Delaware
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|
81-0422894
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(State or other jurisdiction of
|
|
(I.R.S. Employer Identification No.)
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incorporation or organization)
|
|
|
Large accelerated filer
o
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|
Accelerated filer
x
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
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(Do not check if a smaller reporting company)
|
|
|
PART I.
|
FINANCIAL INFORMATION
|
4
|
|
|
|
Item 1.
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Financial Statements
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4
|
|
|
|
|
Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2013 and 2012
|
4
|
|
|
|
|
Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012
|
6
|
|
|
|
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Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012
|
7
|
|
|
|
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Notes to Consolidated Financial Statements
|
9
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|
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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28
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|
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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41
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|
|
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Item 4.
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Controls and Procedures
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41
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|
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PART II.
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OTHER INFORMATION
|
42
|
|
|
|
Item 1.
|
Legal Proceedings
|
42
|
|
|
|
Item 1A.
|
Risk Factors
|
43
|
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
44
|
|
|
|
Item 3.
|
Defaults Upon Senior Securities
|
44
|
|
|
|
Item 4.
|
Mine Safety Disclosures
|
44
|
|
|
|
Item 5.
|
Other Information
|
44
|
|
|
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Item 6.
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Exhibits
|
45
|
|
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Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Revenue:
|
|
|
|
|
||||
Instant tickets
|
|
$
|
122,813
|
|
|
$
|
123,324
|
|
Services
|
|
81,767
|
|
|
86,905
|
|
||
Sales
|
|
15,008
|
|
|
20,965
|
|
||
Total revenue
|
|
219,588
|
|
|
231,194
|
|
||
Operating expenses:
|
|
|
|
|
||||
Cost of instant tickets (1)
|
|
68,194
|
|
|
69,963
|
|
||
Cost of services (1)
|
|
46,233
|
|
|
43,303
|
|
||
Cost of sales (1)
|
|
10,291
|
|
|
16,927
|
|
||
Selling, general and administrative expenses
|
|
50,641
|
|
|
45,298
|
|
||
Employee termination and restructuring costs
|
|
331
|
|
|
2,304
|
|
||
Depreciation and amortization
|
|
32,769
|
|
|
28,468
|
|
||
Operating income
|
|
11,129
|
|
|
24,931
|
|
||
Other income (expense):
|
|
|
|
|
||||
Interest expense
|
|
(25,008
|
)
|
|
(24,898
|
)
|
||
Earnings from equity investments
|
|
6,136
|
|
|
8,845
|
|
||
Other (expense) income, net
|
|
(998
|
)
|
|
522
|
|
||
Total other expense
|
|
(19,870
|
)
|
|
(15,531
|
)
|
||
Net (loss) income from continuing operations before income taxes
|
|
(8,741
|
)
|
|
9,400
|
|
||
Income tax expense
|
|
3,546
|
|
|
5,532
|
|
||
Net (loss) income from continuing operations
|
|
$
|
(12,287
|
)
|
|
$
|
3,868
|
|
|
|
|
|
|
||||
Discontinued operations
|
|
|
|
|
||||
Loss from discontinued operations
|
|
(1,911
|
)
|
|
(2,670
|
)
|
||
Other expense
|
|
(45
|
)
|
|
(44
|
)
|
||
Gain on sale of assets
|
|
828
|
|
|
—
|
|
||
Income tax benefit
|
|
262
|
|
|
665
|
|
||
Net loss from discontinued operations
|
|
$
|
(866
|
)
|
|
$
|
(2,049
|
)
|
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(13,153
|
)
|
|
$
|
1,819
|
|
|
|
|
|
|
||||
Other comprehensive (loss) income:
|
|
|
|
|
||||
Foreign currency translation (loss) gain
|
|
(39,355
|
)
|
|
26,016
|
|
||
Pension gain (loss), net of tax
|
|
514
|
|
|
(371
|
)
|
||
Gain on derivative financial instruments, net of tax
|
|
5
|
|
|
120
|
|
||
Gain (loss) on foreign currency forward contracts
|
|
725
|
|
|
(343
|
)
|
||
Other comprehensive (loss) income
|
|
(38,111
|
)
|
|
25,422
|
|
||
Comprehensive (loss) income
|
|
$
|
(51,264
|
)
|
|
$
|
27,241
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Basic and diluted net (loss) income per share:
|
|
|
|
|
||||
Basic from continuing operations
|
|
$
|
(0.15
|
)
|
|
$
|
0.04
|
|
Basic from discontinued operations
|
|
(0.01
|
)
|
|
(0.02
|
)
|
||
Total net (loss) income per share
|
|
$
|
(0.16
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
||||
Diluted from continuing operations
|
|
$
|
(0.15
|
)
|
|
$
|
0.04
|
|
Diluted from discontinued operations
|
|
(0.01
|
)
|
|
(0.02
|
)
|
||
Total diluted net (loss) income per share
|
|
$
|
(0.16
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
||||
Basic shares
|
|
84,607
|
|
|
92,484
|
|
||
Diluted shares
|
|
84,607
|
|
|
94,224
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
90,019
|
|
|
$
|
109,015
|
|
Restricted cash
|
|
28,543
|
|
|
30,398
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $10,558 and $11,182 as of March 31, 2013 and December 31, 2012, respectively
|
|
182,503
|
|
|
209,915
|
|
||
Inventories
|
|
70,780
|
|
|
71,255
|
|
||
Notes receivable
|
|
10,373
|
|
|
10,298
|
|
||
Deferred income taxes, current portion
|
|
6,643
|
|
|
6,800
|
|
||
Prepaid expenses, deposits and other current assets
|
|
46,448
|
|
|
46,982
|
|
||
Total current assets
|
|
435,309
|
|
|
484,663
|
|
||
Property and equipment, at cost
|
|
839,031
|
|
|
848,622
|
|
||
Less: accumulated depreciation
|
|
(458,347
|
)
|
|
(471,745
|
)
|
||
Net property and equipment
|
|
380,684
|
|
|
376,877
|
|
||
Goodwill
|
|
782,762
|
|
|
801,328
|
|
||
Intangible assets, net
|
|
99,375
|
|
|
84,291
|
|
||
