
|
$
|
2,428.6
|
|
|
$
|
350.0
|
|
|
$
|
109.8
|
|
|
$
|
2,888.4
|
|
Acquired goodwill
|
|
—
|
|
|
—
|
|
|
14.6
|
|
|
14.6
|
|
||||
Foreign currency adjustments
|
|
24.4
|
|
|
3.3
|
|
|
—
|
|
|
27.7
|
|
||||
Balance as of June 30, 2017
|
|
$
|
2,453.0
|
|
|
$
|
353.3
|
|
|
$
|
124.4
|
|
|
$
|
2,930.7
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Software
|
|
$
|
970.1
|
|
|
$
|
924.8
|
|
Accumulated amortization
|
|
(591.4
|
)
|
|
(515.7
|
)
|
||
Software, net
|
|
$
|
378.7
|
|
|
$
|
409.1
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
June 30,
|
|
June 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amortization expense
|
$
|
36.1
|
|
|
$
|
44.1
|
|
|
$
|
72.4
|
|
|
$
|
78.5
|
|
|
|
As of
|
||||||||||||||||||
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||
|
|
Face value
|
|
Unamortized debt (discount) premium
|
|
Unamortized deferred financing costs
|
|
Book value
|
|
Book value
|
||||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revolver, varying interest rate, due 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45.0
|
|
Revolver, varying interest rate, due 2020
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Term Loan B-1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,183.5
|
|
|||||
Term Loan B-2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,905.8
|
|
|||||
Term Loan B-3
|
|
3,282.8
|
|
|
(15.4
|
)
|
|
(55.3
|
)
|
|
3,212.1
|
|
|
—
|
|
|||||
Senior Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured Notes
|
|
2,100.0
|
|
|
64.3
|
|
|
(30.3
|
)
|
|
2,134.0
|
|
|
936.3
|
|
|||||
Unsecured Notes
|
|
2,200.0
|
|
|
—
|
|
|
(33.0
|
)
|
|
2,167.0
|
|
|
2,164.0
|
|
|||||
Subordinated Notes:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2018 Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248.7
|
|
|||||
2020 Notes
|
|
243.5
|
|
|
—
|
|
|
(2.0
|
)
|
|
241.5
|
|
|
241.2
|
|
|||||
2021 Notes
|
|
340.6
|
|
|
(1.3
|
)
|
|
(4.2
|
)
|
|
335.1
|
|
|
334.5
|
|
|||||
Capital lease obligations, 3.9% interest as of June 30, 2017 payable monthly through 2019
|
|
12.5
|
|
|
—
|
|
|
—
|
|
|
12.5
|
|
|
15.2
|
|
|||||
Total long-term debt outstanding
|
|
$
|
8,179.4
|
|
|
$
|
47.6
|
|
|
$
|
(124.8
|
)
|
|
$
|
8,102.2
|
|
|
$
|
8,074.2
|
|
Less: current portion of long-term debt
|
|
|
|
|
|
|
|
(39.5
|
)
|
|
(49.3
|
)
|
||||||||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
$
|
8,062.7
|
|
|
$
|
8,024.9
|
|
||||||
Fair value of debt
(1)
|
|
$
|
8,576.4
|
|
|
|
|
|
|
|
|
$
|
8,221.8
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Repurchase and cancellation of principal balance at discount
|
$
|
—
|
|
|
$
|
26.0
|
|
|
$
|
—
|
|
|
$
|
26.0
|
|
Unamortized debt discount and deferred financing costs
|
—
|
|
|
(0.8
|
)
|
|
(25.8
|
)
|
|
(0.8
|
)
|
||||
Third party debt issuance fees
|
—
|
|
|
—
|
|
|
(3.9
|
)
|
|
—
|
|
||||
Total gain (loss) on extinguishment and modification of debt
|
$
|
—
|
|
|
$
|
25.2
|
|
|
$
|
(29.7
|
)
|
|
$
|
25.2
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Gains recorded in accumulated other comprehensive loss, net of tax
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
2.8
|
|
|
$
|
3.6
|
|
Reclassifications of losses out of accumulated other comprehensive loss
|
|
2.0
|
|
|
2.0
|
|
|
4.1
|
|
|
4.1
|
|
||||
Ineffectiveness recorded in interest expense
|
|
0.1
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Accrued liabilities
|
$
|
3.1
|
|
|
$
|
6.7
|
|
Other long-term liabilities
|
—
|
|
|
0.2
|
|
||
Total fair value
|
$
|
3.1
|
|
|
$
|
6.9
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
June 30,
|
|
June 30,
|
|||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Related to vesting of stock options
|
$
|
1.3
|
|
|
$
|
0.6
|
|
|
$
|
1.5
|
|
|
$
|
1.3
|
|
Related to vesting of RSUs
|
5.8
|
|
|
5.4
|
|
|
11.5
|
|
|
11.2
|
|
||||
Total
|
$
|
7.1
|
|
|
$
|
6.0
|
|
|
$
|
13.0
|
|
|
$
|
12.5
|
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
142.7
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
53.4
|
|
|
$
|
(0.7
|
)
|
|
$
|
198.2
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
25.9
|
|
|
0.1
|
|
|
—
|
|
|
26.0
|
|
||||||
Accounts receivable, net
|
|
0.1
|
|
|
63.7
|
|
|
182.1
|
|
