Nevada
|
|
81-0422894
|
(State or other jurisdiction of
|
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $.001 par value
|
SGMS
|
The NASDAQ Stock Market
|
Preferred Stock Purchase Rights
|
|
The NASDAQ Stock Market
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|
|
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
(1) For this purpose only, “non-affiliates” excludes directors and executive officers.
|
PART I
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
PART III
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
PART IV
|
|
|
Item 15.
|
||
Item 16
|
Glossary of Terms
|
|
The following terms or acronyms used in this Form 10-K are defined below:
|
|
Term or Acronym
|
Definition
|
2020 Notes
|
6.250% senior subordinated notes due 2020 issued by SGI
|
2021 Notes
|
6.625% senior subordinated notes due 2021 issued by SGI
|
2022 Secured Notes
|
7.000% senior secured notes due 2022 issued by SGI
|
2025 Secured Notes
|
5.000% senior secured notes due 2025 issued by SGI
|
2026 Secured Euro Notes
|
3.375% senior secured notes due 2026 issued by SGI
|
2026 Unsecured Euro Notes
|
5.500% senior unsecured notes due 2026 issued by SGI
|
2022 Unsecured Notes
|
10.000% senior unsecured notes due 2022 issued by SGI
|
2026 Unsecured Notes
|
8.250% senior unsecured notes due 2026 issued by SGI
|
2028 Unsecured Notes
|
7.000% senior unsecured notes due 2028 issued by SGI
|
2029 Unsecured Notes
|
7.250% senior unsecured notes due 2029 issued by SGI
|
AEBITDA
|
Adjusted EBITDA, our performance measure of profit or loss for our business segments (see Note 2). We renamed our performance measure of profit or loss from Attributable EBITDA to Adjusted EBITDA in 2018, however such change had no impact on our definition or calculation of our performance measure of profit or loss
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
B2C
|
business to consumer model
|
Bally
|
Bally Technologies, Inc.
|
CMS
|
casino-management system
|
Coin-in
|
the amount wagered
|
CSG
|
Beijing CITIC Scientific Games Technology Co., Ltd.
|
D&A
|
depreciation, amortization and impairments (excluding goodwill)
|
Don Best
|
Don Best Sports Corporation and DBS Canada Corporation
|
ERP
|
enterprise resource planning
|
ESPP
|
employee stock purchase plan
|
ETS
|
electronic table system
|
Exchange Act
|
Securities Exchange Act of 1934, as amended
|
FASB
|
Financial Accounting Standards Board
|
GDPR
|
General Data Protection Regulation
|
GLB
|
Beijing Guard Libang Technology Co., Ltd.
|
Guarantor Subsidiaries
|
substantially all of SGC’s 100%-owned U.S. subsidiaries, but excludes all SciPlay subsidiaries
|
Hellenic Lotteries
|
Hellenic Lotteries S.A.
|
KPIs
|
Key Performance Indicators
|
LAP
|
local-area progressive
|
LBO
|
licensed betting office
|
LIBOR
|
London Interbank Offered Rate
|
LNS
|
Lotterie Nazionali S.r.l.
|
Net win
|
Coin-in less payouts
|
Non-Guarantor Subsidiaries
|
SGC’s U.S. subsidiaries that are not Guarantor Subsidiaries and SGC’s foreign subsidiaries
|
Northstar New Jersey
|
Northstar New Jersey Lottery Group, LLC
|
Note
|
a note in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K, unless otherwise indicated
|
NOL
|
net operating loss
|
NYX
|
NYX Gaming Group Limited
|
NYX acquisition
|
the acquisition of 100% of the ordinary shares of NYX by SGC on January 5, 2018
|
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
|
PASPA
|
Professional and Amateur Sports Protection Act
|
PMA
|
private management agreement
|
POS
|
percentage of retail sales
|
PPU
|
price-per-unit
|
PTG
|
proprietary table games
|
R&D
|
research and development
|
RCN
|
Roberts Communications Network, LLC
|
RFP
|
request for proposal
|
RMG
|
real-money gaming
|
RSU
|
restricted stock unit
|
SciPlay
|
SciPlay Corporation, formerly referred to as our Social business segment
|
SEC
|
Securities and Exchange Commission
|
Secured Notes
|
refers to the 2025 Secured Notes and 2026 Secured Euro Notes, collectively
|
Securities Act
|
Securities Act of 1933, as amended
|
Senior Notes
|
the Secured Notes and the Unsecured Notes
|
SG&A
|
selling, general and administrative
|
SGC
|
Scientific Games Corporation
|
SGEP
|
Scientific Games Enhanced Partnership
|
SGI
|
Scientific Games International, Inc., a wholly-owned subsidiary of SGC
|
SG Gaming
|
SG Gaming, Inc. (formerly known as Bally Gaming, Inc.)
|
Shufflers
|
various models of automatic card shufflers, deck checkers and roulette chip sorters
|
Unsecured Notes
|
refers to the 2026 Unsecured Euro Notes, 2026 Unsecured Notes, 2028 Unsecured Notes and 2029 Unsecured Notes, collectively
|
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, U.S. Virgin Islands and Puerto Rico
|
VGT
|
video gaming terminal
|
VLT
|
video lottery terminal
|
WAP
|
wide-area progressive
|
WMS
|
WMS Industries, Inc.
|
•
|
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 and potential restrictions on internet wagering;
|
•
|
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, both foreign and domestic, including those relating to gaming, data privacy and security, including with respect to the collection, storage, use, transmission and protection of personal information and other consumer data, and environmental laws, and those laws and regulations that affect companies conducting business on the internet, including online gambling;
|
•
|
the continuing evolution of the scope of data privacy and security regulations, and our belief that the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions;
|
•
|
significant opposition in some jurisdictions to interactive social gaming, including social casino gaming and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casino gaming specifically, and how this could result in a prohibition on interactive social gaming or social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations;
|
•
|
legislative interpretation and enforcement, regulatory perception and regulatory risks with respect to gaming, especially internet wagering, social gaming and sports wagering;
|
•
|
reliance on technological blocking systems;
|
•
|
expectations of shift to regulated online gaming or sports wagering;
|
•
|
expectations of growth in total consumer spending on social casino gaming;
|
•
|
SciPlay’s dependence on certain key providers;
|
•
|
inability to win, 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, including the impact of any security breaches or cyber-attacks;
|
•
|
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;
|
•
|
inability to achieve some or all of the anticipated benefits of SciPlay being a standalone public company;
|
•
|
incurrence of restructuring costs;
|
•
|
implementation of complex new accounting standards;
|
•
|
changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;
|
•
|
changes in demand for our products;
|
•
|
fluctuations in our results due to seasonality and other factors;
|
•
|
dependence on suppliers and manufacturers;
|
•
|
risks relating to foreign operations, including anti-corruption laws, fluctuations in currency 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 continuing uncertainty around the U.K.’s withdrawal from the European Union (“EU”);
|
•
|
possibility that the renewal of LNS’ concession to operate the Italian instant games lottery is not finalized (including as the result of a pending third-party protest against the renewal of the concession, or any appeal from existing court rulings relating to such third-party protest);
|
•
|
the impact of U.K. legislation approving the reduction of fixed-odds betting terminals maximum stakes limit on LBO operators, including the related closure of certain LBO shops;
|
•
|
changes in tax laws or tax rulings, or the examination of our tax positions;
|
•
|
difficulty predicting what impact, if any, new tariffs imposed by and other trade actions taken by the U.S. and foreign jurisdictions could have on our business;
|
•
|
the discontinuation or replacement of LIBOR, which may adversely affect interest rates;
|
•
|
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.
|
•
|
Drive innovation — We place great emphasis on producing innovative and high-performing Gaming, Lottery, SciPlay and Digital content, products and services that provide differentiated value to our customers. We seek to leverage our expansive content library and portfolio of proprietary and licensed intellectual property, and use our extensive player and customer research in order to bring innovation to our products, services and processes.
|
•
|
Focus on prudent fiscal management to improve financial returns and cash flow from operations— Setting the right operational and strategic priorities to support our customers, aligning our resources to achieve our targets and tracking our performance is our near term focus. All of these factors, if successful, should increase our cash flow from operations available to reduce our financial leverage.
|
•
|
Build a corporate culture open to new ideas and opportunities that help to accelerate deleveraging— We are creating a culture of discipline that aligns and uses our resources more effectively, and at the same time cultivates open minds willing to capitalize on additional opportunistic situations where we might be able to accelerate our deleveraging efforts, which include our March and November 2019 note offerings along with our redemptions of notes that had higher interest rates (see Note 15).
|
•
|
Digital gaming is an engaging form of entertainment;
|
•
|
Mobile devices are a leading medium to consume content such as games;
|
•
|
Increasing number of players with the emergence of casual games;
|
•
|
Scale is increasingly strategic in order to succeed in mobile gaming;
|
•
|
Social casino gaming is an attractive market within digital gaming; and
|
•
|
Additional market opportunities within the broader mobile gaming landscape.
|
•
|
adopt additional rules and regulations under the implementing statutes;
|
•
|
investigate violations of gaming regulations;
|
•
|
enforce gaming regulations and impose disciplinary sanctions for violations of such laws, including fines, penalties and revocation of gaming licenses;
|
•
|
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;
|
•
|
grant licenses for the manufacture, distribution and operation of gaming products and services;
|
•
|
review and approve transactions (such as acquisitions, material commercial transactions, securities offerings and debt transactions); and
|
•
|
establish and collect related fees and/or taxes.
|
Name
|
|
Age
|
|
Position
|
Ronald O. Perelman
|
|
77
|
|
Executive Chairman of the Board of Directors
|
Barry L. Cottle
|
|
58
|
|
President and Chief Executive Officer
|
Michael A. Quartieri
|
|
51
|
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
James Sottile
|
|
59
|
|
Executive Vice President and Chief Legal Officer
|
Patrick J. McHugh
|
|
54
|
|
Executive Vice President and Group Chief Executive, Lottery
|
Michael F. Winterscheidt
|
|
49
|
|
Senior Vice President and Chief Accounting Officer
|
Stephen E. Richardson
|
|
52
|
|
Senior Vice President, Chief Compliance Officer and Director of Corporate Security
|
•
|
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 or furnished to the SEC;
|
•
|
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
|
•
|
our Code of Business Conduct, which applies to all of our officers, directors and employees (which is also our required code of ethics applicable to our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer in keeping with the Sarbanes-Oxley Act of 2002).
|
•
|
these platform providers discontinue or limit our access to their platforms;
|
•
|
governments or private parties, such as internet providers, impose bandwidth restrictions or increase charges or restrict or prohibit access to those platforms;
|
•
|
these platforms decline in popularity;
|
•
|
these platforms modify their current discovery mechanisms, communication channels available to developers, respective terms of service or other policies, including fees;
|
•
|
these platforms impose restrictions or make it more difficult for players to buy virtual currency; or
|
•
|
these platforms change how the personal information of players is made available to developers or develop their own competitive offerings.
|
•
|
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
|
•
|
divert management’s attention and our resources.
|
•
|
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; and/or
|
•
|
require us by way of injunction to remove products or services on lease or stop selling or leasing new products or services.
|
•
|
experienced computer programmers and hackers who are able to penetrate our security controls and misappropriate or compromise sensitive personal, proprietary or confidential information, create system disruptions or cause shutdowns or who are able to develop and deploy malicious software programs that attack our systems or otherwise exploit any security vulnerabilities;
|
•
|
security incidents, acts of vandalism or theft, coordinated attacks by activist entities, misplaced or lost data, human errors or other similar events that could negatively affect our systems and the data stored on those systems, and the data of our business partners;
|
•
|
third parties, such as hosted solution providers, that provide services to us, are also a source of security risk in the event of a failure of their own security systems and infrastructure.
|
•
|
allowing investors to evaluate the distinct merits, performance and future prospects of the SciPlay business, independent of our other businesses;
|
•
|
improving the SciPlay business’s strategic and operational flexibility and increasing management focus as SciPlay continues to implement its strategic plan and allowing the SciPlay business to respond more effectively to different player needs and the competitive environment for its business;
|
•
|
allowing the SciPlay business to adopt a capital structure better suited to its financial profile and business needs, without competing for capital with our other businesses;
|
•
|
creating an independent equity structure that will facilitate the SciPlay business’s ability to effect future acquisitions utilizing its capital stock; and
|
•
|
facilitating incentive compensation arrangements for employees more directly tied to the performance of the SciPlay business, and enhancing employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives of the SciPlay business.
|
•
|
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 subsidiaries’ ability to pay dividends, make loans or transfer assets; and
|
•
|
alter the business we conduct.
|
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
|
12/18
|
|
12/19
|
||||||||||||
Scientific Games Corporation
|
|
$
|
100.00
|
|
|
$
|
70.46
|
|
|
$
|
109.98
|
|
|
$
|
402.99
|
|
|
$
|
140.46
|
|
|
$
|
210.37
|
|
NASDAQ Composite
|
|
$
|
100.00
|
|
|
$
|
106.96
|
|
|
$
|
116.45
|
|
|
$
|
150.96
|
|
|
$
|
146.67
|
|
|
$
|
200.49
|
|
Peer Group
|
|
$
|
100.00
|
|
|
$
|
129.38
|
|
|
$
|
196.51
|
|
|
$
|
286.48
|
|
|
$
|
217.37
|
|
|
$
|
319.50
|
|
|
|
As of and for the Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Total revenue(1)
|
|
$
|
3,400
|
|
|
$
|
3,363
|
|
|
$
|
3,084
|
|
|
$
|
2,883
|
|
|
$
|
2,759
|
|
Net loss attributable to SGC
|
|
$
|
(130
|
)
|
|
$
|
(352
|
)
|
|
$
|
(242
|
)
|
|
$
|
(354
|
)
|
|
$
|
(1,394
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted net loss attributable to SGC per share
|
|
$
|
(1.40
|
)
|
|
$
|
(3.87
|
)
|
|
$
|
(2.72
|
)
|
|
$
|
(4.05
|
)
|
|
$
|
(16.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets(2)
|
|
$
|
7,809
|
|
|
$
|
7,718
|
|
|
$
|
7,725
|
|
|
$
|
7,087
|
|
|
$
|
7,732
|
|
Total long-term debt, including current portion
|
|
$
|
8,725
|
|
|
$
|
9,037
|
|
|
$
|
8,777
|
|
|
$
|
8,074
|
|
|
$
|
8,207
|
|
(1) As described in Note 3, total revenue for the years ended December 31, 2019 and 2018 are presented in accordance with ASC 606, while prior periods continue to be reported in accordance with historical revenue recognition guidance under ASC 605 or ASC 985-605, as applicable, in accordance with the modified retrospective transition method.