Equity investments
|
|
312,069
|
|
|
316,234
|
|
||
Other assets
|
|
124,027
|
|
|
$
|
123,515
|
|
|
Total assets
|
|
$
|
2,134,226
|
|
|
$
|
2,186,908
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Debt payments due within one year
|
|
$
|
16,895
|
|
|
$
|
16,458
|
|
Accounts payable
|
|
76,248
|
|
|
80,872
|
|
||
Accrued liabilities
|
|
141,772
|
|
|
159,017
|
|
||
Total current liabilities
|
|
234,915
|
|
|
256,347
|
|
||
Deferred income taxes
|
|
62,315
|
|
|
62,265
|
|
||
Other long-term liabilities
|
|
69,999
|
|
|
51,797
|
|
||
Long-term debt, excluding current installments
|
|
1,450,847
|
|
|
1,451,708
|
|
||
Total liabilities
|
|
1,818,076
|
|
|
1,822,117
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
|
||||
Class A common stock, par value $0.01 per share, 199,300 shares authorized, 100,119 and 99,301 shares issued and 84,987 and 84,395 shares outstanding as of March 31, 2013 and December 31, 2012, respectively
|
|
1,001
|
|
|
993
|
|
||
Additional paid-in capital
|
|
720,490
|
|
|
715,910
|
|
||
Accumulated loss
|
|
(219,371
|
)
|
|
(206,218
|
)
|
||
Treasury stock, at cost, 15,132 and 14,906 shares held as of March 31, 2013 and December 31, 2012, respectively
|
|
(144,882
|
)
|
|
(142,917
|
)
|
||
Accumulated other comprehensive loss
|
|
(41,088
|
)
|
|
(2,977
|
)
|
||
Total stockholders' equity
|
|
316,150
|
|
|
364,791
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
2,134,226
|
|
|
$
|
2,186,908
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(13,153
|
)
|
|
$
|
1,819
|
|
Adjustments:
|
|
|
|
|
||||
Depreciation and amortization
|
|
33,366
|
|
|
30,518
|
|
||
Change in deferred income taxes
|
|
780
|
|
|
263
|
|
||
Stock-based compensation
|
|
5,862
|
|
|
5,771
|
|
||
Non-cash interest expense
|
|
1,705
|
|
|
1,996
|
|
||
Earnings from equity investments
|
|
(6,136
|
)
|
|
(8,845
|
)
|
||
Distributed earnings from equity investments
|
|
2,239
|
|
|
—
|
|
||
Allowance for doubtful accounts
|
|
13
|
|
|
195
|
|
||
Changes in current assets and liabilities, net of effects of acquisitions
|
|
|
|
|
||||
Accounts receivable
|
|
24,690
|
|
|
7,045
|
|
||
Inventories
|
|
772
|
|
|
919
|
|
||
Accounts payable
|
|
(12,646
|
)
|
|
(11,428
|
)
|
||
Accrued liabilities
|
|
(17,926
|
)
|
|
(5,968
|
)
|
||
Other current assets and liabilities
|
|
1,566
|
|
|
(706
|
)
|
||
Other
|
|
2,103
|
|
|
345
|
|
||
Net cash provided by operating activities
|
|
23,235
|
|
|
21,924
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(7,346
|
)
|
|
(1,958
|
)
|
||
Lottery and gaming systems expenditures
|
|
(16,856
|
)
|
|
(7,393
|
)
|
||
Other intangible assets and software expenditures
|
|
(12,078
|
)
|
|
(12,446
|
)
|
||
Proceeds from asset disposals
|
|
886
|
|
|
84
|
|
||
Change in other assets and liabilities, net
|
|
(195
|
)
|
|
(152
|
)
|
||
Equity method investments
|
|
—
|
|
|
—
|
|
||
Restricted cash
|
|
965
|
|
|
—
|
|
||
Distributions of capital on equity investments
|
|
—
|
|
|
2,407
|
|
||
Business acquisitions, net of cash acquired
|
|
(287
|
)
|
|
(344
|
)
|
||
Net cash used in
investing activities
|
|
(34,911
|
)
|
|
(19,802
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from the issuance of long-term debt
|
|
963
|
|
|
—
|
|
||
Payments on long-term debt
|
|
(1,587
|
)
|
|
(3,551
|
)
|
||
Payments of financing fees
|
|
(24
|
)
|
|
(57
|
)
|
||
Net redemptions of common stock under stock-based compensation plans
|
|
(2,945
|
)
|
|
(3,555
|
)
|
||
Net cash used in financing activities
|
|
(3,593
|
)
|
|
(7,163
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(3,727
|
)
|
|
1,042
|
|
||
Decrease in cash and cash equivalents
|
|
(18,996
|
)
|
|
(3,999
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
109,015
|
|
|
104,402
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
90,019
|
|
|
$
|
100,403
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Revenue:
|
|
|
|
|
||||
Services
|
|
$
|
1,761
|
|
|
$
|
3,381
|
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
||||
Cost of services
(1)
|
|
2,551
|
|
|
2,556
|
|
||
Selling, general and administrative expenses
|
|
524
|
|
|
874
|
|
||
Employee termination and restructuring costs
|
|
—
|
|
|
571
|
|
||
Depreciation and amortization
|
|
597
|
|
|
2,050
|
|
||
|
|
|
|
|
||||
Loss from discontinued operations
|
|
(1,911
|
)
|
|
(2,670
|
)
|
||
|
|
|
|
|
||||
Other expense
|
|
(45
|
)
|
|
(44
|
)
|
||
Gain on sale of assets
|
|
828
|
|
|
—
|
|
||
Income tax benefits
|
|
262
|
|
|
665
|
|
||
|
|
|
|
|
||||
Net loss from discontinued operations
|
|
$
|
(866
|
)
|
|
$
|
(2,049
|
)
|
|
|
Three Months Ended March 31, 2013
|
||||||||||||||
|
|
Printed Products
|
|
Lottery Systems
|
|
Gaming
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Instant tickets
|
|
$
|
122,813
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
122,813
|
|
Services
|
|
—
|
|
|
50,032
|
|
|
31,735
|
|
|
81,767
|
|
||||
Sales
|
|
3,474
|
|
|
8,161
|
|
|
3,373
|
|
|
15,008
|
|
||||
Total revenue
|
|
126,287
|
|
|
58,193
|
|
|
35,108
|
|
|
219,588
|
|
||||
Cost of instant tickets
(1)
|
|
68,194
|
|
|
—
|
|
|
—
|
|
|
68,194
|
|
||||
Cost of services
(1)
|
|
—
|
|
|
29,258
|
|
|
16,975
|
|
|
46,233
|
|
||||
Cost of sales
(1)
|
|
2,443
|
|
|
5,729
|
|
|
2,119
|
|
|
10,291
|
|
||||
Selling, general and administrative expenses
|
|
12,474
|
|
|
7,538
|
|
|
7,586
|
|
|
27,598
|
|
||||
Employee termination and restructuring costs
|
|
331
|
|
|
—
|
|
|
—
|
|
|
331
|
|
||||
Depreciation and amortization
|
|
8,972
|
|
|
13,758
|
|
|
9,879
|
|
|
32,609
|
|
||||
Segment operating income (loss) from continuing operations
|
|
$
|
33,873
|
|
|
$
|
1,910
|
|
|
$
|
(1,451
|
)
|
|
$
|
34,332
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
23,203
|
|
|||||||
Consolidated operating income from continuing operations
|
|
|
|
|
|
|
|
$
|
11,129
|
|
|
|
Three Months Ended March 31, 2012
|
||||||||||||||
|
|
Printed Products
|
|
Lottery Systems
|
|
Gaming
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Instant tickets
|
|
$
|
123,324
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
