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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Scientific Games Corporation | NASDAQ:SGMS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 58.07 | 50.00 | 62.98 | 0 | 01:00:00 |
Nevada
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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
ý
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Glossary of Terms
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The following terms or acronyms used in this Quarterly Report on Form 10-Q are defined below:
|
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Term or Acronym
|
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Definition
|
2017 10-K
|
|
2017 Annual Report on Form 10-K filed with the SEC on March 1, 2018
|
2018 Notes
|
|
8.125% senior subordinated notes due 2018 issued by SGC
|
2020 Notes
|
|
6.250% senior subordinated notes due 2020 issued by SGI
|
2021 Notes
|
|
6.625% senior subordinated notes due 2021 issued by SGI
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2022 Secured Notes
|
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7.000% senior secured notes due 2022 issued by SGI
|
2025 Secured Notes
|
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5.000% senior secured notes due 2025 issued by SGI
|
2026 Secured Euro Notes
|
|
3.375% senior secured notes due 2026 issued by SGI
|
2026 Unsecured Euro Notes
|
|
5.500% senior unsecured notes due 2026 issued by SGI
|
AEBITDA
|
|
Attributable EBITDA, our performance measure of profit or loss for our business segments (see Note 3)
|
ASC
|
|
Accounting Standards Codification
|
ASU
|
|
Accounting Standards Update
|
B2C
|
|
business to consumer model
|
CSP
|
|
Cooperative Services Program
|
D&A
|
|
depreciation, amortization and impairments (excluding goodwill)
|
FASB
|
|
Financial Accounting Standards Board
|
Guarantor Subsidiaries
|
|
substantially all of SGC’s 100%-owned U.S. subsidiaries other than SGC’s 100%-owned U.S. Social gaming subsidiaries
|
LNS
|
|
Lotterie Nazionali S.r.l.
|
Non-Guarantor Subsidiaries
|
|
SGC’s U.S. subsidiaries that are not Guarantor Subsidiaries and SGC’s foreign subsidiaries
|
Note
|
|
a note in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, unless otherwise indicated
|
NYX
|
|
NYX Gaming Group Limited
|
NYX acquisition
|
|
the acquisition of 100% of the ordinary shares of NYX by SGC on January 5, 2018
|
Participation
|
|
with respect to our Gaming business, refers to gaming machines provided to customers through service or leasing arrangements in which we earn revenues and are paid based on: (1) a percentage of the amount wagered less payouts; (2) fixed daily-fees; (3) a percentage of the amount wagered; or (4) a combination of (2) and (3), and with respect to our Lottery business, refers to a contract or arrangement in which we earn revenues and are paid based on a percentage of retail sales
|
POS
|
|
percentage of retail sales
|
PPU
|
|
price-per-unit
|
PTG
|
|
proprietary table games
|
R&D
|
|
research and development
|
RFP
|
|
request for proposal
|
RMG
|
|
real-money gaming
|
RSU
|
|
restricted stock unit
|
SEC
|
|
Securities and Exchange Commission
|
Secured Notes
|
|
refers to the 2022 Secured Notes, 2025 Secured Notes, and 2026 Secured Euro Notes, collectively
|
SG&A
|
|
selling, general and administrative
|
SGC
|
|
Scientific Games Corporation
|
SGI
|
|
Scientific Games International, Inc., a wholly-owned subsidiary of SGC
|
Shufflers
|
|
various models of automatic card shufflers, deck checkers and roulette chip sorters
|
Subordinated Notes
|
|
refers to the 2020 Notes and 2021 Notes, collectively
|
Unsecured Notes
|
|
10.000% senior unsecured notes due 2022 issued by SGI
|
U.S. GAAP
|
|
accounting principles generally accepted in the U.S.
|
U.S. jurisdictions
|
|
the 50 states in the U.S. plus the District of Columbia and Puerto Rico
|
VGT
|
|
video gaming terminal
|
VLT
|
|
video lottery terminal
|
WAP
|
|
wide-area progressive
|
•
|
competition;
|
•
|
U.S. and international economic and industry conditions;
|
•
|
slow growth of new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of gaming machines;
|
•
|
ownership changes and consolidation in the gaming industry;
|
•
|
opposition to legalized gaming or the expansion thereof;
|
•
|
inability to adapt to, and offer products that keep pace with, evolving technology, including any failure of our investment of significant resources in our R&D efforts;
|
•
|
inability to develop successful products and services and capitalize on trends and changes in our industries, including the expansion of internet and other forms of interactive gaming;
|
•
|
laws and government regulations, including those relating to gaming, data privacy, and environmental laws;
|
•
|
legislative interpretation and enforcement, regulatory perception and regulatory risks with respect to gaming and sports wagering;
|
•
|
reliance on technological blocking systems;
|
•
|
expectations of shift to regulated online gaming or sports wagering;
|
•
|
dependence upon key providers in our Social gaming business;
|
•
|
inability to win, retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
|
•
|
protection of our intellectual property, inability to license third-party intellectual property and the intellectual property rights of others;
|
•
|
security and integrity of our products and systems;
|
•
|
reliance on or failures in information technology and other systems;
|
•
|
security breaches and cyber-attacks, challenges or disruptions relating to the implementation of a new global enterprise resource planning system;
|
•
|
failure to maintain adequate internal control over financial reporting;
|
•
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natural events that disrupt our operations or those of our customers, suppliers or regulators;
|
•
|
inability to benefit from, and risks associated with, strategic equity investments and relationships;
|
•
|
failure to achieve the intended benefits of our acquisitions, including the NYX acquisition and the Don Best acquisition;
|
•
|
the ability to successfully integrate our acquisitions, including the NYX acquisition;
|
•
|
incurrence of restructuring costs;
|
•
|
implementation of complex new accounting standards;
|
•
|
changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;
|
•
|
fluctuations in our results due to seasonality and other factors;
|
•
|
dependence on suppliers and manufacturers;
|
•
|
risks relating to foreign operations, including anti-corruption laws, fluctuations in F/X rates, restrictions on the payment of dividends from earnings, restrictions on the import of products and financial instability, including the potential impact to our business resulting from the affirmative vote in the U.K. to withdraw from the EU, and the potential impact to our instant lottery game concession or VLT lease arrangements resulting from the economic and political conditions in Greece;
|
•
|
possibility that the renewal of LNS’ concession to operate the Italian instant games lottery is not finalized (including as the result of a protest or any right of appeal on a court ruling on a protest);
|
•
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changes in tax laws or tax rulings (including the recent comprehensive U.S. tax reform), or the examination of our tax positions;
|
•
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difficulty predicting what impact, if any, new tariffs imposed by and other trade actions taken by the U.S. and foreign jurisdictions could have on our business;
|
•
|
dependence on key employees;
|
•
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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 (including labor disputes), intellectual property, environmental laws and our strategic relationships;
|
•
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level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
|
•
|
inability to reduce or refinance our indebtedness;
|
•
|
restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;
|
•
|
influence of certain stockholders, including decisions that may conflict with the interests of other stockholders; and
|
•
|
stock price volatility.
|
|
Three Months Ended
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Nine Months Ended
|
||||||||||||
|
September 30,
|
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September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Services
|
$
|
438.9
|
|
|
$
|
386.7
|
|
|
$
|
1,314.5
|
|
|
$
|
1,135.0
|
|
Product sales
|
240.2
|
|
|
240.6
|
|
|
720.8
|
|
|
694.4
|
|
||||
Instant products
|
141.9
|
|
|
141.6
|
|
|
442.2
|
|
|
431.2
|
|
||||
Total revenue
|
821.0
|
|
|
768.9
|
|
|
2,477.5
|
|
|
2,260.6
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
124.4
|
|
|
105.5
|
|
|
370.5
|
|
|
307.7
|
|
||||
Cost of product sales
(1)
|
109.9
|
|
|
116.9
|
|
|
335.4
|
|
|
332.2
|
|
||||
Cost of instant products
(1)
|
67.0
|
|
|
68.4
|
|
|
208.0
|
|
|
209.8
|
|
||||
Selling, general and administrative
|
169.7
|
|
|
158.8
|
|
|
515.2
|
|
|
445.4
|
|
||||
Research and development
|
49.5
|
|
|
47.8
|
|
|
152.5
|
|
|
138.3
|
|
||||
Depreciation, amortization and impairments
|
166.3
|
|
|
173.1
|
|
|
527.1
|
|
|
513.2
|
|
||||
Restructuring and other
|
338.7
|
|
|
7.8
|
|
|
424.4
|
|
|
18.1
|
|
||||
Operating (loss) income
|
(204.5
|
)
|
|
90.6
|
|
|
(55.6
|
)
|
|
295.9
|
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(147.4
|
)
|
|
(148.9
|
)
|
|
(448.3
|
)
|
|
(459.5
|
)
|
||||
Earnings from equity investments
|
4.3
|
|
|
7.5
|
|
|
16.2
|
|
|
20.1
|
|
||||
Loss on debt financing transactions
|
—
|
|
|
(8.4
|
)
|
|
(93.2
|
)
|
|
(38.1
|
)
|
||||
(Loss) gain on remeasurement of debt
|
(4.0
|
)
|
|
—
|
|
|
29.4
|
|
|
—
|
|
||||
Other (expense) income, net
|
(0.4
|
)
|
|
(4.3
|
)
|
|
(1.9
|
)
|
|
1.3
|
|
||||
Total other expense, net
|
(147.5
|
)
|
|
(154.1
|
)
|
|
(497.8
|
)
|
|
(476.2
|
)
|
||||
Net loss before income taxes
|
(352.0
|
)
|
|
(63.5
|
)
|
|
(553.4
|
)
|
|
(180.3
|
)
|
||||
Income tax benefit (expense)
|
0.4
|
|
|
4.2
|
|
|
(5.8
|
)
|
|
(18.9
|
)
|
||||
Net loss
|
$
|
(351.6
|
)
|
|
$
|
(59.3
|
)
|
|
$
|
(559.2
|
)
|
|
$
|
(199.2
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation (loss) gain, net of tax
|
(8.5
|
)
|
|
73.4
|
|
|
(45.8
|
)
|
|
139.1
|
|
||||
Pension and post-retirement (loss) gain, net of tax
|
—
|
|
|
(1.3
|
)
|
|
0.3
|
|
|
(2.0
|
)
|
||||
Derivative financial instruments unrealized gain, net of tax
|
3.3
|
|
|
0.7
|
|
|
9.0
|
|
|
3.5
|
|
||||
Other comprehensive (loss) income
|
(5.2
|
)
|
|
72.8
|
|
|
(36.5
|
)
|
|
140.6
|
|
||||
Comprehensive (loss) income
|
$
|
(356.8
|
)
|
|
$
|
13.5
|
|
|
$
|
(595.7
|
)
|
|
$
|
(58.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
$
|
(3.85
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(6.15
|
)
|
|
$
|
(2.24
|
)
|
Diluted
|
$
|
(3.85
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(6.15
|
)
|
|
$
|
(2.24
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic shares
|
91.4
|
|
|
89.6
|
|
|
90.9
|
|
|
88.9
|
|
||||
Diluted shares
|
91.4
|
|
|
89.6
|
|
|
90.9
|
|
|
88.9
|
|
||||
(1) Exclusive of D&A.