|
||||||||||||||||||||
(2) As described in Note 14, total assets for the year ended December 31, 2019 are presented in accordance with ASC 842, while prior periods continue to be reported in accordance with historical lease recognition guidance under ASC 840.
|
•
|
On March 19, 2019, SGI issued $1,100 million of our 2026 Unsecured Notes. On April 4, 2019, we used the net proceeds of the 2026 Unsecured Notes offering to redeem $1,000 million of our outstanding 2022 Unsecured Notes (see Note 15).
|
•
|
On May 7, 2019, SciPlay completed an IPO for an 18.0% minority interest in our Social gaming business, after giving effect to the underwriters’ partial exercise of their over-allotment option on June 4, 2019 (see Note 1). We received $312 million in net proceeds from the offering (net of $30 million used by SciPlay to pay the IPO fees and balance retained by SciPlay for general corporate purposes) which has enabled us to make substantial payments to reduce our debt.
|
•
|
On November 20, 2019, we entered into an amendment to the revolving credit facility under our credit agreement to refinance the existing revolving credit facility and provide for an aggregate of $650 million of revolving credit commitments through 2024 (see Note 15).
|
•
|
On November 26, 2019, SGI issued $700 million of our 2028 Unsecured Notes and $500 million of our 2029 Unsecured Notes. On December 12, 2019, we used the net proceeds of such 2028 Unsecured Notes and 2029 Unsecured Notes, together with cash on hand and borrowings under our revolving credit facility, to redeem the remaining $1,200 million of our outstanding 2022 Unsecured Notes and all $244 million of our outstanding 2020 Notes (see Note 15).
|
(in millions)
|
Year Ended December 31,
|
|
Variance
|
|||||||||||
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||||
Total revenue
|
$
|
3,400
|
|
|
$
|
3,363
|
|
|
$
|
37
|
|
|
1
|
%
|
Total operating expenses
|
2,854
|
|
|
3,097
|
|
|
(243
|
)
|
|
(8
|
)%
|
|||
Operating income
|
546
|
|
|
266
|
|
|
280
|
|
|
105
|
%
|
|||
Net loss before income taxes
|
(108
|
)
|
|
(339
|
)
|
|
231
|
|
|
(68
|
)%
|
|||
Net loss
|
(118
|
)
|
|
(352
|
)
|
|
234
|
|
|
(66
|
)%
|
|||
Net loss attributable to SGC
|
(130
|
)
|
|
(352
|
)
|
|
222
|
|
|
(63
|
)%
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Variance
|
|||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Cost of services(1)
|
$
|
538
|
|
|
$
|
505
|
|
|
$
|
33
|
|
|
7
|
%
|
Cost of product sales(1)
|
457
|
|
|
466
|
|
|
(9
|
)
|
|
(2
|
)%
|
|||
Cost of instant products(1)
|
289
|
|
|
284
|
|
|
5
|
|
|
2
|
%
|
|||
SG&A
|
707
|
|
|
697
|
|
|
10
|
|
|
1
|
%
|
|||
R&D
|
188
|
|
|
202
|
|
|
(14
|
)
|
|
(7
|
)%
|
|||
D&A
|
647
|
|
|
690
|
|
|
(43
|
)
|
|
(6
|
)%
|
|||
Restructuring and other
|
28
|
|
|
253
|
|
|
(225
|
)
|
|
(89
|
)%
|
|||
Total operating expenses
|
$
|
2,854
|
|
|
$
|
3,097
|
|
|
$
|
(243
|
)
|
|
(8
|
)%
|
(1) Excludes D&A
|
(in millions)
|
Year Ended December 31,
|
|
|
||||||
|
2019
|
|
2018
|
|
Factors Affecting Net Loss
|
||||
|
2019 vs. 2018
|
||||||||
Interest expense
|
$
|
(589
|
)
|
|
$
|
(597
|
)
|
|
Lower cash interest costs primarily resulting from refinancing transactions, partially offset by higher outstanding debt principal balances (further discussed in “Liquidity, Capital Resources and Working Capital” and Note 15).
|
Loss on debt financing transactions
|
(100
|
)
|
|
(93
|
)
|
|
Loss on debt financing transactions consummated during 2019 includes $80 million in premium charges associated with redemptions of the 2022 Unsecured Notes (see Note 15) in the second and fourth quarters of 2019.
Loss on debt financing transactions consummated during 2018 includes a $110 million premium charge associated with the redemption of the 2022 Secured Notes (see Note 15).
|
||
Gain on remeasurement of debt
|
9
|
|
|
43
|
|
|
Gains are attributable to remeasurement of the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes and primarily reflect changes in the Euro vs. the U.S. Dollar foreign exchange rates between the periods.
|
||
Other income, net
|
2
|
|
|
17
|
|
|
2018 reflects a $16 million gain associated with the sale of assets held for sale during the fourth quarter of 2018.
|
||
Net income attributable to noncontrolling interest
|
12
|
|
|
—
|
|
|
2019 reflects SciPlay noncontrolling interest (see Note 1).
|
|
|
Services
|
|
Product sales
|
Gaming operations
|
|
Service revenues from gaming operations are derived from WAP, premium and daily-fee Participation gaming machines and other leased gaming machines (including VLTs and ETSs) and licensing arrangements.
|
|
N/A
|
Gaming machine sales
|
|
N/A
|
|
Sale of new and used gaming machines, ETSs and VLTs, conversion game kits and spare parts.
|
Gaming systems
|
|
We provide services which include installation and support of CMSs, including ongoing hardware maintenance and ongoing software maintenance and upgrade services of customer CMSs.
|
|
We offer CMSs that help our customers improve communication with players, add excitement to the gaming floor and enhance operating efficiencies.
|
Table products
|
|
Revenue is generated from supplied table products and services (including Shufflers).
|
|
Sale of table products (including Shufflers) and PTG licensing.
|
1 - The years ended December 31, 2019 and 2018 include $10 million and $26 million, respectively, in IP charges paid by the SciPlay business segment, which are no longer being paid as of May 7, 2019 in connection with the IP License Agreement described in Note 1.
|
(in millions)
|
Year Ended December 31,
|
|
Variance
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|
|
|
|
|
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gaming operations
|
$
|
597
|
|
|
$
|
632
|
|
|
$
|
(35
|
)
|
|
(6
|
)%
|
|
|
|
|
|
|
|
|
|||
Gaming machine sales
|
609
|
|
|
646
|
|
|
(37
|
)
|
|
(6
|
)%
|
|
|
|
|
|
|
|
|
||||||
Gaming systems
|
295
|
|
|
320
|
|
|
(25
|
)
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
||||||
Table products
|
247
|
|
|
233
|
|
|
14
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
||||||
Total revenue
|
$
|
1,748
|
|
|
$
|
1,831
|
|
|
$
|
(83
|
)
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
F/X impact on revenue
|
$
|
(14
|
)
|
|
$
|
11
|
|
|
$
|
(25
|
)
|
|
(227
|
)%
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Year Ended December 31,
|
|
Variance
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||||
KPIs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. and Canada units(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Installed base at period end
|
31,486
|
|
|
33,585
|
|
|
35,190
|
|
|
(2,099
|
)
|
|
(6
|
)%
|
|
(1,605
|
)
|
|
(5
|
)%
|
|||||
Average daily revenue per unit
|
$
|
38.67
|
|
|
$
|
38.70
|
|
|
$
|
40.06
|
|
|
$
|
(0.03
|
)
|
|
—
|
%
|
|
$
|
(1.36
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
International units(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Installed base at period end
|
34,370
|
|
|
33,744
|
|
|
33,578
|
|
|
626
|
|
|
2
|
%
|
|
166
|
|
|
—
|
%
|
|||||
Average daily revenue per unit
|
$
|
10.57
|
|
|
$
|
11.34
|
|
|
$
|
11.64
|
|
|
$
|
(0.77
|
)
|
|
(7
|
)%
|
|
$
|
(0.30
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gaming machine sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. and Canada new unit shipments
|
19,512
|
|
|
20,187
|
|
|
|
|
(675
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
||||||
International new unit shipments
|
10,810
|
|
|
11,608
|
|
|
|
|
(798
|
)
|
|
(7
|
)%
|
|
|
|
|
|
|
||||||
Total new unit shipments
|
30,322
|
|
|
31,795
|
|
|
|
|
|
(1,473
|
)
|
|
(5
|
)%
|
|
|
|
|
|
|
|||||
Average sales price per new unit
|
$
|
17,343
|
|
|
$
|
17,375
|
|
|
|
|
$
|
(32
|
)
|
|
—
|
%
|
|
|
|
|
|
|
|||
(1) Effective the first quarter of 2019, we changed our gaming operation KPIs, which now reflect the installed base and average daily revenue broken down into two categories: U.S. and Canada and International. This change reflects how the management team views the business and provides a clear representation of what drives our operating results.
|
|
Year Ended December 31,
|
|
Variance
|
||||||||
|
2019
|
|
2018
|
|
2019 vs. 2018
|
||||||
U.S. and Canada unit shipments:
|
|
|
|
|
|
|
|
||||
Replacement units
|
14,290
|
|
|
16,185
|
|
|
(1,895
|
)
|
|
(12
|
)%
|
Casino opening and expansion units
|
5,222
|
|
|
4,002
|
|
|
1,220
|
|
|
30
|
%
|
Total unit shipments
|
19,512
|
|
|
20,187
|
|
|
(675
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
||||
International unit shipments:
|
|
|
|
|
|
|
|
||||
Replacement units
|
10,616
|
|
|
11,030
|
|
|
(414
|
)
|
|
(4
|
)%
|
Casino opening and expansion units
|
194
|
|
|
578
|
|
|
(384
|
)
|
|
(66
|
)%
|
Total unit shipments
|
10,810
|
|
|
11,608
|
|
|
(798
|
)
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Year Ended December 31,
|
|
Variance
|
|||||||||||
|
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant products
|
|
$
|
588
|
|
|
$
|
592
|
|
|
$
|
(4
|
)
|
|
(1
|
)%
|
Lottery systems
|
|
323
|
|
|
254
|
|
|
69
|
|
|
27
|
%
|
|||
Total revenue
|
|
$
|
911
|
|
|
$
|
846
|
|
|
$
|
65
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
F/X impact on revenue
|
|
$
|
(10
|
)
|
|
$
|
5
|
|
|
$
|
(15
|
)
|
|
(300
|
)%
|
1 - The years ended December 31, 2019, 2018 and 2017 include $10 million, $26 million and $24 million of IP charges paid to the Gaming business segment, respectively. These payments are no longer being paid as of May 7, 2019 in connection with the IP License Agreement described in Note 1.
|
(in millions, except ARPDAU)
|
|
Year Ended December 31,
|
|
Variance
|
|||||||||||
|
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Mobile
|
|
$
|
391
|
|
|
$
|
323
|
|
|
$
|
68
|
|
|
21
|
%
|
Web and other
|
|
75
|
|
|
93
|
|
|
(18
|
)
|
|
(19
|
)%
|
|||
Total
|
|
$
|
466
|
|
|
$
|
416
|
|
|
$
|
50
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
KPIs:
|
|
|
|
|
|
|
|
|
|||||||
Mobile Penetration(1)
|
|
83
|
%
|
|
78
|
%
|
|
5pp
|
|
|
nm
|
|
|||
Average MAU(2)
|
|
8.0
|
|
|
8.3
|
|
|
(0.3
|
)
|
|
(4
|
)%
|
|||
Average DAU(3)
|
|
2.7
|
|
|
2.6
|
|
|
0.1
|
|
|
4
|
%
|
|||
ARPDAU(4)
|
|
$
|
0.48
|
|
|
$
|
0.43
|
|
|
$
|
0.05
|
|
|
12
|
%
|
nm = not meaningful.
pp = percentage points.
(1) Mobile penetration is defined by percentage of B2C social gaming revenue generated from mobile platforms.
(2) MAU = Monthly Active Users is a count of visitors to our sites during a month. An individual who plays multiple games or from multiple devices may, in certain circumstances, be counted more than once. However, we use third-party data to limit the occurrence of multiple counting.
(3) DAU = Daily Active Users, a count of visitors to our sites during a day. An individual who plays multiple games or from multiple devices may, in certain circumstances, be counted more than once. However, we use third-party data to limit the occurrence of multiple counting.
(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.
