Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 02, 2016 | |
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 | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 87,523,669 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenue: | |||||
Services | $ 363.5 | $ 337.9 | $ 713.8 | $ 668.3 | |
Product sales | 214.8 | 218.1 | 412.4 | 417.5 | |
Instant games | 150.9 | 135.5 | 285 | 264.4 | |
Total revenue | 729.2 | 691.5 | 1,411.2 | 1,350.2 | |
Operating expenses: | |||||
Cost of services | [1] | 101.4 | 98.6 | 196.3 | 189.1 |
Cost of product sales | [1] | 100.7 | 107.9 | 195.1 | 205.8 |
Cost of instant games | [1] | 74.1 | 68.8 | 141.1 | 135.8 |
Selling, general and administrative | 144.9 | 140.9 | 287.2 | 286.8 | |
Research and development | 51.7 | 48 | 101.5 | 94.9 | |
Employee termination and restructuring | 4.2 | 5.2 | 6.9 | 13.4 | |
Depreciation and amortization | 193.1 | 222.2 | 373.7 | 406.4 | |
Operating (loss) income | 59.1 | (0.1) | 109.4 | 18 | |
Other (expense) income: | |||||
Interest expense | (165.3) | (166.4) | (331) | (330.7) | |
Earnings from equity investments | 8 | 3.3 | 11.2 | 6.4 | |
Gain on early extinguishment of debt | 25.2 | 0 | 25.2 | 0 | |
Other income (expense), net | 1.7 | (4.3) | 2.4 | (9.9) | |
Total other expense, net | (130.4) | (167.4) | (292.2) | (334.2) | |
Net loss before income taxes | (71.3) | (167.5) | (182.8) | (316.2) | |
Income tax benefit | 19.6 | 65.3 | 38.8 | 127.6 | |
Net loss | (51.7) | (102.2) | (144) | (188.6) | |
Other comprehensive (loss) income: | |||||
Foreign currency translation income (loss) | (35.1) | 17.8 | (36.7) | (88.4) | |
Pension and post-retirement gain (loss), net of tax | 0.3 | (0.7) | 0.5 | 0.2 | |
Derivative financial instruments unrealized gain, net of tax | 4.6 | 6 | 3.6 | 1.1 | |
Other comprehensive (loss) income | (30.2) | 23.1 | (32.6) | (87.1) | |
Comprehensive loss | $ (81.9) | $ (79.1) | $ (176.6) | $ (275.7) | |
Basic and diluted net loss per share: | |||||
Basic (in USD per share) | $ (0.59) | $ (1.19) | $ (1.66) | $ (2.20) | |
Diluted (in USD per share) | $ (0.59) | $ (1.19) | $ (1.66) | $ (2.20) | |
Weighted average number of shares used in per share calculations: | |||||
Weighted average basic (in shares) | 87,300,000 | 85,900,000 | 86,900,000 | 85,600,000 | |
Weighted average diluted (in shares) | 87,300,000 | 85,900,000 | 86,900,000 | 85,600,000 | |
[1] | Exclusive of D&A. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 101.4 | $ 128.7 |
Restricted cash | 24.5 | 20.2 |
Accounts receivable, net | 501.3 | 487.1 |
Notes receivable, net | 140 | 167.7 |
Inventories | 249 | 248.5 |
Prepaid expenses, deposits and other current assets | 120.9 | 123.3 |
Total current assets | 1,137.1 | 1,175.5 |
Long-term restricted cash | 17.4 | 17.9 |
Long-term notes receivable, net | 43.8 | 51.3 |
Property and equipment, net | 695.5 | 794 |
Goodwill | 2,992.5 | 3,013.7 |
Intangible assets, net | 1,891.9 | 1,920 |
Software, net | 443.2 | 485.9 |
Equity investments | 199.8 | 228.5 |
Other assets | 43.9 | 45.4 |
Total assets | 7,465.1 | 7,732.2 |
Current liabilities: | ||
Current portion of long-term debt | 49.7 | 50.3 |
Accounts payable | 178.6 | 159.8 |
Accrued liabilities | 417.1 | 443.8 |
Total current liabilities | 645.4 | 653.9 |
Deferred income taxes | 173.9 | 228.2 |
Other long-term liabilities | 245.1 | 188.9 |
Long-term debt, excluding current portion | 8,067.6 | 8,156.7 |
Total liabilities | 9,132 | 9,227.7 |
Commitments and contingencies (see Note 16) | ||
Stockholders' deficit: | ||
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 104.7 and 103.7 shares issued and 87.5 and 86.5 shares outstanding, respectively | 1 | 1 |
Additional paid-in capital | 771.1 | 765.9 |
Accumulated loss | (2,009) | (1,865) |
Treasury stock, at cost, 17.2 shares | (175.2) | (175.2) |
Accumulated other comprehensive loss | (254.8) | (222.2) |
Total stockholders' deficit | (1,666.9) | (1,495.5) |
Total liabilities and stockholders' (deficit) equity | $ 7,465.1 | $ 7,732.2 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
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 (in shares) | 199,300,000 | 199,300,000 |
Class A common stock, shares issued (in shares) | 104,700,000 | 103,700,000 |
Class A common stock, shares outstanding (in shares) | 87,500,000 | 86,500,000 |
Treasury stock, at cost, shares held (in shares) | 17,200,000 | 17,200,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (144) | $ (188.6) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depreciation and amortization | 373.7 | 406.4 |
Change in deferred income taxes | (57) | (145.7) |
Stock-based compensation | 12.5 | 12.1 |
Non-cash interest expense | 20.2 | 19 |
Earnings from equity investments, net | (11.2) | (6.4) |
Distributed earnings from equity investments | 16.3 | 19.9 |
Gain on early extinguishment of debt | (25.2) | 0 |
Changes in current assets and liabilities: | ||
Accounts and notes receivable, net | 14.4 | 23.7 |
Inventories | (3.4) | 18.4 |
Other current assets and liabilities | 15.2 | 10.8 |
Accounts payable | 7.7 | (9.4) |
Accrued liabilities | (26.1) | (44.7) |
Other, net | (1.2) | (1.1) |
Net cash provided by operating activities | 191.9 | 114.4 |
Cash flows from investing activities: | ||
Property and equipment expenditures | (8.7) | (7.8) |
Gaming and lottery operations expenditures | (76.8) | (103.7) |
Intangible assets and software expenditures | (47.1) | (31.3) |
Proceeds from asset sales | 3.1 | 0 |
Changes in other assets and liabilities and other | 3 | 8.5 |
Restricted cash | (3.8) | 1 |
Distributions of capital on equity investments | 22.5 | 35.2 |
Net cash used in investing activities | (107.8) | (98.1) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 160 | 110 |
Repayments under revolving credit facility | (175) | (120) |
Payments on long-term debt | (25.2) | (26.2) |
Repurchase of notes | (39.9) | 0 |
Payments on license obligations | (25) | (18.7) |
Contingent earnout payments | 0 | (0.5) |
(Redemptions) issuance of common stock under stock-based compensation plans | (4.4) | 0.9 |
Net cash provided by (used in) financing activities | (109.5) | (54.5) |
Effect of exchange rate changes on cash and cash equivalents | (1.9) | (4.5) |
Decrease in cash and cash equivalents | (27.3) | (42.7) |
Cash and cash equivalents, beginning of period | 128.7 | 171.8 |
Cash and cash equivalents, end of period | $ 101.4 | $ 129.1 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
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, lottery and interactive gaming 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, interactive gaming and social casino solutions. We also gain access to technologies and pursue global expansion through strategic acquisitions and equity investments. 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 United States dollars ("USD" or "$") unless otherwise stated herein. The accompanying consolidated financial statements include the accounts of the Company and its wholly-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. 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. Such adjustments are of a normal, recurring nature. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2015 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 2015 Annual Report on Form 10-K. New Accounting Guidance - Recently Adopted 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. We adopted this guidance prospectively at the beginning of the second quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations, or cash flows. In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The amended guidance simplifies the accounting for equity investments and eliminates the requirements in Topic 323 that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. We adopted this guidance prospectively at the beginning of the first quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations or cash flows. New Accounting Guidance - Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), 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 (including subsequent amendments) 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." The ASU may be adopted using a full retrospective approach or reporting the cumulative effect as of the date of adoption. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with earlier adoption permitted for fiscal years beginning after December 15, 2016. We are currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases, where we are the lessee, to be recognized on our Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact and timing of adopting this guidance. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The amended guidance is intended to simplify several aspects of accounting for share-based payment award transactions, including income tax consequences, accounting for forfeitures, and classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 has separate transition guidance for each element of the new standard and is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance. We do not expect that any other recently issued accounting guidance will have a significant effect on our financial statements. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2016 | |
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 under applicable accounting standards). Our three business segments represent separate standalone businesses based on the industries in which we operate. Our Gaming business segment generally sells gaming machines, VLTs and conversion kits and parts, leases or otherwise provides gaming machines, server-based systems and content, sells and supports casino-management systems-based software and hardware, and sells and leases PTG content and Shufflers, including automatic card shufflers, deck checkers and roulette chip sorters, to commercial, tribal and governmental gaming operators. Our Lottery business segment provides instant lottery games and related value-added services, as well as licensed brands utilized in instant lottery games and loyalty and reward services. Our Lottery business segment also provides systems products and services generally comprised of point-of-sale terminals, a central system, customized computer software, data communication services, support and/or related equipment. Our Interactive business segment provides social gaming and RMG services to online casino operators through our remote game servers. 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 2015 Annual Report on Form 10-K. The following tables present revenue, cost of revenue, SG&A, R&D, employee termination and restructuring, D&A, operating income and earnings from equity investments for the three and six months ended June 30, 2016 and 2015 , respectively, by business segment. Certain unallocated corporate amounts consisted primarily of general and administrative expenses, other income (expense) and D&A. Three Months Ended June 30, 2016 Gaming Lottery Interactive Total Revenue: Services $ 236.0 $ 44.1 $ 83.4 $ 363.5 Product sales 205.9 8.9 — 214.8 Instant games — 150.9 — 150.9 Total revenue 441.9 203.9 83.4 729.2 Operating expenses: Cost of services (1) 44.4 26.8 30.2 101.4 Cost of product sales (1) 93.4 7.3 — 100.7 Cost of instant games (1) — 74.1 — 74.1 Selling, general and administrative 61.2 17.8 26.8 105.8 Research and development 38.5 2.6 8.4 49.5 Employee termination and restructuring 3.4 0.2 0.5 4.1 Depreciation and amortization 154.3 17.2 3.8 175.3 Segment operating income $ 46.7 $ 57.9 $ 13.7 $ 118.3 Unallocated corporate costs (59.2 ) Consolidated operating income $ 59.1 Earnings from equity investments $ 1.4 $ 6.6 $ — $ 8.0 (1) Exclusive of D&A. Three Months Ended June 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 240.4 $ 45.9 $ 51.6 $ 337.9 Product sales 209.3 8.8 — 218.1 Instant games — 135.5 — 135.5 Total revenue 449.7 190.2 51.6 691.5 Operating expenses: Cost of services (1) 53.1 27.5 18.0 98.6 Cost of product sales (1) 100.9 7.0 — 107.9 Cost of instant games (1) — 68.8 — 68.8 Selling, general and administrative 71.2 16.4 15.2 102.8 Research and development 41.1 1.5 5.4 48.0 Employee termination and restructuring 2.7 — 0.3 3.0 Depreciation and amortization 181.5 20.0 5.4 206.9 Segment operating (loss) income $ (0.8 ) $ 49.0 $ 7.3 $ 55.5 Unallocated corporate costs (55.6 ) Consolidated operating loss $ (0.1 ) Earnings from equity investments $ 1.8 $ 1.5 $ — $ 3.3 (1) Exclusive of D&A. Six Months Ended June 30, 2016 Gaming Lottery Interactive Total Revenue: Services $ 468.6 $ 89.2 $ 156.0 $ 713.8 Product sales 395.0 17.4 — 412.4 Instant games — 285.0 — 285.0 Total revenue 863.6 391.6 156.0 1,411.2 Operating expenses: Cost of services (1) 85.6 54.9 55.8 196.3 Cost of product sales (1) 181.2 13.9 — 195.1 Cost of instant games (1) — 141.1 — 141.1 Selling, general and administrative 129.1 34.3 51.3 214.7 Research and development 76.7 5.2 15.7 97.6 Employee termination and restructuring 5.0 1.3 0.5 6.8 Depreciation and amortization 295.9 35.0 7.5 338.4 Segment operating income $ 90.1 $ 105.9 $ 25.2 $ 221.2 Unallocated corporate costs (111.8 ) Consolidated operating income $ 109.4 Earnings from equity investments $ 1.4 $ 9.8 $ — $ 11.2 (1) Exclusive of D&A. Six Months Ended June 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 478.3 $ 91.5 $ 98.5 $ 668.3 Product sales 397.2 20.3 — 417.5 Instant games — 264.4 — 264.4 Total revenue 875.5 376.2 98.5 1,350.2 Operating expenses: Cost of services (1) 98.6 55.9 34.6 189.1 Cost of product sales (1) 188.7 17.1 — 205.8 Cost of instant games (1) — 135.8 — 135.8 Selling, general and administrative 145.4 33.5 30.3 209.2 Research and development 80.9 3.1 10.9 94.9 Employee termination and restructuring 6.9 0.2 1.0 8.1 Depreciation and amortization 324.8 41.3 10.5 376.6 Segment operating income $ 30.2 $ 89.3 $ 11.2 $ 130.7 Unallocated corporate costs (112.7 ) Consolidated operating income $ 18.0 Earnings from equity investments $ 1.7 $ 4.7 $ — $ 6.4 (1) Exclusive of D&A. The following table presents a reconciliation of business segment operating income to net loss before income taxes for each period: Three Months Ended Six Months Ended 2016 2015 2016 2015 Business segment operating income $ 118.3 $ 55.5 $ 221.2 $ 130.7 Unallocated corporate costs (59.2 ) (55.6 ) (111.8 ) (112.7 ) Consolidated operating income (loss) 59.1 (0.1 ) 109.4 18.0 Interest expense (165.3 ) (166.4 ) (331.0 ) (330.7 ) Earnings from equity investments 8.0 3.3 11.2 6.4 Gain on early extinguishment of debt 25.2 — 25.2 — Other income (expense), net 1.7 (4.3 ) 2.4 (9.9 ) Net loss before income taxes $ (71.3 ) $ (167.5 ) $ (182.8 ) $ (316.2 ) In evaluating financial performance, we focus on operating income (loss) as a segment's measure of profit or loss. The accounting policies of our 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 2015 Annual Report on Form 10-K. |