|
233.4
|
|
|
—
|
|
|
479.3
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
99.2
|
|
|
24.1
|
|
|
—
|
|
|
123.3
|
|
||||||
Inventories
|
|
—
|
|
|
40.6
|
|
|
93.0
|
|
|
147.2
|
|
|
(28.1
|
)
|
|
252.7
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
7.4
|
|
|
23.8
|
|
|
41.9
|
|
|
44.5
|
|
|
—
|
|
|
117.6
|
|
||||||
Property and equipment, net
|
|
14.8
|
|
|
90.3
|
|
|
330.2
|
|
|
161.5
|
|
|
(22.0
|
)
|
|
574.8
|
|
||||||
Investment in subsidiaries
|
|
3,099.8
|
|
|
958.9
|
|
|
967.1
|
|
|
—
|
|
|
(5,025.8
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
188.3
|
|
|
1,932.4
|
|
|
810.0
|
|
|
—
|
|
|
2,930.7
|
|
||||||
Intangible assets, net
|
|
183.2
|
|
|
36.5
|
|
|
1,278.0
|
|
|
212.6
|
|
|
—
|
|
|
1,710.3
|
|
||||||
Intercompany balances
|
|
—
|
|
|
5,478.8
|
|
|
—
|
|
|
315.0
|
|
|
(5,793.8
|
)
|
|
—
|
|
||||||
Software, net
|
|
77.6
|
|
|
20.0
|
|
|
233.0
|
|
|
48.1
|
|
|
—
|
|
|
378.7
|
|
||||||
Other assets
(3)
|
|
233.9
|
|
|
305.0
|
|
|
57.3
|
|
|
150.4
|
|
|
(472.2
|
)
|
|
274.4
|
|
||||||
Total assets
|
|
$
|
3,759.5
|
|
|
$
|
7,208.7
|
|
|
$
|
5,240.1
|
|
|
$
|
2,200.3
|
|
|
$
|
(11,342.6
|
)
|
|
$
|
7,066.0
|
|
Liabilities and stockholders' (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
32.9
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
39.5
|
|
Other current liabilities
|
|
105.9
|
|
|
170.2
|
|
|
212.7
|
|
|
161.0
|
|
|
(2.4
|
)
|
|
647.4
|
|
||||||
Long-term debt, excluding current portion
|
|
—
|
|
|
8,056.9
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
8,062.7
|
|
||||||
Other long-term liabilities
|
|
171.0
|
|
|
9.1
|
|
|
517.2
|
|
|
87.7
|
|
|
(470.5
|
)
|
|
314.5
|
|
||||||
Intercompany balances
|
|
5,480.7
|
|
|
—
|
|
|
313.1
|
|
|
—
|
|
|
(5,793.8
|
)
|
|
—
|
|
||||||
Stockholders' (deficit) equity
|
|
(1,998.1
|
)
|
|
(1,060.4
|
)
|
|
4,197.1
|
|
|
1,939.2
|
|
|
(5,075.9
|
)
|
|
(1,998.1
|
)
|
||||||
Total liabilities and stockholders' (deficit) equity
|
|
$
|
3,759.5
|
|
|
$
|
7,208.7
|
|
|
$
|
5,240.1
|
|
|
$
|
2,200.3
|
|
|
$
|
(11,342.6
|
)
|
|
$
|
7,066.0
|
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
32.7
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
81.8
|
|
|
$
|
(1.1
|
)
|
|
$
|
115.1
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
24.6
|
|
|
0.1
|
|
|
—
|
|
|
24.7
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
61.4
|
|
|
199.2
|
|
|
234.4
|
|
|
—
|
|
|
495.0
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
94.4
|
|
|
31.0
|
|
|
—
|
|
|
125.4
|
|
||||||
Inventories
|
|
—
|
|
|
40.3
|
|
|
83.1
|
|
|
138.1
|
|
|
(19.2
|
)
|
|
242.3
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
11.6
|
|
|
15.7
|
|
|
45.6
|
|
|
41.2
|
|
|
—
|
|
|
114.1
|
|
||||||
Property and equipment, net
|
|
5.6
|
|
|
98.4
|
|
|
369.3
|
|
|
154.9
|
|
|
(16.0
|
)
|
|
612.2
|
|
||||||
Investment in subsidiaries
|
|
3,000.7
|
|
|
926.7
|
|
|
944.0
|
|
|
—
|
|
|
(4,871.4
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
188.3
|
|
|
1,931.6
|
|
|
768.5
|
|
|
—
|
|
|
2,888.4
|
|
||||||
Intangible assets, net
|
|
185.8
|
|
|
37.5
|
|
|
1,343.0
|
|
|
202.0
|
|
|
—
|
|
|
1,768.3
|
|
||||||
Intercompany balances
|
|
—
|
|
|
5,415.1
|
|
|
—
|
|
|
116.6
|
|
|
(5,531.7
|
)
|
|
—
|
|
||||||
Software, net
|
|
74.7
|
|
|
21.4
|
|
|
264.6
|
|
|
48.4
|
|
|
—
|
|
|
409.1
|
|
||||||
Other assets
(3)
|
|
233.6
|
|
|
236.5
|
|
|
50.8
|
|
|
173.5
|
|
|
(401.6
|
)
|
|
292.8
|
|
||||||
Total assets
|
|
$
|
3,544.7
|
|
|
$
|
7,043.0
|
|
|
$
|
5,350.2
|
|
|
$
|
1,990.5
|
|
|
$
|
(10,841.0
|
)
|
|
$
|
7,087.4
|
|
Liabilities and stockholders' (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
$
|
6.3
|
|
|
$
|
—
|
|
|
$
|
49.3
|
|
Other current liabilities
|
|
100.5
|
|
|
158.7
|
|
|
216.3
|
|
|
168.7
|
|
|
(1.1
|
)
|
|
643.1
|
|
||||||
Long-term debt, excluding current portion
|
|
248.7
|
|
|
7,767.3
|
|
|
—
|
|
|
8.9
|
|
|
—
|
|
|
8,024.9
|
|
||||||
Other long-term liabilities
|
|
159.0
|
|
|
12.4
|
|
|
468.8
|
|
|
67.2
|
|
|
(401.6
|
)
|
|
305.8
|
|
||||||
Intercompany balances
|
|
4,972.2
|
|
|
—
|
|
|
559.5
|
|
|
—
|
|
|
(5,531.7
|
)
|
|
—
|
|
||||||
Stockholders' (deficit) equity
|
|
(1,935.7
|
)
|
|
(938.4
|
)
|
|
4,105.6
|
|
|
1,739.4