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Year Ended December 31,
|
Variance
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Sports and platform
|
|
$
|
119
|
|
|
$
|
101
|
|
|
$
|
18
|
|
|
18
|
%
|
Gaming and other
|
|
156
|
|
|
169
|
|
|
(13
|
)
|
|
(8
|
)%
|
|||
Total revenue
|
|
$
|
275
|
|
|
$
|
270
|
|
|
$
|
5
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
F/X impact on revenue
|
|
$
|
(12
|
)
|
|
$
|
1
|
|
|
$
|
(13
|
)
|
|
nm
|
|
|
|
|
|
|
|
|
|
|
|||||||
KPIs:
|
|
|
|
|
|
|
|
|
|||||||
Gaming
|
|
|
|
|
|
|
|
|
|||||||
Wagers processed through OGS (in billions)
|
|
$
|
36
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
nm = not meaningful.
|
•
|
Business combinations;
|
•
|
Revenue recognition;
|
•
|
Goodwill and other indefinite-lived intangibles, long-lived assets and finite-lived intangible assets - impairment assessment;
|
•
|
Income taxes; and
|
•
|
Legal contingencies.
|
•
|
Contracts with Multiple Promised Goods and Services - because we enter into contracts with customers that involve promises to transfer multiple products and services, the determination of the distinct performance obligations in contracts with multiple promises requires significant judgment. Our total gaming systems, lottery systems and Digital
|
•
|
Determination of stand-alone selling prices - the guidance applicable to 2018 and 2019 requires that we determine the stand-alone selling price for our goods and services as a basis for allocating the transaction price to the identified distinct performance obligations in our contracts with customers. Because we often bundle the selling price for multiple promised goods or services or we may license systems for which the solutions we provide are highly customized and therefore the prices we charge are variable, the determination of a stand-alone selling price or the relative range may require significant judgment. Our total gaming systems, lottery systems and Digital revenue that could be subject to this judgment and thus allocated to distinct performance obligations differently was a portion of $527 million for the year ended December 31, 2019, or approximately 15 percent of consolidated revenue.
|
•
|
Transfer of control in Lottery POS contracts - the guidance applicable to 2018 and 2019 requires that we recognize revenue when or as control over a performance obligation transfers to a customer. In instant products contracts under POS terms, instant products are delivered to lottery customers, but we retain the risk of such inventory until retail sales of such tickets takes place. Because those shipments are to a lottery-controlled warehouse and we do not have the ability to direct the use of such instant products subsequent to this delivery, we have determined that control transfers upon delivery. This conclusion requires the use of judgment. If we concluded that control transferred upon retail sales when the end customer obtained control over the instant tickets, the revenue that could be subject to decrease would be a portion of $205 million for the year ended December 31, 2019, or approximately 6 percent of consolidated revenue.
|
(in millions)
|
|
SGC
(excluding SciPlay)
|
|
SciPlay
|
|
Total
|
||||||
Cash and cash equivalents
|
|
$
|
202
|
|
|
$
|
111
|
|
|
$
|
313
|
|
Revolver capacity
|
|
650
|
|
|
150
|
|
|
800
|
|
|||
Revolver capacity drawn or committed to letters of credit
|
|
(207
|
)
|
|
—
|
|
|
(207
|
)
|
|||
Total
|
|
$
|
645
|
|
|
$
|
261
|
|
|
$
|
906
|
|
(in millions)
|
|
Year Ended December 31,
|
|
Variance
|
||||||||
|
|
2019
|
|
2018
|
|
2019 vs. 2018
|
||||||
Net cash provided by operating activities
|
|
$
|
546
|
|
|
$
|
346
|
|
|
$
|
200
|
|
Net cash used in investing activities
|
|
(263
|
)
|
|
(798
|
)
|
|
535
|
|
|||
Net cash used in financing activities
|
|
(129
|
)
|
|
(156
|
)
|
|
27
|
|
|||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
1
|
|
|
(6
|
)
|
|
7
|
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
$
|
155
|
|
|
$
|
(614
|
)
|
|
$
|
769
|
|
•
|
$55 million increase in accounts and notes receivable due to timing of collections primarily associated with our Gaming and Lottery business segments;
|
•
|
$20 million increase in inventory due to timing of orders and shipments;
|
•
|
$31 million net increase in other current assets and liabilities; partially offset by
|
•
|
$19 million increase in accounts payable and accrued liabilities primarily as a result of the timing of expenditures.
|
|
Form 10-K Page
|
1. Financial Statements:
|
|
2. Financial Statement Schedule:
|
|
3. Exhibits
|
•
|
We tested the effectiveness of management’s controls over:
|
–
|
Preparation and review of accounting analyses
|
–
|
Contract reviews to identify all promises and determine whether such promises are both capable of being distinct and distinct in the context of the contract such that they constitute performance obligations
|
–
|
Salesperson certifications to determine whether side agreements exist or whether there were amendments to contracts with customers during the period.
|
•
|
For selected contracts, we performed the following:
|
–
|
Obtained contract documents, including master agreements, and other documents that were relevant to the contract
|
–
|
Tested management’s identification of performance obligations by evaluating whether the promises were both capable of being distinct and distinct within the context of the contract, including reading the selected contracts and inquiring of certain of the Company’s accounting and operations personnel to understand the nature of the promises and how they are delivered to the customer
|
–
|
Sent requests to customers for confirmation of key contract terms and compared responses to management’s analysis and inspected other correspondence between the customer and the Company that could be relevant to the contract. As applicable, inspected the aging of outstanding receivables or credit memos.
|
•
|
We tested the effectiveness of management’s controls over:
|
–
|
The assessment of whether SciPlay Corporation is a variable interest entity and the appropriateness of the consolidation of SciPlay Corporation by the Company
|
–
|
The equity rollforward used to prepare the statement of stockholders’ deficit
|
–
|
Related financial statement disclosures.
|
•
|
We read the executed agreements and other supporting documents relevant to the SciPlay IPO and related transactions and evaluated key terms.
|
•
|
With the assistance of professionals having expertise in consolidation accounting, we evaluated management’s conclusions regarding the accounting policies applied to consolidate SciPlay Corporation and allocate the IPO proceeds proportionately to the non-controlling interest through consideration of possible alternatives under accounting principles generally accepted in the United States of America.
|
•
|
We evaluated the Company’s financial statement disclosures related to the impacts of the SciPlay IPO and related transactions for compliance with disclosure requirements in accounting principles generally accepted in the United States of America.
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Services
|
$
|
1,819
|
|
|
$
|
1,777
|
|
|
$
|
1,523
|
|
Product sales
|
994
|
|
|
994
|
|
|
979
|
|
|||
Instant products
|
587
|
|
|
592
|
|
|
582
|
|
|||
Total revenue
|
3,400
|
|
|
3,363
|
|
|
3,084
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of services (1)
|
538
|
|
|
505
|
|
|
417
|
|
|||
Cost of product sales (1)
|
457
|
|
|
466
|
|
|
465
|
|
|||
Cost of instant products (1)
|
289
|
|
|
284
|
|
|
282
|
|
|||
Selling, general and administrative
|
707
|
|
|
697
|
|
|
613
|
|
|||
Research and development
|
188
|
|
|
202
|
|
|
184
|
|
|||
Depreciation, amortization and impairments
|
647
|
|
|
690
|
|
|
683
|
|
|||
Restructuring and other
|
28
|
|
|
253
|
|
|
46
|
|
|||
Operating income
|
546
|
|
|
266
|
|
|
394
|
|
|||
Other (expense) income:
|
|
|
|
|
|
||||||
Interest expense
|
(589
|
)
|
|
(597
|
)
|
|
(610
|
)
|
|||
Earnings from equity investments
|
24
|
|
|
25
|
|
|
27
|
|
|||
Loss on debt financing transactions
|
(100
|
)
|
|
(93
|
)
|
|
(38
|
)
|
|||
Gain on remeasurement of debt
|
9
|
|
|
43
|
|
|
—
|
|
|||
Other income, net
|
2
|
|
|
17
|
|
|
—
|
|
|||
Total other expense, net
|
(654
|
)
|
|
(605
|
)
|
|
(621
|
)
|
|||
Net loss before income taxes
|
(108
|
)
|
|
(339
|
)
|
|
(227
|
)
|
|||
Income tax expense
|
(10
|
)
|
|
(13
|
)
|
|
(15
|
)
|
|||
Net loss
|
(118
|
)
|
|
(352
|
)
|
|
(242
|
)
|
|||
Less: Net income attributable to noncontrolling interest
|
12
|
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to SGC
|
$
|
(130
|
)
|
|
$
|
(352
|
)
|
|
$
|
(242
|
)
|
|
|
|
|
|
|
||||||
Basic and diluted net loss attributable to SGC per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(1.40
|
)
|
|
$
|
(3.87
|
)
|
|
$
|
(2.72
|
)
|
Diluted
|
$
|
(1.40
|
)
|
|
$
|
(3.87
|
)
|
|
$
|
(2.72
|
)
|
|
|
|
|
|
|
||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic shares
|
93
|
|
|
91
|
|
|
89
|
|
|||
Diluted shares
|
93
|
|
|
91
|
|
|
89
|
|
|||
(1) Excludes D&A.
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(118
|
)
|
|
$
|
(352
|
)
|
|
$
|
(242
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss), net of tax
|
26
|
|
|
(99
|
)
|
|
127
|
|
|||
Pension and post-retirement (loss) gain, net of tax
|
(7
|
)
|
|
(1
|
)
|
|
3
|
|
|||
Derivative financial instruments unrealized (loss) gain, net of tax
|
(11
|
)
|
|
—
|
|
|
4
|
|
|||
Total other comprehensive income (loss)
|
8
|
|
|
(100
|
)
|
|
134
|
|
|||
Total comprehensive loss
|
(110
|
)
|
|
(452
|
)
|
|
(108
|
)
|
|||
Less: comprehensive income attributable to noncontrolling interest
|
12
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive loss attributable to SGC
|
$
|
(122
|
)
|
|
$
|
(452
|
)
|
|
$
|
(108
|
)
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
313
|
|
|
$
|
168
|
|
Restricted cash
|
51
|
|
|
39
|
|
||
Accounts receivable, net
|
649
|
|
|
599
|
|
||
Notes receivable, net
|
106
|
|
|
114
|
|
||
Inventories
|
244
|
|
|
216
|
|
||
Prepaid expenses, deposits and other current assets
|
252
|
|
|
233
|
|
||
Total current assets
|
1,615
|
|
|
1,369
|
|
||
Non-current assets:
|
|
|
|
||||
Restricted cash
|
11
|
|
|
13
|
|
||
Notes receivable, net
|
53
|
|
|
40
|
|
||
Property and equipment, net
|
500
|
|
|
547
|
|
||
Operating lease right-of-use assets
|
105
|
|
|
—
|
|
||
Goodwill
|
3,280
|
|
|
3,280
|
|
||
Intangible assets, net
|
1,516
|
|
|
1,809
|
|
||
Software, net
|
258
|
|
|
285
|
|
||
Equity investments
|
273
|
|
|
298
|
|
||
Other assets
|
198
|
|
|
77
|
|
||
Total assets
|
$
|
7,809
|
|
|
$
|
7,718
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|||||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
45
|
|
|
$
|
45
|
|
Accounts payable
|
226
|
|
|
225
|
|
||
Accrued liabilities
|
495
|
|
|
477
|
|
||
Total current liabilities
|
766
|
|
|
747
|
|
||
Deferred income taxes
|
91
|
|
|
108
|
|
||
Operating lease liabilities
|
88
|
|
|
—
|
|
||
Other long-term liabilities
|
292
|
|
|
334
|
|
||
Long-term debt, excluding current portion
|
8,680
|
|
|
8,992
|
|
||
Total liabilities
|
9,917
|
|
|
10,181
|
|
||
Commitments and contingencies (Note 21)
|
|
|
|
|
|
||
Stockholders’ deficit:
|
|
|
|
||||
Common stock, par value $0.001 per share, 199 shares authorized, 111 and 109 shares issued and 94 and 92 shares outstanding as of December 31, 2019 and 2018, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
1,208
|
|
|
835
|
|
||
Accumulated loss
|
(2,954
|
)
|
|
(2,824
|
)
|
||
Treasury stock, at cost - 17 shares
|
(175
|
)
|
|
(175
|
)
|
||
Accumulated other comprehensive loss
|
(292
|
)
|
|
(300
|
)
|
||
Total SGC stockholders’ deficit
|
(2,212
|
)
|
|
(2,463
|
)
|
||
Noncontrolling interest
|
104
|
|
|
—
|
|
||
Total stockholders’ deficit
|
(2,108
|
)
|
|
(2,463
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
7,809
|
|
|
$
|
7,718
|
|
|
Common Stock
|
|
Additional Paid in Capital
|
|
Accumulated Loss
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling Interest
|
|
Total
|
||||||||||||||
January 1, 2017
|
$
|
1
|
|
|
$
|
791
|
|
|
$
|
(2,219
|
)
|
|
$
|
(175
|
)
|
|
$
|
(334
|
)
|
|
$
|
—
|
|
|
$
|
(1,936
|
)
|
Issuance of common stock in connection with employee stock purchase plan
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Net redemption of common stock in connection with stock options and RSUs
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
(242
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(242
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
134
|
|
|||||||
December 31, 2017
|
$
|
1
|
|
|
$
|
808
|
|
|
$
|
(2,461
|
)
|
|
$
|
(175
|
)
|
|
$
|
(200
|
)
|
|
$
|
—
|
|
|
$
|
(2,027
|
)
|
Net redemption of common stock in connection with stock options and RSUs
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
(352
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(352
|
)
|
|||||||
Adoption impact of ASC 606
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
(100
|
)
|
|||||||
December 31, 2018
|
$
|
1
|
|
|
$
|
835
|
|
|
$
|
(2,824
|