123,324
|
|
Services
|
|
—
|
|
|
53,006
|
|
|
33,899
|
|
|
86,905
|
|
||||
Sales
|
|
2,163
|
|
|
11,471
|
|
|
7,331
|
|
|
20,965
|
|
||||
Total revenue
|
|
125,487
|
|
|
64,477
|
|
|
41,230
|
|
|
231,194
|
|
||||
Cost of instant tickets
(1)
|
|
69,963
|
|
|
—
|
|
|
—
|
|
|
69,963
|
|
||||
Cost of services
(1)
|
|
—
|
|
|
29,359
|
|
|
13,944
|
|
|
43,303
|
|
||||
Cost of sales
(1)
|
|
1,410
|
|
|
7,955
|
|
|
7,562
|
|
|
16,927
|
|
||||
Selling, general and administrative expenses
|
|
11,015
|
|
|
7,053
|
|
|
5,234
|
|
|
23,302
|
|
||||
Employee termination and restructuring costs
|
|
—
|
|
|
—
|
|
|
2,304
|
|
|
2,304
|
|
||||
Depreciation and amortization
|
|
8,003
|
|
|
11,798
|
|
|
8,518
|
|
|
28,319
|
|
||||
Segment operating income from continuing operations
|
|
$
|
35,096
|
|
|
$
|
8,312
|
|
|
$
|
3,668
|
|
|
$
|
47,076
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
22,145
|
|
|||||||
Consolidated operating income from continuing operations
|
|
|
|
|
|
|
|
$
|
24,931
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Reportable segment operating income from continuing operations
|
|
$
|
34,332
|
|
|
$
|
47,076
|
|
Unallocated corporate costs
|
|
(23,203
|
)
|
|
(22,145
|
)
|
||
Consolidated operating income from continuing operations
|
|
11,129
|
|
|
24,931
|
|
||
Interest expense
|
|
(25,008
|
)
|
|
(24,898
|
)
|
||
Earnings from equity investments
|
|
6,136
|
|
|
8,845
|
|
||
Other income (expense), net
|
|
(998
|
)
|
|
522
|
|
||
Net (loss) income from continuing operations before income taxes
|
|
$
|
(8,741
|
)
|
|
$
|
9,400
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Net (loss) income (numerator)
|
|
|
|
|
||||
Net (loss) income from continuing operations
|
|
$
|
(12,287
|
)
|
|
$
|
3,868
|
|
Net loss from discontinued operations
|
|
(866
|
)
|
|
(2,049
|
)
|
||
Net (loss) income
|
|
$
|
(13,153
|
)
|
|
$
|
1,819
|
|
Shares (denominator)
|
|
|
|
|
||||
Weighted average basic common shares outstanding
|
|
84,607
|
|
|
92,484
|
|
||
Effect of dilutive securities-stock rights
|
|
—
|
|
|
1,740
|
|
||
Weighted average diluted common shares outstanding
|
|
84,607
|
|
|
94,224
|
|
||
Basic and diluted per share amounts
|
|
|
|
|
||||
Basic net (loss) income per share from continuing operations
|
|
$
|
(0.15
|
)
|
|
$
|
0.04
|
|
Basic net loss per share from discontinued operations
|
|
(0.01
|
)
|
|
(0.02
|
)
|
||
Total basic net (loss) income per share
|
|
$
|
(0.16
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
||||
Diluted net (loss) income per share from continuing operations
|
|
$
|
(0.15
|
)
|
|
$
|
0.04
|
|
Diluted net loss per share from discontinued operations
|
|
(0.01
|
)
|
|
(0.02
|
)
|
||
Diluted net (loss) income per share
|
|
$
|
(0.16
|
)
|
|
$
|
0.02
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
Parts and work-in-process
|
|
$
|
28,751
|
|
|
$
|
27,355
|
|
Finished goods
|
|
42,029
|
|
|
43,900
|
|
||
Inventory
|
|
$
|
70,780
|
|
|
$
|
71,255
|
|
Intangible Assets
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||
Balance as of March 31, 2013
|
|
|
|
|
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Patents
|
|
$
|
13,887
|
|
|
$
|
6,327
|
|
|
$
|
7,560
|
|
Customer lists
|
|
39,694
|
|
|
25,016
|
|
|
14,678
|
|
|||
Licenses
|
|
84,229
|
|
|
47,874
|
|
|
36,355
|
|
|||
Intellectual property
|
|
22,673
|
|
|
19,075
|
|
|
3,598
|
|
|||
Non-compete agreements
|
|
424
|
|
|
107
|
|
|
317
|
|
|||
Lottery contracts
|
|
1,500
|
|
|
1,322
|
|
|
178
|
|
|||
|
|
162,407
|
|
|
99,721
|
|
|
62,686
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Trade name
|
|
38,807
|
|
|
2,118
|
|
|
36,689
|
|
|||
Total intangible assets
|
|
$
|
201,214
|
|
|
$
|
101,839
|
|
|
$
|
99,375
|
|
Balance as of December 31, 2012
|
|
|
|
|
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Patents
|
|
$
|
13,741
|
|
|
$
|
6,113
|
|
|
$
|
7,628
|
|
Customer lists
|
|
41,471
|
|
|
25,349
|
|
|
16,122
|
|
|||
Licenses
|
|
84,852
|
|
|
66,688
|
|
|
18,164
|
|
|||
Intellectual property
|
|
24,268
|
|
|
20,107
|
|
|
4,161
|
|
|||
Non-compete agreements
|
|
421
|
|
|
73
|
|
|
348
|
|
|||
Lottery contracts
|
|
1,500
|
|
|
1,297
|
|
|
203
|
|
|||
|
|
166,253
|
|
|
119,627
|
|
|
46,626
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Trade name
|
|
39,783
|
|
|
2,118
|
|
|
37,665
|
|
|||
Total intangible assets
|
|
$
|
206,036
|
|
|
$
|
121,745
|
|
|
$
|
84,291
|
|
Goodwill
|
|
Printed Products
|
|
Lottery Systems
|
|
Gaming
|
|
Totals
|
||||||||
Balance as of December 31, 2012
|
|
$
|
327,990
|
|
|
$
|
210,682
|
|
|
$
|
262,656
|
|
|
$
|
801,328
|
|
Foreign Currency Adjustments
|
|
(862
|
)
|
|
(809
|
)
|
|
(16,895
|
)
|
|
(18,566
|
)
|
||||
Balance as of March 31, 2013
|
|
$
|
327,128
|
|
|
$
|
209,873
|
|
|
$
|
245,761
|
|
|
$
|
782,762
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
Revolver, varying interest rate, due 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan, varying interest rate, due 2015 (1)
|
|
558,115
|
|
|
559,619
|
|
||
8.125% Senior Notes, due 2018 ("2018 Notes")
|
|
250,000
|
|
|
250,000
|
|
||
9.250% Senior Notes, due 2019 ("2019 Notes") (2)
|
|
346,013
|
|
|
345,909
|
|
||
6.250% Senior Notes, due 2020 ("2020 Notes")
|
|
300,000
|
|
|
300,000
|
|
||
Chinese Renminbi Yuan ("RMB") denominated loans, due 2014 (the "China Loans") and Other Debt
|
|
13,514
|
|
|
12,523
|
|
||
Capital lease obligations as of March 31, 2013, payable monthly through 2017
|
|
100
|
|
|
115
|
|
||
Total long-term debt outstanding
|
|
1,467,742
|
|
|
1,468,166
|
|
||
Less: debt payments due within one year
|
|
(16,895
|
)
|
|
(16,458
|
)
|
||
Long-term debt, net of current installments
|
|
$
|
1,450,847
|
|
|
$
|
1,451,708
|
|
(1)
|
Total of
$558,160
less amortization of a loan discount in the amount of
$45
as of March 31, 2013. Total of
$559,730
less amortization of a loan discount in the amount of
$111
as of December 31, 2012.
|
(2)
|
Total of
$350,000
less amortization of a loan discount in the amount of
$3,987
and
$4,091
as of March 31, 2013 and December 31, 2012, respectively.
