Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | ||
Sep. 30, 2015 | Nov. 05, 2015 | Nov. 04, 2015 | |
Entity Information [Line Items] | |||
Entity Registrant Name | SCIENTIFIC GAMES CORP | ||
Entity Central Index Key | 750,004 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Class A common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 86,231,747 | ||
Class B Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue: | ||||
Product sales | $ 340.5 | $ 182.8 | $ 1,008.8 | $ 538.9 |
Instant games | 193.5 | 102 | 611 | 289.3 |
Services | 137.6 | 130.8 | 402 | 392.4 |
Total revenue | 671.6 | 415.6 | 2,021.8 | 1,220.6 |
Operating expenses: | ||||
Cost of services | 85.5 | 69.6 | 274.6 | 200.7 |
Cost of product sales | 87.4 | 59.9 | 293.2 | 161.2 |
Cost of instant games | 77.1 | 69.7 | 212.9 | 212.5 |
Selling, general and administrative | 136.8 | 95.6 | 423.6 | 282.6 |
Research and development | 45.9 | 26.3 | 140.8 | 77 |
Employee termination and restructuring | 5.6 | 1.9 | 19 | 12.4 |
Depreciation and amortization | 286.5 | 100.4 | 692.9 | 290.5 |
Goodwill impairment | 535 | 0 | 535 | 0 |
Operating loss | (588.2) | (7.8) | (570.2) | (16.3) |
Other (expense) income: | ||||
Interest expense | (166.8) | (45.7) | (497.5) | (142.9) |
Earnings (loss) from equity investments | 3 | (14) | 9.4 | (7.8) |
Loss on early extinguishment of debt | 0 | 0 | 0 | (25.9) |
Gain on sale of equity interest | 0 | 0 | 0 | 14.5 |
Other (expense) income, net | (7.5) | 3.1 | (17.4) | 9.2 |
Total other expense, net | (171.3) | (56.6) | (505.5) | (152.9) |
Net loss before income taxes | (759.5) | (64.4) | (1,075.7) | (169.2) |
Income tax benefit (expense) | 81.3 | (5.4) | 208.9 | (18) |
Net loss | (678.2) | (69.8) | (866.8) | (187.2) |
Other comprehensive (loss) income: | ||||
Foreign currency translation loss | (47.9) | (57.8) | (136.3) | (47.7) |
Pension and post-retirement gain, net of tax | 0.8 | 0.4 | 1 | 0.3 |
Derivative financial instruments unrealized gain (loss), net of tax | (1.9) | 2.3 | (0.8) | (4) |
Other comprehensive loss | (49) | (55.1) | (136.1) | (51.4) |
Comprehensive loss | $ (727.2) | $ (124.9) | $ (1,002.9) | $ (238.6) |
Basic and diluted net loss per share: | ||||
Basic (per share) | $ (7.88) | $ (0.82) | $ (10.10) | $ (2.22) |
Diluted (per share) | $ (7.88) | $ (0.82) | $ (10.10) | $ (2.22) |
Weighted average number of shares used in per share calculations: | ||||
Weighted average basic (per share) | 86.1 | 84.7 | 85.8 | 84.5 |
Weighted average diluted (per share) | 86.1 | 84.7 | 85.8 | 84.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 102.1 | $ 171.8 |
Restricted cash | 17.2 | 27.2 |
Accounts receivable, net | 470.6 | 468.4 |
Notes receivable, net | 163.1 | 188.7 |
Inventories | 243.8 | 265.6 |
Deferred income taxes | 73.2 | 72.8 |
Prepaid expenses, deposits and other current assets | 199.5 | 183.5 |
Total current assets | 1,269.5 | 1,378 |
Long-term restricted cash | 17.5 | 16.8 |
Property and equipment, net | 57.6 | 87.5 |
Long-term notes receivable | 868.4 | 1,012.8 |
Goodwill | 3,485.2 | 4,108.3 |
Intangible assets, net | 1,940.8 | 2,251.6 |
Software, net | 527 | 592.7 |
Equity investments | 227 | 288.2 |
Other assets | 222.1 | 259.3 |
Total assets | 8,615.1 | 9,995.2 |
Current liabilities: | ||
Current portion of long-term debt | 50.4 | 50.6 |
Accounts payable | 120.4 | 155.8 |
Accrued liabilities | 443.6 | 453.9 |
Total current liabilities | 614.4 | 660.3 |
Deferred income taxes | 400.5 | 628.8 |
Other long-term liabilities | 221.2 | 236.8 |
Long-term debt, excluding current installments | 8,359.8 | 8,465.4 |
Total liabilities | $ 9,595.9 | $ 9,991.3 |
Commitments and contingencies | ||
Stockholders' (deficit) equity: | ||
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 103.4 and 102.3 shares issued and 86.2 and 85.1 shares outstanding, respectively | $ 1 | $ 1 |
Additional paid-in capital | 761.4 | 743.2 |
Accumulated loss | (1,337.5) | (470.7) |
Treasury stock, at cost: 17.2 and 17.2 shares held, respectively | (175.2) | (175.2) |
Accumulated other comprehensive loss | (230.5) | (94.4) |
Total stockholders' (deficit) equity | (980.8) | 3.9 |
Total liabilities and stockholders’ (deficit) equity | $ 8,615.1 | $ 9,995.2 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Class A common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Class A common stock, shares authorized | 199.3 | 199.3 |
Class A common stock, shares issued | 103 | 102.3 |
Class A common stock, shares outstanding | 86.2 | 85.1 |
Treasury stock, at cost, shares held | 17.2 | 17.2 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (866.8) | $ (187.2) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 692.9 | 290.5 |
Change in deferred income taxes | (223.3) | 5.2 |
Stock-based compensation | 19.5 | 18.1 |
Non-cash interest expense | 29 | 12.8 |
Loss (earnings) from equity investments, net | (9.4) | 7.8 |
Distributed earnings from equity investments | 20.9 | 22.5 |
Loss on early extinguishment of debt | 0 | 25.9 |
Gain on sale of equity interest | 0 | (14.5) |
Goodwill impairment | 535 | 0 |
Changes in current assets and liabilities, net of effects of acquisitions: | ||
Accounts and notes receivable, net | 43.7 | 80.8 |
Inventories | 36.8 | (30.9) |
Accounts payable | (17.7) | (36.5) |
Accrued liabilities | (17.4) | 1.2 |
Other current assets and liabilities | 11.8 | 41.6 |
Other, net | 0.5 | (3.9) |
Net cash provided by operating activities | 255.5 | 233.4 |
Cash flows from investing activities: | ||
Additions to property and equipment | (15.7) | (32.4) |
Gaming and lottery operations expenditures | (151.1) | (73.1) |
Intangible assets and software expenditures | (66.8) | (70.8) |
Changes in other assets and liabilities and other | 10.1 | 0.5 |
Additions to equity method investments | 0 | (43.3) |
Distributions of capital on equity investments | 37 | 45.4 |
Proceeds From Sale of Equity Method Interest | 0 | 44.9 |
Proceeds from sale of equity interest | 9.3 | 44.9 |
Restricted cash | 9.3 | (1.1) |
Net cash used in investing activities | (177.2) | (129.9) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 110 | 0 |
Repayments under revolving credit facility | (180) | 0 |
Proceeds from issuance of long-term debt | 0 | 347.9 |
Payments on long-term debt | (38.8) | (377.3) |
Payment of Deferred Financing Costs | 0 | 22.8 |
Payments of deferred financing fees | (7) | |
Payments on license obligations | (32) | (7) |
Common stock repurchases | 0 | (29.5) |
Contingent earnout payments | (0.5) | (10.2) |
Net issuance (redemptions) of common stock under stock-based compensation plans | 0.4 | (19.1) |
Net cash used in financing activities | (140.9) | (118) |
Effect of exchange rate changes on cash and cash equivalents | (7.1) | (6.7) |
Decrease in cash and cash equivalents | (69.7) | (21.2) |
Cash and cash equivalents, beginning of period | 171.8 | 153.7 |
Cash and cash equivalents, end of period | $ 102.1 | $ 132.5 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business and Summary of Significant Accounting Policies | Description of the Business and Summary of Significant Accounting Policies Description of the Business We are a leading developer of technology‑based products and services and associated content for the worldwide gaming and lottery industries. Our portfolio includes gaming machines and game content, casino-management systems, table game products and services, instant and draw‑based lottery games, server‑based gaming and lottery systems, sports betting technology, lottery content and services, loyalty and rewards programs and interactive gaming. We also gain access to technologies and pursue global expansion through strategic acquisitions and equity investments. As a result of our recent acquisitions of Bally and WMS, we have significantly expanded our global gaming and interactive businesses. We report our operations in three business segments—Gaming, Lottery and Interactive. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with SEC and U.S. GAAP requirements. All monetary values set forth in these financial statements are in U.S. dollars ("$") unless otherwise stated herein. The accompanying consolidated financial statements include the accounts of the Company and its 100%-owned subsidiaries, as well as those subsidiaries in which we have a controlling financial interest. Investments in other entities in which we do not have a controlling financial interest but we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation. We have evaluated subsequent events through the date these financial statements were issued. In the opinion of management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations and comprehensive loss and cash flows for the periods presented. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2014 Annual Report on Form 10-K. Interim results of operations are not necessarily indicative of results of operations for a full year. Significant Accounting Policies There have been no changes to our significant accounting policies described in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2014 Annual Report on Form 10-K. Recently Issued Accounting Guidance In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which defers the effective date of ASU 2014-09 by one year to now be effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. Early adoption of the standard is permitted but not before the original effective date of December 15, 2016. The ASU may be adopted using a full retrospective approach or reporting the cumulative effect as of the date of adoption. We are currently evaluating the impact of adopting this guidance. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . ASU 2015-03 intends to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. In August 2015, the FASB issued ASU No. 2015-15 which amended Subtopic 835-30 for the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. In the amendment, an entity can defer and present debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We do not expect this guidance to have a material effect on our financial position, results of operations or cash flows. In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory. ASU 2015-11 changes the criteria for measuring inventory within the scope of the ASU. Inventory will now be measured at the lower of cost and net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance. In July 2015, the FASB issued ASU No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient (consensuses of the FASB Emerging Issues Task Force) . ASU 2015-12 intends to simplify the measurement and presentation of fully benefit-responsive investment contracts. Under the amendments, fully benefit-responsive investment contracts are measured, presented, and disclosed only at contract value. A plan will continue to provide disclosures that help users understand the nature and risks of fully benefit-responsive investment contracts. ASU 2015-12 is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . ASU 2015-16 eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. It requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this ASU require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this ASU require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this ASU 2015-16 should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this ASU with earlier application permitted for financial statements that have not been issued. We do not expect this guidance to have a material effect on our financial position, results of operations or cash flows. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments We report our operations in three business segments—gaming, lottery and Interactive—representing our different products and services. These are our reportable segments under ASC 280, Segment Reporting . Each of our business segments is managed by a separate executive who reports to our chief executive officer (who is our "chief operating decision maker" as defined by applicable accounting standards). Our three business segments represent separate standalone businesses based on the industries in which we operate. Additional discussion regarding the products and services from which each reportable business segment derives its revenue is included in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2014 Annual Report on Form 10-K. In connection with the Bally acquisition in the fourth quarter of 2014, we reviewed our operating and business segments in light of certain changes in the financial information regularly reviewed by our chief executive officer and other factors. Based on this review, we combined our previous lottery-related Instant Products and Lottery Systems business segments into one "Lottery" segment. We also determined that the interactive operating segment should be disclosed as a separate business segment and not aggregated with the gaming operating segment, reflecting the growth of the interactive operating segment. These changes, which were effective prior to December 31, 2014, had no impact on our consolidated financial statements for any periods. Business segment information for the three and nine months ended September 30, 2014 has been adjusted to reflect these changes. The following tables present revenue, cost of revenue, SG&A, R&D, employee termination and restructuring, D&A, goodwill impairment, operating income (loss) and earnings (loss) from equity investments by business segment for the three and nine months ended September 30, 2015 and 2014 . Certain unallocated expenses managed at the corporate level, comprised primarily of general and administrative costs and other (expense) income, net, are not allocated to our business segments. Segment results for 2014 below do not include the results of Bally, which we acquired in November 2014. The increase in unallocated corporate costs for the three and nine months ended September 30, 2015 primarily relates to the inclusion of Bally's results. Three Months Ended September 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 244.3 $ 45.0 $ 51.2 $ 340.5 Product sales 184.8 8.7 — 193.5 Instant games — 137.6 — 137.6 Total revenue 429.1 191.3 51.2 671.6 Cost of services (1) 41.3 27.2 17.0 85.5 Cost of product sales (1) 80.1 7.3 — 87.4 Cost of instant games (1) — 77.1 — 77.1 Selling, general and administrative 70.3 15.7 16.6 102.6 Research and development 39.4 1.1 5.4 45.9 Employee termination and restructuring 3.2 — 0.5 3.7 Depreciation and amortization 245.1 21.6 5.4 272.1 Goodwill impairment 535.0 — — 535.0 Segment operating income (loss) $ (585.3 ) $ 41.3 $ 6.3 $ (537.7 ) Unallocated corporate costs (50.5 ) Consolidated operating loss $ (588.2 ) Earnings from equity investments $ 1.0 $ 2.0 $ — $ 3.0 (1) Exclusive of depreciation and amortization. Three Months Ended September 30, 2014 Gaming Lottery Interactive Total Revenue: Services $ 96.1 $ 48.2 $ 38.5 $ 182.8 Product sales 68.3 33.7 — 102.0 Instant games — 130.8 — 130.8 Total revenue 164.4 212.7 38.5 415.6 Cost of services (1) 24.9 30.4 14.3 69.6 Cost of product sales (1) 32.9 27.0 — 59.9 Cost of instant games (1) — 69.7 — 69.7 Selling, general and administrative 28.7 17.8 13.7 60.2 Research and development 21.5 1.4 3.4 26.3 Employee termination and restructuring 0.9 0.4 0.6 1.9 Depreciation and amortization 66.4 24.9 3.4 94.7 Segment operating income (loss) $ (10.9 ) $ 41.1 $ 3.1 $ 33.3 Unallocated corporate costs $ (41.1 ) Consolidated operating loss $ (7.8 ) Earnings (loss) from equity investments $ 1.3 $ (15.3 ) $ — $ (14.0 ) (1) Exclusive of depreciation and amortization. Nine months ended September 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 722.6 $ 136.5 $ 149.7 $ 1,008.8 Product sales 582.0 29.0 — 611.0 Instant games — 402.0 — 402.0 Total revenue 1,304.6 567.5 149.7 2,021.8 Cost of services (1) 139.9 83.1 51.6 274.6 Cost of product sales (1) 268.8 24.4 — 293.2 Cost of instant games (1) — 212.9 — 212.9 Selling, general and administrative 215.7 49.2 46.9 311.8 Research and development 120.3 4.2 16.3 140.8 Employee termination and restructuring 10.1 0.2 1.5 11.8 Depreciation and amortization 569.9 62.9 15.9 648.7 Goodwill impairment 535.0 — — 535.0 Segment operating income (loss) $ (555.1 ) $ 130.6 $ 17.5 $ (407.0 ) Unallocated corporate costs (163.2 ) Consolidated operating loss $ (570.2 ) Earnings from equity investments $ 2.7 $ 6.7 $ — $ 9.4 (1) Exclusive of depreciation and amortization. Nine months ended September 30, 2014 Gaming Lottery Interactive Total Revenue: Services $ 288.1 $ 149.3 $ 101.5 $ 538.9 Product sales 216.6 72.7 — 289.3 Instant games — 392.4 — 392.4 Total revenue 504.7 614.4 101.5 1,220.6 Cost of services (1) 73.4 90.4 36.9 200.7 Cost of product sales (1) 103.9 57.3 — 161.2 Cost of instant games (1) — 212.5 — 212.5 Selling, general and administrative 92.8 56.0 40.1 188.9 Research and development 64.9 2.7 9.4 77.0 Employee termination and restructuring 4.2 1.6 4.7 10.5 Depreciation and amortization 190.9 70.8 9.3 271.0 Segment operating income (loss) $ (25.4 ) $ 123.1 $ 1.1 $ 98.8 Unallocated corporate costs (115.1 ) Consolidated operating loss $ (16.3 ) Earnings (loss) from equity investments $ 3.3 $ (11.1 ) $ — $ (7.8 ) (1) Exclusive of depreciation and amortization. The following table presents a reconciliation of reportable business segment operating income (loss) to net loss before income taxes for each period: Three Months Ended Nine Months Ended September 30, 2015 2014 2015 2014 Reportable business segment operating income (loss) $ (537.7 ) $ 33.3 $ (407.0 ) $ 98.8 Unallocated corporate costs (50.5 ) (41.1 ) (163.2 ) (115.1 ) Consolidated operating loss (588.2 ) (7.8 ) (570.2 ) (16.3 ) Interest expense (166.8 ) (45.7 ) (497.5 ) (142.9 ) Earnings (loss) from equity investments 3.0 (14.0 ) 9.4 (7.8 ) Loss on early extinguishment of debt — — — (25.9 ) Gain on sale of equity interest — — — 14.5 Other (expense) income, net (7.5 ) 3.1 (17.4 ) 9.2 Net loss before income taxes $ (759.5 ) $ (64.4 ) $ (1,075.7 ) $ (169.2 ) In evaluating segment financial performance, we focus on operating income (loss) as a segment’s measure of profit or loss. Segment operating income (loss) is income (loss) before other (expense) income, net, interest expense, earnings (loss) from equity investments, gain on sale of equity interest, unallocated corporate costs and income tax expense (benefit). The accounting policies of the business segments are the same as those described in our summary of significant accounting policies in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2014 Annual Report on Form 10-K. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On November 21, 2014, the Company acquired Bally for $5.1 billion (including the refinancing of approximately $1.9 billion of existing Bally indebtedness), creating one of the largest diversified global gaming suppliers. We have completed the allocation of the purchase price, which resulted in the purchase price exceeding the aggregate fair value of the acquired assets and assumed liabilities at the acquisition date by $2,956.1 million. Such excess amount has been recognized as goodwill within our Gaming and Interactive business segments. We attribute this goodwill to enhanced financial and operational scale, market diversification, opportunities for synergies, assembled workforce and other strategic benefits. None of the goodwill associated with the acquisition is deductible for income tax purposes and, as such, no deferred taxes have been recorded related to goodwill. The allocation of the purchase price to the fair values of assets acquired and liabilities assumed did not change during the nine months ended September 30, 2015 from the amounts disclosed in Note 3 (Acquisitions and Dispositions) in our 2014 Annual Report on Form 10-K. As required by ASC 805, Business Combinations , the following unaudited pro forma statements of operations for the three and nine months ended September 30, 2014 give effect to the Bally acquisition as if it had been completed on January 1, 2013. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the period presented had the Bally acquisition been completed on January 1, 2013. In addition, the unaudited pro forma financial information does not purport to project future operating results. The unaudited pro forma statements of operations do not reflect: (1) any anticipated synergies (or anticipated costs to achieve synergies) or (2) the impact of non-recurring items directly related to the Bally acquisition. Three Months Ended September 30, 2014 Nine Months Ended Revenue from Consolidated Statements of Operations and Comprehensive Loss $ 415.6 $ 1,220.6 Add: Bally revenue not reflected in Consolidated Statements of Operations and Comprehensive Loss 320.7 1,018.0 Unaudited pro forma revenue $ 736.3 $ 2,238.6 Three Months Ended September 30, 2014 Nine Months Ended Net loss from Consolidated Statements of Operations and Comprehensive Loss $ (69.8 ) $ (187.2 ) Add: Bally net income not reflected in Consolidated Statements of Operations and Comprehensive Loss adjusted by pro forma adjustments (1), (2), (3), (4), (5), and (6) below (40.7 ) (112.9 ) Unaudited pro forma net loss $ (110.5 ) $ (300.1 ) Unaudited pro forma amounts reflect the following adjustments: (1) An adjustment to reflect additional D&A of $43.0 million and $113.2 million for the three and nine months ended September 30, 2014 , respectively, associated with the fair value of the tangible and intangible assets acquired in the Bally acquisition that would have been incurred assuming the fair value adjustments had been applied on January 1, 2013. (2) An adjustment to reflect lower costs of sales of $0 million and $5.2 million for the three and nine months ended September 30, 2014 related to the reversal of the impact of purchase accounting adjustments on the carrying value of SHFL's finished goods inventory made in connection with Bally’s acquisition of SHFL. (3) An adjustment to reverse acquisition-related fees and expenses of $5.6 million for the three and nine months ended September 30, 2014 , which relate to costs incurred in connection with the Bally acquisition. (4) An adjustment to reflect additional interest expense of $77.5 million and $228.6 million for the three and nine months ended September 30, 2014 , respectively, that would have been incurred assuming the financing transactions relating to the Bally acquisition and the purchase and redemption of the 2019 Notes were both completed as of January 1, 2013. (5) An adjustment to reverse the loss on extinguishment of debt of $0 million and $25.9 million for the three and nine months ended September 30, 2014 , respectively, recorded in connection with the purchase and redemption of the 2019 Notes. (6) An adjustment of $43.6 million and $115.6 million for the three and nine months ended September 30, 2014 , respectively, to tax effect the pre-tax pro forma adjustments listed above, calculated based on the statutory rates in effect in each significant jurisdiction for the three and nine months ended September 30, 2014 . This rate does not reflect the Company’s effective tax rate, which includes other tax items, such as state and foreign taxes, as well as other tax charges or benefits, and does not take into account any historical or possible future tax events that may impact the Company. |
Restructuring Plans
Restructuring Plans | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Plans | Restructuring Plans We recorded pre-tax employee termination and restructuring costs of $5.6 million and $1.9 million for the three months ended September 30, 2015 and 2014, respectively, and recorded pre-tax employee termination and restructuring costs of $19.0 million and $12.4 million for the nine months ended September 30, 2015 and 2014, respectively . No new employee termination and restructuring plans were initiated during the nine months ended September 30, 2015. We expect to complete the integration-related restructuring plan actions discussed below related to the Bally and WMS integrations during 2016 and 2015, respectively. All other employee termination and restructuring actions reported in 2014 were completed as of December 31, 2014 and are not reflected in the tables below. Bally Integration-Related Restructuring Plan Upon our acquisition of Bally in November 2014, we began integrating Scientific Games and Bally and implementing our plans to streamline our operations and cost structure. We have recorded costs that meet the criteria under ASC 420, Exit and Disposal Cost Obligations ("ASC 420"), in each of our business segments associated with integration activities that have been initiated in the relevant period. These costs include employee termination costs, costs relating to the exiting of facilities and product lines, as well as costs relating to existing contracts. WMS Integration-Related Restructuring Plan Upon our acquisition of WMS in October 2013, we began integrating Scientific Games and WMS and implementing our plans to streamline our operations and cost structure. We have recorded costs that meet the criteria under ASC 420 in each of our business segments associated with integration activities that have been initiated in the relevant period. These costs include employee termination costs, costs relating to the exiting of facilities and costs related to exiting two immaterial businesses. Unallocated corporate employee termination costs primarily related to terminations of certain executives, including our former chief executive officer, in the fourth quarter of 2013. Employee Termination and Restructuring Costs by Segment The following table presents a summary of employee termination and restructuring costs by business segment related to the restructuring plans described above, including the costs incurred during the three and nine months ended September 30, 2015, the cumulative costs incurred through September 30, 2015 from initiation of the relevant restructuring activities and the total expected costs related to the relevant restructuring activities that have been initiated. As additional integration-related activities are initiated, we expect to incur additional costs related to those activities. Business Segment Employee Termination Costs Property Costs Other Total Gaming (1) Three Months Ended September 30, 2015 $ 2.6 $ — $ 0.6 $ 3.2 Nine Months Ended September 30, 2015 9.4 — 0.7 10.1 Cumulative 27.7 0.9 3.6 32.2 Expected Total 31.0 0.9 3.6 35.5 Lottery Three Months Ended September 30, 2015 — — — — Nine Months Ended September 30, 2015 0.2 — — 0.2 Cumulative 3.3 0.4 — 3.7 Expected Total 3.3 0.4 — 3.7 Interactive (1) Three Months Ended September 30, 2015 0.4 — 0.1 0.5 Nine Months Ended September 30, 2015 1.3 — 0.2 1.5 Cumulative 5.1 0.4 5.1 10.6 Expected Total 5.1 0.4 5.1 10.6 Unallocated corporate (2) Three Months Ended September 30, 2015 1.8 0.1 — 1.9 Nine Months Ended September 30, 2015 2.4 1.9 2.9 7.2 Cumulative 13.8 4.2 2.9 20.9 Expected Total 13.8 4.2 3.0 21.0 Total Three Months Ended September 30, 2015 $ 4.8 $ 0.1 $ 0.7 $ 5.6 Nine Months Ended September 30, 2015 $ 13.3 $ 1.9 $ 3.8 $ 19.0 Cumulative $ 49.9 $ 5.9 $ 11.6 $ 67.4 Expected Total $ 53.2 $ 5.9 $ 11.7 $ 70.8 (1) Other restructuring costs reflect costs related to the exit of two immaterial business lines. (2) Unallocated corporate employee termination costs primarily relates to accrual for cash severance due to former executives. The following table presents a summary of restructuring charges and the changes in the restructuring accrual during the nine months ended September 30, 2015: Employee Termination Costs Property Costs Other Total Balance as of December 31, 2014 $ 17.9 $ 1.7 $ 3.0 $ 22.6 Additional accruals 13.3 1.9 3.8 19.0 Cash payments (21.6 ) (2.3 ) (3.8 ) (27.7 ) Balance as of September 30, 2015 $ 9.6 $ 1.3 $ 3.0 $ 13.9 |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share The following represents a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share available to common stockholders for the three and nine months ended September 30, 2015 and 2014: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Net loss $ (678.2 ) $ (69.8 ) (866.8 ) $ (187.2 ) Basic and diluted net loss per share: Basic $ (7.88 ) $ (0.82 ) $ (10.10 ) (2.22 ) Diluted $ (7.88 ) $ (0.82 ) $ (10.10 ) (2.22 ) Weighted average number of shares used in per share calculations: Basic shares 86.1 84.7 85.8 84.5 Diluted shares 86.1 84.7 85.8 84.5 For all periods presented, basic and diluted net loss per share is the same, as any additional common stock equivalents would be anti-dilutive. We excluded 1.9 million and 1.7 million of stock options from the weighted average diluted common shares outstanding as of September 30, 2015 and 2014, respectively, which would have been anti-dilutive due to the net loss in those periods. In addition, we excluded 6.0 million and 4.0 million of RSUs from the calculation of weighted average diluted common shares outstanding as of September 30, 2015 and 2014, respectively, which would have been anti-dilutive due to the net loss in those periods. |