Restructuring Plans
Restructuring Plans | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Plans | Restructuring Plans We began integrating Scientific Games and WMS subsequent to the WMS acquisition in October 2013. This integration was completed during the first quarter of 2016. We began integrating Scientific Games and Bally subsequent to its acquisition in November 2014 by implementing our plans to streamline our operations and cost structure. We recorded pre-tax employee termination and restructuring costs of $4.2 million and $5.2 million for the three months ended June 30, 2016 and 2015, respectively , and $6.9 million and $13.4 million for the six months ended June 30, 2016 and 2015, respectively. No new material employee termination and restructuring plans were initiated during the six months ended June 30, 2016 . We expect to complete the integration-related restructuring plan actions discussed below relating to the Bally integration during 2016. All other employee termination and restructuring actions reported in 2015 were completed as of March 31, 2016. 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 six months ended June 30, 2016, the cumulative costs incurred through June 30, 2016 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 Three Months Ended June 30, 2016 $ 2.2 $ — $ 1.2 $ 3.4 Six Months Ended June 30, 2016 3.4 0.4 1.2 5.0 Cumulative 24.6 0.4 2.8 27.8 Expected Total 27.1 0.4 2.8 30.3 Lottery Three Months Ended June 30, 2016 — — 0.2 0.2 Six Months Ended June 30, 2016 1.1 — 0.2 1.3 Cumulative 2.3 — 0.2 2.5 Expected Total 2.3 — 0.2 2.5 Interactive Three Months Ended June 30, 2016 0.2 — 0.3 0.5 Six Months Ended June 30, 2016 0.2 — 0.3 0.5 Cumulative 2.7 — 2.0 4.7 Expected Total 2.7 — 2.0 4.7 Unallocated corporate (1) Three Months Ended June 30, 2016 0.1 — — 0.1 Six Months Ended June 30, 2016 0.1 — — 0.1 Cumulative 6.4 4.3 2.1 12.8 Expected Total 8.9 4.3 2.1 15.3 Total Three Months Ended June 30, 2016 $ 2.5 $ — $ 1.7 $ 4.2 Six Months Ended June 30, 2016 $ 4.8 $ 0.4 $ 1.7 $ 6.9 Cumulative $ 36.0 $ 4.7 $ 7.1 $ 47.8 Expected Total $ 41.0 $ 4.7 $ 7.1 $ 52.8 (1) Cumulative unallocated corporate employee termination costs primarily includes cash severance paid to our former chief executive officer and special termination benefits related to the retirement of our former chief financial officer. The following table presents a summary of restructuring charges and the changes in the restructuring accrual during the six months ended June 30, 2016 : Employee Termination Costs Property Costs Other Total Balance as of December 31, 2015 $ 7.3 $ 0.8 $ 1.4 $ 9.5 Additional accruals 4.8 0.4 1.7 6.9 Cash payments (6.2 ) (0.9 ) (0.2 ) (7.3 ) Balance as of June 30, 2016 $ 5.9 $ 0.3 $ 2.9 $ 9.1 |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 6 Months Ended |
Jun. 30, 2016 | |
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 six months ended June 30, 2016 and 2015: Three Months Ended Six Months Ended 2016 2015 2016 2015 Loss (numerator): Net loss $ (51.7 ) $ (102.2 ) $ (144.0 ) $ (188.6 ) Shares (denominator): Basic weighted-average common shares outstanding 87.3 85.9 86.9 85.6 Diluted weighted-average common shares outstanding 87.3 85.9 86.9 85.6 Basic and diluted net loss per share amounts: Basic net loss per share $ (0.59 ) $ (1.19 ) $ (1.66 ) $ (2.20 ) Diluted net loss per share $ (0.59 ) $ (1.19 ) $ (1.66 ) $ (2.20 ) Basic and diluted net loss per share were the same for all periods presented as all common stock equivalents would be anti-dilutive. We excluded 3.0 million and 1.9 million of stock options from the diluted weighted-average common shares outstanding as of June 30, 2016 and 2015, respectively, and 5.3 million and 6.4 million of RSUs from the calculation of diluted weighted-average common shares outstanding as of June 30, 2016 and 2015, respectively. |
Accounts and Notes Receivable a
Accounts and Notes Receivable and Credit Quality of Notes Receivable | 6 Months Ended |
Jun. 30, 2016 | |
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: June 30, 2016 December 31, 2015 Current: Accounts receivable $ 514.0 $ 497.7 Notes receivable 154.5 180.4 Allowance for doubtful accounts (27.2 ) (23.3 ) Current accounts and notes receivable, net $ 641.3 $ 654.8 Long-term: Notes receivable, net 43.8 51.3 Total accounts and notes receivable, net $ 685.1 $ 706.1 Credit Quality of Notes Receivable We have provided extended payment terms and development financing to certain customers in the form of notes receivable. We carry our notes receivable at face amounts 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 10.42% at June 30, 2016 and December 31, 2015. We monitor the credit quality of our accounts and notes receivable by reviewing an aging of customer invoices. Invoices are considered past due if a scheduled payment is not received within the agreed-upon terms. 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. Where possible, we seek payment deposits, collateral, pledge agreements, bills of exchange, foreign bank letters of credit, post-dated checks or personal guarantees with respect to notes receivable from our customers. However, the majority of our international notes receivable do not have these features. Currently, we have not sold our notes receivable to third parties; therefore, we do not have any off-balance sheet liabilities for factored receivables. Over the past few years, the government authorities in Argentina had limited the exchange of pesos into USD and the transfer of funds from Argentina. In December 2015, the newly elected government removed the limitations of the previous government and also devalued the "official" peso to the market rate. Our accounts and notes receivable, net, from customers in Argentina at June 30, 2016 was $19.0 million, which is denominated in USD, 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 USD on the date of payment. With the recent devaluation of the peso, our customers will now have to pay more pesos to reduce their obligations. In evaluating the collectability of customer receivables in Argentina at June 30, 2016 , we specifically evaluated recent government actions, 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 USD on the payment date. We collected $11.4 million of outstanding receivables from customers in Argentina during the six months ended June 30, 2016 . 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. Our accounts and notes receivable, net, from these certain customers in Mexico at June 30, 2016 was $36.4 million . We collected $14.4 million of outstanding receivables from these certain customers during the six months ended June 30, 2016 . The following summarizes the components of total notes receivable, net: June 30, 2016 Balances over 90 days past due December 31, 2015 Balances over 90 days past due Notes receivable: Domestic $ 39.6 $ 2.0 $ 62.4 $ 2.6 International 159.0 41.5 169.8 26.6 Total notes receivable 198.6 43.5 232.2 29.2 Notes receivable allowance for doubtful accounts: Domestic (2.3 ) (2.3 ) (2.6 ) (2.5 ) International (12.5 ) (12.5 ) (10.6 ) (9.5 ) Total notes receivable allowance for doubtful accounts (14.8 ) (14.8 ) (13.2 ) (12.0 ) Notes receivable, net $ 183.8 $ 28.7 $ 219.0 $ 17.2 At June 30, 2016 , 15.6% of our total notes receivable, net, was past due by over 90 days, compared to 7.9% at December 31, 2015. The following tables detail our evaluation of notes receivable for impairment as of June 30, 2016 and December 31, 2015: June 30, 2016 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 39.6 $ 13.7 $ 25.9 International 159.0 81.7 77.3 Total notes receivable $ 198.6 $ 95.4 $ 103.2 December 31, 2015 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 62.4 $ 20.7 $ 41.7 International 169.8 101.8 68.0 Total notes receivable $ 232.2 $ 122.5 $ 109.7 The following table reconciles the allowance for doubtful notes receivable from December 31, 2015 to June 30, 2016 : Total Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Beginning balance at December 31, 2015 $ 13.2 $ 12.9 $ 0.3 Charge-offs (1.3 ) (1.3 ) — Recoveries (0.2 ) (0.2 ) — Provision 3.1 3.1 — Ending balance at June 30, 2016 $ 14.8 $ 14.5 $ 0.3 The following table reconciles the allowance for doubtful notes receivable from December 31, 2014 to June 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 (2.1 ) (2.1 ) — Recoveries (0.5 ) (0.4 ) (0.1 ) Provision 6.4 5.2 1.2 Ending balance at June 30, 2015 $ 9.7 $ 8.6 $ 1.1 For the six months ended June 30, 2016 and 2015, we had no significant modifications to the original financing terms. In certain international jurisdictions, we offer extended payment terms to our customers. Such payment terms subject us to increased credit risk, which could be exacerbated 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 June 30, 2016 : Mexico 26 % Peru 17 % Argentina 9 % Columbia 6 % Other (less than 5% individually) 22 % Total international notes receivable as a percentage of total notes receivable 80 % |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following as of the dates presented below: June 30, 2016 December 31, 2015 Parts and work-in-process $ 128.6 $ 118.3 Finished goods 120.4 130.2 Total inventories $ 249.0 $ 248.5 Parts and work-in-process include parts for gaming machines, lottery terminals and instant lottery ticket materials, as well as labor and overhead costs for work-in-process associated with the manufacturing of instant lottery games and lottery terminals. Our finished goods inventory primarily consists of gaming machines for sale, instant games for our Participation arrangements and our licensed branded merchandise. During the three months ended June 30, 2015, we recorded an impairment of $7.1 million related to the discontinuance of certain product lines as a result of the Bally acquisition. The impairment is included in the cost of product sales in our Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2015. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consisted of the following: June 30, 2016 December 31, 2015 Land $ 38.4 $ 38.5 Buildings and leasehold improvements 184.7 185.2 Gaming and lottery machinery and equipment 1,048.5 1,084.6 Furniture and fixtures 31.4 36.0 Construction in progress 27.9 25.5 Other property and equipment 264.5 271.0 Less: accumulated depreciation (899.9 ) (846.8 ) Total property and equipment, net $ 695.5 $ 794.0 Depreciation expense for the three and six months ended June 30, 2016 was $86.8 million and $167.4 million, respectively. Depreciation expense for the three and six months ended June 30, 2015 was $93.9 million and $176.3 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 included within D&A in the Consolidated Statements of Operations and Comprehensive Loss. During the six months ended June 30, 2016, the Gaming and Lottery business segments disposed of certain gaming and lottery assets with gross balances of approximately $90.2 million and $3.1 million , respectively. These disposals did not result in receipt of material cash proceeds and had an immaterial impact on property and equipment, net in our Consolidated Balance Sheet as of June 30, 2016 and the Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2016. During the three months ended June 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 Sheet as of June 30, 2015 or D&A in the Consolidated Statements of Operations and Comprehensive Loss for three and six months ended June 30, 2015. In addition, during the three months ended June 30, 2015, we recorded an impairment of $5.2 million related to gaming equipment assets for certain product lines that were discontinued as a result of the Bally acquisition, and recorded an impairment of $4.9 million for a Reno, Nevada facility we sold later in the year. The impairments were included in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2015. |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net and Goodwill | Intangible Assets, net and Goodwill Intangible Assets, net The following tables present certain information regarding our intangible assets as of June 30, 2016 and December 31, 2015 . Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual value, which materially approximates the expected pattern of use of these intangible assets. Intangible Assets Gross Carrying Amount Accumulated Amortization Net Balance Balance as of June 30, 2016 Amortizable intangible assets: Patents $ 26.3 $ (13.1 ) $ 13.2 Customer relationships 877.7 (136.8 ) 740.9 Licenses 412.5 (121.8 ) 290.7 Intellectual property (1) 731.5 (170.3 ) 561.2 Trade names 97.4 (4.9 ) 92.5 Brand names 124.4 (25.6 ) 98.8 Non-compete agreements 0.2 (0.2 ) — 2,270.0 (472.7 ) 1,797.3 Non-amortizable intangible assets: Trade names 96.7 (2.1 ) 94.6 Total intangible assets $ 2,366.7 $ (474.8 ) $ 1,891.9 Balance as of December 31, 2015 Amortizable intangible assets: Patents $ 26.8 $ (12.5 ) $ 14.3 Customer relationships 877.7 (109.1 ) 768.6 Licenses 326.1 (91.6 ) 234.5 Intellectual property (1) 731.1 (124.5 ) 606.6 Trade names 97.5 (1.9 ) 95.6 Brand names 124.0 (18.9 ) 105.1 Non-compete agreements 0.3 (0.3 ) — 2,183.5 (358.8 ) 1,824.7 Non-amortizable intangible assets: Trade names 97.4 (2.1 ) 95.3 Total intangible assets $ 2,280.9 $ (360.9 ) $ 1,920.0 (1) Includes $33 million of in-process R&D assets that will not be subject to amortization until they reach commercial feasibility. In January 2016, we amended and extended the terms of one of our existing license agreements through December 31, 2022. Under the terms of the amended agreement, we are obligated to pay aggregate minimum guarantees of $88.0 million over the life of the contract in exchange for the right to use certain licensed properties in game content themes, which are incorporated into our slot games, online games, lottery products and promotional materials. We account for the minimum guaranteed obligations within other long-term liabilities (or, with respect to the portion that is a current liability within accounts payable or accrued liabilities) at the onset of the license arrangement and record a corresponding licensed asset within intangible assets, net in our Consolidated Balance Sheets. The current and long-term portions of our minimum guaranteed obligations related to the amended license agreement were $8.8 million and $74.6 million , respectively, and are recorded in accounts payable and other long-term liabilities, respectively, in our Consolidated Balance Sheet as of June 30, 2016. The aggregate intangible asset amortization expense for the three and six months ended June 30, 2016 was $62.3 million and $127.9 million, respectively. The aggregate intangible amortization expense for the three and six months ended June 30, 2015 was $87.2 million and $150.3 million , respectively. Intangible amortization expense is included within D&A in the Consolidated Statements of Operations and Comprehensive Loss. As a result of an interim review of assets with indefinite useful lives, we recorded an impairment charge of $25.0 million in D&A in our Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2015 to reduce the gross carrying amount of one indefinite-lived trade name asset to its fair value (which was subsequently reclassified to finite-life during the third quarter of 2015). Goodwill The table below reconciles the change in the carrying amount of goodwill by business segment for the period from December 31, 2015 to June 30, 2016 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2015 $ 2,486.0 $ 417.9 $ 109.8 $ 3,013.7 Foreign currency adjustments (23.0 ) 1.8 — (21.2 ) Balance as of June 30, 2016 $ 2,463.0 $ 419.7 $ 109.8 $ 2,992.5 |
Software, net
Software, net | 6 Months Ended |
Jun. 30, 2016 | |
Capitalized Computer Software, Net [Abstract] | |
Software, net | Software, net Software, net consisted of the following: June 30, 2016 December 31, 2015 Software $ 894.8 $ 854.2 Accumulated amortization (451.6 ) (368.3 ) Software, net $ 443.2 $ 485.9 Amortization expense for the three and six months ended June 30, 2016 was $44.0 million and $78.4 million, respectively. Amortization expense for the three and six months ended June 30, 2015 was $41.1 million and $79.8 million , respectively. Amortization expense is included within D&A in the Consolidated Statements of Operations and Comprehensive Loss. |
Equity Investments
Equity Investments | 6 Months Ended |
Jun. 30, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Equity Investments The following provides an update for events that occurred during the six months ended June 30, 2016 related to our equity investments, which are disclosed in Note 11 (Equity Investments) in our 2015 Annual Report on Form 10-K. ITL During the six months ended June 30, 2016 , we received a distribution of capital of €2.8 million, or $3.1 million. During the six months ended June 30, 2015 , we received a distribution of capital of €5.8 million , or $6.5 million . RCN During the six months ended June 30, 2016, we received a dividend of $1.4 million . During the six months ended June 30, 2015, we received a dividend of $1.8 million . LNS During the six months ended June 30, 2016, we received a dividend of €13.5 million , or $14.9 million , and a distribution capital of €17.6 million , or $19.4 million . During the six months ended June 30, 2015, we received a dividend of €12.9 million , or $14.5 million , and a distribution capital of €15.0 million , or $16.8 million . |
Long-Term and Other Debt
Long-Term and Other Debt | 6 Months Ended |
Jun. 30, 2016 | |
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 the dates indicated below: Principal Unamortized debt discount Unamortized deferred financing costs Book value June 30, 2016 Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ 80.0 $ — $ — $ 80.0 Term Loan, varying interest rate, due 2020 2,242.5 (6.9 ) (47.0 ) 2,188.6 Term Loan, varying interest rate, due 2021 1,970.0 (15.2 ) (44.8 ) 1,910.0 2018 Notes 250.0 — (1.6 ) 248.4 2020 Notes 243.5 — (2.6 ) 240.9 2021 Notes 340.6 (1.6 ) (5.1 ) 333.9 Secured Notes 950.0 — (15.1 ) 934.9 Unsecured Notes 2,200.0 — (39.1 ) 2,160.9 Capital lease obligations, 3.9% interest as of June 30, 2016 payable monthly through 2019 19.7 — — 19.7 Total long-term debt outstanding $ 8,296.3 $ (23.7 ) $ (155.3 ) $ 8,117.3 Less: current portion of long-term debt (49.7 ) Long-term debt, excluding current portion $ 8,067.6 Principal Unamortized debt discount Unamortized deferred financing costs Book value December 31, 2015 Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ 95.0 $ — $ — $ 95.0 Term Loan, varying interest rate, due 2020 2,254.0 (7.8 ) (52.5 ) 2,193.7 Term Loan, varying interest rate, due 2021 1,980.0 (16.7 ) (49.2 ) 1,914.1 2018 Notes 250.0 — (2.0 ) 248.0 2020 Notes 300.0 — (3.6 ) 296.4 2021 Notes 350.0 (1.8 ) (5.6 ) 342.6 Secured Notes 950.0 — (16.4 ) 933.6 Unsecured Notes 2,200.0 — (42.1 ) 2,157.9 Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019 25.7 — — 25.7 Total long-term debt outstanding $ 8,404.7 $ (26.3 ) $ (171.4 ) $ 8,207.0 Less: current portion of long-term debt (50.3 ) Long-term debt, excluding current portion $ 8,156.7 Senior Secured Credit Facilities We and certain of our subsidiaries are party to a credit agreement dated as of October 18, 2013, by and among SGI, as the borrower, us, as a guarantor, Bank of America, N.A., as administrative agent, and the lenders and other agents party thereto. 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 USD and multi-currency tranches, and a $2,300.0 million term B-1 loan facility. On October 1, 2014, in connection with the Bally acquisition, we amended our existing credit agreement pursuant to which our $300.0 million revolving credit facility was increased by $267.6 million effective upon the consummation of the Bally acquisition. In addition, we entered into an escrow credit agreement providing for a $2.0 billion senior secured incremental term B-2 loan facility (which became an incremental term B-2 loan facility under our existing credit agreement upon the consummation of the Bally acquisition). 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. 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. During the second quarter of 2016, we repurchased and cancelled $56.5 million and $9.4 million of principal amount of the 2020 Notes and 2021 Notes, respectively, for $34.2 million and $5.7 million in cash, respectively, through separate open market purchases. In connection with this transaction, we recorded a $25.2 million gain on early extinguishment of debt, net of a $0.8 million charge related to the write-off of unamortized debt discount and deferred financing costs associated with the extinguished debt. For additional information regarding our senior secured credit facilities, 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes, Unsecured Notes and capital lease obligations, see Note 15 (Long-Term and Other Debt) in our 2015 Annual Report on Form 10-K. Fair Value of Debt The estimated fair value of our long-term debt as of June 30, 2016 and December 31, 2015 was approximately $7,532.3 million and $6,931.6 million , respectively. We estimate the fair value of debt based on quoted market prices of our securities, if available, and indicative pricing derived from market information. We categorize inputs used to measure the fair value of debt as Level 2 in the fair value hierarchy due to the low volume and frequency of transactions in the market. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value Measurements | Fair Value Measurements 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 due to the short-term nature of these instruments. Our assets and liabilities measured at fair value on a recurring basis are described below. 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. Interest payments pursuant to these contracts started in April 2015 and these contracts 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 a portion 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 at a weighted-average fixed rate of 2.151% and began to 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 income (loss) until the future underlying payment transactions occur. 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 six months ended June 30, 2016, we recorded gains, net of tax, of $4.6 million and $3.6 million, respectively, which represent the change in the fair value associated with these hedges, in other comprehensive income (loss) in our Consolidated Statements of Operations and Comprehensive Loss. For the three and six months ended June 30, 2015, we recorded gains, net of tax, of $5.6 million and $0.8 million , respectively, all of which is recorded in other comprehensive (loss) income in our Consolidated Statements of Operations and Comprehensive Loss related to these hedges. We realized losses of $2.0 million and $4.1 million , which represent reclassifications from accumulated other comprehensive loss to interest expense in our Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2016, respectively. The Company expects to reclassify additional losses of $8.2 million from accumulated other comprehensive loss to interest expense in the next twelve months. As of June 30, 2016, the fair value of these hedges was $11.8 million , of which $8.2 million is recorded in accrued liabilities and $3.6 million is recorded in other long-term liabilities in our Consolidated Balance Sheet. As of December 31, 2015, the fair value of these hedges was $11.9 million , of which $7.9 million is recorded in accrued liabilities and $4.0 million is recorded in other long-term liabilities in our Consolidated Balance Sheet. We estimate the fair value of our interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of our interest rate swap contracts are categorized as Level 2 in the fair value hierarchy. Other As of June 30, 2016 and December 31, 2015, we had $14.5 million and $16.7 million of assets held for sale, respectively, which at year-end primarily consisted of our Waukegan, Illinois manufacturing facility and a portion of our Chicago, Illinois R&D campus. During the second quarter of 2016, we sold the portion of our Chicago, Illinois R&D campus which was previously held for sale at a price that materially approximated the carrying amount, less selling costs. Each of these facilities was included in our Consolidated Balance Sheets within Prepaid expenses, deposits and other current assets and is reported at the lower of the carrying amount or fair market value, less expected costs to sell, which approximated the fair value as of June 30, 2016 and December 31, 2015. The inputs used to measure the fair value of our assets held for sale were based on market approach and are categorized as Level 3 in the fair value hierarchy. Notes Receivable The fair value of notes receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of June 30, 2016 and December 31, 2015, the fair value of the notes receivable, net, approximated the carrying amount due to the short-term nature of notes receivable. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Deficit | Stockholders' Deficit Stock-based and other incentive 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 and the ESPP terminated in accordance with its terms. See Note 18 (Stock-Based and Other Incentive Compensation) in our 2015 Annual Report on Form 10-K. At our annual meeting of stockholders, held on June 15, 2016 (the "Annual Meeting"), our stockholders approved the adoption of a new ESPP, the terms of which are described in our annual proxy statement, filed on Schedule 14A with the SEC on April 29, 2016. The first offering period under the new ESPP will commence on January 1, 2017. We may grant certain awards in which the vesting is contingent upon the Company achieving certain performance targets. Upon determining that the performance target is probable, the fair value of the award is recognized over the service period, subject to potential adjustment. We grant stock options to employees and directors under our stock-based compensation plans with exercise prices that are not less than the fair market value of our common stock on the date of grant, as determined pursuant to the terms of the applicable stock-based compensation plan. The terms of the stock option and RSU awards, including the vesting schedule of such awards, are determined at our discretion subject to the terms of the applicable stock-based compensation plan. Options granted over the last several years have generally become exercisable in four equal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met, in each case, with a maximum period to exercise of ten years. RSUs typically vest in four equal 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 fair value at the grant date and in the case of performance-based awards, compensation costs may be adjusted to reflect the likelihood of achieving the performance targets. Stock Options For the three and six months ended June 30, 2016, we granted 1.2 million options with a weighted average grant date fair value of approximately $4.81 . We had approximately 3.0 million and 0.9 million of options outstanding and options exercisable as of June 30, 2016, respectively. For the three and six months ended June 30, 2016 , we recognized stock-based compensation expense of $0.6 million and $1.3 million, respectively, related to the service period of stock options. For the three and six months ended June 30, 2015, we recognized stock-based compensation expense of $0.5 million and $0.9 million , respectively. As of June 30, 2016 , we had $10.2 million of unrecognized stock-based compensation relating to unvested stock options that will be amortized over a weighted average period of approximately two years. Restricted Stock Units A summary of the changes in RSUs outstanding under our stock-based compensation plans during the six months ended June 30, 2016 is presented below: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested RSUs as of December 31, 2015 5.6 $ 13.05 Granted 0.2 8.21 Vested (0.8 ) 12.46 Canceled (0.4 ) 12.56 Unvested RSUs as of March 31, 2016 4.6 $ 13.00 Granted 1.4 9.60 Vested (0.6 ) 12.51 Canceled (0.1 ) 13.35 Unvested RSUs as of June 30, 2016 5.3 $ 12.16 The weighted average grant date fair value of RSUs granted during the three and six months ended June 30, 2016 was $ 9.60 and $ 9.42 , respectively. During the three and six months ended June 30, 2016 we recognized stock-based compensation expense of $5.4 million and $11.2 million, respectively, related to the vesting of RSUs. For the three and six months ended June 30, 2015, we recognized stock-based compensation expense of $6.3 million and $11.0 million , respectively, related to the service period of RSUs. As of June 30, 2016 , we had $58.0 million of unrecognized stock-based compensation relating to unvested RSUs that will be amortized over a weighted average period of approximately two years. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We have defined benefit pension plans for our U.K.-based union employees (the "U.K. Plan") and certain Canadian-based employees (the "Canadian Plan"). Retirement benefits under the U.K. Plan are generally 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 authorities. See Note 19 (Pension and Other Post Retirement Plans) in our 2015 Annual Report on Form 10-K. The net periodic benefit cost recognized for both the three months ended June 30, 2016 and 2015 was $0.4 million . The net periodic benefit cost recognized for the six months ended June 30, 2016 and 2015 was $0.7 million and $0.9 million , respectively. We have a 401(k) plan for U.S.-based employees. Those employees who participate in our 401(k) plan are eligible to receive matching contributions of 35% from us for participant contributions up to the first 6% of their compensation (as defined in the plan document). Contribution expense for the three months ended June 30, 2016 and 2015 was $2.9 million and $2.7 million , respectively. Contribution expense for the six months ended June 30, 2016 and 2015 was $5.8 million and $5.8 million , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rates for the three and six months ended June 30, 2016 were 27.5% and 21.2% , respectively , and 39.0% and 40.4% for the three and six months ended June 30, 2015, respectively, and were determined using an estimated annual effective tax rate after considering any discrete items for such periods. The reduction in income tax rate for the three and six months ended June 30, 2016 when compared to the three and six months ended June 30, 2015 is primarily attributable to the impact of negative evidence related to the realizability of the deferred tax assets expected to be created by 2016 U.S. taxable losses. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company has remained in a three year cumulative loss in the U.S. federal tax jurisdiction. As of June 30, 2016, on the basis of this evaluation and considering the projected U.S. pre-tax losses for 2016 and the resulting net U.S. deferred tax asset position anticipated to occur during 2016, a valuation allowance has been contemplated as a component of the estimated annual effective tax rate in order to recognize only the portion of the benefit related to current year losses that is more likely than not to be realized. As of December 31, 2015, the Company remained in a net U.S. deferred tax liability position and therefore a valuation allowance against its U.S. deferred tax assets was only necessary for certain state deferred tax assets and U.S. foreign tax credit carryforwards. The Company maintained other valuation allowances for certain non-U.S. jurisdictions with cumulative losses. The Company is projecting a pre-tax loss for its U.S. operations in 2016 in an amount that will more than exceed, on an after tax basis, the net deferred tax liability recorded as of December 31, 2015. Thus, we are projecting to be in a net U.S. deferred tax asset position at December 31, 2016. 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 39% . The foreign jurisdictions that had the most impact on our foreign income tax expense (benefit) in the three and six months ended June 30, 2016 included Austria, Bermuda, Canada, India, Ireland and the U.K. |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2016 | |
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 analyses 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 $ 9.0 million and $16.4 million for all of our legal matters that were contingencies as of June 30, 2016 and December 31, 2015, respectively. 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 well as those related to the previously disclosed settlement agreement entered into in February 2015 with SNAI S.p.a., 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 $13.2 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 results of operations, cash flows or financial condition. 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 (or approximately $30.8 million), 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 results of operations, cash flows or financial position, 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. 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. In April 2015, the court granted the Oregon State Lottery's motion to dismiss, stating the plaintiffs had not satisfied the Oregon Tort Claims Act. As a result of the dismissal, the court indicated that all claims against WMS Gaming Inc. were moot. In June 2015, plaintiffs filed an appeal. 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 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 no less than $100.0 million in compensatory damages, treble 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 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 | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Supplemental Disclosure of Cash Flow Information Additional cash flow information is presented as follows: Six Months Ended June 30, 2016 2015 Interest paid $ 313.6 $ 294.6 Income taxes paid (received) $ 6.6 $ (4.1 ) Six months ended June 30, 2016 During the six months ended June 30, 2016 , we recorded approximately $86.9 million of non-cash additions to intangible assets and corresponding current and long-term liabilities related to license agreements with minimum guaranteed obligations entered into during the period. Six months ended June 30, 2015 During the six months ended June 30, 2015, we recorded approximately $12.5 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 six months ended June 30, 2016 and 2015. |
Financial Information for Guara
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries | 6 Months Ended |
Jun. 30, 2016 | |
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. As of June 30, 2016, SGI's obligations under our credit agreement, the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were 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"). As of June 30, 2016, our 2018 Notes, which were issued by the Parent Company, were 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, the 2021 Notes and the Secured Notes and the Unsecured Notes, the proper designation of the guarantor as an unrestricted subsidiary pursuant to the indenture governing the respective Notes. Presented below is condensed consolidating financial information for (1) the Parent Company, (2) SGI, (3) the Guarantor Subsidiaries and (4) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the "Non-Guarantor Subsidiaries") as of June 30, 2016 and December 31, 2015 and for the three and six months ended June 30, 2016 and 2015. The condensed consolidating financial information has been presented to show the nature of assets held, results of operations and cash flows of the Parent Company, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the guarantee structures of our 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 SGI and in the Guarantor Subsidiaries 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. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of June 30, 2016 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 32.4 $ 0.5 $ — $ 68.5 $ — $ 101.4 Restricted cash — — 24.4 0.1 — 24.5 Accounts receivable, net — 98.0 226.5 176.8 — 501.3 Notes receivable, net — — 91.2 48.8 — 140.0 Inventories — 35.8 89.4 136.2 (12.4 ) 249.0 Prepaid expenses, deposits and other current assets 31.6 14.1 35.1 40.1 — 120.9 Property and equipment, net 11.9 101.4 430.4 166.3 (14.5 ) 695.5 Investment in subsidiaries 3,202.2 851.8 796.8 — (4,850.8 ) — Goodwill — 188.3 1,988.2 816.0 — 2,992.5 Intangible assets, net 207.1 38.7 1,423.6 222.5 — 1,891.9 Intercompany balances — 6,531.8 — — (6,531.8 ) — Software, net 52.4 25.4 316.3 49.1 — 443.2 Other assets 291.0 119.3 44.7 214.6 (364.7 ) 304.9 Total assets $ 3,828.6 $ 8,005.1 $ 5,466.6 $ 1,939.0 $ (11,774.2 ) $ 7,465.1 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 43.0 $ — $ 6.7 $ — $ 49.7 Other current liabilities 74.3 153.2 208.4 159.8 — 595.7 Long-term debt, excluding current portion 248.4 7,806.2 — 13.0 — 8,067.6 Other long-term liabilities 179.2 14.2 498.8 91.5 (364.7 ) 419.0 Intercompany balances 4,993.6 — 1,503.7 34.5 (6,531.8 ) — Stockholders' (deficit) equity (1,666.9 ) (11.5 ) 3,255.7 1,633.5 (4,877.7 ) (1,666.9 ) Total liabilities and stockholders' (deficit) equity $ 3,828.6 $ 8,005.1 $ 5,466.6 $ 1,939.0 $ (11,774.2 ) $ 7,465.1 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 43.2 $ — $ 4.7 $ 80.8 $ — $ 128.7 Restricted cash — — 20.0 0.2 — 20.2 Accounts receivable, net — 94.6 233.6 158.9 — 487.1 Notes receivable, net — — 114.2 53.5 — 167.7 Inventories — 36.9 104.2 119.6 (12.2 ) 248.5 Prepaid expenses, deposits and other current assets 26.8 7.0 52.1 37.4 — 123.3 Property and equipment, net 8.2 106.4 502.2 188.7 (11.5 ) 794.0 Investment in subsidiaries 3,280.9 838.1 648.3 — (4,767.3 ) — Goodwill — 186.0 1,990.5 837.2 — 3,013.7 Intangible assets, net 138.3 39.8 1,505.8 236.1 — 1,920.0 Intercompany balances — 6,511.1 — — (6,511.1 ) — Software, net 35.6 32.7 359.8 57.8 — 485.9 Other assets 232.5 123.4 51.7 241.7 (306.2 ) 343.1 Total assets $ 3,765.5 $ 7,976.0 $ 5,587.1 $ 2,011.9 $ (11,608.3 ) $ 7,732.2 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 43.0 $ — $ 7.3 $ — $ 50.3 Other current liabilities 63.7 150.5 245.4 144.0 — 603.6 Long-term debt, excluding current portion 248.0 7,890.3 — 18.4 — 8,156.7 Other long-term liabilities 119.1 14.5 502.1 87.7 (306.3 ) 417.1 Intercompany balances 4,830.2 — 1,558.2 122.6 (6,511.0 ) — Stockholders' (deficit) equity (1,495.5 ) (122.3 ) 3,281.4 1,631.9 (4,791.0 ) (1,495.5 ) Total liabilities and stockholders' (deficit) equity $ 3,765.5 $ 7,976.0 $ 5,587.1 $ 2,011.9 $ (11,608.3 ) $ 7,732.2 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended June 30, 2016 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 126.4 $ 408.6 $ 265.5 $ (71.3 ) $ 729.2 Cost of services, cost of product sales and cost of instant games (1) — 86.1 108.8 152.6 (71.3 ) 276.2 Selling, general and administrative 36.9 11.7 51.7 44.6 — 144.9 Research and development 1.9 2.3 39.1 8.4 — 51.7 Employee termination and restructuring 0.1 (0.1 ) 3.3 0.9 — 4.2 Depreciation and amortization 13.0 10.3 141.1 28.7 — 193.1 Operating (loss) income (51.9 ) 16.1 64.6 30.3 — 59.1 Interest expense — (35.1 ) (130.1 ) (0.1 ) — (165.3 ) Gain on early extinguishment of debt — 25.2 — — — 25.2 Other (expense) income, net (24.7 ) 52.5 (24.2 ) 6.1 — 9.7 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (76.6 ) 58.7 (89.7 ) 36.3 — (71.3 ) Equity in (loss) income of subsidiaries — 11.3 9.3 — (20.6 ) — Income tax benefit (expense) 24.9 — — (5.3 ) — 19.6 Net (loss) income $ (51.7 ) $ 70.0 $ (80.4 ) $ 31.0 $ (20.6 ) $ (51.7 ) Other comprehensive (loss) income (30.2 ) 3.2 (8.1 ) (33.4 ) 38.3 (30.2 ) Comprehensive (loss) income $ (81.9 ) $ 73.2 $ (88.5 ) $ (2.4 ) $ 17.7 $ (81.9 ) (1) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended June 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 106.4 $ 430.6 $ 261.5 $ (107.0 ) $ 691.5 Cost of services, cost of product sales and cost of instant games (1) — 79.0 139.5 163.8 (107.0 ) 275.3 Selling, general and administrative 16.7 18.4 70.8 35.0 — 140.9 Research and development — 1.4 39.3 7.3 — 48.0 Employee termination and restructuring 1.4 0.7 2.4 0.7 — 5.2 Depreciation and amortization 8.1 9.8 170.8 33.5 — 222.2 Operating (loss) income (26.2 ) (2.9 ) 7.8 21.2 — (0.1 ) Interest expense (5.3 ) (83.1 ) (77.9 ) (0.1 ) — (166.4 ) Other (expense) income, net 6.2 18.3 (29.0 ) 3.5 — (1.0 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (25.3 ) (67.7 ) (99.1 ) 24.6 — (167.5 ) Equity in (loss) income of subsidiaries (143.0 ) 22.7 9.5 — 110.8 — Income tax benefit (expense) 66.1 (0.1 ) 2.9 (3.6 ) — 65.3 Net (loss) income $ (102.2 ) $ (45.1 ) $ (86.7 ) $ 21.0 $ 110.8 $ (102.2 ) Other comprehensive income (loss) 23.1 3.3 (25.4 ) 42.4 (20.3 ) 23.1 Comprehensive (loss) income $ (79.1 ) $ (41.8 ) $ (112.1 ) $ 63.4 $ 90.5 $ (79.1 ) (1) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Six Months Ended June 30, 2016 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 241.7 $ 816.5 $ 483.4 $ (130.4 ) $ 1,411.2 Cost of instant games, cost of services and cost of product sales (1) — 169.0 219.8 274.1 (130.4 ) 532.5 Selling, general and administrative 61.0 22.9 119.4 83.9 — 287.2 Research and development 2.8 4.6 78.4 15.7 — 101.5 Employee termination and restructuring 0.1 — 4.1 2.7 — 6.9 Depreciation and amortization 25.8 21.1 267.9 58.9 — 373.7 Operating (loss) income (89.7 ) 24.1 126.9 48.1 — 109.4 Interest expense (0.1 ) (69.9 ) (260.9 ) (0.1 ) — (331.0 ) Gain on early extinguishment of debt — 25.2 — — — 25.2 Other (expense) income, net (50.3 ) 102.8 (47.3 ) 8.4 — 13.6 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (140.1 ) 82.2 (181.3 ) 56.4 — (182.8 ) Equity in (loss) income of subsidiaries (51.0 ) 30.2 16.2 — 4.6 — Income tax benefit (expense) 47.1 — — (8.3 ) — 38.8 Net (loss) income $ (144.0 ) $ 112.4 $ (165.1 ) $ 48.1 $ 4.6 $ (144.0 ) Other comprehensive income (loss) (32.6 ) 3.0 (6.2 ) (30.7 ) 33.9 (32.6 ) Comprehensive (loss) income $ (176.6 ) $ 115.4 $ (171.3 ) $ 17.4 $ 38.5 $ (176.6 ) (1) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Six Months Ended June 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 217.6 $ 862.9 $ 470.3 $ (200.6 ) $ 1,350.2 Cost of instant games, cost of services and cost of product sales (1) — 160.3 284.8 286.2 (200.6 ) 530.7 Selling, general and administrative 31.6 34.6 145.1 75.5 — 286.8 Research and development — 2.8 77.1 15.0 — 94.9 Employee termination and restructuring 3.2 0.9 6.9 2.4 — 13.4 Depreciation and amortization 16.0 19.6 299.6 71.2 — 406.4 Operating (loss) income (50.8 ) (0.6 ) 49.4 20.0 — 18.0 Interest expense (3.9 ) (119.3 ) (207.3 ) (0.2 ) — (330.7 ) Other (expense) income, net 18.0 35.9 (68.8 ) 11.4 — (3.5 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (36.7 ) (84.0 ) (226.7 ) 31.2 — (316.2 ) Equity in (loss) income of subsidiaries (281.3 ) 29.3 3.3 — 248.7 — Income tax benefit (expense) 129.4 (0.1 ) 2.9 (4.6 ) — 127.6 Net (loss) income $ (188.6 ) $ (54.8 ) $ (220.5 ) $ 26.6 $ 248.7 $ (188.6 ) Other comprehensive loss (87.1 ) (9.8 ) (8.5 ) (77.2 ) 95.5 (87.1 ) Comprehensive loss $ (275.7 ) $ (64.6 ) $ (229.0 ) $ (50.6 ) $ 344.2 $ (275.7 ) (1) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (109.5 ) $ 122.1 $ 104.8 $ 74.5 $ — $ 191.9 Cash flows from investing activities: Capital expenditures (26.7 ) (5.2 ) (77.3 ) (23.4 ) — (132.6 ) Distributions of capital on equity investments — — — 22.5 — 22.5 Restricted Cash — — (3.8 ) — — (3.8 ) Changes in other assets and liabilities and other 0.3 — 8.0 (2.2 ) — 6.1 Other, principally change in intercompany investing activities — (39.9 ) — — 39.9 — Net cash used in investing activities (26.4 ) (45.1 ) (73.1 ) (3.1 ) 39.9 (107.8 ) Cash flows from financing activities: Net payments of long-term debt including repurchases of notes — (76.5 ) — (3.6 ) — (80.1 ) Payments on license obligations (15.1 ) — (9.9 ) — — (25.0 ) Redemptions of common stock under stock-based compensation plans (4.4 ) — — — — (4.4 ) Other, principally change in intercompany financing activities 144.6 — (25.9 ) (78.8 ) (39.9 ) — Net cash provided by (used in) financing activities 125.1 (76.5 ) (35.8 ) (82.4 ) (39.9 ) (109.5 ) Effect of exchange rate changes on cash and cash equivalents — — (0.6 ) (1.3 ) — (1.9 ) Increase (decrease) in cash and cash equivalents (10.8 ) 0.5 (4.7 ) (12.3 ) — (27.3 ) Cash and cash equivalents, beginning of period 43.2 — 4.7 80.8 — 128.7 Cash and cash equivalents, end of period $ 32.4 $ 0.5 $ — $ 68.5 $ — $ 101.4 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (33.1 ) $ (69.4 ) $ 127.7 $ 89.2 $ — $ 114.4 Cash flows from investing activities: Capital expenditures (8.6 ) (12.4 ) (95.6 ) (26.2 ) — (142.8 ) Distributions of capital on equity investments — 0.8 — 34.4 — 35.2 Changes in other assets and liabilities and other — — 4.0 5.5 — 9.5 Other, principally change in intercompany investing activities — 114.2 — — (114.2 ) — Net cash (used in) provided by investing activities (8.6 ) 102.6 (91.6 ) 13.7 (114.2 ) (98.1 ) Cash flows from financing activities: Net payments on long-term debt — (31.5 ) — (4.7 ) — (36.2 ) Payments on license obligations (13.5 ) — (5.2 ) — — (18.7 ) Contingent earnout payments — — (0.5 ) — — (0.5 ) Issuance (redemptions) of common stock under stock-based compensation plans 0.9 — (29.6 ) (116.0 ) 145.6 0.9 Other, principally change in intercompany financing activities 58.2 — (12.0 ) (14.8 ) (31.4 ) — Net cash provided by (used in) financing activities 45.6 (31.5 ) (47.3 ) (135.5 ) 114.2 (54.5 ) Effect of exchange rate changes on cash and cash equivalents 0.1 (0.4 ) (1.8 ) (2.4 ) — (4.5 ) Increase (decrease) in cash and cash equivalents 4.0 1.3 (13.0 ) (35.0 ) — (42.7 ) Cash and cash equivalents, beginning of period 37.9 0.1 28.8 105.0 — 171.8 Cash and cash equivalents, end of period $ 41.9 $ 1.4 $ 15.8 $ 70.0 $ — $ 129.1 |
Description of the Business a24
Description of the Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
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 United States dollars ("USD" or "$") unless otherwise stated herein. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of the Company and its wholly-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. 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. Such adjustments are of a normal, recurring nature. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K. Interim results of operations are not necessarily indicative of results of operations for a full year. |
New Accounting Guidance | New Accounting Guidance - Recently Adopted 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. We adopted this guidance prospectively at the beginning of the second quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations, or cash flows. In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The amended guidance simplifies the accounting for equity investments and eliminates the requirements in Topic 323 that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. We adopted this guidance prospectively at the beginning of the first quarter of 2016. The adoption of this guidance did not have a material effect on our financial condition, results of operations or cash flows. New Accounting Guidance - Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), 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 (including subsequent amendments) 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." The ASU may be adopted using a full retrospective approach or reporting the cumulative effect as of the date of adoption. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with earlier adoption permitted for fiscal years beginning after December 15, 2016. We are currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The amended guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases, where we are the lessee, to be recognized on our Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact and timing of adopting this guidance. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The amended guidance is intended to simplify several aspects of accounting for share-based payment award transactions, including income tax consequences, accounting for forfeitures, and classification of awards as either equity or liabilities and classification in the statement of cash flows. ASU 2016-09 has separate transition guidance for each element of the new standard and is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years with earlier adoption permitted. We are currently evaluating the impact of adopting this guidance. |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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, operating income and earnings from equity investments for the three and six months ended June 30, 2016 and 2015 , respectively, by business segment. Certain unallocated corporate amounts consisted primarily of general and administrative expenses, other income (expense) and D&A. Three Months Ended June 30, 2016 Gaming Lottery Interactive Total Revenue: Services $ 236.0 $ 44.1 $ 83.4 $ 363.5 Product sales 205.9 8.9 — 214.8 Instant games — 150.9 — 150.9 Total revenue 441.9 203.9 83.4 729.2 Operating expenses: Cost of services (1) 44.4 26.8 30.2 101.4 Cost of product sales (1) 93.4 7.3 — 100.7 Cost of instant games (1) — 74.1 — 74.1 Selling, general and administrative 61.2 17.8 26.8 105.8 Research and development 38.5 2.6 8.4 49.5 Employee termination and restructuring 3.4 0.2 0.5 4.1 Depreciation and amortization 154.3 17.2 3.8 175.3 Segment operating income $ 46.7 $ 57.9 $ 13.7 $ 118.3 Unallocated corporate costs (59.2 ) Consolidated operating income $ 59.1 Earnings from equity investments $ 1.4 $ 6.6 $ — $ 8.0 (1) Exclusive of D&A. Three Months Ended June 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 240.4 $ 45.9 $ 51.6 $ 337.9 Product sales 209.3 8.8 — 218.1 Instant games — 135.5 — 135.5 Total revenue 449.7 190.2 51.6 691.5 Operating expenses: Cost of services (1) 53.1 27.5 18.0 98.6 Cost of product sales (1) 100.9 7.0 — 107.9 Cost of instant games (1) — 68.8 — 68.8 Selling, general and administrative 71.2 16.4 15.2 102.8 Research and development 41.1 1.5 5.4 48.0 Employee termination and restructuring 2.7 — 0.3 3.0 Depreciation and amortization 181.5 20.0 5.4 206.9 Segment operating (loss) income $ (0.8 ) $ 49.0 $ 7.3 $ 55.5 Unallocated corporate costs (55.6 ) Consolidated operating loss $ (0.1 ) Earnings from equity investments $ 1.8 $ 1.5 $ — $ 3.3 (1) Exclusive of D&A. Six Months Ended June 30, 2016 Gaming Lottery Interactive Total Revenue: Services $ 468.6 $ 89.2 $ 156.0 $ 713.8 Product sales 395.0 17.4 — 412.4 Instant games — 285.0 — 285.0 Total revenue 863.6 391.6 156.0 1,411.2 Operating expenses: Cost of services (1) 85.6 54.9 55.8 196.3 Cost of product sales (1) 181.2 13.9 — 195.1 Cost of instant games (1) — 141.1 — 141.1 Selling, general and administrative 129.1 34.3 51.3 214.7 Research and development 76.7 5.2 15.7 97.6 Employee termination and restructuring 5.0 1.3 0.5 6.8 Depreciation and amortization 295.9 35.0 7.5 338.4 Segment operating income $ 90.1 $ 105.9 $ 25.2 $ 221.2 Unallocated corporate costs (111.8 ) Consolidated operating income $ 109.4 Earnings from equity investments $ 1.4 $ 9.8 $ — $ 11.2 (1) Exclusive of D&A. Six Months Ended June 30, 2015 Gaming Lottery Interactive Total Revenue: Services $ 478.3 $ 91.5 $ 98.5 $ 668.3 Product sales 397.2 20.3 — 417.5 Instant games — 264.4 — 264.4 Total revenue 875.5 376.2 98.5 1,350.2 Operating expenses: Cost of services (1) 98.6 55.9 34.6 189.1 Cost of product sales (1) 188.7 17.1 — 205.8 Cost of instant games (1) — 135.8 — 135.8 Selling, general and administrative 145.4 33.5 30.3 209.2 Research and development 80.9 3.1 10.9 94.9 Employee termination and restructuring 6.9 0.2 1.0 8.1 Depreciation and amortization 324.8 41.3 10.5 376.6 Segment operating income $ 30.2 $ 89.3 $ 11.2 $ 130.7 Unallocated corporate costs (112.7 ) Consolidated operating income $ 18.0 Earnings from equity investments $ 1.7 $ 4.7 $ — $ 6.4 (1) Exclusive of D&A. |