|
|
|
Location of Balance Sheet
|
|
Notional Amount
|
|
Weighted average exchange rate
|
|
Fair Value Asset (Liability)
|
|
Valuation Technique
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts
|
|
Accrued Liabilities
|
|
€20,000
|
|
1.2690
|
|
(288)
|
|
Quoted prices in active markets for identical assets or liabilities
|
|
|
Three Months Ended
|
|
Twelve Months
Ended
|
||
|
|
March 31,
2013 |
|
December 31,
2012 |
||
Shares outstanding as of beginning of period
|
|
84,395
|
|
|
92,433
|
|
Shares issued as part of equity-based compensation plans and the Employee
Stock Purchase Plan, net of restricted stock units surrendered
|
|
818
|
|
|
1,119
|
|
Shares repurchased into treasury stock
|
|
(226
|
)
|
|
(9,157
|
)
|
Shares outstanding as of end of period
|
|
84,987
|
|
|
84,395
|
|
|
|
Number of
Options
|
|
Weighted
Average
Remaining
Contract Term
(Years)
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
|
|||||
Options outstanding as of December 31, 2012
|
|
3,461
|
|
|
7.8
|
|
$
|
9.34
|
|
|
$
|
659
|
|
Granted
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||
Canceled
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||
Options outstanding as of March 31, 2013
|
|
3,461
|
|
|
7.6
|
|
$
|
9.34
|
|
|
$
|
744
|
|
Options exercisable as of March 31, 2013
|
|
1,304
|
|
|
7.3
|
|
$
|
10.25
|
|
|
$
|
79
|
|
|
|
Number of
RSUs
|
|
Weighted Average Grant Date Fair Value Per RSU
|
|||
Unvested units as of December 31, 2012
|
|
4,815
|
|
|
$
|
10.53
|
|
Granted
|
|
1,354
|
|
|
8.86
|
|
|
Vested
|
|
(918
|
)
|
|
12.36
|
|
|
Canceled
|
|
(3
|
)
|
|
10.76
|
|
|
Unvested units as of March 31, 2013
|
|
5,248
|
|
|
$
|
10.05
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Components of net periodic pension benefit cost:
|
|
|
|
|
||||
Service cost
|
|
$
|
639
|
|
|
$
|
568
|
|
Interest cost
|
|
1,186
|
|
|
1,147
|
|
||
Expected return on plan assets
|
|
(1,409
|
)
|
|
(1,227
|
)
|
||
Amortization of actuarial gains
|
|
261
|
|
|
251
|
|
||
Amortization of prior service costs
|
|
(65
|
)
|
|
(19
|
)
|
||
Net periodic cost
|
|
$
|
612
|
|
|
$
|
720
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
16,703
|
|
|
$
|
151
|
|
|
$
|
—
|
|
|
$
|
74,647
|
|
|
$
|
(1,482
|
)
|
|
$
|
90,019
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,543
|
|
|
—
|
|
|
28,543
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
59,790
|
|
|
28,966
|
|
|
93,747
|
|
|
—
|
|
|
182,503
|
|
||||||
Inventories
|
|
—
|
|
|
25,281
|
|
|
15,191
|
|
|
30,308
|
|
|
—
|
|
|
70,780
|
|
||||||
Note receivable
|
|
10,373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,373
|
|
||||||
Other current assets
|
|
9,059
|
|
|
4,111
|
|
|
7,340
|
|
|
32,581
|
|
|
—
|
|
|
53,091
|
|
||||||
Property and equipment, net
|
|
6,079
|
|
|
147,453
|
|
|
33,697
|
|
|
193,455
|
|
|
—
|
|
|
380,684
|
|
||||||
Investment in subsidiaries
|
|
492,107
|
|
|
813,544
|
|
|
—
|
|
|
855,802
|
|
|
(2,161,453
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
253,928
|
|
|
76,742
|
|
|
452,092
|
|
|
—
|
|
|
782,762
|
|
||||||
Intangible assets
|
|
—
|
|
|
41,816
|
|
|
38,369
|
|
|
19,190
|
|
|
—
|
|
|
99,375
|
|
||||||
Intercompany balances
|
|
58,739
|
|
|
—
|
|
|
310,248
|
|
|
—
|
|
|
(368,987
|
)
|
|
—
|
|
||||||
Other assets
|
|
7,685
|
|
|
74,230
|
|
|
8,575
|
|
|
348,219
|
|
|
(2,613
|
)
|
|
436,096
|
|
||||||
Total assets
|
|
$
|
600,745
|
|
|
$
|
1,420,304
|
|
|
$
|
519,128
|
|
|
$
|
2,128,584
|
|
|
$
|
(2,534,535
|
)
|
|
$
|
2,134,226
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current installments of long-term debt
|
|
$
|
—
|
|
|
$
|
6,280
|
|
|
$
|
—
|
|
|
$
|
10,615
|
|
|
$
|
—
|
|
|
$
|
16,895
|
|
Other current liabilities
|
|
17,573
|
|
|
54,624
|
|
|
31,928
|
|
|
115,383
|
|
|
(1,488
|
)
|
|
218,020
|
|
||||||
Long-term debt, excluding current installments
|
|
250,000
|
|
|
1,197,849
|
|
|
—
|
|
|
2,998
|
|
|
—
|
|
|
1,450,847
|
|
||||||
Other non-current liabilities
|
|
17,022
|
|
|
25,771
|
|
|
31,876
|
|
|
57,645
|
|
|
—
|
|
|
132,314
|
|
||||||
Intercompany balances
|
|
—
|
|
|
144,608
|
|
|
—
|
|
|
224,398
|
|
|
(369,006
|
)
|
|
—
|
|
||||||
Stockholders’ equity
|
|
316,150
|
|
|
(8,828
|
)
|
|
455,324
|
|
|
1,717,545
|
|
|
(2,164,041
|
)
|
|
316,150
|
|
||||||
Total liabilities and stockholders’ equity
|
|
$
|
600,745
|
|
|
$
|
1,420,304
|
|
|
$
|
519,128
|
|
|
$
|
2,128,584
|
|
|
$
|
(2,534,535
|
)
|
|
$
|
2,134,226
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
27,159
|
|
|
$
|
201
|
|
|
$
|
—
|
|
|
$
|
82,834
|
|
|
$
|
(1,179
|
)
|
|
$
|
109,015
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,398
|
|
|
—
|
|
|
30,398
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
63,944
|
|
|
29,156
|
|
|
116,815
|
|
|
—
|
|
|
209,915
|
|
||||||
Inventories
|
|
—
|
|
|
25,411
|
|
|
16,063
|
|
|
29,781
|
|
|
—
|
|
|
71,255
|
|
||||||
Note receivable
|
|
10,298
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,298
|
|
||||||
Other current assets
|
|
9,693
|
|
|
3,809
|
|
|
6,773
|
|
|
33,507
|
|
|
—
|
|
|
53,782
|
|
||||||
Property and equipment, net
|
|
5,727
|
|
|
154,243
|
|
|
32,957
|
|
|
183,950
|
|
|
—
|
|
|
376,877
|
|
||||||
Investment in subsidiaries
|
|
520,969
|
|
|
802,425
|
|
|
—
|
|
|
855,801
|
|
|
(2,179,195
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
253,928
|
|
|
76,741
|
|
|
470,659
|
|
|
—
|
|
|
801,328
|
|
||||||
Intangible assets
|
|
—
|
|
|
42,000
|
|
|
20,367
|
|
|
21,924
|
|
|
—
|
|
|
84,291
|
|
||||||
Intercompany balances
|
|
79,735
|
|
|
—
|
|
|
302,396
|
|
|
—
|
|
|
(382,131
|
)
|
|
—
|
|
||||||
Other assets
|
|
6,479
|
|
|
74,923
|
|
|
7,507
|
|
|
353,455
|
|
|
(2,615
|
)
|
|
439,749
|
|
||||||
Total assets
|
|
$
|
660,060
|
|
|
$
|
1,420,884
|
|
|
$
|
491,960
|
|
|
$
|
2,179,124
|
|
|
$
|
(2,565,120
|
)
|
|
$
|
2,186,908
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current installments of long-term debt
|
|
$
|
—
|
|
|
$
|
6,280
|
|
|
$
|
—
|
|
|
$
|
10,178
|
|
|
$
|
—
|
|
|
$
|
16,458
|
|
Other current liabilities
|
|
28,485
|
|
|
58,473
|
|
|
35,436
|
|
|
118,682
|
|
|
(1,187
|
)
|
|
239,889
|
|
||||||
Long-term debt, excluding current installments
|
|
250,000
|
|
|
1,199,247
|
|
|
—
|
|
|
2,461
|
|
|
—
|
|
|
1,451,708
|
|
||||||
Other non-current liabilities
|
|
16,784
|
|
|
25,560
|
|
|
12,174
|
|
|
59,544
|
|
|
—
|
|
|
114,062
|
|
||||||
Intercompany balances
|
|
—
|
|
|
136,402
|
|
|
—
|
|
|
245,748