|
|
|
(4,906.6
|
)
|
|
(1,935.7
|
)
|
||||||
Total liabilities and stockholders' (deficit) equity
|
|
$
|
3,544.7
|
|
|
$
|
7,043.0
|
|
|
$
|
5,350.2
|
|
|
$
|
1,990.5
|
|
|
$
|
(10,841.0
|
)
|
|
$
|
7,087.4
|
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
128.3
|
|
|
$
|
420.5
|
|
|
$
|
284.8
|
|
|
$
|
(67.3
|
)
|
|
$
|
766.3
|
|
Cost of services, cost of product sales and cost of instant games
(3)
|
|
—
|
|
|
86.8
|
|
|
129.0
|
|
|
135.6
|
|
|
(72.5
|
)
|
|
278.9
|
|
||||||
Selling, general and administrative
|
|
29.2
|
|
|
8.5
|
|
|
68.9
|
|
|
52.1
|
|
|
(12.8
|
)
|
|
145.9
|
|
||||||
Research and development
|
|
0.7
|
|
|
2.4
|
|
|
16.9
|
|
|
28.1
|
|
|
—
|
|
|
48.1
|
|
||||||
Depreciation, amortization and impairments
|
|
16.9
|
|
|
8.0
|
|
|
122.8
|
|
|
29.6
|
|
|
(2.3
|
)
|
|
175.0
|
|
||||||
Restructuring and other
|
|
1.5
|
|
|
0.3
|
|
|
(1.1
|
)
|
|
0.4
|
|
|
—
|
|
|
1.1
|
|
||||||
Operating (loss) income
|
|
(48.3
|
)
|
|
22.3
|
|
|
84.0
|
|
|
39.0
|
|
|
20.3
|
|
|
117.3
|
|
||||||
Interest income (expense)
|
|
0.2
|
|
|
(151.1
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(151.2
|
)
|
||||||
Other (expense) income, net
|
|
(18.1
|
)
|
|
51.7
|
|
|
(31.0
|
)
|
|
(1.4
|
)
|
|
—
|
|
|
1.2
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(66.2
|
)
|
|
(77.1
|
)
|
|
53.0
|
|
|
37.3
|
|
|
20.3
|
|
|
(32.7
|
)
|
||||||
Equity in income of subsidiaries
|
|
18.8
|
|
|
14.6
|
|
|
6.1
|
|
|
—
|
|
|
(39.5
|
)
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
8.3
|
|
|
28.9
|
|
|
(27.4
|
)
|
|
(16.2
|
)
|
|
—
|
|
|
(6.4
|
)
|
||||||
Net (loss) income
|
|
$
|
(39.1
|
)
|
|
$
|
(33.6
|
)
|
|
$
|
31.7
|
|
|
$
|
21.1
|
|
|
$
|
(19.2
|
)
|
|
$
|
(39.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income
|
|
31.7
|
|
|
0.3
|
|
|
44.7
|
|
|
30.2
|
|
|
(75.2
|
)
|
|
31.7
|
|
||||||
Comprehensive (loss) income
|
|
$
|
(7.4
|
)
|
|
$
|
(33.3
|
)
|
|
$
|
76.4
|
|
|
$
|
51.3
|
|
|
$
|
(94.4
|
)
|
|
$
|
(7.4
|
)
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
126.4
|
|
|
$
|
354.7
|
|
|
$
|
319.4
|
|
|
$
|
(71.3
|
)
|
|
$
|
729.2
|
|
Cost of services, cost of product sales and cost of instant games
(3)
|
|
—
|
|
|
86.1
|
|
|
92.4
|
|
|
169.0
|
|
|
(71.3
|
)
|
|
276.2
|
|
||||||
Selling, general and administrative
|
|
37.0
|
|
|
11.6
|
|
|
36.2
|
|
|
60.1
|
|
|
—
|
|
|
144.9
|
|
||||||
Research and development
|
|
1.9
|
|
|
2.3
|
|
|
34.9
|
|
|
12.6
|
|
|
—
|
|
|
51.7
|
|
||||||
Depreciation, amortization and impairments
|
|
12.9
|
|
|
10.4
|
|
|
140.5
|
|
|
29.3
|
|
|
—
|
|
|
193.1
|
|
||||||
Restructuring and other
|
|
0.1
|
|
|
—
|
|
|
3.2
|
|
|
0.9
|
|
|
—
|
|
|
4.2
|
|
||||||
Operating (loss) income
|
|
(51.9
|
)
|
|
16.0
|
|
|
47.5
|
|
|
47.5
|
|
|
—
|
|
|
59.1
|
|
||||||
Interest expense
|
|
(5.3
|
)
|
|
(159.9
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(165.3
|
)
|
||||||
Gain on extinguishment and modification of debt
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.2
|
|
||||||
Other (expense) income, net
|
|
(24.7
|
)
|
|
52.5
|
|
|
(24.1
|
)
|
|
6.0
|
|
|
—
|
|
|
9.7
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(81.9
|
)
|
|
(66.2
|
)
|
|
23.4
|
|
|
53.4
|
|
|
—
|
|
|
(71.3
|
)
|
||||||
Equity in income of subsidiaries
|
|
5.3
|
|
|
11.3
|
|
|
26.4
|
|
|
—
|
|
|
(43.0
|
)
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
24.9
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
19.6
|
|
||||||
Net (loss) income
|
|
$
|
(51.7
|
)
|
|
$
|
(54.9
|
)
|
|
$
|
49.8
|
|
|
$
|
48.1
|
|
|
$
|
(43.0
|
)
|
|
$
|
(51.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(30.1
|
)
|
|
3.1
|
|
|
(8.1
|
)
|
|
(33.5
|
)
|
|
38.4
|
|
|
(30.2
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(81.8
|
)
|
|
$
|
(51.8
|
)
|
|
$
|
41.7
|
|
|
$
|
14.6
|
|
|
$
|
(4.6
|
)
|
|
$
|
(81.9
|
)
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
246.3
|
|
|
$
|
820.3
|
|
|
$
|
549.4
|
|
|
$
|
(124.3
|
)
|
|
$
|
1,491.7
|
|
Cost of services, cost of product sales and cost of instant games
(3)
|
|
—
|
|
|
169.7
|
|
|
252.7
|
|
|
257.4
|
|
|
(120.9
|
)
|
|
558.9
|
|
||||||
Selling, general and administrative
|
|
58.9
|
|
|
18.0
|
|
|
117.7
|
|
|
114.5
|
|
|
(22.5
|
)
|
|
286.6