Accounts and Notes Receivable a
Accounts and Notes Receivable and Credit Quality of Notes Receivable | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Accounts and Notes Receivable and Credit Quality of Notes Receivable | Accounts and Notes Receivable and Credit Quality of Notes Receivable Accounts and Notes Receivable The following summarizes the components of current and long-term accounts and notes receivable, net: September 30, 2015 December 31, 2014 Current: Accounts receivable $ 478.9 $ 479.5 Notes receivable 174.5 194.6 Allowance for doubtful accounts (19.7 ) (17.0 ) Current accounts and notes receivable, net $ 633.7 $ 657.1 Long-term: Notes receivable 57.6 87.5 Total accounts and notes receivable, net $ 691.3 $ 744.6 Credit Quality of Notes Receivable The Company includes in its notes receivable amounts due in installment payments and any amounts due for development financing provided to certain customers. We carry our notes receivable at face amount less an allowance for doubtful accounts and imputed interest, if any. Interest income is recognized ratably over the life of the note receivable and any related fees or costs to establish the notes are expensed as incurred, as they are considered insignificant. Actual or imputed interest, if any, is determined based on stated rates or current market rates at the time the note originated and is recorded as interest income in other income (expense), net, ratably over the payment period. We generally impute interest income on notes receivable with terms greater than one year that do not contain a stated interest rate. The interest rates on our outstanding notes receivable ranged from 3.25% to 10.4% at September 30, 2015 and December 31, 2014. Our policy is to generally recognize interest on our notes receivable until the note receivable is deemed non-performing, which we define as a note on which payments are over 180 days past due. The amount of our non-performing notes was immaterial at September 30, 2015 and December 31, 2014. We monitor the credit quality of our accounts receivable by reviewing an aging of customer invoices. Invoices are considered past due if a scheduled payment is not received within agreed-upon terms. Our notes receivable are reviewed for impairment at least quarterly. We also review a variety of other relevant qualitative information such as collection experience, economic conditions and customer-specific financial conditions to evaluate credit risk in recording the allowance for doubtful accounts or as an indicator of an impaired loan. For notes receivable from customers in the U.S. with payment terms over 90 days, we generally file a UCC-1 form to retain a security interest in the gaming machines until we are fully paid. For notes receivable from international customers, where possible, we seek payment deposits, collateral, pledge agreements, bills of exchange, foreign bank letters of credit, post-dated checks or personal guarantees from such customers. However, the majority of our notes receivable from international customers do not have these features. Currently, we have not sold our notes receivable to third parties. The government authorities in Argentina limit the exchange of pesos into U.S. dollars and the transfer of funds from Argentina. Our accounts and notes receivable, net, from customers in Argentina at September 30, 2015 were $19.1 million, which is denominated in U.S. dollars, although, under the terms of our arrangements with our customers in Argentina, they are required to pay us in pesos at the spot exchange rate between the peso and the U.S. dollar on the date of payment. In evaluating the collectability of customer receivables in Argentina at September 30, 2015 , we specifically evaluated recent payments, receivables aging, any additional security or collateral we had (bills of exchange, pledge agreements, etc.) and other facts and circumstances relevant to our customers’ ability to pay. Our customers in Argentina have continued to pay us in pesos based on the spot exchange rate between the peso and the U.S. dollar on the payment date. We collected $23.6 million of outstanding receivables from customers in Argentina during the nine months ended September 30, 2015 . In late November 2015, Argentinians will elect a new president and we cannot predict what the impact of this change in leadership may have on our operations, customer payments or our ability to transfer funds from Argentina. Recent government actions and challenges affecting the gaming industry in Mexico have increased the credit quality risk with respect to certain of our current Mexico customers. In evaluating the collectability of customer receivables in Mexico at September 30, 2015 , we specifically evaluated recent payments, receivable aging, any additional security or collateral we had (bills of exchange, pledge agreements, etc.) and other facts and circumstances relevant to our customers’ ability to pay. Our accounts and notes receivable, net, from all customers in Mexico was $42.1 million at September 30, 2015 . We collected $23.7 million of outstanding receivables from customers during the nine months ended September 30, 2015 . The following summarizes the components of total notes receivable, net: September 30, 2015 Balances over 90 days past due December 31, 2014 Balances over 90 days past due Notes receivable: Domestic $ 63.1 $ 2.6 $ 95.3 $ 7.9 International 169.0 20.3 186.8 12.0 Total notes receivable 232.1 22.9 282.1 19.9 Notes receivable allowance for doubtful accounts: Domestic (2.9 ) (1.5 ) — — International (8.5 ) (4.4 ) (5.9 ) (3.5 ) Total notes receivable allowance for doubtful accounts (11.4 ) (5.9 ) (5.9 ) (3.5 ) Note receivable, net $ 220.7 $ 17.0 $ 276.2 $ 16.4 At September 30, 2015 , 7.7% of our total notes receivable, net, was past due by over 90 days compared to 5.9% at December 31, 2014. The following tables detail our evaluation of notes receivable for impairment as of September 30, 2015 and December 31, 2014: September 30, 2015 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 63.1 $ 32.4 $ 30.7 International 169.0 112.3 56.7 Total notes receivable $ 232.1 $ 144.7 $ 87.4 December 31, 2014 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 95.3 $ 36.1 $ 59.2 International 186.8 121.0 65.8 Total notes receivable $ 282.1 $ 157.1 $ 125.0 The following table reconciles the allowance for doubtful notes receivable from December 31, 2014 to September 30, 2015 : Total Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Beginning balance at December 31, 2014 $ 5.9 $ 5.9 $ — Charge-offs (1.9 ) (1.9 ) — Recoveries (0.5 ) (0.4 ) (0.1 ) Provision 7.9 6.2 1.7 Ending balance at September 30, 2015 $ 11.4 $ 9.8 $ 1.6 The following table reconciles the allowance for doubtful notes receivable from December 31, 2013 to September 30, 2014 : 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 $ — Modifications to original financing terms are exceptions to our cash collection process and are a function of collection activities with the customer. If a customer requests a modification of financing terms during the collection process, we evaluate the proposed modification in relation to the recovery of our gaming machines, generally seek additional security and recognize any additional interest income ratably over the remaining new financing term. Additionally, we often take the opportunity to simplify the customer's future payments by consolidating several notes (each typically representing an individual purchase transaction) into one note. In those instances, the aging of any outstanding receivable balance would be adjusted to reflect the new payment terms. Such modifications generally do not include a concession on the amount owed and typically result only in a delay of payments relative to the original terms. For the nine months ended September 30, 2015 , we had no significant modifications to the original financing terms. The following summarizes the notes receivable financing terms that were modified during the nine months ended September 30, 2014 : 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 (1) The modifications are detailed below: • 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. In certain international jurisdictions, we offer extended financing terms to our customers. Such financing activities subject us to increased credit risk, which could be worsened by, among other things, unfavorable economic conditions or political or economic instability in those regions. Our notes receivable were concentrated in the following international gaming jurisdictions at September 30, 2015 : Mexico 19 % Peru 17 % Australia 8 % Columbia 7 % Argentina 7 % Other (less than 5% individually) 15 % Total international notes receivable as a percentage of total notes receivable 73 % |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following as of the dates presented below: September 30, 2015 December 31, 2014 Parts and work-in-process $ 122.0 $ 105.7 Finished goods 121.8 159.9 Total inventories $ 243.8 $ 265.6 Parts and work-in-process include parts for gaming machines, lottery terminals and instant lottery ticket materials, as well as labor and overhead costs associated with the manufacturing of our gaming machines and instant lottery games. Our finished goods inventory primarily consists of gaming machines for sale, instant games for our participation arrangements and our licensed branded merchandise. During the nine months ended September 30, 2015 , we recorded valuation adjustments of $7.1 million related to the discontinuance of certain product lines as a result of the Bally acquisition. The impairments are included in cost of product sales in our Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2015 . There were no inventory impairments recorded for the three months ended September 30, 2015 or the three and nine months ended September 30, 2014. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Gaming and lottery machinery and equipment, including assets under capital leases, were as follows: September 30, 2015 December 31, 2014 Gaming equipment $ 772.0 $ 799.9 Less: accumulated depreciation (266.4 ) (279.1 ) Gaming equipment, net 505.6 520.8 Lottery machinery and equipment 307.9 311.7 Less: accumulated depreciation (231.2 ) (207.4 ) Lottery machinery and equipment, net 76.7 104.3 Total gaming and lottery machinery and equipment, net $ 582.3 $ 625.1 Property and equipment consisted of the following: September 30, 2015 December 31, 2014 Land $ 39.1 $ 43.0 Buildings and leasehold improvements 183.1 206.3 Furniture and fixtures 40.8 36.2 Transportation equipment 4.4 5.0 Construction in progress 38.6 11.7 Other property and equipment, at cost 292.3 292.8 Less: accumulated depreciation (312.2 ) (207.3 ) Property and equipment, net $ 286.1 $ 387.7 Total property and equipment, net $ 868.4 $ 1,012.8 Depreciation expense for the three and nine months ended September 30, 2015 was $72.8 million and $249.1 million, respectively. Depreciation expense for the three and nine months ended September 30, 2014 was $58.5 million and $166.8 million, respectively. Depreciation expense is excluded from cost of services, cost of product sales, cost of instant games and other operating expenses and is separately stated within D&A in the Consolidated Statements of Operations and Comprehensive Loss. Accumulated amortization of capital lease assets was $10.8 million and $5.3 million as of September 30, 2015 and December 31, 2014, respectively. During the nine months ended September 30, 2015 , the Gaming business segment disposed of certain fully depreciated gaming assets with a historical cost of $59.9 million . The disposal had no impact on property and equipment, net in our Consolidated Balance Sheets as of September 30, 2015 or D&A in the Consolidated Statements of Operations and Comprehensive Loss for three and nine months ended September 30, 2015 . In addition, during the three and nine months ended September 30, 2015 , we recorded an impairment of $0.5 million and $5.7 million , respectively, related to gaming equipment assets for certain product lines that were discontinued as a result of the Bally acquisition. The impairment is included in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2015 . There were no impairments of our gaming equipment fixed assets recorded for the three and nine months ended September 30, 2014. As a result of our acquisition of Bally in the fourth quarter of 2014, we determined that we would consolidate our gaming manufacturing operations in Las Vegas, Nevada and sell our manufacturing facility in Waukegan, Illinois. As a result, we recorded a $9.4 million facility impairment in the fourth quarter of 2014. In June 2015 we ceased manufacturing operations at our Waukegan facility and are actively marketing the facility for sale. During the second quarter of 2015, we initiated plans to sell our facility in Reno, Nevada, and consolidate our operations in one of our leased facilities, which supports sales, distribution, WAP operations and development operations for our Gaming business. In June 2015, we recorded a $4.9 million impairment of this facility to adjust the carrying value to fair value less cost to sell. This charge is included in D&A in the Consolidated Statements of Operations and Comprehensive Loss for nine months ended September 30, 2015 . Both the Waukegan and Reno facilities are part of our Gaming business segment and represented $27.5 million of land and buildings, which we have classified as held for sale within prepaid expenses, deposits and other current assets in our Consolidated Balance Sheets as of September 30, 2015 . In August 2015, we executed an agreement to sell our Reno facility and the sale closed in November 2015. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets The following tables present certain information regarding our intangible assets as of September 30, 2015 and December 31, 2014 . Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual value. Intangible Assets Gross Carrying Amount Accumulated Amortization Net Balance Balance as of September 30, 2015 Amortizable intangible assets: Patents $ 20.4 $ 9.5 $ 10.9 Customer relationships 876.5 95.1 781.4 Licenses 366.4 128.6 237.8 Intellectual property 727.1 117.3 609.8 Trade names 97.5 — 97.5 Brand names 123.3 15.2 108.1 Non-compete agreements 0.3 0.3 — 2,211.5 366.0 1,845.5 Non-amortizable intangible assets: Trade names 97.4 2.1 95.3 Total intangible assets $ 2,308.9 $ 368.1 $ 1,940.8 Balance as of December 31, 2014 Amortizable intangible assets: Patents $ 17.9 $ 8.4 $ 9.5 Customer relationships 883.2 46.7 836.5 Licenses 332.8 88.5 244.3 Intellectual property 736.3 19.5 716.8 Brand names 128.2 5.3 122.9 Non-compete agreements 0.3 0.2 0.1 Lottery contracts 1.5 1.5 — 2,100.2 170.1 1,930.1 Non-amortizable intangible assets: Trade names 323.6 2.1 321.5 Total intangible assets $ 2,423.8 $ 172.2 $ 2,251.6 The aggregate intangible amortization expense for the three and nine months ended September 30, 2015 was $181.5 million and $331.8 million, respectively. The aggregate intangible amortization expense for the three and nine months ended September 30, 2014 was $18.1 million and $49.0 million, respectively. Amortization expense is excluded from cost of services, cost of product sales, cost of instant games and other operating expenses and is separately stated within D&A in the Consolidated Statements of Operations and Comprehensive Loss. We conduct impairment tests of our indefinite-lived trade name assets annually in the fourth quarter and on an interim quarterly basis when events arise or circumstances change that indicate that it is more likely than not that the fair value is less than carrying value or when circumstances no longer continue to support an indefinite useful life. During the second quarter of 2015, as a result of an interim review of assets with indefinite useful lives, we recorded an impairment charge of $25.0 million to reduce the carrying value of one indefinite-lived trade name asset to its fair value. During the third quarter of 2015 and in conjunction with both our introduction of a new SG-branded gaming cabinet and our step two impairment analysis for our SG gaming reporting unit goodwill as further described below, we determined that certain of our indefinite-lived trade name assets in our gaming business segment should be classified as finite-lived instead of indefinite-lived. In connection with this change, we performed a quantitative impairment test for our SG gaming related trade name assets which consisted of a comparison of the fair value of the assets to their carrying amount. If the carrying amount exceeds fair value, an impairment loss is recognized in an amount equal to that excess. We estimated the fair value of the trade names using the relief-from-royalty method, which uses several significant assumptions, including an estimate of useful life and revenue projections that consider historical and estimated future results, general economic and market conditions, as well as the impact of planned business and operational strategies. The following estimates and assumptions were also used in the relief-from-royalty method: • Royalty rates between 0.5% and 1.0% based on market observed royalty rates; and • A discount rate of 9.0% based on the required rate of return for the trade name assets. Based on the estimated fair value of the trade names, we recorded a non-cash impairment charge of $103.6 million for the three ended September 30, 2015, which impairment is reflected in D&A in our Consolidated Statements of Operations and Comprehensive Loss. The change in useful life determination was treated as a change in estimate with the new $97.5 million carrying value of the trade names to be amortized on a straight-line basis over a fifteen-year period beginning in the fourth quarter of 2015. The fifteen-year estimated useful life is a matter of management judgment which we believe most accurately represents the period over which the trade names will contribute to the future cash flows of the gaming business segment and is consistent with our policies for assigning useful lives as disclosed in Note 1 (Description of the Business and Summary of Significant Accounting Policies) in our 2014 Annual Report on Form 10-K. The aggregate amount of impairment charges for our trade name assets reflected in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2015 are $103.6 million and $128.6 million, respectively. No intangible asset impairments were recorded for the three and nine months ended September 30, 2014 . Goodwill We evaluate goodwill at the reporting unit level by comparing the carrying value of each reporting unit to its fair value using a quantitative two-step impairment test in accordance with ASC 350-20. We conduct impairment tests of goodwill annually in the fourth quarter and on an interim quarterly basis when events arise or circumstances change that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the indicated fair value of the reporting unit is greater than its carrying value, goodwill is not considered impaired. If the indicated fair value of the reporting unit is less than its carrying value, the amount of the impairment loss, if any, will be measured by comparing the indicated fair value of goodwill to its carrying value. Our reporting units as of September 30, 2015 include: instant products, U.S. lottery systems, international lottery systems, SG gaming, legacy U.K. gaming, casino management systems, table products, and interactive. As of September 30, 2015, we have reviewed each of our reporting units for indicators of impairment, and, with the exception of the SG gaming reporting unit, we have not identified events or circumstances affecting our other seven reporting units which would indicate an impairment. Market-related factors negatively impacting gaming machine unit demand and the number of gaming machines leased by our customers coupled with fewer than anticipated new casino openings and expansions have resulted in continued declines in our gaming machine sales and participation game revenues. A prolonged reduction in customer spending on new gaming machine units, a lack of new casino openings, economic and political conditions impacting unit sales and participation game revenues in certain international jurisdictions, and cost reduction initiatives undertaken by certain of our customers during the quarter have all negatively impacted our SG gaming reporting unit. These conditions have culminated in a change in outlook for the SG gaming reporting unit during the third quarter of 2015 which we believe is an indicator of goodwill impairment. Our SG gaming reporting unit is included in our gaming operating segment, which is reflected in the segment table below. We performed an interim step one goodwill analysis of our SG gaming reporting unit, and we determined that the indicated fair value of our SG gaming reporting unit was less than its carrying value. For purposes of the step one analysis under ASC 350-20, we estimated the fair value of the SG gaming reporting unit using both an income approach that analyzed projected discounted cash flows and a market approach that considered both comparable public companies as well as comparable industry transactions. In determining the fair value of our SG gaming reporting unit, we have given more weight to the income approach than to the market valuation approach due to a relatively small number of comparable companies within our industry and absence of a significant volume of recent comparable industry transactions. In calculating the fair value of our SG gaming reporting unit using the income approach, we used projections of revenues, gross margin, operating costs and cash flows that considered historical and estimated future results, general economic and market conditions, as well as the impact of planned business and operational strategies. The following estimates and assumptions were also used in the discounted cash flow analysis: • A terminal profit margin percentage reflecting our historical and forecasted profit margins; • A terminal revenue growth rate of 2.0% based on long term nominal growth rate potential; • Assumptions regarding future capital expenditures reflective of maintaining our installed base of leased gaming machines and facilities under normalized operations; and • An overall discount rate of 9% based on our weighted average cost of capital for the SG gaming reporting unit. Additionally, under the market approach, we used other significant observable inputs including various peer company comparisons and industry transaction data. Changes in these estimates or assumptions could materially affect the determination of fair value and the conclusions of the step one analysis for the reporting unit. As the step one analysis indicated an impairment in the carrying value of the SG gaming unit, we then proceeded to perform a step two impairment analysis to determine the amount of goodwill impairment to be recorded. The amount of the impairment is calculated by comparing the implied fair value of the goodwill to its carrying amount, which requires us to allocate the fair value determined in the step one analysis to the individual assets and liabilities of the reporting unit. Any remaining fair value would represent the implied fair value of goodwill as of the testing date. As of the filing date of this Quarterly Report on Form 10-Q, we have not completed our step two analysis due to its complexity. However, based on the work performed through the date of this filing, we recorded a $535.0 million non-cash impairment charge with no tax benefit to reduce the historical carrying value of our SG gaming goodwill to its implied fair value, which impairment is reflected in Goodwill impairment in our Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2015. This impairment charge does not impact our operations, compliance with our debt covenants or our cash flows. The carrying value of our SG gaming goodwill as of September 30, 2015 following the impairment charge is $1,483.7 million. The completion of our step two analysis is subject to the finalization of fair values which we expect to complete prior to filing our 2015 Annual Report on Form 10-K. We believe that the preliminary estimate of the impairment charge is reasonable and represents our current good faith estimate of the amount of the impairment charge based on our analysis to date. We based our fair value estimates on assumptions that are subject to inherent uncertainty and there can be no assurance that no material adjustments to the preliminary estimate will be required as the step two analysis is finalized. Following completion of the analysis, we will adjust our preliminary estimate if necessary, and record any required adjustment in our consolidated financial statements for the year ended December 31, 2015. The table below reconciles the change in the carrying amount of goodwill by business segment for the period from December 31, 2013 to September 30, 2015 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2013 $ 612.7 $ 513.9 $ 56.5 $ 1,183.1 Acquisitions 2,902.8 — 53.3 2,956.1 Foreign currency adjustments (15.8 ) (15.1 ) — (30.9 ) Balance as of December 31, 2014 3,499.7 498.8 109.8 4,108.3 Foreign currency adjustments (77.0 ) (11.1 ) — (88.1 ) Impairment (535.0 ) — — (535.0 ) Balance as of September 30, 2015 $ 2,887.7 $ 487.7 $ 109.8 $ 3,485.2 |
Software
Software | 9 Months Ended |
Sep. 30, 2015 | |
Capitalized Computer Software, Net [Abstract] | |
Software | Software September 30, 2015 December 31, 2014 Software $ 857.3 $ 812.1 Accumulated amortization (330.3 ) (219.4 ) Software, net $ 527.0 $ 592.7 Amortization expense for the three and nine months ended September 30, 2015 was $32.2 million and $112.0 million, respectively. Amortization expense for the three and nine months ended September 30, 2014 was $23.8 million and $74.7 million, respectively. Amortization expense is excluded from cost of services, cost of product sales, cost of instant games and other operating expenses and is separately stated within D&A in the Consolidated Statements of Operations and Comprehensive Loss. |