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
113.5
|
|
|
$
|
788.8
|
|
Restricted cash
|
37.1
|
|
|
29.0
|
|
||
Accounts receivable, net
|
526.7
|
|
|
540.9
|
|
||
Notes receivable, net
|
124.4
|
|
|
143.5
|
|
||
Inventories
|
238.4
|
|
|
243.1
|
|
||
Prepaid expenses, deposits and other current assets
|
269.7
|
|
|
131.1
|
|
||
Total current assets
|
1,309.8
|
|
|
1,876.4
|
|
||
Non-current assets:
|
|
|
|
||||
Restricted cash
|
15.2
|
|
|
16.3
|
|
||
Notes receivable, net
|
40.2
|
|
|
52.8
|
|
||
Property and equipment, net
|
542.4
|
|
|
568.2
|
|
||
Goodwill
|
3,308.2
|
|
|
2,956.1
|
|
||
Intangible assets, net
|
1,725.7
|
|
|
1,604.6
|
|
||
Software, net
|
301.2
|
|
|
339.4
|
|
||
Equity investments
|
206.0
|
|
|
253.9
|
|
||
Other assets
|
80.2
|
|
|
57.6
|
|
||
Total assets
|
$
|
7,528.9
|
|
|
$
|
7,725.3
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
46.8
|
|
|
$
|
40.3
|
|
Accounts payable
|
215.4
|
|
|
190.4
|
|
||
Accrued liabilities
|
810.2
|
|
|
509.1
|
|
||
Total current liabilities
|
1,072.4
|
|
|
739.8
|
|
||
Deferred income taxes
|
140.0
|
|
|
73.1
|
|
||
Other long-term liabilities
|
200.1
|
|
|
203.1
|
|
||
Long-term debt, excluding current portion
|
8,735.0
|
|
|
8,736.3
|
|
||
Total liabilities
|
10,147.5
|
|
|
9,752.3
|
|
||
Commitments and contingencies (see Note 15)
|
|
|
|
|
|
||
Stockholders' deficit:
|
|
|
|
||||
Common stock, par value $0.001 per share
(1)
: 199.3 shares authorized; 108.6 and 107.1 shares issued and 91.4 and 89.9 shares outstanding, respectively
|
1.1
|
|
|
1.1
|
|
||
Additional paid-in capital
|
822.8
|
|
|
807.8
|
|
||
Accumulated loss
|
(3,031.1
|
)
|
|
(2,461.0
|
)
|
||
Treasury stock, at cost, 17.2 shares
|
(175.2
|
)
|
|
(175.2
|
)
|
||
Accumulated other comprehensive loss
|
(236.2
|
)
|
|
(199.7
|
)
|
||
Total stockholders' deficit
|
(2,618.6
|
)
|
|
(2,027.0
|
)
|
||
Total liabilities and stockholders' deficit
|
$
|
7,528.9
|
|
|
$
|
7,725.3
|
|
(1) Following the consummation of the reincorporation merger on January 10, 2018, each authorized, issued and outstanding share of Class A common stock of SGC, par value $0.01 per share, automatically converted into one share of common stock of the surviving corporation, par value $0.001 per share. The change in par value had no impact on total number of authorized, issued and outstanding shares.
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(559.2
|
)
|
|
$
|
(199.2
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities
|
678.0
|
|
|
589.4
|
|
||
Changes in working capital accounts, net of acquisitions
|
236.9
|
|
|
(6.0
|
)
|
||
Changes in deferred income taxes and other
|
0.2
|
|
|
4.8
|
|
||
Net cash provided by operating activities
|
355.9
|
|
|
389.0
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(293.1
|
)
|
|
(214.1
|
)
|
||
Acquisitions of businesses and assets, net of cash acquired
|
(274.1
|
)
|
|
(57.7
|
)
|
||
Distributions of capital from equity investments
|
24.6
|
|
|
23.9
|
|
||
Additions to equity method investments
|
(76.2
|
)
|
|
—
|
|
||
Other
|
—
|
|
|
10.0
|
|
||
Net cash used in
investing activities
|
(618.8
|
)
|
|
(237.9
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under revolving credit facility
|
185.0
|
|
|
125.0
|
|
||
Repayments under revolving credit facility
|
(490.0
|
)
|
|
(170.0
|
)
|
||
Proceeds from issuance of senior notes and term loans
|
2,512.4
|
|
|
1,762.4
|
|
||
Repayment of senior notes and term loans (inclusive of redemption premium)
|
(2,210.3
|
)
|
|
(1,693.4
|
)
|
||
Repayment of assumed NYX debt
|
(288.2
|
)
|
|
—
|
|
||
Payments on long-term debt
|
(26.7
|
)
|
|
(13.1
|
)
|
||
Payments of debt issuance and deferred financing costs
|
(38.5
|
)
|
|
(52.3
|
)
|
||
Payments on license obligations
|
(22.3
|
)
|
|
(29.0
|
)
|
||
Net redemptions of common stock under stock-based compensation plans and other
|
(24.3
|
)
|
|
(2.7
|
)
|
||
Net cash used in financing activities
|
(402.9
|
)
|
|
(73.1
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(2.5
|
)
|
|
4.8
|
|
||
(Decrease) increase in cash, cash equivalents and restricted cash
|
(668.3
|
)
|
|
82.8
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
834.1
|
|
|
156.9
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
165.8
|
|
|
$
|
239.7
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
441.8
|
|
|
$
|
423.1
|
|
Income taxes paid
|
24.9
|
|
|
27.8
|
|
||
Supplemental non-cash transactions:
|
|
|
|
||||
Non-cash rollover and refinancing of term loans (see Note 11)
|
3,274.6
|
|
|
6,030.4
|
|
||
Non-cash interest expense
|
18.8
|
|
|
17.4
|
|
||
Non-cash additions to intangible assets related to license agreements
|
—
|
|
|
28.1
|
|
||
NYX non-cash consideration transferred (inclusive of 2017 acquisition of ordinary shares) (see Note 1)
|
93.2
|
|
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30, 2018
|
||||||
Revenue
|
$
|
46.5
|
|
|
$
|
146.3
|
|
Net loss
|
10.9
|
|
|
26.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
||||||||
Revenue
|
$
|
821.0
|
|
|
$
|
814.5
|
|
|
$
|
2,477.5
|
|
|
$
|
2,393.8
|
|
Net loss
|
351.6
|
|
|
76.1
|
|
|
551.5
|
|
|
244.8
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gaming
|
|
|
|
|
|
|
|
||||||||
Gaming operations
|
$
|
159.2
|
|
|
$
|
176.0
|
|
|
$
|
480.5
|
|
|
$
|
526.8
|
|
Gaming machine sales
|
167.2
|
|
|
163.1
|
|
|
479.6
|
|
|
482.6
|
|
||||
Gaming systems
|
69.7
|
|
|
62.0
|
|
|
229.0
|
|
|
190.6
|
|
||||
Table products
|
51.8
|
|
|
53.5
|
|
|
172.5
|
|
|
151.8
|
|
||||
Total
|
$
|
447.9
|
|
|
$
|
454.6
|
|
|
$
|
1,361.6
|
|
|
$
|
1,351.8
|
|
|
|
|
|
|
|
|
|
||||||||
Lottery
|
|
|
|
|
|
|
|
||||||||
Instant products
|
$
|
142.0
|
|
|
$
|
142.7
|
|
|
$
|
442.3
|
|
|
$
|
435.7
|
|
Lottery systems
|
64.8
|
|
|
60.2
|
|
|
173.3
|
|
|
158.6
|
|
||||
Total
|
$
|
206.8
|
|
|
$
|
202.9
|
|
|
$
|
615.6
|
|
|
$
|
594.3
|
|
|
|
|
|
|
|
|
|
||||||||
Social
|
|
|
|
|
|
|
|
||||||||
Social gaming
|
$
|
105.1
|
|
|
$
|
95.1
|
|
|
$
|
302.2
|
|
|
$
|
266.4
|
|
|
|
|
|
|
|
|
|
||||||||
Digital
|
|
|
|
|
|
|
|
||||||||
Sports and platform
|
$
|
20.8
|
|
|
$
|
—
|
|
|
$
|
67.2
|
|
|
$
|
—
|
|
Gaming and other
|
40.4
|
|
|
16.3
|
|
|
130.9
|
|
|
48.1
|
|
||||
Total
|
$
|
61.2
|
|
|
$
|
16.3
|
|
|
$
|
198.1
|
|
|
$
|
48.1
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Current:
|
|
|
|
||||
Accounts receivable
|
$
|
541.2
|
|
|
$
|
551.5
|
|
Notes receivable
|
147.4
|
|
|
164.1
|
|
||
Allowance for doubtful accounts and notes
|
(37.5
|
)
|
|
(31.2
|
)
|
||
Current accounts and notes receivable, net
|
$
|
651.1
|
|
|
$
|
684.4
|
|
Long-term:
|
|
|
|
||||
Notes receivable, net of allowance of $0.1 and $0.2
|
40.2
|
|
|
52.8
|
|
||
Total accounts and notes receivable, net
|
$
|
691.3
|
|
|
$
|
737.2
|
|
•
|
Mexico - Our notes receivable, net, from certain customers in Mexico at
September 30, 2018
was
$25.5 million
. We collected
$25.3 million
of outstanding receivables from these customers during the nine months ended
September 30, 2018
.
