UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K


CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 30, 2022

Light & Wonder, Inc.
(Exact name of registrant as specified in its charter)

Nevada
  
81-0422894
(State or other jurisdiction of incorporation)
  
(IRS Employer
   
Identification No.)

001-11693
(Commission File Number)

6601 Bermuda Road, Las Vegas, NV 89119
(Address of registrant’s principal executive office)

(702) 897-7150
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $.001 par value
LNW
The NASDAQ Stock Market
Preferred Stock Purchase Rights

The NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐          Emerging growth company

☐          If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.





Item 1.01. Entry into a Material Definitive Agreement.

On June 30, 2022, Light & Wonder, Inc. (formerly known as Scientific Games Corporation), a Nevada corporation (the “Company”), entered into Amendment No. 1 to the Equity Purchase Agreement (the “Amendment”) with Endeavor Operating Company, LLC, a Delaware limited liability company (“Endeavor”), and Endeavor Group Holdings, Inc., a Delaware corporation (“Endeavor Holdings”), amending that certain Equity Purchase Agreement (the “Original Purchase Agreement”, and as amended by the Amendment, the “Purchase Agreement”), by and among the Company, Endeavor and, solely with respect to certain sections therein, Endeavor Holdings. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, Endeavor agreed to acquire from the Company, and certain of its subsidiaries, all of the issued and outstanding equity interests of the companies (the “Transaction”) which together constitute the Company’s Sports Betting business (the “Sports Betting Business”). Capitalized terms not otherwise defined herein have the meaning set forth in the Purchase Agreement.

The Amendment, which has been approved by the Board of Directors of the Company, provides that, among other things, (i) the Cash Consideration payable in the Transaction is reduced from $1 billion to $750 million, subject to certain customary adjustments as set forth in the Purchase Agreement, and the Stock Consideration is reduced from 7,605,199 shares of Class A common stock, par value $0.00001, of Endeavor Holdings (“Endeavor Common Stock”), with a market value of $200 million based on the volume weighted average price of Endeavor Common Stock in the twenty days ending on September 24, 2021, to 2,305,794 shares of Endeavor Common Stock, with a market value of $50 million based on the volume weighted average price of Endeavor Common Stock in the twenty days before the date of the Amendment; (ii) Endeavor will waive the closing condition requiring regulatory approval by the Nevada Gaming Control Board, if required; and (iii) the Outside Date of the Purchase Agreement is extended to December 30, 2022 if certain conditions to closing are not met by September 27, 2022.

Pursuant to the Amendment, Endeavor also unconditionally and irrevocably (i) waived the conditions to closing in the Purchase Agreement with respect to the Company’s representations, warranties and covenants and (ii) waived and consented to any actions taken, or failure to take action, of the Company prior to the date of the Amendment that may constitute a breach or violation of or failure to comply with the Purchase Agreement, in each case, to the extent known to Endeavor as of the date of the Amendment, except for certain claims specified in the Parent Disclosure Letter. Additionally, the Company unconditionally and irrevocably (i) waived the conditions to closing in the Purchase Agreement with respect to Endeavor’s representations, warranties and covenants and (ii) waived and consented to any actions taken, or failure to take action, of Endeavor prior to the date of the Amendment that may constitute a breach or violation of or failure to comply with the Purchase Agreement, in each case, to the extent known to the Company as of the date of the Amendment, except for certain claims specified in the Parent Disclosure Letter.

The foregoing description of the Amendment is not complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached as Exhibit 10.1 hereto, and the full text of the Original Purchase Agreement, a copy of which is attached as Exhibit 2.1 to the Company’s Form 8-K, filed with the SEC on September 28, 2021, and the terms of which are incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On June 30, 2022, the Company issued a press release announcing the execution of the Amendment. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Item 7.01 as well as in Exhibit 99.1 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.
 
  
Description
 

     

     
104
  
Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document.
     
* Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon request by the SEC.
 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 Date: June 30, 2022
LIGHT & WONDER, INC.
 
 
By:
/s/ Constance P. James
   
Name:
Constance P. James
   
Title:
 
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary

Exhibit 10.1

EXECUTION VERSION


AMENDMENT NO. 1 TO THE EQUITY PURCHASE AGREEMENT

This AMENDMENT NO. 1 TO THE EQUITY PURCHASE AGREEMENT is entered into as of June 30, 2022 (this “Amendment”), by and between Endeavor Operating Company, LLC, a Delaware limited liability company (“Buyer”), Light & Wonder, Inc. (formerly known as Scientific Games Corporation), a Nevada corporation (“Parent”), and Endeavor Group Holdings, Inc., a Delaware corporation (collectively, the “Parties”).  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Equity Purchase Agreement (as defined below).