Equity Investments
Equity Investments | 9 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Equity Investments The following provides an update for events that occurred during the nine months ended September 30, 2015 related to our equity method investments, which are disclosed in Note 11 (Equity Investments) in our 2014 Annual Report on Form 10-K. Northstar Illinois We own a 20% equity interest in Northstar Illinois, an entity formed with Gtech Corporation, a subsidiary of International Gaming Technology PLC, ("Gtech") to be the private manager for the Illinois lottery. Northstar Illinois manages the day-to-day operations of the lottery under a PMA with the State of Illinois which commenced in January 2011 and has a 10 -year term. Northstar Illinois is responsible for annual shortfall payments to the Illinois Lottery to the extent predetermined net income targets in the PMA are not achieved. Under our supply agreement with Northstar Illinois, we are responsible for the design, development, manufacturing, warehousing and distribution of instant lottery games and are compensated based on a percentage of retail sales. In August 2014, we understand that the Governor’s office of the State of Illinois directed the Illinois Lottery to end the PMA with Northstar Illinois. In December 2014, Northstar Illinois, the State of Illinois, SGI and Gtech entered into a termination agreement with respect to the PMA (the "2014 termination agreement"). In February 2015, the Illinois Governor’s Office sent a letter to Northstar Illinois stating that the Illinois Attorney General issued a written notice disapproving the 2014 termination agreement and that the Governor’s Office had directed the Illinois Lottery to enforce the terms of the PMA. In August 2015, the parties entered into a new termination agreement that replaced the 2014 termination agreement. The new termination agreement, contemplates, among other things, (1) a $10.0 million net income shortfall payment for the lottery’s 2015 fiscal year, (2) termination of the PMA in January 2017 (subject to possible extension by mutual agreement of the State of Illinois and Northstar Illinois in 3- to 6-month increments), (3) that, following December 2014, Northstar Illinois will no longer be entitled to any incentive compensation payments and will no longer be liable for any shortfall payments following the $10 million shortfall payment for the lottery's 2015 fiscal year, (4) reimbursement of Northstar Illinois for certain costs it incurs in transitioning its obligations under the PMA, (5) continuation of our instant lottery game supply agreement (and Gtech’s lottery systems supply agreement) with Northstar Illinois until July 2017, subject to a reduced rate structure, and (6) our right to negotiate a new supply agreement with any manager that replaces Northstar Illinois and our ability to participate in the procurement process for such replacement manager. During the second quarter of 2015 we recorded a charge of $2.0 million in earnings from equity investments in our Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2015, representing our 20% share of the $10 million net income shortfall payment for the lottery's 2015 fiscal year. Also during the second quarter of 2015, we recorded an adjustment to reduce revenue by $1.3 million which is reflected in our Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2015. Sportech In January 2014, we completed the sale of our 20% equity interest in Sportech for cash proceeds of £27.8 million, or $44.9 million, resulting in a gain of approximately £9.0 million, or $14.5 million, which is reflected as a gain on sale of equity interest in our Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2014. GLB During the nine months ended September 30, 2015 , we received a dividend of RMB 11.1 million, or $1.6 million. ITL During the nine months ended September 30, 2015 , we received a distribution of capital of €7.3 million, or $8.1 million. RCN During the nine months ended September 30, 2015 , we received a dividend of $2.9 million. Hellenic Lotteries During the nine months ended September 30, 2015 , we received a dividend of €1.8 million, or $2.0 million and a distribution of capital of €10.7 million, or $12.0 million. LNS During the nine months ended September 30, 2015 , we received a dividend of €12.9 million, or $14.5 million and a distribution of capital of €15.1 million, or $16.9 million. |
Long-Term and Other Debt
Long-Term and Other Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term and Other Debt | Long-Term and Other Debt Outstanding Debt and Capital Leases The following reflects our outstanding debt as of September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ 115.0 $ 185.0 Term Loan, varying interest rate, due 2020 (1) 2,251.5 2,267.6 Term Loan, varying interest rate, due 2021 (2) 1,967.6 1,980.3 2018 Notes 250.0 250.0 2020 Notes 300.0 300.0 2021 Notes (3) 348.1 347.8 Secured Notes 950.0 950.0 Unsecured Notes 2,200.0 2,200.0 Capital lease obligations, 3.9% interest as of September 30, 2015 payable monthly through 2019 28.0 35.3 Total long-term debt outstanding 8,410.2 8,516.0 Less: debt payments due within one year (50.4 ) (50.6 ) Long-term debt, net of debt payments due within one year $ 8,359.8 $ 8,465.4 (1) Total of $2,259.7 million in principal amount less unamortized loan discount in the amount of $8.2 million as of September 30, 2015 . Total of $2,277.0 million in principal amount less unamortized loan discount in the amount of $9.4 million as of December 31, 2014. (2) Total of $1,985.0 million in principal amount less unamortized loan discount in the amount of $17.4 million as of September 30, 2015 . Total of $2,000.0 million in principal amount less unamortized loan discount in the amount of $19.7 million as of December 31, 2014. (3) Total of $350.0 million in principal amount less unamortized loan discount in the amount of $1.9 million as of September 30, 2015 . Total of $350.0 million in principal amount less unamortized loan discount in the amount of $2.2 million as of December 31, 2014. Senior Secured Credit Facilities The Company and certain of its subsidiaries are party to a credit agreement dated as of October 18, 2013, by and among SGI, as the borrower, the Company, as a guarantor, Bank of America, N.A., as administrative agent, and the lenders and other agents party thereto (the "Credit Agreement"). Prior to the increase in the revolving credit facility and the assumption of the incremental term loans referred to below, the Credit Agreement provided for senior secured credit facilities in an aggregate principal amount of $2,600.0 million , including a $300.0 million revolving credit facility, which has dollar and multi-currency tranches, and a $2,300.0 million term B-1 loan facility. On October 1, 2014, the Company entered into an amendment to the Credit Agreement to, among other things, (1) permit the Bally acquisition and the transactions related thereto and (2) effective as of the consummation of the Bally acquisition, (A) increase the revolving credit facility to $567.6 million , (B) permit SGI to assume the term loans under the escrow credit agreement referred to below as incremental term B-2 loans under the Credit Agreement and (C) modify the financial covenant contained in the Credit Agreement such that it will be tested each quarter, irrespective of usage of the revolving credit facility. On October 1, 2014, SGMS Escrow Corp., a 100% owned subsidiary of SGI, entered into an escrow credit agreement by and among SGMS Escrow Corp., as borrower, the lenders and other agents from time to time party thereto, and Bank of America, N.A., as administrative agent. The escrow credit agreement provided for $2,000.0 million of term loans, the net proceeds of which provided a portion of the funds used to finance the Bally acquisition. Upon the consummation of the Bally acquisition, the term loans under the escrow credit agreement were assumed by SGI as incremental term B-2 loans under the Credit Agreement. On February 11, 2015, SGI entered into a lender joinder agreement to the Credit Agreement with an additional commitment lender. Pursuant to the joinder agreement, the amount of the revolving credit facility under the Credit Agreement was increased by $25.0 million to $592.6 million . Up to $350.0 million of the revolving credit facility is available for issuances of letters of credit. The term B-1 loans incurred in 2013 under the Credit Agreement are scheduled to mature on October 18, 2020, the term B-2 loans incurred in 2014 under the Credit Agreement are scheduled to mature on October 1, 2021 and the revolving credit facility under the Credit Agreement is scheduled to mature on October 18, 2018. All of the debt incurred under the Credit Agreement is subject to accelerated maturity depending on our liquidity at the time our 2018 Notes, 2020 Notes and 2021 Notes become due. For additional information regarding our senior secured credit facilities, see Note 15 (Long-Term and Other Debt) in our 2014 Annual Report on Form 10-K. 2021 Notes In May 2015, SGI completed an exchange offer in which all of the unregistered 2021 Notes were exchanged for a like amount of 2021 Notes that have been registered under the Securities Act. Unsecured Notes In May 2015, SGI completed an exchange offer in which all of the unregistered Unsecured Notes were exchanged for a like amount of Unsecured Notes that have been registered under the Securities Act. Capital Lease Obligations During the nine months ended September 30, 2015 , we did not enter into any new capital lease arrangements and our remaining obligation at September 30, 2015 was $28.0 million. For additional information regarding our 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes, Unsecured Notes and capital lease obligations, see Note 15 (Long-Term and Other Debt) in our 2014 Annual Report on Form 10-K. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset and liability in an orderly transaction between market participants at the measurement date. We estimate fair value of our assets and liabilities utilizing an established three-level hierarchy as described in Note 16 (Fair Value Measurements) in our 2014 Annual Report on Form 10-K. The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued liabilities, approximates their recorded values. Interest rate swap contracts In August 2013, we entered into forward starting interest rate swap contracts with an aggregate notional value of $500.0 million. In October 2013, we entered into additional forward starting interest rate swap contracts with an aggregate notional value of $200.0 million. These hedges became effective in April 2015 and will mature in January 2018. We entered into the forward starting interest rate swap contracts, which are designated as cash flow hedges of the future interest payment transactions in accordance with ASC 815, Derivatives and Hedging , in order to eliminate the variability of cash flows attributable to the LIBOR component of interest expense to be paid on our variable rate debt. Under these hedges, beginning in April 2015 we began to pay interest on the notional amount of debt at a weighted-average fixed rate of 2.151% and receive interest on the notional amount at the greater of 1% or the then prevailing three-month LIBOR rate. These hedges are highly effective in offsetting changes in our future expected cash flows due to fluctuation in the three-month LIBOR rate associated with our variable rate debt. The effectiveness of these hedges is measured quarterly on a retrospective basis by comparing the cumulative change in the hedging instrument's fair value to the change in the hedged transaction's fair value. To the extent these hedges have no ineffectiveness, all gains and losses from these hedges are recorded in other comprehensive loss until the future underlying interest expense is incurred. Any realized gains or losses resulting from the hedges will be recognized (together with the hedged transaction) as interest expense in our Consolidated Statements of Operations and Comprehensive Loss. For the three and nine months ended September 30, 2015, we recorded losses, net of tax, of $1.7 million and $1.0 million, respectively, all of which is recorded in Other comprehensive loss in our Consolidated Statements of Operations and Comprehensive Loss related to these hedges. For the three and nine months ended September 30, 2014, we recorded a gain, net of tax, of $2.2 million and a loss, net of tax, of $4.2 million, respectively, all of which is recorded in other comprehensive loss in our Consolidated Statements of Operations and Comprehensive Loss related to these hedges. The fair value of these hedges as of September 30, 2015 was $14.9 million with a current portion of $8.2 million recorded in other current liabilities in our Consolidated Balance Sheets and $6.7 million recorded in other long-term liabilities in our Consolidated Balance Sheets. The fair value of these hedges as of December 31, 2014 was $9.5 million, which is recorded in other long-term liabilities in our Consolidated Balance Sheets. The hedges became effective in April 2015, and for the three and nine months ended September 30, 2015 we recorded realized gains of $0.6 million and realized losses of $1.1 million , respectively, which is recorded in interest expense in our Consolidated Statements of Operations and Comprehensive Loss. We categorized the interest rate swap contracts as Level 2 in the fair value hierarchy. Other In accordance with ASC 323, Investments - Equity Method and Joint Ventures , we record our share of a derivative instrument held by LNS. Changes in the fair value of the derivative instrument are recorded by LNS in other comprehensive income on LNS' statement of comprehensive income. During the three and nine months ended September 30, 2015 and 2014, our 20% share of the change associated with this derivative instrument was not material to other comprehensive loss in our Consolidated Statements of Operations and Comprehensive Loss and equity investments in our Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014. Items Measured at Fair Value on a Non-Recurring Basis Our non-financial assets, which primarily consist of goodwill and other intangible assets are not required to be measured at fair value on a recurring basis, however, whenever events arise or circumstances change to indicate that the fair value of the asset is less than its carrying value, and at least annually for goodwill and indefinite-lived intangible assets, non-financial assets are tested for impairment, and if applicable, adjusted to fair value. As of September 30, 2015, the total of our non-financial assets that were required to be measured at fair value was $1,581.1 million . During the three months ended September 30, 2015, we recorded impairment charges of $535.0 million and $103.6 million related to our goodwill and trade name intangible assets, respectively. During the nine months ended September 30, 2015, we recorded impairment charges of $535.0 million and $128.6 million related to our goodwill and trade name intangible assets, respectively. Our assessment of goodwill and other intangible assets for impairment includes various Level 2 inputs, such as market multiples, discount rate, and royalty rates, and Level 3 inputs, such as cash flow projections. See Note 9, "Intangible Assets and Goodwill," for more information on the application of inputs used to measure fair value of goodwill and other intangible assets. As a result, we classify the items measured at fair value on a non-recurring basis within Level 3 in the fair value hierarchy. |
Stockholders' (Deficity) Equity
Stockholders' (Deficity) Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' (Deficit) Equity | Stockholders’ (Deficit) Equity The following table presents the change in the number of shares of our Class A common stock outstanding during the nine months ended September 30, 2015 and during the year ended December 31, 2014: Nine Months Ended September 30, 2015 Twelve Months Ended December 31, 2014 Shares outstanding as of beginning of period 85.1 85.2 Shares issued as part of equity-based compensation plans and the ESPP, net of RSUs surrendered 1.1 1.9 Common stock repurchases — (2.0 ) Shares outstanding as of end of period 86.2 85.1 Treasury Stock In December 2014, our existing stock repurchase program, which was originally announced in May 2010, expired and was not renewed. Under the program, we were authorized to repurchase, from time to time through open market purchases or otherwise, shares of our outstanding common stock in an aggregate amount up to $200.0 million. During the first quarter of 2014, we repurchased approximately 2.0 million shares at an aggregate cost of $29.5 million. Purchases made during 2014 were funded by cash flows from operations, borrowings or a combination thereof. As of the program’s expiration on December 31, 2014, we had $75.0 million remaining available for potential repurchases under the program. Accumulated Other Comprehensive Loss During the three and nine months ended September 30, 2015 and 2014, the primary changes in accumulated other comprehensive loss were related to the foreign currency translation component. The foreign exchange rates that had the largest impact on our foreign currency translation in the three and nine months ended September 30, 2015 were the Euro, British Pound Sterling, Australian Dollar and Canadian Dollar. The foreign exchange rates that had the largest impact on our foreign currency translation in the three and nine months ended September 30, 2014 were the Euro and British Pound Sterling. There were no tax effects related to foreign currency translation gains and losses. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We offer stock-based compensation in the form of stock options and RSUs. We also offered an ESPP through June 30, 2015 at which point in time the shares allocated to this plan were fully issued. We grant stock options to employees and directors under our equity-based compensation plans with exercise prices that are not less than the fair market value of our common stock on the date of grant. The terms of the stock option and RSU awards, including the vesting schedule of such awards, are generally determined at the discretion of the compensation committee of our board of directors, subject to the terms of the applicable equity-based compensation plan. Options granted in recent years have generally become exercisable in four equal annual installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met and have a maximum term of ten years. RSUs typically vest in four equal annual installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met. We record compensation cost for all stock options and RSUs based on the grant date fair value. On January 1, 2015, the Company granted 0.3 million performance-conditioned RSUs with a grant date fair value of $13.26 and a three -year vesting schedule to one of the Company's executives. Of the total award, half of the RSUs have three one-year performance targets and half have a three -year cumulative performance target. For the RSUs with one-year performance targets, one-third vest each year if specified performance targets are met. In any year in which the performance targets are not achieved, that one-third will be canceled. For the RSUs with the three-year performance target, the RSUs only vest at the end of the three -year period if specified cumulative performance targets are met. If the performance targets are not met on December 31, 2017, the RSUs will be canceled. If the performance targets are determined to be met following the conclusion of the performance period on December 31, 2017, the performance-conditioned units will vest and be distributed by no later than March 15, 2018 On April 27, 2015, the Company granted approximately 0.2 million performance-conditioned RSUs with a grant date fair value of $12.83 to certain executives, which awards are subject to three -year cliff vesting at the conclusion of the performance period, contingent upon the achievement of a specified performance target. Performance achievement is measured against the performance targets following the end of the performance period (December 31, 2017) and the RSUs will be cancelled if the threshold performance targets are not met. If the performance targets are determined to be met following the conclusion of the performance period on December 31, 2017, the performance-conditioned units will vest and be distributed by no later than March 15, 2018. When we acquired Bally in November 2014, we consolidated the Bally 2010 Long Term Incentive Plan (amended and restated in 2013) (the “Legacy Bally Plan”) with and into the Company’s 2003 Incentive Compensation Plan (the “2003 Plan”) such that the Legacy Bally Plan became a sub-plan of the 2003 Plan with respect to the Bally awards that we assumed (discussed below). In connection therewith, Bally equity awards that were not cashed out in connection with the acquisition were assumed and adjusted (using an exchange ratio based on the stock prices of Bally and the Company at the time of the acquisition) to become awards relating to approximately 1.4 million shares of our common stock. In addition, we assumed shares available for future awards under the Legacy Bally Plan that totaled (after adjustment using the exchange ratio) 3.4 million shares of our common stock (such shares, together with the shares underlying the assumed Bally equity awards, the “Legacy Bally Shares”). On June 10, 2015, the Company held its annual meeting of stockholders. At the annual meeting, the Company’s stockholders approved an amendment and restatement of the Company’s 2003 Plan in which the Legacy Bally Shares were consolidated with the shares of Company common stock previously reserved and available for issuance under the 2003 Plan. As a result, the shares reserved and available for issuance under the 2003 Plan were combined into a single share pool, with such shares available for equity awards to any employee, non-employee director or other eligible service provider of the Company or its subsidiaries, including Bally. As a result of merging the Legacy Bally Plan into the 2003 Plan, as of September 30, 2015 , we had approximately 5.1 million shares available for future grants of equity awards under the 2003 Plan plus available shares from a pre-existing equity-based compensation plan (excluding shares underlying outstanding awards). We also have outstanding stock options and RSUs granted as part of inducement awards that were not approved by our stockholders, as permitted by applicable stock exchange rules. Under the share counting rules of our 2003 Plan, awards may be outstanding relating to a greater number of shares than the aggregate remaining shares available under our 2003 Plan so long as awards will not result in delivery and vesting of shares in excess of the number then available under the plan. Shares available for future issuance do not include shares expected to be withheld in connection with outstanding awards to satisfy tax withholding obligations, which would be available for future awards under our 2003 Plan under the applicable share counting rules. The shares available for issuance through the ESPP were exhausted following the purchase period which ended June 30, 2015 and our Board of Directors did not recommend to stockholders that additional shares be added to the ESPP. Our ESPP allowed for a total of up to 1.0 million shares of Class A common stock to be purchased by eligible employees under offerings made each January 1 and July 1. Employees participated through payroll deductions up to a maximum of 15% of eligible compensation. The term of each offering period was six months and shares were purchased on the last day of the offering period at a 15% discount to the stock's market value. Stock Options A summary of the changes in stock options outstanding during the nine months ended September 30, 2015 is presented below: Number of Options Weighted Average Remaining Contract Term (Years) Weighted Average Exercise Price Aggregate Intrinsic Value Options outstanding as of December 31, 2014 1.6 6.3 $ 11.61 $ 4.0 Granted 0.2 12.04 — Exercised (0.3 ) 9.83 0.9 Canceled — — Options outstanding as of March 31, 2015 1.5 7.2 $ 11.78 $ 1.2 Granted 0.6 12.83 — Exercised (0.1 ) 9.10 0.2 Canceled (0.1 ) 10.47 — Options outstanding as of June 30, 2015 1.9 7.9 $ 12.24 $ 7.1 Granted — — — Exercised — — — Canceled — — — Options outstanding as of September 30, 2015 1.9 7.8 $ 12.29 $ 1.0 Options exercisable as of September 30, 2015 0.8 5.7 11.25 $ 0.8 The weighted average grant date fair value of options awarded during the three months ended September 30, 2015 , June 30, 2015, and March 31, 2015 was $7.56 , $ 6.43 and $6.05 , respectively. For the three and nine months ended September 30, 2015 , we recognized stock-based compensation expense of $0.6 million and $1.5 million, respectively, related to the service period of stock options and a related tax benefit of $0.2 million and $0.6 million, respectively. For the three and nine months ended September 30, 2014, we recognized stock-based compensation expense of approximately $ 0.3 million and $ 1.8 million, respectively, related to the service period of stock options and a related tax benefit of $ 0.1 million and $ 0.7 million, respectively. As of September 30, 2015 , we had unrecognized compensation expense of $6.3 million relating to stock option awards that is scheduled to be expensed over a weighted average period of approximately two years. Restricted Stock Units A summary of the changes in RSUs outstanding during the nine months ended September 30, 2015 is presented below: Number of RSUs Weighted Average Grant Date Fair Value Per RSU Unvested units as December 31, 2014 5.0 $ 13.12 Granted 0.3 13.15 Vested (0.7 ) 12.72 Canceled (0.3 ) 15.08 Unvested units as of March 31, 2015 4.3 $ 13.39 Granted 2.4 12.90 Vested (0.2 ) 10.53 Canceled (0.1 ) 14.32 Unvested units as of June 30, 2015 6.4 $ 13.27 Granted 0.1 15.18 Vested (0.2 ) 13.48 Canceled (0.3 ) 13.82 Unvested Units as of September 30, 2015 6.0 13.21 For the three and nine months ended September 30, 2015 , we recognized stock-based compensation expense of $6.6 million and $17.6 million, respectively, related to the service period of RSUs and a related tax benefit of $2.5 million and $6.5 million, respectively. For the three and nine months ending September 30, 2014 we recognized stock-based compensation of $ 4.3 million and $ 15.9 million respectively, related to the service period of RSUs and a related tax benefit of $ 1.6 million and $ 5.9 million, respectively. As of September 30, 2015 , we had unrecognized compensation expense of $60.6 million relating to RSUs that is scheduled to be expensed over a weighted average period of approximately two years. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We have defined benefit pension plans for our U.K.