|
•
|
Peru - Our notes receivable, net, from certain customers in Peru at
September 30, 2018
was
$16.9 million
. We collected
$9.2 million
of outstanding receivables from these customers during the nine months ended
September 30, 2018
.
|
•
|
Argentina - Our notes receivable, net, from customers in Argentina at
September 30, 2018
was
$21.4 million
denominated in USD. Our customers are required to, and have continued to, pay us in pesos at the spot exchange rate on the date of payment. We collected
$24.8 million
of outstanding receivables from customers in Argentina during the nine months ended
September 30, 2018
.
|
|
September 30, 2018
|
|
Balances over 90 days past due
|
|
December 31, 2017
|
|
Balances over 90 days past due
|
||||||||
Notes receivable:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
70.2
|
|
|
$
|
3.5
|
|
|
$
|
93.5
|
|
|
$
|
9.2
|
|
International
|
117.4
|
|
|
25.2
|
|
|
123.6
|
|
|
33.2
|
|
||||
Total notes receivable
|
187.6
|
|
|
28.7
|
|
|
217.1
|
|
|
42.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable allowance
|
|
|
|
|
|
|
|
||||||||
Domestic
|
(5.1
|
)
|
|
(5.1
|
)
|
|
(4.0
|
)
|
|
(4.0
|
)
|
||||
International
|
(18.0
|
)
|
|
(18.0
|
)
|
|
(16.8
|
)
|
|
(16.8
|
)
|
||||
Total notes receivable allowance
|
(23.1
|
)
|
|
(23.1
|
)
|
|
(20.8
|
)
|
|
(20.8
|
)
|
||||
Notes receivable, net
|
$
|
164.5
|
|
|
$
|
5.6
|
|
|
$
|
196.3
|
|
|
$
|
21.6
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Beginning allowance for notes receivable
|
|
$
|
(20.8
|
)
|
|
$
|
(15.0
|
)
|
Provision
|
|
(3.9
|
)
|
|
(4.8
|
)
|
||
Charge-offs and recoveries
|
|
1.6
|
|
|
1.2
|
|
||
Ending allowance for notes receivable
|
|
$
|
(23.1
|
)
|
|
$
|
(18.6
|
)
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Parts and work-in-process
|
|
$
|
147.3
|
|
|
$
|
128.7
|
|
Finished goods
|
|
91.1
|
|
|
114.4
|
|
||
Total inventories
|
|
$
|
238.4
|
|
|
$
|
243.1
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Land
|
$
|
20.4
|
|
|
$
|
35.7
|
|
Buildings and leasehold improvements
|
125.6
|
|
|
183.6
|
|
||
Gaming and lottery machinery and equipment
|
1,029.7
|
|
|
962.2
|
|
||
Furniture and fixtures
|
30.3
|
|
|
33.2
|
|
||
Construction in progress
|
22.2
|
|
|
27.7
|
|
||
Other property and equipment
|
245.9
|
|
|
236.9
|
|
||
Less: accumulated depreciation
|
(931.7
|
)
|
|
(911.1
|
)
|
||
Total property and equipment, net
|
$
|
542.4
|
|
|
$
|
568.2
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Depreciation expense
|
$
|
51.2
|
|
|
$
|
69.0
|
|
|
$
|
159.0
|
|
|
$
|
205.9
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Balance
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
1,083.6
|
|
|
$
|
(278.7
|
)
|
|
$
|
804.9
|
|
|
$
|
881.4
|
|
|
$
|
(214.8
|
)
|
|
$
|
666.6
|
|
Intellectual property
|
919.3
|
|
|
(427.5
|
)
|
|
491.8
|
|
|
788.1
|
|
|
(332.7
|
)
|
|
455.4
|
|
||||||
Licenses
|
421.4
|
|
|
(251.6
|
)
|
|
169.8
|
|
|
419.5
|
|
|
(206.9
|
)
|
|
212.6
|
|
||||||
Brand names
|
124.1
|
|
|
(56.2
|
)
|
|
67.9
|
|
|
125.7
|
|
|
(46.5
|
)
|
|
79.2
|
|
||||||
Trade names
|
107.8
|
|
|
(20.6
|
)
|
|
87.2
|
|
|
98.7
|
|
|
(14.7
|
)
|
|
84.0
|
|
||||||
Patents and other
|
23.2
|
|
|
(13.3
|
)
|
|
9.9
|
|
|
27.1
|
|
|
(14.5
|
)
|
|
12.6
|
|
||||||
|
2,679.4
|
|
|
(1,047.9
|
)
|
|
1,631.5
|
|
|
2,340.5
|
|
|
(830.1
|
)
|
|
1,510.4
|
|
||||||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
96.3
|
|
|
(2.1
|
)
|
|
94.2
|
|
|
96.3
|
|
|
(2.1
|
)
|
|
94.2
|
|
||||||
Total intangible assets
|
$
|
2,775.7
|
|
|
$
|
(1,050.0
|
)
|
|
$
|
1,725.7
|
|
|
$
|
2,436.8
|
|
|
$
|
(832.2
|
)
|
|
$
|
1,604.6
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Amortization expense
|
$
|
72.9
|
|
|
$
|
62.3
|
|
|
$
|
225.6
|
|
|
$
|
193.1
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Software
|
|
$
|
1,083.0
|
|
|
$
|
1,003.2
|
|
Accumulated amortization
|
|
(781.8
|
)
|
|
(663.8
|
)
|
||
Software, net
|
|
$
|
301.2
|
|
|
$
|
339.4
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Amortization expense
|
|
$
|
42.2
|
|
|
$
|
41.8
|
|
|
$
|
123.5
|
|
|
$
|
114.2
|
|
|
|
As of
|
|||||||||||||||||||
|
|
September 30, 2018
|
|
December 31, 2017
|
|||||||||||||||||
|
|
Final Maturity
|
|
Rate(s)
|
|
Face value
|
|
Unamortized debt discount/premium and deferred financing costs, net
|
|
Book value
|
|
Book value
|
|||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2018 Revolver, varying interest rate
|
|
2018
|
|
variable
|
|
|
$
|
12.2
|
|
|
$
|
—
|
|
|
$
|
12.2
|
|
|
$
|
100.5
|
|
2020 Revolver, varying interest rate
|
|
2020
|
|
variable
|
|
|
32.8
|
|
|
—
|
|
|
32.8
|
|
|
249.5
|
|
||||
Term Loan B-4
|
|
2024
|
|
variable
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,193.6
|
|
||||
Term Loan B-5
|
|
2024
|
|
variable
|
|
|
4,153.7
|
|
|
(75.2
|
)
|
|
4,078.5
|
|
|
—
|
|
||||
Senior Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2022 Secured Notes
|
|
2022
|
|
7.000
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,130.7
|
|
||||
2025 Secured Notes
(2)
|
|
2025
|
|
5.000
|
%
|
|
1,250.0
|
|
|
(18.0
|
)
|
|
1,232.0
|
|
|
343.7
|
|
||||
2026 Secured Euro Notes
(3)
|
|
2026
|
|
3.375
|
%
|
|
382.2
|
|
|
(5.5
|
)
|
|
376.7
|
|
|
—
|
|
||||
Unsecured Notes
|
|
2022
|
|
10.000
|
%
|
|
2,200.0
|
|
|
(25.4
|
)
|
|
2,174.6
|
|
|
2,170.1
|
|
||||
2026 Unsecured Euro Notes
(3)
|
|
2026
|
|
5.500
|
%
|
|
294.0
|
|
|
(4.3
|
)
|
|
289.7
|
|
|
—
|
|
||||
Subordinated Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2020 Notes
|
|
2020
|
|
6.250
|
%
|
|
243.5
|
|
|
(1.2
|
)
|
|
242.3
|
|
|
241.8
|
|
||||
2021 Notes
|
|
2021
|
|
6.625
|
%
|
|
340.6
|
|
|
(3.6
|
)
|
|
337.0
|
|
|
336.0
|
|
||||
Capital lease obligations as of September 30, 2018 payable monthly through 2019
|
|
2019
|
|
3.900
|
%
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
|
10.7
|
|
||||
Total long-term debt outstanding
|
|
|
|
|
|
$
|
8,915.0
|
|
|
$
|
(133.2
|
)
|
|
$
|
8,781.8
|
|
|
$
|
8,776.6
|
|
|
Less: current portion of long-term debt
|
|
|
|
|
|
|
|
|
|
(46.8
|
)
|
|
(40.3
|
)
|
|||||||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
|
|
$
|
8,735.0
|
|
|
$
|
8,736.3
|
|
|||||
Fair value of debt
(1)
|
|
|
|
|
|
$
|
8,935.0
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Repayment and cancellation of principal balance at premium
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
110.3
|
|
|
$
|
—
|
|
Unamortized debt (premium) discount and deferred financing costs, net
|
—
|
|
|
0.6
|
|
|
(29.8
|
)
|
|
26.4
|
|
||||
Third party debt issuance fees
|
—
|
|
|
7.8
|
|
|
12.7
|
|
|
11.7
|
|
||||
Total loss on debt financing transactions
|
$
|
—
|
|
|
$
|
8.4
|
|
|
$
|
93.2
|
|
|
$
|
38.1
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gains recorded in accumulated other comprehensive loss, net of tax
|
|
$
|
3.3
|
|
|
$
|
0.8
|
|
|
$
|
9.0
|
|
|
$
|
3.6
|
|
Interest expense recorded related to interest rate swap contracts
|
|
0.7
|
|
|
1.7
|
|
|
2.3
|
|
|
5.8
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
September 30,
|
|
September 30,
|
||||
|
|
2018
|
|
2018
|
||||
|
|
Interest expense
|
||||||
Total amounts of expense line item presented in the statements of operations and comprehensive loss in which the effects of cash flow hedges are recorded
|
|
$
|
(147.4
|
)
|
|
$
|
(448.3
|
)
|
Hedged item
|
|
