Delaware
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81-0422894
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Large accelerated filer
¨
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Accelerated filer
ý
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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Financial Statements
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Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2014 and 2013
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Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013
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Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013
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Notes to Consolidated Financial Statements
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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OTHER INFORMATION
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74
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information
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Item 6.
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Exhibits
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•
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competition;
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•
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U.S. and international economic and industry conditions, including declines in or slow growth of lottery retail sales or gross gaming revenues, reductions in or constraints on capital spending by gaming or lottery operators and credit risk relating to customers;
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•
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slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines;
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•
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ownership changes and consolidation in the casino industry;
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•
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opposition to legalized gaming or the expansion thereof;
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•
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inability to adapt to, and offer products that keep pace with, evolving technology;
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•
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inability to develop successful gaming or lottery concepts and content;
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•
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laws and government regulation, including those relating to gaming licenses and environmental laws;
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•
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inability to identify and capitalize on trends and changes in the gaming and lottery industries, including the expansion of interactive gaming;
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•
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dependence upon key providers in our social gaming business;
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•
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retention and renewal of existing contracts or entry into new or revised contracts;
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•
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level of our indebtedness, higher interest rates, unavailability or inadequacy of cash flows and liquidity to satisfy obligations or future needs, and restrictions and covenants in our debt agreements;
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•
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protection of our intellectual property, ability to license third party intellectual property and the intellectual property rights of others;
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•
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security and integrity of our software and systems and reliance on or failures in our information technology systems;
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•
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natural events that disrupt our operations or those of our customers, suppliers or regulators;
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•
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inability to benefit from, and risks associated with, strategic equity investments and relationships, including (1) the inability of our joint venture to meet the net income targets or otherwise to realize the anticipated benefits under its PMA with the Illinois lottery, (2) the inability of our joint venture to meet the net income targets or other requirements under its agreement to provide marketing and sales services to the New Jersey lottery or otherwise to realize the anticipated benefits under such agreement (including as a result of a protest) and (3) failure to realize the anticipated benefits related to the award to our consortium of an instant lottery game concession in Greece;
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•
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failure to achieve the intended benefits of the WMS acquisition, including due to the inability to realize synergies in the anticipated amounts or within the contemplated time-frames or cost expectations, or at all;
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•
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inability to complete future acquisitions, including the pending acquisition of Bally due to the failure to obtain the required approvals or debt financing or otherwise;
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•
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litigation relating to the pending Bally acquisition;
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•
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disruption of our current plans and operations in connection with the pending Bally acquisition (whether prior to its completion or following its completion, including in connection with the integration of Bally), including departure of key personnel or inability to recruit additional qualified personnel or maintain relationships with customers, suppliers or other third parties;
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•
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costs, charges and expenses relating to the pending Bally acquisition;
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•
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inability to successfully integrate future acquisitions, including Bally (including SHFL entertainment, Inc. and Dragonplay Ltd.) following completion of the pending Bally acquisition;
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•
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failure to realize the intended benefits of the pending Bally acquisition, including the inability to realize the anticipated synergies in the anticipated amounts or within the contemplated time-frames or cost expectations, or at all;
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•
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inability to control Bally until completion of the Bally acquisition;
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•
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incurrence of restructuring costs, revenue recognition standards and impairment charges;
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•
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fluctuations in our results due to seasonality and other factors;
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•
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dependence on suppliers and manufacturers;
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•
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risks relating to foreign operations, including fluctuations in foreign currency exchange rates and restrictions on the import of our products;
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•
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dependence on our employees;
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•
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litigation and other liabilities relating to our business, including litigation and liabilities relating to our contracts and licenses, our products and systems, our employees, intellectual property and our strategic relationships;
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•
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influence of certain stockholders; and
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•
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stock price volatility.
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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2014
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2013
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2014
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2013
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||||||||
Revenue:
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Instant games
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$
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130.8
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$
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129.7
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$
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392.4
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$
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379.0
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Services
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182.8
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80.7
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538.9
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247.7
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||||
Product sales
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102.0
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24.0
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289.3
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62.3
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Total revenue
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415.6
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234.4
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1,220.6
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689.0
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Operating expenses:
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Cost of instant games
(1)
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69.7
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70.6
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212.5
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210.3
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Cost of services
(1)
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69.6
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42.6
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200.7
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135.0
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Cost of product sales
(1)
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59.9
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13.3
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161.2
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39.3
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Selling, general and administrative
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95.6
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45.6
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282.6
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139.1
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Research and development
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26.3
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1.4
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77.0
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4.7
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Employee termination and restructuring
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1.9
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—
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12.4
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0.3
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Depreciation and amortization
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100.4
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35.2
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290.5
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111.1
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Operating (loss) income
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(7.8
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)
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25.7
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(16.3
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)
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49.2
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Other income (expense):
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Interest expense
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(45.7
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)
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(25.2
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)
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(142.9
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)
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(75.3
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)
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||||
Earnings (loss) from equity investments
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(14.0
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)
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3.4
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(7.8
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)
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13.0
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Loss on early extinguishment of debt
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—
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—
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(25.9
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)
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—
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Gain on sale of equity interest
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—
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—
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14.5
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—
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Other income (expense), net
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3.1
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—
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9.2
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(0.8
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)
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||||
Total other expense
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(56.6
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)
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(21.8
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)
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(152.9
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)
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(63.1
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)
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||||
Net (loss) income from continuing operations before income taxes
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(64.4
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)
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3.9
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(169.2
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)
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(13.9
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)
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||||
Income tax expense
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(5.4
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)
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(4.3
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)