WHEREAS, the Parties entered into that certain Equity Purchase Agreement, dated as of September 27, 2021 (as it may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Equity Purchase Agreement”);

WHEREAS, pursuant to Section 9.04 of the Equity Purchase Agreement, the Equity Purchase Agreement (including the Parent Disclosure Letter) may be amended or modified by a written instrument signed by the Parties; and

WHEREAS, each of the Parties wishes to amend and modify the Equity Purchase Agreement and Parent Disclosure Letter as set forth herein.

NOW, THEREFORE, the Parties agree as follows:


 1.
Amendments.

(a)          Annex 1.01(b) of the Parent Disclosure Letter is hereby amended and restated in its entirety as set forth on Exhibit A hereto.

(b)          Article V of the Equity Purchase Agreement is hereby amended by adding the following as Section 5.27 of the Equity Purchase Agreement:

“SECTION 5.27. Commercial Arrangement. Following Closing, Buyer and Parent shall enter into the commercial arrangement set forth on Section 5.27 of the Parent Disclosure Letter.”

(c)          The Parent Disclosure Letter is hereby amended by adding Exhibit B hereto as Section 5.27 of the Parent Disclosure Letter.

(d)          Section 7.01(b)(i) of the Equity Purchase Agreement is hereby amended and restated in its entirety as follows:

“(i) subject to Section 7.01(b)(i) of the Parent Disclosure Letter, the Closing has not occurred on or before September 27, 2022 (the “Outside Date”); provided that (i) the conditions set forth in Sections 6.01(a), 6.01(b) or 6.01(c) (with respect to the approvals contemplated by Section 6.01(a) or Section 6.01(b)) are not satisfied as of such date, the Outside Date shall automatically be extended to December 30, 2022 and (ii) a party shall not have the right to terminate this Agreement pursuant to this Section 7.01(b)(i) if such party has failed to perform any covenant or agreement in this Agreement which failure has been the proximate cause of the failure of the Closing to occur; or”



(e)          Section 7.01(b)(i) of the Parent Disclosure Letter is hereby amended and restated in its entirety as set forth on Exhibit C hereto.

(f)          The defined term “Cash Consideration” in Section 9.02 of the Equity Purchase Agreement is hereby amended and restated in its entirety as follows:

“Cash Consideration” means $750,000,000.

(g)          The defined term “Stock Consideration” in Section 9.02 of the Equity Purchase Agreement is hereby amended and restated in its entirety as follows and relocated to appear in appropriate alphabetical order:

“Stock Consideration” means 2,305,794 Buyer Pubco Class A Common Shares (as may be equitably adjusted for any stock split, reverse stock split or extraordinary dividend (excluding for the avoidance of doubt, any tax-related distributions and regular quarterly cash dividends in respect of Buyer Pubco Class A Common Shares which dividends, for the avoidance of doubt, may be increased or decreased in amount from quarter to quarter at the discretion of the board of directors of Buyer)).

(h)          The Parent Disclosure Letter is hereby amended by adding Exhibit D hereto as Section 9.02(g) of the Parent Disclosure Letter.

(i)          The Parent Disclosure Letter is hereby amended by adding Exhibit E hereto as Section 9.14 of the Parent Disclosure Letter.

(j)          Section 9.02 of the Buyer Disclosure Letter is hereby amended and restated in its entirety as set forth on Exhibit F hereto.


 2.
Effectiveness.  This Amendment shall become effective as of the date hereof.


3.
Effect of Amendment.  This Amendment shall not constitute a waiver, amendment or modification of any provision of the Equity Purchase Agreement or the Parent Disclosure Letter not expressly referred to in Section 1 of this Amendment.  Except as specifically modified and amended hereby, the Equity Purchase Agreement shall remain unchanged and in full force and effect. References in the Equity Purchase Agreement to “this Agreement”, “herein”, “hereunder”, “hereto”, “hereof” and words of similar import shall refer to the Equity Purchase Agreement as amended hereby, and references to the date of the Equity Purchase Agreement, and references to the “date hereof”, “the date of this Agreement” or words of similar meaning in the Equity Purchase Agreement, shall continue to refer to September 27, 2021.