)
|
|
$
|
(175
|
)
|
|
$
|
(300
|
)
|
|
$
|
—
|
|
|
$
|
(2,463
|
)
|
Net issuance of common stock in connection with stock options and RSUs and other
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||||
Sale of SciPlay common stock and related transactions
|
—
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|
419
|
|
|||||||
Stock-based compensation
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
34
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
(130
|
)
|
|
—
|
|
|
—
|
|
|
12
|
|
|
(118
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||||
December 31, 2019
|
$
|
1
|
|
|
$
|
1,208
|
|
|
$
|
(2,954
|
)
|
|
$
|
(175
|
)
|
|
$
|
(292
|
)
|
|
$
|
104
|
|
|
$
|
(2,108
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(118
|
)
|
|
$
|
(352
|
)
|
|
$
|
(242
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, amortization and impairments
|
647
|
|
|
690
|
|
|
683
|
|
|||
Change in deferred income taxes
|
(21
|
)
|
|
(33
|
)
|
|
(6
|
)
|
|||
Stock-based compensation
|
37
|
|
|
44
|
|
|
27
|
|
|||
Non-cash interest expense
|
25
|
|
|
25
|
|
|
21
|
|
|||
Earnings from equity investments, net
|
(24
|
)
|
|
(25
|
)
|
|
(27
|
)
|
|||
Distributed earnings from equity investments
|
26
|
|
|
33
|
|
|
33
|
|
|||
Loss (gain) on sale of assets and other, net
|
6
|
|
|
(16
|
)
|
|
1
|
|
|||
Loss on debt financing transactions
|
100
|
|
|
93
|
|
|
38
|
|
|||
Gain on remeasurement of debt
|
(9
|
)
|
|
(43
|
)
|
|
—
|
|
|||
Contingent acquisition consideration fair value adjustment
|
2
|
|
|
29
|
|
|
—
|
|
|||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts and notes receivable, net
|
(55
|
)
|
|
32
|
|
|
(48
|
)
|
|||
Inventories
|
(20
|
)
|
|
22
|
|
|
(2
|
)
|
|||
Other assets and liabilities
|
(31
|
)
|
|
(27
|
)
|
|
(36
|
)
|
|||
Accounts payable and accrued liabilities
|
(19
|
)
|
|
(126
|
)
|
|
65
|
|
|||
Net cash provided by operating activities
|
546
|
|
|
346
|
|
|
507
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(285
|
)
|
|
(391
|
)
|
|
(294
|
)
|
|||
Acquisitions of businesses and assets, net of cash acquired
|
—
|
|
|
(297
|
)
|
|
(58
|
)
|
|||
Acquisitions and additions to equity method investments
|
(1
|
)
|
|
(180
|
)
|
|
(107
|
)
|
|||
Distributions of capital from equity investments
|
23
|
|
|
30
|
|
|
34
|
|
|||
Proceeds from asset sales and other
|
—
|
|
|
40
|
|
|
10
|
|
|||
Net cash used in investing activities
|
(263
|
)
|
|
(798
|
)
|
|
(415
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings under revolving credit facility
|
270
|
|
|
560
|
|
|
475
|
|
|||
Repayments under revolving credit facility
|
(400
|
)
|
|
(585
|
)
|
|
(170
|
)
|
|||
Proceeds from issuance of senior notes and term loans
|
2,300
|
|
|
2,512
|
|
|
2,112
|
|
|||
Repayment of assumed NYX and other acquisitions debt
|
—
|
|
|
(290
|
)
|
|
—
|
|
|||
Payments on long-term debt
|
(44
|
)
|
|
(39
|
)
|
|
(23
|
)
|
|||
Repayments of senior notes and term loans (including redemption premium)
|
(2,523
|
)
|
|
(2,210
|
)
|
|
(1,693
|
)
|
|||
Payments of debt issuance and deferred financing costs
|
(35
|
)
|
|
(38
|
)
|
|
(59
|
)
|
|||
Payments on license obligations
|
(40
|
)
|
|
(45
|
)
|
|
(53
|
)
|
|||
Sale of future revenue
|
11
|
|
|
—
|
|
|
—
|
|
|||
Net proceeds from issuance of SciPlay’s common stock
|
342
|
|
|
—
|
|
|
—
|
|
|||
Payments of deferred SciPlay common stock offering costs
|
(9
|
)
|
|
—
|
|
|
—
|
|
|||
Net redemptions of common stock under stock-based compensation plans and other
|
(1
|
)
|
|
(21
|
)
|
|
(9
|
)
|
|||
Net cash (used in) provided by financing activities
|
(129
|
)
|
|
(156
|
)
|
|
580
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
1
|
|
|
(6
|
)
|
|
5
|
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
155
|
|
|
(614
|
)
|
|
677
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
220
|
|
|
834
|
|
|
157
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
375
|
|
|
$
|
220
|
|
|
$
|
834
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
549
|
|
|
$
|
633
|
|
|
$
|
575
|
|
Income taxes paid
|
41
|
|
|
33
|
|
|
38
|
|
|||
Cash paid for contingent acquisition considerations included in operating activities
|
26
|
|
|
—
|
|
|
—
|
|
|||
Non-cash investing and financing transactions:
|
|
|
|
|
|
||||||
Non-cash rollover and refinancing of Term loans
|
$
|
—
|
|
|
$
|
3,275
|
|
|
$
|
6,030
|
|
Non-cash additions to intangible assets related to license agreements
|
—
|
|
|
138
|
|
|
26
|
|
|||
NYX non-cash consideration transferred (including 2017 acquisition of ordinary shares)
|
—
|
|
|
93
|
|
|
—
|
|
•
|
A tax receivable agreement (“TRA”), which provides for the payment by SciPlay to SGC of 85% of the amount of tax benefits, if any, that SciPlay actually realizes (or in some circumstances is deemed to realize) as a result of (i) increases in the tax basis of assets of SciPlay Parent Company, LLC (“SciPlay Parent LLC”) (a) in connection with the SciPlay IPO, (b) resulting from any redemptions or exchanges of membership interests of SciPlay Parent LLC pursuant to the SciPlay Parent LLC Operating Agreement or (c) resulting from certain distributions (or deemed distributions) by SciPlay Parent LLC and (ii) certain other tax benefits related to SciPlay’s making of payments under the TRA.
|
•
|
An Intercompany Services Agreement, under which SGC provides to SciPlay certain corporate level general and administrative services, including but not limited to, finance, corporate development, human resources,
|
•
|
An intellectual property license agreement (“IP License Agreement”), pursuant to which SciPlay acquired the following licenses from a restricted subsidiary of SGC for a one-time payment of $255 million: (i) an exclusive (subject to certain limited exceptions), perpetual, non-royalty bearing license to use intellectual property created or acquired by SG Gaming, or its affiliates on or before the third anniversary of the date of the IP License Agreement (the date of the IP License Agreement, the “Effective Date”), in any of the Covered Games (defined as any of SciPlay’s currently available or future social games that are developed for mobile platforms, social media platforms, internet platforms or other interactive platforms and distributed solely via digital delivery); (ii) an exclusive (subject to certain limited exceptions and payment of royalties owed to third-party licensors for SciPlay’s use of third-party licensed property) license to use third-party intellectual property licensed to SG Gaming or its affiliates on or before the third anniversary of the Effective Date, to the extent permitted to be sublicensed to SciPlay, in any of the Covered Games; (iii) a non-exclusive, perpetual, non-royalty bearing license to use intellectual property created or acquired by SG Gaming or its affiliates after the third anniversary of the Effective Date, but only in SciPlay’s currently available games; and (iv) a non-exclusive license to use third-party intellectual property licensed to SG Gaming or its affiliates after the third anniversary of the Effective Date, to the extent permitted to be sublicensed to SciPlay, but only in SciPlay’s currently available games.
|
•
|
SciPlay Holding Company, LLC (“SciPlay Holding”), a subsidiary of SciPlay, entered into a $150 million revolving credit agreement (the “SciPlay Revolver”) that matures in May 2024 (see Note 15).
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Accrued liabilities
|
|
$
|
39
|
|
|
$
|
50
|
|
Other long-term liabilities
|
|
172
|
|
|
212
|
|
||
Total minimum guarantee obligations
|
|
$
|
211
|
|
|
$
|
262
|
|
Weighted average remaining term (in years)
|
|
4.7
|
|
|
4.2
|
|
|
Year Ended December 31,
|
||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
After 2024
|
Expected future payments
|
$39
|
|
$47
|
|
$42
|
|
$27
|
|
$28
|
|
$28
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Property and equipment, net:
|
|
|
|
|
||||
U.S.
|
|
$
|
299
|
|
|
$
|
334
|
|
Other
|
|
201
|
|
|
213
|
|
||
Total
|
|
$
|
500
|
|
|
$
|
547
|
|
|
|
Year Ended December 31, 2019
|
||
Contract liability balance, beginning of period(1)
|
|
$
|
97
|
|
Liabilities recognized during the period
|
|
47
|
|
|
Amounts recognized in revenue from beginning balance
|
|
(35
|
)
|
|
Contract liability balance, end of period(1)
|
|
$
|
109
|
|
(1) Contract liabilities are included within Accrued liabilities and Other long-term liabilities in our consolidated balance sheets.
|
•
|
Revenue from the sale of instant products that are sold on a PPU basis is recognized when the customer accepts the product pursuant to the terms of the contract and are recognized under general accounting policy described above.
|
•
|
Revenue from the sale of instant products that are sold on a Participation basis (POS and SGEP) is recognized as retail sales are generated. We believe that products and services provided under these arrangements are delivered contemporaneously and are not separate units of account; therefore, as the services offered are a comprehensive solution in exchange for Participation-based or price-per-unit based compensation, this revenue is recognized under the general revenue recognition policy above.
|
•
|
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. Some lottery systems contracts also result in recognition of revenue when retail sales of instant tickets through the system 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 maintenance on lottery software and lottery terminals is recognized ratably over the maintenance period.
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Current:
|
|
|
|
||||
Accounts receivable
|
$
|
668
|
|
|
$
|
615
|
|
Notes receivable
|
123
|
|
|
138
|
|
||
Allowance for doubtful accounts
|
(36
|
)
|
|
(40
|
)
|
||
Current accounts and notes receivable, net
|
$
|
755
|
|
|
$
|
713
|
|
Long-term:
|
|
|
|
||||
Notes receivable, net of allowance
|
53
|
|
|
40
|
|
||
Total accounts and notes receivable, net
|
$
|
808
|
|
|
$
|
753
|
|
•
|
Mexico - Our notes receivable, net, from certain customers in Mexico at December 31, 2019 was $28 million. We collected $30 million of outstanding receivables from these customers during the year ended December 31, 2019.
|
•
|
Peru - Our notes receivable, net, from certain customers in Peru at December 31, 2019 was $15 million. We collected $6 million of outstanding receivables from these customers during the year ended December 31, 2019.
|
•
|
Argentina - Our notes receivable, net, from customers in Argentina at December 31, 2019 was $19 million, which are 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 $20 million of outstanding receivables from customers in Argentina during the year ended December 31, 2019.
|
|
December 31, 2019
|
|
Balances over 90 days past due
|
|
December 31, 2018
|
|
Balances over 90 days past due
|
||||||||
Notes receivable:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
79
|
|
|
$
|
12
|
|
|
$
|
55
|
|
|
$
|
6
|
|
International
|
97
|
|
|
18
|
|
|
123
|
|
|
25
|
|
||||
Total notes receivable
|
176
|
|
|
30
|
|
|
178
|
|
|
31
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable allowance
|
|
|
|
|
|
|
|
||||||||
Domestic
|
(2
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
International
|
(15
|
)
|
|
(15
|
)
|
|
(18
|
)
|
|
(18
|
)
|
||||
Total notes receivable allowance
|
(17
|
)
|
|
(17
|
)
|
|
(24
|
)
|
|
(24
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable, net
|
$
|
159
|
|
|
$
|
13
|
|
|
$
|
154
|
|
|
$
|
7
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Beginning allowance for notes receivable
|
$
|
(24
|
)
|
|
$
|
(21
|
)
|
Provision
|
(3
|
)
|
|
(6
|
)
|
||
Charge-offs and recoveries
|
10
|
|
|
3
|
|
||
Ending allowance for notes receivable
|
$
|
(17
|
)
|
|
$
|
(24
|
)
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Parts and work-in-process
|
|
$
|
153
|
|
|
$
|
131
|
|
Finished goods
|
|
91
|
|
|
85
|
|
||
Total inventories
|
|
$
|
244
|
|
|
$
|
216
|
|
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
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Land
|
|
$
|
15
|
|
|
$
|
15
|
|
Buildings and leasehold improvements
|
|
129
|
|
|
128
|
|
||
Gaming and lottery machinery and equipment
|
|
1,028
|
|
|
1,041
|
|
||
Furniture and fixtures
|
|
31
|
|
|
27
|
|
||
Construction in progress
|
|
30
|
|
|
17
|
|
||
Other property and equipment
|
|
263
|
|
|
240
|
|
||
Less: accumulated depreciation
|
|
(996
|
)
|
|
(921
|
)
|
||
Total property and equipment, net
|
|
$
|
500
|
|
|
$
|
547
|
|
|
Year Ended
|
||
|
December 31, 2018
|
||
Revenue
|
$
|
198
|
|
Net loss
|
41
|
|
|
Total
Consideration |
|
Cash paid, net
of cash acquired |
|
Contingent Acquisition 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 2018
|
$
|
46
|
|
|
$
|
34
|
|
|
$
|
9
|
|
|
$
|
42
|
|
|
9.4 Years
|
|
$
|
11
|
|
Aggregate total 2017
|
66
|
|
|
58
|
|
|
8
|
|
|
56
|
|
|
8.3 Years
|
|
13
|
|
|||||
(1) Contingent consideration is determined by fair value and included in the consideration transferred (see Note 16 for subsequent changes due to remeasurements, which are recorded in Restructuring and other).