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(18.0
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)
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(11.2
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)
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||||
Net loss from continuing operations
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$
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(69.8
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)
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$
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(0.4
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)
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$
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(187.2
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)
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$
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(25.1
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)
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||||||||
Discontinued operations:
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Loss from discontinued operations
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—
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(0.1
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)
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—
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(2.7
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)
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||||
Gain on sale of assets
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—
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—
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—
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0.8
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||||
Income tax benefit
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—
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—
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—
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0.3
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||||
Net loss from discontinued operations
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$
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—
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$
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(0.1
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)
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$
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—
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$
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(1.6
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)
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|
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|
|
|
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||||||||
Net loss
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$
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(69.8
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)
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$
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(0.5
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)
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$
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(187.2
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)
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$
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(26.7
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)
|
|
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||||||||
Other comprehensive (loss) income:
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||||||||
Foreign currency translation (loss) gain
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(57.8
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)
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42.3
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(47.7
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)
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3.6
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||||
Pension and post-retirement gain (loss), net of tax
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0.4
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(0.5
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)
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0.3
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0.2
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Derivative financial instruments unrealized (loss) gain, net of tax
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2.3
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(2.6
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)
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(4.0
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)
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(1.9
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)
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||||
Other comprehensive (loss) income
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(55.1
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)
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39.2
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(51.4
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)
|
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1.9
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|
||||
Comprehensive (loss) income
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$
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(124.9
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)
|
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$
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38.7
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|
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$
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(238.6
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)
|
|
$
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(24.8
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)
|
|
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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||||||||||||
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2014
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2013
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2014
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2013
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||||||||
Basic net loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
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(0.82
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)
|
|
$
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(0.01
|
)
|
|
$
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(2.22
|
)
|
|
$
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(0.29
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)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
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(0.02
|
)
|
||||
Total basic net loss per share
|
|
$
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(0.82
|
)
|
|
$
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(0.01
|
)
|
|
$
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(2.22
|
)
|
|
$
|
(0.31
|
)
|
Diluted net loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
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(0.82
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(0.29
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
||||
Total diluted net loss per share
|
|
$
|
(0.82
|
)
|
|
$
|
(0.01
|
)
|
|
$
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(2.22
|
)
|
|
$
|
(0.31
|
)
|
|
|
|
|
|
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|
||||||||
Weighted average number of shares used in per share calculations:
|
|
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|
||||||||
Basic shares
|
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84.7
|
|
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85.1
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|
|
84.5
|
|
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84.9
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|
||||
Diluted shares
|
|
84.7
|
|
|
85.1
|
|
|
84.5
|
|
|
84.9
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
ASSETS
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(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
132.5
|
|
|
$
|
153.7
|
|
Restricted cash
|
12.1
|
|
|
10.9
|
|
||
Accounts receivable, net
|
297.3
|
|
|
346.0
|
|
||
Notes receivable, net
|
128.1
|
|
|
158.7
|
|
||
Inventories
|
170.9
|
|
|
137.8
|
|
||
Deferred income taxes, current portion
|
36.2
|
|
|
31.0
|
|
||
Prepaid expenses, deposits and other current assets
|
72.9
|
|
|
119.3
|
|
||
Total current assets
|
850.0
|
|
|
957.4
|
|
||
Property and equipment, net
|
739.6
|
|
|
773.1
|
|
||
Long-term notes receivable
|
55.5
|
|
|
72.6
|
|
||
Goodwill
|
1,168.7
|
|
|
1,183.1
|
|
||
Intangible assets, net
|
500.3
|
|
|
411.1
|
|
||
Software, net
|
306.8
|
|
|
343.5
|
|
||
Equity investments
|
298.7
|
|
|
367.2
|
|
||
Other assets
|
119.3
|
|
|
128.4
|
|
||
Total assets
|
$
|
4,038.9
|
|
|
$
|
4,236.4
|
|
|
|
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|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Debt payments due within one year
|
$
|
30.9
|
|
|
$
|
30.4
|
|
Accounts payable
|
94.3
|
|
|
140.9
|
|
||
Accrued liabilities
|
266.9
|
|
|
280.3
|
|
||
Total current liabilities
|
392.1
|
|
|
451.6
|
|
||
Deferred income taxes
|
146.6
|
|
|
138.0
|
|
||
Other long-term liabilities
|
216.1
|
|
|
109.6
|
|
||
Long-term debt, excluding current installments
|
3,178.4
|
|
|
3,162.2
|
|
||
Total liabilities
|
3,933.2
|
|
|
3,861.4
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
||||
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 102.0 and 100.4 shares issued and 84.8 and 85.2 shares outstanding, respectively
|
1.0
|
|
|
1.0
|
|
||
Additional paid-in capital
|
736.6
|
|
|
737.8
|
|
||
Accumulated loss
|
(423.6
|
)
|
|
(236.4
|
)
|
||
Treasury stock, at cost: 17.2 and 15.2 shares held, respectively
|
(175.2
|
)
|
|
(145.7
|
)
|
||
Accumulated other comprehensive (loss) income
|
(33.1
|
)
|
|
18.3
|
|
||
Total stockholders' equity
|
105.7
|
|
|
375.0
|
|
||
Total liabilities and stockholders' equity
|
$
|
4,038.9
|
|
|
$
|
4,236.4
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(187.2
|
)
|
|
$
|
(26.7
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
290.5
|
|
|
111.7
|
|
||
Change in deferred income taxes
|
5.2
|
|
|
1.5
|
|
||
Stock-based compensation
|
18.1
|
|
|
17.3
|
|
||
Non-cash interest expense
|
12.8
|
|
|
5.1
|
|
||
Loss (earnings) from equity investments, net
|
7.8
|
|
|
(13.0
|
)
|
||
Distributed earnings from equity investments
|
22.5
|
|
|
28.8
|
|
||
Loss on early extinguishment of debt
|
25.9
|
|
|
—
|
|
||
Gain on sale of equity interest
|
(14.5
|
)
|
|
—
|
|
||
Changes in current assets and liabilities, net of effects of acquisitions:
|
|
|
|
||||
Accounts and notes receivable
|
80.8
|
|
|
9.6
|
|
||
Inventories
|
(30.9
|
)
|
|
(9.3
|
)
|
||
Accounts payable
|
(36.5
|
)
|
|
(18.2
|
)
|
||
Accrued liabilities
|
1.2
|
|
|
(2.4
|
)
|
||
Other current assets and liabilities
|
41.6
|
|
|
(4.8
|
)
|
||
Other
|
(3.9
|
)
|
|
(4.0
|
)
|
||
Net cash provided by operating activities
|
233.4
|
|
|
95.6
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property and equipment
|
(32.4
|
)
|
|
(22.9
|
)
|
||
Lottery and gaming services expenditures
|
(73.1
|
)
|
|
(51.3
|
)
|
||
Intangible assets and software expenditures
|
(70.8
|
)
|
|
(38.1
|
)
|
||
Proceeds from asset disposals
|
0.5
|
|
|
10.9
|
|
||
Change in other assets and liabilities, net
|
—
|
|
|
(0.2
|
)
|
||
Additions to equity method investments
|
(43.3
|
)
|
|
(65.0
|
)
|
||
Distributions of capital on equity investments
|
45.4
|
|
|
19.4
|
|
||
Proceeds from sale of equity interest
|
44.9
|
|
|
—
|
|
||
Restricted cash
|
(1.1
|
)
|
|
30.8
|
|
||
Business acquisitions, net of cash acquired
|
—
|
|
|
(0.4
|
)
|
||
Net cash used in
investing activities
|
(129.9
|
)
|
|
(116.8
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the issuance of long-term debt
|
347.9
|
|
|
3.9
|
|
||
Payments on long-term debt
|
(377.3
|
)
|
|
(13.4
|
)
|
||
Payments of financing fees
|
(22.8
|
)
|
|
(2.0
|
)
|
||
Payments on license obligations
|
(7.0
|
)
|
|
—
|
|
||
Common stock repurchases
|
(29.5
|
)
|
|
—
|
|
||
Contingent earnout payments
|
(10.2
|
)
|
|
—
|
|
||
Net redemptions of common stock under stock-based compensation plans
|
(19.1
|
)
|
|
(2.1
|
)
|
||
Net cash used in financing activities
|
(118.0
|
)
|
|
(13.6
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(6.7
|
)
|
|
(0.7
|
)
|
||
Decrease in cash and cash equivalents
|
(21.2
|
)
|
|
(35.5
|
)
|
||
Cash and cash equivalents, beginning of period
|
153.7
|
|
|
109.0
|
|
||
Cash and cash equivalents, end of period
|
$
|
132.5
|
|
|
$
|
73.5
|
|
|
|
Three Months Ended September 30, 2014
|
||||||||||||||
|
|
Instant Products
|
|
Lottery Systems
|
|
Gaming
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Instant games
|
|
$
|
130.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130.8
|
|
Services
|
|
—
|
|
|
48.2
|
|
|
134.6
|
|
|
182.8
|
|
||||
Product sales
|
|
3.2
|
|
|
30.5
|
|
|
68.3
|
|
|
102.0
|
|
||||
Total revenue
|
|
134.0
|
|
|
78.7
|
|
|
202.9
|
|
|
415.6
|
|
||||
Cost of instant games
(1)
|
|
69.7
|
|
|
—
|
|
|
—
|
|
|
69.7
|
|
||||
Cost of services
(1)
|
|
—
|
|
|
30.4
|
|
|
39.2
|
|
|
69.6
|
|
||||
Cost of product sales
(1)
|
|
2.4
|
|
|
24.6
|
|
|
32.9
|
|
|
59.9
|
|
||||
Selling, general and administrative
|
|
12.2
|
|
|
5.6
|
|
|
42.4
|
|
|
60.2
|
|
||||
Research and development
|
|
0.5
|
|
|
0.9
|
|
|
24.9
|
|
|
26.3
|
|
||||
Employee termination and restructuring
|
|
0.4
|
|
|
—
|
|
|
1.5
|
|
|
1.9
|
|
||||
Depreciation and amortization
|
|
8.9
|
|
|
16.0
|
|
|
69.8
|
|
|
94.7
|
|
||||
Segment operating income (loss) from continuing operations
|
|
$
|
39.9
|
|
|
$
|
1.2
|
|
|
$
|
(7.8
|
)
|
|
$
|
33.3
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
41.1
|
|
|||||||
Consolidated operating loss from continuing operations
|
|
|
|
|
|
|
|
$
|
(7.8
|
)
|
||||||
Earnings (loss) from equity investments
|
|
$
|
(15.4
|
)
|
|
$
|
0.1
|
|
|
$
|
1.3
|
|
|
$
|
(14.0
|
)
|
|
|
Three Months Ended September 30, 2013
|
||||||||||||||
|
|
Instant Products
|
|
Lottery Systems
|
|
Gaming
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Instant games
|
|
$
|
129.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129.7
|
|
Services
|
|
—
|
|
|
48.6
|
|
|
32.1
|
|
|
80.7
|
|
||||
Product sales
|
|
3.1
|
|
|
13.6
|
|
|
7.3
|
|
|
24.0
|
|
||||
Total revenue
|
|
132.8
|
|
|
62.2
|
|
|
39.4
|
|
|
234.4
|
|
||||
Cost of instant games
(1)
|
|
70.6
|
|
|
—
|
|
|
—
|
|
|
70.6
|
|
||||
Cost of services
(1)
|
|
—
|
|
|
27.1
|
|
|
15.5
|
|
|
42.6
|
|
||||
Cost of product sales
(1)
|
|
2.2
|
|
|
7.3
|
|
|
3.8
|
|
|
13.3
|
|
||||
Selling, general and administrative
|
|
11.5
|
|
|
5.3
|
|
|
6.3
|
|
|
23.1
|
|
||||
Research and development
|
|
0.1
|
|
|
0.9
|
|
|
0.4
|
|
|
1.4
|
|
||||
Depreciation and amortization
|
|
9.2
|
|
|
13.4
|
|
|
12.4
|
|
|
35.0
|
|
||||
Segment operating income from continuing operations
|
|
$
|
39.2
|
|
|
$
|
8.2
|
|
|
$
|
1.0
|
|
|
$
|
48.4
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
22.7
|
|
|||||||
Consolidated operating income from continuing operations
|
|
|
|
|
|
|
|
$
|
25.7
|
|
||||||
Earnings (loss) from equity investments
|
|
$
|
5.2
|
|
|
$
|
0.1
|
|
|
$
|
(1.9
|
)
|
|
$
|
3.4
|
|
|
|
Nine Months Ended September 30, 2014
|
||||||||||||||
|
|
Instant Products
|
|
Lottery
Systems |
|
Gaming
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Instant games
|
|
$
|
392.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
392.4
|
|
Services
|
|
—
|
|
|
149.3
|
|
|
389.6
|
|
|
538.9
|
|
||||
Product sales
|
|
9.4
|
|
|
63.3
|
|
|
216.6
|
|
|
289.3
|
|
||||
Total revenue
|
|
401.8
|
|
|
212.6
|
|
|
606.2
|
|
|
1,220.6
|
|
||||
Cost of instant games
(1)
|
|
212.5
|
|
|
—
|
|
|
—
|
|
|
212.5
|
|
||||
Cost of services
(1)
|
|
—
|
|
|
90.4
|
|
|
110.3
|
|
|
200.7
|
|
||||
Cost of product sales
(1)
|
|
6.5
|
|
|
50.8
|
|
|
103.9
|
|
|
161.2
|
|
||||
Selling, general and administrative
|
|
38.9
|
|
|
17.1
|
|
|
132.9
|
|
|
188.9
|
|
||||
Research and development
|
|
1.0
|
|
|
1.7
|
|
|
74.3
|
|
|
77.0
|
|
||||
Employee termination and restructuring
|
|
1.6
|
|
|
—
|
|
|
8.9
|
|
|
10.5
|
|
||||
Depreciation and amortization
|
|
26.2
|
|
|
44.6
|
|
|
200.2
|
|
|
271.0
|
|
||||
Segment operating income (loss) from continuing operations
|
|
$
|