-based union employees and certain Canadian-based employees (the "U.K. Plan" and the "Canadian Plan," respectively). Retirement benefits under the U.K. Plan are based on an employee’s average compensation over the two years preceding retirement. Retirement benefits under the Canadian Plan are generally based on the number of years of credited service. Our policy is to fund the minimum contribution permissible by the applicable regulatory authorities. The following table sets forth the combined amount of net periodic benefit cost recognized for the three and nine months ended September 30, 2015 and 2014: Three Months Ended Nine Months Ended September 30, 2015 2014 2015 2014 Components of net periodic pension benefit cost: Service cost $ 0.7 $ 0.7 $ 2.1 $ 1.9 Interest cost 1.2 1.3 $ 3.6 $ 3.9 Expected return on plan assets (1.7 ) (1.6 ) $ (5.1 ) $ (4.9 ) Amortization of actuarial gains 0.3 0.2 $ 1.0 $ 0.5 Curtailment — — $ — $ 0.2 Amortization of prior service costs (0.1 ) (0.1 ) $ (0.2 ) $ (0.2 ) Net periodic cost $ 0.4 $ 0.5 $ 1.4 $ 1.4 We presently have two 401(k) plans for U.S.-based employees. Those employees who participate in our 401(k) plan are eligible to receive matching contributions . For the Scientific Games 401(k) plan, we match 35% of a participant's contributions, up to the first 6% of their compensation (as defined in the plan document). In connection with the WMS acquisition, we assumed WMS' existing 401(k) plan and effective January 1, 2015 combined it with the Scientific Games 401(k) plan. In connection with the Bally acquisition, we assumed Bally's existing 401(k) plan. The plan was adopted for domestic employees of Bally Technologies, Inc. and all its domestic subsidiaries and matches 50% of any participant's contributions, up to the first 6% of their compensation (as defined in the plan document). |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rates on the net loss before income taxes of 10.6% and 19.4% for the three and nine months ended September 30, 2015 , respectively, and (8.4)% and (10.7)% for the three and nine months ended September 30, 2014 , respectively, were determined using an estimated annual effective tax rate after considering any discrete items for such periods. The effective tax rate benefit in the three and nine months ended September 30, 2015 was unfavorably impacted by a nondeductible goodwill impairment. As a result of the release of the valuation allowance on our U.S. deferred tax assets during the December 2014 quarter, the estimated annual effective tax rate for the three and nine months ended September 30, 2015 included the benefit of the U.S. tax loss. Our effective income tax rate on foreign earnings is impacted by the mix of income and the statutory tax rates in our foreign jurisdictions, which range from a low of 0% to a high of 35% . The foreign jurisdictions that had the most impact on our foreign income tax expense (benefit) in the three and nine months ended September 30, 2015 included Australia, Bermuda, Canada, Ireland, India and the U.K. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company is involved in various legal proceedings, including those discussed below. We record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss can be reasonably estimated (although, as discussed below, there may be an exposure to loss in excess of the accrued liability). We evaluate our accruals for legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect (1) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments, (2) the advice and analysis of counsel and (3) the assumptions and judgment of management. Legal costs associated with our legal proceedings are expensed as incurred. We had accrued liabilities of $ 13.9 million and $47.3 million for all of our legal matters that were contingencies as of September 30, 2015 and December 31, 2014, respectively. The decrease is primarily related to the €25.0 million payment to SNAI in February 2015, as discussed below. Substantially all of our legal contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss involves a series of complex judgments about future events. Consequently, the ultimate outcomes of our legal contingencies could result in losses in excess of amounts we have accrued. We may be unable to estimate a range of possible losses for some matters pending against the Company or its subsidiaries, even when the amount of damages claimed against the Company or its subsidiaries is stated because, among other things: (1) the claimed amount may be exaggerated or unsupported; (2) the claim may be based on a novel legal theory or involve a large number of parties; (3) there may be uncertainty as to the likelihood of a class being certified or the ultimate size of the class; (4) there may be uncertainty as to the outcome of pending appeals or motions; (5) the matter may not have progressed sufficiently through discovery or there may be significant factual or legal issues to be resolved or developed; and/or (6) there may be uncertainty as to the enforceability of legal judgments and outcomes in certain jurisdictions. Other matters have progressed sufficiently that we are able to estimate a range of possible loss. For those legal contingencies disclosed below as to which a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a range of possible loss, the current estimated range is up to approximately $13.4 million in excess of the accrued liabilities (if any) related to those legal contingencies. This aggregate range represents management’s estimate of additional possible loss in excess of the accrued liabilities (if any) with respect to these matters based on currently available information, including any damages claimed by the plaintiffs, and is subject to significant judgment and a variety of assumptions and inherent uncertainties. For example, at the time of making an estimate, management may have only preliminary, incomplete, or inaccurate information about the facts underlying a claim; its assumptions about the future rulings of the court or other tribunal on significant issues, or the behavior and incentives of adverse parties, regulators, indemnitors or co‑defendants, may prove to be wrong; and the outcomes it is attempting to predict are often not amenable to the use of statistical or other quantitative analytical tools. In addition, from time to time an outcome may occur that management had not accounted for in its estimate because it had considered that outcome to be remote. Furthermore, as noted above, the aggregate range does not include any matters for which the Company is not able to estimate a range of possible loss. Accordingly, the estimated aggregate range of possible loss does not represent our maximum loss exposure. Any such losses could have a material adverse impact on our financial condition, results of operations or cash flows. The legal proceedings underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. Colombia Litigation Our subsidiary, SGI, owned a minority interest in Wintech de Colombia S.A., or Wintech (now liquidated), which formerly operated the Colombian national lottery under a contract with Empresa Colombiana de Recursos para la Salud, S.A. (together with its successors, "Ecosalud"), an agency of the Colombian government. The contract provided for a penalty against Wintech, SGI and the other shareholders of Wintech of up to $5.0 million if certain levels of lottery sales were not achieved. In addition, SGI delivered to Ecosalud a $4.0 million surety bond as a further guarantee of performance under the contract. Wintech started the instant lottery in Colombia but, due to difficulties beyond its control, including, among other factors, social and political unrest in Colombia, frequently interrupted telephone service and power outages, and competition from another lottery being operated in a province of Colombia that we believe was in violation of Wintech’s exclusive license from Ecosalud, the projected sales level was not met for the year ended June 30, 1993. In 1993, Ecosalud issued a resolution declaring that the contract was in default. In 1994, Ecosalud issued a liquidation resolution asserting claims for compensation and damages against Wintech, SGI and other shareholders of Wintech for, among other things, realization of the full amount of the penalty, plus interest, and the amount of the bond. SGI filed separate actions opposing each resolution with the Tribunal Contencioso of Cundinamarca in Colombia (the "Tribunal"), which upheld both resolutions. SGI appealed each decision to the Council of State. In May 2012, the Council of State upheld the contract default resolution, which decision was notified to us in August 2012. In October 2013, the Council of State upheld the liquidation resolution, which decision was notified to us in December 2013. In July 1996, Ecosalud filed a lawsuit against SGI in the U.S. District Court for the Northern District of Georgia asserting many of the same claims asserted in the Colombia proceedings, including breach of contract, and seeking damages. In March 1997, the District Court dismissed Ecosalud’s claims. Ecosalud appealed the decision to the U.S. Court of Appeals for the Eleventh Circuit. The Court of Appeals affirmed the District Court’s decision in 1998. In June 1999, Ecosalud filed a collection proceeding against SGI to enforce the liquidation resolution and recover the claimed damages. In May 2013, the Tribunal denied SGI’s merit defenses to the collection proceeding and issued an order of payment of approximately 90 billion Colombian pesos (approximately $29.1 million based on the recent exchange rates) plus default interest (potentially accrued since 1994 at a 12% statutory interest rate). SGI has filed an appeal to the Council of State, which appeal has stayed the payment order. SGI believes it has various defenses, including on the merits, against Ecosalud’s claims. Although we believe these claims will not result in a material adverse effect on our consolidated financial position, results of operations or cash flows, it is not feasible to predict the final outcome, and there can be no assurance that these claims will not ultimately be resolved adversely to us or result in material liability. SNAI Litigation On April 16, 2012, certain VLTs operated by SNAI S.p.a. ("SNAI") in Italy and supplied by Barcrest erroneously printed what appeared to be winning jackpot and other tickets with a face amount in excess of €400.0 million. SNAI has stated, and system data confirms, that no jackpots were actually won on that day. The terminals were deactivated by the Italian regulatory authority. Following the incident, we understand that the Italian regulatory authority revoked the certification of the version of the gaming system that Barcrest provided to SNAI and fined SNAI €1.5 million, but determined to not revoke SNAI’s concession to operate VLTs in Italy. In October 2012, SNAI filed a lawsuit in the Court of First Instance of Rome in Italy against Barcrest and Global Draw, our subsidiary which acquired Barcrest from IGT‑UK Group Limited, a subsidiary of International Gaming Technology ("IGT"), claiming liability based on breach of contract and tort. The lawsuit sought to terminate SNAI’s agreement with Barcrest and damages arising from the deactivation of the terminals, including among other things, lost profits, expenses and costs, potential awards to players who have sought to enforce what appeared to be winning jackpot and other tickets, compensation for lost profits sought by managers of the gaming locations where SNAI VLTs supplied by Barcrest were installed, damages to commercial reputation and any future damages arising from SNAI’s potential loss of its concession or inability to obtain a new concession. In September 2013, Global Draw brought an action against IGT‑UK Group Limited and IGT in the High Court of Justice (Commercial Court) in London, England seeking relief under the indemnification and warranty provisions contained in the agreement pursuant to which Barcrest was acquired from IGT‑UK Group, including in connection with the April 2012 incident and a number of ancillary matters. The action against IGT was resolved in May 2015, pursuant to a settlement agreement in which neither party admitted liability. The settlement did not have a material impact on our results of operations. In February 2015, we entered into a settlement agreement with SNAI that provides, among other things, for us to make a €25.0 million upfront payment to SNAI and to indemnify SNAI against certain potential future losses which payment was made in February 2015. In connection with the settlement, the parties’ pending claims in the Court of First Instance of Rome were dismissed on February 19, 2015. In May 2015, certain underwriters at Lloyd’s London filed a complaint against the Company, Barcrest and Global Draw in the Supreme Court of the State of New York seeking a declaratory judgment that such underwriters do not owe insurance coverage for the matters that are the subject of the settlement agreement with SNAI. In May 2015, the Company filed its amended answer to the complaint and counterclaims with the court, and also filed a third-party complaint against four excess insurers. We are continuing to pursue recovery from our insurance carriers in connection with this matter; however, there can be no assurance that any amounts will ultimately be recovered. Bally Acquisition Litigation Complaints challenging the Bally acquisition were filed in August 2014 in the District Court of Clark County, Nevada. The actions were putative class actions filed on behalf of the public stockholders of Bally and name as defendants Bally, its directors, Scientific Games Corporation and certain of its affiliates. The complaints generally alleged that the Bally directors breached their fiduciary duties in connection with their consideration and approval of the acquisition and that we aided and abetted those alleged breaches. The plaintiffs sought equitable relief, including to enjoin the acquisition, to rescind the acquisition if not enjoined, damages, attorneys’ fees and other costs. All of the actions were consolidated under the caption In re Bally Technologies, Inc. Shareholders Litigation (C.A. No. A‑14‑ 705012‑B) (the "Nevada Action"). In October 2014, plaintiffs filed a motion for limited expedited discovery in connection with an anticipated motion to enjoin the proposed transaction. Following that, in October 2014, Bally and its directors filed a motion to dismiss the consolidated complaint and Scientific Games Corporation and its affiliates filed a motion to dismiss the count of the consolidated complaint alleging wrongdoing by Scientific Games Corporation and its affiliates. Following that, the plaintiffs withdrew their motion for expedited discovery and the parties entered into preliminary settlement discussions. On October 17, 2014, following arm’s‑length negotiations, the parties to the Nevada Action entered into a Memorandum of Understanding ("MOU") under which they agreed in principle to settle all of the claims asserted in the Nevada Action on a class‑wide basis, subject to certain conditions, including confirmatory discovery by the plaintiffs in the Nevada Action and preliminary and final approval of the Nevada court, which would consider the fairness, reasonableness and adequacy of the settlement. Bally, Scientific Games and the other named defendants entered into the MOU solely to avoid the costs, risks and uncertainties inherent in litigation and without admitting any liability or wrongdoing, and vigorously denied, and continue to vigorously deny, the claims alleged in the Nevada Action. The MOU provided that Bally would make certain supplemental disclosures about the transaction in a definitive proxy statement, which it did on October 20, 2014. On November 18, 2014, Bally's stockholders approved the Bally acquisition and the Bally acquisition was consummated on November 21, 2014. After entering into the MOU, the plaintiffs completed confirmatory discovery and concluded that the settlement contemplated by the MOU was fair, reasonable and adequate and in the best interests of the Bally public stockholders. In April 2015, all parties to the Nevada Action entered into a definitive stipulation and agreement of compromise, settlement and release, providing for all claims that were or could be asserted in the Nevada Action to be dismissed with prejudice on a class-wide basis in accordance with the terms of the MOU, subject to court approval. Subsequently, plaintiffs moved for preliminary approval of the settlement, class certification and notice to class members. The Nevada court approved the motion for preliminary approval in June 2015. In October 2015, the Nevada court dismissed the matter with prejudice, approved the settlement, and awarded $450,000 to be paid by the Company for plaintiff's' attorneys fees. Oregon State Lottery Matter On December 31, 2014, a representative of a purported class of persons alleged to have been financially harmed by relying on the "auto hold" feature of various manufacturers' video lottery terminals played in Oregon, filed suit in the Circuit Court of Multnomah County, Oregon, against the Oregon State Lottery and various manufacturers, including WMS Gaming Inc. The suit alleges that the auto hold feature of video poker games is perceived by players as providing the best possible playing strategy that will maximize the odds of the player winning, when such auto hold feature does not maximize the players' odds of winning. The plaintiffs are seeking in excess of $134.0 million in monetary damages. WMS Gaming Inc. and the other defendants filed motions to dismiss in February 2015. In April 2015, the court granted the Oregon State Lottery’s motion to dismiss, stating the plaintiff had not satisfied the Oregon Tort Claims Act. As a result of the dismissal, the court indicated that all claims against WMS Gaming Inc. are moot. In June 2015, plaintiffs filed an appeal on the matter. We intend to vigorously defend against the claims asserted in the lawsuit. Shuffle Tech Matter In April 2015, Shuffle Tech International, LLC, Aces Up Gaming, Inc. and Poydras-Talrick Holdings LLC brought a civil action in the United States District Court for the Northern District of Illinois against the Company, Bally Technologies, Inc. and Bally Gaming, Inc., alleging monopolization of the market for card shufflers in violation of federal antitrust laws, fraudulent procurement of patents on card shufflers, unfair competition and deceptive trade practices. Specifically, the plaintiffs claim that the defendants utilized certain shuffler patents in a predatory manner to create and maintain a monopoly in the relevant shuffler market. The plaintiffs seek damages, including not less than $100.0 million in compensatory damages, and injunctive and declaratory relief. In June 2015, the defendants filed a motion to dismiss. In October 2015, the court dismissed all of the plaintiffs’ claims against Bally Technologies, Inc. and Bally Gaming, Inc. with prejudice except for the claims of violation of antitrust laws related to the fraudulent procurement of patents on card shufflers. We intend to vigorously defend against the claims asserted in the lawsuit. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Supplemental Disclosure of Cash Flow Information Additional cash flow information is presented below: Nine Months Ended September 30, 2015 2014 Interest paid $ 424.4 $ 109.0 Income tax refunds, net of payments $ (9.1 ) $ (31.6 ) Nine months ended September 30, 2015 During the nine months ended September 30, 2015 , we recorded approximately $9.1 million of non-cash other assets and related long-term liabilities related to license agreements with minimum guaranteed obligations entered into during the period. There were no other significant non-cash investing or financing activities for the nine months ended September 30, 2015 . Nine months ended September 30, 2014 On March 31, 2014, we entered into a new leasing arrangement with ITL for the lease of gaming machines in connection with a long-term services contract with a customer and recorded a non-cash capital lease liability of $42.8 million during the three months ended June 30, 2014. We recorded no additional non-cash capital lease assets during the three months ended September 30, 2014. During the nine months ended September 30, 2014 we recorded approximately $115 million of non-cash other assets and related long-term liabilities related to license agreements with minimum guaranteed obligations entered into during the period. During the nine-months ended September 30, 2014 we made a non-cash capital contribution of $10.8 million to Northstar Illinois. There were no other significant non-cash investing or financing activities for the nine months ended September 30, 2014. |
Financial Information for Guara
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries | 9 Months Ended |
Sep. 30, 2015 | |
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract] | |
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries | Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries We conduct substantially all of our business through our U.S. and foreign subsidiaries. SGI’s obligations under the Credit Agreement, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes are fully and unconditionally and jointly and severally guaranteed by Scientific Games Corporation (the “Parent Company”) and substantially all of our 100% -owned U.S. subsidiaries other than SGI (the “Guarantor Subsidiaries”). Our 2018 Notes, which were issued by the Parent Company, are fully and unconditionally and jointly and severally guaranteed by substantially all of our 100% -owned U.S. subsidiaries, including SGI. The guarantees of our 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes will terminate under the following customary circumstances: (1) the sale or disposition of the capital stock of the guarantor (including by consolidation or merger of the guarantor into another person); (2) the liquidation or dissolution of the guarantor; (3) the defeasance or satisfaction and discharge of the notes; (4) the release of the guarantor from any guarantees of indebtedness of the Parent Company and SGI (or, in the case of the 2018 Notes, the release of the guarantor from any guarantees of indebtedness of the Parent Company); and (5) in the case of the 2020 Notes, 2021 Notes, the Secured Notes and the Unsecured Notes, the proper designation of the guarantor as an unrestricted subsidiary pursuant to the indenture governing the 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes respectively. Presented below is condensed consolidated financial information for (1) the Parent Company, (2) SGI, (3) the Guarantor Subsidiaries and (4) our 100% -owned foreign subsidiaries and our non- 100% -owned U.S. and foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of September 30, 2015 and December 31, 2014 and for the three and nine months ended September 30, 2015 and 2014. The condensed consolidating financial information has been presented to show the nature of assets held by, and the results of operations and cash flows of, the Parent Company, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the guarantee structures of the Credit Agreement, the 2018 Notes, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were in effect at the beginning of the periods presented. The condensed consolidating financial information reflects the investments of the Parent Company in the Guarantor and Non-Guarantor Subsidiaries using the equity method of accounting. They also reflect the investments of the Guarantor Subsidiaries in the Non-Guarantor Subsidiaries. Net changes in intercompany due from/due to accounts are reported in the accompanying Supplemental Condensed Consolidating Statements of Cash Flows as investing activities if the applicable entities have a net investment (asset) in intercompany accounts, and as a financing activity if the applicable entities have a net intercompany borrowing (liability) balance. Subsequent to the filing of the December 31, 2014 Form 10-K, the Company identified certain corrections necessary for the disclosure of condensed consolidating financial information. The below presentation of the condensed consolidating financial information reflects the following items which are corrections from the prior-year presentation: (1) the Guarantor Subsidiaries inclusion of their investment in the Non-Guarantor Subsidiaries in the accompanying Supplemental Condensed Consolidating Balance Sheet; (2) the pushdown of goodwill created in the Bally acquisition from the Guarantor Subsidiaries to the Non-Guarantor Subsidiaries in the accompanying Supplemental Condensed Consolidating Balance Sheet; (3) the recognition by the Guarantor Subsidiaries of equity in losses of Non-Guarantor Subsidiaries in the accompanying Supplemental Condensed Consolidating Statement of Operations and Comprehensive Loss; (4) the inclusion in the Eliminating Entries in the accompanying Supplemental Condensed Consolidating Financial Statements of all intercompany transactions between the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries and (5) the inclusion in the Eliminating Entries in the accompanying Supplemental Condensed Consolidating Financial Statements of all intercompany transactions between Parent and SGI. The impact of these corrections increased the Guarantor Subsidiaries’ total assets and stockholders’ equity each by $546.0 million , as well as increased the Non-Guarantor Subsidiaries’ total assets and stockholders’ equity each by $466.3 million all as compared to amounts previously disclosed as of December 31, 2014. The corrections also increased the net loss of the Guarantor Subsidiaries for the three and nine months September 30, 2014 by $1.7 million and $1.1 million , respectively, and decreased the net income of the Non-Guarantor Subsidiaries by $3.8 million and $11.3 million , respectively, for the three and nine months ended September 30, 2014. The corrections had no impact on the condensed consolidating statement of cash flows for the nine months ended September 30, 2014. The offsetting impact of these adjustments is reflected in the eliminating entries column as these corrections had no impact on our consolidated balance sheet, results of operations or cash flows for the prior periods presented. We believe the effects of the corrections are immaterial to our prior year condensed consolidating financial statements. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 17.3 $ — $ 6.8 $ 78.0 $ — $ 102.1 Restricted cash — — 17.1 0.1 — 17.2 Accounts receivable, net — 78.9 204.1 187.6 — 470.6 Notes receivable, net — — 108.6 54.5 — 163.1 Inventories — 35.9 108.9 114.5 (15.5 ) 243.8 Other current assets 17.7 26.6 166.9 61.5 — 272.7 Property and equipment, net 2.0 110.4 548.8 216.7 (9.5 ) 868.4 Investment in subsidiaries 3,562.2 876.9 758.2 — (5,197.3 ) — Goodwill — 253.6 2,311.8 919.8 — 3,485.2 Intangible assets, net 145.8 40.4 1,511.6 243.0 — 1,940.8 Intercompany balances — 6,514.7 — — (6,514.7 ) — Software, net 20.0 32.4 413.2 61.4 — 527.0 Other assets 4.0 223.9 72.5 223.8 — 524.2 Total assets $ 3,769.0 $ 8,193.7 $ 6,228.5 $ 2,160.9 $ (11,737.0 ) $ 8,615.1 Liabilities and stockholders’ (deficit) equity Debt payments due within one year $ — $ 43.0 $ — $ 7.4 $ — $ 50.4 Other current liabilities 47.8 167.7 221.9 126.6 — 564.0 Long-term debt, excluding current installments 250.0 8,089.2 — 20.6 — 8,359.8 Other long-term liabilities 54.0 58.9 455.0 53.8 — 621.7 Intercompany balances 4,397.9 — 1,886.0 230.7 (6,514.6 ) — Stockholders’ (deficit) equity (980.7 ) (165.1 ) 3,665.6 1,721.8 (5,222.4 ) (980.8 ) Total liabilities and stockholders’ (deficit) equity $ 3,769.0 $ 8,193.7 $ 6,228.5 $ 2,160.9 $ (11,737.0 ) $ 8,615.1 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 37.9 $ 0.1 $ 28.8 $ 105.0 $ — $ 171.8 Restricted cash — — 27.1 0.1 — 27.2 Accounts receivable, net — 61.8 212.9 193.7 — 468.4 Notes receivable, net — — 136.6 52.1 — 188.7 Inventories — 35.2 133.8 124.4 (27.8 ) 265.6 Other current assets 65.4 20.2 114.7 56.0 — 256.3 Property and equipment, net 0.5 119.5 660.4 241.7 (9.3 ) 1,012.8 Investment in subsidiaries 4,730.7 953.4 975.2 — (6,659.3 ) — Goodwill — 253.6 2,781.6 1,073.1 — 4,108.3 Intangible assets, net 162.0 42.2 1,761.8 285.6 — 2,251.6 Intercompany balances — 6,580.0 — — (6,580.0 ) — Software, net 15.6 32.9 467.3 76.9 — 592.7 Other assets 2.8 255.4 96.8 296.8 — 651.8 Total assets $ 5,014.9 $ 8,354.3 $ 7,397.0 $ 2,505.4 $ (13,276.4 ) $ 9,995.2 Liabilities and stockholders’ equity Debt payments due within one year $ — $ 43.0 $ — $ 7.6 $ — $ 50.6 Other current liabilities 68.9 119.8 247.2 173.8 — 609.7 Long-term debt, excluding current installments 250.0 8,187.7 — 27.7 — 8,465.4 Other long-term liabilities 136.2 74.0 593.7 61.7 — 865.6 Intercompany balances 4,555.9 (0.1 ) 1,637.9 386.3 (6,580.0 ) — Stockholders’ equity 3.9 (70.1 ) 4,918.2 1,848.3 (6,696.4 ) 3.9 Total liabilities and stockholders’ equity $ 5,014.9 $ 8,354.3 $ 7,397.0 $ 2,505.4 $ (13,276.4 ) $ 9,995.2 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 106.5 $ 404.2 $ 236.9 $ (76.0 ) $ 671.6 Cost of services, cost of product sales and cost of instant games (1) — 77.7 125.6 122.7 (76.0 ) 250.0 Selling, general and administrative 16.2 15.9 68.9 35.8 — 136.8 Research and development — 0.8 37.9 7.2 — 45.9 Employee termination and restructuring 1.4 0.6 2.9 0.7 — 5.6 Depreciation and amortization 8.3 10.5 234.3 33.4 — 286.5 Goodwill impairment — — 460.2 74.8 — 535.0 Operating (loss) income (25.9 ) 1.0 (525.6 ) (37.7 ) — (588.2 ) Interest expense 3.3 22.1 (192.0 ) (0.2 ) — (166.8 ) Other (expense) income, net 6.9 19.3 (8.2 ) (22.5 ) — (4.5 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (15.7 ) 42.4 (725.8 ) (60.4 ) — (759.5 ) Equity in (loss) income of subsidiaries (745.9 ) 11.8 (93.2 ) — 827.3 — Income tax benefit (expense) 83.5 (0.1 ) (0.9 ) (1.2 ) — 81.3 Net (loss) income $ (678.1 ) $ 54.1 $ (819.9 ) $ (61.6 ) $ 827.3 $ (678.2 ) Other comprehensive (loss) income (49.1 ) (3.1 ) 56.9 (104.1 ) 50.4 (49.0 ) Comprehensive (loss) income $ (727.2 ) $ 51.0 $ (763.0 ) $ (165.7 ) $ 877.7 $ (727.2 ) (1) Exclusive of depreciation and amortization. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended September 30, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 106.9 $ 221.2 $ 149.7 $ (62.2 ) $ 415.6 Cost of services, cost of product sales and cost of instant games (1) — 79.0 91.2 91.2 (62.2 ) 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 income (loss) (20.6 ) (1.9 ) (0.4 ) 15.1 — (7.8 ) Interest expense (0.2 ) (16.2 ) (29.1 ) (0.2 ) — (45.7 ) Other (expense) income, net (7.0 ) (6.1 ) (7.9 ) 10.1 — (10.9 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (27.8 ) (24.2 ) (37.4 ) 25.0 — (64.4 ) Equity in (loss) income of subsidiaries (38.8 ) 16.3 (5.5 ) — 28.0 — Income tax expense (3.2 ) (0.2 ) — (2.0 ) — (5.4 ) Net (loss) income $ (69.8 ) $ (8.1 ) $ (42.9 ) $ 23.0 $ 28.0 $ (69.8 ) Other comprehensive (loss) income (55.1 ) (5.4 ) — (55.7 ) 61.1 (55.1 ) Comprehensive (loss) income $ (124.9 ) $ (13.5 ) $ (42.9 ) $ (32.7 ) $ 89.1 $ (124.9 ) (1) Exclusive of depreciation and amortization. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Nine Months Ended September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 324.1 $ 1,267.1 $ 707.2 $ (276.6 ) $ 2,021.8 Cost of instant games, cost of services and cost of product sales (1) — 238.0 410.4 408.9 (276.6 ) 780.7 Selling, general and administrative 47.8 50.5 214.0 111.3 — 423.6 Research and development — 3.6 115.0 22.2 — 140.8 Employee termination and restructuring 4.6 1.5 9.8 3.1 — 19.0 Depreciation and amortization 24.3 30.1 533.9 104.6 — 692.9 Goodwill impairment — — 460.2 74.8 — 535.0 Operating (loss) income (76.7 ) 0.4 (476.2 ) (17.7 ) — (570.2 ) Interest expense (0.6 ) (97.2 ) (399.3 ) (0.4 ) — (497.5 ) Other (expense) income, net 24.9 55.2 (77.0 ) (11.1 ) — (8.0 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (52.4 ) (41.6 ) (952.5 ) (29.2 ) — (1,075.7 ) Equity in (loss) income of subsidiaries (1,027.2 ) 41.1 (89.9 ) — 1,076.0 — Income tax benefit (expense) 212.9 (0.2 ) 2.0 (5.8 ) — 208.9 Net (loss) income $ (866.7 ) $ (0.7 ) $ (1,040.4 ) $ (35.0 ) $ 1,076.0 $ (866.8 ) Other comprehensive income (loss) (136.2 ) (12.9 ) 48.4 (181.3 ) 145.9 (136.1 ) Comprehensive (loss) income $ (1,002.9 ) $ (13.6 ) $ (992.0 ) $ (216.3 ) $ 1,221.9 $ (1,002.9 ) (1) Exclusive of depreciation and amortization. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Nine Months Ended September 30, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 317.1 $ 655.0 $ 428.4 $ (179.9 ) $ 1,220.6 Cost of instant games, cost of services and cost of product sales (1) — 235.0 270.5 248.7 (179.8 ) 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 ) (3.4 ) 6.5 40.9 (0.1 ) (16.3 ) Interest expense (2.5 ) (62.7 ) (77.0 ) (0.7 ) — (142.9 ) Other (expense) income, net (39.6 ) (9.2 ) (8.7 ) 47.5 — (10.0 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (102.3 ) (75.3 ) (79.2 ) 87.7 (0.1 ) (169.2 ) Equity in (loss) income of subsidiaries (71.7 ) 51.4 (12.5 ) — 32.8 — Income tax expense (13.2 ) (0.3 ) — (4.5 ) — (18.0 ) Net (loss) income $ (187.2 ) $ (24.2 ) $ (91.7 ) $ 83.2 $ 32.7 $ (187.2 ) Other comprehensive income (loss) (51.4 ) (2.4 ) (0.3 ) (45.6 ) 48.3 (51.4 ) Comprehensive (loss) income $ (238.6 ) $ (26.6 ) $ (92.0 ) $ 37.6 $ 81.0 $ (238.6 ) (1) Exclusive of depreciation and amortization. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months ended September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash provided by (used in) operating activities $ (11.5 ) $ 44.3 $ 85.2 $ 137.5 $ — $ 255.5 Cash flows from investing activities: — Capital expenditures (12.8 ) (19.7 ) (169.9 ) (31.2 ) — (233.6 ) Distributions of capital on equity investments — 1.0 — 36.0 — 37.0 Restricted Cash — — 9.3 — — 9.3 Other — (0.1 ) 5.1 5.1 — 10.1 Intercompany balances — 77.2 — — (77.2 ) — Net cash provided by (used in) investing activities (12.8 ) 58.4 (155.5 ) 9.9 (77.2 ) (177.2 ) Cash flows from financing activities: Net proceeds/payments on long-term debt — (102.3 ) — (6.5 ) — (108.8 ) Payments on license obligations (19.5 ) — (12.5 ) — — (32.0 ) Net issuance (redemptions) of common stock under stock-based compensation plans 0.5 — (37.1 ) (110.2 ) 147.2 0.4 Contingent earnout payments — — (0.5 ) — — (0.5 ) Other, principally intercompany balances 22.7 — 99.0 (51.7 ) (70.0 ) — Net cash provided by (used in) financing activities 3.7 (102.3 ) 48.9 (168.4 ) 77.2 (140.9 ) Effect of exchange rate changes on cash — (0.5 ) (0.6 ) (6.0 ) — (7.1 ) (Decrease) increase in cash and cash equivalents (20.6 ) (0.1 ) (22.0 ) (27.0 ) — (69.7 ) Cash and cash equivalents, beginning of period 37.9 0.1 28.8 105.0 — 171.8 Cash and cash equivalents, end of period $ 17.3 $ — $ 6.8 $ 78.0 $ — $ 102.1 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months ended September 30, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash provided by (used in) operating activities $ (79.2 ) $ 19.8 $ 160.0 $ 132.8 $ — $ 233.4 Cash flows from investing activities: Capital expenditures (8.4 ) (23.9 ) (113.3 ) (30.7 ) — (176.3 ) 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 and financing related costs — (42.3 ) — (9.9 ) — (52.2 ) Payments of license obligations — — (7.0 ) — — (7.0 ) Common stock repurchases (29.5 ) — — — — (29.5 ) Contingent earnout payments — — (7.0 ) (3.2 ) — (10.2 ) Net issuance (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 ) (Decrease) increase 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 |
Description of the Business a26
Description of the Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements of the Company have been prepared in accordance with SEC and U.S. GAAP requirements. All monetary values set forth in these financial statements are in U.S. dollars ("$") unless otherwise stated herein. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of the Company and its 100%-owned subsidiaries, as well as those subsidiaries in which we have a controlling financial interest. Investments in other entities in which we do not have a controlling financial interest but we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation. We have evaluated subsequent events through the date these financial statements were issued. In the opinion of management, we have made all adjustments necessary to present fairly our consolidated financial position, results of operations and comprehensive loss and cash flows for the periods presented. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2014 Annual Report on Form 10-K. Interim results of operations are not necessarily indicative of results of operations for a full year. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which defers the effective date of ASU 2014-09 by one year to now be effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. Early adoption of the standard is permitted but not before the original effective date of December 15, 2016. The ASU may be adopted using a full retrospective approach or reporting the cumulative effect as of the date of adoption. We are currently evaluating the impact of adopting this guidance. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . ASU 2015-03 intends to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. In August 2015, the FASB issued ASU No. 2015-15 which amended Subtopic 835-30 for the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. In the amendment, an entity can defer and present debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We do not expect this guidance to have a material effect on our financial position, results of operations or cash flows. In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory. ASU 2015-11 changes the criteria for measuring inventory within the scope of the ASU. Inventory will now be measured at the lower of cost and net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance. In July 2015, the FASB issued ASU No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient (consensuses of the FASB Emerging Issues Task Force) . ASU 2015-12 intends to simplify the measurement and presentation of fully benefit-responsive investment contracts. Under the amendments, fully benefit-responsive investment contracts are measured, presented, and disclosed only at contract value. A plan will continue to provide disclosures that help users understand the nature and risks of fully benefit-responsive investment contracts. ASU 2015-12 is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . ASU 2015-16 eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. It requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this ASU require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this ASU require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this ASU 2015-16 should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this ASU with earlier application permitted for financial statements that have not been issued. We do not expect this guidance to have a material effect on our financial position, results of operations or cash flows. |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Operating Information by Segment | The following tables present revenue, cost of revenue, SG&A, R&D, employee termination and restructuring, D&A, goodwill impairment, operating income (loss) and earnings (loss) from equity investments by business segment for the three and nine months ended September 30, 2015 and 2014 . Certain unallocated expenses managed at the corporate level, comprised primarily of general and administrative costs and other (expense) income, net, are not allocated to our business segments. Segment results for 2014 below do not include the results of Bally, which we acquired in November 2014. The increase in unallocated corporate costs for the three and nine months ended September 30, 2015 primarily relates to the inclusion of Bally's results. Three Months Ended September 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 244.3 $ 45.0 $ 51.2 $ 340.5 Product sales 184.8 8.7 — 193.5 Instant games — 137.6 — 137.6 Total revenue 429.1 191.3 51.2 671.6 Cost of services (1) 41.3 27.2 17.0 85.5 Cost of product sales (1) 80.1 7.3 — 87.4 Cost of instant games (1) — 77.1 — 77.1 Selling, general and administrative 70.3 15.7 16.6 102.6 Research and development 39.4 1.1 5.4 45.9 Employee termination and restructuring 3.2 — 0.5 3.7 Depreciation and amortization 245.1 21.6 5.4 272.1 Goodwill impairment 535.0 — — 535.0 Segment operating income (loss) $ (585.3 ) $ 41.3 $ 6.3 $ (537.7 ) Unallocated corporate costs (50.5 ) Consolidated operating loss $ (588.2 ) Earnings from equity investments $ 1.0 $ 2.0 $ — $ 3.0 (1) Exclusive of depreciation and amortization. Three Months Ended September 30, 2014 Gaming Lottery Interactive Total Revenue: Services $ 96.1 $ 48.2 $ 38.5 $ 182.8 Product sales 68.3 33.7 — 102.0 Instant games — 130.8 — 130.8 Total revenue 164.4 212.7 38.5 415.6 Cost of services (1) 24.9 30.4 14.3 69.6 Cost of product sales (1) 32.9 27.0 — 59.9 Cost of instant games (1) — 69.7 — 69.7 Selling, general and administrative 28.7 17.8 13.7 60.2 Research and development 21.5 1.4 3.4 26.3 Employee termination and restructuring 0.9 0.4 0.6 1.9 Depreciation and amortization 66.4 24.9 3.4 94.7 Segment operating income (loss) $ (10.9 ) $ 41.1 $ 3.1 $ 33.3 Unallocated corporate costs $ (41.1 ) Consolidated operating loss $ (7.8 ) Earnings (loss) from equity investments $ 1.3 $ (15.3 ) $ — $ (14.0 ) (1) Exclusive of depreciation and amortization. Nine months ended September 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 722.6 $ 136.5 $ 149.7 $ 1,008.8 Product sales 582.0 29.0 — 611.0 Instant games — 402.0 — 402.0 Total revenue 1,304.6 567.5 149.7 2,021.8 Cost of services (1) 139.9 83.1 51.6 274.6 Cost of product sales (1) 268.8 24.4 — 293.2 Cost of instant games (1) — 212.9 — 212.9 Selling, general and administrative 215.7 49.2 46.9 311.8 Research and development 120.3 4.2 16.3 140.8 Employee termination and restructuring 10.1 0.2 1.5 11.8 Depreciation and amortization 569.9 62.9 15.9 648.7 Goodwill impairment 535.0 — — 535.0 Segment operating income (loss) $ (555.1 ) $ 130.6 $ 17.5 $ (407.0 ) Unallocated corporate costs (163.2 ) Consolidated operating loss $ (570.2 ) Earnings from equity investments $ 2.7 $ 6.7 $ — $ 9.4 (1) Exclusive of depreciation and amortization. Nine months ended September 30, 2014 Gaming Lottery Interactive Total Revenue: Services $ 288.1 $ 149.3 $ 101.5 $ 538.9 Product sales 216.6 72.7 — 289.3 Instant games — 392.4 — 392.4 Total revenue 504.7 614.4 101.5 1,220.6 Cost of services (1) 73.4 90.4 36.9 200.7 Cost of product sales (1) 103.9 57.3 — 161.2 Cost of instant games (1) — 212.5 — 212.5 Selling, general and administrative 92.8 56.0 40.1 188.9 Research and development 64.9 2.7 9.4 77.0 Employee termination and restructuring 4.2 1.6 4.7 10.5 Depreciation and amortization 190.9 70.8 9.3 271.0 Segment operating income (loss) $ (25.4 ) $ 123.1 $ 1.1 $ 98.8 Unallocated corporate costs (115.1 ) Consolidated operating loss $ (16.3 ) Earnings (loss) from equity investments $ 3.3 $ (11.1 ) $ — $ (7.8 ) (1) Exclusive of depreciation and amortization. |
Reconciliation of segment operating income to consolidated income before income taxes | The following table presents a reconciliation of reportable business segment operating income (loss) to net loss before income taxes for each period: Three Months Ended Nine Months Ended September 30, 2015 2014 2015 2014 Reportable business segment operating income (loss) $ (537.7 ) $ 33.3 $ (407.0 ) $ 98.8 Unallocated corporate costs (50.5 ) (41.1 ) (163.2 ) (115.1 ) Consolidated operating loss (588.2 ) (7.8 ) (570.2 ) (16.3 ) Interest expense (166.8 ) (45.7 ) (497.5 ) (142.9 ) Earnings (loss) from equity investments 3.0 (14.0 ) 9.4 (7.8 ) Loss on early extinguishment of debt — — — (25.9 ) Gain on sale of equity interest — — — 14.5 Other (expense) income, net (7.5 ) 3.1 (17.4 ) 9.2 Net loss before income taxes $ (759.5 ) $ (64.4 ) $ (1,075.7 ) $ (169.2 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
WMS Acquisition | |
Business Acquisition [Line Items] | |
Unaudited pro forma financial information | As required by ASC 805, Business Combinations , the following unaudited pro forma statements of operations for the three and nine months ended September 30, 2014 give effect to the Bally acquisition as if it had been completed on January 1, 2013. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the period presented had the Bally acquisition been completed on January 1, 2013. In addition, the unaudited pro forma financial information does not purport to project future operating results. The unaudited pro forma statements of operations do not reflect: (1) any anticipated synergies (or anticipated costs to achieve synergies) or (2) the impact of non-recurring items directly related to the Bally acquisition. Three Months Ended September 30, 2014 Nine Months Ended Revenue from Consolidated Statements of Operations and Comprehensive Loss $ 415.6 $ 1,220.6 Add: Bally revenue not reflected in Consolidated Statements of Operations and Comprehensive Loss 320.7 1,018.0 Unaudited pro forma revenue $ 736.3 $ 2,238.6 Three Months Ended September 30, 2014 Nine Months Ended Net loss from Consolidated Statements of Operations and Comprehensive Loss $ (69.8 ) $ (187.2 ) Add: Bally net income not reflected in Consolidated Statements of Operations and Comprehensive Loss adjusted by pro forma adjustments (1), (2), (3), (4), (5), and (6) below (40.7 ) (112.9 ) Unaudited pro forma net loss $ (110.5 ) $ (300.1 ) Unaudited pro forma amounts reflect the following adjustments: (1) An adjustment to reflect additional D&A of $43.0 million and $113.2 million for the three and nine months ended September 30, 2014 , respectively, associated with the fair value of the tangible and intangible assets acquired in the Bally acquisition that would have been incurred assuming the fair value adjustments had been applied on January 1, 2013. (2) An adjustment to reflect lower costs of sales of $0 million and $5.2 million for the three and nine months ended September 30, 2014 related to the reversal of the impact of purchase accounting adjustments on the carrying value of SHFL's finished goods inventory made in connection with Bally’s acquisition of SHFL. (3) An adjustment to reverse acquisition-related fees and expenses of $5.6 million for the three and nine months ended September 30, 2014 , which relate to costs incurred in connection with the Bally acquisition. (4) An adjustment to reflect additional interest expense of $77.5 million and $228.6 million for the three and nine months ended September 30, 2014 , respectively, that would have been incurred assuming the financing transactions relating to the Bally acquisition and the purchase and redemption of the 2019 Notes were both completed as of January 1, 2013. (5) An adjustment to reverse the loss on extinguishment of debt of $0 million and $25.9 million for the three and nine months ended September 30, 2014 , respectively, recorded in connection with the purchase and redemption of the 2019 Notes. (6) An adjustment of $43.6 million and $115.6 million for the three and nine months ended September 30, 2014 , respectively, to tax effect the pre-tax pro forma adjustments listed above, calculated based on the statutory rates in effect in each significant jurisdiction for the three and nine months ended September 30, 2014 . This rate does not reflect the Company’s effective tax rate, which includes other tax items, such as state and foreign taxes, as well as other tax charges or benefits, and does not take into account any historical or possible future tax events that may impact the Company. |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Employee termination and restructuring cost by segment | The following table presents a summary of employee termination and restructuring costs by business segment related to the restructuring plans described above, including the costs incurred during the three and nine months ended September 30, 2015, the cumulative costs incurred through September 30, 2015 from initiation of the relevant restructuring activities and the total expected costs related to the relevant restructuring activities that have been initiated. As additional integration-related activities are initiated, we expect to incur additional costs related to those activities. Business Segment Employee Termination Costs Property Costs Other Total Gaming (1) Three Months Ended September 30, 2015 $ 2.6 $ — $ 0.6 $ 3.2 Nine Months Ended September 30, 2015 9.4 — 0.7 10.1 Cumulative 27.7 0.9 3.6 32.2 Expected Total 31.0 0.9 3.6 35.5 Lottery Three Months Ended September 30, 2015 — — — — Nine Months Ended September 30, 2015 0.2 — — 0.2 Cumulative 3.3 0.4 — 3.7 Expected Total 3.3 0.4 — 3.7 Interactive (1) Three Months Ended September 30, 2015 0.4 — 0.1 0.5 Nine Months Ended September 30, 2015 1.3 — 0.2 1.5 Cumulative 5.1 0.4 5.1 10.6 Expected Total 5.1 0.4 5.1 10.6 Unallocated corporate (2) Three Months Ended September 30, 2015 1.8 0.1 — 1.9 Nine Months Ended September 30, 2015 2.4 1.9 2.9 7.2 Cumulative 13.8 4.2 2.9 20.9 Expected Total 13.8 4.2 3.0 21.0 Total Three Months Ended September 30, 2015 $ 4.8 $ 0.1 $ 0.7 $ 5.6 Nine Months Ended September 30, 2015 $ 13.3 $ 1.9 $ 3.8 $ 19.0 Cumulative $ 49.9 $ 5.9 $ 11.6 $ 67.4 Expected Total $ 53.2 $ 5.9 $ 11.7 $ 70.8 (1) Other restructuring costs reflect costs related to the exit of two immaterial business lines. (2) Unallocated corporate employee termination costs primarily relates to accrual for cash severance due to former executives. |
Termination and restructuring costs | The following table presents a summary of restructuring charges and the changes in the restructuring accrual during the nine months ended September 30, 2015: Employee Termination Costs Property Costs Other Total Balance as of December 31, 2014 $ 17.9 $ 1.7 $ 3.0 $ 22.6 Additional accruals 13.3 1.9 3.8 19.0 Cash payments (21.6 ) (2.3 ) (3.8 ) (27.7 ) Balance as of September 30, 2015 $ 9.6 $ 1.3 $ 3.0 $ 13.9 |
Basic and Diluted Net Loss Pe30
Basic and Diluted Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Numerator and Denominator Used in Computing the Basic and Diluted Net Income (Loss) Per Share | The following represents a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share available to common stockholders for the three and nine months ended September 30, 2015 and 2014: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Net loss $ (678.2 ) $ (69.8 ) (866.8 ) $ (187.2 ) Basic and diluted net loss per share: Basic $ (7.88 ) $ (0.82 ) $ (10.10 ) (2.22 ) Diluted $ (7.88 ) $ (0.82 ) $ (10.10 ) (2.22 ) Weighted average number of shares used in per share calculations: Basic shares 86.1 84.7 85.8 84.5 Diluted shares 86.1 84.7 85.8 84.5 |
Accounts and Notes Receivable31
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | The following summarizes the components of current and long-term accounts and notes receivable, net: September 30, 2015 December 31, 2014 Current: Accounts receivable $ 478.9 $ 479.5 Notes receivable 174.5 194.6 Allowance for doubtful accounts (19.7 ) (17.0 ) Current accounts and notes receivable, net $ 633.7 $ 657.1 Long-term: Notes receivable 57.6 87.5 Total accounts and notes receivable, net $ 691.3 $ 744.6 |
Schedule of Notes Receivable, Balances Over 90 Days Past Due | The following summarizes the components of total notes receivable, net: September 30, 2015 Balances over 90 days past due December 31, 2014 Balances over 90 days past due Notes receivable: Domestic $ 63.1 $ 2.6 $ 95.3 $ 7.9 International 169.0 20.3 186.8 12.0 Total notes receivable 232.1 22.9 282.1 19.9 Notes receivable allowance for doubtful accounts: Domestic (2.9 ) (1.5 ) — — International (8.5 ) (4.4 ) (5.9 ) (3.5 ) Total notes receivable allowance for doubtful accounts (11.4 ) (5.9 ) (5.9 ) (3.5 ) Note receivable, net $ 220.7 $ 17.0 $ 276.2 $ 16.4 |
Schedule of Notes Receivable Evaluated For Impairment | The following tables detail our evaluation of notes receivable for impairment as of September 30, 2015 and December 31, 2014: September 30, 2015 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 63.1 $ 32.4 $ 30.7 International 169.0 112.3 56.7 Total notes receivable $ 232.1 $ 144.7 $ 87.4 December 31, 2014 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 95.3 $ 36.1 $ 59.2 International 186.8 121.0 65.8 Total notes receivable $ 282.1 $ 157.1 $ 125.0 |
Schedule of Allowance For Doubtful Notes Receivable | The following table reconciles the allowance for doubtful notes receivable from December 31, 2014 to September 30, 2015 : Total Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Beginning balance at December 31, 2014 $ 5.9 $ 5.9 $ — Charge-offs (1.9 ) (1.9 ) — Recoveries (0.5 ) (0.4 ) (0.1 ) Provision 7.9 6.2 1.7 Ending balance at September 30, 2015 $ 11.4 $ 9.8 $ 1.6 The following table reconciles the allowance for doubtful notes receivable from December 31, 2013 to September 30, 2014 : 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 $ — |
Schedule of Notes Receivable That Had Modification of Terms | The following summarizes the notes receivable financing terms that were modified during the nine months ended September 30, 2014 : 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 (1) The modifications are detailed below: • 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. |
Schedules of Concentration Risk, Notes Receivable | Our notes receivable were concentrated in the following international gaming jurisdictions at September 30, 2015 : Mexico 19 % Peru 17 % Australia 8 % Columbia 7 % Argentina 7 % Other (less than 5% individually) 15 % Total international notes receivable as a percentage of total notes receivable 73 % |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Disclosure of Inventories | Inventories consisted of the following as of the dates presented below: September 30, 2015 December 31, 2014 Parts and work-in-process $ 122.0 $ 105.7 Finished goods 121.8 159.9 Total inventories $ 243.8 $ 265.6 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property Plant and Equipment | Gaming and lottery machinery and equipment, including assets under capital leases, were as follows: September 30, 2015 December 31, 2014 Gaming equipment $ 772.0 $ 799.9 Less: accumulated depreciation (266.4 ) (279.1 ) Gaming equipment, net 505.6 520.8 Lottery machinery and equipment 307.9 311.7 Less: accumulated depreciation (231.2 ) (207.4 ) Lottery machinery and equipment, net 76.7 104.3 Total gaming and lottery machinery and equipment, net $ 582.3 $ 625.1 Property and equipment consisted of the following: September 30, 2015 December 31, 2014 Land $ 39.1 $ 43.0 Buildings and leasehold improvements 183.1 206.3 Furniture and fixtures 40.8 36.2 Transportation equipment 4.4 5.0 Construction in progress 38.6 11.7 Other property and equipment, at cost 292.3 292.8 Less: accumulated depreciation (312.2 ) (207.3 ) Property and equipment, net $ 286.1 $ 387.7 Total property and equipment, net $ 868.4 $ 1,012.8 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Disclosure of Acquired Intangible Assets | The following tables present certain information regarding our intangible assets as of September 30, 2015 and December 31, 2014 . Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual value. Intangible Assets Gross Carrying Amount Accumulated Amortization Net Balance Balance as of September 30, 2015 Amortizable intangible assets: Patents $ 20.4 $ 9.5 $ 10.9 Customer relationships 876.5 95.1 781.4 Licenses 366.4 128.6 237.8 Intellectual property 727.1 117.3 609.8 Trade names 97.5 — 97.5 Brand names 123.3 15.2 108.1 Non-compete agreements 0.3 0.3 — 2,211.5 366.0 1,845.5 Non-amortizable intangible assets: Trade names 97.4 2.1 95.3 Total intangible assets $ 2,308.9 $ 368.1 $ 1,940.8 Balance as of December 31, 2014 Amortizable intangible assets: Patents $ 17.9 $ 8.4 $ 9.5 Customer relationships 883.2 46.7 836.5 Licenses 332.8 88.5 244.3 Intellectual property 736.3 19.5 716.8 Brand names 128.2 5.3 122.9 Non-compete agreements 0.3 0.2 0.1 Lottery contracts 1.5 1.5 — 2,100.2 170.1 1,930.1 Non-amortizable intangible assets: Trade names 323.6 2.1 321.5 Total intangible assets $ 2,423.8 $ 172.2 $ 2,251.6 |