Reconciliation of segment operating income (loss) | The following table presents a reconciliation of business segment operating income to net loss before income taxes for each period: Three Months Ended Six Months Ended 2016 2015 2016 2015 Business segment operating income $ 118.3 $ 55.5 $ 221.2 $ 130.7 Unallocated corporate costs (59.2 ) (55.6 ) (111.8 ) (112.7 ) Consolidated operating income (loss) 59.1 (0.1 ) 109.4 18.0 Interest expense (165.3 ) (166.4 ) (331.0 ) (330.7 ) Earnings from equity investments 8.0 3.3 11.2 6.4 Gain on early extinguishment of debt 25.2 — 25.2 — Other income (expense), net 1.7 (4.3 ) 2.4 (9.9 ) Net loss before income taxes $ (71.3 ) $ (167.5 ) $ (182.8 ) $ (316.2 ) |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of employee termination and restructuring cost by segment | 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 Three Months Ended June 30, 2016 $ 2.2 $ — $ 1.2 $ 3.4 Six Months Ended June 30, 2016 3.4 0.4 1.2 5.0 Cumulative 24.6 0.4 2.8 27.8 Expected Total 27.1 0.4 2.8 30.3 Lottery Three Months Ended June 30, 2016 — — 0.2 0.2 Six Months Ended June 30, 2016 1.1 — 0.2 1.3 Cumulative 2.3 — 0.2 2.5 Expected Total 2.3 — 0.2 2.5 Interactive Three Months Ended June 30, 2016 0.2 — 0.3 0.5 Six Months Ended June 30, 2016 0.2 — 0.3 0.5 Cumulative 2.7 — 2.0 4.7 Expected Total 2.7 — 2.0 4.7 Unallocated corporate (1) Three Months Ended June 30, 2016 0.1 — — 0.1 Six Months Ended June 30, 2016 0.1 — — 0.1 Cumulative 6.4 4.3 2.1 12.8 Expected Total 8.9 4.3 2.1 15.3 Total Three Months Ended June 30, 2016 $ 2.5 $ — $ 1.7 $ 4.2 Six Months Ended June 30, 2016 $ 4.8 $ 0.4 $ 1.7 $ 6.9 Cumulative $ 36.0 $ 4.7 $ 7.1 $ 47.8 Expected Total $ 41.0 $ 4.7 $ 7.1 $ 52.8 (1) Cumulative unallocated corporate employee termination costs primarily includes cash severance paid to our former chief executive officer and special termination benefits related to the retirement of our former chief financial officer. |
Summary of restructuring charges and accrual | The following table presents a summary of restructuring charges and the changes in the restructuring accrual during the six months ended June 30, 2016 : Employee Termination Costs Property Costs Other Total Balance as of December 31, 2015 $ 7.3 $ 0.8 $ 1.4 $ 9.5 Additional accruals 4.8 0.4 1.7 6.9 Cash payments (6.2 ) (0.9 ) (0.2 ) (7.3 ) Balance as of June 30, 2016 $ 5.9 $ 0.3 $ 2.9 $ 9.1 |
Basic and Diluted Net Loss Pe27
Basic and Diluted Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Earnings 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 six months ended June 30, 2016 and 2015: Three Months Ended Six Months Ended 2016 2015 2016 2015 Loss (numerator): Net loss $ (51.7 ) $ (102.2 ) $ (144.0 ) $ (188.6 ) Shares (denominator): Basic weighted-average common shares outstanding 87.3 85.9 86.9 85.6 Diluted weighted-average common shares outstanding 87.3 85.9 86.9 85.6 Basic and diluted net loss per share amounts: Basic net loss per share $ (0.59 ) $ (1.19 ) $ (1.66 ) $ (2.20 ) Diluted net loss per share $ (0.59 ) $ (1.19 ) $ (1.66 ) $ (2.20 ) |
Accounts and Notes Receivable28
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Summary of Components of Accounts Receivable, Net | The following summarizes the components of current and long-term accounts and notes receivable, net: June 30, 2016 December 31, 2015 Current: Accounts receivable $ 514.0 $ 497.7 Notes receivable 154.5 180.4 Allowance for doubtful accounts (27.2 ) (23.3 ) Current accounts and notes receivable, net $ 641.3 $ 654.8 Long-term: Notes receivable, net 43.8 51.3 Total accounts and notes receivable, net $ 685.1 $ 706.1 |
Summary of Components of Notes Receivable | The following summarizes the components of total notes receivable, net: June 30, 2016 Balances over 90 days past due December 31, 2015 Balances over 90 days past due Notes receivable: Domestic $ 39.6 $ 2.0 $ 62.4 $ 2.6 International 159.0 41.5 169.8 26.6 Total notes receivable 198.6 43.5 232.2 29.2 Notes receivable allowance for doubtful accounts: Domestic (2.3 ) (2.3 ) (2.6 ) (2.5 ) International (12.5 ) (12.5 ) (10.6 ) (9.5 ) Total notes receivable allowance for doubtful accounts (14.8 ) (14.8 ) (13.2 ) (12.0 ) Notes receivable, net $ 183.8 $ 28.7 $ 219.0 $ 17.2 |
Schedule of Notes Receivable Evaluated For Impairment | The following tables detail our evaluation of notes receivable for impairment as of June 30, 2016 and December 31, 2015: June 30, 2016 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 39.6 $ 13.7 $ 25.9 International 159.0 81.7 77.3 Total notes receivable $ 198.6 $ 95.4 $ 103.2 December 31, 2015 Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Notes receivable: Domestic $ 62.4 $ 20.7 $ 41.7 International 169.8 101.8 68.0 Total notes receivable $ 232.2 $ 122.5 $ 109.7 |
Schedule of Allowance For Doubtful Notes Receivable | The following table reconciles the allowance for doubtful notes receivable from December 31, 2015 to June 30, 2016 : Total Ending Balance Individually Evaluated for Impairment Ending Balance Collectively Evaluated for Impairment Beginning balance at December 31, 2015 $ 13.2 $ 12.9 $ 0.3 Charge-offs (1.3 ) (1.3 ) — Recoveries (0.2 ) (0.2 ) — Provision 3.1 3.1 — Ending balance at June 30, 2016 $ 14.8 $ 14.5 $ 0.3 The following table reconciles the allowance for doubtful notes receivable from December 31, 2014 to June 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 (2.1 ) (2.1 ) — Recoveries (0.5 ) (0.4 ) (0.1 ) Provision 6.4 5.2 1.2 Ending balance at June 30, 2015 $ 9.7 $ 8.6 $ 1.1 |
Schedule of Notes Receivable Concentration Risk | Our notes receivable were concentrated in the following international gaming jurisdictions at June 30, 2016 : Mexico 26 % Peru 17 % Argentina 9 % Columbia 6 % Other (less than 5% individually) 22 % Total international notes receivable as a percentage of total notes receivable 80 % |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following as of the dates presented below: June 30, 2016 December 31, 2015 Parts and work-in-process $ 128.6 $ 118.3 Finished goods 120.4 130.2 Total inventories $ 249.0 $ 248.5 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property and Equipment | Property and equipment, net consisted of the following: June 30, 2016 December 31, 2015 Land $ 38.4 $ 38.5 Buildings and leasehold improvements 184.7 185.2 Gaming and lottery machinery and equipment 1,048.5 1,084.6 Furniture and fixtures 31.4 36.0 Construction in progress 27.9 25.5 Other property and equipment 264.5 271.0 Less: accumulated depreciation (899.9 ) (846.8 ) Total property and equipment, net $ 695.5 $ 794.0 |
Intangible Assets, net and Go31
Intangible Assets, net and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual value, which materially approximates the expected pattern of use of these intangible assets. Intangible Assets Gross Carrying Amount Accumulated Amortization Net Balance Balance as of June 30, 2016 Amortizable intangible assets: Patents $ 26.3 $ (13.1 ) $ 13.2 Customer relationships 877.7 (136.8 ) 740.9 Licenses 412.5 (121.8 ) 290.7 Intellectual property (1) 731.5 (170.3 ) 561.2 Trade names 97.4 (4.9 ) 92.5 Brand names 124.4 (25.6 ) 98.8 Non-compete agreements 0.2 (0.2 ) — 2,270.0 (472.7 ) 1,797.3 Non-amortizable intangible assets: Trade names 96.7 (2.1 ) 94.6 Total intangible assets $ 2,366.7 $ (474.8 ) $ 1,891.9 Balance as of December 31, 2015 Amortizable intangible assets: Patents $ 26.8 $ (12.5 ) $ 14.3 Customer relationships 877.7 (109.1 ) 768.6 Licenses 326.1 (91.6 ) 234.5 Intellectual property (1) 731.1 (124.5 ) 606.6 Trade names 97.5 (1.9 ) 95.6 Brand names 124.0 (18.9 ) 105.1 Non-compete agreements 0.3 (0.3 ) — 2,183.5 (358.8 ) 1,824.7 Non-amortizable intangible assets: Trade names 97.4 (2.1 ) 95.3 Total intangible assets $ 2,280.9 $ (360.9 ) $ 1,920.0 (1) Includes $33 million of in-process R&D assets that will not be subject to amortization until they reach commercial feasibility. |
Reconciliation of the Carrying Amount of Goodwill, by Business Segment | The table below reconciles the change in the carrying amount of goodwill by business segment for the period from December 31, 2015 to June 30, 2016 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2015 $ 2,486.0 $ 417.9 $ 109.8 $ 3,013.7 Foreign currency adjustments (23.0 ) 1.8 — (21.2 ) Balance as of June 30, 2016 $ 2,463.0 $ 419.7 $ 109.8 $ 2,992.5 |
Software, net (Tables)
Software, net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of Software, net | Software, net consisted of the following: June 30, 2016 December 31, 2015 Software $ 894.8 $ 854.2 Accumulated amortization (451.6 ) (368.3 ) Software, net $ 443.2 $ 485.9 |
Long-Term and Other Debt (Table
Long-Term and Other Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following reflects our outstanding debt as of the dates indicated below: Principal Unamortized debt discount Unamortized deferred financing costs Book value June 30, 2016 Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ 80.0 $ — $ — $ 80.0 Term Loan, varying interest rate, due 2020 2,242.5 (6.9 ) (47.0 ) 2,188.6 Term Loan, varying interest rate, due 2021 1,970.0 (15.2 ) (44.8 ) 1,910.0 2018 Notes 250.0 — (1.6 ) 248.4 2020 Notes 243.5 — (2.6 ) 240.9 2021 Notes 340.6 (1.6 ) (5.1 ) 333.9 Secured Notes 950.0 — (15.1 ) 934.9 Unsecured Notes 2,200.0 — (39.1 ) 2,160.9 Capital lease obligations, 3.9% interest as of June 30, 2016 payable monthly through 2019 19.7 — — 19.7 Total long-term debt outstanding $ 8,296.3 $ (23.7 ) $ (155.3 ) $ 8,117.3 Less: current portion of long-term debt (49.7 ) Long-term debt, excluding current portion $ 8,067.6 Principal Unamortized debt discount Unamortized deferred financing costs Book value December 31, 2015 Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ 95.0 $ — $ — $ 95.0 Term Loan, varying interest rate, due 2020 2,254.0 (7.8 ) (52.5 ) 2,193.7 Term Loan, varying interest rate, due 2021 1,980.0 (16.7 ) (49.2 ) 1,914.1 2018 Notes 250.0 — (2.0 ) 248.0 2020 Notes 300.0 — (3.6 ) 296.4 2021 Notes 350.0 (1.8 ) (5.6 ) 342.6 Secured Notes 950.0 — (16.4 ) 933.6 Unsecured Notes 2,200.0 — (42.1 ) 2,157.9 Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019 25.7 — — 25.7 Total long-term debt outstanding $ 8,404.7 $ (26.3 ) $ (171.4 ) $ 8,207.0 Less: current portion of long-term debt (50.3 ) Long-term debt, excluding current portion $ 8,156.7 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of RSUs Outstanding Under Stock-Based Compensation Plans | A summary of the changes in RSUs outstanding under our stock-based compensation plans during the six months ended June 30, 2016 is presented below: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested RSUs as of December 31, 2015 5.6 $ 13.05 Granted 0.2 8.21 Vested (0.8 ) 12.46 Canceled (0.4 ) 12.56 Unvested RSUs as of March 31, 2016 4.6 $ 13.00 Granted 1.4 9.60 Vested (0.6 ) 12.51 Canceled (0.1 ) 13.35 Unvested RSUs as of June 30, 2016 5.3 $ 12.16 |
Supplemental Disclosure of Ca35
Supplemental Disclosure of Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Disclosure of Cash Flow Information | Additional cash flow information is presented as follows: Six Months Ended June 30, 2016 2015 Interest paid $ 313.6 $ 294.6 Income taxes paid (received) $ 6.6 $ (4.1 ) |
Financial Information for Gua36
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, 2016 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 32.4 $ 0.5 $ — $ 68.5 $ — $ 101.4 Restricted cash — — 24.4 0.1 — 24.5 Accounts receivable, net — 98.0 226.5 176.8 — 501.3 Notes receivable, net — — 91.2 48.8 — 140.0 Inventories — 35.8 89.4 136.2 (12.4 ) 249.0 Prepaid expenses, deposits and other current assets 31.6 14.1 35.1 40.1 — 120.9 Property and equipment, net 11.9 101.4 430.4 166.3 (14.5 ) 695.5 Investment in subsidiaries 3,202.2 851.8 796.8 — (4,850.8 ) — Goodwill — 188.3 1,988.2 816.0 — 2,992.5 Intangible assets, net 207.1 38.7 1,423.6 222.5 — 1,891.9 Intercompany balances — 6,531.8 — — (6,531.8 ) — Software, net 52.4 25.4 316.3 49.1 — 443.2 Other assets 291.0 119.3 44.7 214.6 (364.7 ) 304.9 Total assets $ 3,828.6 $ 8,005.1 $ 5,466.6 $ 1,939.0 $ (11,774.2 ) $ 7,465.1 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 43.0 $ — $ 6.7 $ — $ 49.7 Other current liabilities 74.3 153.2 208.4 159.8 — 595.7 Long-term debt, excluding current portion 248.4 7,806.2 — 13.0 — 8,067.6 Other long-term liabilities 179.2 14.2 498.8 91.5 (364.7 ) 419.0 Intercompany balances 4,993.6 — 1,503.7 34.5 (6,531.8 ) — Stockholders' (deficit) equity (1,666.9 ) (11.5 ) 3,255.7 1,633.5 (4,877.7 ) (1,666.9 ) Total liabilities and stockholders' (deficit) equity $ 3,828.6 $ 8,005.1 $ 5,466.6 $ 1,939.0 $ (11,774.2 ) $ 7,465.1 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 43.2 $ — $ 4.7 $ 80.8 $ — $ 128.7 Restricted cash — — 20.0 0.2 — 20.2 Accounts receivable, net — 94.6 233.6 158.9 — 487.1 Notes receivable, net — — 114.2 53.5 — 167.7 Inventories — 36.9 104.2 119.6 (12.2 ) 248.5 Prepaid expenses, deposits and other current assets 26.8 7.0 52.1 37.4 — 123.3 Property and equipment, net 8.2 106.4 502.2 188.7 (11.5 ) 794.0 Investment in subsidiaries 3,280.9 838.1 648.3 — (4,767.3 ) — Goodwill — 186.0 1,990.5 837.2 — 3,013.7 Intangible assets, net 138.3 39.8 1,505.8 236.1 — 1,920.0 Intercompany balances — 6,511.1 — — (6,511.1 ) — Software, net 35.6 32.7 359.8 57.8 — 485.9 Other assets 232.5 123.4 51.7 241.7 (306.2 ) 343.1 Total assets $ 3,765.5 $ 7,976.0 $ 5,587.1 $ 2,011.9 $ (11,608.3 ) $ 7,732.2 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 43.0 $ — $ 7.3 $ — $ 50.3 Other current liabilities 63.7 150.5 245.4 144.0 — 603.6 Long-term debt, excluding current portion 248.0 7,890.3 — 18.4 — 8,156.7 Other long-term liabilities 119.1 14.5 502.1 87.7 (306.3 ) 417.1 Intercompany balances 4,830.2 — 1,558.2 122.6 (6,511.0 ) — Stockholders' (deficit) equity (1,495.5 ) (122.3 ) 3,281.4 1,631.9 (4,791.0 ) (1,495.5 ) Total liabilities and stockholders' (deficit) equity $ 3,765.5 $ 7,976.0 $ 5,587.1 $ 2,011.9 $ (11,608.3 ) $ 7,732.2 |