115.1
|
|
|
$
|
8.0
|
|
|
$
|
(24.3
|
)
|
|
$
|
98.8
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
|
|
|
115.1
|
|
||||
Consolidated operating loss from continuing operations
|
|
|
|
|
|
|
|
|
|
|
$
|
(16.3
|
)
|
|||
Earnings (loss) from equity investments
|
|
$
|
(12.4
|
)
|
|
$
|
1.3
|
|
|
$
|
3.3
|
|
|
$
|
(7.8
|
)
|
|
|
Nine Months Ended September 30, 2013
|
||||||||||||||
|
|
Instant Products
|
|
Lottery
Systems |
|
Gaming
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Instant games
|
|
$
|
379.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379.0
|
|
Services
|
|
—
|
|
|
146.1
|
|
|
101.6
|
|
|
247.7
|
|
||||
Product sales
|
|
10.1
|
|
|
35.2
|
|
|
17.0
|
|
|
62.3
|
|
||||
Total revenue
|
|
389.1
|
|
|
181.3
|
|
|
118.6
|
|
|
689.0
|
|
||||
Cost of instant games
(1)
|
|
210.3
|
|
|
—
|
|
|
—
|
|
|
210.3
|
|
||||
Cost of services
(1)
|
|
—
|
|
|
82.0
|
|
|
53.0
|
|
|
135.0
|
|
||||
Cost of product sales
(1)
|
|
7.2
|
|
|
22.4
|
|
|
9.7
|
|
|
39.3
|
|
||||
Selling, general and administrative
|
|
35.5
|
|
|
16.0
|
|
|
19.3
|
|
|
70.8
|
|
||||
Research and development
|
|
0.4
|
|
|
3.1
|
|
|
1.2
|
|
|
4.7
|
|
||||
Employee termination and restructuring
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Depreciation and amortization
|
|
27.0
|
|
|
38.8
|
|
|
44.8
|
|
|
110.6
|
|
||||
Segment operating income (loss) from continuing operations
|
|
$
|
108.4
|
|
|
$
|
19.0
|
|
|
$
|
(9.4
|
)
|
|
$
|
118.0
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
|
|
|
68.8
|
|
||||
Consolidated operating income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
$
|
49.2
|
|
|||
Earnings (loss) from equity investments
|
|
$
|
15.8
|
|
|
$
|
0.7
|
|
|
$
|
(3.5
|
)
|
|
$
|
13.0
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Reportable business segment operating income from continuing operations
|
|
$
|
33.3
|
|
|
$
|
48.4
|
|
|
$
|
98.8
|
|
|
$
|
118.0
|
|
Unallocated corporate costs
|
|
(41.1
|
)
|
|
(22.7
|
)
|
|
(115.1
|
)
|
|
(68.8
|
)
|
||||
Consolidated operating (loss) income from continuing operations
|
|
(7.8
|
)
|
|
25.7
|
|
|
(16.3
|
)
|
|
49.2
|
|
||||
Interest expense
|
|
(45.7
|
)
|
|
(25.2
|
)
|
|
(142.9
|
)
|
|
(75.3
|
)
|
||||
Earnings (loss) from equity investments
|
|
(14.0
|
)
|
|
3.4
|
|
|
(7.8
|
)
|
|
13.0
|
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(25.9
|
)
|
|
—
|
|
||||
Gain on sale of equity interest
|
|
—
|
|
|
—
|
|
|
14.5
|
|
|
—
|
|
||||
Other income (expense), net
|
|
3.1
|
|
|
—
|
|
|
9.2
|
|
|
(0.8
|
)
|
||||
Net (loss) income from continuing operations before income taxes
|
|
$
|
(64.4
|
)
|
|
$
|
3.9
|
|
|
$
|
(169.2
|
)
|
|
$
|
(13.9
|
)
|
|
At October 18, 2013
|
||
Current assets
|
$
|
503.9
|
|
Long-term notes receivable
|
76.2
|
|
|
Property, plant and equipment, net
|
465.8
|
|
|
Goodwill
|
381.8
|
|
|
Intangible assets
|
325.0
|
|
|
Intellectual property
|
201.2
|
|
|
Other long-term assets
|
7.8
|
|
|
Total assets
|
1,961.7
|
|
|
Current liabilities
|
(158.9
|
)
|
|
Deferred income taxes
|
(166.6
|
)
|
|
Long-term liabilities
|
(150.3
|
)
|
|
Total liabilities
|
(475.8
|
)
|
|
Total equity purchase price
|
$
|
1,485.9
|
|
|
Three Months Ended
September 30, 2013 |
|
Nine Months Ended
September 30, 2013 |
||||
Revenue from Consolidated Statements of Operations and Comprehensive (Loss) Income
|
$
|
234.4
|
|
|
$
|
689.0
|
|
Add: WMS revenue not reflected in Consolidated Statements of Operations and Comprehensive (Loss) Income
|
166.4
|
|
|
547.1
|
|
||
Unaudited pro forma revenue
|
$
|
400.8
|
|
|
$
|
1,236.1
|
|
|
Three Months Ended
September 30, 2013 |
|
Nine Months Ended
September 30, 2013 |
||||
Net loss from continuing operations from Consolidated Statements of Operations and Comprehensive (Loss) Income
|
$
|
(0.4
|
)
|
|
$
|
(25.1
|
)
|
Add: WMS net loss from continuing operations not reflected in Consolidated Statements of Operations and Comprehensive (Loss) Income plus pro forma adjustments (1), (2), (3) and (4) below
|
(25.4
|
)
|
|
(45.0
|
)
|
||
Unaudited pro forma net loss from continuing operations
|
$
|
(25.8
|
)
|
|
$
|
(70.1
|
)
|
|
Three Months Ended
September 30, 2013 |
|
Nine Months Ended
September 30, 2013 |
||||
Revenue:
|
|
|
|
||||
Services
|
$
|
—
|
|
|
$
|
1.8
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Cost of services
(1)
|
0.1
|
|
|
3.0
|
|
||
Selling, general and administrative
|
—
|
|
|
1.0
|
|
||
Depreciation and amortization
|
—
|
|
|
0.5
|
|
||
|
|
|
|
||||
Loss from discontinued operations
|
(0.1
|
)
|
|
(2.7
|
)
|
||
|
|
|
|
||||
Other expense
|
—
|
|
|
—
|
|
||
Gain on sale of assets
|
—
|
|
|
0.8
|
|
||
Income tax benefits
|
—
|
|
|
0.3
|
|
||
|
|
|
|
||||
Net loss from discontinued operations
|
$
|
(0.1
|
)
|
|
$
|
(1.6
|
)
|
Business Segment
|
|
|
Employee Termination Costs
|
|
Property Costs
|
|
Other
|
|
Total
|
||||||||
Instant Products
|
Three months ended September 30, 2014
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Nine months ended September 30, 2014
|
|
1.0
|
|
|
0.4
|
|
|
0.2
|
|
|
1.6
|
|
|||||
Cumulative
|
|
1.0
|
|
|
0.4
|
|
|
4.9
|
|
|
6.3
|
|
|||||
Expected Total
|
|
1.0
|
|
|
0.4
|
|
|
4.9
|
|
|
6.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Lottery Systems
|
Three months ended September 30, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Nine months ended September 30, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cumulative
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Expected Total
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Gaming
|
Three months ended September 30, 2014
|
|
1.4
|
|
|
—
|
|
|
0.1
|
|
|
1.5
|
|
||||
Nine months ended September 30, 2014
|
|
6.8
|
|
|
0.4
|
|
|
1.7
|
|
|
8.9
|
|
|||||
Cumulative
|
|
10.6
|
|
|
1.4
|
|
|
5.5
|
|
|
17.5
|
|
|||||
Expected Total
|
|
10.6
|
|
|
1.4
|
|
|
5.6
|
|
|
17.6
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Unallocated corporate
|
Three months ended September 30, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Nine months ended September 30, 2014
|
|
1.7
|
|
|
0.2
|
|
|
—
|
|
|
1.9
|
|
|||||
Cumulative
|
|
8.6
|
|
|
2.3
|
|
|
—
|
|
|
10.9
|
|
|||||
Expected Total
|
|
8.6
|
|
|
2.3
|
|
|
—
|
|
|
10.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
Three months ended September 30, 2014
|
|
$
|
1.4
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
1.9
|
|
Nine months ended September 30, 2014
|
|
$
|
9.5
|
|
|
$
|
1.0
|
|
|
$
|
1.9
|
|
|
$
|
12.4
|
|
|
Cumulative
|
|
$
|
20.6
|
|
|
$
|
4.1
|
|
|
$
|
10.4
|
|
|
$
|
35.1
|
|
|
Expected Total
|
|
$
|
20.6
|
|
|
$
|
4.1
|
|
|
$
|
10.5
|
|
|
$
|
35.2
|
|
|
|
Employee Termination Costs
|
|
Property Costs
|
|
Other
|
|
Total
|
||||||||
Balance as of December 31, 2013
|
|
$
|
9.3
|
|
|
$
|
2.8
|
|
|
$
|
0.1
|
|
|
$
|
12.2
|
|
Additional accruals
|
|
9.5
|
|
|
1.0
|
|
|
1.9
|
|
|
12.4
|
|
||||
Cash payments
|
|
(12.1
|
)
|
|
(0.9
|
)
|
|
(1.9
|
)
|
|
(14.9
|
)
|
||||
Non-cash expense
|
|
0.5
|
|
|
(0.6
|
)
|
|
1.6
|
|
|
1.5
|
|
||||
Balance as of September 30, 2014
|
|
$
|
7.2
|
|
|
$
|
2.3
|
|
|
$
|
1.7
|
|
|
$
|
11.2
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
|
$
|
(69.8
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(187.2
|
)
|
|
$
|
(25.1
|
)
|
Net loss from discontinued operations
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(1.6
|
)
|
||||
Net loss
|
|
$
|
(69.8
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(187.2
|
)
|
|
$
|
(26.7
|
)
|
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
|
||||||||
Basic shares
|
|
84.7
|
|
|
85.1
|
|
|
84.5
|
|
|
84.9
|
|
||||
Diluted shares
|
|
84.7
|
|
|
85.1
|
|
|
84.5
|
|
|
84.9
|
|
||||
Basic net loss per share:
|
|
|
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(0.82
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(0.29
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
||||
Total basic net loss per share
|
|
$
|
(0.82
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(0.31
|
)
|
Diluted net loss per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(0.82
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(0.29
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
||||
Total diluted net loss per share
|
|
$
|
(0.82
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(0.31
|
)
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Current:
|
|
|
|
||||
Accounts receivable
|
$
|
307.9
|
|
|
$
|
360.4
|
|
Notes receivable
|
135.5
|
|
|
164.3
|
|
||
Allowance for doubtful accounts
|
(18.0
|
)
|
|
(20.0
|
)
|
||
Current accounts and notes receivable, net
|
$
|
425.4
|
|
|
$
|
504.7
|
|
Long-term:
|
|
|
|
||||
Notes receivable
|
55.5
|
|
|
72.6
|
|
||
Total accounts and notes receivable, net
|
$
|
480.9
|
|
|
$
|
577.3
|
|
|
September 30, 2014
|
|
Balances over 90 days past due
|
|
December 31, 2013
|
|
Balances over 90 days past due
|
||||||||
Notes receivable:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
48.1
|
|
|
$
|
2.2
|
|
|
$
|
65.1
|
|
|
$
|
0.4
|
|
International
|
142.9
|
|
|
8.2
|
|
|
171.8
|
|
|
8.7
|
|
||||
Total notes receivable
|
191.0
|
|
|
10.4
|
|
|
236.9
|
|
|
9.1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
International
|
(7.4
|
)
|
|
(4.7
|
)
|
|
(5.6
|
)
|
|
(3.3
|
)
|
||||
Total notes receivable allowance for doubtful accounts
|
(7.4
|
)
|
|
(4.7
|
)
|
|
(5.6
|
)
|
|
(3.3
|
)
|
||||
Note receivable, net
|
$
|
183.6
|
|
|
$
|
5.7
|
|
|
$
|
231.3
|
|
|
$
|
5.8
|
|
|
September 30, 2014
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Notes receivable:
|
|
|
|
|
|
||||||
Domestic
|
$
|
48.1
|
|
|
$
|
6.7
|
|
|
$
|
41.4
|
|
International
|
142.9
|
|
|
78.9
|
|
|
64.0
|
|
|||
Total notes receivable
|
$
|
191.0
|
|
|
$
|
85.6
|
|
|
$
|
105.4
|
|
|
December 31, 2013
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Notes receivable:
|
|
|
|
|
|
||||||
Domestic
|
$
|
65.1
|
|
|
$
|
4.8
|
|
|
$
|
60.3
|
|
International
|
171.8
|
|
|
99.7
|
|
|
72.1
|
|
|||
Total notes receivable
|
$
|
236.9
|
|
|
$
|
104.5
|
|
|
$
|
132.4
|
|
|
Total
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Beginning balance at December 31, 2013
|
$
|
5.6
|
|
|
$
|
5.6
|
|
|
$
|
—
|
|
Charge-offs
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|||
Provision
|
1.9
|
|
|
1.9
|
|
|
—
|
|
|||
Ending balance at September 30, 2014
|
$
|
7.4
|
|
|
$
|
7.4
|
|
|
$
|
—
|
|
|
|
Nine Months Ended September 30, 2014
|
||||||||||
|
# of
Customers
|
# of Notes
|
|
Pre-Modification
Investment
|
|
Post-Modification
Investment
|
||||||
Financing term modifications:
|
|
|
|
|
|
|
||||||
International
(1)
|
9
|
|
28
|
|
|
$
|
12.8
|
|
|
$
|
12.8
|
|
Total financing term modifications
|
9
|
|
28
|
|
|
$
|
12.8
|
|
|
$
|
12.8
|
|
•
|
One
customer for which
12
notes were consolidated into one note aggregating
$4.0
million, with an average
28
-month payment extension;
|
•
|
One
customer for which
three
notes were consolidated into one note aggregating
$3.1
million, with an average
four
-month payment extension;
|
•
|
One
customer with a note for
$2.3
million for which original payment terms were extended by
nine
months;
|
•
|
One
customer for which
four
notes were consolidated into one note aggregating
$1.4
million, with an average
five
-month extension, and another note for
$0.2
million for which original payment terms were extended by
seven
months;
|
•
|
One customer for which
two
notes were consolidated into one note aggregating
$0.7 million
, with an average
15
-month payment extension;
|
•
|
One
customer with a note for
$0.5
million for which original payment terms were extended by
21
months;
|
•
|
One
customer with a note for
$0.3
million for which original payment terms were extended by
27
months;
|
•
|
One customer for which
two
notes were consolidated into one note aggregating
$0.2 million
, with an average
14
-month payment extension; and
|
•
|
One
customer with a note for
$0.1
million for which original payment terms were extended by
21
months.
|
Peru
|
25
|
%
|
Mexico
|
17
|
%
|
Argentina
|
12
|
%
|
Colombia
|
10
|
%
|
Other (less than 5% individually)
|
11
|
%
|
Total international notes receivable as a percentage of total notes receivable
|
75
|
%
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Parts and work-in-process
|
|
$
|
70.4
|
|
|
$
|
62.1
|
|
Finished goods
|
|
100.5
|
|
|
75.7
|
|
||
Inventory
|
|
$
|
170.9
|
|
|
$
|
137.8
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Lottery equipment
|
|
$
|
358.8
|
|
|
$
|
350.3
|
|
Less: accumulated depreciation
|
|
(237.7
|
)
|
|
(210.6
|
)
|
||
Net lottery equipment
|
|
121.1
|
|
|
139.7
|
|
||
|
|
|
|
|
||||
Gaming equipment
|
|
478.3
|
|
|
439.7
|
|
||
Less: accumulated depreciation
|
|
(223.9
|
)
|
|
(145.0
|
)
|
||
Net gaming equipment
|
|
254.4
|
|
|
294.7
|
|
||
|
|
|
|
|
||||
Total lottery and gaming equipment, net
|
|
$
|
375.5
|
|
|
$
|
434.4
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Land
|
|
$
|
25.1
|
|
|
$
|
25.6
|
|
Buildings and leasehold improvements
|
|
182.2
|
|
|
181.6
|
|
||
Machinery and equipment
|
|
269.3
|
|
|
239.1
|
|
||
Furniture and fixtures
|
|
25.6
|
|
|
30.1
|
|
||
Transportation equipment
|
|
4.4
|
|
|
6.4
|
|
||
Construction in progress
|
|
12.0
|
|
|
33.4
|
|
||
Capital leases
|
|
41.8
|
|
|
—
|
|
||
Less: accumulated depreciation
|
|
(196.3
|
)
|
|
(177.5
|
)
|
||
Total other property and equipment, net
|
|
$
|
364.1
|
|
|
$
|
338.7
|
|
|
|
|
|
|
||||
Total property and equipment, net
|
|
$
|
739.6
|
|
|
$
|
773.1
|
|
Intangible Assets
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||
Balance as of September 30, 2014
|
|
|
|
|
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Patents
|
|
$
|
17.1
|
|
|
$
|
8.0
|
|
|
$
|
9.1
|
|
Customer lists
|
|
161.3
|
|
|
37.2
|
|
|
124.1
|
|
|||
Licenses
|
|
309.2
|
|
|
82.4
|
|
|
226.8
|
|
|||
Intellectual property
|
|
8.5
|
|
|
6.6
|
|
|
1.9
|
|
|||
Brand name
|
|
39.3
|
|
|
3.8
|
|
|
35.5
|
|
|||
Non-compete agreements
|
|
0.3
|
|
|
0.2
|
|
|
0.1
|
|
|||
Lottery contracts
|
|
1.5
|
|
|
1.5
|
|
|
—
|
|
|||
|
|
537.2
|
|
|
139.7
|
|
|
397.5
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Trade name
|
|
104.9
|
|
|
2.1
|
|
|
102.8
|
|
|||
Total intangible assets
|
|
$
|
642.1
|
|
|
$
|
141.8
|
|
|
$
|
500.3
|
|
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2013
|
|
|
|
|
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Patents
|
|
$
|
14.5
|
|
|
$
|
7.1
|
|
|
$
|
7.4
|
|
Customer lists
|
|
161.9
|
|
|
24.0
|
|
|
137.9
|
|
|||
Licenses
|
|
181.0
|
|
|
59.9
|
|
|
121.1
|
|
|||
Intellectual property
|
|
8.6
|
|
|
5.7
|
|
|
2.9
|
|
|||
Brand name
|
|
39.3
|
|
|
0.6
|
|
|
38.7
|
|
|||
Non-compete agreements
|
|
0.4
|
|
|
0.2
|
|
|
0.2
|
|
|||
Lottery contracts
|
|
1.5
|
|
|
1.4
|
|
|
0.1
|
|
|||
|
|
407.2
|
|
|
98.9
|
|
|
308.3
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Trade name
|
|
104.9
|
|
|
2.1
|
|
|
102.8
|
|
|||
Total intangible assets
|
|
$
|
512.1
|
|
|
$
|
101.0
|
|
|
$
|
411.1
|
|
Goodwill
|
|
Instant
Products
|
|
Lottery
Systems
|
|
Gaming
|
|
Totals
|
||||||||
Balance as of December 31, 2012
|
|
$
|
328.0
|
|
|
$
|
210.7
|
|
|
$
|
262.7
|
|
|
$
|
801.4
|
|
Acquisitions
|
|
—
|
|
|
—
|
|
|
381.8
|
|
|
381.8
|
|
||||
Impairments
|
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
||||
Foreign currency adjustments
|
|
(2.4
|
)
|
|
2.7
|
|
|
5.0
|
|
|
5.3
|
|
||||
Reallocation of goodwill
|
|
20.0
|
|
|
(39.7
|
)
|
|
19.7
|
|
|
—
|
|
||||
Balance as of December 31, 2013
|
|
340.2
|
|
|
173.7
|
|
|
669.2
|
|
|
1,183.1
|
|
||||
Foreign currency adjustments
|
|
(2.8
|
)
|
|
(6.0
|
)
|
|
(5.6
|
)
|
|
(14.4
|
)
|
||||
Balance as of September 30, 2014
|
|
$
|
337.4
|
|
|
$
|
167.7
|
|
|
$
|
663.6
|
|
|
$
|
1,168.7
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Software
|
|
$
|
500.8
|
|
|
$
|
457.7
|
|
Accumulated amortization
|
|
(194.0
|
)
|
|
(114.2
|
)
|
||
Software, net
|
|
$
|
306.8
|
|
|
$
|
343.5
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||
Revolver, varying interest rate, due 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan, varying interest rate, due 2020
(1)
|
|
2,272.9
|
|
|
2,288.8
|
|
||
2018 Notes
|
|
250.0
|
|
|
250.0
|
|
||
2019 Notes
(2)
|
|
—
|
|
|
346.3
|
|
||
2020 Notes
|
|
300.0
|
|
|
300.0
|
|
||
2021 Notes
(3)
|
|
347.7
|
|
|
—
|
|
||
China Loans, varying interest rates
|
|
—
|
|
|
7.4
|
|
||
Capital lease obligations, 3.9% interest as of September 30, 2014 payable monthly through 2019
|
|
38.7
|
|
|
0.1
|
|
||
Total long-term debt outstanding and capital lease obligations
|
|
3,209.3
|
|
|
3,192.6
|
|
||
Less: debt and capital lease payments due within one year
|
|
(30.9
|
)
|
|
(30.4
|
)
|
||
Long-term debt, net of current installments
|
|
$
|
3,178.4
|
|
|
$
|
3,162.2
|
|
(1)
|
Total of
$2,282.8
million less amortization of a loan discount in the amount of
$9.9
million as of September 30, 2014. Total of
$2,300.0
million less amortization of a loan discount in the amount of
$11.2
million as of December 31, 2013.