(4.9
|
)
|
|
(11.5
|
)
|
||
Derivative designated as hedging instrument
|
|
4.2
|
|
|
9.2
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Related to stock options
|
|
$
|
2.1
|
|
|
$
|
1.1
|
|
|
$
|
10.8
|
|
|
$
|
2.6
|
|
Related to RSUs
|
|
7.3
|
|
|
6.4
|
|
|
23.0
|
|
|
17.9
|
|
||||
Total
|
|
$
|
9.4
|
|
|
$
|
7.5
|
|
|
$
|
33.8
|
|
|
$
|
20.5
|
|
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
38.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79.9
|
|
|
$
|
(5.0
|
)
|
|
$
|
113.5
|
|
Restricted cash
|
|
—
|
|
|
0.6
|
|
|
31.0
|
|
|
5.5
|
|
|
—
|
|
|
37.1
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
58.0
|
|
|
189.3
|
|
|
279.4
|
|
|
—
|
|
|
526.7
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
109.6
|
|
|
14.8
|
|
|
—
|
|
|
124.4
|
|
||||||
Inventories
|
|
—
|
|
|
39.0
|
|
|
88.7
|
|
|
130.7
|
|
|
(20.0
|
)
|
|
238.4
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
12.6
|
|
|
76.8
|
|
|
102.0
|
|
|
78.1
|
|
|
0.2
|
|
|
269.7
|
|
||||||
Property and equipment, net
|
|
32.4
|
|
|
112.1
|
|
|
232.6
|
|
|
196.5
|
|
|
(31.2
|
)
|
|
542.4
|
|
||||||
Investment in subsidiaries
|
|
2,996.9
|
|
|
950.0
|
|
|
1,025.7
|
|
|
—
|
|
|
(4,972.6
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
240.2
|
|
|
1,886.1
|
|
|
1,181.9
|
|
|
—
|
|
|
3,308.2
|
|
||||||
Intangible assets, net
|
|
10.8
|
|
|
34.3
|
|
|
1,199.4
|
|
|
481.2
|
|
|
—
|
|
|
1,725.7
|
|
||||||
Intercompany balances
|
|
—
|
|
|
5,812.7
|
|
|
27.8
|
|
|
—
|
|
|
(5,840.5
|
)
|
|
—
|
|
||||||
Software, net
|
|
61.9
|
|
|
38.1
|
|
|
142.7
|
|
|
58.5
|
|
|
—
|
|
|
301.2
|
|
||||||
Other assets
(2)
|
|
234.2
|
|
|
413.1
|
|
|
48.2
|
|
|
228.7
|
|
|
(582.6
|
)
|
|
341.6
|
|
||||||
Total assets
|
|
$
|
3,387.4
|
|
|
$
|
7,774.9
|
|
|
$
|
5,083.1
|
|
|
$
|
2,735.2
|
|
|
$
|
(11,451.7
|
)
|
|
$
|
7,528.9
|
|
Liabilities and stockholders' (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
41.8
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
46.8
|
|
Other current liabilities
|
|
417.6
|
|
|
195.5
|
|
|
200.4
|
|
|
249.0
|
|
|
(36.9
|
)
|
|
1,025.6
|
|
||||||
Long-term debt, excluding current portion
|
|
—
|
|
|
8,734.1
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
8,735.0
|
|
||||||
Other long-term liabilities
|
|
93.4
|
|
|
8.7
|
|
|
610.3
|
|
|
197.6
|
|
|
(569.9
|
)
|
|
340.1
|
|
||||||
Intercompany balances
|
|
5,495.0
|
|
|
—
|
|
|
—
|
|
|
345.5
|
|
|
(5,840.5
|
)
|
|
—
|
|
||||||
Stockholders' (deficit) equity
|
|
(2,618.6
|
)
|
|
(1,205.2
|
)
|
|
4,272.4
|
|
|
1,937.2
|
|
|
(5,004.4
|
)
|
|
(2,618.6
|
)
|
||||||
Total liabilities and stockholders' (deficit) equity
|
|
$
|
3,387.4
|
|
|
$
|
7,774.9
|
|
|
$
|
5,083.1
|
|
|
$
|
2,735.2
|
|
|
$
|
(11,451.7
|
)
|
|
$
|
7,528.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
(2) Includes $14.5 million and $0.7 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively. |
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
732.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59.4
|
|
|
$
|
(3.2
|
)
|
|
$
|
788.8
|
|
Restricted cash
|
|
—
|
|
|
0.6
|
|
|
28.3
|
|
|
0.1
|
|
|
—
|
|
|
29.0
|
|
||||||
Accounts receivable, net
|
|
0.4
|
|
|
68.1
|
|
|
192.6
|
|
|
279.8
|
|
|
—
|
|
|
540.9
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
121.1
|
|
|
22.4
|
|
|
—
|
|
|
143.5
|
|
||||||
Inventories
|
|
—
|
|
|
40.7
|
|
|
91.8
|
|
|
131.8
|
|
|
(21.2
|
)
|
|
243.1
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
6.5
|
|
|
30.3
|
|
|
41.6
|
|
|
52.7
|
|
|
—
|
|
|
131.1
|
|
||||||
Property and equipment, net
|
|
28.8
|
|
|
91.5
|
|
|
295.6
|
|
|
179.9
|
|
|
(27.6
|
)
|
|
568.2
|
|
||||||
Investment in subsidiaries
|
|
3,098.7
|
|
|
867.9
|
|
|
987.7
|
|
|
—
|
|
|
(4,954.3
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
240.3
|
|
|
1,880.4
|
|
|
835.4
|
|
|
—
|
|
|
2,956.1
|
|
||||||
Intangible assets, net
|
|
15.7
|
|
|
34.9
|
|
|
1,335.3
|
|
|
218.7
|
|
|
—
|
|
|
1,604.6
|
|
||||||
Intercompany balances
|
|
—
|
|
|
5,889.8
|
|
|
—
|
|
|
222.5
|
|
|
(6,112.3
|
)
|
|
—
|
|
||||||
Software, net
|
|
67.2
|
|
|
24.7
|
|
|
199.0
|
|
|
48.5
|
|
|
—
|
|
|
339.4
|
|
||||||
Other assets
(2)
|
|
234.4
|
|
|
388.8
|
|
|
62.0
|
|
|
270.3
|
|
|
(574.9
|
)
|
|
380.6
|
|
||||||
Total assets
|
|
$
|
4,184.3
|
|
|
$
|
7,677.6
|
|
|
$
|
5,235.4
|
|
|
$
|
2,321.5
|
|
|
$
|
(11,693.5
|
)
|
|
$
|
7,725.3
|
|
Liabilities and stockholders' (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
32.8
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
|
$
|
—
|
|
|
$
|
40.3
|
|
Other current liabilities
|
|
67.6
|
|
|
199.0
|
|
|
254.2
|
|
|
206.4
|
|
|
(27.7
|
)
|
|
699.5
|
|
||||||
Long-term debt, excluding current portion
|
|
—
|
|
|
8,733.0
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
8,736.3
|
|
||||||
Other long-term liabilities
|
|
68.8
|
|
|
11.3
|
|
|
650.3
|
|
|
110.9
|
|
|
(565.1
|
)
|
|
276.2
|
|
||||||
Intercompany balances
|
|
6,074.9
|
|
|
—
|
|
|
37.4
|
|
|
—
|
|
|
(6,112.3
|
)
|
|
—
|
|
||||||
Stockholders' (deficit) equity
|
|
(2,027.0
|
)
|
|
(1,298.5
|
)
|
|
4,293.5
|
|
|
1,993.4
|
|
|
(4,988.4
|
)
|
|
(2,027.0
|
)
|
||||||
Total liabilities and stockholders' (deficit) equity
|
|
$
|
4,184.3
|
|
|
$
|
7,677.6
|
|
|
$
|
5,235.4
|
|
|
$
|
2,321.5
|
|
|
$
|
(11,693.5
|
)
|
|
$
|
7,725.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, the 2025 Secured Notes and the Unsecured Notes.
(2) Includes $16.1 million and $0.7 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively. |
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
138.4
|
|
|
$
|
404.3
|
|
|
$
|
361.3
|
|
|
$
|
(83.0
|
)
|
|
$
|
821.0
|
|
Cost of services, cost of product sales and cost of instant products
(2)
|
|
—
|
|
|
90.4
|
|
|
119.1
|
|
|
159.7
|
|
|
(67.9
|
)
|
|
301.3
|
|
||||||
SG&A
|
|
38.3
|
|
|
12.1
|
|
|
57.1
|
|
|
76.2
|
|
|
(14.0
|
)
|
|
169.7
|
|
||||||
R&D
|
|
—
|
|
|
0.2
|
|
|
21.3
|
|
|
28.0
|
|
|
—
|
|
|
49.5
|
|
||||||
D&A
|
|
10.8
|
|
|
8.7
|
|
|
105.9
|
|
|
44.9
|
|
|
(4.0
|
)
|
|
166.3
|
|
||||||
Restructuring and other
|
|
318.5
|
|
|
2.8
|
|
|
4.2
|
|
|
13.2
|
|
|
—
|
|
|
338.7
|
|
||||||
Operating (loss) income
|
|
(367.6
|
)
|
|
24.2
|
|
|
96.7
|
|
|
39.3
|
|
|
2.9
|
|
|
(204.5
|
)
|
||||||
Interest expense
|
|
—
|
|
|
(147.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(147.4
|
)
|
||||||
Gain on remeasurement of debt
|
|
—
|
|
|
(4.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
||||||
Other income (expense), net
|
|
16.3
|
|
|
129.7
|
|
|
(122.8
|
)
|
|
(19.3
|
)
|
|
—
|
|
|
3.9
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(351.3
|
)
|
|
2.5
|
|
|
(26.1
|
)
|
|
20.0
|
|
|
2.9
|
|
|
(352.0
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(1.7
|
)
|
|
4.3
|
|
|
(10.1
|
)
|
|
—
|
|
|
7.5
|
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
1.4
|
|
|
(0.6
|
)
|
|
5.5
|
|
|
(5.9
|
)
|
|
—
|
|
|
0.4
|
|
||||||
Net (loss) income
|
|
$
|
(351.6
|
)
|
|
$
|
6.2
|
|
|
$
|
(30.7
|
)
|
|
$
|
14.1
|
|
|
$
|
10.4
|
|
|
$
|
(351.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(5.2
|
)
|
|
11.2
|
|
|
(9.6
|
)
|
|
(2.0
|
)
|
|
0.4
|
|
|
(5.2
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(356.8
|
)
|
|
$
|
17.4
|
|
|
$
|
(40.3
|
)
|
|
$
|
12.1
|
|
|
$
|
10.8
|
|
|
$
|
(356.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
(2) Exclusive of D&A.