|
|
||||||
Research and development
|
|
1.2
|
|
|
3.8
|
|
|
51.1
|
|
|
34.4
|
|
|
—
|
|
|
90.5
|
|
||||||
Depreciation, amortization and impairments
|
|
37.2
|
|
|
15.5
|
|
|
234.7
|
|
|
57.4
|
|
|
(4.7
|
)
|
|
340.1
|
|
||||||
Restructuring and other
|
|
5.3
|
|
|
0.5
|
|
|
3.1
|
|
|
1.4
|
|
|
—
|
|
|
10.3
|
|
||||||
Operating (loss) income
|
|
(102.6
|
)
|
|
38.8
|
|
|
161.0
|
|
|
84.3
|
|
|
23.8
|
|
|
205.3
|
|
||||||
Interest expense
|
|
(4.3
|
)
|
|
(305.7
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(310.6
|
)
|
||||||
Loss on extinguishment and modification of debt
|
|
(1.1
|
)
|
|
(28.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.7
|
)
|
||||||
Other (expense) income, net
|
|
(38.9
|
)
|
|
102.4
|
|
|
(56.5
|
)
|
|
11.2
|
|
|
—
|
|
|
18.2
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(146.9
|
)
|
|
(193.1
|
)
|
|
104.5
|
|
|
94.9
|
|
|
23.8
|
|
|
(116.8
|
)
|
||||||
Equity in income of subsidiaries
|
|
23.5
|
|
|
31.9
|
|
|
21.5
|
|
|
—
|
|
|
(76.9
|
)
|
|
—
|
|
||||||
Income tax (expense) benefit
|
|
(16.5
|
)
|
|
72.3
|
|
|
(48.0
|
)
|
|
(30.9
|
)
|
|
—
|
|
|
(23.1
|
)
|
||||||
Net (loss) income
|
|
$
|
(139.9
|
)
|
|
$
|
(88.9
|
)
|
|
$
|
78.0
|
|
|
$
|
64.0
|
|
|
$
|
(53.1
|
)
|
|
$
|
(139.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income
|
|
67.8
|
|
|
4.3
|
|
|
66.2
|
|
|
59.7
|
|
|
(130.2
|
)
|
|
67.8
|
|
||||||
Comprehensive (loss) income
|
|
$
|
(72.1
|
)
|
|
$
|
(84.6
|
)
|
|
$
|
144.2
|
|
|
$
|
123.7
|
|
|
$
|
(183.3
|
)
|
|
$
|
(72.1
|
)
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
241.7
|
|
|
$
|
716.2
|
|
|
$
|
583.7
|
|
|
$
|
(130.4
|
)
|
|
$
|
1,411.2
|
|
Cost of instant games, cost of services and cost of product sales
(3)
|
|
—
|
|
|
169.0
|
|
|
189.1
|
|
|
304.8
|
|
|
(130.4
|
)
|
|
532.5
|
|
||||||
Selling, general and administrative
|
|
61.0
|
|
|
22.8
|
|
|
89.7
|
|
|
113.7
|
|
|
—
|
|
|
287.2
|
|
||||||
Research and development
|
|
2.8
|
|
|
4.6
|
|
|
70.8
|
|
|
23.3
|
|
|
—
|
|
|
101.5
|
|
||||||
Depreciation, amortization and impairments
|
|
25.8
|
|
|
21.1
|
|
|
266.7
|
|
|
60.1
|
|
|
—
|
|
|
373.7
|
|
||||||
Restructuring and other
|
|
0.1
|
|
|
—
|
|
|
4.1
|
|
|
2.7
|
|
|
—
|
|
|
6.9
|
|
||||||
Operating (loss) income
|
|
(89.7
|
)
|
|
24.2
|
|
|
95.8
|
|
|
79.1
|
|
|
—
|
|
|
109.4
|
|
||||||
Interest expense
|
|
(10.5
|
)
|
|
(320.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(331.0
|
)
|
||||||
Gain on extinguishment and modification of debt
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.2
|
|
||||||
Other (expense) income, net
|
|
(50.3
|
)
|
|
102.8
|
|
|
(47.2
|
)
|
|
8.3
|
|
|
—
|
|
|
13.6
|
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(150.5
|
)
|
|
(168.3
|
)
|
|
48.6
|
|
|
87.4
|
|
|
—
|
|
|
(182.8
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(40.7
|
)
|
|
30.2
|
|
|
47.3
|
|
|
—
|
|
|
(36.8
|
)
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
47.1
|
|
|
—
|
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
|
38.8
|
|
||||||
Net (loss) income
|
|
$
|
(144.1
|
)
|
|
$
|
(138.1
|
)
|
|
$
|
95.9
|
|
|
$
|
79.1
|
|
|
$
|
(36.8
|
)
|
|
$
|
(144.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(32.6
|
)
|
|
3.0
|
|
|
(6.2
|
)
|
|
(30.7
|
)
|
|
33.9
|
|
|
(32.6
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(176.7
|
)
|
|
$
|
(135.1
|
)
|
|
$
|
89.7
|
|
|
$
|
48.4
|
|
|
$
|
(2.9
|
)
|
|
$
|
(176.6
|
)
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(101.1
|
)
|
|
$
|
(125.1
|
)
|
|
$
|
327.9
|
|
|
$
|
177.4
|
|
|
$
|
0.4
|
|
|
$
|
279.5
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
|
(25.1
|
)
|
|
(8.9
|
)
|
|
(67.9
|
)
|
|
(38.3
|
)
|
|
—
|
|
|
(140.2
|
)
|
||||||
Acquisitions of businesses, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(26.3
|
)
|
|
(25.8
|
)
|
|
—
|
|
|
(52.1
|
)
|
||||||
Distributions of capital from equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.4
|
|
|
—
|
|
|
22.4
|
|
||||||
Changes in other assets and liabilities and other
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
2.5
|
|
|
—
|
|
|
10.0
|
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
(102.9
|
)
|
|
—
|
|
|
(166.3
|
)
|
|
269.2
|
|
|
—
|
|
||||||