|
(2)
|
Total of
$350.0
million less amortization of a loan discount in the amount of
$3.7
million as of December 31, 2013.
|
(3)
|
Total of
$350.0
million less amortization of a loan discount in the amount of
$2.3
million as of September 30, 2014.
|
|
|
Nine Months Ended September 30, 2014
|
|
Twelve Months Ended December 31, 2013
|
||
Shares outstanding as of beginning of period
|
|
85.2
|
|
|
84.4
|
|
Shares issued as part of equity-based compensation plans and the ESPP, net of RSUs surrendered
|
|
1.6
|
|
|
1.1
|
|
Common stock repurchases
|
|
(2.0
|
)
|
|
(0.3
|
)
|
Shares outstanding as of end of period
|
|
84.8
|
|
|
85.2
|
|
|
|
Number of
Options
|
|
Weighted
Average
Remaining
Contract Term
(Years)
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
|
|||||
Options outstanding as of December 31, 2013
|
|
2.6
|
|
|
4.2
|
|
$
|
10.46
|
|
|
$
|
17.8
|
|
Granted
|
|
0.4
|
|
|
|
|
16.03
|
|
|
—
|
|
||
Exercised
|
|
—
|
|
|
|
|
—
|
|
|
0.2
|
|
||
Canceled
|
|
(1.1
|
)
|
|
|
|
9.04
|
|
|
—
|
|
||
Options outstanding as of March 31, 2014
|
|
1.9
|
|
|
7.7
|
|
$
|
12.62
|
|
|
$
|
5.0
|
|
Granted
|
|
0.2
|
|
|
|
|
8.94
|
|
|
—
|
|
||
Exercised
|
|
—
|
|
|
|
|
—
|
|
|
0.1
|
|
||
Canceled
|
|
(0.1
|
)
|
|
|
|
13.88
|
|
|
—
|
|
||
Options outstanding as of June 30, 2014
|
|
2.0
|
|
|
7.4
|
|
$
|
12.34
|
|
|
$
|
2.3
|
|
Granted
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
|
(0.1
|
)
|
|
|
|
9.11
|
|
|
0.1
|
|
||
Canceled
|
|
(0.2
|
)
|
|
|
|
17.36
|
|
|
—
|
|
||
Options outstanding as of September 30, 2014
|
|
1.7
|
|
|
7.1
|
|
$
|
11.71
|
|
|
$
|
1.8
|
|
Options exercisable as of September 30, 2014
|
|
0.9
|
|
|
6.1
|
|
$
|
11.01
|
|
|
$
|
1.1
|
|
|
|
Number of
RSUs
|
|
Weighted Average Grant Date Fair Value Per RSU
|
|||
Unvested units as of December 31, 2013
|
|
5.2
|
|
|
$
|
11.93
|
|
Granted
|
|
1.4
|
|
|
16.02
|
|
|
Vested
|
|
(1.7
|
)
|
|
10.09
|
|
|
Canceled
|
|
(0.1
|
)
|
|
13.84
|
|
|
Unvested units as of March 31, 2014
|
|
4.8
|
|
|
$
|
13.76
|
|
Granted
|
|
0.3
|
|
|
10.33
|
|
|
Vested
|
|
(0.4
|
)
|
|
11.53
|
|
|
Canceled
|
|
(0.3
|
)
|
|
13.44
|
|
|
Unvested units as of June 30, 2014
|
|
4.4
|
|
|
$
|
13.50
|
|
Granted
|
|
—
|
|
|
8.95
|
|
|
Vested
|
|
(0.2
|
)
|
|
14.56
|
|
|
Canceled
|
|
(0.2
|
)
|
|
15.80
|
|
|
Unvested units as of September 30, 2014
|
|
4.0
|
|
|
$
|
13.43
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Components of net periodic pension benefit cost:
|
|
|
|
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
1.9
|
|
|
$
|
1.9
|
|
Interest cost
|
|
1.3
|
|
|
1.1
|
|
|
3.9
|
|
|
3.5
|
|
||||
Expected return on plan assets
|
|
(1.6
|
)
|
|
(1.4
|
)
|
|
(4.9
|
)
|
|
(4.2
|
)
|
||||
Amortization of actuarial gains
|
|
0.2
|
|
|
0.3
|
|
|
0.5
|
|
|
0.8
|
|
||||
Curtailment
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Amortization of prior service costs
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Net periodic cost
|
|
$
|
0.5
|
|
|
$
|
0.6
|
|
|
$
|
1.4
|
|
|
$
|
1.8
|
|
|
Nine Months Ended September 30,
|
||||||
|
2014
|
|
2013
|
||||
Interest paid
|
$
|
109.0
|
|
|
$
|
72.1
|
|
Income taxes paid (received), net of refunds
|
$
|
(31.6
|
)
|
|
$
|
8.9
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
36.4
|
|
|
$
|
0.3
|
|
|
$
|
11.3
|
|
|
$
|
84.5
|
|
|
$
|
—
|
|
|
$
|
132.5
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
12.0
|
|
|
0.1
|
|
|
—
|
|
|
12.1
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
62.3
|
|
|
117.1
|
|
|
117.9
|
|
|
—
|
|
|
297.3
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
71.5
|
|
|
56.6
|
|
|
—
|
|
|
128.1
|
|
||||||
Inventories
|
|
—
|
|
|
40.7
|
|
|
60.1
|
|
|
70.1
|
|
|
—
|
|
|
170.9
|
|
||||||
Other current assets
|
|
14.6
|
|
|
14.4
|
|
|
51.6
|
|
|
28.5
|
|
|
—
|
|
|
109.1
|
|
||||||
Property and equipment, net
|
|
0.5
|
|
|
125.7
|
|
|
410.2
|
|
|
203.2
|
|
|
—
|
|
|
739.6
|
|
||||||
Investment in subsidiaries
|
|
1,849.5
|
|
|
952.6
|
|
|
—
|
|
|
—
|
|
|
(2,802.1
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
253.6
|
|
|
480.5
|
|
|
434.6
|
|
|
—
|
|
|
1,168.7
|
|
||||||
Intangible assets, net
|
|
161.1
|
|
|
42.4
|
|
|
284.8
|
|
|
12.0
|
|
|
—
|
|
|
500.3
|
|
||||||
Intercompany balances
|
|
—
|
|
|
1,413.0
|
|
|
343.4
|
|
|
—
|
|
|
(1,756.4
|
)
|
|
—
|
|
||||||
Software, net
|
|
12.7
|
|
|
33.2
|
|
|
211.2
|
|
|
49.7
|
|
|
—
|
|
|
306.8
|
|
||||||
Other assets
|
|
3.1
|
|
|
116.4
|
|
|
26.3
|
|
|
327.7
|
|
|
—
|
|
|
473.5
|
|
||||||
Total assets
|
|
$
|
2,077.9
|
|
|
$
|
3,054.6
|
|
|
$
|
2,080.0
|
|
|
$
|
1,384.9
|
|
|
$
|
(4,558.5
|
)
|
|
$
|
4,038.9
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt payments due within one year
|
|
$
|
—
|
|
|
$
|
23.0
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
30.9
|
|
Other current liabilities
|
|
39.7
|
|
|
77.5
|
|
|
117.0
|
|
|
127.0
|
|
|
—
|
|
|
361.2
|
|
||||||
Long-term debt, excluding current installments
|
|
250.0
|
|
|
2,897.6
|
|
|
—
|
|
|
30.8
|
|
|
—
|
|
|
3,178.4
|
|
||||||
Other long-term liabilities
|
|
179.8
|
|
|
45.9
|
|
|
69.7
|
|
|
67.3
|
|
|
—
|
|
|
362.7
|
|
||||||
Intercompany balances
|
|
1,502.7
|
|
|
—
|
|
|
—
|
|
|
253.7
|
|
|
(1,756.4
|
)
|
|
—
|
|
||||||
Stockholders’ equity
|
|
105.7
|
|
|
10.6
|
|
|
1,893.3
|
|
|
898.2
|
|
|
(2,802.1
|
)
|
|
105.7
|
|
||||||
Total liabilities and stockholders’ equity
|
|
$
|
2,077.9
|
|
|
$
|
3,054.6
|
|
|
$
|
2,080.0
|
|
|
$
|
1,384.9
|
|
|
$
|
(4,558.5
|
)
|
|
$
|
4,038.9
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
56.0
|
|
|
$
|
—
|
|
|
$
|
24.4
|
|
|
$
|
73.3
|
|
|
$
|
—
|
|
|
$
|
153.7
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
10.9
|
|
|
—
|
|
|
—
|
|
|
10.9
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
66.9
|
|
|
135.4
|
|
|
143.7
|
|
|
—
|
|
|
346.0
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
90.9
|
|
|
67.8
|
|
|
—
|
|
|
158.7
|
|
||||||
Inventories
|
|
—
|
|
|
28.2
|
|
|
59.6
|
|
|
50.0
|
|
|
—
|
|
|
137.8
|
|
||||||
Other current assets
|
|
13.9
|
|
|
10.5
|
|
|
95.0
|
|
|
30.9
|
|
|
—
|
|
|
150.3
|
|
||||||
Property and equipment, net
|
|
1.1
|
|
|
137.3
|
|
|
441.8
|
|
|
192.9
|
|
|
—
|
|
|
773.1
|
|
||||||
Investment in subsidiaries
|
|
1,962.5
|
|
|
796.5
|
|
|
—
|
|
|
—
|
|
|
(2,759.0
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
251.7
|
|
|
465.4
|
|
|
466.0
|
|
|
—
|
|
|
1,183.1
|
|
||||||
Intangible assets, net
|
|
1.9
|
|
|
42.0
|
|
|
340.6
|
|
|
26.6
|
|
|
—
|
|
|
411.1
|
|
||||||
Intercompany balances
|
|
—
|
|
|
1,430.1
|
|
|
296.3
|
|
|
—
|
|
|
(1,726.4
|
)
|
|
—
|
|
||||||
Software, net
|
|
9.4
|
|
|
31.7
|
|
|
251.4
|
|
|
51.0
|
|
|
—
|
|
|
343.5
|
|
||||||
Other assets
|
|
6.0
|
|
|
147.7
|
|
|
42.2
|
|
|
372.3
|
|
|
—
|
|
|
568.2
|
|
||||||
Total assets
|
|
$
|
2,050.8
|
|
|
$
|
2,942.6
|
|
|
$
|
2,253.9
|
|
|
$
|
1,474.5
|
|
|
$
|
(4,485.4
|
)
|
|
$
|
4,236.4
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt payments due within one year
|
|
$
|
—
|
|
|
$
|
23.0
|
|
|
$
|
—
|
|
|
$
|
7.4
|
|
|
$
|
—
|
|
|
$
|
30.4
|
|
Other current liabilities
|
|
30.4
|
|
|
63.2
|
|
|
176.2
|
|
|
151.4
|
|
|
—
|
|
|
421.2
|
|
||||||
Long-term debt, excluding current installments
|
|
250.0
|
|
|
2,912.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,162.2
|
|
||||||
Other long-term liabilities
|
|
20.8
|
|
|
37.8
|
|
|
121.2
|
|
|
67.8
|
|
|
—
|
|
|
247.6
|
|
||||||
Intercompany balances
|
|
1,374.6
|
|
|
—
|
|
|
—
|
|
|
351.8
|
|
|
(1,726.4
|
)
|
|
—
|
|
||||||
Stockholders’ equity
|
|
375.0
|
|
|
(93.6
|
)
|
|
1,956.5
|
|
|
896.1
|
|
|
(2,759.0
|
)
|
|
375.0
|
|
||||||
Total liabilities and stockholders’ equity
|
|
$
|
2,050.8
|
|
|
$
|
2,942.6
|
|
|
$
|
2,253.9
|
|
|
$
|
1,474.5
|
|
|
$
|
(4,485.4
|
)
|
|
$
|
4,236.4
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
106.9
|
|
|
$
|
159.1
|
|
|
$
|
149.6
|
|
|
$
|
—
|
|
|
$
|
415.6
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
29.7
|
|
|
82.2
|
|
|
87.3
|
|
|
—
|
|
|
199.2
|
|
||||||
Selling, general and administrative
|
|
19.5
|
|
|
16.8
|
|
|
40.4
|
|
|
18.9
|
|
|
—
|
|
|
95.6
|
|
||||||
Research and development
|
|
—
|
|
|
1.2
|
|
|
20.9
|
|
|
4.2
|
|
|
—
|
|
|
26.3
|
|
||||||
Employee termination and restructuring
|
|
(0.1
|
)
|
|
—
|
|
|
1.4
|
|
|
0.6
|
|
|
—
|
|
|
1.9
|
|
||||||
Depreciation and amortization
|
|
1.2
|
|
|
11.8
|
|
|
67.7
|
|
|
19.7
|
|
|
—
|
|
|
100.4
|
|
||||||
Operating (loss) income
|
|
(20.6
|
)
|
|
47.4
|
|
|