|
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
129.3
|
|
|
$
|
400.0
|
|
|
$
|
311.6
|
|
|
$
|
(72.0
|
)
|
|
$
|
768.9
|
|
Cost of services, cost of product sales and cost of instant products
(2)
|
|
—
|
|
|
88.1
|
|
|
120.7
|
|
|
152.7
|
|
|
(70.7
|
)
|
|
290.8
|
|
||||||
SG&A
|
|
30.8
|
|
|
11.1
|
|
|
60.9
|
|
|
70.1
|
|
|
(14.1
|
)
|
|
158.8
|
|
||||||
R&D
|
|
0.5
|
|
|
2.6
|
|
|
26.0
|
|
|
18.7
|
|
|
—
|
|
|
47.8
|
|
||||||
D&A
|
|
22.3
|
|
|
8.8
|
|
|
111.6
|
|
|
33.5
|
|
|
(3.1
|
)
|
|
173.1
|
|
||||||
Restructuring and other
|
|
7.0
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
0.8
|
|
|
—
|
|
|
7.8
|
|
||||||
Operating (loss) income
|
|
(60.6
|
)
|
|
18.8
|
|
|
80.7
|
|
|
35.8
|
|
|
15.9
|
|
|
90.6
|
|
||||||
Interest expense
|
|
(0.1
|
)
|
|
(148.5
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(148.9
|
)
|
||||||
Loss on debt financing transactions
|
|
—
|
|
|
(8.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.4
|
)
|
||||||
Other (expense) income, net
|
|
(21.2
|
)
|
|
59.4
|
|
|
(14.5
|
)
|
|
(20.5
|
)
|
|
—
|
|
|
3.2
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(81.9
|
)
|
|
(78.7
|
)
|
|
66.2
|
|
|
15.0
|
|
|
15.9
|
|
|
(63.5
|
)
|
||||||
Equity in income of subsidiaries
|
|
26.1
|
|
|
22.5
|
|
|
15.5
|
|
|
—
|
|
|
(64.1
|
)
|
|
—
|
|
||||||
Income tax (expense) benefit
|
|
(3.5
|
)
|
|
29.4
|
|
|
(31.0
|
)
|
|
9.3
|
|
|
—
|
|
|
4.2
|
|
||||||
Net (loss) income
|
|
$
|
(59.3
|
)
|
|
$
|
(26.8
|
)
|
|
$
|
50.7
|
|
|
$
|
24.3
|
|
|
$
|
(48.2
|
)
|
|
$
|
(59.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income
|
|
72.8
|
|
|
4.6
|
|
|
53.2
|
|
|
67.0
|
|
|
(124.8
|
)
|
|
72.8
|
|
||||||
Comprehensive income (loss)
|
|
$
|
13.5
|
|
|
$
|
(22.2
|
)
|
|
$
|
103.9
|
|
|
$
|
91.3
|
|
|
$
|
(173.0
|
)
|
|
$
|
13.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes and the 2025 Secured Notes, which were issued in October 2017.
(2) Exclusive of D&A.
|
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
404.0
|
|
|
$
|
1,195.6
|
|
|
$
|
1,106.5
|
|
|
$
|
(228.6
|
)
|
|
$
|
2,477.5
|
|
Cost of services, cost of product sales and cost of instant products
(2)
|
|
—
|
|
|
263.0
|
|
|
368.9
|
|
|
472.0
|
|
|
(190.0
|
)
|
|
913.9
|
|
||||||
SG&A
|
|
119.4
|
|
|
32.1
|
|
|
166.0
|
|
|
237.6
|
|
|
(39.9
|
)
|
|
515.2
|
|
||||||
R&D
|
|
—
|
|
|
1.1
|
|
|
66.1
|
|
|
85.3
|
|
|
—
|
|
|
152.5
|
|
||||||
D&A
|
|
31.9
|
|
|
23.7
|
|
|
339.4
|
|
|
142.8
|
|
|
(10.7
|
)
|
|
527.1
|
|
||||||
Restructuring and other
|
|
374.8
|
|
|
0.2
|
|
|
7.4
|
|
|
42.0
|
|
|
—
|
|
|
424.4
|
|
||||||
Operating (loss) income
|
|
(526.1
|
)
|
|
83.9
|
|
|
247.8
|
|
|
126.8
|
|
|
12.0
|
|
|
(55.6
|
)
|
||||||
Interest expense
|
|
—
|
|
|
(447.9
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(448.3
|
)
|
||||||
Loss on debt financing transactions
|
|
—
|
|
|
(93.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93.2
|
)
|
||||||
Gain on remeasurement of debt
|
|
—
|
|
|
29.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29.4
|
|
||||||
Other income (expense), net
|
|
48.8
|
|
|
398.8
|
|
|
(374.8
|
)
|
|
(58.5
|
)
|
|
—
|
|
|
14.3
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(477.3
|
)
|
|
(29.0
|
)
|
|
(127.0
|
)
|
|
67.9
|
|
|
12.0
|
|
|
(553.4
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(59.8
|
)
|
|
21.6
|
|
|
(16.9
|
)
|
|
—
|
|
|
55.1
|
|
|
—
|
|
||||||
Income tax (expense) benefit
|
|
(22.1
|
)
|
|
6.9
|
|
|
26.9
|
|
|
(17.5
|
)
|
|
—
|
|
|
(5.8
|
)
|
||||||
Net (loss) income
|
|
$
|
(559.2
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(117.0
|
)
|
|
$
|
50.4
|
|
|
$
|
67.1
|
|
|
$
|
(559.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(36.5
|
)
|
|
23.4
|
|
|
(23.0
|
)
|
|
(47.9
|
)
|
|
47.5
|
|
|
(36.5
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(595.7
|
)
|
|
$
|
22.9
|
|
|
$
|
(140.0
|
)
|
|
$
|
2.5
|
|
|
$
|
114.6
|
|
|
$
|
(595.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
(2) Exclusive of D&A.
|
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
375.6
|
|
|
$
|
1,220.3
|
|
|
$
|
861.0
|
|
|
$
|
(196.3
|
)
|
|
$
|
2,260.6
|
|
Cost of services, cost of product sales and cost of instant products
(2)
|
|
—
|
|
|
257.8
|
|
|
373.4
|
|
|
410.1
|
|
|
(191.6
|
)
|
|
849.7
|
|
||||||
SG&A
|
|
89.7
|
|
|
29.1
|
|
|
178.6
|
|
|
184.6
|
|
|
(36.6
|
)
|
|
445.4
|
|
||||||
R&D
|
|
1.7
|
|
|
6.4
|
|
|
77.1
|
|
|
53.1
|
|
|
—
|
|
|
138.3
|
|
||||||
D&A
|
|
59.5
|
|
|
24.3
|
|
|
346.3
|
|
|
90.9
|
|
|
(7.8
|
)
|
|
513.2
|
|
||||||
Restructuring and other
|
|
12.3
|
|
|
0.4
|
|
|
3.2
|
|
|
2.2
|
|
|
—
|
|
|
18.1
|
|
||||||
Operating (loss) income
|
|
(163.2
|
)
|
|
57.6
|
|
|
241.7
|
|
|
120.1
|
|
|
39.7
|
|
|
295.9
|
|
||||||
Interest expense
|
|
(4.4
|
)
|
|
(454.2
|
)
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(459.5
|
)
|
||||||
Loss on debt financing transactions
|
|
(1.1
|
)
|
|
(37.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.1
|
)
|
||||||
Other (expense) income, net
|
|
(60.1
|
)
|
|
161.8
|
|
|
(71.0
|
)
|
|
(9.3
|
)
|
|
—
|
|
|
21.4
|
|
||||||
Net (loss) income before equity in income of subsidiaries and income taxes
|
|
(228.8
|
)
|
|
(271.8
|
)
|
|
170.7
|
|
|
109.9
|
|
|
39.7
|
|
|
(180.3
|
)
|
||||||
Equity in income of subsidiaries
|
|
49.6
|
|
|
54.4
|
|
|
37.0
|
|
|
—
|
|
|
(141.0
|
)
|
|
—
|
|
||||||
Income tax (expense) benefit
|
|
(20.0
|
)
|
|
101.7
|
|
|
(79.0
|
)
|
|
(21.6
|
)
|
|
—
|
|
|
(18.9
|
)
|
||||||
Net (loss) income
|
|
$
|
(199.2
|
)
|
|
$
|
(115.7
|
)
|
|
$
|
128.7
|
|
|
$
|
88.3
|
|
|
$
|
(101.3
|
)
|
|
$
|
(199.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income
|
|
140.6
|
|
|
8.9
|
|
|
119.4
|
|
|
126.7
|
|
|
(255.0
|
)
|
|
140.6
|
|
||||||
Comprehensive (loss) income
|
|
$
|
(58.6
|
)
|
|
$
|
(106.8
|
)
|
|
$
|
248.1
|
|
|
$
|
215.0
|
|
|
$
|
(356.3
|
)
|
|
$
|
(58.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes and the 2025 Secured Notes, which were issued in October 2017.