Supplemental Condensed Consolidating Statement of Income | SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended June 30, 2016 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 126.4 $ 408.6 $ 265.5 $ (71.3 ) $ 729.2 Cost of services, cost of product sales and cost of instant games (1) — 86.1 108.8 152.6 (71.3 ) 276.2 Selling, general and administrative 36.9 11.7 51.7 44.6 — 144.9 Research and development 1.9 2.3 39.1 8.4 — 51.7 Employee termination and restructuring 0.1 (0.1 ) 3.3 0.9 — 4.2 Depreciation and amortization 13.0 10.3 141.1 28.7 — 193.1 Operating (loss) income (51.9 ) 16.1 64.6 30.3 — 59.1 Interest expense — (35.1 ) (130.1 ) (0.1 ) — (165.3 ) Gain on early extinguishment of debt — 25.2 — — — 25.2 Other (expense) income, net (24.7 ) 52.5 (24.2 ) 6.1 — 9.7 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (76.6 ) 58.7 (89.7 ) 36.3 — (71.3 ) Equity in (loss) income of subsidiaries — 11.3 9.3 — (20.6 ) — Income tax benefit (expense) 24.9 — — (5.3 ) — 19.6 Net (loss) income $ (51.7 ) $ 70.0 $ (80.4 ) $ 31.0 $ (20.6 ) $ (51.7 ) Other comprehensive (loss) income (30.2 ) 3.2 (8.1 ) (33.4 ) 38.3 (30.2 ) Comprehensive (loss) income $ (81.9 ) $ 73.2 $ (88.5 ) $ (2.4 ) $ 17.7 $ (81.9 ) (1) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended June 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 106.4 $ 430.6 $ 261.5 $ (107.0 ) $ 691.5 Cost of services, cost of product sales and cost of instant games (1) — 79.0 139.5 163.8 (107.0 ) 275.3 Selling, general and administrative 16.7 18.4 70.8 35.0 — 140.9 Research and development — 1.4 39.3 7.3 — 48.0 Employee termination and restructuring 1.4 0.7 2.4 0.7 — 5.2 Depreciation and amortization 8.1 9.8 170.8 33.5 — 222.2 Operating (loss) income (26.2 ) (2.9 ) 7.8 21.2 — (0.1 ) Interest expense (5.3 ) (83.1 ) (77.9 ) (0.1 ) — (166.4 ) Other (expense) income, net 6.2 18.3 (29.0 ) 3.5 — (1.0 ) Net (loss) income before equity in (loss) income of subsidiaries and income taxes (25.3 ) (67.7 ) (99.1 ) 24.6 — (167.5 ) Equity in (loss) income of subsidiaries (143.0 ) 22.7 9.5 — 110.8 — Income tax benefit (expense) 66.1 (0.1 ) 2.9 (3.6 ) — 65.3 Net (loss) income $ (102.2 ) $ (45.1 ) $ (86.7 ) $ 21.0 $ 110.8 $ (102.2 ) Other comprehensive income (loss) 23.1 3.3 (25.4 ) 42.4 (20.3 ) 23.1 Comprehensive (loss) income $ (79.1 ) $ (41.8 ) $ (112.1 ) $ 63.4 $ 90.5 $ (79.1 ) (1) Exclusive of D&A. |
Supplemental Condensed Consolidating Statement of Cash Flows | SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (109.5 ) $ 122.1 $ 104.8 $ 74.5 $ — $ 191.9 Cash flows from investing activities: Capital expenditures (26.7 ) (5.2 ) (77.3 ) (23.4 ) — (132.6 ) Distributions of capital on equity investments — — — 22.5 — 22.5 Restricted Cash — — (3.8 ) — — (3.8 ) Changes in other assets and liabilities and other 0.3 — 8.0 (2.2 ) — 6.1 Other, principally change in intercompany investing activities — (39.9 ) — — 39.9 — Net cash used in investing activities (26.4 ) (45.1 ) (73.1 ) (3.1 ) 39.9 (107.8 ) Cash flows from financing activities: Net payments of long-term debt including repurchases of notes — (76.5 ) — (3.6 ) — (80.1 ) Payments on license obligations (15.1 ) — (9.9 ) — — (25.0 ) Redemptions of common stock under stock-based compensation plans (4.4 ) — — — — (4.4 ) Other, principally change in intercompany financing activities 144.6 — (25.9 ) (78.8 ) (39.9 ) — Net cash provided by (used in) financing activities 125.1 (76.5 ) (35.8 ) (82.4 ) (39.9 ) (109.5 ) Effect of exchange rate changes on cash and cash equivalents — — (0.6 ) (1.3 ) — (1.9 ) Increase (decrease) in cash and cash equivalents (10.8 ) 0.5 (4.7 ) (12.3 ) — (27.3 ) Cash and cash equivalents, beginning of period 43.2 — 4.7 80.8 — 128.7 Cash and cash equivalents, end of period $ 32.4 $ 0.5 $ — $ 68.5 $ — $ 101.4 SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2015 Parent SGI Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (33.1 ) $ (69.4 ) $ 127.7 $ 89.2 $ — $ 114.4 Cash flows from investing activities: Capital expenditures (8.6 ) (12.4 ) (95.6 ) (26.2 ) — (142.8 ) Distributions of capital on equity investments — 0.8 — 34.4 — 35.2 Changes in other assets and liabilities and other — — 4.0 5.5 — 9.5 Other, principally change in intercompany investing activities — 114.2 — — (114.2 ) — Net cash (used in) provided by investing activities (8.6 ) 102.6 (91.6 ) 13.7 (114.2 ) (98.1 ) Cash flows from financing activities: Net payments on long-term debt — (31.5 ) — (4.7 ) — (36.2 ) Payments on license obligations (13.5 ) — (5.2 ) — — (18.7 ) Contingent earnout payments — — (0.5 ) — — (0.5 ) Issuance (redemptions) of common stock under stock-based compensation plans 0.9 — (29.6 ) (116.0 ) 145.6 0.9 Other, principally change in intercompany financing activities 58.2 — (12.0 ) (14.8 ) (31.4 ) — Net cash provided by (used in) financing activities 45.6 (31.5 ) (47.3 ) (135.5 ) 114.2 (54.5 ) Effect of exchange rate changes on cash and cash equivalents 0.1 (0.4 ) (1.8 ) (2.4 ) — (4.5 ) Increase (decrease) in cash and cash equivalents 4.0 1.3 (13.0 ) (35.0 ) — (42.7 ) Cash and cash equivalents, beginning of period 37.9 0.1 28.8 105.0 — 171.8 Cash and cash equivalents, end of period $ 41.9 $ 1.4 $ 15.8 $ 70.0 $ — $ 129.1 |
Description of the Business a37
Description of the Business and Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2016Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 3 |
Business Segments - Schedule of
Business Segments - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenue: | |||||
Services | $ 363.5 | $ 337.9 | $ 713.8 | $ 668.3 | |
Product sales | 214.8 | 218.1 | 412.4 | 417.5 | |
Instant games | 150.9 | 135.5 | 285 | 264.4 | |
Revenue | 729.2 | 691.5 | 1,411.2 | 1,350.2 | |
Cost of services | [1] | 101.4 | 98.6 | 196.3 | 189.1 |
Cost of product sales | [1] | 100.7 | 107.9 | 195.1 | 205.8 |
Cost of instant games | [1] | 74.1 | 68.8 | 141.1 | 135.8 |
Selling, general and administrative | 144.9 | 140.9 | 287.2 | 286.8 | |
Research and development | 51.7 | 48 | 101.5 | 94.9 | |
Employee termination and restructuring | 4.2 | 5.2 | 6.9 | 13.4 | |
Depreciation and amortization | 193.1 | 222.2 | 373.7 | 406.4 | |
Operating income | 59.1 | (0.1) | 109.4 | 18 | |
Earnings from equity investments | 8 | 3.3 | 11.2 | 6.4 | |
Operating Segments | |||||
Revenue: | |||||
Services | 363.5 | 337.9 | 713.8 | 668.3 | |
Product sales | 214.8 | 218.1 | 412.4 | 417.5 | |
Instant games | 150.9 | 135.5 | 285 | 264.4 | |
Revenue | 729.2 | 691.5 | 1,411.2 | 1,350.2 | |
Cost of services | [2] | 101.4 | 98.6 | 196.3 | 189.1 |
Cost of product sales | [2] | 100.7 | 107.9 | 195.1 | 205.8 |
Cost of instant games | [2] | 74.1 | 68.8 | 141.1 | 135.8 |
Selling, general and administrative | 105.8 | 102.8 | 214.7 | 209.2 | |
Research and development | 49.5 | 48 | 97.6 | 94.9 | |
Employee termination and restructuring | 4.1 | 3 | 6.8 | 8.1 | |
Depreciation and amortization | 175.3 | 206.9 | 338.4 | 376.6 | |
Operating income | 118.3 | 55.5 | 221.2 | 130.7 | |
Unallocated corporate costs | |||||
Revenue: | |||||
Unallocated corporate costs | (59.2) | (55.6) | (111.8) | (112.7) | |
Gaming | |||||
Revenue: | |||||
Earnings from equity investments | 1.4 | 1.8 | |||
Gaming | Operating Segments | |||||
Revenue: | |||||
Services | 236 | 240.4 | 468.6 | 478.3 | |
Product sales | 205.9 | 209.3 | 395 | 397.2 | |
Instant games | 0 | 0 | 0 | 0 | |
Revenue | 441.9 | 449.7 | 863.6 | 875.5 | |
Cost of services | 44.4 | 53.1 | 85.6 | 98.6 | |
Cost of product sales | 93.4 | 100.9 | 181.2 | 188.7 | |
Cost of instant games | 0 | 0 | 0 | 0 | |
Selling, general and administrative | 61.2 | 71.2 | 129.1 | 145.4 | |
Research and development | 38.5 | 41.1 | 76.7 | 80.9 | |
Employee termination and restructuring | 3.4 | 2.7 | 5 | 6.9 | |
Depreciation and amortization | 154.3 | 181.5 | 295.9 | 324.8 | |
Operating income | 46.7 | (0.8) | 90.1 | 30.2 | |
Earnings from equity investments | 1.4 | 1.7 | |||
Lottery | |||||
Revenue: | |||||
Earnings from equity investments | 6.6 | 1.5 | |||
Lottery | Operating Segments | |||||
Revenue: | |||||
Services | 44.1 | 45.9 | 89.2 | 91.5 | |
Product sales | 8.9 | 8.8 | 17.4 | 20.3 | |
Instant games | 150.9 | 135.5 | 285 | 264.4 | |
Revenue | 203.9 | 190.2 | 391.6 | 376.2 | |
Cost of services | 26.8 | 27.5 | 54.9 | 55.9 | |
Cost of product sales | 7.3 | 7 | 13.9 | 17.1 | |
Cost of instant games | 74.1 | 68.8 | 141.1 | 135.8 | |
Selling, general and administrative | 17.8 | 16.4 | 34.3 | 33.5 | |
Research and development | 2.6 | 1.5 | 5.2 | 3.1 | |
Employee termination and restructuring | 0.2 | 0 | 1.3 | 0.2 | |
Depreciation and amortization | 17.2 | 20 | 35 | 41.3 | |
Operating income | 57.9 | 49 | 105.9 | 89.3 | |
Earnings from equity investments | 9.8 | 4.7 | |||
Interactive | |||||
Revenue: | |||||
Earnings from equity investments | 0 | 0 | |||
Interactive | Operating Segments | |||||
Revenue: | |||||
Services | 83.4 | 51.6 | 156 | 98.5 | |
Product sales | 0 | 0 | 0 | 0 | |
Instant games | 0 | 0 | 0 | 0 | |
Revenue | 83.4 | 51.6 | 156 | 98.5 | |
Cost of services | 30.2 | 18 | 55.8 | 34.6 | |
Cost of product sales | 0 | 0 | 0 | 0 | |
Cost of instant games | 0 | 0 | 0 | 0 | |
Selling, general and administrative | 26.8 | 15.2 | 51.3 | 30.3 | |
Research and development | 8.4 | 5.4 | 15.7 | 10.9 | |
Employee termination and restructuring | 0.5 | 0.3 | 0.5 | 1 | |
Depreciation and amortization | 3.8 | 5.4 | 7.5 | 10.5 | |
Operating income | $ 13.7 | $ 7.3 | 25.2 | 11.2 | |
Earnings from equity investments | $ 0 | $ 0 | |||
[1] | Exclusive of D&A. | ||||
[2] | Exclusive of D&A. |
Business Segments - Reconciliat
Business Segments - Reconciliation of Segment Operating Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Reconciliation of reportable segment operating income to consolidated income before income taxes | ||||
Segment operating income (loss) from continuing operations | $ 59.1 | $ (0.1) | $ 109.4 | $ 18 |
Interest expense | (165.3) | (166.4) | (331) | (330.7) |
Earnings from equity investments | 8 | 3.3 | 11.2 | 6.4 |
Gain on early extinguishment of debt | 25.2 | 0 | 25.2 | 0 |
Other income (expense), net | 1.7 | (4.3) | 2.4 | (9.9) |
Net loss from continuing operations before income taxes | (71.3) | (167.5) | (182.8) | (316.2) |
Operating Segments | ||||
Reconciliation of reportable segment operating income to consolidated income before income taxes | ||||
Segment operating income (loss) from continuing operations | 118.3 | 55.5 | 221.2 | 130.7 |
Unallocated corporate costs | ||||
Reconciliation of reportable segment operating income to consolidated income before income taxes | ||||
Segment operating income (loss) from continuing operations | $ (59.2) | $ (55.6) | $ (111.8) | $ (112.7) |
Business Segments - Additional
Business Segments - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of business segments | 3 |
Restructuring Plans - Employee
Restructuring Plans - Employee Termination and Restructuring Cost by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | $ 4.2 | $ 5.2 | $ 6.9 | $ 13.4 |
Cumulative | 47.8 | 47.8 | ||
Expected Total | 52.8 | 52.8 | ||
Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 2.5 | 4.8 | ||
Cumulative | 36 | 36 | ||
Expected Total | 41 | 41 | ||
Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0.4 | ||
Cumulative | 4.7 | 4.7 | ||
Expected Total | 4.7 | 4.7 | ||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 1.7 | 1.7 | ||
Cumulative | 7.1 | 7.1 | ||
Expected Total | 7.1 | 7.1 | ||
Business Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 4.1 | 3 | 6.8 | 8.1 |
Business Segment | Gaming | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 3.4 | 5 | ||
Cumulative | 27.8 | 27.8 | ||
Expected Total | 30.3 | 30.3 | ||
Business Segment | Gaming | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 2.2 | 3.4 | ||
Cumulative | 24.6 | 24.6 | ||
Expected Total | 27.1 | 27.1 | ||
Business Segment | Gaming | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0.4 | ||
Cumulative | 0.4 | 0.4 | ||
Expected Total | 0.4 | 0.4 | ||
Business Segment | Gaming | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 1.2 | 1.2 | ||
Cumulative | 2.8 | 2.8 | ||
Expected Total | 2.8 | 2.8 | ||
Business Segment | Lottery | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.2 | $ 0 | 1.3 | $ 0.2 |
Cumulative | 2.5 | 2.5 | ||
Expected Total | 2.5 | 2.5 | ||
Business Segment | Lottery | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 1.1 | ||
Cumulative | 2.3 | 2.3 | ||
Expected Total | 2.3 | 2.3 | ||
Business Segment | Lottery | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 0 | 0 | ||
Expected Total | 0 | 0 | ||
Business Segment | Lottery | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.2 | 0.2 | ||
Cumulative | 0.2 | 0.2 | ||
Expected Total | 0.2 | 0.2 | ||
Business Segment | Interactive | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.5 | 0.5 | ||
Cumulative | 4.7 | 4.7 | ||