(53.5
|
)
|
|
18.9
|
|
|
—
|
|
|
(7.8
|
)
|
||||||
Interest expense
|
|
(0.2
|
)
|
|
(16.2
|
)
|
|
(29.1
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(45.7
|
)
|
||||||
Other (expense) income, net
|
|
(7.0
|
)
|
|
(55.4
|
)
|
|
41.4
|
|
|
10.1
|
|
|
—
|
|
|
(10.9
|
)
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(27.8
|
)
|
|
(24.2
|
)
|
|
(41.2
|
)
|
|
28.8
|
|
|
—
|
|
|
(64.4
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(38.8
|
)
|
|
16.3
|
|
|
—
|
|
|
—
|
|
|
22.5
|
|
|
—
|
|
||||||
Income tax expense
|
|
(3.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
(5.4
|
)
|
||||||
Net (loss) income from continuing operations
|
|
$
|
(69.8
|
)
|
|
$
|
(8.1
|
)
|
|
$
|
(41.2
|
)
|
|
$
|
26.8
|
|
|
$
|
22.5
|
|
|
$
|
(69.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
(69.8
|
)
|
|
(8.1
|
)
|
|
(41.2
|
)
|
|
26.8
|
|
|
22.5
|
|
|
(69.8
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(55.1
|
)
|
|
(5.4
|
)
|
|
—
|
|
|
(55.7
|
)
|
|
61.1
|
|
|
(55.1
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(124.9
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
(41.2
|
)
|
|
$
|
(28.9
|
)
|
|
$
|
83.6
|
|
|
$
|
(124.9
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
100.6
|
|
|
$
|
20.3
|
|
|
$
|
113.9
|
|
|
$
|
(0.4
|
)
|
|
$
|
234.4
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
30.2
|
|
|
38.1
|
|
|
59.8
|
|
|
(1.6
|
)
|
|
126.5
|
|
||||||
Selling, general and administrative
|
|
16.9
|
|
|
13.3
|
|
|
2.5
|
|
|
13.1
|
|
|
(0.2
|
)
|
|
45.6
|
|
||||||
Research and development
|
|
—
|
|
|
0.9
|
|
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
1.4
|
|
||||||
Employee termination and restructuring
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Depreciation and amortization
|
|
0.2
|
|
|
9.8
|
|
|
5.6
|
|
|
19.6
|
|
|
—
|
|
|
35.2
|
|
||||||
Operating (loss) income
|
|
(17.1
|
)
|
|
46.4
|
|
|
(26.1
|
)
|
|
21.1
|
|
|
1.4
|
|
|
25.7
|
|
||||||
Interest expense
|
|
(5.3
|
)
|
|
(19.7
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(25.2
|
)
|
||||||
Other income (expense), net
|
|
1.3
|
|
|
(44.9
|
)
|
|
45.1
|
|
|
3.3
|
|
|
(1.4
|
)
|
|
3.4
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(21.1
|
)
|
|
(18.2
|
)
|
|
19.0
|
|
|
24.2
|
|
|
—
|
|
|
3.9
|
|
||||||
Equity in income (loss) of subsidiaries
|
|
23.6
|
|
|
18.8
|
|
|
—
|
|
|
—
|
|
|
(42.4
|
)
|
|
—
|
|
||||||
Income tax expense
|
|
(2.9
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
(4.3
|
)
|
||||||
Net (loss) income from continuing operations
|
|
$
|
(0.4
|
)
|
|
$
|
0.5
|
|
|
$
|
19.0
|
|
|
$
|
22.9
|
|
|
$
|
(42.4
|
)
|
|
$
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss from discontinued operations
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
(0.5
|
)
|
|
0.5
|
|
|
19.0
|
|
|
22.8
|
|
|
(42.3
|
)
|
|
(0.5
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
39.2
|
|
|
(2.1
|
)
|
|
—
|
|
|
41.0
|
|
|
(38.9
|
)
|
|
39.2
|
|
||||||
Comprehensive (loss) income
|
|
$
|
38.7
|
|
|
$
|
(1.6
|
)
|
|
$
|
19.0
|
|
|
$
|
63.8
|
|
|
$
|
(81.2
|
)
|
|
$
|
38.7
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
317.1
|
|
|
$
|
475.4
|
|
|
$
|
428.1
|
|
|
$
|
—
|
|
|
$
|
1,220.6
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
93.5
|
|
|
243.8
|
|
|
237.1
|
|
|
—
|
|
|
574.4
|
|
||||||
Selling, general and administrative
|
|
51.6
|
|
|
50.9
|
|
|
122.5
|
|
|
57.6
|
|
|
—
|
|
|
282.6
|
|
||||||
Research and development
|
|
—
|
|
|
2.3
|
|
|
62.5
|
|
|
12.2
|
|
|
—
|
|
|
77.0
|
|
||||||
Employee termination and restructuring
|
|
1.9
|
|
|
0.2
|
|
|
5.5
|
|
|
4.8
|
|
|
—
|
|
|
12.4
|
|
||||||
Depreciation and amortization
|
|
6.7
|
|
|
32.1
|
|
|
187.5
|
|
|
64.2
|
|
|
—
|
|
|
290.5
|
|
||||||
Operating (loss) income
|
|
(60.2
|
)
|
|
138.1
|
|
|
(146.4
|
)
|
|
52.2
|
|
|
—
|
|
|
(16.3
|
)
|
||||||
Interest expense
|
|
(2.5
|
)
|
|
(62.7
|
)
|
|
(77.0
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
(142.9
|
)
|
||||||
Other (expense) income, net
|
|
(39.6
|
)
|
|
(150.7
|
)
|
|
132.8
|
|
|
47.5
|
|
|
—
|
|
|
(10.0
|
)
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(102.3
|
)
|
|
(75.3
|
)
|
|
(90.6
|
)
|
|
99.0
|
|
|
—
|
|
|
(169.2
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(71.7
|
)
|
|
51.4
|
|
|
—
|
|
|
—
|
|
|
20.3
|
|
|
—
|
|
||||||
Income tax expense
|
|
(13.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
(18.0
|
)
|
||||||
Net (loss) income from continuing operations
|
|
$
|
(187.2
|
)
|
|
$
|
(24.2
|
)
|
|
$
|
(90.6
|
)
|
|
$
|
94.5
|
|
|
$
|
20.3
|
|
|
$
|
(187.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
(187.2
|
)
|
|
(24.2
|
)
|
|
(90.6
|
)
|
|
94.5
|
|
|
20.3
|
|
|
(187.2
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(51.4
|
)
|
|
(2.4
|
)
|
|
(0.3
|
)
|
|
(45.6
|
)
|
|
48.3
|
|
|
(51.4
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(238.6
|
)
|
|
$
|
(26.6
|
)
|
|
$
|
(90.9
|
)
|
|
$
|
48.9
|
|
|
$
|
68.6
|
|
|
$
|
(238.6
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
308.4
|
|
|
$
|
42.2
|
|
|
$
|
340.5
|
|
|
$
|
(2.1
|
)
|
|
$
|
689.0
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
97.1
|
|
|
107.2
|
|
|
185.8
|
|
|
(5.5
|
)
|
|
384.6
|
|
||||||
Selling, general and administrative
|
|
52.2
|
|
|
38.1
|
|
|
7.6
|
|
|
42.0
|
|
|
(0.8
|
)
|
|
139.1
|
|
||||||
Research and development
|
|
—
|
|
|
3.1
|
|
|
0.5
|
|
|
1.1
|
|
|
—
|
|
|
4.7
|
|
||||||
Employee termination and restructuring
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||
Depreciation and amortization
|
|
0.5
|
|
|
28.4
|
|
|
16.7
|
|
|
65.5
|
|
|
—
|
|
|
111.1
|
|
||||||
Operating (loss) income
|
|
(52.7
|
)
|
|
141.7
|
|
|
(89.8
|
)
|
|
45.8
|
|
|
4.2
|
|
|
49.2
|
|
||||||
Interest expense
|
|
(15.9
|
)
|
|
(58.8
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(75.3
|
)
|
||||||
Other income (expense), net
|
|
4.5
|
|
|
(131.7
|
)
|
|
134.6
|
|
|
9.0
|
|
|
(4.2
|
)
|
|
12.2
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(64.1
|
)
|
|
(48.8
|
)
|
|
44.8
|
|
|
54.2
|
|
|
—
|
|
|
(13.9
|
)
|
||||||
Equity in income (loss) of subsidiaries
|
|
45.5
|
|
|
44.6
|
|
|
—
|
|
|
—
|
|
|
(90.1
|
)
|
|
—
|
|
||||||
Income tax expense
|
|
(6.5
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
|
(11.2
|
)
|
||||||
Net (loss) income from continuing operations
|
|
$
|
(25.1
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
44.8
|
|
|
$
|
49.8
|
|
|
$
|
(90.1
|
)
|
|
$
|
(25.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss from discontinued operations
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
1.6
|
|
|
(1.6
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
|
(26.7
|
)
|
|
(4.5
|
)
|
|
44.8
|
|
|
48.2
|
|
|
(88.5
|
)
|
|
(26.7
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
1.9
|
|
|
(1.9
|
)
|
|
—
|
|
|
3.6
|
|
|
(1.7
|
)
|
|
1.9
|
|
||||||
Comprehensive (loss) income
|
|
$
|
(24.8
|
)
|
|
$
|
(6.4
|
)
|
|
$
|
44.8
|
|
|
$
|
51.8
|
|
|
$
|
(90.2
|
)
|
|
$
|
(24.8
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(79.2
|
)
|
|
$
|
19.8
|
|
|
$
|
160.0
|
|
|
$
|
132.8
|
|
|
$
|
—
|
|
|
$
|
233.4
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||
Additions to property and equipment
|
|
(2.3
|
)
|
|
(2.1
|
)
|
|
(22.1
|
)
|
|
(5.9
|
)
|
|
—
|
|
|
(32.4
|
)
|
||||||
Lottery and gaming services expenditures
|
|
(0.1
|
)
|
|
(9.7
|
)
|
|
(41.3
|
)
|
|
(22.0
|
)
|
|
—
|
|
|
(73.1
|
)
|
||||||
Intangible assets and software expenditures
|
|
(6.0
|
)
|
|
(12.1
|
)
|
|
(49.9
|
)
|
|
(2.8
|
)
|
|
—
|
|
|
(70.8
|
)
|
||||||
Additions to equity method investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.3
|
)
|
|
—
|
|
|
(43.3
|
)
|
||||||
Distributions of capital on equity investments
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
46.7
|
|
|
—
|
|
|
45.4
|
|
||||||
Proceeds on sale of equity interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44.9
|
|
|
—
|
|
|
44.9
|
|
||||||
Other
|
|
(9.6
|
)
|
|
29.2
|
|
|
(0.6
|
)
|
|
16.1
|
|
|
(35.7
|
)
|
|
(0.6
|
)
|
||||||
Intercompany balances
|
|
—
|
|
|
18.8
|
|
|
(44.9
|
)
|
|
—
|
|
|
26.1
|
|
|
—
|
|
||||||
Net cash provided by (used in) investing activities
|
|
(18.0
|
)
|
|
22.8
|
|
|
(158.8
|
)
|
|
33.7
|
|
|
(9.6
|
)
|
|
(129.9
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net payments on long-term debt
|
|
—
|
|
|
(19.5
|
)
|
|
—
|
|
|
(9.9
|
)
|
|
—
|
|
|
(29.4
|
)
|
||||||
Payments of financing fees
|
|
—
|
|
|