Reconciliation of the Carrying Amount of Goodwill, by Reporting Segment | The table below reconciles the change in the carrying amount of goodwill by business segment for the period from December 31, 2013 to September 30, 2015 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2013 $ 612.7 $ 513.9 $ 56.5 $ 1,183.1 Acquisitions 2,902.8 — 53.3 2,956.1 Foreign currency adjustments (15.8 ) (15.1 ) — (30.9 ) Balance as of December 31, 2014 3,499.7 498.8 109.8 4,108.3 Foreign currency adjustments (77.0 ) (11.1 ) — (88.1 ) Impairment (535.0 ) — — (535.0 ) Balance as of September 30, 2015 $ 2,887.7 $ 487.7 $ 109.8 $ 3,485.2 |
Software (Tables)
Software (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of Capitalized Computer Software | September 30, 2015 December 31, 2014 Software $ 857.3 $ 812.1 Accumulated amortization (330.3 ) (219.4 ) Software, net $ 527.0 $ 592.7 |
Long-Term and Other Debt (Table
Long-Term and Other Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following reflects our outstanding debt as of September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ 115.0 $ 185.0 Term Loan, varying interest rate, due 2020 (1) 2,251.5 2,267.6 Term Loan, varying interest rate, due 2021 (2) 1,967.6 1,980.3 2018 Notes 250.0 250.0 2020 Notes 300.0 300.0 2021 Notes (3) 348.1 347.8 Secured Notes 950.0 950.0 Unsecured Notes 2,200.0 2,200.0 Capital lease obligations, 3.9% interest as of September 30, 2015 payable monthly through 2019 28.0 35.3 Total long-term debt outstanding 8,410.2 8,516.0 Less: debt payments due within one year (50.4 ) (50.6 ) Long-term debt, net of debt payments due within one year $ 8,359.8 $ 8,465.4 (1) Total of $2,259.7 million in principal amount less unamortized loan discount in the amount of $8.2 million as of September 30, 2015 . Total of $2,277.0 million in principal amount less unamortized loan discount in the amount of $9.4 million as of December 31, 2014. (2) Total of $1,985.0 million in principal amount less unamortized loan discount in the amount of $17.4 million as of September 30, 2015 . Total of $2,000.0 million in principal amount less unamortized loan discount in the amount of $19.7 million as of December 31, 2014. (3) Total of $350.0 million in principal amount less unamortized loan discount in the amount of $1.9 million as of September 30, 2015 . Total of $350.0 million in principal amount less unamortized loan discount in the amount of $2.2 million as of December 31, 2014. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Change in the Number of Shares of Class A Common Stock | The following table presents the change in the number of shares of our Class A common stock outstanding during the nine months ended September 30, 2015 and during the year ended December 31, 2014: Nine Months Ended September 30, 2015 Twelve Months Ended December 31, 2014 Shares outstanding as of beginning of period 85.1 85.2 Shares issued as part of equity-based compensation plans and the ESPP, net of RSUs surrendered 1.1 1.9 Common stock repurchases — (2.0 ) Shares outstanding as of end of period 86.2 85.1 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options Outstanding Under Equity-Based Compensation Plans | A summary of the changes in stock options outstanding during the nine months ended September 30, 2015 is presented below: Number of Options Weighted Average Remaining Contract Term (Years) Weighted Average Exercise Price Aggregate Intrinsic Value Options outstanding as of December 31, 2014 1.6 6.3 $ 11.61 $ 4.0 Granted 0.2 12.04 — Exercised (0.3 ) 9.83 0.9 Canceled — — Options outstanding as of March 31, 2015 1.5 7.2 $ 11.78 $ 1.2 Granted 0.6 12.83 — Exercised (0.1 ) 9.10 0.2 Canceled (0.1 ) 10.47 — Options outstanding as of June 30, 2015 1.9 7.9 $ 12.24 $ 7.1 Granted — — — Exercised — — — Canceled — — — Options outstanding as of September 30, 2015 1.9 7.8 $ 12.29 $ 1.0 Options exercisable as of September 30, 2015 0.8 5.7 11.25 $ 0.8 |
RSUs Outstanding Under Equity-Based Compensation Plans | A summary of the changes in RSUs outstanding during the nine months ended September 30, 2015 is presented below: Number of RSUs Weighted Average Grant Date Fair Value Per RSU Unvested units as December 31, 2014 5.0 $ 13.12 Granted 0.3 13.15 Vested (0.7 ) 12.72 Canceled (0.3 ) 15.08 Unvested units as of March 31, 2015 4.3 $ 13.39 Granted 2.4 12.90 Vested (0.2 ) 10.53 Canceled (0.1 ) 14.32 Unvested units as of June 30, 2015 6.4 $ 13.27 Granted 0.1 15.18 Vested (0.2 ) 13.48 Canceled (0.3 ) 13.82 Unvested Units as of September 30, 2015 6.0 13.21 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Combined Amount of Net Periodic Benefit Cost Recognizedd | The following table sets forth the combined amount of net periodic benefit cost recognized for the three and nine months ended September 30, 2015 and 2014: Three Months Ended Nine Months Ended September 30, 2015 2014 2015 2014 Components of net periodic pension benefit cost: Service cost $ 0.7 $ 0.7 $ 2.1 $ 1.9 Interest cost 1.2 1.3 $ 3.6 $ 3.9 Expected return on plan assets (1.7 ) (1.6 ) $ (5.1 ) $ (4.9 ) Amortization of actuarial gains 0.3 0.2 $ 1.0 $ 0.5 Curtailment — — $ — $ 0.2 Amortization of prior service costs (0.1 ) (0.1 ) $ (0.2 ) $ (0.2 ) Net periodic cost $ 0.4 $ 0.5 $ 1.4 $ 1.4 |
Supplemental Disclosure of Ca40
Supplemental Disclosure of Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Disclosure of Cash Flow Information | Additional cash flow information is presented below: Nine Months Ended September 30, 2015 2014 Interest paid $ 424.4 $ 109.0 Income tax refunds, net of payments $ (9.1 ) $ (31.6 ) |
Financial Information for Gua41
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract] | |
Supplemental Condensed Consolidating Balance Sheet | SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 17.3 $ — $ 6.8 $ 78.0 $ — $ 102.1 Restricted cash — — 17.1 0.1 — 17.2 Accounts receivable, net — 78.9 204.1 187.6 — 470.6 Notes receivable, net — — 108.6 54.5 — 163.1 Inventories — 35.9 108.9 114.5 (15.5 ) 243.8 Other current assets 17.7 26.6 166.9 61.5 — 272.7 Property and equipment, net 2.0 110.4 548.8 216.7 (9.5 ) 868.4 Investment in subsidiaries 3,562.2 876.9 758.2 — (5,197.3 ) — Goodwill — 253.6 2,311.8 919.8 — 3,485.2 Intangible assets, net 145.8 40.4 1,511.6 243.0 — 1,940.8 Intercompany balances — 6,514.7 — — (6,514.7 ) — Software, net 20.0 32.4 413.2 61.4 — 527.0 Other assets 4.0 223.9 72.5 223.8 — 524.2 Total assets $ 3,769.0 $ 8,193.7 $ 6,228.5 $ 2,160.9 $ (11,737.0 ) $ 8,615.1 Liabilities and stockholders’ (deficit) equity Debt payments due within one year $ — $ 43.0 $ — $ 7.4 $ — $ 50.4 Other current liabilities 47.8 167.7 221.9 126.6 — 564.0 Long-term debt, excluding current installments 250.0 8,089.2 — 20.6 — 8,359.8 Other long-term liabilities 54.0 58.9 455.0 53.8 — 621.7 Intercompany balances 4,397.9 — 1,886.0 230.7 (6,514.6 ) — Stockholders’ (deficit) equity (980.7 ) (165.1 ) 3,665.6 1,721.8 (5,222.4 ) (980.8 ) Total liabilities and stockholders’ (deficit) equity $ 3,769.0 $ 8,193.7 $ 6,228.5 $ 2,160.9 $ (11,737.0 ) $ 8,615.1 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 37.9 $ 0.1 $ 28.8 $ 105.0 $ — $ 171.8 Restricted cash — — 27.1 0.1 — 27.2 Accounts receivable, net — 61.8 212.9 193.7 — 468.4 Notes receivable, net — — 136.6 52.1 — 188.7 Inventories — 35.2 133.8 124.4 (27.8 ) 265.6 Other current assets 65.4 20.2 114.7 56.0 — 256.3 Property and equipment, net 0.5 119.5 660.4 241.7 (9.3 ) 1,012.8 Investment in subsidiaries 4,730.7 953.4 975.2 — (6,659.3 ) — Goodwill — 253.6 2,781.6 1,073.1 — 4,108.3 Intangible assets, net 162.0 42.2 1,761.8 285.6 — 2,251.6 Intercompany balances — 6,580.0 — — (6,580.0 ) — Software, net 15.6 32.9 467.3 76.9 — 592.7 Other assets 2.8 255.4 96.8 296.8 — 651.8 Total assets $ 5,014.9 $ 8,354.3 $ 7,397.0 $ 2,505.4 $ (13,276.4 ) $ 9,995.2 Liabilities and stockholders’ equity Debt payments due within one year $ — $ 43.0 $ — $ 7.6 $ — $ 50.6 Other current liabilities 68.9 119.8 247.2 173.8 — 609.7 Long-term debt, excluding current installments 250.0 8,187.7 — 27.7 — 8,465.4 Other long-term liabilities 136.2 74.0 593.7 61.7 — 865.6 Intercompany balances 4,555.9 (0.1 ) 1,637.9 386.3 (6,580.0 ) — Stockholders’ equity 3.9 (70.1 ) 4,918.2 1,848.3 (6,696.4 ) 3.9 Total liabilities and stockholders’ equity $ 5,014.9 $ 8,354.3 $ 7,397.0 $ 2,505.4 $ (13,276.4 ) $ 9,995.2 |
Supplemental Condensed Consolidating Statement of Income | SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 106.5 $ 404.2 $ 236.9 $ (76.0 ) $ 671.6 Cost of services, cost of product sales and cost of instant games (1) — 77.7 125.6 122.7 (76.0 ) 250.0 Selling, general and administrative 16.2 15.9 68.9 35.8 — 136.8 Research and development — 0.8 37.9 7.2 — 45.9 Employee termination and restructuring 1.4 0.6 2.9 0.7 — 5.6 Depreciation and amortization 8.3 10.5 234.3 33.4 — 286.5 Goodwill impairment — — 460.2 74.8 — 535.0 Operating (loss) income (25.9 ) 1.0 (525.6 ) (37.7 ) — (588.2 ) Interest expense 3.3 22.1 (192.0 ) (0.2 ) — (166.8 ) Other (expense) income, net 6.9 19.3 (8.2 ) (22.5 ) — (4.5 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (15.7 ) 42.4 (725.8 ) (60.4 ) — (759.5 ) Equity in (loss) income of subsidiaries (745.9 ) 11.8 (93.2 ) — 827.3 — Income tax benefit (expense) 83.5 (0.1 ) (0.9 ) (1.2 ) — 81.3 Net (loss) income $ (678.1 ) $ 54.1 $ (819.9 ) $ (61.6 ) $ 827.3 $ (678.2 ) Other comprehensive (loss) income (49.1 ) (3.1 ) 56.9 (104.1 ) 50.4 (49.0 ) Comprehensive (loss) income $ (727.2 ) $ 51.0 $ (763.0 ) $ (165.7 ) $ 877.7 $ (727.2 ) (1) Exclusive of depreciation and amortization. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended September 30, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 106.9 $ 221.2 $ 149.7 $ (62.2 ) $ 415.6 Cost of services, cost of product sales and cost of instant games (1) — 79.0 91.2 91.2 (62.2 ) 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 income (loss) (20.6 ) (1.9 ) (0.4 ) 15.1 — (7.8 ) Interest expense (0.2 ) (16.2 ) (29.1 ) (0.2 ) — (45.7 ) Other (expense) income, net (7.0 ) (6.1 ) (7.9 ) 10.1 — (10.9 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (27.8 ) (24.2 ) (37.4 ) 25.0 — (64.4 ) Equity in (loss) income of subsidiaries (38.8 ) 16.3 (5.5 ) — 28.0 — Income tax expense (3.2 ) (0.2 ) — (2.0 ) — (5.4 ) Net (loss) income $ (69.8 ) $ (8.1 ) $ (42.9 ) $ 23.0 $ 28.0 $ (69.8 ) Other comprehensive (loss) income (55.1 ) (5.4 ) — (55.7 ) 61.1 (55.1 ) Comprehensive (loss) income $ (124.9 ) $ (13.5 ) $ (42.9 ) $ (32.7 ) $ 89.1 $ (124.9 ) (1) Exclusive of depreciation and amortization. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Nine Months Ended September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 324.1 $ 1,267.1 $ 707.2 $ (276.6 ) $ 2,021.8 Cost of instant games, cost of services and cost of product sales (1) — 238.0 410.4 408.9 (276.6 ) 780.7 Selling, general and administrative 47.8 50.5 214.0 111.3 — 423.6 Research and development — 3.6 115.0 22.2 — 140.8 Employee termination and restructuring 4.6 1.5 9.8 3.1 — 19.0 Depreciation and amortization 24.3 30.1 533.9 104.6 — 692.9 Goodwill impairment — — 460.2 74.8 — 535.0 Operating (loss) income (76.7 ) 0.4 (476.2 ) (17.7 ) — (570.2 ) Interest expense (0.6 ) (97.2 ) (399.3 ) (0.4 ) — (497.5 ) Other (expense) income, net 24.9 55.2 (77.0 ) (11.1 ) — (8.0 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (52.4 ) (41.6 ) (952.5 ) (29.2 ) — (1,075.7 ) Equity in (loss) income of subsidiaries (1,027.2 ) 41.1 (89.9 ) — 1,076.0 — Income tax benefit (expense) 212.9 (0.2 ) 2.0 (5.8 ) — 208.9 Net (loss) income $ (866.7 ) $ (0.7 ) $ (1,040.4 ) $ (35.0 ) $ 1,076.0 $ (866.8 ) Other comprehensive income (loss) (136.2 ) (12.9 ) 48.4 (181.3 ) 145.9 (136.1 ) Comprehensive (loss) income $ (1,002.9 ) $ (13.6 ) $ (992.0 ) $ (216.3 ) $ 1,221.9 $ (1,002.9 ) (1) Exclusive of depreciation and amortization. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Nine Months Ended September 30, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 317.1 $ 655.0 $ 428.4 $ (179.9 ) $ 1,220.6 Cost of instant games, cost of services and cost of product sales (1) — 235.0 270.5 248.7 (179.8 ) 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 ) (3.4 ) 6.5 40.9 (0.1 ) (16.3 ) Interest expense (2.5 ) (62.7 ) (77.0 ) (0.7 ) — (142.9 ) Other (expense) income, net (39.6 ) (9.2 ) (8.7 ) 47.5 — (10.0 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (102.3 ) (75.3 ) (79.2 ) 87.7 (0.1 ) (169.2 ) Equity in (loss) income of subsidiaries (71.7 ) 51.4 (12.5 ) — 32.8 — Income tax expense (13.2 ) (0.3 ) — (4.5 ) — (18.0 ) Net (loss) income $ (187.2 ) $ (24.2 ) $ (91.7 ) $ 83.2 $ 32.7 $ (187.2 ) Other comprehensive income (loss) (51.4 ) (2.4 ) (0.3 ) (45.6 ) 48.3 (51.4 ) Comprehensive (loss) income $ (238.6 ) $ (26.6 ) $ (92.0 ) $ 37.6 $ 81.0 $ (238.6 ) (1) Exclusive of depreciation and amortization. |
Supplemental Condensed Consolidating Statement of Cash Flows | SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months ended September 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash provided by (used in) operating activities $ (11.5 ) $ 44.3 $ 85.2 $ 137.5 $ — $ 255.5 Cash flows from investing activities: — Capital expenditures (12.8 ) (19.7 ) (169.9 ) (31.2 ) — (233.6 ) Distributions of capital on equity investments — 1.0 — 36.0 — 37.0 Restricted Cash — — 9.3 — — 9.3 Other — (0.1 ) 5.1 5.1 — 10.1 Intercompany balances — 77.2 — — (77.2 ) — Net cash provided by (used in) investing activities (12.8 ) 58.4 (155.5 ) 9.9 (77.2 ) (177.2 ) Cash flows from financing activities: Net proceeds/payments on long-term debt — (102.3 ) — (6.5 ) — (108.8 ) Payments on license obligations (19.5 ) — (12.5 ) — — (32.0 ) Net issuance (redemptions) of common stock under stock-based compensation plans 0.5 — (37.1 ) (110.2 ) 147.2 0.4 Contingent earnout payments — — (0.5 ) — — (0.5 ) Other, principally intercompany balances 22.7 — 99.0 (51.7 ) (70.0 ) — Net cash provided by (used in) financing activities 3.7 (102.3 ) 48.9 (168.4 ) 77.2 (140.9 ) Effect of exchange rate changes on cash — (0.5 ) (0.6 ) (6.0 ) — (7.1 ) (Decrease) increase in cash and cash equivalents (20.6 ) (0.1 ) (22.0 ) (27.0 ) — (69.7 ) Cash and cash equivalents, beginning of period 37.9 0.1 28.8 105.0 — 171.8 Cash and cash equivalents, end of period $ 17.3 $ — $ 6.8 $ 78.0 $ — $ 102.1 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months ended September 30, 2014 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash provided by (used in) operating activities $ (79.2 ) $ 19.8 $ 160.0 $ 132.8 $ — $ 233.4 Cash flows from investing activities: Capital expenditures (8.4 ) (23.9 ) (113.3 ) (30.7 ) — (176.3 ) 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 and financing related costs — (42.3 ) — (9.9 ) — (52.2 ) Payments of license obligations — — (7.0 ) — — (7.0 ) Common stock repurchases (29.5 ) — — — — (29.5 ) Contingent earnout payments — — (7.0 ) (3.2 ) — (10.2 ) Net issuance (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 ) (Decrease) increase 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 |
Business Segments (Schedule of
Business Segments (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenue: | |||||
Product sales | $ 340.5 | $ 182.8 | $ 1,008.8 | $ 538.9 | |
Instant games | 193.5 | 102 | 611 | 289.3 | |
Services | 137.6 | 130.8 | 402 | 392.4 | |
Total revenue | 671.6 | 415.6 | 2,021.8 | 1,220.6 | |
Cost of services | 85.5 | 69.6 | 274.6 | 200.7 | |
Cost of product sales | 87.4 | 59.9 | 293.2 | 161.2 | |
Cost of instant games | 77.1 | 69.7 | 212.9 | 212.5 | |
Selling, general and administrative | 136.8 | 95.6 | 423.6 | 282.6 | |
Research and development | 45.9 | 26.3 | 140.8 | 77 | |
Employee termination and restructuring | 5.6 | 1.9 | 19 | 12.4 | |
Depreciation and amortization | 286.5 | 100.4 | 692.9 | 290.5 | |
Goodwill impairment | 535 | 0 | 535 | 0 | |
Operating loss | (588.2) | (7.8) | (570.2) | (16.3) | |
Earnings (loss) from equity investments | 3 | (14) | 9.4 | (7.8) | |
Operating Segments | |||||
Revenue: | |||||
Product sales | 340.5 | 182.8 | 1,008.8 | 538.9 | |
Instant games | 193.5 | 102 | 611 | 289.3 | |
Services | 137.6 | 130.8 | 402 | 392.4 | |
Total revenue | 671.6 | 415.6 | 2,021.8 | 1,220.6 | |
Cost of services | [1] | 85.5 | 69.6 | 274.6 | 200.7 |
Cost of product sales | [1] | 87.4 | 59.9 | 293.2 | 161.2 |
Cost of instant games | [1] | 77.1 | 69.7 | 212.9 | 212.5 |
Selling, general and administrative | 102.6 | 60.2 | 311.8 | 188.9 | |
Research and development | 45.9 | 26.3 | 140.8 | 77 | |
Employee termination and restructuring | 3.7 | 1.9 | 11.8 | 10.5 | |
Depreciation and amortization | 272.1 | 94.7 | 648.7 | 271 | |
Goodwill impairment | 535 | 535 | |||
Operating loss | (537.7) | 33.3 | (407) | 98.8 | |
Unallocated corporate costs | |||||
Revenue: | |||||
Unallocated corporate costs | (50.5) | (41.1) | (163.2) | (115.1) | |
Gaming | Operating Segments | |||||
Revenue: | |||||
Product sales | 244.3 | 96.1 | 722.6 | 288.1 | |
Instant games | 184.8 | 68.3 | 582 | 216.6 | |
Services | 0 | 0 | 0 | 0 | |
Total revenue | 429.1 | 164.4 | 1,304.6 | 504.7 | |
Cost of services | 41.3 | 24.9 | 139.9 | 73.4 | |
Cost of product sales | 80.1 | 32.9 | 268.8 | 103.9 | |
Cost of instant games | 0 | 0 | 0 | 0 | |
Selling, general and administrative | 70.3 | 28.7 | 215.7 | 92.8 | |
Research and development | 39.4 | 21.5 | 120.3 | 64.9 | |
Employee termination and restructuring | 3.2 | 0.9 | 10.1 | 4.2 | |
Depreciation and amortization | 245.1 | 66.4 | 569.9 | 190.9 | |
Goodwill impairment | 535 | 535 | |||
Operating loss | (585.3) | (10.9) | (555.1) | (25.4) | |
Earnings (loss) from equity investments | 1 | 1.3 | 2.7 | 3.3 | |
Lottery | |||||
Revenue: | |||||
Goodwill impairment | 0 | ||||
Lottery | Operating Segments | |||||
Revenue: | |||||
Product sales | 45 | 48.2 | 136.5 | 149.3 | |
Instant games | 8.7 | 33.7 | 29 | 72.7 | |
Services | 137.6 | 130.8 | 402 | 392.4 | |
Total revenue | 191.3 | 212.7 | 567.5 | 614.4 | |
Cost of services | 27.2 | 30.4 | 83.1 | 90.4 | |
Cost of product sales | 7.3 | 27 | 24.4 | 57.3 | |
Cost of instant games | 77.1 | 69.7 | 212.9 | 212.5 | |
Selling, general and administrative | 15.7 | 17.8 | 49.2 | 56 | |
Research and development | 1.1 | 1.4 | 4.2 | 2.7 | |
Employee termination and restructuring | 0 | 0.4 | 0.2 | 1.6 | |
Depreciation and amortization | 21.6 | 24.9 | 62.9 | 70.8 | |
Goodwill impairment | 0 | 0 | |||
Operating loss | 41.3 | 41.1 | 130.6 | 123.1 | |
Earnings (loss) from equity investments | 2 | (15.3) | 6.7 | (11.1) | |
Interactive | Operating Segments | |||||
Revenue: | |||||
Product sales | 51.2 | 38.5 | 149.7 | 101.5 | |
Instant games | 0 | 0 | 0 | 0 | |
Services | 0 | 0 | 0 | 0 | |
Total revenue | 51.2 | 38.5 | 149.7 | 101.5 | |
Cost of services | 17 | 14.3 | 51.6 | 36.9 | |
Cost of product sales | 0 | 0 | 0 | 0 | |
Cost of instant games | 0 | 0 | 0 | 0 | |
Selling, general and administrative | 16.6 | 13.7 | 46.9 | 40.1 | |
Research and development | 5.4 | 3.4 | 16.3 | 9.4 | |
Employee termination and restructuring | 0.5 | 0.6 | 1.5 | 4.7 | |
Depreciation and amortization | 5.4 | 3.4 | 15.9 | 9.3 | |
Goodwill impairment | 0 | 0 | |||
Operating loss | 6.3 | 3.1 | 17.5 | 1.1 | |
Earnings (loss) from equity investments | $ 0 | $ 0 | $ 0 | $ 0 | |
[1] | Exclusive of depreciation and amortization. |
Business Segments (Reconciliati
Business Segments (Reconciliation of Operating Profit (Loss) from Segments to Consolidated) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reconciliation of reportable segment operating income to consolidated income before income taxes | ||||
Segment operating income (loss) from continuing operations | $ (588.2) | $ (7.8) | $ (570.2) | $ (16.3) |
Interest expense | (166.8) | (45.7) | (497.5) | (142.9) |
Earnings (loss) from equity investments | 3 | (14) | 9.4 | (7.8) |
Loss on early extinguishment of debt | 0 | 0 | 0 | (25.9) |
Gain on sale of equity interest | 0 | 0 | 0 | 14.5 |
Other (expense) income, net | (7.5) | 3.1 | (17.4) | 9.2 |
Net loss from continuing operations before income taxes | (759.5) | (64.4) | (1,075.7) | (169.2) |
Operating Segments | ||||
Reconciliation of reportable segment operating income to consolidated income before income taxes | ||||
Segment operating income (loss) from continuing operations | (537.7) | 33.3 | (407) | 98.8 |
Unallocated corporate costs | ||||
Reconciliation of reportable segment operating income to consolidated income before income taxes | ||||
Segment operating income (loss) from continuing operations | $ (50.5) | $ (41.1) | $ (163.2) | $ (115.1) |
Business Segments (Narrative) (
Business Segments (Narrative) (Details) - Segment | 3 Months Ended | 9 Months Ended |
Dec. 31, 2014 | Sep. 30, 2015 | |
Disclosures related to operating segments | ||
Number of business segments | 3 | |
Lottery | ||
Disclosures related to operating segments | ||
Number of business segments | 1 |
Acquisitions (Acquisitions) (De
Acquisitions (Acquisitions) (Details) - USD ($) $ in Millions | Nov. 21, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||||
Goodwill impairment | $ 535 | $ 0 | $ 535 | $ 0 | |||
Goodwill | 3,485.2 | 3,485.2 | $ 4,108.3 | $ 1,183.1 | |||
Revenue from Consolidated Statements of Operations and Comprehensive Loss | (671.6) | (415.6) | (2,021.8) | (1,220.6) | |||
Net loss from Consolidated Statements of Operations and Comprehensive Loss | (678.2) | (69.8) | (866.8) | (187.2) | |||
WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 5,100 | ||||||
Goodwill impairment | 1,900 | ||||||
Add: Bally revenue not reflected in Consolidated Statements of Operations and Comprehensive Loss | 320.7 | 1,018 | |||||
Unaudited pro forma revenue | 736.3 | 2,238.6 | |||||
Add: Bally net income not reflected in Consolidated Statements of Operations and Comprehensive Loss adjusted by pro forma adjustments (1), (2), (3), (4), (5), and (6) below | (40.7) | (112.9) | |||||
Unaudited pro forma net loss | (110.5) | (300.1) | |||||
Interactive | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill impairment | 535 | ||||||
Goodwill | 2,887.7 | $ 2,887.7 | $ 3,499.7 | $ 612.7 | |||
Interactive | WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | $ 2,956.1 | ||||||
Depreciation and amortization | WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Unaudited pro forma net loss | (43) | (113.2) | |||||
Fair Value Adjustment to Inventory [Member] | WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Unaudited pro forma net loss | 0 | 5.2 | |||||
Acquisition-related fees and expenses | WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Unaudited pro forma net loss | (5.6) | ||||||
Interest expense | WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Unaudited pro forma net loss | (77.5) | (228.6) | |||||
Loss on early extinguishment of debt | WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Unaudited pro forma net loss | $ 0 | (25.9) | |||||
Income tax expense | WMS Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Unaudited pro forma net loss | $ 43.6 | $ 115.6 |
Restructuring Plans (Schedule o
Restructuring Plans (Schedule of Restructuring Reserve by Segment) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)business_line | Sep. 30, 2014USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | $ 5.6 | $ 1.9 | $ 19 | $ 12.4 |
Cumulative | 67.4 | 67.4 | ||
Expected Total | 70.8 | 70.8 | ||
Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 4.8 | 13.3 | ||
Cumulative | 49.9 | 49.9 | ||
Expected Total | 53.2 | 53.2 | ||
Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.1 | 1.9 | ||
Cumulative | 5.9 | 5.9 | ||
Expected Total | 5.9 | 5.9 | ||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.7 | 3.8 | ||
Cumulative | 11.6 | 11.6 | ||
Expected Total | 11.7 | $ 11.7 | ||
Gaming | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of immaterial business lines with exit costs | business_line | 2 | |||
Business Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 3.7 | 1.9 | $ 11.8 | 10.5 |
Business Segment | Gaming | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 3.2 | 10.1 | ||
Cumulative | 32.2 | 32.2 | ||
Expected Total | 35.5 | 35.5 | ||
Business Segment | Gaming | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 2.6 | 9.4 | ||
Cumulative | 27.7 | 27.7 | ||
Expected Total | 31 | 31 | ||
Business Segment | Gaming | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 0.9 | 0.9 | ||
Expected Total | 0.9 | 0.9 | ||
Business Segment | Gaming | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.6 | 0.7 | ||
Cumulative | 3.6 | 3.6 | ||
Expected Total | 3.6 | 3.6 | ||
Business Segment | Lottery | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | $ 0.4 | 0.2 | $ 1.6 |
Cumulative | 3.7 | 3.7 | ||
Expected Total | 3.7 | 3.7 | ||
Business Segment | Lottery | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0.2 | ||
Cumulative | 3.3 | 3.3 | ||
Expected Total | 3.3 | 3.3 | ||
Business Segment | Lottery | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 0.4 | 0.4 | ||
Expected Total | 0.4 | 0.4 | ||
Business Segment | Lottery | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 0 | 0 | ||
Expected Total | 0 | 0 | ||
Business Segment | Interactive | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.5 | 1.5 | ||
Cumulative | 10.6 | 10.6 | ||
Expected Total | 10.6 | 10.6 | ||
Business Segment | Interactive | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.4 | 1.3 | ||
Cumulative | 5.1 | 5.1 | ||
Expected Total | 5.1 | 5.1 | ||
Business Segment | Interactive | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 0.4 | 0.4 | ||
Expected Total | 0.4 | 0.4 | ||
Business Segment | Interactive | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.1 | 0.2 | ||
Cumulative | 5.1 | 5.1 | ||
Expected Total | 5.1 | 5.1 | ||
Unallocated corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 1.9 | 7.2 | ||
Cumulative | 20.9 | 20.9 | ||
Expected Total | 21 | 21 | ||
Unallocated corporate | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 1.8 | 2.4 | ||
Cumulative | 13.8 | 13.8 | ||
Expected Total | 13.8 | 13.8 | ||
Unallocated corporate | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.1 | 1.9 | ||
Cumulative | 4.2 | 4.2 | ||
Expected Total | 4.2 | 4.2 | ||
Unallocated corporate | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 2.9 | ||
Cumulative | 2.9 | 2.9 | ||
Expected Total | $ 3 | $ 3 |
Restructuring Plans (Reserve Ro
Restructuring Plans (Reserve Rollforward) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 22.6 | |||
Additional accruals | $ 5.6 | $ 1.9 | 19 | $ 12.4 |
Cash payments | (27.7) | |||
Ending balance | 13.9 | 13.9 | ||
Employee Termination Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 17.9 | |||
Additional accruals | 4.8 | 13.3 | ||
Cash payments | (21.6) | |||
Ending balance | 9.6 | 9.6 | ||