|
|
|
(382,150
|
)
|
|
—
|
|
||||||
Stockholders’ equity
|
|
364,791
|
|
|
(5,078
|
)
|
|
444,350
|
|
|
1,742,511
|
|
|
(2,181,783
|
)
|
|
364,791
|
|
||||||
Total liabilities and stockholders’ equity
|
|
$
|
660,060
|
|
|
$
|
1,420,884
|
|
|
$
|
491,960
|
|
|
$
|
2,179,124
|
|
|
$
|
(2,565,120
|
)
|
|
$
|
2,186,908
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
100,773
|
|
|
$
|
12,115
|
|
|
$
|
107,625
|
|
|
$
|
(925
|
)
|
|
$
|
219,588
|
|
Cost of instant ticket revenue, cost of services and cost of sales
(1)
|
|
—
|
|
|
32,546
|
|
|
34,348
|
|
|
59,907
|
|
|
(2,083
|
)
|
|
124,718
|
|
||||||
Selling, general and administrative expenses
|
|
17,609
|
|
|
14,213
|
|
|
2,953
|
|
|
16,449
|
|
|
(583
|
)
|
|
50,641
|
|
||||||
Employee termination and restructuring costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
331
|
|
|
—
|
|
|
331
|
|
||||||
Depreciation and amortization
|
|
160
|
|
|
9,105
|
|
|
5,506
|
|
|
17,998
|
|
|
—
|
|
|
32,769
|
|
||||||
Operating income (loss)
|
|
(17,769
|
)
|
|
44,909
|
|
|
(30,692
|
)
|
|
12,940
|
|
|
1,741
|
|
|
11,129
|
|
||||||
Interest expense
|
|
(5,306
|
)
|
|
(19,440
|
)
|
|
—
|
|
|
(262
|
)
|
|
—
|
|
|
(25,008
|
)
|
||||||
Other income (expense), net
|
|
2,464
|
|
|
(40,376
|
)
|
|
41,665
|
|
|
3,126
|
|
|
(1,741
|
)
|
|
5,138
|
|
||||||
Income (loss) before equity in income of subsidiaries, and income taxes
|
|
(20,611
|
)
|
|
(14,907
|
)
|
|
10,973
|
|
|
15,804
|
|
|
—
|
|
|
(8,741
|
)
|
||||||
Equity in income (loss) of subsidiaries
|
|
10,117
|
|
|
10,917
|
|
|
—
|
|
|
—
|
|
|
(21,034
|
)
|
|
—
|
|
||||||
Income tax expense
|
|
1,793
|
|
|
41
|
|
|
—
|
|
|
1,712
|
|
|
—
|
|
|
3,546
|
|
||||||
Net (loss) income from continuing operations
|
|
$
|
(12,287
|
)
|
|
$
|
(4,031
|
)
|
|
$
|
10,973
|
|
|
$
|
14,092
|
|
|
$
|
(21,034
|
)
|
|
$
|
(12,287
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss from discontinued operations
|
|
(866
|
)
|
|
—
|
|
|
—
|
|
|
(866
|
)
|
|
866
|
|
|
(866
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
(13,153
|
)
|
|
(4,031
|
)
|
|
10,973
|
|
|
13,226
|
|
|
(20,168
|
)
|
|
(13,153
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
(38,111
|
)
|
|
280
|
|
|
—
|
|
|
(38,202
|
)
|
|
37,922
|
|
|
(38,111
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
(51,264
|
)
|
|
$
|
(3,751
|
)
|
|
$
|
10,973
|
|
|
$
|
(24,976
|
)
|
|
$
|
17,754
|
|
|
$
|
(51,264
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
106,651
|
|
|
$
|
9,549
|
|
|
$
|
115,567
|
|
|
$
|
(573
|
)
|
|
$
|
231,194
|
|
Cost of instant ticket revenue, cost of services and cost of sales
(1)
|
|
—
|
|
|
32,990
|
|
|
34,214
|
|
|
64,615
|
|
|
(1,626
|
)
|
|
130,193
|
|
||||||
Selling, general and administrative expenses
|
|
15,522
|
|
|
14,737
|
|
|
3,632
|
|
|
12,058
|
|
|
(651
|
)
|
|
45,298
|
|
||||||
Employee termination and restructuring costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,304
|
|
|
—
|
|
|
2,304
|
|
||||||
Depreciation and amortization
|
|
149
|
|
|
7,320
|
|
|
4,777
|
|
|
16,222
|
|
|
—
|
|
|
28,468
|
|
||||||
Operating income (loss)
|
|
(15,671
|
)
|
|
51,604
|
|
|
(33,074
|
)
|
|
20,368
|
|
|
1,704
|
|
|
24,931
|
|
||||||
Interest expense
|
|
(5,302
|
)
|
|
(19,172
|
)
|
|
—
|
|
|
(424
|
)
|
|
—
|
|
|
(24,898
|
)
|
||||||
Other income (expense), net
|
|
2,188
|
|
|
(40,049
|
)
|
|
45,321
|
|
|
3,611
|
|
|
(1,704
|
)
|
|
9,367
|
|
||||||
Income (loss) before equity in income of subsidiaries, and income taxes
|
|
(18,785
|
)
|
|
(7,617
|
)
|
|
12,247
|
|
|
23,555
|
|
|
—
|
|
|
9,400
|
|
||||||
Equity in income (loss) of subsidiaries
|
|
(32,270
|
)
|
|
12,107
|
|
|
—
|
|
|
—
|
|
|
20,163
|
|
|
—
|
|
||||||
Income tax expense
|
|
(54,923
|
)
|
|
58,199
|
|
|
—
|
|
|
2,256
|
|
|
—
|
|
|
5,532
|
|
||||||
Net income (loss)
|
|
$
|
3,868
|
|
|
$
|
(53,709
|
)
|
|
$
|
12,247
|
|
|
$
|
21,299
|
|
|
$
|
20,163
|
|
|
$
|
3,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss from discontinued operations
|
|
(2,049
|
)
|
|
—
|
|
|
—
|
|
|
(2,049
|
)
|
|
2,049
|
|
|
(2,049
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
1,819
|
|
|
(53,709
|
)
|
|
12,247
|
|
|
19,250
|
|
|
22,212
|
|
|
1,819
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
25,422
|
|
|
219
|
|
|
—
|
|
|
25,031
|
|
|
(25,250
|
)
|
|
25,422
|
|
||||||
Comprehensive income (loss)
|
|
$
|
27,241
|
|
|
$
|
(53,490
|
)
|
|
$
|
12,247
|
|
|
$
|
44,281
|
|
|
$
|
(3,038
|
)
|
|
$
|
27,241
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(15,176
|
)
|
|
$
|
646
|
|
|
$
|
1,767
|
|
|
$
|
35,998
|
|
|
$
|
0
|
|
|
$
|
23,235
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||
Capital, lottery and gaming systems expenditures
|
|
(1,492
|
)
|
|
(4,221
|
)
|
|
(8,415
|
)
|
|
(22,152
|
)
|
|
—
|
|
|
(36,280
|
)
|
||||||
Business acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(287
|
)
|
|
—
|
|
|
(287
|
)
|
||||||
Other assets and investments
|
|
(159
|
)
|
|
(15
|
)
|
|
—
|
|
|
1,830
|
|
|
—
|
|
|
1,656
|
|
||||||
Net cash used in investing activities
|
|
(1,651
|
)
|
|
(4,236
|
)
|
|
(8,415
|
)
|
|
(20,609
|
)
|
|
—
|
|
|
(34,911
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (payments) proceeds on long-term debt
|
|
—
|
|
|
(1,570
|
)
|
|
—
|
|
|
946
|
|
|
—
|
|
|
(624
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans
|
|
(2,945
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,945
|
)
|
||||||
Payment of financing fees
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
||||||
Other, principally intercompany balances
|
|
9,315
|
|
|
5,433
|
|
|
6,345
|
|
|
(21,107
|
)
|
|
14
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
6,370
|
|
|
3,839
|
|
|
6,345
|
|
|
(20,161
|
)
|
|
14
|
|
|
(3,593
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
(299
|
)
|
|
—
|
|
|
(3,428
|
)
|
|
—
|
|
|
(3,727
|
)
|
||||||
Decrease in cash and cash equivalents
|
|
(10,457
|
)
|
|
(50
|
)
|
|
(303
|
)
|
|
(8,200
|
)
|
|
14
|
|
|
(18,996
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
27,160
|
|
|
201
|
|
|
2,378
|
|
|
79,276
|
|
|
—
|
|
|
109,015
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
16,703
|
|
|
$
|
151
|
|
|
$
|
2,075
|
|
|
$
|
71,076
|
|
|
$
|
14
|
|
|
$
|
90,019
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(14,095
|
)
|
|
$
|
14,044
|
|
|
$
|
1,337
|
|
|
$
|
20,593
|
|
|
$
|
45
|
|
|
$
|
21,924
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital, lottery and gaming systems expenditures