(2) Exclusive of D&A.
|
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(56.4
|
)
|
|
$
|
29.6
|
|
|
$
|
153.0
|
|
|
$
|
231.5
|
|
|
$
|
(1.8
|
)
|
|
$
|
355.9
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
|
(30.3
|
)
|
|
(56.6
|
)
|
|
(121.9
|
)
|
|
(84.3
|
)
|
|
—
|
|
|
(293.1
|
)
|
||||||
Acquisitions of businesses and assets, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(9.6
|
)
|
|
(264.5
|
)
|
|
—
|
|
|
(274.1
|
)
|
||||||
Distributions of capital from equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.6
|
|
|
—
|
|
|
24.6
|
|
||||||
Additions to equity method investments
|
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
(74.3
|
)
|
|
—
|
|
|
(76.2
|
)
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
91.3
|
|
|
(15.5
|
)
|
|
—
|
|
|
(75.8
|
)
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(30.3
|
)
|
|
32.8
|
|
|
(147.0
|
)
|
|
(398.5
|
)
|
|
(75.8
|
)
|
|
(618.8
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payments on long-term debt, net of proceeds
|
|
—
|
|
|
(23.9
|
)
|
|
—
|
|
|
(5.7
|
)
|
|
—
|
|
|
(29.6
|
)
|
||||||
Repayment of assumed NYX debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(288.2
|
)
|
|
—
|
|
|
(288.2
|
)
|
||||||
Payments of debt issuance and deferred financing costs
|
|
—
|
|
|
(38.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.5
|
)
|
||||||
Payments on license obligations
|
|
(20.4
|
)
|
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|
(22.3
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans and other
|
|
(21.8
|
)
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
(24.3
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
(565.1
|
)
|
|
—
|
|
|
—
|
|
|
489.3
|
|
|
75.8
|
|
|
—
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(607.3
|
)
|
|
(62.4
|
)
|
|
(4.4
|
)
|
|
195.4
|
|
|
75.8
|
|
|
(402.9
|
)
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
||||||
(Decrease) increase in cash, cash equivalents and restricted cash
|
|
(694.0
|
)
|
|
—
|
|
|
1.6
|
|
|
25.9
|
|
|
(1.8
|
)
|
|
(668.3
|
)
|
||||||
Cash, cash equivalents and restricted cash, beginning of period
|
|
732.6
|
|
|
0.6
|
|
|
43.9
|
|
|
60.2
|
|
|
(3.2
|
)
|
|
834.1
|
|
||||||
Cash, cash equivalents and restricted cash end of period
|
|
$
|
38.6
|
|
|
$
|
0.6
|
|
|
$
|
45.5
|
|
|
$
|
86.1
|
|
|
$
|
(5.0
|
)
|
|
$
|
165.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018.
|
|
|
SGC (Parent)
|
|
SGI (Issuer
1
)
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(162.6
|
)
|
|
$
|
(169.9
|
)
|
|
$
|
471.5
|
|
|
$
|
254.3
|
|
|
$
|
(4.3
|
)
|
|
$
|
389.0
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
|
(42.0
|
)
|
|
(13.6
|
)
|
|
(96.4
|
)
|
|
(62.1
|
)
|
|
—
|
|
|
(214.1
|
)
|
||||||
Acquisition of business, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(26.3
|
)
|
|
(31.4
|
)
|
|
—
|
|
|
(57.7
|
)
|
||||||
Distributions of capital from equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.9
|
|
|
—
|
|
|
23.9
|
|
||||||
Changes in other assets and liabilities and other
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
2.5
|
|
|
—
|
|
|
10.0
|
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
(27.7
|
)
|
|
—
|
|
|
(208.4
|
)
|
|
236.1
|
|
|
—
|
|
||||||
Net cash used in investing activities
|
|
(42.0
|
)
|
|
(41.3
|
)
|
|
(115.2
|
)
|
|
(275.5
|
)
|
|
236.1
|
|
|
(237.9
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans
|
|
(250.0
|
)
|
|
265.7
|
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
10.9
|
|
||||||
Payments of debt issuance and deferred financing costs
|
|
—
|
|
|
(52.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52.3
|
)
|
||||||
Payments on license obligations
|
|
(24.3
|
)
|
|
—
|
|
|
(4.7
|
)
|
|
—
|
|
|
—
|
|
|
(29.0
|
)
|
||||||
Net redemptions of common stock under stock-based compensation plans
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
586.2
|
|
|
—
|
|
|
(350.1
|
)
|
|
—
|
|
|
(236.1
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
309.2
|
|
|
213.4
|
|
|
(354.8
|
)
|
|
(4.8
|
)
|
|
(236.1
|
)
|
|
(73.1
|
)
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
4.8
|
|
||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
104.6
|
|
|
2.2
|
|
|
1.5
|
|
|
(21.2
|
)
|
|
(4.3
|
)
|
|
82.8
|
|
||||||
Cash, cash equivalents and restricted cash, beginning of period
|
|
32.7
|
|
|
1.7
|
|
|
41.0
|
|
|
82.6
|
|
|
(1.1
|
)
|
|
156.9
|
|
||||||
Cash, cash equivalents and restricted cash end of period
|
|
$
|
137.3
|
|
|
$
|
3.9
|
|
|
$
|
42.5
|
|
|
$
|
61.4
|
|
|
$
|
(5.4
|
)
|
|
$
|
239.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes and the 2025 Secured Notes, which were issued in October 2017.
|
•
|
During the third quarter of 2018, we successfully launched our sports betting platform with Caesars Entertainment in multiple jurisdictions.
|
•
|
In August 2018, the jury returned a verdict for the plaintiffs in the Shuffle Tech Matter described in Note 15. We have sought review in the trial court of both the finding of liability and the damages award, and, if necessary, will also do so on appeal (see Note 15 and “Liquidity, Capital Resources and Working Capital - Cash and Available Revolver Capacity" below).
|
•
|
On October 18, 2018, we increased the amount of our existing revolving credit agreement by
$50.0 million
to
$495.7 million
until the extended maturity on October 18, 2020.
|
•
|
In November 2018, we acquired Don Best, a leading global supplier of real-time betting data and pricing for North American sporting events (see Note 1), which will allow us to broaden our portfolio of U.S. sports betting industry services.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||
($ in millions)
|
Revenue
|
|
% Consolidated Revenue
|
|
Revenue
|
|
% Consolidated Revenue
|
|
Revenue
|
|
% Consolidated Revenue
|
|
Revenue
|
|
% Consolidated Revenue
|
||||||||||||
Foreign Currency:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
British Pound Sterling
|
$
|
71.6
|
|
|
8.7
|
%
|
|
$
|
56.0
|
|
|
7.3
|
%
|
|
$
|
234.8
|
|
|
9.5
|
%
|
|
$
|
158.1
|
|
|
7.0
|
%
|
Euro
|
55.3
|
|
|
6.7
|
%
|
|
41.6
|
|
|
5.4
|
%
|
|
168.5
|
|
|
6.8
|
%
|
|
108.4
|
|
|
4.8
|
%
|
||||
Australian Dollar
|
27.4
|
|
|
3.3
|
%
|
|
37.1
|
|
|
4.8
|
%
|
|
80.2
|
|
|
3.2
|
%
|
|
95.6
|
|
|
4.2
|
%
|
|
|
Three Months Ended
September 30, |
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Total revenue
|
|
$
|
821.0
|
|
|
$
|
768.9
|
|
|
$
|
52.1
|
|
|
7
|
%
|
|
$
|
2,477.5
|
|
|
$
|
2,260.6
|
|
|
$
|
216.9
|
|
|
10
|
%
|
Total operating expenses
|
|
1,025.5
|
|
|
678.3
|
|
|
347.2
|
|
|
51
|
%
|
|
2,533.1
|
|
|
1,964.7
|
|
|
568.4
|
|
|
29
|
%
|
||||||
Operating (loss) income
|
|
(204.5
|
)
|
|
90.6
|
|
|
(295.1
|
)
|
|
(326
|
)%
|
|
(55.6
|
)
|
|
295.9
|
|
|
(351.5
|
)
|
|
(119
|
)%
|
||||||
Net loss before income taxes
|
|
(352.0
|
)
|
|
(63.5
|
)
|
|
(288.5
|
)
|
|
454
|
%
|
|
(553.4
|
)
|
|
(180.3
|
)
|
|
(373.1
|
)
|
|
207
|
%
|
||||||
Net loss
|
|
$
|
(351.6
|
)
|
|
$
|
(59.3
|
)
|
|
$
|
(292.3
|
)
|
|
493
|
%
|
|
$
|
(559.2
|
)
|
|
$
|
(199.2
|
)
|
|
$
|
(360.0
|
)
|
|
181
|
%
|
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Gaming
|
|
$
|
447.9
|
|
|
$
|
454.6
|
|
|
$
|
(6.7
|
)
|
|
(1
|
)%
|
|
$
|
1,361.6
|
|
|
$
|
1,351.8
|
|
|
$
|
9.8
|
|
|
1
|
%
|
Lottery
|
|
206.8
|
|
|
202.9
|
|
|
3.9
|
|
|
2
|
%
|
|
615.6
|
|
|
594.3
|
|
|
21.3
|
|
|
4
|
%
|
||||||
Social
|
|
105.1
|
|
|
95.1
|
|
|
10.0
|
|
|
11
|
%
|
|
302.2
|
|
|
266.4
|
|
|
35.8
|
|
|
13
|
%
|
||||||
Digital
|
|
61.2
|
|
|
16.3
|
|
|
44.9
|
|
|
275
|
%
|
|
198.1
|
|
|
48.1
|
|
|
150.0
|
|
|
312
|
%
|
||||||
Total revenue
|
|
$
|
821.0
|
|
|
$
|
768.9
|
|
|
$
|
52.1
|
|
|
7
|
%
|
|
$
|
2,477.5
|
|
|
$
|
2,260.6
|
|
|
$
|
216.9
|
|
|
10
|
%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of services
|
$
|
124.4
|
|
|
$
|
105.5
|
|
|
$
|
18.9
|
|
|
18
|
%
|
|
$
|
370.5
|
|
|
$
|
307.7
|
|
|
$
|
62.8
|
|
|
20
|
%
|
Cost of product sales
|
109.9
|
|
|
116.9
|
|
|
(7.0
|
)
|
|
(6
|
)%
|
|
335.4
|
|
|
332.2
|
|
|
3.2
|
|
|
1
|
%
|
||||||
Cost of instant products
|
67.0
|
|
|
68.4
|
|
|
(1.4
|
)
|
|
(2
|
)%
|
|
208.0
|
|
|
209.8
|
|
|
(1.8
|
)
|
|
(1
|
)%
|
||||||
SG&A
|
169.7
|
|
|
158.8
|
|
|
10.9
|
|
|
7
|
%
|
|
515.2
|
|
|
445.4
|
|
|
69.8
|
|
|
16
|
%
|
||||||
R&D
|
49.5
|
|
|
47.8
|
|
|
1.7
|
|
|
4
|
%
|
|
152.5
|
|
|
138.3
|
|
|
14.2
|
|
|
10
|
%
|
||||||
D&A
|
166.3
|
|
|
173.1
|
|
|
(6.8
|
)
|
|
(4
|
)%
|
|
527.1
|
|
|
513.2
|
|
|
13.9
|
|
|
3
|
%
|
||||||
Restructuring and other
|
338.7
|
|
|
7.8
|
|
|
330.9
|
|
|
nm
|
|
|
424.4
|
|
|
18.1
|
|
|
406.3
|
|
|
nm
|
|
||||||
Total operating expenses
|
$
|
1,025.5
|
|
|
$
|
678.3
|
|
|
$
|
347.2
|
|
|
51
|
%
|
|
$
|
2,533.1
|
|
|
$
|
1,964.7
|
|
|
$
|
568.4
|
|
|
29
|
%
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
($ in millions)
|
Three Month Variance
|
|
NYX Impact
|
|
Remaining Variance
|
|
Nine Month Variance
|
|
NYX Impact
|
|
Remaining Variance
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
$
|
18.9
|
|
|
$
|
16.3
|
|
|
$
|
2.6
|
|
|
$
|
62.8
|
|
|
$
|
49.9
|
|
|
$
|
12.9
|
|
Cost of product sales
|
(7.0
|
)
|
|
—
|
|
|
(7.0
|
)
|
|
3.2
|
|
|
—
|
|
|
3.2
|
|
||||||
Cost of instant products
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
||||||
SG&A
|
10.9
|
|
|
14.7
|
|
|
(3.8
|
)
|
|
69.8
|
|
|
45.0
|
|
|
24.8
|
|
||||||
R&D
|
1.7
|
|
|
8.2
|
|
|
(6.5
|
)
|
|
14.2
|
|
|
24.1
|
|
|
(9.9
|
)
|
||||||
D&A
|
(6.8
|
)
|
|
13.0
|
|
|
(19.8
|
)
|
|
13.9
|
|
|
39.2
|
|
|
(25.3
|
)
|
||||||
Restructuring and other
|
330.9
|
|
|
4.2
|
|
|
326.7
|
|
|
406.3
|
|
|
13.4
|
|
|
392.9
|
|
||||||
Total operating expenses
|
$
|
347.2
|
|
|
$
|
56.4
|
|
|
$
|
290.8
|
|
|
$
|
568.4
|
|
|
$
|
171.6
|
|
|
$
|
396.8
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
Factors Affecting Net Loss
|
||||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||
Interest expense
|
|
$
|
(147.4
|
)
|
|
$
|
(148.9
|
)
|
|
$
|
(448.3
|
)
|
|
$
|
(459.5
|
)
|
|
Lower interest costs primarily resulting from 2017 and 2018 refinancing transactions, partially offset by higher outstanding debt principal balances (further discussed in “Liquidity, Capital Resources and Working Capital” and Note 11).