Property Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 1.7 | |||
Additional accruals | 0.1 | 1.9 | ||
Cash payments | (2.3) | |||
Ending balance | 1.3 | 1.3 | ||
Other | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 3 | |||
Additional accruals | 0.7 | 3.8 | ||
Cash payments | (3.8) | |||
Ending balance | $ 3 | $ 3 |
Restructuring Plans (Narrative)
Restructuring Plans (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)business_line | Sep. 30, 2014USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Pre-tax employee termination and restructuring costs | $ | $ 5.6 | $ 1.9 | $ 19 | $ 12.4 |
Gaming | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of immaterial business lines with exit costs | 2 |
Basic and Diluted Net Loss Pe49
Basic and Diluted Net Loss Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net loss | ||||
Net loss | $ (678.2) | $ (69.8) | $ (866.8) | $ (187.2) |
Basic and diluted net loss per share: | ||||
Basic | $ (7.88) | $ (0.82) | $ (10.10) | $ (2.22) |
Diluted | $ (7.88) | $ (0.82) | $ (10.10) | $ (2.22) |
Weighted average number of shares used in per share calculations: | ||||
Basic shares | 86.1 | 84.7 | 85.8 | 84.5 |
Diluted shares | 86.1 | 84.7 | 85.8 | 84.5 |
Basic and Diluted Net Loss Pe50
Basic and Diluted Net Loss Per Share (Narrative) (Details) - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 1.9 | 1.7 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 6 | 4 |
Accounts and Notes Receivable51
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Components of Current and Long-term Accounts and Notes Receivable, Net) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current: | ||
Accounts receivable | $ 478.9 | $ 479.5 |
Notes receivable | 174.5 | 194.6 |
Allowance for doubtful accounts | (19.7) | (17) |
Current accounts and notes receivable, net | 633.7 | 657.1 |
Long-term: | ||
Notes receivable | 57.6 | 87.5 |
Total accounts and notes receivable, net | $ 691.3 | $ 744.6 |
Accounts and Notes Receivable52
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Components of Total Notes Receivable, Net) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total accounts and notes receivable, net | $ 691.3 | $ 744.6 | ||
Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 232.1 | 282.1 | ||
Notes receivable allowance for doubtful accounts | (11.4) | (5.9) | $ (7.4) | $ (5.6) |
Total accounts and notes receivable, net | 220.7 | 276.2 | ||
Domestic | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 63.1 | 95.3 | ||
Notes receivable allowance for doubtful accounts | (2.9) | 0 | ||
International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 169 | 186.8 | ||
Notes receivable allowance for doubtful accounts | (8.5) | (5.9) | ||
Financing Receivables, Equal to Greater than 90 Days Past Due | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable past due | 22.9 | 19.9 | ||
Notes receivable allowance for doubtful accounts, balances over 90 days past due | (5.9) | (3.5) | ||
Notes receivable, net, balances over 90 days past due | 17 | 16.4 | ||
Financing Receivables, Equal to Greater than 90 Days Past Due | Domestic | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable past due | 2.6 | 7.9 | ||
Notes receivable allowance for doubtful accounts, balances over 90 days past due | (1.5) | 0 | ||
Financing Receivables, Equal to Greater than 90 Days Past Due | International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable past due | 20.3 | 12 | ||
Notes receivable allowance for doubtful accounts, balances over 90 days past due | $ (4.4) | $ (3.5) |
Accounts and Notes Receivable53
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Evaluation of Notes Receivable For Impairment) (Details) - Notes receivable - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Notes receivable | $ 232.1 | $ 282.1 |
Ending Balance Individually Evaluated for Impairment | 144.7 | 157.1 |
Ending Balance Collectively Evaluated for Impairment | 87.4 | 125 |
Domestic | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Notes receivable | 63.1 | 95.3 |
Ending Balance Individually Evaluated for Impairment | 32.4 | 36.1 |
Ending Balance Collectively Evaluated for Impairment | 30.7 | 59.2 |
International | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Notes receivable | 169 | 186.8 |
Ending Balance Individually Evaluated for Impairment | 112.3 | 121 |
Ending Balance Collectively Evaluated for Impairment | $ 56.7 | $ 65.8 |
Accounts and Notes Receivable54
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Allowance for Doubtful Accounts Receivable) (Details) - Notes receivable - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | $ 5.9 | $ 5.6 |
Charge-offs | (1.9) | (0.1) |
Recoveries | (0.5) | 0 |
Provision | 7.9 | 1.9 |
Ending balance | 11.4 | 7.4 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment [Roll Forward] | ||
Beginning balance | 5.9 | 5.6 |
Charge-offs | (1.9) | (0.1) |
Recoveries | (0.4) | 0 |
Provision | 6.2 | 1.9 |
Ending balance | 9.8 | 7.4 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment [Roll Forward] | ||
Beginning balance | 0 | 0 |
Charge-offs | 0 | 0 |
Recoveries | (0.1) | 0 |
Provision | 1.7 | 0 |
Ending balance | $ 1.6 | $ 0 |
Accounts and Notes Receivable55
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Modification of Terms) (Details) - Notes receivable $ in Millions | 9 Months Ended | |
Sep. 30, 2014USD ($)customercontract | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 9 | |
Number of notes | contract | 28 | |
Pre-modification investment | $ 12.8 | |
Post-modification investment | $ 12.8 | |
International | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 9 | [1] |
Number of notes | contract | 28 | [1] |
Pre-modification investment | $ 12.8 | [1] |
Post-modification investment | $ 12.8 | [1] |
International | Customer four | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 4 | |
Number of notes consolidated into one | customer | 12 | |
Contract extension term | 28 months | |
International | Customer Four, Note One | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of notes consolidated into one | contract | 1 | |
International | Customer one | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 3.1 | |
Number of notes consolidated into one | contract | 3 | |
Contract extension term | 4 months | |
International | Customer One, Note One | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of notes consolidated into one | contract | 1 | |
International | Customer two | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 2.3 | |
Contract extension term | 9 months | |
International | Customer three | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Number of notes consolidated into one | contract | 4 | |
International | Customer three, note one | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Post-modification investment | $ 1.4 | |
Number of notes consolidated into one | contract | 1 | |
Contract extension term | 5 months | |
International | Customer three, note two | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Post-modification investment | $ 0.2 | |
Contract extension term | 7 months | |
International | Customer eight | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 0.7 | |
Number of notes consolidated into one | contract | 2 | |
Contract extension term | 15 months | |
International | Customer eight, note one | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of notes consolidated into one | contract | 1 | |
International | Customer five | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 0.5 | |
Contract extension term | 21 months | |
International | Customer six | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 0.3 | |
Contract extension term | 27 months | |
International | Customer Nine | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 0.2 | |
Number of notes consolidated into one | contract | 2 | |
Contract extension term | 14 years | |
International | Customer Nine, Note One | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of notes consolidated into one | contract | 1 | |
International | Customer seven | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of customers | customer | 1 | |
Post-modification investment | $ 0.1 | |
Contract extension term | 21 months | |
[1] | The modifications are detailed below: •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 $0.1 million for which original payment terms were extended by 21 months. |
Accounts and Notes Receivable56
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Concentration Risk) (Details) - Geographic concentration risk - Notes receivable | 9 Months Ended |
Sep. 30, 2015 | |
Mexico | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 19.00% |
Peru | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 17.00% |
Australia | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 8.00% |
Columbia | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 7.00% |
Argentina | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 7.00% |
Other (less than 5% individually) | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 15.00% |
Concentration risk, individual percentage | 0.05 |
Total international notes receivable as a percentage of total notes receivable | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 73.00% |
Accounts and Notes Receivable57
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 691.3 | $ 744.6 |
Argentina | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 19.1 | |
Proceeds from collection of accounts and notes receivable, net | 23.6 | |
Mexico | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 42.1 | |
Proceeds from collection of accounts and notes receivable, net | $ 23.7 | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield (interest rate) | 3.25% | 4.00% |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield (interest rate) | 10.40% | 10.40% |
Notes receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 220.7 | $ 276.2 |
Financing receivable, percentage greater than 90 days past due | 7.70% | 5.90% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Inventories | |||
Parts and work-in-process | $ 122 | $ 105.7 | |
Finished goods | $ 121.8 | 159.9 | |
Total inventories | $ 243.8 | $ 265.6 | |
Bally Technologies Inc. | |||
Business Acquisition [Line Items] | |||
Asset impairment charges | $ 7.1 |
Property and Equipment (Gaming
Property and Equipment (Gaming and Lottery Machinery and Equipment) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 292.3 | $ 292.8 |
Total gaming and lottery machinery and equipment, net | 868.4 | 1,012.8 |
Gaming equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 772 | 799.9 |
Accumulated amortization | (266.4) | (279.1) |
Total gaming and lottery machinery and equipment, net | 505.6 | 520.8 |
Lottery machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 307.9 | 311.7 |
Accumulated amortization | (231.2) | (207.4) |
Total gaming and lottery machinery and equipment, net | 76.7 | 104.3 |
Lottery and gaming operations machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total gaming and lottery machinery and equipment, net | $ 582.3 | $ 625.1 |
Property and Equipment (Propert
Property and Equipment (Property and Equipment) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 292.3 | $ 292.8 |
Long-term notes receivable | 868.4 | 1,012.8 |
Other property and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation | (312.2) | (207.3) |
Long-term notes receivable | 286.1 | 387.7 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 39.1 | 43 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 183.1 | 206.3 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 40.8 | 36.2 |
Transportation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 4.4 | 5 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 38.6 | $ 11.7 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property, Plant and Equipment [Line Items] | ||||||
Depreciation expense | $ 72.8 | $ 58.5 | $ 249.1 | $ 166.8 | ||
Property, plant and equipment, gross | 292.3 | $ 292.8 | 292.3 | |||
Property, plant and equipment, net | 868.4 | 1,012.8 | 868.4 | |||
Capital lease assets | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Accumulated amortization | 10.8 | 5.3 | 10.8 | |||
Gaming equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Accumulated amortization | 266.4 | 279.1 | 266.4 | |||
Property, plant and equipment, gross | 772 | 799.9 | 772 | |||
Property, plant and equipment, net | 505.6 | 520.8 | 505.6 | |||
Gaming | Gaming equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 59.9 | 59.9 | ||||
Gaming | Land and Building | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, net | 27.5 | 27.5 | ||||
Bally Technologies Inc. | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Asset impairment charges | 7.1 | |||||
Bally Technologies Inc. | Gaming | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Asset impairment charges | $ 0.5 | $ 5.7 | ||||
Bally Technologies Inc. | Gaming | Manufacturing Facility | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Asset impairment charges | $ 9.4 | |||||
Bally Technologies Inc. | Gaming | Sales | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Asset impairment charges | $ 4.9 |
Intangible Assets and Goodwil62
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Amortizable intangible assets: | ||
Gross Carrying Amount | $ 2,211.5 | $ 2,100.2 |
Accumulated Amortization | 366 | 170.1 |
Net Balance | 1,845.5 | 1,930.1 |
Non-amortizable intangible assets | ||
Total intangible assets, gross carrying amount | 2,308.9 | 2,423.8 |
Total intangible assets, accumulated amortization (excluding goodwill) | 368.1 | 172.2 |
Total intangible assets, net | 1,940.8 | 2,251.6 |
Trade names | ||
Non-amortizable intangible assets | ||
Non-amortizable intangible assets, Gross Carrying Amount | 97.4 | 323.6 |
Non-amortizable intangible assets, Accumulated Amortization | 2.1 | 2.1 |
Non-amortizable intangible assets, Net Balance | 95.3 | 321.5 |
Patents | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 20.4 | 17.9 |
Accumulated Amortization | 9.5 | 8.4 |
Net Balance | 10.9 | 9.5 |
Customer relationships | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 876.5 | 883.2 |
Accumulated Amortization | 95.1 | 46.7 |
Net Balance | 781.4 | 836.5 |
Licenses | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 366.4 | 332.8 |
Accumulated Amortization | 128.6 | 88.5 |
Net Balance | 237.8 | 244.3 |
Intellectual property | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 727.1 | 736.3 |
Accumulated Amortization | 117.3 | 19.5 |
Net Balance | 609.8 | 716.8 |
Trade names | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 97.5 | |
Accumulated Amortization | 0 | |
Net Balance | 97.5 | |
Brand names | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 123.3 | 128.2 |
Accumulated Amortization | 15.2 | 5.3 |
Net Balance | 108.1 | 122.9 |
Non-compete agreements | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 0.3 | 0.3 |
Accumulated Amortization | 0.3 | 0.2 |
Net Balance | $ 0 | 0.1 |
Lottery contracts | ||
Amortizable intangible assets: | ||
Gross Carrying Amount | 1.5 | |
Accumulated Amortization | 1.5 | |
Net Balance | $ 0 |
Intangible Assets and Goodwil63
Intangible Assets and Goodwill (Schedule of Goodwil)l (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | |||||
Balance at the beginning of the period | $ 4,108.3 | $ 1,183.1 | $ 1,183.1 | ||
Acquisitions | 2,956.1 | ||||
Foreign currency adjustments | (88.1) | (30.9) | |||
Balance at the end of the period | $ 3,485.2 | 3,485.2 | 4,108.3 | ||
Goodwill impairment | (535) | $ 0 | (535) | 0 | |
Interactive | |||||
Goodwill [Roll Forward] | |||||
Balance at the beginning of the period | 3,499.7 | 612.7 | 612.7 | ||
Acquisitions | 2,902.8 | ||||
Foreign currency adjustments | (77) | (15.8) | |||
Balance at the end of the period | 2,887.7 | 2,887.7 | 3,499.7 | ||
Goodwill impairment | (535) | ||||
Lottery | |||||
Goodwill [Roll Forward] | |||||
Balance at the beginning of the period | 498.8 | 513.9 | 513.9 | ||
Acquisitions | 0 | ||||
Foreign currency adjustments | (11.1) | (15.1) | |||
Balance at the end of the period | 487.7 | 487.7 | 498.8 | ||
Goodwill impairment | 0 | ||||
Interactive | |||||
Goodwill [Roll Forward] | |||||
Balance at the beginning of the period | 109.8 | $ 56.5 | 56.5 | ||
Acquisitions | 53.3 | ||||
Foreign currency adjustments | 0 | 0 | |||
Balance at the end of the period | $ 109.8 | 109.8 | $ 109.8 | ||
Goodwill impairment | $ 0 |
Intangible Assets and Goodwil64
Intangible Assets and Goodwill (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible amortization expense | $ 181.5 | $ 18.1 | $ 331.8 | $ 49 | ||
Discount rate | 9.00% | 9.00% | ||||
Impairment of intangible assets (excluding goodwill) | $ 103.6 | 103.6 | 128.6 | |||
Number of Reporting Units | 7 | |||||
Gross Carrying Amount | $ 2,211.5 | $ 2,211.5 | $ 2,100.2 | |||
Terminal revenue growth rate | 2.00% | 2.00% | ||||
Goodwill impairment | $ 535 | $ 0 | $ 535 | $ 0 | ||
Goodwill | $ 3,485.2 | 3,485.2 | 4,108.3 | $ 1,183.1 | ||
Depreciation and amortization | Trade names | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Asset impairment charges | $ 25 | |||||
Minimum | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Royalty rates | 0.50% | 0.50% | ||||
Maximum | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Royalty rates | 1.00% | 1.00% | ||||
Gaming | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill impairment | $ 535 | |||||
Goodwill | $ 2,887.7 | 2,887.7 | $ 3,499.7 | $ 612.7 | ||
Gaming | SG Gaming reporting unit | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill impairment | 535 | |||||
Goodwill | 1,483.7 | 1,483.7 | ||||
Trade names | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | $ 97.5 | $ 97.5 |
Software (Details)
Software (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Capitalized Computer Software, Net [Abstract] | |||||
Software | $ 857.3 | $ 857.3 | $ 812.1 | ||
Accumulated amortization | (330.3) | (330.3) | (219.4) | ||
Software, net | 527 | 527 | $ 592.7 | ||
Amortization expense | $ 32.2 | $ 23.8 | $ 112 | $ 74.7 |
Equity Investments - Narrative
Equity Investments - Narrative (Details) € in Millions, ¥ in Millions, £ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Aug. 31, 2015USD ($) | Jan. 31, 2014USD ($) | Jan. 31, 2014GBP (£) | Jun. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015CNY (¥) | Sep. 30, 2015EUR (€) | Sep. 30, 2014USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Estimated shortfall payment | $ 1.3 | |||||||
Distributed earnings from equity investments | $ 20.9 | $ 22.5 | ||||||
Northstar Lottery Group, LLC | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Maximum lottery net income as incentive compensation | 20.00% | 20.00% | 20.00% | 20.00% | ||||
PMA term | 10 years | 10 years | 10 years | |||||
Shortfall Payment | $ 10 | |||||||
Charge against net income | $ 2 | |||||||
Sportech | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percentage sold | 20.00% | 20.00% | ||||||
Cash proceeds | $ 44.9 | ÂŁ 27.8 | ||||||
Gain (loss) on sale | $ 14.5 | ÂŁ 9 | ||||||
GLB | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributed earnings from equity investments | $ 1.6 | ÂĄ 11.1 | ||||||
ITL | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributions | 8.1 | € 7.3 | ||||||
RCN | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributed earnings from equity investments | 2.9 | |||||||
Hellenic Lotteries | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributions | 12 | 10.7 | ||||||
Distributed earnings from equity investments | 2 | 1.8 | ||||||
LNS | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Distributions | 16.9 | 15.1 | ||||||
Distributed earnings from equity investments | $ 14.5 | € 12.9 |
Long-Term and Other Debt Schedu
Long-Term and Other Debt Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument | |||
Total long-term debt outstanding | $ 8,410.2 | $ 8,516 | |
Less: debt payments due within one year | (50.4) | (50.6) | |
Long-term debt, net of debt payments due within one year | 8,359.8 | 8,465.4 | |
Revolver, varying interest rate, due 2018 | |||
Debt Instrument | |||
Total long-term debt outstanding | 115 | 185 | |
Senior secured term loan credit facility, due 2020 | |||
Debt Instrument | |||
Total long-term debt outstanding | [1] | 2,251.5 | 2,267.6 |
Long-term debt, gross | 2,259.7 | 2,277 | |
Loan discount amortization | 8.2 | 9.4 | |
Senior secured term loan credit facility due 2021 | |||
Debt Instrument | |||
Total long-term debt outstanding | [2] | 1,967.6 | 1,980.3 |
Long-term debt, gross | 1,985 | 2,000 | |
Loan discount amortization | 17.4 | 19.7 | |
2018 Notes | |||
Debt Instrument | |||
Total long-term debt outstanding | 250 | 250 | |
2020 Notes | |||
Debt Instrument | |||
Total long-term debt outstanding | 300 | 300 | |
2021 Notes | |||
Debt Instrument | |||
Total long-term debt outstanding | [3] | 348.1 | 347.8 |
Long-term debt, gross | 350 | 350 | |
Loan discount amortization | 1.9 | 2.2 | |
Secured Notes | |||
Debt Instrument | |||
Total long-term debt outstanding | 950 | 950 | |
Unsecured Notes | |||
Debt Instrument | |||
Total long-term debt outstanding | 2,200 | 2,200 | |
Capital lease obligations, 3.9% interest as of September 30, 2015 payable monthly through 2019 | |||
Debt Instrument | |||
Total long-term debt outstanding | $ 28 | $ 35.3 | |
Capital lease interest rate | 3.90% | 3.90% | |
[1] | Total of $2,259.7 million in principal amount less unamortized loan discount in the amount of $8.2 million as of September 30, 2015. Total of $2,277.0 million in principal amount less unamortized loan discount in the amount of $9.4 million as of December 31, 2014. | ||
[2] | Total of $1,985.0 million in principal amount less unamortized loan discount in the amount of $17.4 million as of September 30, 2015. Total of $2,000.0 million in principal amount less unamortized loan discount in the amount of $19.7 million as of December 31, 2014. | ||
[3] | Total of $350.0 million in principal amount less unamortized loan discount in the amount of $1.9 million as of September 30, 2015. Total of $350.0 million in principal amount less unamortized loan discount in the amount of $2.2 million as of December 31, 2014. |
Long-Term and Other Debt - Narr
Long-Term and Other Debt - Narrative (Details) - USD ($) | Sep. 30, 2015 | Feb. 12, 2015 | Feb. 11, 2015 | Oct. 01, 2014 | Oct. 18, 2013 |
Capital lease obligations, 3.9% interest as of September 30, 2015 payable monthly through 2019 | |||||
Debt Instrument | |||||
Capital lease obligations | $ 28,000,000 | ||||
Senior secured credit facilities | |||||
Debt Instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 2,600,000,000 | ||||
Senior secured term loan credit facility due 2021 | Term loan facility | |||||
Debt Instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000,000 | ||||
Revolver, varying interest rate, due 2018 | Revolving credit facility | |||||
Debt Instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 592,600,000 | $ 25,000,000 | 300,000,000 | ||
Revolver, varying interest rate, due 2018 | Revolving credit facility | Bally Technologies Inc. | |||||
Debt Instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 567,600,000 | ||||
Revolver, varying interest rate, due 2018 | Letter of credit | Revolving credit facility | |||||
Debt Instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | ||||
Senior secured term loan credit facility, due 2020 | Term loan facility | |||||
Debt Instrument | |||||
Line of credit facility, maximum borrowing capacity | $ 2,300,000,000 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Oct. 31, 2013 | Aug. 31, 2013 | |
Derivatives Fair Value | |||||||
Assets, fair value disclosure, nonrecurring | $ 1,581,100,000 | $ 1,581,100,000 | |||||
Goodwill and intangible asset impairment | 535,000,000 | 103,600,000 | $ 128,600,000 | ||||
Interest rate swap | |||||||
Derivatives Fair Value | |||||||
Derivative notional amount | $ 200,000,000 | $ 500,000,000 | |||||
Derivative average fixed interest rate | 2.151% | ||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||
Gain (loss) on derivatives representing change in fair value of hedges | (1,700,000) | $ 2,200,000 | (1,000,000) | $ (4,200,000) | |||
Derivative liability fair value | $ 14,900,000 | $ 14,900,000 | |||||
LNS | |||||||
Derivatives Fair Value | |||||||
Equity interest in derivative instrument held by Lotterie Nazionali | 20.00% | 20.00% | 20.00% | 20.00% | |||
Other Current Liabilities [Member] | Interest rate swap | |||||||
Derivatives Fair Value | |||||||
Derivative liability fair value | $ 8,200,000 | $ 8,200,000 | |||||
Other long-term liabilities | Interest rate swap | |||||||
Derivatives Fair Value | |||||||
Derivative liability fair value | 6,700,000 | 6,700,000 | $ 9,500,000 | ||||
Interest expense | Interest rate swap | |||||||
Derivatives Fair Value | |||||||
Derivative liability fair value | $ 600,000 | $ 1,100,000 | $ 600,000 | $ 1,100,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - shares shares in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Change in the number of shares of Class A common stock outstanding | ||
Shares outstanding as of beginning of period | 85.1 | 85.2 |
Shares issued as part of equity-based compensation plans and the ESPP, net of RSUs surrendered | 1.1 | 1.9 |
Common stock repurchases | 0 | (2) |
Shares outstanding as of end of period | 86.2 | 85.1 |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity - Narrative (Details) - USD ($) shares in Millions | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | ||
Stock repurchase program, authorized amount | $ 200,000,000 | |
Stock repurchased (in shares) | 2 | |
Stock repurchased value | $ 29,500,000 | |
Remaining amount for purchases under the repurchase program | $ 75,000,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | Apr. 27, 2015$ / sharesshares | Jan. 01, 2015performance_target$ / sharesshares | Nov. 30, 2014shares | Sep. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2015$ / sharesshares | Mar. 31, 2015$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) |
Legacy Bally Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based awards assumed in acquisition | shares | 1,400,000 | ||||||||
Shares assumed under Bally Legacy Plan | shares | 3,400,000 | ||||||||
2003 Incentive Compensation Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | shares | 5,100,000 | 5,100,000 | |||||||
Employee stock option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award expiration period | 10 years | ||||||||
Grants in period, weighted average grant date fair value | $ / shares | $ 7.56 | $ 6.43 | $ 6.05 | ||||||
Share-based compensation expense | $ 0.6 | $ 0 | $ 1.5 | $ 0 | |||||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 0.2 | 0 | 0.6 | 0 | |||||
Compensation cost not yet recognized | $ 6.3 | $ 6.3 | |||||||
Compensation cost not yet recognized, period for recognition | 2 years | ||||||||
Employee stock option | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period | 4 years | ||||||||
Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.00% | ||||||||
Award vesting period | 3 years | 3 years | |||||||
Number of performance targets | performance_target | 3 | ||||||||
Number of cumulative performance targets | performance_target | 3 | ||||||||
Grants in period | shares | 200,000 | 300,000 | 100,000 | 2,400,000 | 300,000 | ||||
Average grant date fair value | $ / shares | $ 12.83 | $ 13.26 | $ 15.18 | $ 12.90 | $ 13.15 | ||||
Share-based compensation expense | $ 6.6 | 0 | $ 17.6 | 0 | |||||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 2.5 | $ 0 | 6.5 | $ 0 | |||||