(2) Intangible assets primarily consist of technology-based and customer relationship intangible assets. The fair value of these intangible assets was determined using a combination of a relief from royalty method and the excess earnings method using Level 3 in the hierarchy as established by ASC 820. The discount rates and royalty rates used in the valuation analyses ranged between 9% and 20% and 1% and 16%, respectively. |
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross Carrying
Value |
|
Accumulated
Amortization |
|
Net Balance
|
|
Gross Carrying
Value
|
|
Accumulated
Amortization
|
|
Net Balance
|
||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
1,086
|
|
|
$
|
(383
|
)
|
|
$
|
703
|
|
|
$
|
1,084
|
|
|
$
|
(299
|
)
|
|
$
|
785
|
|
Intellectual property
|
931
|
|
|
(563
|
)
|
|
368
|
|
|
931
|
|
|
(453
|
)
|
|
478
|
|
||||||
Licenses
|
548
|
|
|
(329
|
)
|
|
219
|
|
|
546
|
|
|
(253
|
)
|
|
293
|
|
||||||
Brand names
|
123
|
|
|
(72
|
)
|
|
51
|
|
|
123
|
|
|
(59
|
)
|
|
64
|
|
||||||
Trade names
|
116
|
|
|
(31
|
)
|
|
85
|
|
|
108
|
|
|
(23
|
)
|
|
85
|
|
||||||
Patents and other
|
24
|
|
|
(15
|
)
|
|
9
|
|
|
23
|
|
|
(13
|
)
|
|
10
|
|
||||||
|
2,828
|
|
|
(1,393
|
)
|
|
1,435
|
|
|
2,815
|
|
|
(1,100
|
)
|
|
1,715
|
|
||||||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
83
|
|
|
(2
|
)
|
|
81
|
|
|
96
|
|
|
(2
|
)
|
|
94
|
|
||||||
Total intangible assets
|
$
|
2,911
|
|
|
$
|
(1,395
|
)
|
|
$
|
1,516
|
|
|
$
|
2,911
|
|
|
$
|
(1,102
|
)
|
|
$
|
1,809
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Amortization expense
|
$
|
306
|
|
|
$
|
297
|
|
|
$
|
260
|
|
|
Year Ending December 31,
|
||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
||||||||||
Amortization expense
|
$
|
250
|
|
|
$
|
219
|
|
|
$
|
211
|
|
|
$
|
184
|
|
|
$
|
167
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Software
|
|
$
|
1,173
|
|
|
$
|
1,101
|
|
Accumulated amortization
|
|
(915
|
)
|
|
(816
|
)
|
||
Software, net
|
|
$
|
258
|
|
|
$
|
285
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Amortization expense
|
$
|
124
|
|
|
$
|
161
|
|
|
$
|
153
|
|
|
|
Equity investment Balance as of
December 31,
|
|
Equity earnings (loss) recognized
for the Year Ended
December 31,
|
|
Cash distributions and dividends received
for the Year Ended
December 31,
|
||||||||||||||||||||||||||
Equity Investment
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||
LNS
|
|
$
|
201
|
|
|
$
|
224
|
|
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
14
|
|
|
$
|
33
|
|
|
$
|
38
|
|
|
$
|
40
|
|
Northstar NJ and NJ Supply Co
|
|
21
|
|
|
25
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
4
|
|
||||||||
GLB and CSG
|
|
26
|
|
|
23
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
5
|
|
||||||||
Other
|
|
25
|
|
|
26
|
|
|
5
|
|
|
4
|
|
|
12
|
|
|
11
|
|
|
14
|
|
|
18
|
|
||||||||
Total under equity method
|
|
$
|
273
|
|
|
$
|
298
|
|
|
$
|
24
|
|
|
$
|
25
|
|
|
$
|
27
|
|
|
$
|
49
|
|
|
$
|
63
|
|
|
$
|
67
|
|
|
|
Revenue recognized from sales to investee for the Year Ended December 31,
|
||||||||||
Equity Investment
|
|
2019
|
|
2018
|
|
2017
|
||||||
LNS
|
|
$
|
46
|
|
|
$
|
40
|
|
|
$
|
45
|
|
Northstar NJ and NJ Supply Co
|
|
24
|
|
|
23
|
|
|
20
|
|
|||
Other
|
|
6
|
|
|
7
|
|
|
30
|
|
|||
Total
|
|
$
|
76
|
|
|
$
|
70
|
|
|
$
|
95
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Compensation and benefits
|
|
$
|
94
|
|
|
$
|
120
|
|
Contract liability
|
|
84
|
|
|
73
|
|
||
Accrued interest
|
|
74
|
|
|
64
|
|
||
Customer advances and licenses
|
|
45
|
|
|
43
|
|
||
Taxes, other than income
|
|
36
|
|
|
27
|
|
||
Operating lease liabilities
|
|
26
|
|
|
—
|
|
||
Contingent acquisition consideration liabilities
|
|
7
|
|
|
22
|
|
||
Other
|
|
129
|
|
|
128
|
|
||
Total
|
|
$
|
495
|
|
|
$
|
477
|
|
|
December 31, 2019
|
||
Operating lease right-of-use assets
|
$
|
105
|
|
Accrued liabilities
|
26
|
|
|
Operating lease liabilities
|
88
|
|
|
Total operating lease liabilities
|
$
|
114
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
||
Operating leases
|
$
|
12
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases for the twelve months period
|
$
|
33
|
|
Weighted average remaining lease term, years
|
5
|
|
|
Weighted average discount rate
|
5
|
%
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Less Imputed Interest
|
|
Total
|
||||||||||||||||
Operating leases
|
$
|
31
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
21
|
|
|
$
|
(16
|
)
|
|
$
|
113
|
|
|
As of December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|||||||||||||||||
|
Final Maturity
|
|
Rate(s)
|
|
Face Value
|
|
Unamortized debt discount/premium and deferred financing costs, net
|
|
Book Value
|
|
Book Value
|
|||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revolver
|
2020
|
|
variable
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
325
|
|
Revolver
|
2024
|
|
variable
|
|
|
195
|
|
|
—
|
|
|
195
|
|
|
—
|
|
||||
Term Loan B-5
|
2024
|
|
variable
|
|
|
4,102
|
|
|
(60
|
)
|
|
4,042
|
|
|
4,071
|
|
||||
SciPlay Revolver
|
2024
|
|
variable
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Senior Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2025 Secured Notes(1)
|
2025
|
|
5.000%
|
|
|
1,250
|
|
|
(15
|
)
|
|
1,235
|
|
|
1,233
|
|
||||
2026 Secured Euro Notes(2)
|
2026
|
|
3.375%
|
|
|
364
|
|
|
(5
|
)
|
|
359
|
|
|
367
|
|
||||
2022 Unsecured Notes
|
2022
|
|
10.000%
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,176
|
|
||||
2026 Unsecured Euro Notes(2)
|
2026
|
|
5.500%
|
|
|
280
|
|
|
(4
|
)
|
|
276
|
|
|
282
|
|
||||
2026 Unsecured Notes
|
2026
|
|
8.250%
|
|
|
1,100
|
|
|
(15
|
)
|
|
1,085
|
|
|
—
|
|
||||
2028 Unsecured Notes
|
2028
|
|
7.000%
|
|
700
|
|
|
(10
|
)
|
|
690
|
|
|
—
|
|
|||||
2029 Unsecured Notes
|
2029
|
|
7.250%
|
|
500
|
|
|
(7
|
)
|
|
493
|
|
|
—
|
|
|||||
Subordinated Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2020 Notes
|
2020
|
|
6.250%
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
242
|
|
||||
2021 Notes
|
2021
|
|
6.625%
|
|
|
341
|
|
|
(2
|
)
|
|
339
|
|
|
337
|
|
||||
Finance lease obligations as of December 31, 2019 payable monthly through 2023 and other(3)
|
2023
|
|
4.652
|
%
|
|
11
|
|
|
—
|
|
|
11
|
|
|
4
|
|
||||
Total long-term debt outstanding
|
|
|
|
|
$
|
8,843
|
|
|
$
|
(118
|
)
|
|
$
|
8,725
|
|
|
$
|
9,037
|
|
|
Less: current portion of long-term debt
|
|
|
|
|
|
|
|
|
(45
|
)
|
|
(45
|
)
|
|||||||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
|
$
|
8,680
|
|
|
$
|
8,992
|
|
|||||
Fair value of debt(4)
|
|
|
|
|
$
|
9,181
|
|
|
|
|
|
|
|
|
|
Total
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
After 2024
|
||||||||||||||
Senior Secured Credit Facilities
|
|
$
|
4,297
|
|
|
$
|
42
|
|
|
$
|
42
|
|
|
$
|
42
|
|
|
$
|
42
|
|
|
$
|
4,129
|
|
|
$
|
—
|
|
Senior Notes
|
|
4,194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,194
|
|
|||||||
Subordinated Notes
|
|
341
|
|
|
—
|
|
|
341
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Finance lease obligations and other
|
|
11
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Total long-term debt outstanding
|
|
$
|
8,843
|
|
|
$
|
45
|
|
|
$
|
386
|
|
|
$
|
45
|
|
|
$
|
44
|
|
|
$
|
4,129
|
|
|
$
|
4,194
|
|
Unamortized deferred financing costs and discount/premium
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total debt book value
|
|
$
|
8,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Repurchase and cancellation of principal balance at premium
|
$
|
80
|
|
|
$
|
110
|
|
|
$
|
—
|
|
Unamortized debt (premium) discount and deferred financing costs, net
|
20
|
|
|
(30
|
)
|
|
26
|
|
|||
Third party debt issuance fees
|
—
|
|
|
13
|
|
|
12
|
|
|||
Total loss on debt financing transactions
|
$
|
100
|
|
|
$
|
93
|
|
|
$
|
38
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Losses recorded in accumulated other comprehensive loss, net of tax
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
Interest expense recorded related to interest rate swap contracts
|
|
1
|
|
|
3
|
|
|
7
|
|
|
|
Year Ended December 31,
2019
|
|
Year Ended December 31,
2018
|
||||
|
|
Interest expense
|
|
Interest expense
|
||||
Total interest expense which reflects the effects of cash flow hedges
|
|
$
|
(589
|
)
|
|
$
|
(597
|
)
|
Hedged item
|
|
(20
|
)
|
|
(17
|
)
|
||
Derivative designated as hedging instrument
|
|
19
|
|
|
14
|
|
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Related to SGC stock options
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
4
|
|
Related to SGC RSUs
|
23
|
|
|
32
|
|
|
23
|
|
|||
Related to SciPlay RSUs
|
9
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
37
|
|
|
$
|
44
|
|
|
$
|
27
|
|
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||
Shares outstanding as of beginning of period
|
|
92
|
|
|
90
|
|
Shares issued as part of equity-based compensation plans and the ESPP, net of shares surrendered
|
|
2
|
|
|
2
|
|
Shares outstanding as of end of period
|
|
94
|
|
|
92
|
|
|
Number of
Restricted
Stock
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Unvested RSUs as of December 31, 2018
|
2.6
|
|
|
$
|
25.37
|
|
Granted
|
1.5
|
|
|
$
|
21.78
|
|
Vested
|
(1.0
|
)
|
|
$
|
19.17
|
|
Cancelled
|
(0.2
|
)
|
|
$
|
32.26
|
|
Unvested RSUs as of December 31, 2019
|
2.9
|
|
|
$
|
24.80
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Change in benefit obligation:
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
125
|
|
|
$
|
134
|
|
Service cost
|
|
2
|
|
|
3
|
|
||
Interest cost
|
|
4
|
|
|
4
|
|
||
Participant contributions
|
|
1
|
|
|
1
|
|
||
Actuarial loss (gain)
|
|
21
|
|
|
(7
|
)
|
||
Benefits paid
|
|
(3
|
)
|
|
(4
|
)
|
||
Other, principally foreign exchange
|
|
4
|
|
|
(6
|
)
|
||
Benefit obligation at end of year
|
|
$
|
154
|
|
|
$
|
125
|
|
Change in plan assets:
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
|
$
|
107
|
|
|
$
|
116
|
|
Actual gain (loss) on plan assets
|
|
18
|
|
|
(4
|
)
|
||
Employer contributions
|
|
4
|
|
|
3
|
|
||
Participant contributions
|
|
1
|
|
|
1
|
|
||
Benefits paid
|
|
(3
|
)
|
|
(4
|
)
|
||
Other, principally foreign exchange
|
|
2
|
|
|
(5
|
)
|
||
Fair value of assets at end of year
|
|
$
|
129
|
|
|
$
|
107
|
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
||||
Funded status (current)
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status (non-current)
|
|
(25
|
)
|
|
(18
|
)
|
||
Accumulated other comprehensive loss:
|
|
|
|
|
||||
Unrecognized actuarial loss
|
|
34
|
|
|
25
|
|
||
Unrecognized prior service cost
|
|
—
|
|
|
—
|
|
||
Deferred taxes
|
|
(1
|
)
|
|
(5
|
)
|
||
Net amount recognized
|
|
$
|
8
|
|
|
$
|
2
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Components of net periodic pension benefit cost:
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
|
4
|
|
|
4
|
|
|
4
|
|
|||
Expected return on plan assets
|
|
(5
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
Amortization of actuarial losses
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
Net periodic cost
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Unrecognized loss
|
|
$
|
2
|
|
Unrecognized prior service cost
|
|
(1
|
)
|
|
Net amount expected to be recognized
|
|
$
|
1
|
|
|
2019
|
|
2018
|
||||
Significant unobservable inputs (Level 3), beginning of period
|
$
|
4
|
|
|
$
|
4
|
|
Unrealized gain (loss) on asset still held
|
1
|
|
|
—
|
|
||
Significant unobservable inputs (Level 3), end of period
|
$
|
5
|
|
|
$
|
4
|
|
|
|