Net cash used in investing activities
|
|
(25.1
|
)
|
|
(111.8
|
)
|
|
(86.7
|
)
|
|
(205.5
|
)
|
|
269.2
|
|
|
(159.9
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans
|
|
(250.0
|
)
|
|
265.7
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
12.6
|
|
||||||
Payments of debt issuance and deferred financing costs
|
|
—
|
|
|
(27.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27.7
|
)
|
||||||
Payments on license obligations
|
|
(17.0
|
)
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
(19.5
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans and other
|
|
(3.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.9
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
507.1
|
|
|
—
|
|
|
(237.9
|
)
|
|
—
|
|
|
(269.2
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
236.2
|
|
|
238.0
|
|
|
(240.4
|
)
|
|
(3.1
|
)
|
|
(269.2
|
)
|
|
(38.5
|
)
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
110.0
|
|
|
1.1
|
|
|
0.8
|
|
|
(28.4
|
)
|
|
0.4
|
|
|
83.9
|
|
||||||
Cash, cash equivalents and restricted cash, beginning of period
|
|
32.7
|
|
|
1.7
|
|
|
41.0
|
|
|
82.6
|
|
|
(1.1
|
)
|
|
156.9
|
|
||||||
Cash, cash equivalents and restricted cash end of period
|
|
$
|
142.7
|
|
|
$
|
2.8
|
|
|
$
|
41.8
|
|
|
$
|
54.2
|
|
|
$
|
(0.7
|
)
|
|
$
|
240.8
|
|
|
|
SGC (Parent and Issuer
1
)
|
|
SGI (Issuer
2
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(119.9
|
)
|
|
$
|
(128.5
|
)
|
|
$
|
331.9
|
|
|
$
|
108.5
|
|
|
$
|
(0.1
|
)
|
|
$
|
191.9
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
(26.7
|
)
|
|
(5.2
|
)
|
|
(75.5
|
)
|
|
(25.2
|
)
|
|
—
|
|
|
(132.6
|
)
|
||||||
Distributions of capital from equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.5
|
|
|
—
|
|
|
22.5
|
|
||||||
Changes in other assets and liabilities and other
|
|
0.3
|
|
|
—
|
|
|
7.9
|
|
|
(2.1
|
)
|
|
—
|
|
|
6.1
|
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
210.7
|
|
|
—
|
|
|
—
|
|
|
(210.7
|
)
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(26.4
|
)
|
|
205.5
|
|
|
(67.6
|
)
|
|
(4.8
|
)
|
|
(210.7
|
)
|
|
(104.0
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net payments on long-term debt
|
|
—
|
|
|
(76.5
|
)
|
|
—
|
|
|
(3.6
|
)
|
|
—
|
|
|
(80.1
|
)
|
||||||
Payments on license obligations
|
|
(15.1
|
)
|
|
—
|
|
|
(9.9
|
)
|
|
—
|
|
|
—
|
|
|
(25.0
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans and other
|
|
(4.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
155.1
|
|
|
—
|
|
|
(250.5
|
)
|
|
(115.3
|
)
|
|
210.7
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
135.6
|
|
|
(76.5
|
)
|
|
(260.4
|
)
|
|
(118.9
|
)
|
|
210.7
|
|
|
(109.5
|
)
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
(1.9
|
)
|
||||||
(Decrease) increase in cash, cash equivalents and restricted cash
|
|
(10.7
|
)
|
|
0.5
|
|
|
3.3
|
|
|
(16.5
|
)
|
|
(0.1
|
)
|
|
(23.5
|
)
|
||||||
Cash, cash equivalents and restricted cash, beginning of period
|
|
43.2
|
|
|
—
|
|
|
37.7
|
|
|
85.9
|
|
|
—
|
|
|
166.8
|
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
32.5
|
|
|
$
|
0.5
|
|
|
$
|
41.0
|
|
|
$
|
69.4
|
|
|
$
|
(0.1
|
)
|
|
$
|
143.3
|
|
•
|
In April 2017, we completed the acquisition of Spicerack Media, Inc.
|
•
|
In May 2017, we unveiled a new, advanced software security system and robotic technologies for lottery instant games security, which extends the protection of an instant game from initial game data generation though the final delivery of the game to the lottery or its retailers.
|
•
|
In June 2017, we announced the launch of one of our first games in which skill of the player is a dominant factor in affecting the outcome of the bonus game,
SPACE INVADERS
TM
,
based on the popular classic arcade video game, which was originally released in 1978.
SPACE INVADERS
is currently available in New Jersey and will soon be available in various jurisdictions throughout North America.
|
•
|
In June 2017, we were awarded a new, four-year contract to provide instant games and additional services to the New Hampshire Lottery.
|
•
|
In June 2017, we were awarded a new, eight-year systems technology and services contract from the Maryland Lottery and Gaming Control Agency.