4.
Waiver of Accounting Principles.  By its execution of this Amendment, Buyer hereby consents, pursuant to Section 4.01(b)(xiii) of the Equity Purchase Agreement, to Parent’s use of the accounting principles set forth on Section 9.02(g) of the Parent Disclosure Letter.


5.
Release.  By their execution of this Amendment, Buyer and Parent hereby agree to the release set forth on Section 9.14 of the Parent Disclosure Letter.


6.
Waiver and Consent of Buyer.  Buyer hereby (i) unconditionally and irrevocably waives, and consents to, any actions taken, or failure to take action, of Parent or any of its Affiliates prior to the date of this Amendment that may constitute an inaccuracy under, a breach or violation of or a failure to comply with the Equity Purchase Agreement, in each case to the extent known to the Knowledge of Buyer as of the date of this Amendment, including the matters occurring prior to the date of this Amendment set forth in Section 9.14 of the Parent Disclosure Letter, for all purposes, and (ii) unconditionally and irrevocably waives each of the conditions set forth in Section 6.02(a) and Section 6.02(b) of the Equity Purchase Agreement with respect to any such inaccuracy, breach, violation or failure; provided that, clause (i) shall not apply to any actions taken, or failure to take action, of Parent or any of its Affiliates relating to the Specified Matters (as defined in Section 9.14 of the Parent Disclosure Letter).


7.
Waiver and Consent of Parent.  Parent hereby (i) unconditionally and irrevocably waives, and consents to, any actions taken, or failure to take action, of Buyer or any of its Affiliates prior to the date of this Amendment that may constitute an inaccuracy under, a breach or violation of or a failure to comply with the Equity Purchase Agreement, in each case to the extent known to the Knowledge of Parent as of the date of this Amendment, including the matters occurring prior to the date of this Amendment set forth in Section 9.14 of the Parent Disclosure Letter, for all purposes, and (ii) unconditionally and irrevocably waives each of the conditions set forth in Section 6.03(a) and Section 6.03(b) of the Equity Purchase Agreement with respect to any such inaccuracy, breach, violation or failure; provided that, clause (i) shall not apply to any actions taken, or failure to take action, of Buyer or any of its Affiliates relating to the Specified Matters (as defined in Section 9.14 of the Parent Disclosure Letter).


8.
Miscellaneous.  The provisions of the Confidentiality Agreement and Sections, 8.06 (Exclusivity, No Duplicate Recovery), 9.01 (Notices), 9.03 (Interpretation), 9.04 (Amendment), 9.05 (Extension; Waivers), 9.06 (Severability), 9.07 (Counterparts), 9.08 (Entire Agreement; Third-Party Beneficiaries), 9.09 (Governing Law), 9.10 (Assignment), 9.11 (Enforcement) and 9.12 (Jurisdiction; Consent to Service of Process) of the Equity Purchase Agreement are incorporated herein by reference mutatis mutandis and shall be binding upon the Parties.


[Signature Pages Follow]



IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed as of the date first written above.


 
ENDEAVOR OPERATING COMPANY, LLC
   
 
By:
 /s/ Jason Lublin
 
Name:
 Jason Lublin
 
Title:
Chief Financial Officer


 
LIGHT & WONDER, INC.
   
 
By:
 /s/ James Sottile
 
Name:
James Sottile
 
Title:
Executive Vice President and Chief Legal Officer


 
ENDEAVOR GROUP HOLDINGS, INC.
   
 
By:
 /s/ Jason Lublin
 
Name:
 Jason Lublin
 
Title:
 Chief Financial Officer





[Signature Page to Amendment No. 1 to Equity Purchase Agreement]
Exhibit 99.1


Light & Wonder Enters into Amended Purchase Agreement for the Sale of OpenBet to Endeavor

Final Step to Streamline Portfolio and Become the Leading Cross-Platform Global Game Company

Facilitates Path to Further De-Lever and Achieve Targeted Net Debt Leverage Ratio(1) Range of 2.5x to 3.5x

Simplifies Path to Close and Modifies Valuation

Generates Approximately $5.6 billion in Total Net After-Tax Proceeds from the Sale of Lottery and OpenBet Businesses


LAS VEGAS – June 30, 2022 – Light & Wonder, Inc. (NASDAQ: LNW), formerly known as Scientific Games Corporation (“Light & Wonder” or the “Company”), today announced that it has entered into an amendment to its definitive purchase agreement with Endeavor Operating Company, LLC and Endeavor Group Holdings, Inc. (NYSE: EDR) (collectively, “Endeavor”), a global sports and entertainment company, related to the sale of its Sports Betting business, OpenBet.