|
Loss on debt financing transactions
|
|
—
|
|
|
(8.4
|
)
|
|
(93.2
|
)
|
|
(38.1
|
)
|
|
Loss on debt financing transactions from our refinancing transactions consummated during the 2018 first quarter, inclusive of a $110.3 million premium charge associated with the redemption of the 2022 Secured Notes (see Note 11).
|
||||
(Loss) gain on remeasurement of debt
|
|
(4.0
|
)
|
|
—
|
|
|
29.4
|
|
|
—
|
|
|
The nine-month period gain is attributable to remeasurement of the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes and reflective of weakening of the Euro vs. the U.S. dollar since the issuance of these notes (1.24 exchange rate at issuance vs. 1.18 as of September 30, 2018).
|
||||
Income tax benefit (expense)
|
|
0.4
|
|
|
4.2
|
|
|
(5.8
|
)
|
|
(18.9
|
)
|
|
The reduction is primarily due to the overall mix of income in our foreign jurisdictions.
|
|
|
Three Months Ended
September 30, |
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Total revenue
|
|
$
|
447.9
|
|
|
$
|
454.6
|
|
|
$
|
(6.7
|
)
|
|
(1
|
)%
|
|
$
|
1,361.6
|
|
|
$
|
1,351.8
|
|
|
$
|
9.8
|
|
|
1
|
%
|
Total operating expenses
|
|
344.9
|
|
|
369.4
|
|
|
(24.5
|
)
|
|
(7
|
)%
|
|
1,078.4
|
|
|
1,103.2
|
|
|
(24.8
|
)
|
|
(2
|
)%
|
||||||
AEBITDA
|
|
232.5
|
|
|
221.2
|
|
|
11.3
|
|
|
5
|
%
|
|
686.3
|
|
|
657.8
|
|
|
28.5
|
|
|
4
|
%
|
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gaming operations
|
|
$
|
159.2
|
|
|
$
|
176.0
|
|
|
$
|
(16.8
|
)
|
|
(10
|
)%
|
|
$
|
480.5
|
|
|
$
|
526.8
|
|
|
$
|
(46.3
|
)
|
|
(9
|
)%
|
Gaming machine sales
|
|
167.2
|
|
|
163.1
|
|
|
4.1
|
|
|
3
|
%
|
|
479.6
|
|
|
482.6
|
|
|
(3.0
|
)
|
|
(1
|
)%
|
||||||
Gaming systems
|
|
69.7
|
|
|
62.0
|
|
|
7.7
|
|
|
12
|
%
|
|
229.0
|
|
|
190.6
|
|
|
38.4
|
|
|
20
|
%
|
||||||
Table products
|
|
51.8
|
|
|
53.5
|
|
|
(1.7
|
)
|
|
(3
|
)%
|
|
172.5
|
|
|
151.8
|
|
|
20.7
|
|
|
14
|
%
|
||||||
Total revenue
|
|
$
|
447.9
|
|
|
$
|
454.6
|
|
|
$
|
(6.7
|
)
|
|
(1
|
)%
|
|
$
|
1,361.6
|
|
|
$
|
1,351.8
|
|
|
$
|
9.8
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
F/X impact on revenue
|
|
$
|
0.2
|
|
|
$
|
2.2
|
|
|
|
|
|
|
|
|
$
|
13.1
|
|
|
$
|
(7.8
|
)
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
KPIs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
WAP, premium and daily-fee Participation units:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Installed base at period end
|
|
19,117
|
|
|
21,061
|
|
|
(1,944
|
)
|
|
(9
|
)%
|
|
19,117
|
|
|
21,061
|
|
|
(1,944
|
)
|
|
(9
|
)%
|
||||||
Average daily revenue per unit (exclusive of WAP jackpot expense)
|
|
$
|
50.52
|
|
|
$
|
51.59
|
|
|
$
|
(1.07
|
)
|
|
(2
|
)%
|
|
$
|
50.28
|
|
|
$
|
51.70
|
|
|
$
|
(1.42
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other Participation and leased units:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Installed base at period end
|
|
48,143
|
|
|
48,633
|
|
|
(490
|
)
|
|
(1
|
)%
|
|
48,143
|
|
|
48,633
|
|
|
(490
|
)
|
|
(1
|
)%
|
||||||
Average daily revenue per unit
|
|
$
|
13.18
|
|
|
$
|
14.64
|
|
|
$
|
(1.46
|
)
|
|
(10
|
)%
|
|
$
|
13.93
|
|
|
$
|
14.85
|
|
|
$
|
(0.92
|
)
|
|
(6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gaming machine unit sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. and Canadian new unit shipments
|
|
5,038
|
|
|
4,662
|
|
|
376
|
|
|
8
|
%
|
|
15,454
|
|
|
14,891
|
|
|
563
|
|
|
4
|
%
|
||||||
International new unit shipments
|
|
2,625
|
|
|
2,940
|
|
|
(315
|
)
|
|
(11
|
)%
|
|
7,318
|
|
|
8,848
|
|
|
(1,530
|
)
|
|
(17
|
)%
|
||||||
Total new unit shipments
|
|
7,663
|
|
|
7,602
|
|
|
61
|
|
|
1
|
%
|
|
22,772
|
|
|
23,739
|
|
|
(967
|
)
|
|
(4
|
)%
|
||||||
Average sales price per new unit
|
|
$
|
18,199
|
|
|
$
|
17,643
|
|
|
$
|
556
|
|
|
3
|
%
|
|
$
|
17,874
|
|
|
$
|
17,391
|
|
|
$
|
483
|
|
|
3
|
%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||
U.S. and Canadian unit shipments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Replacement units
|
4,266
|
|
|
3,932
|
|
|
334
|
|
|
8
|
%
|
|
12,397
|
|
|
10,844
|
|
|
1,553
|
|
|
14
|
%
|
Casino opening and expansion units
|
772
|
|
|
730
|
|
|
42
|
|
|
6
|
%
|
|
3,057
|
|
|
4,047
|
|
|
(990
|
)
|
|
(24
|
)%
|
Total unit shipments
|
5,038
|
|
|
4,662
|
|
|
376
|
|
|
8
|
%
|
|
15,454
|
|
|
14,891
|
|
|
563
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
International unit shipments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Replacement units
|
2,414
|
|
|
2,910
|
|
|
(496
|
)
|
|
(17
|
)%
|
|
6,846
|
|
|
8,194
|
|
|
(1,348
|
)
|
|
(16
|
)%
|
Casino opening and expansion units
|
211
|
|
|
30
|
|
|
181
|
|
|
603
|
%
|
|
472
|
|
|
654
|
|
|
(182
|
)
|
|
(28
|
)%
|
Total unit shipments
|
2,625
|
|
|
2,940
|
|
|
(315
|
)
|
|
(11
|
)%
|
|
7,318
|
|
|
8,848
|
|
|
(1,530
|
)
|
|
(17
|
)%
|
|
|
Three Months Ended
September 30, |
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Total revenue
|
|
$
|
206.8
|
|
|
$
|
202.9
|
|
|
$
|
3.9
|
|
|
2
|
%
|
|
$
|
615.6
|
|
|
$
|
594.3
|
|
|
$
|
21.3
|
|
|
4
|
%
|
Total operating expenses
|
|
146.0
|
|
|
140.5
|
|
|
5.5
|
|
|
4
|
%
|
|
421.3
|
|
|
405.5
|
|
|
15.8
|
|
|
4
|
%
|
||||||
AEBITDA
|
|
92.3
|
|
|
89.2
|
|
|
3.1
|
|
|
3
|
%
|
|
285.8
|
|
|
270.1
|
|
|
15.7
|
|
|
6
|
%
|
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Instant products
|
|
$
|
142.0
|
|
|
$
|
142.7
|
|
|
$
|
(0.7
|
)
|
|
—
|
|
|
$
|
442.3
|
|
|
$
|
435.7
|
|
|
$
|
6.6
|
|
|
2
|
%
|
Lottery systems
|
|
64.8
|
|
|
60.2
|
|
|
4.6
|
|
|
8
|
%
|
|
173.3
|
|
|
158.6
|
|
|
14.7
|
|
|
9
|
%
|
||||||
Total revenue
|
|
$
|
206.8
|
|
|
$
|
202.9
|
|
|
$
|
3.9
|
|
|
2
|
%
|
|
$
|
615.6
|
|
|
$
|
594.3
|
|
|
$
|
21.3
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
F/X impact on revenue
|
|
$
|
0.3
|
|
|
$
|
(0.1
|
)
|
|
|
|
|
|
|
|
$
|
6.4
|
|
|
$
|
(4.3
|
)
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
KPIs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Change in retail sales of U.S. lottery instant products customers
(1)(2)
|
|
4.4
|
%
|
|
6.4
|
%
|
|
(2.0)pp
|
|
|
nm
|
|
|
4.7
|
%
|
|
4.6
|
%
|
|
0.1pp
|
|
|
nm
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Change in retail sales of U.S. lottery systems contract customers
(1)(3)
|
|
(5.6
|
)%
|
|
5.8
|
%
|
|
(11.4)pp
|
|
|
nm
|
|
|
(2.8
|
)%
|
|
(3.2
|
)%
|
|
0.4pp
|
|
|
nm
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Change in Italy retail sales of instant products
(1)
|
|
(0.9
|
)%
|
|
4.8
|
%
|
|
(5.7)pp
|
|
|
nm
|
|
|
1.5
|
%
|
|
2.7
|
%
|
|
(1.2)pp
|
|
|
nm
|
|
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
(1)
|
|
2018 vs. 2017
|
|
2018
|
|
2017
(1)
|
|
2018 vs. 2017
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Social gaming
|
|
$
|
105.1
|
|
|
$
|
95.1
|
|
|
$
|
10.0
|
|
|
11
|
%
|
|
$
|
302.2
|
|
|
$
|
266.4
|
|
|
$
|
35.8
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
KPIs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Social gaming:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mobile Penetration