(22.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.8
|
)
|
||||||
Payments on license obligations
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
||||||
Common stock repurchases
|
|
(29.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.5
|
)
|
||||||
Contingent earnout payments
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
|
(3.2
|
)
|
|
—
|
|
|
(10.2
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans
|
|
(19.1
|
)
|
|
—
|
|
|
—
|
|
|
(35.7
|
)
|
|
35.7
|
|
|
(19.1
|
)
|
||||||
Other, principally intercompany balances
|
|
126.2
|
|
|
—
|
|
|
—
|
|
|
(100.1
|
)
|
|
(26.1
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
77.6
|
|
|
(42.3
|
)
|
|
(14.0
|
)
|
|
(148.9
|
)
|
|
9.6
|
|
|
(118.0
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(6.4
|
)
|
|
—
|
|
|
(6.7
|
)
|
||||||
Increase (decrease) in cash and cash equivalents
|
|
(19.6
|
)
|
|
0.3
|
|
|
(13.1
|
)
|
|
11.2
|
|
|
—
|
|
|
(21.2
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
56.0
|
|
|
—
|
|
|
24.4
|
|
|
73.3
|
|
|
—
|
|
|
153.7
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
36.4
|
|
|
$
|
0.3
|
|
|
$
|
11.3
|
|
|
$
|
84.5
|
|
|
$
|
—
|
|
|
$
|
132.5
|
|
|
|
Parent
Company
|
|
SGI
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminating
Entries
|
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(44.7
|
)
|
|
$
|
(16.1
|
)
|
|
$
|
43.3
|
|
|
$
|
113.1
|
|
|
$
|
—
|
|
|
$
|
95.6
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Additions to property and equipment
|
|
(3.3
|
)
|
|
(1.8
|
)
|
|
(12.2
|
)
|
|
(5.6
|
)
|
|
—
|
|
|
(22.9
|
)
|
||||||
Lottery and gaming services expenditures
|
|
(0.2
|
)
|
|
(6.4
|
)
|
|
(0.4
|
)
|
|
(44.3
|
)
|
|
—
|
|
|
(51.3
|
)
|
||||||
Intangible assets and software expenditures
|
|
(2.1
|
)
|
|
(12.2
|
)
|
|
(11.7
|
)
|
|
(12.1
|
)
|
|
—
|
|
|
(38.1
|
)
|
||||||
Business acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
||||||
Other assets and investments
|
|
9.9
|
|
|
14.0
|
|
|
—
|
|
|
36.3
|
|
|
(64.3
|
)
|
|
(4.1
|
)
|
||||||
Other, principally intercompany balances
|
|
32.3
|
|
|
—
|
|
|
(23.4
|
)
|
|
—
|
|
|
(8.9
|
)
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
36.6
|
|
|
(6.4
|
)
|
|
(47.7
|
)
|
|
(26.1
|
)
|
|
(73.2
|
)
|
|
(116.8
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net payments on long-term debt
|
|
—
|
|
|
(4.7
|
)
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(9.5
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
(64.3
|
)
|
|
64.3
|
|
|
(2.1
|
)
|
||||||
Payment of financing fees
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
||||||
Other, principally intercompany balances
|
|
—
|
|
|
29.0
|
|
|
—
|
|
|
(37.9
|
)
|
|
8.9
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
(2.1
|
)
|
|
22.3
|
|
|
—
|
|
|
(107.0
|
)
|
|
73.2
|
|
|
(13.6
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||||
Decrease in cash and cash equivalents
|
|
(10.2
|
)
|
|
—
|
|
|
(4.4
|
)
|
|
(20.9
|
)
|
|
—
|
|
|
(35.5
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
27.2
|
|
|
0.2
|
|
|
2.4
|
|
|
79.2
|
|
|
—
|
|
|
109.0
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
17.0
|
|
|
$
|
0.2
|
|
|
$
|
(2.0
|
)
|
|
$
|
58.3
|
|
|
$
|
—
|
|
|
$
|
73.5
|
|
•
|
BUSINESS OVERVIEW
|
•
|
CONSOLIDATED RESULTS
|
•
|
BUSINESS SEGMENT RESULTS
|
•
|
RECENTLY ISSUED ACCOUNTING GUIDANCE
|
•
|
CRITICAL ACCOUNTING ESTIMATES
|
•
|
LIQUIDITY, CAPITAL SOURCES AND WORKING CAPITAL
|
|
|
|
|
|
|
Variance for the
|
|||||||||
(in millions)
|
|
Three Months Ended
September 30, |
|
Three Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant games
|
|
$
|
130.8
|
|
|
$
|
129.7
|
|
|
$
|
1.1
|
|
|
0.8
|
%
|
Services
|
|
182.8
|
|
|
80.7
|
|
|
102.1
|
|
|
126.5
|
%
|
|||
Product sales
|
|
102.0
|
|
|
24.0
|
|
|
78.0
|
|
|
325.0
|
%
|
|||
Total revenue
|
|
415.6
|
|
|
234.4
|
|
|
181.2
|
|
|
77.3
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of instant games
(1)
|
|
69.7
|
|
|
70.6
|
|
|
(0.9
|
)
|
|
(1.3
|
)%
|
|||
Cost of services
(1)
|
|
69.6
|
|
|
42.6
|
|
|
27.0
|
|
|
63.4
|
%
|
|||
Cost of product sales
(1)
|
|
59.9
|
|
|
13.3
|
|
|
46.6
|
|
|
350.4
|
%
|
|||
Selling, general and administrative
|
|
95.6
|
|
|
45.6
|
|
|
50.0
|
|
|
109.6
|
%
|
|||
Research and development
|
|
26.3
|
|
|
1.4
|
|
|
24.9
|
|
|
n/m
|
|
|||
Employee termination and restructuring
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
|
100.4
|
|
|
35.2
|
|
|
65.2
|
|
|
185.2
|
%
|
|||
Operating (loss) income
|
|
(7.8
|
)
|
|
25.7
|
|
|
(33.5
|
)
|
|
n/m
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(45.7
|
)
|
|
(25.2
|
)
|
|
(20.5
|
)
|
|
81.3
|
%
|
|||
Earnings (loss) from equity investments
|
|
(14.0
|
)
|
|
3.4
|
|
|
(17.4
|
)
|
|
n/m
|
|
|||
Other income, net
|
|
3.1
|
|
|
—
|
|
|
3.1
|
|
|
n/m
|
|
|||
Net (loss) income from continuing operations before income taxes
|
|
(64.4
|
)
|
|
3.9
|
|
|
(68.3
|
)
|
|
n/m
|
|
|||
Income tax expense
|
|
(5.4
|
)
|
|
(4.3
|
)
|
|
(1.1
|
)
|
|
25.6
|
%
|
|||
Net loss from continuing operations
|
|
$
|
(69.8
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(69.4
|
)
|
|
n/m
|
|
|
|
|
|
|
|
Variance for the
|
|||||||||
(in millions)
|
|
Three Months Ended
September 30, |
|
Three Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant games
|
|
$
|
130.8
|
|
|
$
|
129.7
|
|
|
$
|
1.1
|
|
|
0.8
|
%
|
Product sales
|
|
3.2
|
|
|
3.1
|
|
|
0.1
|
|
|
3.2
|
%
|
|||
Total revenue
|
|
134.0
|
|
|
132.8
|
|
|
1.2
|
|
|
0.9
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Cost of instant games
(1)
|
|
69.7
|
|
|
70.6
|
|
|
(0.9
|
)
|
|
(1.3
|
)%
|
|||
Cost of product sales
(1)
|
|
2.4
|
|
|
2.2
|
|
|
0.2
|
|
|
9.1
|
%
|
|||
Selling, general and administrative
|
|
12.2
|
|
|
11.5
|
|
|
0.7
|
|
|
6.1
|
%
|
|||
Research and development
|
|
0.5
|
|
|
0.1
|
|
|
0.4
|
|
|
n/m
|
|
|||
Employee termination and restructuring
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
|
8.9
|
|
|
9.2
|
|
|
(0.3
|
)
|
|
(3.3
|
)%
|
|||
Operating income
|
|
$
|
39.9
|
|
|
$
|
39.2
|
|
|
$
|
0.7
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings (loss) from equity investments
|
|
$
|
(15.4
|
)
|
|
$
|
5.2
|
|
|
$
|
(20.6
|
)
|
|
(396.2
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Instant games by revenue type:
|
|
|
|
|
|
|
|
|
|||||||
Participation contracts
|
|
$
|
70.2
|
|
|
$
|
62.0
|
|
|
$
|
8.2
|
|
|
13.2
|
%
|
Price-per-unit contracts
|
|
48.4
|
|
|
46.3
|
|
|
2.1
|
|
|
4.5
|
%
|
|||
Licensing and player loyalty
|
|
12.2
|
|
|
21.4
|
|
|
(9.2
|
)
|
|
(43.0
|
)%
|
|||
Total instant games revenue
|
|
$
|
130.8
|
|
|
$
|
129.7
|
|
|
$
|
1.1
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Instant games revenue by geography:
|
|
|
|
|
|
|
|
|
|||||||
U.S.
(2)
|
|
$
|
82.6
|
|
|
$
|
82.8
|
|
|
$
|
(0.2
|
)
|
|
(0.2
|
)%
|
International
(2)
|
|
48.2
|
|
|
46.9
|
|
|
1.3
|
|
|
2.8
|
%
|
|||
Total instant games revenue
|
|
$
|
130.8
|
|
|
$
|
129.7
|
|
|
$
|
1.1
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. lottery customers’ retail sales of instant games
|
|
$
|
9,298
|
|
|
$
|
8,689
|
|
|
$
|
609
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Italy retail sales of instant games (in Euros)
|
|
€
|
2,185
|
|
|
€
|
2,253
|
|
|
€
|
(68
|
)
|
|
(3.0
|
)%
|
(1)
|
Exclusive of depreciation and amortization.
|
(2)
|
Amounts reflect a reclassification of $2.8 million from International to U.S. in the prior-year.
|
|
|
|
|
|
|
Variance for the
|
|||||||||
(in millions)
|
|
Three Months Ended
September 30, |
|
Three Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
48.2
|
|
|
$
|
48.6
|
|
|
$
|
(0.4
|
)
|
|
(0.8
|
)%
|
Product sales
|
|
30.5
|
|
|
13.6
|
|
|
16.9
|
|
|
124.3
|
%
|
|||
Total revenue
|
|
78.7
|
|
|
62.2
|
|
|
16.5
|
|
|
26.5
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
30.4
|
|
|
27.1
|
|
|
3.3
|
|
|
12.2
|
%
|
|||
Cost of product sales
(1)
|
|
24.6
|
|
|
7.3
|
|
|
17.3
|
|
|
237.0
|
%
|
|||
Selling, general and administrative
|
|
5.6
|
|
|
5.3
|
|
|
0.3
|
|
|
5.7
|
%
|
|||
Research and development
|
|
0.9
|
|
|
0.9
|
|
|
—
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
|
16.0
|
|
|
13.4
|
|
|
2.6
|
|
|
19.4
|
%
|
|||
Operating income
|
|
$
|
1.2
|
|
|
$
|
8.2
|
|
|
$
|
(7.0
|
)
|
|
(85.4
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings from equity investments
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Services revenue by geography:
|
|
|
|
|
|
|
|
|
|||||||
U.S.