|
|
(423
|
)
|
|
(6,078
|
)
|
|
(3,757
|
)
|
|
(11,539
|
)
|
|
—
|
|
|
(21,797
|
)
|
||||||
Business acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(344
|
)
|
|
—
|
|
|
(344
|
)
|
||||||
Other assets and investments
|
|
(12
|
)
|
|
(51,411
|
)
|
|
156
|
|
|
55,742
|
|
|
(2,136
|
)
|
|
2,339
|
|
||||||
Net cash provided by (used in) investing activities
|
|
(435
|
)
|
|
(57,489
|
)
|
|
(3,601
|
)
|
|
43,859
|
|
|
(2,136
|
)
|
|
(19,802
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net payments on long-term debt
|
|
—
|
|
|
(1,570
|
)
|
|
—
|
|
|
(1,981
|
)
|
|
—
|
|
|
(3,551
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans
|
|
(3,555
|
)
|
|
—
|
|
|
5
|
|
|
(2,141
|
)
|
|
2,136
|
|
|
(3,555
|
)
|
||||||
Purchase of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payment of financing fees
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
||||||
Other, principally intercompany balances
|
|
15,946
|
|
|
45,041
|
|
|
998
|
|
|
(61,940
|
)
|
|
(45
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
12,391
|
|
|
43,414
|
|
|
1,003
|
|
|
(66,062
|
)
|
|
2,091
|
|
|
(7,163
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
272
|
|
|
—
|
|
|
770
|
|
|
—
|
|
|
1,042
|
|
||||||
Increase (decrease) in cash and cash equivalents
|
|
(2,139
|
)
|
|
241
|
|
|
(1,261
|
)
|
|
(840
|
)
|
|
—
|
|
|
(3,999
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
24,042
|
|
|
56
|
|
|
2,379
|
|
|
77,925
|
|
|
—
|
|
|
104,402
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
21,903
|
|
|
$
|
297
|
|
|
$
|
1,118
|
|
|
$
|
77,085
|
|
|
$
|
—
|
|
|
$
|
100,403
|
|
|
|
|
|
|
|
Variance for the
|
|||||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
|||||||||||
|
|
March 31,
|
|
March 31,
|
|||||||||||
|
|
2013
|
|
2012
|
|
2013 vs. 2012
|
|||||||||
|
|
(in thousands)
|
|
(in millions)
|
|||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant tickets
|
|
$
|
122,813
|
|
|
$
|
123,324
|
|
|
$
|
(0.5
|
)
|
|
(0.4
|
)%
|
Services
|
|
81,767
|
|
|
86,905
|
|
|
(5.1
|
)
|
|
(5.9
|
)%
|
|||
Sales
|
|
15,008
|
|
|
20,965
|
|
|
(6.0
|
)
|
|
(28.4
|
)%
|
|||
Total revenue
|
|
219,588
|
|
|
231,194
|
|
|
(11.6
|
)
|
|
(5.0
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of instant tickets (1)
|
|
68,194
|
|
|
69,963
|
|
|
(1.8
|
)
|
|
(2.5
|
)%
|
|||
Cost of services (1)
|
|
46,233
|
|
|
43,303
|
|
|
2.9
|
|
|
6.8
|
%
|
|||
Cost of sales (1)
|
|
10,291
|
|
|
16,927
|
|
|
(6.6
|
)
|
|
(39.2
|
)%
|
|||
Selling, general and administrative
|
|
50,641
|
|
|
45,298
|
|
|
5.3
|
|
|
11.8
|
%
|
|||
Employee termination and restructuring
|
|
331
|
|
|
2,304
|
|
|
(2.0
|
)
|
|
(85.6
|
)%
|
|||
Depreciation and amortization
|
|
32,769
|
|
|
28,468
|
|
|
4.3
|
|
|
15.1
|
%
|
|||
Operating income
|
|
11,129
|
|
|
24,931
|
|
|
(13.8
|
)
|
|
(55.4
|
)%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(25,008
|
)
|
|
(24,898
|
)
|
|
(0.1
|
)
|
|
0.4
|
%
|
|||
Earnings from equity investments
|
|
6,136
|
|
|
8,845
|
|
|
(2.7
|
)
|
|
(30.6
|
)%
|
|||
Other (expense) income, net
|
|
(998
|
)
|
|
522
|
|
|
(1.5
|
)
|
|
(291.2
|
)%
|
|||
Net (loss) income from continuing operations before income taxes
|
|
(8,741
|
)
|
|
9,400
|
|
|
(18.1
|
)
|
|
(193.0
|
)%
|
|||
Income tax expense
|
|
3,546
|
|
|
5,532
|
|
|
(2.0
|
)
|
|
(35.9
|
)%
|
|||
Net (loss) income from continuing operations
|
|
$
|
(12,287
|
)
|
|
$
|
3,868
|
|
|
$
|
(16.2
|
)
|
|
(417.7
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Discontinued operations
|
|
|
|
|
|
|
|
|
|||||||
Loss from discontinued operations
|
|
$
|
(1,911
|
)
|
|
$
|
(2,670
|
)
|
|
$
|
0.8
|
|
|
(28.4
|
)%
|
Other expense
|
|
(45
|
)
|
|
(44
|
)
|
|
—
|
|
|
2.3
|
%
|
|||
Gain on sale of assets
|
|
828
|
|
|
—
|
|
|
0.8
|
|
|
n/m
|
||||
Income tax benefits
|
|
262
|
|
|
665
|
|
|
$
|
(0.4
|
)
|
|
(60.6
|
)%
|
||
Net loss from discontinued operations
|
|
$
|
(866
|
)
|
|
$
|
(2,049
|
)
|
|
$
|
1.2
|
|
|
(57.7
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Net (loss) income
|
|
$
|
(13,153
|
)
|
|
$
|
1,819
|
|
|
$
|
(15.0
|
)
|
|
(823.1
|
)%
|
|
|
|
|
|
|
Variance for the
|
|||||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
|||||||||||
|
|
March 31,
|
|
March 31,
|
|||||||||||
|
|
2013
|
|
2012
|
|
2013 vs. 2012
|
|||||||||
|
|
(in thousands)
|
|
(in millions)
|
|||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant tickets
|
|
$
|
122,813
|
|
|
$
|
123,324
|
|
|
$
|
(0.5
|
)
|
|
(0.4
|
)%
|
Services
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Sales
|
|
3,474
|
|
|
2,163
|
|
|
1.3
|
|
|
60.6
|
%
|
|||
Total revenue
|
|
126,287
|
|
|
125,487
|
|
|
0.8
|
|
|
0.6
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Cost of instant tickets (1)
|
|
68,194
|
|
|
69,963
|
|
|
(1.8
|
)
|
|
(2.5
|
)%
|
|||
Cost of services (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Cost of sales (1)
|
|
2,443
|
|
|
1,410
|
|
|
1.0
|
|
|
73.3
|
%
|
|||
Selling, general and administrative
|
|
12,474
|
|
|
11,015
|
|
|
1.5
|
|
|
13.2
|
%
|
|||
Employee termination and restructuring
|
|
331
|
|
|
—
|
|
|
0.3
|
|
|
—
|
%
|
|||
Depreciation and amortization
|
|
8,972
|
|
|
8,003
|
|
|
1.0
|
|
|
12.1
|
%
|
|||
Operating income
|
|
$
|
33,873
|
|
|
$
|
35,096
|
|
|
$
|
(1.2
|
)
|
|
(3.5
|
)%
|
|
|
|
|
|
|
Variance for the
|
|||||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
|||||||||||
|
|
March 31,
|
|
March 31,
|
|||||||||||
|
|
2013
|
|
2012
|
|
2013 vs. 2012
|
|||||||||
|
|
(in thousands)
|
|
(in millions)
|
|||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant tickets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
Services
|
|
50,032
|
|
|
53,006
|
|
|
(3.0
|
)
|
|
(5.6
|
)%
|
|||
Sales
|
|
8,161
|
|
|
11,471
|
|
|
(3.3
|
)
|
|
(28.9
|
)%
|
|||
Total revenue
|
|
58,193
|
|
|
64,477
|
|
|
(6.3
|
)
|
|
(9.7
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of instant tickets (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Cost of services (1)
|
|
29,258
|
|
|
29,359
|
|
|
(0.1
|
)
|
|
(0.3
|
)%
|
|||
Cost of sales (1)
|
|
5,729
|
|
|
7,955
|
|
|
(2.2
|
)
|
|
(28.0
|
)%
|
|||
Selling, general and administrative
|
|
7,538
|
|
|
7,053
|
|
|
0.5
|
|
|
6.9
|
%
|
|||
Depreciation and amortization
|
|
13,758
|
|
|
11,798
|
|
|
2.0
|
|
|
16.6
|
%
|
|||
Operating income
|
|
$
|
1,910
|
|
|
$
|
8,312
|
|
|
$
|
(6.4
|
)
|
|
(77.0
|
)%
|
|
|
|
|
|