(2)
|
|
79
|
%
|
|
72
|
%
|
|
7pp
|
|
|
nm
|
|
|
77
|
%
|
|
71
|
%
|
|
6pp
|
|
|
nm
|
|
||||||
Average MAU
(3)
|
|
8.4
|
|
|
7.9
|
|
|
0.5
|
|
|
6
|
%
|
|
8.2
|
|
|
7.7
|
|
|
0.5
|
|
|
6
|
%
|
||||||
Average DAU
(4)
|
|
2.7
|
|
|
2.5
|
|
|
0.2
|
|
|
8
|
%
|
|
2.5
|
|
|
2.5
|
|
|
-
|
|
|
-
|
|
||||||
ARPDAU
(5)
|
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
0.01
|
|
|
2
|
%
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
$
|
0.04
|
|
|
10
|
%
|
nm = not meaningful.
pp = percentage points.
(1) Business segment information has been recast to reflect current segments - see Note 3.
(2) Mobile penetration as defined by percentage of B2C social gaming revenue generated from mobile platforms.
(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 daily revenue per DAU is calculated by dividing revenue for a period by the DAU for the period by the number of days for the period.
|
|
|
Three Months Ended
September 30, |
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
(1)
|
|
2018 vs. 2017
|
|
2018
|
|
2017
(1)
|
|
2018 vs. 2017
|
||||||||||||||||||
Total revenue
|
|
$
|
61.2
|
|
|
$
|
16.3
|
|
|
$
|
44.9
|
|
|
275
|
%
|
|
$
|
198.1
|
|
|
$
|
48.1
|
|
|
$
|
150.0
|
|
|
312
|
%
|
Operating expenses
|
|
70.0
|
|
|
15.6
|
|
|
54.4
|
|
|
349
|
%
|
|
219.4
|
|
|
42.4
|
|
|
177.0
|
|
|
417
|
%
|
||||||
AEBITDA
|
|
11.9
|
|
|
3.1
|
|
|
8.8
|
|
|
284
|
%
|
|
42.3
|
|
|
10.9
|
|
|
31.4
|
|
|
288
|
%
|
||||||
(1) Business segment information has been recast to reflect current segments - see Note 3.
|
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
(1)
|
|
2018 vs. 2017
|
|
2018
|
|
2017
(1)
|
|
2018 vs. 2017
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sports and platform
|
|
$
|
20.8
|
|
|
$
|
—
|
|
|
$
|
20.8
|
|
|
nm
|
|
|
$
|
67.2
|
|
|
$
|
—
|
|
|
$
|
67.2
|
|
|
nm
|
|
Gaming and other
|
|
40.4
|
|
|
16.3
|
|
|
24.1
|
|
|
148
|
%
|
|
130.9
|
|
|
48.1
|
|
|
82.8
|
|
|
172
|
%
|
||||||
Total revenue
|
|
$
|
61.2
|
|
|
$
|
16.3
|
|
|
$
|
44.9
|
|
|
275
|
%
|
|
$
|
198.1
|
|
|
$
|
48.1
|
|
|
$
|
150.0
|
|
|
312
|
%
|
(1) Business segment information has been recast to reflect current segments - see Note 3.
|
||||||||||||||||||||||||||||||
nm = not meaningful.
|
•
|
Contracts with Multiple Promised Goods and Services -
because we enter into contracts with customers that involve promises to transfer multiple products and services, the determination of the distinct performance obligations in contracts with multiple promises requires significant judgment. Our total gaming systems, lottery systems and digital revenue that often contain multiple promised goods and services was
$353.5 million
for the
nine months ended
September 30, 2018
, or approximately
14 percent
of consolidated revenue, a portion of which would not be recognized if we had reached a different conclusion.
|
•
|
Determination of stand-alone selling prices -
the guidance in ASC 606 requires that we determine the stand-alone selling price for our goods and services as a basis for allocating the transaction price to the identified distinct performance obligations in our contracts with customers. Because we often bundle the selling price for multiple promised goods or services or we may license systems for which the solutions we provide are highly customized and therefore the prices we charge are either uncertain, highly variable, or both, the determination of a stand-alone selling price or the relative range requires significant judgment. Our total gaming systems, lottery systems and digital revenue that could be subject to this judgment and thus allocated to distinct performance obligations differently was a portion of
$353.5 million
for the
nine months ended
September 30, 2018
, or approximately
14 percent
of consolidated revenue.
|
•
|
Transfer of control in Lottery POS contracts -
the guidance in ASC 606 requires that we recognize revenue when or as control over a performance obligation transfers to a customer. In instant products contracts under POS terms, instant products are delivered to lottery customers but we retain the risk of such inventory until retail sales of such tickets takes place. Because those shipments are to a lottery-controlled warehouse and we do not have the ability to direct the use of such instant products subsequent to this delivery, we have determined that control transfers upon delivery. This conclusion requires the use of judgment. If we concluded that control transferred upon retail sales when the end customer obtained control over the instant tickets, revenue would be decreased by
$7.1 million
for the
nine months ended
September 30, 2018
.
|
|
|
As of
|
||||||
($ in millions)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
|
$
|
113.5
|
|
|
$
|
788.8
|
|
Revolver capacity
|
|
620.2
|
|
|
596.2
|
|
||
Revolver capacity drawn or committed to letters of credit
|
|
(70.4
|
)
|
|
(375.6
|
)
|
||
Total
|
|
$
|
663.3
|
|
|
$
|
1,009.4
|
|
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||
Net cash provided by operating activities
|
|
$
|
355.9
|
|
|
$
|
389.0
|
|
|
$
|
(33.1
|
)
|
Net cash used in investing activities
|
|
(618.8
|
)
|
|
(237.9
|
)
|
|
(380.9
|
)
|
|||
Net cash used in financing activities
|
|
(402.9
|
)
|
|
(73.1
|
)
|
|
(329.8
|
)
|
|||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
(2.5
|
)
|
|
4.8
|
|
|
(7.3
|
)
|
|||
(Decrease) increase in cash, cash equivalents and restricted cash
|
|
$
|
(668.3
|
)
|
|
$
|
82.8
|
|
|
$
|
(751.1
|
)
|
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||
($ in millions)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||
Net loss
|
|
$
|
(559.2
|
)
|
|
$
|
(199.2
|
)
|
|
$
|
(360.0
|
)
|
Adjustments to reconcile net loss to cash flows from operations
|
|
678.0
|
|
|
589.4
|
|
|
88.6
|
|
|||
Changes in working capital accounts
|
|
236.9
|
|
|
(6.0
|
)
|
|
242.9
|
|
|||
Changes in deferred income taxes and other
|
|
0.2
|
|
|
4.8
|
|
|
(4.6
|
)
|
•
|
$213.7 million
increase in accounts payable and accrued liabilities, which is reflective of a
$334.6 million
increase in legal reserve associated with the Shuffle Tech Matter;
|
•
|
$89.6 million
decrease in accounts and notes receivables due to strong collections during the nine-month period primarily driven by our Gaming and Lottery business segments; partially offset by
|
•
|
$66.4 million
net increase in contract assets and other current assets and liabilities, inclusive of an impact of ASC 606 adoption.
|
Exhibit
Number
|
|
Description
|
3.1(a)
|
|
|
|
|
|
3.1(b)
|
|
|
|
|
|
3.1(c)
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Label Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
|
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
|
By:
|
/s/ Michael F. Winterscheidt
|
|
|
Name:
|
Michael F. Winterscheidt
|
|
|
Title:
|
Chief Accounting Officer
|
Dated:
|
November 8, 2018
|
|
|
1 Year Scientific Games Chart |
1 Month Scientific Games Chart |
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