(2)
|
|
$
|
27.6
|
|
|
$
|
27.7
|
|
|
$
|
(0.1
|
)
|
|
(0.4
|
)%
|
International
|
|
20.6
|
|
|
20.9
|
|
|
(0.3
|
)
|
|
(1.4
|
)%
|
|||
Total services revenue
|
|
$
|
48.2
|
|
|
$
|
48.6
|
|
|
$
|
(0.4
|
)
|
|
(0.8
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Product sales by geography:
|
|
|
|
|
|
|
|
|
|||||||
U.S.
|
|
$
|
1.5
|
|
|
$
|
1.0
|
|
|
$
|
0.5
|
|
|
50.0
|
%
|
International
|
|
29.0
|
|
|
12.6
|
|
|
16.4
|
|
|
130.2
|
%
|
|||
Total product sales revenue
|
|
$
|
30.5
|
|
|
$
|
13.6
|
|
|
$
|
16.9
|
|
|
124.3
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. lottery customers' retail sales (3)
|
|
$
|
2,065
|
|
|
$
|
2,100
|
|
|
$
|
(35
|
)
|
|
(1.7
|
)%
|
(1)
|
Exclusive of depreciation and amortization.
|
(2)
|
U.S. services revenue excludes revenue from Puerto Rico.
|
(3)
|
U.S. lottery customers' retail sales primarily include retail sales of draw games, keno and instant games validated by the relevant system. The retail sales metric for the Lottery Systems segment previously disclosed for earlier periods included draw game retail sales only. We believe the revised metric more clearly correlates to our U.S. Lottery Systems services revenue, since we are generally compensated based on total retail sales generated by the relevant lottery system and not just draw game retail sales. The prior-year period retail sales information presented above has been revised to conform to the revised metric.
|
|
|
|
|
|
|
Variance for the
|
||||||||
(in millions)
|
|
Three Months Ended
September 30, |
|
Three Months Ended
September 30, |
||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||
Services
|
|
$
|
134.6
|
|
|
$
|
32.1
|
|
|
$
|
102.5
|
|
|
n/m
|
Product sales
|
|
68.3
|
|
|
7.3
|
|
|
61.0
|
|
|
n/m
|
|||
Total revenue
|
|
202.9
|
|
|
39.4
|
|
|
163.5
|
|
|
n/m
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||
Cost of services
(1)
|
|
39.2
|
|
|
15.5
|
|
|
23.7
|
|
|
n/m
|
|||
Cost of product sales
(1)
|
|
32.9
|
|
|
3.8
|
|
|
29.1
|
|
|
n/m
|
|||
Selling, general and administrative
|
|
42.4
|
|
|
6.3
|
|
|
36.1
|
|
|
n/m
|
|||
Research and development
|
|
24.9
|
|
|
0.4
|
|
|
24.5
|
|
|
n/m
|
|||
Employee termination and restructuring
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
n/m
|
|||
Depreciation and amortization
|
|
69.8
|
|
|
12.4
|
|
|
57.4
|
|
|
n/m
|
|||
Operating (loss) income
|
|
$
|
(7.8
|
)
|
|
$
|
1.0
|
|
|
$
|
(8.8
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
||||||
Earnings (loss) from equity investments
|
|
$
|
1.3
|
|
|
$
|
(1.9
|
)
|
|
$
|
3.2
|
|
|
n/m
|
(in millions, except for unit and per unit (or user) information)
|
|
|
|
Variance for the
|
|||||||||||
|
|
Three Months Ended
September 30, |
|
Three Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs 2013
|
|||||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Services revenue:
|
|
|
|
|
|
|
|
|
|||||||
WAP and premium participation products
|
|
$
|
57.5
|
|
|
$
|
—
|
|
|
$
|
57.5
|
|
|
n/m
|
|
Other leased and participation products
|
|
30.6
|
|
|
26.6
|
|
|
4.0
|
|
|
15.0
|
%
|
|||
Interactive gaming products and services
|
|
38.5
|
|
|
—
|
|
|
38.5
|
|
|
n/m
|
|
|||
Other services
|
|
8.0
|
|
|
5.5
|
|
|
2.5
|
|
|
45.5
|
%
|
|||
Total services revenue
|
|
$
|
134.6
|
|
|
$
|
32.1
|
|
|
$
|
102.5
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
WAP and premium participation units
(1)
:
|
|
|
|
|
|
|
|
|
|||||||
Installed base at period end
|
|
9,054
|
|
|
—
|
|
|
9,054
|
|
|
n/m
|
|
|||
Average installed base
|
|
8,678
|
|
|
—
|
|
|
8,678
|
|
|
n/m
|
|
|||
Average daily revenue per unit
|
|
$
|
71.95
|
|
|
$
|
—
|
|
|
$
|
71.95
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other leased and participation units
(2)
:
|
|
|
|
|
|
|
|
|
|||||||
Installed base at period end
|
|
26,711
|
|
|
26,829
|
|
|
(118
|
)
|
|
(0.4
|
)%
|
|||
Average installed base
|
|
26,667
|
|
|
26,641
|
|
|
26
|
|
|
0.1
|
%
|
|||
Average daily revenue per unit
|
|
$
|
12.49
|
|
|
$
|
10.87
|
|
|
$
|
1.62
|
|
|
14.9
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Interactive gaming products and services - social casino:
|
|
|
|
|
|
|
|
|
|||||||
Average Monthly Active Users (MAU)
(3)
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
|
n/m
|
|
|||
Average Daily Active Users (DAU)
(4)
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
n/m
|
|
|||
Average revenue per daily active user (ARPDAU)
(5)
|
|
$
|
0.23
|
|
|
$
|
—
|
|
|
$
|
0.23
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
Product sales revenue:
|
|
|
|
|
|
|
|
|
|||||||
New gaming machine sales
|
|
$
|
48.2
|
|
|
$
|
1.6
|
|
|
$
|
46.6
|
|
|
n/m
|
|
Other product sales
|
|
20.1
|
|
|
5.7
|
|
|
14.4
|
|
|
n/m
|
|
|||
Total product sales revenue
|
|
$
|
68.3
|
|
|
$
|
7.3
|
|
|
$
|
61.0
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
Product sales:
|
|
|
|
|
|
|
|
|
|||||||
U.S. and Canadian new unit shipments
|
|
1,933
|
|
|
—
|
|
|
1,933
|
|
|
n/m
|
|
|||
International new unit shipments
|
|
1,362
|
|
|
276
|
|
|
1,086
|
|
|
n/m
|
|
|||
Total new unit shipments
|
|
3,295
|
|
|
276
|
|
|
3,019
|
|
|
n/m
|
|
|||
Average sales price per new unit
|
|
$
|
14,638
|
|
|
$
|
5,818
|
|
|
$
|
8,820
|
|
|
n/m
|
|
(1)
|
WAP and premium participation products are comprised of WMS participation gaming machines (WAP, LAP and standalone units) generally available only as leased units
|
(2)
|
Other leased and participation units are comprised principally of Scientific Games legacy server-based gaming machines, primarily in the U.K., and other leased WMS units
|
(3)
|
MAU = Monthly Active Users, a count of unique visitors to our sites during a month
|
(4)
|
DAU = Daily Active Users, a count of unique visitors to our sites during a day
|
(5)
|
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
|
|
|
|
|
|
|
Variance for the
|
|||||||||
(in millions)
|
|
Nine Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant games
|
|
$
|
392.4
|
|
|
$
|
379.0
|
|
|
$
|
13.4
|
|
|
3.5
|
%
|
Services
|
|
538.9
|
|
|
247.7
|
|
|
291.2
|
|
|
117.6
|
%
|
|||
Product sales
|
|
289.3
|
|
|
62.3
|
|
|
227.0
|
|
|
364.4
|
%
|
|||
Total revenue
|
|
1,220.6
|
|
|
689.0
|
|
|
531.6
|
|
|
77.2
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of instant games
(1)
|
|
212.5
|
|
|
210.3
|
|
|
2.2
|
|
|
1.0
|
%
|
|||
Cost of services
(1)
|
|
200.7
|
|
|
135.0
|
|
|
65.7
|
|
|
48.7
|
%
|
|||
Cost of product sales
(1)
|
|
161.2
|
|
|
39.3
|
|
|
121.9
|
|
|
310.2
|
%
|
|||
Selling, general and administrative
|
|
282.6
|
|
|
139.1
|
|
|
143.5
|
|
|
103.2
|
%
|
|||
Research and development
|
|
77.0
|
|
|
4.7
|
|
|
72.3
|
|
|
n/m
|
|
|||
Employee termination and restructuring
|
|
12.4
|
|
|
0.3
|
|
|
12.1
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
|
290.5
|
|
|
111.1
|
|
|
179.4
|
|
|
161.5
|
%
|
|||
Operating (loss) income
|
|
(16.3
|
)
|
|
49.2
|
|
|
(65.5
|
)
|
|
(133.1
|
)%
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(142.9
|
)
|
|
(75.3
|
)
|
|
(67.6
|
)
|
|
89.8
|
%
|
|||
Earnings (loss) from equity investments
|
|
(7.8
|
)
|
|
13.0
|
|
|
(20.8
|
)
|
|
(160.0
|
)%
|
|||
Loss on early extinguishment of debt
|
|
(25.9
|
)
|
|
—
|
|
|
(25.9
|
)
|
|
n/m
|
|
|||
Gain on sale of equity interest
|
|
14.5
|
|
|
—
|
|
|
14.5
|
|
|
n/m
|
|
|||
Other (expense) income, net
|
|
9.2
|
|
|
(0.8
|
)
|
|
10.0
|
|
|
n/m
|
|
|||
Net loss from continuing operations before income taxes
|
|
(169.2
|
)
|
|
(13.9
|
)
|
|
(155.3
|
)
|
|
n/m
|
|
|||
Income tax expense
|
|
(18.0
|
)
|
|
(11.2
|
)
|
|
(6.8
|
)
|
|
60.7
|
%
|
|||
Net loss from continuing operations
|
|
$
|
(187.2
|
)
|
|
$
|
(25.1
|
)
|
|
$
|
(162.1
|
)
|
|
645.8
|
%
|
|
|
|
|
|
|
Variance for the
|
|||||||||
(in millions)
|
|
Nine Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Instant games
|
|
$
|
392.4
|
|
|
$
|
379.0
|
|
|
$
|
13.4
|
|
|
3.5
|
%
|
Product sales
|
|
9.4
|
|
|
10.1
|
|
|
(0.7
|
)
|
|
(6.9
|
)%
|
|||
Total revenue
|
|
401.8
|
|
|
389.1
|
|
|
12.7
|
|
|
3.3
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of instant games
(1)
|
|
212.5
|
|
|
210.3
|
|
|
2.2
|
|
|
1.0
|
%
|
|||
Cost of product sales
(1)
|
|
6.5
|
|
|
7.2
|
|
|
(0.7
|
)
|
|
(9.7
|
)%
|
|||
Selling, general and administrative
|
|
38.9
|
|
|
35.5
|
|
|
3.4
|
|
|
9.6
|
%
|
|||
Research and development
|
|
1.0
|
|
|
0.4
|
|
|
0.6
|
|
|
150.0
|
%
|
|||
Employee termination and restructuring
|
|
1.6
|
|
|
0.3
|
|
|
1.3
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
|
26.2
|
|
|
27.0
|
|
|
(0.8
|
)
|
|
(3.0
|
)%
|
|||
Operating income
|
|
$
|
115.1
|
|
|
$
|
108.4
|
|
|
$
|
6.7
|
|
|
6.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings (loss) from equity investments
|
|
$
|
(12.4
|
)
|
|
$
|
15.8
|
|
|
$
|
(28.2
|
)
|
|
(178.5
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Instant games by revenue type:
|
|
|
|
|
|
|
|
|
|||||||
Participation contracts
|
|
$
|
206.9
|
|
|
$
|
187.5
|
|
|
$
|
19.4
|
|
|
10.3
|
%
|
Price-per-unit contracts
|
|
144.7
|
|
|
147.0
|
|
|
(2.3
|
)
|
|
(1.6
|
)%
|
|||
Licensing and player loyalty
|
|
40.8
|
|
|
44.5
|
|
|
(3.7
|
)
|
|
(8.3
|
)%
|
|||
Total instant games revenue
|
|
$
|
392.4
|
|
|
$
|
379.0
|
|
|
$
|
13.4
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Instant games revenue by geography:
|
|
|
|
|
|
|
|
|
|||||||
U.S.
|
|
$
|
252.6
|
|
|
$
|
237.7
|
|
|
$
|
14.9
|
|
|
6.3
|
%
|
International
|
|
139.8
|
|
|
141.3
|
|
|
(1.5
|
)
|
|
(1.1
|
)%
|
|||
Total instant games revenue
|
|
$
|
392.4
|
|
|
$
|
379.0
|
|
|
$
|
13.4
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. lottery customers’ retail sales of instant games
|
|
$
|
29,030
|
|
|
$
|
27,575
|
|
|
$
|
1,455
|
|
|
5.3
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Italy retail sales of instant games (in Euros)
|
|
€
|
6,976
|
|
|
€
|
7,173
|
|
|
€
|
(197
|
)
|
|
(2.7
|
)%
|
(1)
|
Exclusive of depreciation and amortization.
|
|
|
|
|
|
|
Variance for the
|
|||||||||
(in millions)
|
|
Nine Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
149.3
|
|
|
$
|
146.1
|
|
|
$
|
3.2
|
|
|
2.2
|
%
|
Product sales
|
|
63.3
|
|
|
35.2
|
|
|
28.1
|
|
|
79.8
|
%
|
|||
Total revenue
|
|
212.6
|
|
|
181.3
|
|
|
31.3
|
|
|
17.3
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
90.4
|
|
|
82.0
|
|
|
8.4
|
|
|
10.2
|
%
|
|||
Cost of product sales
(1)
|
|
50.8
|
|
|
22.4
|
|
|
28.4
|
|
|
126.8
|
%
|
|||
Selling, general and administrative
|
|
17.1
|
|
|
16.0
|
|
|
1.1
|
|
|
6.9
|
%
|
|||
Research and development
|
|
1.7
|
|
|
3.1
|
|
|
(1.4
|
)
|
|
(45.2
|
)%
|
|||
Depreciation and amortization
|
|
44.6
|
|
|
38.8
|
|
|
5.8
|
|
|
14.9
|
%
|
|||
Operating income
|
|
$
|
8.0
|
|
|
$
|
19.0
|
|
|
$
|
(11.0
|
)
|
|
(57.9
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings from equity investments
|
|
$
|
1.3
|
|
|
$
|
0.7
|
|
|
$
|
0.6
|
|
|
85.7
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Services revenue by geography:
|
|
|
|
|
|
|
|
|
|||||||
U.S.