Compensation cost not yet recognized | $ 60.6 | $ 60.6 | |||||||
Compensation cost not yet recognized, period for recognition | 2 years | ||||||||
Restricted stock units | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period | 4 years | ||||||||
Employee stock | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | shares | 1,000,000 | 1,000,000 | |||||||
Maximum employee subscription rate | 15.00% | 15.00% | |||||||
Award offering period | 6 months | ||||||||
Discount from market price | 15.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Changes in Stock Options Outstanding (Details) - Employee stock option - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Number of Options (in shares): | |||||
Options outstanding at beginning of period | 1.5 | 1.6 | 1.6 | 1.6 | |
Granted | 0.6 | 0.2 | |||
Exercised | (0.1) | (0.3) | |||
Canceled | (0.1) | 0 | |||
Options outstanding at end of period | 1.9 | 1.5 | 1.9 | 1.9 | 1.6 |
Options exercisable at end of period | 0.8 | ||||
Options outstanding, weighted average remaining contract term (in years) | 7 years 2 months 12 days | 7 years 10 months 24 days | 7 years 9 months 18 days | 6 years 3 months 18 days | |
Options exercisable, Weighted average remaining contract term (in years) | 5 years 8 months 12 days | ||||
Weighted average exercise price (in dollars per share): | |||||
Options outstanding at beginning of period | $ 11.78 | $ 11.61 | $ 11.61 | $ 11.61 | |
Granted | 12.83 | 12.04 | |||
Exercised | 9.10 | 9.83 | |||
Canceled | 10.47 | ||||
Options outstanding at end of period | $ 12.24 | $ 11.78 | $ 12.24 | 12.29 | $ 11.61 |
Options exercisable at end of period | $ 11.25 | ||||
Aggregate Intrinsic Value: | |||||
Options outstanding at beginning of period | $ 1.2 | $ 4 | $ 4 | $ 4 | |
Exercised | 0 | 0 | |||
Options outstanding at end of period | $ 7.1 | $ 1.2 | $ 7.1 | 1 | $ 4 |
Options exercisable at end of period | $ 0.8 |
Stock-Based Compensation - Su74
Stock-Based Compensation - Summary of Changes in RSUs Outstanding (Details) - Restricted stock units - $ / shares shares in Millions | Apr. 27, 2015 | Jan. 01, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 |
Number of RSUs: | |||||
Unvested units at beginning of period | 5 | 6.4 | 4.3 | 5 | |
Granted | 0.2 | 0.3 | 0.1 | 2.4 | 0.3 |
Vested | (0.2) | (0.2) | (0.7) | ||
Canceled | (0.3) | (0.1) | (0.3) | ||
Unvested units at end of period | 6 | 6.4 | 4.3 | ||
Weighted Average Grant Date Fair Value Per RSU (in dollars per share): | |||||
Unvested units at beginning of period | $ 13.12 | $ 13.27 | $ 13.39 | $ 13.12 | |
Granted | $ 12.83 | $ 13.26 | 15.18 | 12.90 | 13.15 |
Vested | 13.48 | 10.53 | 12.72 | ||
Canceled | 13.82 | 14.32 | 15.08 | ||
Unvested units at end of period | $ 13.21 | $ 13.27 | $ 13.39 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer matching contribution on dollar for participant contributions | $ 0.35 |
Maximum percentage of participant contribution eligible for employer contribution match | 6.00% |
United Kingdom Pension Plans of US Entity Defined Benefit | |
Defined Benefit Plan Disclosure [Line Items] | |
Period of employees average compensation, preceding retirement considered for computation of retirement benefits | 2 years |
Bally Technologies Inc. | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer matching contribution | 6.00% |
Maximum annual contributions per employee (as percent) | 50.00% |
Employee Benefit Plans - Combin
Employee Benefit Plans - Combined Amount Of Net Periodic Benefit Cost Recognized (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Components of net periodic pension benefit cost | ||||
Service cost | $ 0.7 | $ 0.7 | $ 2.1 | $ 1.9 |
Interest cost | 1.2 | 1.3 | 3.6 | 3.9 |
Expected return on plan assets | (1.7) | (1.6) | (5.1) | (4.9) |
Amortization of actuarial gains | 0.3 | 0.2 | 1 | 0.5 |
Curtailments | 0 | 0 | 0 | 0.2 |
Amortization of prior service costs | (0.1) | (0.1) | (0.2) | (0.2) |
Net periodic cost | $ 0.4 | $ 0.5 | $ 1.4 | $ 1.4 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax [Line Items] | ||||
Effective tax rates (as a percent) | 10.60% | (8.40%) | 19.40% | (10.70%) |
Minimum | ||||
Income Tax [Line Items] | ||||
Effective income tax rate on foreign earnings | 0.00% | |||
Maximum | ||||
Income Tax [Line Items] | ||||
Effective income tax rate on foreign earnings | 35.00% |
Litigation - Narrative (Details
Litigation - Narrative (Details) COP in Billions | Apr. 16, 2012EUR (€) | Apr. 30, 2015USD ($) | Feb. 28, 2015EUR (€) | May. 31, 2013USD ($) | May. 31, 2013COP | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Loss Contingencies [Line Items] | |||||||
Loss contingency accrual | $ 13,900,000 | $ 47,300,000 | |||||
Legal contingencies, liability, estimated range | 13,400,000 | ||||||
Litigation settlement, amount | $ 450,000 | ||||||
Czech Republic Barcrest | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation settlement, amount | € | € 25,000,000 | ||||||
Loss contingency, third party erroneous winning jackpot face amount, in excess of | € | € 400,000,000 | ||||||
Loss contingency, third party loss | € | € 1,500,000 | ||||||
Ecosalud | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation settlement, amount | $ 29,100,000 | COP 90 | |||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 12.00% | 12.00% | |||||
Oregon State Lottery Matter | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, damages claimed, value, in excess of | $ 134,000,000 | ||||||
Bally Technologies Inc. | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, damages sought, value | 100,000,000 | ||||||
Guarantee of business revenue | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency possible amount of damages | 5,000,000 | ||||||
Performance guarantee | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency deposit of surety bond | $ 4,000,000 |
Supplemental Disclosure of Ca79
Supplemental Disclosure of Cash Flow Information - Additional Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Supplemental Cash Flow Elements [Abstract] | |||
Interest paid | $ 424.4 | $ 109 | |
Income tax refunds, net of payments | (9.1) | (31.6) | |
Noncash contribution expense | $ 0 | 9.1 | $ 115 |
Long-term licensed assets with minimum royalty guarantees | $ 42.8 |
Financial Information for Gua80
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Supplemental Condensed Consolidating Balance Sheet) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Assets | ||||
Cash and cash equivalents | $ 102.1 | $ 171.8 | $ 132.5 | $ 153.7 |
Restricted cash | 17.2 | 27.2 | ||
Accounts receivable, net | 470.6 | 468.4 | ||
Notes receivable, net | 163.1 | 188.7 | ||
Inventories | 243.8 | 265.6 | ||
Other current assets | 272.7 | 256.3 | ||
Long-term notes receivable | 868.4 | 1,012.8 | ||
Investment in subsidiaries | 0 | 0 | ||
Goodwill | 3,485.2 | 4,108.3 | 1,183.1 | |
Intangible assets, net | 1,940.8 | 2,251.6 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 527 | 592.7 | ||
Other assets | 524.2 | 651.8 | ||
Total assets | 8,615.1 | 9,995.2 | ||
Liabilities and stockholders' equity | ||||
Debt payments due within one year | 50.4 | 50.6 | ||
Other current liabilities | 564 | 609.7 | ||
Long-term debt, excluding current installments | 8,359.8 | 8,465.4 | ||
Other long-term liabilities | 621.7 | 865.6 | ||
Intercompany balances | 0 | 0 | ||
Stockholders’ (deficit) equity | (980.8) | 3.9 | ||
Total liabilities and stockholders’ (deficit) equity | 8,615.1 | 9,995.2 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 17.3 | 37.9 | 36.4 | 56 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Notes receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Other current assets | 17.7 | 65.4 | ||
Long-term notes receivable | 2 | 0.5 | ||
Investment in subsidiaries | 3,562.2 | 4,730.7 | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 145.8 | 162 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 20 | 15.6 | ||
Other assets | 4 | 2.8 | ||
Total assets | 3,769 | 5,014.9 | ||
Liabilities and stockholders' equity | ||||
Debt payments due within one year | 0 | 0 | ||
Other current liabilities | 47.8 | 68.9 | ||
Long-term debt, excluding current installments | 250 | 250 | ||
Other long-term liabilities | 54 | 136.2 | ||
Intercompany balances | 4,397.9 | 4,555.9 | ||
Stockholders’ (deficit) equity | (980.7) | 3.9 | ||
Total liabilities and stockholders’ (deficit) equity | 3,769 | 5,014.9 | ||
SGI | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0.1 | 0.3 | 0 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 78.9 | 61.8 | ||
Notes receivable, net | 0 | 0 | ||
Inventories | 35.9 | 35.2 | ||
Other current assets | 26.6 | 20.2 | ||
Long-term notes receivable | 110.4 | 119.5 | ||
Investment in subsidiaries | 876.9 | 953.4 | ||
Goodwill | 253.6 | 253.6 | ||
Intangible assets, net | 40.4 | 42.2 | ||
Intercompany balances | 6,514.7 | 6,580 | ||
Software, net | 32.4 | 32.9 | ||
Other assets | 223.9 | 255.4 | ||
Total assets | 8,193.7 | 8,354.3 | ||
Liabilities and stockholders' equity | ||||
Debt payments due within one year | 43 | 43 | ||
Other current liabilities | 167.7 | 119.8 | ||
Long-term debt, excluding current installments | 8,089.2 | 8,187.7 | ||
Other long-term liabilities | 58.9 | 74 | ||
Intercompany balances | 0 | (0.1) | ||
Stockholders’ (deficit) equity | (165.1) | (70.1) | ||
Total liabilities and stockholders’ (deficit) equity | 8,193.7 | 8,354.3 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 6.8 | 28.8 | 11.3 | 24.4 |
Restricted cash | 17.1 | 27.1 | ||
Accounts receivable, net | 204.1 | 212.9 | ||
Notes receivable, net | 108.6 | 136.6 | ||
Inventories | 108.9 | 133.8 | ||
Other current assets | 166.9 | 114.7 | ||
Long-term notes receivable | 548.8 | 660.4 | ||
Investment in subsidiaries | 758.2 | 975.2 | ||
Goodwill | 2,311.8 | 2,781.6 | ||
Intangible assets, net | 1,511.6 | 1,761.8 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 413.2 | 467.3 | ||
Other assets | 72.5 | 96.8 | ||
Total assets | 6,228.5 | 7,397 | ||
Liabilities and stockholders' equity | ||||
Debt payments due within one year | 0 | 0 | ||
Other current liabilities | 221.9 | 247.2 | ||
Long-term debt, excluding current installments | 0 | 0 | ||
Other long-term liabilities | 455 | 593.7 | ||
Intercompany balances | 1,886 | 1,637.9 | ||
Stockholders’ (deficit) equity | 3,665.6 | 4,918.2 | ||
Total liabilities and stockholders’ (deficit) equity | 6,228.5 | 7,397 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 78 | 105 | 84.5 | 73.3 |
Restricted cash | 0.1 | 0.1 | ||
Accounts receivable, net | 187.6 | 193.7 | ||
Notes receivable, net | 54.5 | 52.1 | ||
Inventories | 114.5 | 124.4 | ||
Other current assets | 61.5 | 56 | ||
Long-term notes receivable | 216.7 | 241.7 | ||
Investment in subsidiaries | 0 | 0 | ||
Goodwill | 919.8 | 1,073.1 | ||
Intangible assets, net | 243 | 285.6 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 61.4 | 76.9 | ||
Other assets | 223.8 | 296.8 | ||
Total assets | 2,160.9 | 2,505.4 | ||
Liabilities and stockholders' equity | ||||
Debt payments due within one year | 7.4 | 7.6 | ||
Other current liabilities | 126.6 | 173.8 | ||
Long-term debt, excluding current installments | 20.6 | 27.7 | ||
Other long-term liabilities | 53.8 | 61.7 | ||
Intercompany balances | 230.7 | 386.3 | ||
Stockholders’ (deficit) equity | 1,721.8 | 1,848.3 | ||
Total liabilities and stockholders’ (deficit) equity | 2,160.9 | 2,505.4 | ||
Eliminating Entries | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Notes receivable, net | 0 | 0 | ||
Inventories | (15.5) | (27.8) | ||
Other current assets | 0 | 0 | ||
Long-term notes receivable | (9.5) | (9.3) | ||
Investment in subsidiaries | (5,197.3) | (6,659.3) | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Intercompany balances | (6,514.7) | (6,580) | ||
Software, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | (11,737) | (13,276.4) | ||
Liabilities and stockholders' equity | ||||
Debt payments due within one year | 0 | 0 | ||
Other current liabilities | 0 | 0 | ||
Long-term debt, excluding current installments | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Intercompany balances | (6,514.6) | (6,580) | ||
Stockholders’ (deficit) equity | (5,222.4) | (6,696.4) | ||
Total liabilities and stockholders’ (deficit) equity | $ (11,737) | $ (13,276.4) |
Financial Information for Gua81
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Supplemental Condensed Consolidating Statement of Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |||
Condensed Financial Statements | ||||||
Revenue | $ 671.6 | $ 415.6 | $ 2,021.8 | $ 1,220.6 | ||
Cost of services, cost of product sales and cost of instant games (1) | [1] | 250 | 199.2 | 780.7 | 574.4 | |
Selling, general and administrative | 136.8 | 95.6 | 423.6 | 282.6 | ||
Research and development | 45.9 | 26.3 | 140.8 | 77 | ||
Employee termination and restructuring | 5.6 | 1.9 | 19 | 12.4 | ||
Depreciation and amortization | 286.5 | 100.4 | 692.9 | 290.5 | ||
Goodwill impairment | 535 | 0 | 535 | 0 | ||
Operating loss | (588.2) | (7.8) | (570.2) | (16.3) | ||
Interest expense | (166.8) | (45.7) | (497.5) | (142.9) | ||
Other (expense) income, net | (4.5) | (10.9) | (8) | (10) | ||
Net loss before income taxes | (759.5) | (64.4) | (1,075.7) | (169.2) | ||
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | 0 | ||
Income tax benefit (expense) | 81.3 | (5.4) | 208.9 | (18) | ||
Net loss | (678.2) | (69.8) | (866.8) | (187.2) | ||
Other comprehensive (loss) income | (49) | (55.1) | (136.1) | (51.4) | ||
Comprehensive (loss) income | (727.2) | (124.9) | (1,002.9) | (238.6) | ||
Parent Company | ||||||
Condensed Financial Statements | ||||||
Revenue | 0 | 0 | 0 | 0 | ||
Cost of services, cost of product sales and cost of instant games (1) | 0 | [1] | 0 | 0 | 0 | |
Selling, general and administrative | 16.2 | 19.5 | 47.8 | 51.6 | ||
Research and development | 0 | 0 | 0 | 0 | ||
Employee termination and restructuring | 1.4 | (0.1) | 4.6 | 1.9 | ||
Depreciation and amortization | 8.3 | 1.2 | 24.3 | 6.7 | ||
Goodwill impairment | 0 | 0 | ||||
Operating loss | (25.9) | (20.6) | (76.7) | (60.2) | ||
Interest expense | 3.3 | (0.2) | (0.6) | (2.5) | ||
Other (expense) income, net | 6.9 | (7) | 24.9 | (39.6) | ||
Net loss before income taxes | (15.7) | (27.8) | (52.4) | (102.3) | ||
Equity in (loss) income of subsidiaries | (745.9) | (38.8) | (1,027.2) | (71.7) | ||
Income tax benefit (expense) | 83.5 | (3.2) | 212.9 | (13.2) | ||
Net loss | (678.1) | (69.8) | (866.7) | (187.2) | ||
Other comprehensive (loss) income | (49.1) | (55.1) | (136.2) | (51.4) | ||
Comprehensive (loss) income | (727.2) | (124.9) | (1,002.9) | (238.6) | ||
SGI | ||||||
Condensed Financial Statements | ||||||
Revenue | 106.5 | 106.9 | 324.1 | 317.1 | ||
Cost of services, cost of product sales and cost of instant games (1) | [1] | 77.7 | 79 | 238 | 235 | |
Selling, general and administrative | 15.9 | 16.8 | 50.5 | 50.9 | ||
Research and development | 0.8 | 1.2 | 3.6 | 2.3 | ||
Employee termination and restructuring | 0.6 | 0 | 1.5 | 0.2 | ||
Depreciation and amortization | 10.5 | 11.8 | 30.1 | 32.1 | ||
Goodwill impairment | 0 | 0 | ||||
Operating loss | 1 | (1.9) | 0.4 | (3.4) | ||
Interest expense | 22.1 | (16.2) | (97.2) | (62.7) | ||
Other (expense) income, net | 19.3 | (6.1) | 55.2 | (9.2) | ||
Net loss before income taxes | 42.4 | (24.2) | (41.6) | (75.3) | ||
Equity in (loss) income of subsidiaries | 11.8 | 16.3 | 41.1 | 51.4 | ||
Income tax benefit (expense) | (0.1) | (0.2) | (0.2) | (0.3) | ||
Net loss | 54.1 | (8.1) | (0.7) | (24.2) | ||
Other comprehensive (loss) income | (3.1) | (5.4) | (12.9) | (2.4) | ||
Comprehensive (loss) income | 51 | (13.5) | (13.6) | (26.6) | ||
Guarantor Subsidiaries | ||||||
Condensed Financial Statements | ||||||
Revenue | 404.2 | 221.2 | 1,267.1 | 655 | ||
Cost of services, cost of product sales and cost of instant games (1) | [1] | 125.6 | 91.2 | 410.4 | 270.5 | |
Selling, general and administrative | 68.9 | 40.4 | 214 | 122.5 | ||
Research and development | 37.9 | 20.9 | 115 | 62.5 | ||
Employee termination and restructuring | 2.9 | 1.4 | 9.8 | 5.5 | ||
Depreciation and amortization | 234.3 | 67.7 | 533.9 | 187.5 | ||
Goodwill impairment | 460.2 | 460.2 | ||||
Operating loss | (525.6) | (0.4) | (476.2) | 6.5 | ||
Interest expense | (192) | (29.1) | (399.3) | (77) | ||
Other (expense) income, net | (8.2) | (7.9) | (77) | (8.7) | ||
Net loss before income taxes | (725.8) | (37.4) | (952.5) | (79.2) | ||
Equity in (loss) income of subsidiaries | (93.2) | (5.5) | (89.9) | (12.5) | ||
Income tax benefit (expense) | (0.9) | 0 | 2 | 0 | ||
Net loss | (819.9) | (42.9) | (1,040.4) | (91.7) | ||
Other comprehensive (loss) income | 56.9 | 0 | 48.4 | (0.3) | ||
Comprehensive (loss) income | (763) | (42.9) | (992) | (92) | ||
Non-Guarantor Subsidiaries | ||||||
Condensed Financial Statements | ||||||
Revenue | 236.9 | 149.7 | 707.2 | 428.4 | ||
Cost of services, cost of product sales and cost of instant games (1) | [1] | 122.7 | 91.2 | 408.9 | 248.7 | |
Selling, general and administrative | 35.8 | 18.9 | 111.3 | 57.6 | ||
Research and development | 7.2 | 4.2 | 22.2 | 12.2 | ||
Employee termination and restructuring | 0.7 | 0.6 | 3.1 | 4.8 | ||
Depreciation and amortization | 33.4 | 19.7 | 104.6 | 64.2 | ||
Goodwill impairment | 74.8 | 74.8 | ||||
Operating loss | (37.7) | 15.1 | (17.7) | 40.9 | ||
Interest expense | (0.2) | (0.2) | (0.4) | (0.7) | ||
Other (expense) income, net | (22.5) | 10.1 | (11.1) | 47.5 | ||
Net loss before income taxes | (60.4) | 25 | (29.2) | 87.7 | ||
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | 0 | ||
Income tax benefit (expense) | (1.2) | (2) | (5.8) | (4.5) | ||
Net loss | (61.6) | 23 | (35) | 83.2 | ||
Other comprehensive (loss) income | (104.1) | (55.7) | (181.3) | (45.6) | ||
Comprehensive (loss) income | (165.7) | (32.7) | (216.3) | 37.6 | ||
Eliminating Entries | ||||||
Condensed Financial Statements | ||||||
Revenue | (76) | (62.2) | (276.6) | (179.9) | ||
Cost of services, cost of product sales and cost of instant games (1) | [1] | (76) | (62.2) | (276.6) | (179.8) | |
Selling, general and administrative | 0 | 0 | 0 | 0 | ||
Research and development | 0 | 0 | 0 | 0 | ||
Employee termination and restructuring | 0 | 0 | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Goodwill impairment | 0 | 0 | ||||
Operating loss | 0 | 0 | 0 | (0.1) | ||
Interest expense | 0 | 0 | 0 | 0 | ||
Other (expense) income, net | 0 | 0 | 0 | 0 | ||
Net loss before income taxes | 0 | 0 | 0 | (0.1) | ||
Equity in (loss) income of subsidiaries | 827.3 | 28 | 1,076 | 32.8 | ||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | ||
Net loss | 827.3 | 28 | 1,076 | 32.7 | ||
Other comprehensive (loss) income | 50.4 | 61.1 | 145.9 | 48.3 | ||
Comprehensive (loss) income | $ 877.7 | $ 89.1 | $ 1,221.9 | $ 81 | ||
[1] | Exclusive of depreciation and amortization. |
Financial Information for Gua82
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Supplemental Condensed Consolidating Statement of Cash Flows) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Financial Statements | ||
Net cash provided by (used in) operating activities | $ 255.5 | $ 233.4 |
Cash flows from investing activities: | ||
Capital expenditures | (233.6) | (176.3) |
Proceeds from (Payments for) Interests in Joint Ventures | (43.3) | |
Distributions of capital on equity investments | 37 | 45.4 |
Proceeds from Sale of Equity Method Investments | 9.3 | 44.9 |
Payments for (Proceeds from) Other Investing Activities | 10.1 | (0.6) |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (177.2) | (129.9) |
Cash flows from financing activities: | ||
Net proceeds/payments on long-term debt | (108.8) | (52.2) |
Payments on license obligations | 32 | 7 |
Payments of license obligations | (7) | |
Common stock repurchases | 0 | (29.5) |
Contingent earnout payments | (0.5) | (10.2) |
Cash flows from financing activities: | 0.4 | (19.1) |
Other, principally intercompany balances | 0 | 0 |
Net cash provided by (used in) financing activities | (140.9) | (118) |
Cash and cash equivalents, end of period | 102.1 | 132.5 |
Effect of exchange rate changes on cash and cash equivalents | (7.1) | (6.7) |
Net Cash Provided by (Used in) Continuing Operations | (69.7) | (21.2) |
Parent Company | ||
Condensed Financial Statements | ||
Net cash provided by (used in) operating activities | (11.5) | (79.2) |
Cash flows from investing activities: | ||
Capital expenditures | (12.8) | (8.4) |
Proceeds from (Payments for) Interests in Joint Ventures | 0 | |
Distributions of capital on equity investments | 0 | 0 |
Proceeds from Sale of Equity Method Investments | 0 | 0 |
Payments for (Proceeds from) Other Investing Activities | 0 | (9.6) |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (12.8) | (18) |
Cash flows from financing activities: | ||
Net proceeds/payments on long-term debt | 0 | 0 |
Payments on license obligations | 19.5 | |
Payments of license obligations | 0 | |
Common stock repurchases | (29.5) | |
Contingent earnout payments | 0 | 0 |
Cash flows from financing activities: | 0.5 | (19.1) |
Other, principally intercompany balances | 22.7 | 126.2 |
Net cash provided by (used in) financing activities | 3.7 | 77.6 |
Cash and cash equivalents, end of period | 17.3 | 36.4 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net Cash Provided by (Used in) Continuing Operations | (20.6) | (19.6) |
SGI | ||
Condensed Financial Statements | ||
Net cash provided by (used in) operating activities | 44.3 | 19.8 |
Cash flows from investing activities: | ||
Capital expenditures | (19.7) | (23.9) |
Proceeds from (Payments for) Interests in Joint Ventures | 0 | |
Distributions of capital on equity investments | 1 | (1.3) |
Proceeds from Sale of Equity Method Investments | 0 | 0 |
Payments for (Proceeds from) Other Investing Activities | (0.1) | 29.2 |
Other, principally intercompany balances | 77.2 | 18.8 |
Net cash used in investing activities | 58.4 | 22.8 |
Cash flows from financing activities: | ||
Net proceeds/payments on long-term debt | (102.3) | (42.3) |
Payments on license obligations | 0 | |
Payments of license obligations | 0 | |
Common stock repurchases | 0 | |
Contingent earnout payments | 0 | 0 |
Cash flows from financing activities: | 0 | 0 |
Other, principally intercompany balances | 0 | 0 |
Net cash provided by (used in) financing activities | (102.3) | (42.3) |
Cash and cash equivalents, end of period | 0 | 0.3 |
Effect of exchange rate changes on cash and cash equivalents | (0.5) | 0 |
Net Cash Provided by (Used in) Continuing Operations | (0.1) | 0.3 |
Guarantor Subsidiaries | ||
Condensed Financial Statements | ||
Net cash provided by (used in) operating activities | 85.2 | 160 |
Cash flows from investing activities: | ||
Capital expenditures | (169.9) | (113.3) |
Proceeds from (Payments for) Interests in Joint Ventures | 0 | |
Distributions of capital on equity investments | 0 | 0 |
Proceeds from Sale of Equity Method Investments | 9.3 | 0 |
Payments for (Proceeds from) Other Investing Activities | 5.1 | (0.6) |
Other, principally intercompany balances | 0 | (44.9) |
Net cash used in investing activities | (155.5) | (158.8) |
Cash flows from financing activities: | ||
Net proceeds/payments on long-term debt | 0 | 0 |
Payments on license obligations | 12.5 | |
Payments of license obligations | (7) | |
Common stock repurchases | 0 | |
Contingent earnout payments | (0.5) | (7) |
Cash flows from financing activities: | (37.1) | 0 |
Other, principally intercompany balances | 99 | 0 |
Net cash provided by (used in) financing activities | 48.9 | (14) |
Cash and cash equivalents, end of period | 6.8 | 11.3 |
Effect of exchange rate changes on cash and cash equivalents | (0.6) | (0.3) |
Net Cash Provided by (Used in) Continuing Operations | (22) | (13.1) |
Non-Guarantor Subsidiaries | ||
Condensed Financial Statements | ||
Net cash provided by (used in) operating activities | 137.5 | 132.8 |
Cash flows from investing activities: | ||
Capital expenditures | (31.2) | (30.7) |
Proceeds from (Payments for) Interests in Joint Ventures | (43.3) | |
Distributions of capital on equity investments | 36 | 46.7 |
Proceeds from Sale of Equity Method Investments | 0 | 44.9 |
Payments for (Proceeds from) Other Investing Activities | 5.1 | 16.1 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | 9.9 | 33.7 |
Cash flows from financing activities: | ||
Net proceeds/payments on long-term debt | (6.5) | (9.9) |
Payments on license obligations | 0 | |
Payments of license obligations | 0 | |
Common stock repurchases | 0 | |
Contingent earnout payments | 0 | (3.2) |
Cash flows from financing activities: | (110.2) | (35.7) |
Other, principally intercompany balances | (51.7) | (100.1) |
Net cash provided by (used in) financing activities | (168.4) | (148.9) |
Cash and cash equivalents, end of period | 78 | 84.5 |
Effect of exchange rate changes on cash and cash equivalents | (6) | (6.4) |
Net Cash Provided by (Used in) Continuing Operations | (27) | 11.2 |
Eliminating Entries | ||
Condensed Financial Statements | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from (Payments for) Interests in Joint Ventures | 0 | |
Distributions of capital on equity investments | 0 | 0 |
Proceeds from Sale of Equity Method Investments | 0 | 0 |
Payments for (Proceeds from) Other Investing Activities | 0 | (35.7) |
Other, principally intercompany balances | (77.2) | 26.1 |
Net cash used in investing activities | (77.2) | (9.6) |
Cash flows from financing activities: | ||
Net proceeds/payments on long-term debt | 0 | 0 |
Payments on license obligations | 0 | |
Payments of license obligations | 0 | |
Common stock repurchases | 0 | |
Contingent earnout payments | 0 | 0 |
Cash flows from financing activities: | 147.2 | 35.7 |
Other, principally intercompany balances | (70) | (26.1) |
Net cash provided by (used in) financing activities | 77.2 | 9.6 |
Cash and cash equivalents, end of period | 0 | 0 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net Cash Provided by (Used in) Continuing Operations | $ 0 | $ 0 |
Financial Information for Gua83
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Mar. 31, 2014 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Parent company's percentage ownership of guarantors (as a percent) | 100.00% | 100.00% | ||||
Assets | $ 8,615.1 | $ 8,615.1 | $ 9,995.2 | |||
Liabilities | 9,595.9 | 9,595.9 | 9,991.3 | |||
Net loss from Consolidated Statements of Operations and Comprehensive Loss | (678.2) | $ (69.8) | (866.8) | $ (187.2) | ||
Net cash provided by (used in) operating activities | 255.5 | 233.4 | ||||
Guarantor Subsidiaries | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Assets | 6,228.5 | 6,228.5 | 7,397 | |||
Net loss from Consolidated Statements of Operations and Comprehensive Loss | (819.9) | (42.9) | (1,040.4) | (91.7) | ||
Net cash provided by (used in) operating activities | 85.2 | 160 | ||||
Non-Guarantor Subsidiaries | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Assets | 2,160.9 | 2,160.9 | $ 2,505.4 | |||
Net loss from Consolidated Statements of Operations and Comprehensive Loss | $ (61.6) | 23 | (35) | 83.2 | ||
Net cash provided by (used in) operating activities | $ 137.5 | 132.8 | ||||
Restatement Adjustment | Guarantor Subsidiaries | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Assets | 546 | 546 | ||||
Liabilities | 466.3 | 466.3 | ||||
Stockholders liability | 1.1 | 1.1 | $ 1.7 | |||
Restatement Adjustment | Non-Guarantor Subsidiaries | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Assets | $ 11.3 | $ 11.3 | $ 3.8 |