Under the terms of the amended purchase agreement, Light & Wonder will receive $750 million in cash and $50 million in Class A common stock of Endeavor Group Holdings, Inc., based on the volume weighted average price of such stock in the twenty days before the date of the amendment, or total gross proceeds of $800 million and estimated total net after-tax proceeds of approximately $700 million. The amended purchase agreement provides a strong valuation in the current market and also increases the speed and certainty of closing by modifying the conditions for closing, including Endeavor’s agreement to waive the closing condition requiring regulatory approval by the Nevada Gaming Control Board, if required. Under the revised terms, the transaction is anticipated to close by the end of the third quarter of 2022, subject to the remaining applicable regulatory approvals and customary closing conditions. The recently completed Lottery sale and the pending sale of OpenBet will cumulatively generate approximately $5.6 billion of estimated net after-tax proceeds.

“Endeavor is the right partner for OpenBet and the amended agreement increases speed and certainty by creating a simplified path to closing the transaction, while unlocking substantial benefits for OpenBet and Light & Wonder,” said Barry Cottle, President and Chief Executive Officer of Light & Wonder. “OpenBet demonstrates continued momentum across their key markets and the amended terms of the transaction provide strong value for the business. The significant cash consideration from the OpenBet sale will enable us to further de-lever our balance sheet and achieve our Targeted Net Debt Leverage Ratio(1) range of 2.5x to 3.5x.”

“This transaction is the final step in our journey to streamline our organization as we deliver on our promises as the leading cross-platform global game company. The cumulative proceeds from our divestitures, as well as our double digit growth profile and $1.4 billion 2025 Targeted Consolidated AEBITDA(1) resulting in strong cash flow generation, is expected to create tremendous value for our shareholders. Our enhanced financial flexibility will enable us to accelerate the return of significant capital to shareholders through our share repurchase program, while also investing in key growth initiatives.”


OpenBet is one of the world’s leading global online sports betting technology companies, offering an ecosystem of sports content, technology and services to the largest operators around the world. It is a leading business-to-business sports betting partner in the U.S., U.K., Australia and Canada, with a strong position in Europe and APAC. To date, OpenBet has over 75 global customers, including 46 sports books across 12 states and a 100% uptime record across major sporting events.

(1) Represents a non-GAAP financial measure. Additional information on this non-GAAP financial measure is available at the end of this release.

About Light & Wonder, Inc.
Light & Wonder, Inc. (formerly known as Scientific Games Corporation), is the global leader in cross-platform games and entertainment. The Company brings together 5,000 employees from six continents to connect content between land-based and digital channels with unmatched technology and distribution. Guided by a culture that values daring teamwork and creativity, the Company builds new worlds of play, developing game experiences loved by players around the globe. Its OpenGaming™ platform powers the largest digital-gaming network in the industry. The Company is committed to the highest standards of integrity, from promoting player responsibility to implementing sustainable practices. To learn more, visit lnw.com.

CONTACTS

Investor Inquiries
Jim Bombassei, Senior Vice President of Investor Relations
jbombassei@lnw.com

Media Inquiries
Nick Lamplough / T.J. O’Sullivan / Lucas Pers, Joele Frank, Wilkinson Brimmer Katcher, +1 212 355 4449

Forward-Looking Statements

In this press release, Light & Wonder makes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “will,” “may,” and “should.” These statements are based upon Light & Wonder’s management’s current expectations, assumptions and estimates regarding the amendment between Light & Wonder and Endeavor, the expected benefits of the amendment, the expected timing of completion of the proposed transaction as amended and anticipated future financial and operating performance and results. Forward-looking statements are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks, uncertainties and other factors, including (i) the risk that the conditions to the closing of the proposed transaction as amended may not be satisfied, (ii) the risk that a material adverse change, event or occurrence may affect Light & Wonder and Endeavor prior to the closing of the proposed transaction as amended and may delay the proposed transaction as amended or cause the companies to abandon the proposed transaction as amended, (iii) the possibility that the amendment may involve unexpected costs, liabilities or delays, (iv) the risk that the businesses of the companies may suffer as a result of uncertainty surrounding the amendment and (v) the risk that disruptions from the amendment will harm relationships with customers, employees and suppliers or (vi) that Light & Wonder may be unable to achieve expected financial, operational and strategic benefits of the amendment, and those factors described in Light & Wonder’s filings with the Securities and Exchange Commission (the “SEC”), including Light & Wonder’s current reports on Form 8-K, quarterly reports on Form 10-Q and its latest annual report on Form 10-K filed with the SEC on March 1, 2022 (including under the headings “Forward-Looking Statements” and “Risk Factors”). Forward-looking statements speak only as of the date they are made and, except for Light & Wonder’s ongoing obligations under the U.S. federal securities laws, Light & Wonder undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.