|
Variance for the
|
|||||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
|||||||||||
|
|
March 31,
|
|
March 31,
|
|||||||||||
|
|
2013
|
|
2012
|
|
2013 vs. 2012
|
|||||||||
|
|
(in thousands)
|
|
(in millions)
|
|||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant tickets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
Services
|
|
31,735
|
|
|
33,899
|
|
|
(2.2
|
)
|
|
(6.4
|
)%
|
|||
Sales
|
|
3,373
|
|
|
7,331
|
|
|
(4.0
|
)
|
|
(54.0
|
)%
|
|||
Total revenue
|
|
35,108
|
|
|
41,230
|
|
|
(6.1
|
)
|
|
(14.8
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of instant tickets (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Cost of services (1)
|
|
16,975
|
|
|
13,944
|
|
|
3.0
|
|
|
21.7
|
%
|
|||
Cost of sales (1)
|
|
2,119
|
|
|
7,562
|
|
|
(5.4
|
)
|
|
(72.0
|
)%
|
|||
Selling, general and administrative
|
|
7,586
|
|
|
5,234
|
|
|
2.4
|
|
|
44.9
|
%
|
|||
Employee termination and restructuring
|
|
—
|
|
|
2,304
|
|
|
(2.3
|
)
|
|
(100.0
|
)%
|
|||
Depreciation and amortization
|
|
9,879
|
|
|
8,518
|
|
|
1.4
|
|
|
16.0
|
%
|
|||
Operating (loss) income
|
|
$
|
(1,451
|
)
|
|
$
|
3,668
|
|
|
$
|
(5.1
|
)
|
|
(139.6
|
)%
|
|
|
Three Months Ended March 31,
|
|
Variance for the Three Months Ended March 31,
|
||||||||
|
|
2013
|
|
2012
|
|
2013 vs. 2012
|
||||||
Net cash provided by operating activities
|
|
$
|
23.2
|
|
|
$
|
21.9
|
|
|
$
|
1.3
|
|
Net cash used in investing activities
|
|
(34.9
|
)
|
|
(19.8
|
)
|
|
(15.1
|
)
|
|||
Net cash used in financing activities
|
|
(3.6
|
)
|
|
(7.2
|
)
|
|
3.6
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
|
(3.7
|
)
|
|
1.0
|
|
|
(4.7
|
)
|
|||
Decrease in cash and cash equivalents
|
|
$
|
(19.0
|
)
|
|
$
|
(4.1
|
)
|
|
$
|
(14.9
|
)
|
Period
|
|
Total Number
of Shares
Purchased (1)
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the
Plans or Programs (2)
|
|||||
1/1/2013 - 1/31/2013
|
|
229,250
|
|
|
$
|
8.70
|
|
|
226,276
|
|
|
|
$105.2 million
|
2/1/2013 - 2/28/2013
|
|
205,326
|
|
|
$
|
9.07
|
|
|
—
|
|
|
|
$105.2 million
|
3/1/2013 - 3/31/2013
|
|
118,083
|
|
|
$
|
8.80
|
|
|
—
|
|
|
|
$105.2 million
|
Total
|
|
552,659
|
|
|
$
|
8.86
|
|
|
226,276
|
|
|
|
$105.2 million
|
(1)
|
This column reflects 326,383 shares acquired from employees to satisfy the withholding taxes associated with the vesting of restricted stock units and 226,276 shares with an approximate value of $2.0 million related to a cashless exercise of stock options.
|
(2)
|
The $200 million stock repurchase program, which expires on December 31, 2013, was publicly announced on May 10, 2010 and extended on December 6, 2012. Under the program, we are authorized to repurchase, from time to time through open market purchases or otherwise, shares of our outstanding common stock in an aggregate amount up to $200.0 million. As of March 31, 2013, we had approximately $105.2 million available for potential repurchases under the program.
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Exhibit
Number
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2.1
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|
Agreement and Plan of Merger, dated as of January 30, 2013, entered into by and among Scientific Games Corporation, Scientific Games International, Inc., SG California Merger Sub, Inc. and WMS Industries Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on February 5, 2013).
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4.1
|
|
Supplemental Indenture, dated as of August 20, 2012, among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto, Sciplay Inc. and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture dated May 21, 2009, by and among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee. (†)
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|
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4.2
|
|
Supplemental Indenture, dated as of August 20, 2012, among the Company, as issuer, the subsidiary guarantors party thereto, Sciplay Inc. and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture dated September 22, 2010, by and among the Company, as issuer, the subsidiary guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee. (†)
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|
|
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4.3
|
|
Supplemental Indenture, dated as of April 16, 2013, among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto, SG California Merger Sub, Inc., Scientific Games New Jersey, LLC and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture dated May, 21 2009, by and among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee. (†)
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|
|
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4.4
|
|
Supplemental Indenture, dated as of April 16, 2013, among the Company, as issuer, the subsidiary guarantors party thereto, SG California Merger Sub, Inc., Scientific Games New Jersey, LLC and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture dated September 22, 2010, by and among the Company, as issuer, the subsidiary guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee. (†)
|
|
|
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4.5
|
|
Supplemental Indenture, dated as of April 16, 2013, among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto, SG California Merger Sub, Inc., Scientific Games New Jersey, LLC and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to the Indenture dated August 20, 2012, by and among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto and The Bank of Nova Scotia Trust Company of New York, as trustee. (†)
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|
|
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10.1
|
|
Amended and Restated Commitment Letter, dated as of February 19, 2013, among the Company, Scientific Games International, Inc., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse AG, Credit Suisse Securities (USA) LLC, UBS AG, Stamford Branch, UBS Securities LLC, JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, The Royal Bank of Scotland plc, RBS Securities Inc., Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, HSBC Bank USA, National Association and HSBC Securities (USA) Inc. (incorporated by reference to Exhibit 10.68 to the Company's 2012 Annual Report on Form 10-K filed on March 12, 2013).