|
•
|
We completed the business improvement initiative announced in November 2016, which has streamlined our organization, increased our efficiencies and significantly reduced our operating costs.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
June 30,
|
|
June 30,
|
|||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
($ in millions)
|
Revenue
|
% Consolidated Revenue
|
|
Revenue
|
% Consolidated Revenue
|
|
Revenue
|
% Consolidated Revenue
|
|
Revenue
|
% Consolidated Revenue
|
||||||||||||
Foreign Currency:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
British Pound Sterling
|
$
|
50.7
|
|
6.6
|
%
|
|
$
|
61.1
|
|
8.4
|
%
|
|
$
|
102.1
|
|
6.8
|
%
|
|
$
|
116.2
|
|
8.2
|
%
|
Euro
|
33.7
|
|
4.4
|
%
|
|
31.2
|
|
4.3
|
%
|
|
66.8
|
|
4.5
|
%
|
|
57.7
|
|
4.1
|
%
|
||||
Australian Dollar
|
34.6
|
|
4.5
|
%
|
|
34.5
|
|
4.7
|
%
|
|
58.5
|
|
3.9
|
%
|
|
52.0
|
|
3.7
|
%
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Total revenue
|
|
$
|
766.3
|
|
|
$
|
729.2
|
|
|
$
|
37.1
|
|
|
5.1
|
%
|
|
$
|
1,491.7
|
|
|
$
|
1,411.2
|
|
|
$
|
80.5
|
|
|
5.7
|
%
|
Total operating expenses
|
|
649.0
|
|
|
670.1
|
|
|
(21.1
|
)
|
|
(3.1
|
)%
|
|
1,286.4
|
|
|
1,301.8
|
|
|
(15.4
|
)
|
|
(1.2
|
)%
|
||||||
Operating income
|
|
117.3
|
|
|
59.1
|
|
|
58.2
|
|
|
98.5
|
%
|
|
205.3
|
|
|
109.4
|
|
|
95.9
|
|
|
87.7
|
%
|
||||||
Net loss before income taxes
|
|
(32.7
|
)
|
|
(71.3
|
)
|
|
38.6
|
|
|
(54.1
|
)%
|
|
(116.8
|
)
|
|
(182.8
|
)
|
|
66.0
|
|
|
(36.1
|
)%
|
||||||
Net loss
|
|
$
|
(39.1
|
)
|
|
$
|
(51.7
|
)
|
|
$
|
12.6
|
|
|
(24.4
|
)%
|
|
$
|
(139.9
|
)
|
|
$
|
(144.0
|
)
|
|
$
|
4.1
|
|
|
(2.8
|
)%
|
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Gaming
|
|
$
|
457.2
|
|
|
$
|
441.9
|
|
|
$
|
15.3
|
|
|
3.5
|
%
|
|
$
|
897.2
|
|
|
$
|
863.6
|
|
|
$
|
33.6
|
|
|
3.9
|
%
|
Lottery
|
|
202.3
|
|
|
203.9
|
|
|
(1.6
|
)
|
|
(0.8
|
)%
|
|
391.4
|
|
|
391.6
|
|
|
(0.2
|
)
|
|
(0.1
|
)%
|
||||||
Interactive
|
|
106.8
|
|
|
83.4
|
|
|
23.4
|
|
|
28.1
|
%
|
|
203.1
|
|
|
156.0
|
|
|
47.1
|
|
|
30.2
|
%
|
||||||
Total revenue
|
|
$
|
766.3
|
|
|
$
|
729.2
|
|
|
$
|
37.1
|
|
|
5.1
|
%
|
|
$
|
1,491.7
|
|
|
$
|
1,411.2
|
|
|
$
|
80.5
|
|
|
5.7
|
%
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of services
|
$
|
98.9
|
|
|
$
|
101.4
|
|
|
$
|
(2.5
|
)
|
|
(2.5
|
)%
|
|
$
|
202.2
|
|
|
$
|
196.3
|
|
|
$
|
5.9
|
|
|
3.0
|
%
|
Cost of product sales
|
108.7
|
|
|
100.7
|
|
|
8.0
|
|
|
7.9
|
%
|
|
215.3
|
|
|
195.1
|
|
|
20.2
|
|
|
10.4
|
%
|
||||||
Cost of instant games
|
71.3
|
|
|
74.1
|
|
|
(2.8
|
)
|
|
(3.8
|
)%
|
|
141.4
|
|
|
141.1
|
|
|
0.3
|
|
|
0.2
|
%
|
||||||
Selling, general and administrative
|
145.9
|
|
|
144.9
|
|
|
1.0
|
|
|
0.7
|
%
|
|
286.6
|
|
|
287.2
|
|
|
(0.6
|
)
|
|
(0.2
|
)%
|
||||||
Research and development
|
48.1
|
|
|
51.7
|
|
|
(3.6
|
)
|
|
(7.0
|
)%
|
|
90.5
|
|
|
101.5
|
|
|
(11.0
|
)
|
|
(10.8
|
)%
|
||||||
Depreciation, amortization and impairments
|
175.0
|
|
|
193.1
|
|
|
(18.1
|
)
|
|
(9.4
|
)%
|
|
340.1
|
|
|
373.7
|
|
|
(33.6
|
)
|
|
(9.0
|
)%
|
||||||
Restructuring and other
|
1.1
|
|
|
4.2
|
|
|
(3.1
|
)
|
|
(73.8
|
)%
|
|
10.3
|
|
|
6.9
|
|
|
3.4
|
|
|
49.3
|
%
|
||||||
Total operating expenses
|
$
|
649.0
|
|
|
$
|
670.1
|
|
|
$
|
(21.1
|
)
|
|
(3.1
|
)%
|
|
$
|
1,286.4
|
|
|
$
|
1,301.8
|
|
|
$
|
(15.4
|
)
|
|
(1.2
|
)%
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended
June 30, |
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Total revenue
|
|
$
|
457.2
|
|
|
$
|
441.9
|
|
|
$
|
15.3
|
|
|
3.5
|
%
|
|
$
|
897.2
|
|
|
863.6
|
|
|
$
|
33.6
|
|
|
3.9
|
%
|
|
Total operating expenses
|
|
371.3
|
|
|
395.2
|
|
|
(23.9
|
)
|
|
(6.0
|
)%
|
|
733.8
|
|
|
773.5
|
|
|
(39.7
|
)
|
|
(5.1
|
)%
|
||||||
Operating income
|
|
$
|
85.9
|
|
|
$
|
46.7
|
|
|
$
|
39.2
|
|
|
83.9
|
%
|
|
$
|
163.4
|
|
|
$
|
90.1
|
|
|
$
|
73.3
|
|
|
81.4
|
%
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended
June 30, |
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gaming operations
|
|
$
|
178.4
|
|
|
$
|
186.0
|
|
|
$
|
(7.6
|
)
|
|
(4.1
|
)%
|
|
$
|
350.8
|
|
|
$
|
370.4
|
|
|
$
|
(19.6
|
)
|
|
(5.3
|
)%
|
Gaming machine sales
|
|
163.3
|
|
|
154.4
|
|
|
8.9
|
|
|
5.8
|
%
|
|
319.5
|
|
|
288.9
|
|
|
30.6
|
|
|
10.6
|
%
|
||||||
Gaming systems
|
|
67.1
|
|
|
59.5
|
|
|
7.6
|
|
|
12.8
|
%
|
|
128.6
|
|
|
119.2
|
|
|
9.4
|
|
|
7.9
|
%
|
||||||
Table products
|
|
48.4
|
|
|
42.0
|
|
|
6.4
|
|
|
15.2
|
%
|
|
98.3
|
|
|
85.1
|
|
|
13.2
|
|
|
15.5
|
%
|
||||||
Total revenue
|
|
$
|
457.2
|
|
|
$
|
441.9
|
|
|
$
|
15.3
|
|
|
3.5
|
%
|
|
$
|
897.2
|
|
|
$
|
863.6
|
|
|
$
|
33.6
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
F/X impact on revenue
|
|
$
|
(4.9
|
)
|
|
$
|
(3.7
|
)
|
|
|
|
|
|
|
|
$
|
(10.0
|
)
|
|
$
|
(7.7
|
)
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
KPIs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