U.K. Plan
|
|
Canadian Plan
|
||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
Discount rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Benefit obligation
|
|
2.0
|
%
|
|
2.9
|
%
|
|
2.6
|
%
|
|
3.1
|
%
|
|
3.9
|
%
|
|
4.0
|
%
|
Net periodic pension cost
|
|
2.0
|
%
|
|
2.6
|
%
|
|
2.8
|
%
|
|
3.9
|
%
|
|
3.6
|
%
|
|
3.6
|
%
|
Rate of compensation increase
|
|
1.0
|
%
|
|
1.0
|
%
|
|
1.0
|
%
|
|
3.0
|
%
|
|
1.0
|
%
|
|
3.0
|
%
|
Expected return on assets
|
|
5.1
|
%
|
|
5.0
|
%
|
|
4.8
|
%
|
|
5.5
|
%
|
|
5.7
|
%
|
|
6.0
|
%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
|
$
|
(158
|
)
|
|
$
|
(356
|
)
|
|
$
|
(336
|
)
|
Foreign
|
|
50
|
|
|
17
|
|
|
109
|
|
|||
Net loss before income tax (benefit) expense
|
|
$
|
(108
|
)
|
|
$
|
(339
|
)
|
|
$
|
(227
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
|
|
|
|
|
|
||||||
U.S. Federal
|
|
$
|
(5
|
)
|
|
$
|
19
|
|
|
$
|
5
|
|
U.S. State
|
|
1
|
|
|
4
|
|
|
(4
|
)
|
|||
Foreign
|
|
32
|
|
|
22
|
|
|
25
|
|
|||
Total
|
|
28
|
|
|
45
|
|
|
26
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
U.S. Federal
|
|
(3
|
)
|
|
(10
|
)
|
|
(6
|
)
|
|||
U.S. State
|
|
(3
|
)
|
|
(7
|
)
|
|
3
|
|
|||
Foreign
|
|
(12
|
)
|
|
(15
|
)
|
|
(8
|
)
|
|||
Total
|
|
(18
|
)
|
|
(32
|
)
|
|
(11
|
)
|
|||
Total income tax expense
|
|
$
|
10
|
|
|
$
|
13
|
|
|
$
|
15
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Statutory U.S. federal income tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
Foreign earnings at rates different than U.S. federal rate
|
|
(3.7
|
)%
|
|
(1.5
|
)%
|
|
(5.7
|
)%
|
Valuation allowance adjustments
|
|
(31.0
|
)%
|
|
(16.8
|
)%
|
|
(40.8
|
)%
|
Impact of U.S. Tax Reform
|
|
—
|
%
|
|
(3.1
|
)%
|
|
4.3
|
%
|
Permanent Items
|
|
(3.6
|
)%
|
|
(2.5
|
)%
|
|
(1.0
|
)%
|
Reduction of UTBs
|
|
6.2
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
|
1.9
|
%
|
|
(1.0
|
)%
|
|
1.8
|
%
|
Effective income tax rate
|
|
(9.2
|
)%
|
|
(3.9
|
)%
|
|
(6.4
|
)%
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Reserves and other accrued expenses
|
|
$
|
78
|
|
|
$
|
37
|
|
Net operating loss carry forwards
|
|
296
|
|
|
436
|
|
||
Tax credit carry forwards
|
|
40
|
|
|
29
|
|
||
Interest limitation carryforwards
|
|
157
|
|
|
106
|
|
||
Differences in financial reporting and tax basis for:
|
|
|
|
|
||||
Other
|
|
51
|
|
|
64
|
|
||
Valuation allowance
|
|
(209
|
)
|
|
(245
|
)
|
||
Realizable deferred tax assets
|
|
413
|
|
|
427
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Deferred costs and prepaid expenses
|
|
(12
|
)
|
|
(45
|
)
|
||
Differences in financial reporting and tax basis for:
|
|
|
|
|
||||
Identifiable intangible assets
|
|
(312
|
)
|
|
(383
|
)
|
||
Property and equipment
|
|
(47
|
)
|
|
(62
|
)
|
||
Other
|
|
(13
|
)
|
|
(15
|
)
|
||
Total deferred tax liabilities
|
|
(384
|
)
|
|
(505
|
)
|
||
Net deferred tax liability on balance sheet
|
|
$
|
29
|
|
|
$
|
(78
|
)
|
|
December 31, 2019
|
||||||||||
|
Federal
|
|
State
|
|
Foreign
|
||||||
NOL carry forwards
|
$
|
960
|
|
|
$
|
1,196
|
|
|
$
|
181
|
|
Interest limitation carry forwards
|
614
|
|
|
317
|
|
|
28
|
|
|||
R&D and state credit carry forwards
|
40
|
|
|
2
|
|
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of period
|
|
$
|
34
|
|
|
$
|
22
|
|
|
$
|
28
|
|
Tax positions related to current year additions
|
|
1
|
|
|
11
|
|
|
2
|
|
|||
Additions for tax positions of prior years
|
|
—
|
|
|
2
|
|
|
—
|
|
|||
Tax positions related to prior years reductions
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||
Reductions due to lapse of statute of limitations on tax positions
|
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Balance at end of period
|
|
$
|
28
|
|
|
$
|
34
|
|
|
$
|
22
|
|
|
SGC (Parent)
|
|
SGI (Issuer1)
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
97
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
213
|
|
|
$
|
—
|
|
|
$
|
313
|
|
Restricted cash
|
—
|
|
|
1
|
|
|
40
|
|
|
10
|
|
|
—
|
|
|
51
|
|
||||||
Accounts receivable, net
|
—
|
|
|
91
|
|
|
221
|
|
|
337
|
|
|
—
|
|
|
649
|
|
||||||
Notes receivable, net
|
—
|
|
|
—
|
|
|
94
|
|
|
12
|
|
|
—
|
|
|
106
|
|
||||||
Inventories
|
—
|
|
|
53
|
|
|
113
|
|
|
87
|
|
|
(9
|
)
|
|
244
|
|
||||||
Prepaid expenses, deposits and other current assets
|
9
|
|
|
62
|
|
|
84
|
|
|
97
|
|
|
—
|
|
|
252
|
|
||||||
Property and equipment, net
|
31
|
|
|
95
|
|
|
197
|
|
|
209
|
|
|
(32
|
)
|
|
500
|
|
||||||
Operating lease right-of-use, net
|
1
|
|
|
24
|
|
|
30
|
|
|
50
|
|
|
—
|
|
|
105
|
|
||||||
Investment in subsidiaries
|
3,133
|
|
|
1,024
|
|
|
1,153
|
|
|
—
|
|
|
(5,310
|
)
|
|
—
|
|
||||||
Goodwill
|
—
|
|
|
240
|
|
|
1,897
|
|
|
1,143
|
|
|
—
|
|
|
3,280
|
|
||||||
Intangible assets, net
|
31
|
|
|
34
|
|
|
1,087
|
|
|
364
|
|
|
—
|
|
|
1,516
|
|
||||||
Intercompany balances
|
—
|
|
|
5,845
|
|
|
—
|
|
|
—
|
|
|
(5,845
|
)
|
|
—
|
|
||||||
Software, net
|
46
|
|
|
36
|
|
|
94
|
|
|
82
|
|
|
—
|
|
|
258
|
|
||||||
Other assets(2)
|
87
|
|
|
411
|
|
|
49
|
|
|
313
|
|
|
(325
|
)
|
|
535
|
|
||||||
Total assets
|
$
|
3,435
|
|
|
$
|
7,918
|
|
|
$
|
5,060
|
|
|
$
|
2,917
|
|
|
$
|
(11,521
|
)
|
|
$
|
7,809
|
|
Liabilities and stockholders’ (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
45
|
|
Other current liabilities
|
52
|
|
|
190
|
|
|
256
|
|
|
248
|
|
|
(25
|
)
|
|
721
|
|
||||||
Long-term debt, excluding current portion
|
—
|
|
|
8,673
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
8,680
|
|
||||||
Operating lease liabilities
|
1
|
|
|
19
|
|
|
25
|
|
|
43
|
|
|
—
|
|
|
88
|
|
||||||
Other long-term liabilities
|
52
|
|
|
22
|
|
|
547
|
|
|
179
|
|
|
(417
|
)
|
|
383
|
|
||||||
Intercompany balances
|
5,542
|
|
|
—
|
|
|
3
|
|
|
300
|
|
|
(5,845
|
)
|
|
—
|
|
||||||
Total SGC stockholders’ (deficit) equity
|
(2,212
|
)
|
|
(1,028
|
)
|
|
4,220
|
|
|
2,042
|
|
|
(5,234
|
)
|
|
(2,212
|
)
|
||||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||||
Total liabilities and stockholders’ (deficit) equity
|
$
|
3,435
|
|
|
$
|
7,918
|
|
|
$
|
5,060
|
|
|
$
|
2,917
|
|
|
$
|
(11,521
|
)
|
|
$
|
7,809
|
|
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, the 2026 Unsecured Notes, which were issued in March 2019, and the 2028 Unsecured Notes and the 2029 Unsecured Notes, which were issued in November 2019.
|
|||||||||||||||||||||||
(2) Includes $11 million in non-current restricted cash for Guarantor Subsidiaries.
|
|
SGC (Parent)
|
|
SGI (Issuer1)
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
74
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
94
|
|
|
$
|
(1
|
)
|
|
$
|
168
|
|
Restricted cash
|
—
|
|
|
1
|
|
|
32
|
|
|
6
|
|
|
—
|
|
|
39
|
|
||||||
Accounts receivable, net
|
—
|
|
|
79
|
|
|
205
|
|
|
315
|
|
|
—
|
|
|
599
|
|
||||||
Notes receivable, net
|
—
|
|
|
—
|
|
|
101
|
|
|
13
|
|
|
—
|
|
|
114
|
|
||||||
Inventories
|
—
|
|
|
40
|
|
|
82
|
|
|
111
|
|
|
(17
|
)
|
|
216
|
|
||||||
Prepaid expenses, deposits and other current assets
|
6
|
|
|
63
|
|
|
92
|
|
|
72
|
|
|
—
|
|
|
233
|
|
||||||
Property and equipment, net
|
31
|
|
|
112
|
|
|
219
|
|
|
218
|
|
|
(33
|
)
|
|
547
|
|
||||||
Investment in subsidiaries
|
2,836
|
|
|
975
|
|
|
1,093
|
|
|
—
|
|
|
(4,904
|
)
|
|
—
|
|
||||||
Goodwill
|
—
|
|
|
240
|
|
|
1,897
|
|
|
1,143
|
|
|
—
|
|
|
3,280
|
|
||||||
Intangible assets, net
|
43
|
|
|
34
|
|
|
1,291
|
|
|
441
|
|
|
—
|
|
|
1,809
|
|
||||||
Intercompany balances
|
—
|
|
|
6,054
|
|
|
—
|
|
|
—
|
|
|
(6,054
|
)
|
|
—
|
|
||||||
Software, net
|
58
|
|
|
39
|
|
|
128
|
|
|
60
|
|
|
—
|
|
|
285
|
|
||||||
Other assets(2)
|
110
|
|
|
404
|
|
|
46
|
|
|
308
|
|
|
(440
|
)
|
|
428
|
|
||||||
Total assets
|
$
|
3,158
|
|
|
$
|
8,042
|
|
|
$
|
5,186
|
|
|
$
|
2,781
|
|
|
$
|
(11,449
|
)
|
|
$
|
7,718
|
|
Liabilities and stockholders’ (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long-term debt
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
45
|
|
Other current liabilities
|
64
|
|
|
162
|
|
|
248
|
|
|
254
|
|
|
(26
|
)
|
|
702
|
|
||||||
Long-term debt, excluding current portion
|
—
|
|
|
8,991
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
8,992
|
|
||||||
Other long-term liabilities
|
106
|
|
|
8
|
|
|
637
|
|
|
172
|
|
|
(481
|
)
|
|
442
|
|
||||||
Intercompany balances
|
5,451
|
|
|
—
|
|
|
49
|
|
|
554
|
|
|
(6,054
|
)
|
|
—
|
|
||||||
Stockholders’ (deficit) equity
|
(2,463
|
)
|
|
(1,161
|
)
|
|
4,252
|
|
|
1,797
|
|
|
(4,888
|
)
|
|
(2,463
|
)
|
||||||
Total liabilities and stockholders’ (deficit) equity
|
$
|
3,158
|
|
|
$
|
8,042
|
|
|
$
|
5,186
|
|
|
$
|
2,781
|
|
|
$
|
(11,449
|
)
|
|
$
|
7,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, which were issued in October 2017 and February 2018, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
|
|||||||||||||||||||||||
(2) Includes $12 million and $1 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively.
|
|
SGC (Parent)
|
|
SGI (Issuer1)
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
590
|
|
|
$
|
1,538
|
|
|
$
|
1,648
|
|
|
$
|
(376
|
)
|
|
$
|
3,400
|
|
Cost of services, cost of product sales and cost of instant products(2)
|
—
|
|
|
387
|
|
|
446
|
|
|
776
|
|
|
(325
|
)
|
|
1,284
|
|
||||||
Selling, general and administrative
|
132
|
|
|
35
|
|
|
223
|
|
|
360
|
|
|
(43
|
)
|
|
707
|
|
||||||
Research and development
|
—
|
|
|
5
|
|
|
86
|
|
|
97
|
|
|
—
|
|
|
188
|
|
||||||
Depreciation, amortization and impairments
|
53
|
|
|
40
|
|
|
392
|
|
|
180
|
|
|
(18
|
)
|
|
647
|
|
||||||
Restructuring and other
|
4
|
|
|
1
|
|
|
6
|
|
|
17
|
|
|
—
|
|
|
28
|
|
||||||
Operating (loss) income
|
(189
|
)
|
|
122
|
|
|
385
|
|
|
218
|
|
|
10
|
|
|
546
|
|
||||||
Interest expense
|
—
|
|
|
(588
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(589
|
)
|
||||||
Loss on debt financing transactions
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
||||||
Gain on remeasurement of debt
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Other income (expense), net
|
191
|
|
|
586
|
|
|
(660
|
)
|
|
(91
|
)
|
|
—
|
|
|
26
|
|
||||||
Net income (loss) before equity in (loss) income of subsidiaries and income taxes
|
2
|
|
|
29
|
|
|
(275
|
)
|
|
126
|
|
|
10
|
|
|
(108
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
(109
|
)
|
|
8
|
|
|
6
|
|
|
—
|
|
|
95
|
|
|
—
|
|
||||||
Income tax (expense) benefit
|
(23
|
)
|
|
(8
|
)
|
|
65
|
|
|
(44
|
)
|
|
—
|
|
|
(10
|
)
|
||||||
Net (loss) income
|
(130
|
)
|
|
29
|
|
|
(204
|
)
|
|
82
|
|
|
105
|
|
|
(118
|
)
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Net (loss) income attributable to SGC
|
$
|
(130
|
)
|
|
$
|
29
|
|
|
$
|
(204
|
)
|
|
$
|
70
|
|
|
$
|
105
|
|
|
$
|
(130
|
)
|
Net (loss) income
|
$
|
(130
|
)
|
|
$
|
29
|
|
|
$
|
(204
|
)
|
|
$
|
82
|
|
|
$
|
105
|
|
|
$
|
(118
|
)
|
Other comprehensive income (loss)
|
8
|
|
|
9
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
8
|
|
||||||
Total comprehensive (loss) income
|
(122
|
)
|
|
38
|
|
|
(206
|
)
|
|
81
|
|
|
99
|
|
|
(110
|
)
|
||||||
Less: comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Comprehensive (loss) income attributable to SGC
|
$
|
(122
|
)
|
|
$
|
38
|
|
|
$
|
(206
|
)
|
|
$
|
69
|
|
|
$
|
99
|
|
|
$
|
(122
|
)
|
|
|||||||||||||||||||||||
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, the 2026 Unsecured Notes, which were issued in March 2019, and the 2028 Unsecured Notes and the 2029 Unsecured Notes, which were issued in November 2019.
|
|||||||||||||||||||||||
(2) Excludes D&A.