Non-GAAP Financial Measures

Targeted Net Debt Leverage Ratio

Net debt is defined as total principal face value of debt outstanding, the most directly comparable GAAP measure, less cash and cash equivalents. Principal face value of debt outstanding includes the face value of debt issued under Senior Secured Credit Facilities, Senior Notes and Subordinated Notes, which are all described in Note 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and in Note 11 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, but it does not include other long term obligations of $3 million primarily comprised of certain revenue transactions presented as debt in accordance with ASC 470. Net debt leverage ratio, represents Net debt divided by Combined AEBITDA (as defined below) (or Consolidated AEBITDA for future periods after the disposition of discontinued operations). The forward-looking non-GAAP financial measure targeted net debt leverage ratio is presented on a supplemental basis and does not reflect Company guidance. We are not providing a forward-looking quantitative reconciliation of targeted net debt leverage ratio to the most directly comparable GAAP measure because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the relevant period.

Targeted Consolidated AEBITDA

Consolidated AEBITDA, is a non-GAAP financial measure that is presented as a supplemental disclosure of the Company’s continuing operations. Consolidated AEBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company’s financial statements filed with the SEC. Consolidated AEBITDA may differ from similarly titled measures presented by other companies. Consolidated AEBITDA is reconciled to Net income (loss) attributable to the Company and includes the following adjustments: (1) Net income attributable to noncontrolling interest; (2) Net income from discontinued operations, net of tax; (3) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition costs and other unusual items; (4) Depreciation amortization and impairment charges and Goodwill impairments; (5) change in fair value of investments and Gain on remeasurement of debt; (6) Interest expense; (7) Income tax expense (benefit); (8) Stock-based compensation; and (9) Other income, net including foreign currency (gains) and losses, and earnings from equity investments. The forward-looking non-GAAP financial measure Targeted Consolidated AEBITDA represents a goal for the Company and does not reflect Company guidance. We are not providing a forward-looking quantitative reconciliation of Targeted Consolidated AEBITDA to the most directly comparable GAAP measure because we are unable to do so without unreasonable efforts or to reasonably estimate the projected outcome of certain significant items. These items are uncertain, depend on various factors out of our control and could have a material impact on the corresponding measures calculated in accordance with GAAP.

Combined AEBITDA

Combined AEBITDA, is a non-GAAP financial measure that combines Consolidated AEBITDA (representing our continuing operations), AEBITDA from discontinued operations and EBITDA from equity investments included in continuing operations and is presented as a supplemental disclosure. Combined AEBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company’s financial statements filed with the SEC. Combined AEBITDA may differ from similarly titled measures presented by other companies.

AEBITDA from Discontinued Operations

AEBITDA from discontinued operations, is a non-GAAP financial measure that is presented as a supplemental disclosure for the Company’s discontinued operations. AEBITDA from discontinued operations should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company’s financial statements filed with the SEC. AEBITDA from discontinued operations may differ from similarly titled measures presented by other companies. AEBITDA from discontinued operations is reconciled to Net income from discontinued operations, net of tax and includes the following adjustments: (1) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition costs and other unusual items; (2) Depreciation, amortization and impairment charges and Goodwill impairments; (3) Income tax expense; and (4) Stock-based compensation and other, net. In addition to the preceding adjustments, we exclude Earnings from equity investments and add (without duplication) discontinued operations pro rata share of EBITDA from equity investments, which represents their share of earnings (whether or not distributed) before income tax expense, depreciation and amortization expense, and interest expense, net of our joint ventures and minority investees, which is included in our calculation of AEBITDA from discontinued operations.

EBITDA from Equity Investments

EBITDA from equity investments, represents our share of earnings (loss) (whether or not distributed to us) plus income tax expense, depreciation and amortization expense (inclusive of amortization of payments made to customers for LNS), interest (income) expense, net, and other non-cash and unusual items from our joint ventures and minority investees. EBITDA from equity investments is a non-GAAP financial measure that is presented as supplemental disclosure for illustrative purposes only.