(2)
|
|
$
|
82.8
|
|
|
$
|
83.1
|
|
|
$
|
(0.3
|
)
|
|
(0.4
|
)%
|
International
|
|
66.5
|
|
|
63.0
|
|
|
3.5
|
|
|
5.6
|
%
|
|||
Total services revenue
|
|
$
|
149.3
|
|
|
$
|
146.1
|
|
|
$
|
3.2
|
|
|
2.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Product sales by geography:
|
|
|
|
|
|
|
|
|
|||||||
U.S.
|
|
$
|
6.3
|
|
|
$
|
4.1
|
|
|
$
|
2.2
|
|
|
53.7
|
%
|
International
|
|
57.0
|
|
|
31.1
|
|
|
25.9
|
|
|
83.3
|
%
|
|||
Total product sales revenue
|
|
$
|
63.3
|
|
|
$
|
35.2
|
|
|
$
|
28.1
|
|
|
79.8
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. lottery customers' retail sales
(3)
|
|
$
|
6,310
|
|
|
$
|
6,384
|
|
|
$
|
(74
|
)
|
|
(1.2
|
)%
|
(1)
|
Exclusive of depreciation and amortization.
|
(2)
|
U.S. services revenue excludes revenue from Puerto Rico.
|
(3)
|
U.S. lottery customers' retail sales primarily include retail sales of draw games, keno and instant games validated by the relevant system. The retail sales metric for the Lottery Systems segment presented in prior periods included draw game retail sales only. We believe the revised metric more clearly
|
|
|
|
|
|
|
Variance for the
|
||||||||
(in millions)
|
|
Nine Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||
Services
|
|
$
|
389.6
|
|
|
$
|
101.6
|
|
|
$
|
288.0
|
|
|
n/m
|
Product sales
|
|
216.6
|
|
|
17.0
|
|
|
199.6
|
|
|
n/m
|
|||
Total revenue
|
|
606.2
|
|
|
118.6
|
|
|
487.6
|
|
|
n/m
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||
Cost of services
(1)
|
|
110.3
|
|
|
53.0
|
|
|
57.3
|
|
|
n/m
|
|||
Cost of product sales
(1)
|
|
103.9
|
|
|
9.7
|
|
|
94.2
|
|
|
n/m
|
|||
Selling, general and administrative
|
|
132.9
|
|
|
19.3
|
|
|
113.6
|
|
|
n/m
|
|||
Research and development
|
|
74.3
|
|
|
1.2
|
|
|
73.1
|
|
|
n/m
|
|||
Employee termination and restructuring
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
|
n/m
|
|||
Depreciation and amortization
|
|
200.2
|
|
|
44.8
|
|
|
155.4
|
|
|
n/m
|
|||
Operating loss
|
|
$
|
(24.3
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
(14.9
|
)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
||||||
Earnings (loss) from equity investments
|
|
$
|
3.3
|
|
|
$
|
(3.5
|
)
|
|
$
|
6.8
|
|
|
n/m
|
(in millions, except for unit and per unit (or user) information)
|
|
|
|
Variance for the
|
|||||||||||
|
|
Nine Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|||||||||||
|
|
2014
|
|
2013
|
|
2014 vs 2013
|
|||||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Services revenue:
|
|
|
|
|
|
|
|
|
|||||||
WAP and premium participation products
|
|
$
|
172.9
|
|
|
$
|
—
|
|
|
$
|
172.9
|
|
|
n/m
|
|
Other leased and participation products
|
|
91.1
|
|
|
83.0
|
|
|
8.1
|
|
|
9.8
|
%
|
|||
Interactive gaming products and services
|
|
101.6
|
|
|
—
|
|
|
101.6
|
|
|
n/m
|
|
|||
Other services
|
|
24.0
|
|
|
18.6
|
|
|
5.4
|
|
|
29.0
|
%
|
|||
Total services revenue
|
|
$
|
389.6
|
|
|
$
|
101.6
|
|
|
$
|
288.0
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
WAP and premium participation units
(1)
:
|
|
|
|
|
|
|
|
|
|||||||
Installed base at period end
|
|
9,054
|
|
|
—
|
|
|
9,054
|
|
|
n/m
|
|
|||
Average installed base
|
|
8,931
|
|
|
—
|
|
|
8,931
|
|
|
n/m
|
|
|||
Average daily revenue per unit
|
|
$
|
70.91
|
|
|
$
|
—
|
|
|
$
|
70.91
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other leased and participation units
(2)
:
|
|
|
|
|
|
|
|
|
|||||||
Installed base at period end
|
|
26,711
|
|
|
26,829
|
|
|
(118
|
)
|
|
(0.4
|
)%
|
|||
Average installed base
|
|
27,628
|
|
|
26,234
|
|
|
1,394
|
|
|
5.3
|
%
|
|||
Average daily revenue per unit
|
|
$
|
12.08
|
|
|
$
|
11.59
|
|
|
$
|
0.49
|
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Interactive gaming products and services - social casino:
|
|
|
|
|
|
|
|
|
|||||||
Average Monthly Active Users (MAU)
(3)
|
|
5.3
|
|
|
—
|
|
|
5.3
|
|
|
n/m
|
|
|||
Average Daily Active Users (DAU)
(4)
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|
n/m
|
|
|||
Average revenue per daily active user (ARPDAU)
(5)
|
|
$
|
0.22
|
|
|
$
|
—
|
|
|
$
|
0.22
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
Product sales revenue:
|
|
|
|
|
|
|
|
|
|||||||
New gaming machine sales
|
|
$
|
157.9
|
|
|
$
|
7.6
|
|
|
$
|
150.3
|
|
|
n/m
|
|
Other product sales
|
|
58.7
|
|
|
9.4
|
|
|
49.3
|
|
|
n/m
|
|
|||
Total product sales revenue
|
|
$
|
216.6
|
|
|
$
|
17.0
|
|
|
$
|
199.6
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
Product sales:
|
|
|
|
|
|
|
|
|
|||||||
U.S. and Canadian new unit shipments
|
|
6,522
|
|
|
74
|
|
|
6,448
|
|
|
n/m
|
|
|||
International new unit shipments
|
|
4,390
|
|
|
1,121
|
|
|
3,269
|
|
|
n/m
|
|
|||
Total new unit shipments
|
|
10,912
|
|
|
1,195
|
|
|
9,717
|
|
|
n/m
|
|
|||
Average sales price per new unit
|
|
$
|
14,470
|
|
|
$
|
6,360
|
|
|
$
|
8,110
|
|
|
n/m
|
|
(1)
|
WAP and premium participation products are comprised of WMS participation gaming machines (WAP, LAP and standalone units) generally available only as leased units
|
(2)
|
Other leased and participation units are comprised principally of Scientific Games legacy server-based gaming machines, primarily in the U.K., and other leased WMS units
|
(3)
|
MAU = Monthly Active Users, a count of unique visitors to our sites during a month
|
(4)
|
DAU = Daily Active Users, a count of unique visitors to our sites during a day
|
(5)
|
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
|
•
|
Income taxes and deferred income taxes
|
•
|
Valuation of investments, long-lived and intangible assets and goodwill
|
•
|
Business combinations
|
•
|
Revenue recognition
|
•
|
Notes receivable
|
•
|
Performance-based compensation
|
•
|
Inventory
|
•
|
Restructuring
|
|
|
|
|
|
|
Variance for the
|
||||||
|
|
Nine Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
|
2014
|
|
2013
|
|
2014 vs. 2013
|
||||||
Net cash provided by operating activities
|
|
$
|
233.4
|
|
|
$
|
95.6
|
|
|
$
|
137.8
|
|
Net cash used in investing activities
|
|
(129.9
|
)
|
|
(116.8
|
)
|
|
(13.1
|
)
|
|||
Net cash used in financing activities
|
|
(118.0
|
)
|
|
(13.6
|
)
|
|
(104.4
|
)
|
|||
Effect of exchange rates on cash and cash equivalents
|
|
(6.7
|
)
|
|
(0.7
|
)
|
|
(6.0
|
)
|
|||
Decrease in cash and cash equivalents
|
|
$
|
(21.2
|
)
|
|
$
|
(35.5
|
)
|
|
$
|
14.3
|
|
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)
|
||||||
7/1/2014 - 7/31/2014
|
|
5,021
|
|
|
|
$
|
10.42
|
|
|
—
|
|
|
|
$75.0 million
|
8/1/2014 - 8/31/2014
|
|
36,215
|
|
|
|
$
|
9.70
|
|
|
—
|
|
|
|
$75.0 million
|
9/1/2014 - 9/30/2014
|
|
28,012
|
|
|
|
$
|
12.06
|
|
|
—
|
|
|
|
$75.0 million
|
Total
|
|
69,248
|
|
|
|
$
|
10.71
|
|
|
—
|
|
|
|
$75.0 million
|
(1)
|
This column reflects 69,248 shares withheld from employees to satisfy tax withholding obligations associated with the vesting of RSUs during the three months ended September 30, 2014.
|
(2)
|
On December 5, 2013, our board of directors approved an extension of our existing stock repurchase program to December 31, 2014. The program, originally announced in May 2010, was due to expire on December 31, 2013. 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 million. As of September 30, 2014, we had $75.0 million available for potential repurchases under the program.
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of August 1, 2014, by and among the Company, SGI, Scientific Games Nevada, Inc. and Bally Technologies, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on August 4, 2014).
|
|
|
|
4.1
|
|
Supplemental Indenture, dated as of September 15, 2014, among the Company, as issuer, the subsidiary guarantors party thereto, Scientific Games Productions, LLC, Scientific Games Distribution, LLC, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture dated September 22, 2010, by and among the Company, as issuer, the subsidiary guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee).(†)
|
|
|
|
4.2
|
|
Supplemental Indenture, dated as of September 15, 2014, among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto, Scientific Games Productions, LLC, Scientific Games Distribution, LLC, and Deutsche Bank Trust Company Americas, 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 Deutsche Bank Trust Company Americas, as trustee).(†)
|
|
|
|
4.3
|
|
Supplemental Indenture, dated as of September 15, 2014, among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto, Scientific Games Productions, LLC, Scientific Games Distribution, LLC, and Deutsche Bank Trust Company Americas, as trustee, relating to the Indenture dated June 4, 2014, by and among Scientific Games International, Inc., as issuer, the Company, as a guarantor, the subsidiary guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee).(†)
|
|
|
|
10.1
|
|
Amendment No. 1 to Credit Agreement, dated as of October 1, 2014, by and among Scientific Games International, Inc., as the borrower, the Company, the lenders and other agents from time to time party thereto, and Bank of America, N.A., as administrative agent, collateral agent, issuing lender and swingline lender (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on October 7, 2014).
|
|
|
|
10.2
|
|
Escrow Credit Agreement, dated as of October 1, 2014, by and among SGMS Escrow Corp., the lenders and other agents from time to time party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on October 7, 2014).
|
|
|
|
10.3
|
|
Letter Agreement dated as of July 31, 2014 between the Company and David L. Kennedy.*(†)
|
|
|
|
10.4
|
|
Agreement and General Release dated as of September 30, 2014 between the Company and Andrew E. Tomback.*(†)
|
|
|
|
10.5
|
|
Form of Inducement Equity Award Agreement between the Company and M. Gavin Isaacs (incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 (No. 333-197948) filed on August 7, 2014).*
|
|
|
|
10.6
|
|
Commitment Letter, dated as of August 1, 2014, by and among the Company, SGI and Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 4, 2014).
|
|
|
|
10.7
|
|
Employment Agreement dated as of August 28, 2014 by and between the Company and Steven W. Beason.*
(†)
|
Exhibit
Number
|
|
Description
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (†)
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (†)
|
|
|
|
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. (†)
|
|
|
|
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. (†)
|
|
|
|
101
|
|
Financial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2014, filed on October 31, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations and Comprehensive (Loss) 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. (†)(**)
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Scott D. Schweinfurth
|
|
|
Name:
|
Scott D. Schweinfurth
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jeffrey B. Johnson
|
|
|
Name:
|
Jeffrey B. Johnson
|
|
|
Title:
|
Vice President, Finance, and Chief Accounting Officer
|
|
|
|
|
|
|
|
|
Dated:
|
October 31, 2014
|
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
By:
/s/ Peter A. Mani________________________
Name: Peter A. Mani
Title: VP and Chief Human Resources Officer
|
|
|
|
EXECUTIVE
|
|
|
|
/s/ Steve W. Beason________________________
Name: Steven Wayne Beason
|
/s/ M. Gavin Isaacs
|
M. Gavin Isaacs
|
Chief Executive Officer
|
/s/ Scott D. Schweinfurth
|
Scott D. Schweinfurth
|
Chief Financial Officer
|
|
/s/ M. Gavin Isaacs
|
|
M. Gavin Isaacs
|
|
Chief Executive Officer
|
|
October 31, 2014
|
|
/s/ Scott D. Schweinfurth
|
|
Scott D. Schweinfurth
|
|
Chief Financial Officer
|
|
October 31, 2014
|