|
|
SGC (Parent)
|
|
SGI (Issuer1)
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
547
|
|
|
$
|
1,654
|
|
|
$
|
1,540
|
|
|
$
|
(378
|
)
|
|
$
|
3,363
|
|
Cost of services, cost of product sales and cost of instant products(2)
|
—
|
|
|
361
|
|
|
490
|
|
|
721
|
|
|
(317
|
)
|
|
1,255
|
|
||||||
Selling, general and administrative
|
154
|
|
|
42
|
|
|
227
|
|
|
326
|
|
|
(52
|
)
|
|
697
|
|
||||||
Research and development
|
—
|
|
|
3
|
|
|
87
|
|
|
112
|
|
|
—
|
|
|
202
|
|
||||||
Depreciation, amortization and impairments
|
44
|
|
|
33
|
|
|
440
|
|
|
188
|
|
|
(15
|
)
|
|
690
|
|
||||||
Restructuring and other
|
195
|
|
|
(1
|
)
|
|
9
|
|
|
50
|
|
|
—
|
|
|
253
|
|
||||||
Operating (loss) income
|
(393
|
)
|
|
109
|
|
|
401
|
|
|
143
|
|
|
6
|
|
|
266
|
|
||||||
Interest expense
|
—
|
|
|
(596
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(597
|
)
|
||||||
Loss on debt financing transactions
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
||||||
Gain on remeasurement of debt
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||||
Other income (expense), net
|
336
|
|
|
535
|
|
|
(745
|
)
|
|
(84
|
)
|
|
—
|
|
|
42
|
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
(57
|
)
|
|
(2
|
)
|
|
(344
|
)
|
|
58
|
|
|
6
|
|
|
(339
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
(219
|
)
|
|
44
|
|
|
(28
|
)
|
|
—
|
|
|
203
|
|
|
—
|
|
||||||
Income tax (expense) benefit
|
(76
|
)
|
|
—
|
|
|
82
|
|
|
(19
|
)
|
|
—
|
|
|
(13
|
)
|
||||||
Net (loss) income
|
$
|
(352
|
)
|
|
$
|
42
|
|
|
$
|
(290
|
)
|
|
$
|
39
|
|
|
$
|
209
|
|
|
$
|
(352
|
)
|
Other comprehensive (loss) income
|
(100
|
)
|
|
30
|
|
|
(66
|
)
|
|
(114
|
)
|
|
150
|
|
|
(100
|
)
|
||||||
Comprehensive (loss) income
|
$
|
(452
|
)
|
|
$
|
72
|
|
|
$
|
(356
|
)
|
|
$
|
(75
|
)
|
|
$
|
359
|
|
|
$
|
(452
|
)
|
|
|||||||||||||||||||||||
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, which were issued in October 2017 and February 2018, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
|
|||||||||||||||||||||||
(2) Excludes D&A.
|
|
SGC (Parent)
|
|
SGI (Issuer1)
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
498
|
|
|
$
|
1,684
|
|
|
$
|
1,223
|
|
|
$
|
(321
|
)
|
|
$
|
3,084
|
|
Cost of services, cost of product sales and cost of instant products(2)
|
—
|
|
|
342
|
|
|
511
|
|
|
629
|
|
|
(318
|
)
|
|
1,164
|
|
||||||
Selling, general and administrative
|
127
|
|
|
41
|
|
|
244
|
|
|
250
|
|
|
(49
|
)
|
|
613
|
|
||||||
Research and development
|
2
|
|
|
7
|
|
|
101
|
|
|
74
|
|
|
—
|
|
|
184
|
|
||||||
Depreciation, amortization and impairments
|
72
|
|
|
31
|
|
|
463
|
|
|
128
|
|
|
(11
|
)
|
|
683
|
|
||||||
Restructuring and other
|
30
|
|
|
5
|
|
|
7
|
|
|
4
|
|
|
—
|
|
|
46
|
|
||||||
Operating (loss) income
|
(231
|
)
|
|
72
|
|
|
358
|
|
|
138
|
|
|
57
|
|
|
394
|
|
||||||
Interest expense
|
(5
|
)
|
|
(604
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(610
|
)
|
||||||
Loss on debt financing transactions
|
(1
|
)
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
||||||
Other income (expense), net
|
88
|
|
|
150
|
|
|
(185
|
)
|
|
(26
|
)
|
|
—
|
|
|
27
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
(149
|
)
|
|
(419
|
)
|
|
173
|
|
|
111
|
|
|
57
|
|
|
(227
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
(45
|
)
|
|
67
|
|
|
22
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
||||||
Income tax (expense) benefit
|
(48
|
)
|
|
158
|
|
|
(86
|
)
|
|
(39
|
)
|
|
—
|
|
|
(15
|
)
|
||||||
Net (loss) income
|
$
|
(242
|
)
|
|
$
|
(194
|
)
|
|
$
|
109
|
|
|
$
|
72
|
|
|
$
|
13
|
|
|
$
|
(242
|
)
|
Other comprehensive income
|
134
|
|
|
10
|
|
|
66
|
|
|
129
|
|
|
(205
|
)
|
|
134
|
|
||||||
Comprehensive (loss) income
|
$
|
(108
|
)
|
|
$
|
(184
|
)
|
|
$
|
175
|
|
|
$
|
201
|
|
|
$
|
(192
|
)
|
|
$
|
(108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, and the 2025 Secured Notes, which were issued in October 2017 and February 2018.
|
|||||||||||||||||||||||
(2) Exclusive of D&A.
|
|
SGC (Parent)
|
|
SGI (Issuer1)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(57
|
)
|
|
$
|
173
|
|
|
$
|
109
|
|
|
$
|
320
|
|
|
$
|
1
|
|
|
$
|
546
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
(22
|
)
|
|
(28
|
)
|
|
(112
|
)
|
|
(123
|
)
|
|
—
|
|
|
(285
|
)
|
||||||
Distributions of capital from equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||||
Additions to equity method investments
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Other, principally change in intercompany investing activities
|
—
|
|
|
289
|
|
|
—
|
|
|
—
|
|
|
(289
|
)
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
(22
|
)
|
|
260
|
|
|
(112
|
)
|
|
(100
|
)
|
|
(289
|
)
|
|
(263
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payments on long-term debt, net of proceeds
|
—
|
|
|
(395
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(397
|
)
|
||||||
Payments of debt issuance and deferred financing costs
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(35
|
)
|
||||||
Payments on license obligations
|
(27
|
)
|
|
(1
|
)
|
|
(10
|
)
|
|
(2
|
)
|
|
—
|
|
|
(40
|
)
|
||||||
Sale of future revenue
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Net proceeds from the sale of SciPlay common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
342
|
|
|
—
|
|
|
342
|
|
||||||
Payments of deferred SciPlay common stock offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans and other
|
7
|
|
|
(2
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Other, principally change in intercompany financing activities
|
122
|
|
|
—
|
|
|
15
|
|
|
(426
|
)
|
|
289
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
102
|
|
|
(432
|
)
|
|
12
|
|
|
(100
|
)
|
|
289
|
|
|
(129
|
)
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Increase in cash, cash equivalents and restricted cash
|
23
|
|
|
1
|
|
|
9
|
|
|
121
|
|
|
1
|
|
|
155
|
|
||||||
Cash, cash equivalents, and restricted cash, beginning of period
|
74
|
|
|
2
|
|
|
43
|
|
|
102
|
|
|
(1
|
)
|
|
220
|
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
97
|
|
|
$
|
3
|
|
|
$
|
52
|
|
|
$
|
223
|
|
|
$
|
—
|
|
|
$
|
375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, the 2026 Unsecured Notes, which were issued in March 2019, and the 2028 Unsecured Notes and the 2029 Unsecured Notes, which were issued in November 2019.
|
|
SGC (Parent)
|
|
SGI (Issuer1)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(221
|
)
|
|
$
|
18
|
|
|
$
|
206
|
|
|
$
|
341
|
|
|
$
|
2
|
|
|
$
|
346
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
(35
|
)
|
|
(63
|
)
|
|
(146
|
)
|
|
(147
|
)
|
|
—
|
|
|
(391
|
)
|
||||||
Acquisitions of businesses and assets, net of cash acquired
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
(265
|
)
|
|
—
|
|
|
(297
|
)
|
||||||
Proceeds from asset sales
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Acquisitions and additions to equity method investments
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(178
|
)
|
|
—
|
|
|
(180
|
)
|
||||||
Distributions of capital from equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||||
Other, principally change in intercompany investing activities
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
—
|
|
|
159
|
|
|
—
|
|
||||||
Net cash used in investing activities
|
(35
|
)
|
|
(224
|
)
|
|
(138
|
)
|
|
(560
|
)
|
|
159
|
|
|
(798
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payments on long-term debt, net of proceeds
|
—
|
|
|
246
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
238
|
|
||||||
Payments of assumed NYX debt and other acquisitions debt
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(288
|
)
|
|
—
|
|
|
(290
|
)
|
||||||
Payments of debt issuance and deferred financing costs
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
||||||
Payments on license obligations
|
(43
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans and other
|
(18
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
||||||
Other, principally change in intercompany financing activities
|
(342
|
)
|
|
—
|
|
|
(62
|
)
|
|
563
|
|
|
(159
|
)
|
|
—
|
|
||||||
Net cash (used in) provided by financing activities
|
(403
|
)
|
|
208
|
|
|
(69
|
)
|
|
267
|
|
|
(159
|
)
|
|
(156
|
)
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
||||||
(Decrease) increase in cash, cash equivalents and restricted cash
|
(659
|
)
|
|
2
|
|
|
(1
|
)
|
|
42
|
|
|
2
|
|
|
(614
|
)
|
||||||
Cash, cash equivalents, and restricted cash, beginning of period
|
733
|
|
|
—
|
|
|
44
|
|
|
60
|
|
|
(3
|
)
|
|
834
|
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
74
|
|
|
$
|
2
|
|
|
$
|
43
|
|
|
$
|
102
|
|
|
$
|
(1
|
)
|
|
$
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, the 2025 Secured Notes, which were issued in October 2017 and February 2018, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
|
|
SGC (Parent1)
|
|
SGI (Issuer2)
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(41
|
)
|
|
$
|
(300
|
)
|
|
$
|
567
|
|
|
$
|
283
|
|
|
$
|
(2
|
)
|
|
$
|
507
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
(53
|
)
|
|
(31
|
)
|
|
(129
|
)
|
|
(81
|
)
|
|
—
|
|
|
(294
|
)
|
||||||
Acquisitions of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(32
|
)
|
|
—
|
|
|
(58
|
)
|
||||||
Acquisitions and additions to equity method investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|
—
|
|
|
(107
|
)
|
||||||
Distributions of capital on equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
||||||
Changes in other assets and liabilities and other
|
—
|
|
|
—
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|
10
|
|
||||||
Other, principally change in intercompany investing activities
|
—
|
|
|
(569
|
)
|
|
—
|
|
|
(120
|
)
|
|
689
|
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
(53
|
)
|
|
(600
|
)
|
|
(147
|
)
|
|
(304
|
)
|
|
689
|
|
|
(415
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (payments) proceeds of long-term debt including senior notes and term loans
|
(250
|
)
|
|
958
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
701
|
|
||||||
Payments of debt issuance and deferred financing costs
|
—
|
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
||||||
Payments on license obligations
|
(48
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans and other
|
(8
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||||
Other, principally change in intercompany financing activities
|
1,100
|
|
|
—
|
|
|
(411
|
)
|
|
—
|
|
|
(689
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
794
|
|
|
899
|
|
|
(417
|
)
|
|
(7
|
)
|
|
(689
|
)
|
|
580
|
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
700
|
|
|
(1
|
)
|
|
3
|
|
|
(23
|
)
|
|
(2
|
)
|
|
677
|
|
||||||
Cash, cash equivalents, and restricted cash, beginning of period
|
33
|
|
|
1
|
|
|
41
|
|
|
83
|
|
|
(1
|
)
|
|
157
|
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
733
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
60
|
|
|
$
|
(3
|
)
|
|
$
|
834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, which were redeemed in December 2019, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the 2022 Unsecured Notes, which were redeemed in April and December 2019, and the 2025 Secured Notes, which were issued in October 2017 and February 2018.
|
|
Quarter Ended 2019
|
||||||||||||||
|
March 31 (a)
|
|
June 30 (b)
|
|
September 30 (c)
|
|
December 31 (d)
|
||||||||
Total operating revenues
|
$
|
837
|
|
|
$
|
845
|
|
|
$
|
855
|
|
|
$
|
863
|
|
Total cost of revenues(1)
|
307
|
|
|
321
|
|
|
317
|
|
|
339
|
|
||||
Net (loss) income
|
(24
|
)
|
|
(75
|
)
|
|
18
|
|
|
(37
|
)
|
||||
Net (loss) income attributable to SGC
|
(24
|
)
|
|
(77
|
)
|
|
14
|
|
|
(43
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net (loss) income attributable to SGC per share:
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income per share
|
$
|
(0.26
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
0.15
|
|
|
$
|
(0.46
|
)
|
Diluted net (loss) income per share
|
$
|
(0.26
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
0.15
|
|
|
$
|
(0.46
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
92
|
|
|
93
|
|
|
93
|
|
|
93
|
|
||||
Diluted shares
|
92
|
|
|
93
|
|
|
94
|
|
|
93
|
|
||||
(1) Excludes D&A
|
(a)
|
Includes a $5 million gain on remeasurement of debt.
|
(b)
|
Includes a loss on debt financing transactions of $60 million in connection with a partial retirement of the 2022 10% Unsecured Notes and a $3 million loss on remeasurement of debt.
|
(c)
|
Includes a gain on remeasurement of debt of $19 million.
|
(d)
|
Includes a loss on debt financing transactions of $40 million in connection with the retirement of the 2020 Notes and 2022 Unsecured Notes and the November 2019 amendment to our revolver, and a loss on remeasurement of debt of $12 million.
|
(a)
|
Includes a loss on debt financing transactions of $93 million in connection with the February 2018 Refinancing and $1 million loss on remeasurement of debt.
|
(b)
|
Includes a gain on remeasurement of debt of $35 million.
|
(c)
|
Includes a loss on remeasurement of debt of $4 million and a $310 million reserve related to the Shuffle Tech matter.