WAP, premium and daily-fee Participation units:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Installed base at period end
|
|
20,956
|
|
|
21,909
|
|
|
(953
|
)
|
|
(4.3
|
)%
|
|
20,956
|
|
|
21,909
|
|
|
(953
|
)
|
|
(4.3
|
)%
|
||||||
Average daily revenue per unit
|
|
$
|
52.30
|
|
|
$
|
52.85
|
|
|
$
|
(0.55
|
)
|
|
(1.0
|
)%
|
|
$
|
51.76
|
|
|
$
|
52.90
|
|
|
$
|
(1.14
|
)
|
|
(2.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other Participation and leased units:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Installed base at period end
|
|
48,645
|
|
|
47,857
|
|
|
788
|
|
|
1.6
|
%
|
|
48,645
|
|
|
47,857
|
|
|
788
|
|
|
1.6
|
%
|
||||||
Average daily revenue per unit
|
|
$
|
14.94
|
|
|
$
|
15.95
|
|
|
$
|
(1.01
|
)
|
|
(6.3
|
)%
|
|
$
|
14.95
|
|
|
$
|
15.66
|
|
|
$
|
(0.71
|
)
|
|
(4.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gaming machine unit sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. and Canadian new unit shipments
|
|
4,367
|
|
|
4,678
|
|
|
(311
|
)
|
|
(6.6
|
)%
|
|
10,229
|
|
|
9,043
|
|
|
1,186
|
|
|
13.1
|
%
|
||||||
International new unit shipments
|
|
3,411
|
|
|
2,990
|
|
|
421
|
|
|
14.1
|
%
|
|
5,908
|
|
|
5,373
|
|
|
535
|
|
|
10.0
|
%
|
||||||
Total new unit shipments
|
|
7,778
|
|
|
7,668
|
|
|
110
|
|
|
1.4
|
%
|
|
16,137
|
|
|
14,416
|
|
|
1,721
|
|
|
11.9
|
%
|
||||||
Average sales price per new unit
|
|
$
|
17,550
|
|
|
$
|
16,859
|
|
|
$
|
691
|
|
|
4.1
|
%
|
|
$
|
17,278
|
|
|
$
|
16,719
|
|
|
$
|
559
|
|
|
3.3
|
%
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended
June 30, |
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Total revenue
|
|
$
|
202.3
|
|
|
$
|
203.9
|
|
|
$
|
(1.6
|
)
|
|
(0.8
|
)%
|
|
$
|
391.4
|
|
|
$
|
391.6
|
|
|
$
|
(0.2
|
)
|
|
(0.1
|
)%
|
Total operating expenses
|
|
132.0
|
|
|
146.0
|
|
|
(14.0
|
)
|
|
(9.6
|
)%
|
|
265.0
|
|
|
285.7
|
|
|
(20.7
|
)
|
|
(7.2
|
)%
|
||||||
Operating income
|
|
$
|
70.3
|
|
|
$
|
57.9
|
|
|
$
|
12.4
|
|
|
21.4
|
%
|
|
$
|
126.4
|
|
|
$
|
105.9
|
|
|
$
|
20.5
|
|
|
19.4
|
%
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended
June 30, |
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Instant products
|
|
$
|
151.3
|
|
|
$
|
153.7
|
|
|
$
|
(2.4
|
)
|
|
(1.6
|
)%
|
|
$
|
293.0
|
|
|
$
|
291.0
|
|
|
$
|
2.0
|
|
|
0.7
|
%
|
Lottery systems
|
|
51.0
|
|
|
50.2
|
|
|
0.8
|
|
|
1.6
|
%
|
|
98.4
|
|
|
100.6
|
|
|
(2.2
|
)
|
|
(2.2
|
)%
|
||||||
Total revenue
|
|
$
|
202.3
|
|
|
$
|
203.9
|
|
|
$
|
(1.6
|
)
|
|
(0.8
|
)%
|
|
$
|
391.4
|
|
|
$
|
391.6
|
|
|
$
|
(0.2
|
)
|
|
(0.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
F/X impact on revenue
|
|
$
|
(2.2
|
)
|
|
$
|
(1.2
|
)
|
|
|
|
|
|
|
|
$
|
(4.2
|
)
|
|
$
|
(4.2
|
)
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
KPIs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Change in retail sales of U.S. lottery instant games customers
(1)(2)
|
|
5.3
|
%
|
|
4.1
|
%
|
|
1.2pp
|
|
|
nm
|
|
|
3.8
|
%
|
|
6.1
|
%
|
|
(2.3)pp
|
|
|
nm
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Change in retail sales of U.S. lottery systems contract customers
(1)(3)
|
|
(1.0
|
)%
|
|
7.2
|
%
|
|
(8.2)pp
|
|
|
nm
|
|
|
(7.3
|
)%
|
|
9.0
|
%
|
|
(16.3)pp
|
|
|
nm
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Change in Italy retail sales of instant games
(1)
|
|
(0.8
|
)%
|
|
(0.8
|
)%
|
|
—
|
|
|
nm
|
|
|
(0.7
|
)%
|
|
0.8
|
%
|
|
(1.5)pp
|
|
|
nm
|
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended
June 30, |
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Total revenue
|
|
$
|
106.8
|
|
|
$
|
83.4
|
|
|
$
|
23.4
|
|
|
28.1
|
%
|
|
$
|
203.1
|
|
|
156.0
|
|
|
$
|
47.1
|
|
|
30.2
|
%
|
|
Operating expenses
|
|
88.0
|
|
|
69.7
|
|
|
18.3
|
|
|
26.3
|
%
|
|
167.1
|
|
|
130.8
|
|
|
36.3
|
|
|
27.8
|
%
|
||||||
Operating income
|
|
$
|
18.8
|
|
|
$
|
13.7
|
|
|
$
|
5.1
|
|
|
37.2
|
%
|
|
$
|
36.0
|
|
|
$
|
25.2
|
|
|
$
|
10.8
|
|
|
42.9
|
%
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|
Six Months Ended
June 30, |
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Social Gaming - B2C
|
|
$
|
91.1
|
|
|
$
|
69.1
|
|
|
$
|
22.0
|
|
|
31.8
|
%
|
|
$
|
171.3
|
|
|
$
|
129.2
|
|
|
$
|
42.1
|
|
|
32.6
|
%
|
Other
|
|
15.7
|
|
|
14.3
|
|
|
1.4
|
|
|
9.8
|
%
|
|
31.8
|
|
|
26.8
|
|
|
5.0
|
|
|
18.7
|
%
|
||||||
Total revenue
|
|
$
|
106.8
|
|
|
$
|
83.4
|
|
|
$
|
23.4
|
|
|
28.1
|
%
|
|
$
|
203.1
|
|
|
$
|
156.0
|
|
|
$
|
47.1
|
|
|
30.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
KPIs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Social gaming:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mobile Penetration
(1)
|
|
72.0
|
%
|
|
67.0
|
%
|
|
5.0pp
|
|
|
nm
|
|
|
72.0
|
%
|
|
66.0
|
%
|
|
6.0pp
|
|
|
nm
|
|
||||||
Average MAU
(2)
|
|
7.5
|
|
|
8.0
|
|
|
(0.5
|
)
|
|
(6.3
|
)%
|
|
7.6
|
|
|
9.1
|
|
|
(1.5
|
)
|
|