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31.1
|
|
Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (†)
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|
|
31.2
|
|
Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (†)
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|
|
|
32.1
|
|
Certification of the Chief Executive Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (†)
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|
|
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32.2
|
|
Certification of the Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (†)
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|
|
|
101
|
|
Financial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013, filed on May 8, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations and Comprehensive Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements tagged as blocks of text. (†)(*)
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|
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SCIENTIFIC GAMES CORPORATION
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(Registrant)
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By:
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/s/ Jeffrey S. Lipkin
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Name:
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Jeffrey S. Lipkin
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Title:
|
Senior Vice President and Chief Financial Officer
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By:
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/s/ Jeffrey B. Johnson
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|
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Name:
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Jeffrey B. Johnson
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|
|
Title:
|
Vice President, Chief Accounting Officer and Corporate Controller
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|
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Dated:
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May 8, 2013
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|
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Company:
|
|
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SCIENTIFIC GAMES INTERNATIONAL, INC.
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By:
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/s/ John B. Sarno
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Name: John B. Sarno
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|
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Title: Vice President and Deputy General Counsel
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|
|
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|
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Additional Guarantor:
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|
|
SCIPLAY INC.
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By:
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/s/ John B. Sarno
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|
|
Name: John B. Sarno
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|
|
Title: Vice President and Secretary
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|
|
|
|
|
|
|
Existing Guarantors:
|
|
|
SCIENTIFIC GAMES CORPORATION
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|
|
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By:
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/s/ John B. Sarno
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|
|
Name: John B. Sarno
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|
|
Title: Vice President, Deputy General Counsel and Assistant Secretary
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|
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SG GAMING, INC.
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By:
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/s/ John B. Sarno
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|
|
Name: John B. Sarno
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|
|
Title: Vice President and Secretary
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|
|
|
|
SCIENTIFIC GAMES PRODUCTS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ John B. Sarno
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|
|
Name: John B. Sarno
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|
|
Title: Vice President and Secretary
|
|
MDI ENTERTAINMENT, LLC
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|
|
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
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|
|
|
|
By:
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/s/ John B. Sarno
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|
|
Name: John B. Sarno
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|
|
Title: Vice President and Deputy General Counsel
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|
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|
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|
|
SCIENTIFIC GAMES SA, INC.
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|
|
|
|
|
|
|
|
By:
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/s/ John B. Sarno
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|
|
Name: John B. Sarno
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|
|
Title: General Counsel and Secretary
|
|
|
|
|
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|
|
Trustee:
|
|
|
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK
|
|
|
|
|
|
|
|
|
By:
|
/s/ Warren A. Goshine
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|
|
Name: Warren A. Goshine
|
|
|
Title: Vice President
|
|
Company:
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ John B. Sarno
|
|
|
Name: John B. Sarno
|
|
|
Title: Vice President, Deputy General Counsel and Assistant Secretary
|
|
|
|
|
|
|
|
Additional Guarantor:
|
|
|
SCIPLAY INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ John B. Sarno
|
|
|
Name: John B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
|
|
|
Existing Guarantors:
|
|
|
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ John B. Sarno
|
|
|
Name: John B. Sarno
|
|
|
Title: Vice President and Deputy General Counsel
|
|
|
|
|
SG GAMING, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ John B. Sarno
|
|
|
Name: John B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
SCIENTIFIC GAMES PRODUCTS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ John B. Sarno
|
|
|
Name: John B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|
|
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
|
|
|
|
|
By:
|
/s/ John B. Sarno
|
|
|
Name: John B. Sarno
|
|
|
Title: Vice President and Deputy General Counsel
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES SA, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ John B. Sarno
|
|
|
Name: John B. Sarno
|
|
|
Title: General Counsel and Secretary
|
|
|
|
|
|
|
|
Trustee:
|
|
|
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK
|
|
|
|
|
|
|
|
|
By:
|
/s/ Warren A. Goshine
|
|
|
Name: Warren A. Goshine
|
|
|
Title: Vice President
|
|
Company:
|
|
|
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
Additional Guarantor:
|
|
|
SG CALIFORNIA MERGER SUB, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Secretary
|
|
|
|
|
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
Existing Guarantors:
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President-Worldwide Legal Affairs and Corporate Secretary
|
|
|
|
|
SG GAMING NORTH AMERICA, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
SCIENTIFIC GAMES PRODUCTS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|
|
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES SA, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: General Counsel and Secretary
|
|
|
|
|
|
|
|
SCIPLAY INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
|
|
|
Trustee:
|
|
|
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK
|
|
|
|
|
|
|
|
|
By:
|
/s/ John F. Neylan
|
|
|
Name: John F. Neylan
|
|
|
Title: Trust Officer
|
|
Company:
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President-Worldwide Legal Affairs and Corporate Secretary
|
|
|
|
|
|
|
|
Additional Guarantor:
|
|
|
SG CALIFORNIA MERGER SUB, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Secretary
|
|
|
|
|
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
Existing Guarantors:
|
|
|
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
SG GAMING NORTH AMERICA, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
SCIENTIFIC GAMES PRODUCTS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|
|
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES SA, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: General Counsel and Secretary
|
|
|
|
|
|
|
|
SCIPLAY INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
|
|
|
Trustee:
|
|
|
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK
|
|
|
|
|
|
|
|
|
By:
|
/s/ John F. Neylan
|
|
|
Name: John F. Neylan
|
|
|
Title: Trust Officer
|
|
Company:
|
|
|
SCIENTIFIC GAMES INTERNATIONAL, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title:
Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
Additional Guarantor:
|
|
|
SG CALIFORNIA MERGER SUB, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Secretary
|
|
|
|
|
SCIENTIFIC GAMES NEW JERSEY, LLC
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
Existing Guarantors:
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title:
Vice President-Worldwide Affairs and Corporate Secretary
|
|
|
|
|
SG GAMING NORTH AMERICA, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
SCIENTIFIC GAMES PRODUCTS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
MDI ENTERTAINMENT, LLC
|
|
|
|
|
|
|
|
|
By:
|
Scientific Games International, Inc., its sole member
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES SA, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: General Counsel and Secretary
|
|
|
|
|
|
|
|
SCIPLAY INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jack B. Sarno
|
|
|
Name: Jack B. Sarno
|
|
|
Title: Vice President and Secretary
|
|
|
|
|
|
|
|
Trustee:
|
|
|
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK
|
|
|
|
|
|
|
|
|
By:
|
/s/ John F. Neylan
|
|
|
Name: John F. Neylan
|
|
|
Title: Trust Officer
|
/s/ A. Lorne Weil
|
A. Lorne Weil
|
Chief Executive Officer
|
/s/ Jeffrey S. Lipkin
|
Jeffrey S. Lipkin
|
Chief Financial Officer
|
|
/s/ A. Lorne Weil
|
|
A. Lorne Weil
|
|
Chief Executive Officer
|
|
May 8, 2013
|
|
/s/ Jeffrey S. Lipkin
|
|
Jeffrey S. Lipkin
|
|
Chief Financial Officer
|
|
May 8, 2013
|