|
(d)
|
Includes a gain on remeasurement of debt of $14 million and a $183 million reversal of the Shuffle Tech matter legal reserve as a result of a settlement agreement reached.
|
Allowance for doubtful accounts
|
|
Balance at
beginning of period |
|
Additions
|
|
Deductions (1)
|
|
Balance at end
of period |
||||||
Year Ended December 31, 2019
|
|
$
|
40
|
|
|
9
|
|
|
(13
|
)
|
|
$
|
36
|
|
Year Ended December 31, 2018
|
|
$
|
31
|
|
|
9
|
|
|
—
|
|
|
$
|
40
|
|
Year Ended December 31, 2017
|
|
$
|
28
|
|
|
11
|
|
|
(8
|
)
|
|
$
|
31
|
|
(1) Amounts written off, net of recovery, and related impact of foreign currency exchange.
|
Tax-related valuation allowance
|
|
Balance at
beginning of period |
|
Additions / (deductions)
|
|
Balance at end
of period |
|||||
Year Ended December 31, 2019
|
|
$
|
245
|
|
|
(36
|
)
|
|
$
|
209
|
|
Year Ended December 31, 2018
|
|
$
|
159
|
|
|
86
|
|
|
$
|
245
|
|
Year Ended December 31, 2017
|
|
$
|
119
|
|
|
40
|
|
|
$
|
159
|
|
Exhibit Number
|
Description
|
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
2.5
|
|
|
|
|
|
3.1(a)
|
|
|
|
|
|
3.1(b)
|
|
|
|
|
|
3.1(c)
|
|
|
|
|
|
3.1(d)
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
4.18
|
|
|
|
|
|
4.19
|
|
|
|
|
|
4.20
|
|
|
|
|
|
4.21
|
|
|
|
|
|
4.22
|
|
|
|
|
4.23
|
|
|
|
|
|
4.24
|
|
|
|
|
|
4.25
|
|
|
|
|
|
4.26
|
|
|
|
|
|
4.27
|
|
|
|
|
|
4.28
|
|
|
|
|
|
4.29
|
|
|
|
|
|
4.30
|
|
|
|
|
4.31
|
|
|
|
|
|
4.32
|
|
|
|
|
|
4.33
|
|
|
|
|
|
4.34
|
|
|
|
|
|
4.35
|
|
|
|
|
|
4.36
|
|
|
|
|
|
4.37
|
|
|
|
|
|
4.38
|
|
|
|
|
4.39
|
|
|
|
|
|
4.40
|
|
|
|
|
|
4.41
|
|
|
|
|
|
4.42
|
|
|
|
|
|
4.43
|
|
|
|
|
|
4.44
|
|
|
|
|
|
4.45
|
|
|
|
|
|
4.46
|
|
|
|
|
|
4.47
|
|
|
|
|
4.48
|
|
|
|
|
|
4.49
|
|
|
|
|
|
4.50
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
10.46
|
|
|
|
|
|
10.47
|
|
|
|
|
|
10.48
|
|
|
|
|
|
10.49
|
|
|
|
|
|
21
|
|
|
|
|
|
23.1
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
99.1
|
|
|
|
|
|
99.2
|
|
|
|
|
|
99.3
|
|
|
|
|
|
99.4
|
|
|
|
|
|
99.5
|
|
|
|
|
|
99.6
|
|
|
|
|
|
99.7
|
|
|
|
|
|
99.8
|
|
|
|
|
|
99.9
|
|
|
|
|
|
99.10
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Label Linkbase Document
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
February 18, 2020
|
|
SCIENTIFIC GAMES CORPORATION
|
||
|
|
By:
|
|
/s/ Michael A. Quartieri
|
Michael A. Quartieri,
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
||||
|
|
|
|
|
|
|
By:
|
|
/s/ Michael F. Winterscheidt
|
Michael F. Winterscheidt,
Senior Vice President and Chief Accounting Officer
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ Barry L. Cottle
|
|
President and Chief Executive Officer and Director (principal executive officer)
|
Barry L. Cottle
|
||
|
|
|
/s/ Michael A. Quartieri
|
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary (principal financial officer)
|
Michael A. Quartieri
|
||
|
|
|
/s/ Michael F. Winterscheidt
|
|
Senior Vice President and Chief Accounting Officer (principal accounting officer)
|
Michael F. Winterscheidt
|
||
|
|
|
/s/ Peter A. Cohen
|
|
Vice Chairman of the Board of Directors and Director
|
Peter A. Cohen
|
||
|
|
|
/s/ Richard M. Haddrill
|
|
Vice Chairman of the Board of Directors and Director
|
Richard M. Haddrill
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ Jack A. Markell
|
|
Director
|
Jack A. Markell
|
|
|
|
|
|
/s/ Paul M. Meister
|
|
Director
|
Paul M. Meister
|
|
|
|
|
|
/s/ Michael J. Regan
|
|
Director
|
Michael J. Regan
|
||
|
|
|
/s/ Barry F. Schwartz
|
|
Director
|
Barry F. Schwartz
|
||
|
|
|
/s/ Frances F. Townsend
|
|
Director
|
Frances F. Townsend
|
||
|
|
|
/s/ Maria T. Vullo
|
|
Director
|
Maria T. Vullo
|
|
|
|
|
|
/s/ Kneeland C. Youngblood
|
|
Director
|
Kneeland C. Youngblood
|
Company:
|
|||
|
|||
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|||
|
|
||
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
|
|
|
Additional Guarantor:
|
|||
|
|
|
|
NYX DIGITAL GAMING (USA), LLC
|
|||
|
|
|
|
By: Scientific Games Corporation, its sole member
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
Existing Guarantors:
|
|||
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC.
|
|||
WILLIAMS ELECTRONICS GAMES, INC.
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
President, Treasurer and Secretary
|
SG GAMING, INC.
|
|||
SCIENTIFIC GAMES PRODUCTS, INC.
|
|||
SG GAMING NORTH AMERICA, INC.
|
|||
DON BEST SPORTS CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Treasurer and Secretary
|
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|||
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|||
|
|
|
|
By: Scientific Games International, Inc., its sole member/manager
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
Trustee:
|
|||
|
|||
DEUTSCHE BANK TRUST COMPANY AMERICAS
|
|||
|
|
|
|
By:
|
/s/ Chris Niesz
|
||
Print Name: Chris Niesz
|
|||
Its: Authorized Signatory
|
|||
|
|
|
|
By:
|
/s/ Luke Russell
|
||
Print Name: Luke Russell
|
|||
Its: Authorized Signatory
|
Company:
|
|||
|
|||
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|||
|
|
||
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
|
|
|
Additional Guarantor:
|
|||
|
|
|
|
NYX DIGITAL GAMING (USA), LLC
|
|||
|
|
|
|
By: Scientific Games Corporation, its sole member
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
Existing Guarantors:
|
|||
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC.
|
|||
WILLIAMS ELECTRONICS GAMES, INC.
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
President, Treasurer and Secretary
|
SG GAMING, INC.
|
|||
SCIENTIFIC GAMES PRODUCTS, INC.
|
|||
SG GAMING NORTH AMERICA, INC.
|
|||
DON BEST SPORTS CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Treasurer and Secretary
|
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|||
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|||
|
|
|
|
By: Scientific Games International, Inc., its sole member/manager
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
Trustee:
|
|||
|
|||
DEUTSCHE BANK TRUST COMPANY AMERICAS
|
|||
|
|
|
|
By:
|
/s/ Chris Niesz
|
||
Print Name: Chris Niesz
|
|||
Its: Authorized Signatory
|
|||
|
|
|
|
By:
|
/s/ Luke Russell
|
||
Print Name: Luke Russell
|
|||
Its: Authorized Signatory
|
Company:
|
|||
|
|||
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|||
|
|
||
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
|
|
|
Additional Guarantor:
|
|||
|
|
|
|
NYX DIGITAL GAMING (USA), LLC
|
|||
|
|
|
|
By: Scientific Games Corporation, its sole member
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
Existing Guarantors:
|
|||
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC.
|
|||
WILLIAMS ELECTRONICS GAMES, INC.
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
President, Treasurer and Secretary
|
SG GAMING, INC.
|
|||
SCIENTIFIC GAMES PRODUCTS, INC.
|
|||
SG GAMING NORTH AMERICA, INC.
|
|||
DON BEST SPORTS CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Treasurer and Secretary
|
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|||
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|||
|
|
|
|
By: Scientific Games International, Inc., its sole member/manager
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
Trustee:
|
|||
|
|||
DEUTSCHE BANK TRUST COMPANY AMERICAS
|
|||
|
|
|
|
By:
|
/s/ Chris Niesz
|
||
Print Name: Chris Niesz
|
|||
Its: Authorized Signatory
|
|||
|
|
|
|
By:
|
/s/ Luke Russell
|
||
Print Name: Luke Russell
|
|||
Its: Authorized Signatory
|
Company:
|
|||
|
|||
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|||
|
|
||
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
|
|
|
Additional Guarantor:
|
|||
|
|
|
|
NYX DIGITAL GAMING (USA), LLC
|
|||
|
|
|
|
By: Scientific Games Corporation, its sole member
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
Existing Guarantors:
|
|||
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC.
|
|||
WILLIAMS ELECTRONICS GAMES, INC.
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
President, Treasurer and Secretary
|
SG GAMING, INC.
|
|||
SCIENTIFIC GAMES PRODUCTS, INC.
|
|||
SG GAMING NORTH AMERICA, INC.
|
|||
DON BEST SPORTS CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Treasurer and Secretary
|
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|||
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|||
|
|
|
|
By: Scientific Games International, Inc., its sole member/manager
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
Trustee:
|
|||
|
|||
DEUTSCHE BANK TRUST COMPANY AMERICAS
|
|||
|
|
|
|
By:
|
/s/ Chris Niesz
|
||
Print Name: Chris Niesz
|
|||
Its: Authorized Signatory
|
|||
|
|
|
|
By:
|
/s/ Luke Russell
|
||
Print Name: Luke Russell
|
|||
Its: Authorized Signatory
|
Company:
|
|||
|
|||
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|||
|
|
||
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
|
|
|
Additional Guarantor:
|
|||
|
|
|
|
NYX DIGITAL GAMING (USA), LLC
|
|||
|
|
|
|
By: Scientific Games Corporation, its sole member
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
Existing Guarantors:
|
|||
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC.
|
|||
WILLIAMS ELECTRONICS GAMES, INC.
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
President, Treasurer and Secretary
|
SG GAMING, INC.
|
|||
SCIENTIFIC GAMES PRODUCTS, INC.
|
|||
SG GAMING NORTH AMERICA, INC.
|
|||
DON BEST SPORTS CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Treasurer and Secretary
|
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|||
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|||
|
|
|
|
By: Scientific Games International, Inc., its sole member/manager
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
Trustee:
|
|||
|
|||
DEUTSCHE BANK TRUST COMPANY AMERICAS
|
|||
|
|
|
|
By:
|
/s/ Chris Niesz
|
||
Print Name: Chris Niesz
|
|||
Its: Authorized Signatory
|
|||
|
|
|
|
By:
|
/s/ Luke Russell
|
||
Print Name: Luke Russell
|
|||
Its: Authorized Signatory
|
Company:
|
|||
|
|||
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|||
|
|
||
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
|
|
|
Additional Guarantor:
|
|||
|
|
|
|
NYX DIGITAL GAMING (USA), LLC
|
|||
|
|
|
|
By: Scientific Games Corporation, its sole member
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
Existing Guarantors:
|
|||
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC.
|
|||
WILLIAMS ELECTRONICS GAMES, INC.
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
President, Treasurer and Secretary
|
SG GAMING, INC.
|
|||
SCIENTIFIC GAMES PRODUCTS, INC.
|
|||
SG GAMING NORTH AMERICA, INC.
|
|||
DON BEST SPORTS CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Treasurer and Secretary
|
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|||
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|||
|
|
|
|
By: Scientific Games International, Inc., its sole member/manager
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
Trustee:
|
|||
|
|||
DEUTSCHE BANK TRUST COMPANY AMERICAS
|
|||
|
|
|
|
By:
|
/s/ Chris Niesz
|
||
Print Name: Chris Niesz
|
|||
Its: Authorized Signatory
|
|||
|
|
|
|
By:
|
/s/ Luke Russell
|
||
Print Name: Luke Russell
|
|||
Its: Authorized Signatory
|
Company:
|
|||
|
|||
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|||
|
|
||
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
|
|
|
Additional Guarantor:
|
|||
|
|
|
|
NYX DIGITAL GAMING (USA), LLC
|
|||
|
|
|
|
By: Scientific Games Corporation, its sole member
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
Existing Guarantors:
|
|||
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC.
|
|||
WILLIAMS ELECTRONICS GAMES, INC.
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
President, Treasurer and Secretary
|
SG GAMING, INC.
|
|||
SCIENTIFIC GAMES PRODUCTS, INC.
|
|||
SG GAMING NORTH AMERICA, INC.
|
|||
DON BEST SPORTS CORPORATION
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Treasurer and Secretary
|
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|||
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|||
|
|
|
|
By: Scientific Games International, Inc., its sole member/manager
|
|||
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
||
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
|
Trustee:
|
|||
|
|||
DEUTSCHE BANK TRUST COMPANY AMERICAS
|
|||
|
|
|
|
By:
|
/s/ Chris Niesz
|
||
Print Name: Chris Niesz
|
|||
Its: Authorized Signatory
|
|||
|
|
|
|
By:
|
/s/ Luke Russell
|
||
Print Name: Luke Russell
|
|||
Its: Authorized Signatory
|
/s/ Barry L. Cottle
|
Barry L. Cottle
|
Chief Executive Officer
|
/s/ Michael A. Quartieri
|
Michael A. Quartieri
|
Chief Financial Officer
|
|
/s/ Barry L. Cottle
|
|
Barry L. Cottle
|
|
Chief Executive Officer
|
|
February 18, 2020
|
|
/s/ Michael A. Quartieri
|
|
Michael A. Quartieri
|
|
Chief Financial Officer
|
|
February 18, 2020
|
•
|
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.
|