(16.5
|
)%
|
||||||
Average DAU
(3)
|
|
2.5
|
|
|
2.4
|
|
|
0.1
|
|
|
4.2
|
%
|
|
2.5
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
||||||
ARPDAU
(4)
|
|
$
|
0.40
|
|
|
$
|
0.31
|
|
|
$
|
0.09
|
|
|
29.0
|
%
|
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
0.10
|
|
|
34.5
|
%
|
(1)
|
Mobile penetration as defined by percentage of B2C social gaming revenue generated from mobile platforms.
|
(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 daily 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.
|
|
|
As of
|
||||||
($ in millions)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Cash and cash equivalents
|
|
$
|
198.2
|
|
|
$
|
115.1
|
|
Revolver capacity
|
|
556.2
|
|
|
592.6
|
|
||
Revolver capacity drawn or committed to letters of credit
|
|
(25.2
|
)
|
|
(76.1
|
)
|
||
Total
|
|
$
|
729.2
|
|
|
$
|
631.6
|
|
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||
Net cash provided by operating activities
|
|
$
|
279.5
|
|
|
$
|
191.9
|
|
|
$
|
87.6
|
|
Net cash used in investing activities
|
|
(159.9
|
)
|
|
(104.0
|
)
|
|
(55.9
|
)
|
|||
Net cash used in financing activities
|
|
(38.5
|
)
|
|
(109.5
|
)
|
|
71.0
|
|
|||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
2.8
|
|
|
(1.9
|
)
|
|
4.7
|
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
$
|
83.9
|
|
|
$
|
(23.5
|
)
|
|
$
|
107.4
|
|
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||
Net loss
|
|
$
|
(139.9
|
)
|
|
$
|
(144.0
|
)
|
|
$
|
4.1
|
|
Adjustments to reconcile net loss to cash flows from operations
|
|
402.1
|
|
|
386.3
|
|
|
15.8
|
|
|||
Changes in working capital accounts
|
|
12.6
|
|
|
7.8
|
|
|
4.8
|
|
|||
Changes in deferred income taxes and other
|
|
4.7
|
|
|
(58.2
|
)
|
|
62.9
|
|
•
|
$24.4 million decrease in accounts and notes receivables due to strong collections during the six-month period;
|
•
|
$5.4 million increase in inventories primarily due to the timing of orders and deployment of units in our Gaming segment; and
|
•
|
$6.4 million negative net impact on cash flows from changes in other current assets and liabilities.
|
Exhibit
Number
|
|
Description
|
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).
|
|
|
|
3.1(c)
|
|
Certificate of Designation of Series C Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to Scientific Games Corporation’s Current Report on Form 8-K filed on June 19, 2017).
|
|
|
|
3.2(a)
|
|
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).
|
|
|
|
3.2(b)
|
|
Amendment to the 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 June 12, 2017).
|
|
|
|
4.1
|
|
Rights Agreement, dated as of June 19, 2017, between Scientific Games Corporation and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 4.1 to Scientific Games Corporation’s Current Report on Form 8-K filed on June 19, 2017).
|
|
|
|
10.1
|
|
Supplemental Indenture, dated as of July 14, 2017, by and among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Lapis Software Associates, 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. (†)
|
|
|
|
10.2
|
|
Supplemental Indenture, dated as of July 14, 2017, by and among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Lapis Software Associates, 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. (†)
|
|
|
|
10.3
|
|
Supplemental Indenture, dated as of July 14, 2017, by and among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Lapis Software Associates, 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. (†)
|
|
|
|
10.4
|
|
Supplemental Indenture, dated as of July 14, 2017, by and among Scientific Games International, Inc., as issuer, Scientific Games Corporation, Lapis Software Associates, 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. (†)
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer of Scientific Games Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (†)
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer of Scientific Games Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (†)
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer of Scientific Games Corporation 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 the Chief Financial Officer of Scientific Games Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (†)
|
|
|
|
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
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
|
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
|
By:
|
/s/ Michael F. Winterscheidt
|
|
|
Name:
|
Michael F. Winterscheidt
|
|
|
Title:
|
Chief Accounting Officer
|
Dated:
|
July 24, 2017
|
|
|
/s/ Kevin Sheehan
|
Kevin Sheehan
|
Chief Executive Officer
|
/s/ Michael A. Quartieri
|
Michael A. Quartieri
|
Chief Financial Officer
|
|
/s/ Kevin Sheehan
|
|
Kevin Sheehan
|
|
Chief Executive Officer
|
|
July 24, 2017
|
|
/s/ Michael A. Quartieri
|
|
Michael A. Quartieri
|
|
Chief Financial Officer
|
|
July 24, 2017
|