Expected Total | 4.7 | 4.7 | ||
Business Segment | Interactive | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.2 | 0.2 | ||
Cumulative | 2.7 | 2.7 | ||
Expected Total | 2.7 | 2.7 | ||
Business Segment | Interactive | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 0 | 0 | ||
Expected Total | 0 | 0 | ||
Business Segment | Interactive | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.3 | 0.3 | ||
Cumulative | 2 | 2 | ||
Expected Total | 2 | 2 | ||
Unallocated corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.1 | 0.1 | ||
Cumulative | 12.8 | 12.8 | ||
Expected Total | 15.3 | 15.3 | ||
Unallocated corporate | Employee Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0.1 | 0.1 | ||
Cumulative | 6.4 | 6.4 | ||
Expected Total | 8.9 | 8.9 | ||
Unallocated corporate | Property Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 4.3 | 4.3 | ||
Expected Total | 4.3 | 4.3 | ||
Unallocated corporate | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee termination and restructuring | 0 | 0 | ||
Cumulative | 2.1 | 2.1 | ||
Expected Total | $ 2.1 | $ 2.1 |
Restructuring Plans - Summary o
Restructuring Plans - Summary of Restructuring Charges and Accrual (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 9.5 | |||
Additional accruals | $ 4.2 | $ 5.2 | 6.9 | $ 13.4 |
Cash payments | (7.3) | |||
Ending balance | 9.1 | 9.1 | ||
Employee Termination Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 7.3 | |||
Additional accruals | 2.5 | 4.8 | ||
Cash payments | (6.2) | |||
Ending balance | 5.9 | 5.9 | ||
Property Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 0.8 | |||
Additional accruals | 0 | 0.4 | ||
Cash payments | (0.9) | |||
Ending balance | 0.3 | 0.3 | ||
Other | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 1.4 | |||
Additional accruals | 1.7 | 1.7 | ||
Cash payments | (0.2) | |||
Ending balance | $ 2.9 | $ 2.9 |
Restructuring Plans - Additiona
Restructuring Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Restructuring and Related Activities [Abstract] | ||||
Pre-tax employee termination and restructuring costs | $ 4.2 | $ 5.2 | $ 6.9 | $ 13.4 |
Basic and Diluted Net Loss Pe44
Basic and Diluted Net Loss Per Share - Schedule of the Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Loss (numerator): | ||||
Net loss | $ (51.7) | $ (102.2) | $ (144) | $ (188.6) |
Shares (denominator): | ||||
Basic weighted-average common shares outstanding (in shares) | 87,300,000 | 85,900,000 | 86,900,000 | 85,600,000 |
Diluted weighted-average common shares outstanding (in shares) | 87,300,000 | 85,900,000 | 86,900,000 | 85,600,000 |
Basic and diluted net loss per share: | ||||
Basic net loss per share (in USD per share) | $ (0.59) | $ (1.19) | $ (1.66) | $ (2.20) |
Diluted net loss per share (in USD per share) | $ (0.59) | $ (1.19) | $ (1.66) | $ (2.20) |
Basic and Diluted Net Loss Pe45
Basic and Diluted Net Loss Per Share - Additional Information (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 3 | 1.9 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 5.3 | 6.4 |
Accounts and Notes Receivable46
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Components Accounts and Notes Receivable, Net (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Current: | ||
Accounts receivable | $ 514 | $ 497.7 |
Notes receivable | 154.5 | 180.4 |
Allowance for doubtful accounts | (27.2) | (23.3) |
Current accounts and notes receivable, net | 641.3 | 654.8 |
Long-term: | ||
Notes receivable, net | 43.8 | 51.3 |
Total accounts and notes receivable, net | $ 685.1 | $ 706.1 |
Accounts and Notes Receivable47
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 685.1 | $ 706.1 |
Argentina | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 19 | |
Proceeds from collection of accounts and notes receivable, net | 11.4 | |
Mexico | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 36.4 | |
Proceeds from collection of accounts and notes receivable, net | $ 14.4 | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield (interest rate) | 3.25% | 3.25% |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield (interest rate) | 10.42% | 10.42% |
Notes receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 183.8 | $ 219 |
Percentage of total notes receivable over 90 days past due | 15.60% | 7.90% |
Accounts and Notes Receivable48
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Components of Notes Receivable, Net (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total accounts and notes receivable, net | $ 685.1 | $ 706.1 | ||
Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 198.6 | 232.2 | ||
Notes receivable allowance for doubtful accounts | (14.8) | (13.2) | $ (9.7) | $ (5.9) |
Total accounts and notes receivable, net | 183.8 | 219 | ||
Domestic | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 39.6 | 62.4 | ||
Notes receivable allowance for doubtful accounts | (2.3) | (2.6) | ||
International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 159 | 169.8 | ||
Notes receivable allowance for doubtful accounts | (12.5) | (10.6) | ||
Balances over 90 days past due | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 43.5 | 29.2 | ||
Notes receivable allowance for doubtful accounts over 90 days past due | (14.8) | (12) | ||
Notes receivable, net, balances over 90 days past due | 28.7 | 17.2 | ||
Balances over 90 days past due | Domestic | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 2 | 2.6 | ||
Notes receivable allowance for doubtful accounts over 90 days past due | (2.3) | (2.5) | ||
Balances over 90 days past due | International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 41.5 | 26.6 | ||
Notes receivable allowance for doubtful accounts over 90 days past due | $ (12.5) | $ (9.5) |
Accounts and Notes Receivable49
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Evaluation of Notes Receivable For Impairment (Details) - Notes receivable - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Notes receivable | $ 198.6 | $ 232.2 |
Ending Balance Individually Evaluated for Impairment | 95.4 | 122.5 |
Ending Balance Collectively Evaluated for Impairment | 103.2 | 109.7 |
Domestic | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Notes receivable | 39.6 | 62.4 |
Ending Balance Individually Evaluated for Impairment | 13.7 | 20.7 |
Ending Balance Collectively Evaluated for Impairment | 25.9 | 41.7 |
International | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Notes receivable | 159 | 169.8 |
Ending Balance Individually Evaluated for Impairment | 81.7 | 101.8 |
Ending Balance Collectively Evaluated for Impairment | $ 77.3 | $ 68 |
Accounts and Notes Receivable50
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Allowance for Doubtful Accounts Receivable (Details) - Notes receivable - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | $ 13.2 | $ 5.9 |
Charge-offs | (1.3) | (2.1) |
Recoveries | (0.2) | (0.5) |
Provision | 3.1 | 6.4 |
Ending balance | 14.8 | 9.7 |
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment [Roll Forward] | ||
Beginning balance | 12.9 | 5.9 |
Charge-offs | (1.3) | (2.1) |
Recoveries | (0.2) | (0.4) |
Provision | 3.1 | 5.2 |
Ending balance | 14.5 | 8.6 |
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment [Roll Forward] | ||
Beginning balance | 0.3 | 0 |
Charge-offs | 0 | 0 |
Recoveries | 0 | (0.1) |
Provision | 0 | 1.2 |
Ending balance | $ 0.3 | $ 1.1 |
Accounts and Notes Receivable51
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Notes Receivable Concentration Risk (Details) - Geographic concentration risk - Notes receivable | 6 Months Ended |
Jun. 30, 2016 | |
Mexico | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 26.00% |
Peru | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 17.00% |
Columbia | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 6.00% |
Argentina | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 9.00% |
Other (less than 5% individually) | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 22.00% |
Concentration risk, individual percentage | 0.05 |
Total international notes receivable as a percentage of total notes receivable | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 80.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Parts and work-in-process | $ 128.6 | $ 118.3 | |
Finished goods | 120.4 | 130.2 | |
Total inventories | $ 249 | $ 248.5 | |
Bally Technologies Inc. | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairment charge | $ 7.1 |
Property and Equipment, net - P
Property and Equipment, net - Property and Equipment, net (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (899.9) | $ (846.8) |
Property and equipment, net | 695.5 | 794 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 38.4 | 38.5 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 184.7 | 185.2 |
Gaming and lottery machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,048.5 | 1,084.6 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 31.4 | 36 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 27.9 | 25.5 |
Other property and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 264.5 | $ 271 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 86.8 | $ 93.9 | $ 167.4 | $ 176.3 | |
Manufacturing Facility | |||||
Property, Plant and Equipment [Line Items] | |||||
Asset impairment charge | $ 4.9 | ||||
Historical cost of assets disposed of | Gaming equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, disposals | 90.2 | ||||
Historical cost of assets disposed of | Lottery machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, disposals | $ 3.1 | ||||
Gaming | Historical cost of assets disposed of | Gaming equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 59.9 | $ 59.9 | |||
Bally Technologies Inc. | |||||
Property, Plant and Equipment [Line Items] | |||||
Asset impairment charge | 7.1 | ||||
Bally Technologies Inc. | Gaming equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Asset impairment charge | $ 5.2 |
Intangible Assets, net and Go55
Intangible Assets, net and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | $ 2,270 | $ 2,183.5 |
Amortizable intangible assets, accumulated amortization | (472.7) | (358.8) |
Amortizable intangible assets, net balance | 1,797.3 | 1,824.7 |
Non-amortizable intangible assets: | ||
Total intangible assets, gross carrying amount | 2,366.7 | 2,280.9 |
Total intangible assets, accumulated amortization (excluding goodwill) | (474.8) | (360.9) |
Total intangible assets, net | 1,891.9 | 1,920 |
Trade names | ||
Non-amortizable intangible assets: | ||
Non-amortizable intangible assets, Gross Carrying Amount | 96.7 | 97.4 |
Non-amortizable intangible assets, Accumulated Amortization | (2.1) | (2.1) |
Non-amortizable intangible assets, Net Balance | 94.6 | 95.3 |
Patents | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 26.3 | 26.8 |
Amortizable intangible assets, accumulated amortization | (13.1) | (12.5) |
Amortizable intangible assets, net balance | 13.2 | 14.3 |
Customer relationships | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 877.7 | 877.7 |
Amortizable intangible assets, accumulated amortization | (136.8) | (109.1) |
Amortizable intangible assets, net balance | 740.9 | 768.6 |
Licenses | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 412.5 | 326.1 |
Amortizable intangible assets, accumulated amortization | (121.8) | (91.6) |
Amortizable intangible assets, net balance | 290.7 | 234.5 |
Intellectual property | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 731.5 | 731.1 |
Amortizable intangible assets, accumulated amortization | (170.3) | (124.5) |
Amortizable intangible assets, net balance | 561.2 | 606.6 |
Intellectual property | In Process Research and Development | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 33 | 33 |
Trade names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 97.4 | 97.5 |
Amortizable intangible assets, accumulated amortization | (4.9) | (1.9) |
Amortizable intangible assets, net balance | 92.5 | 95.6 |
Brand names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 124.4 | 124 |
Amortizable intangible assets, accumulated amortization | (25.6) | (18.9) |
Amortizable intangible assets, net balance | 98.8 | 105.1 |
Non-compete agreements | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 0.2 | 0.3 |
Amortizable intangible assets, accumulated amortization | (0.2) | (0.3) |
Amortizable intangible assets, net balance | $ 0 | $ 0 |
Intangible Assets, net and Go56
Intangible Assets, net and Goodwill - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible amortization expense | $ 62,300,000 | $ 87,200,000 | $ 127,900,000 | $ 150,300,000 |
Licenses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Minimum aggregate guarantee | 88,000,000 | 88,000,000 | ||
Minimum aggregate guarantee, due in one year | 8,800,000 | 8,800,000 | ||
Minimum aggregate guarantee, noncurrent | $ 74,600,000 | 74,600,000 | ||
Trade names | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Asset impairment charge | $ 0 | $ 25,000,000 |
Intangible Assets, net and Go57
Intangible Assets, net and Goodwill - Reconciliation of the Carrying Amount of Goodwill (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | $ 3,013.7 |
Foreign currency adjustments | (21.2) |
Balance at the end of the period | 2,992.5 |
Interactive | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 2,486 |
Foreign currency adjustments | (23) |
Balance at the end of the period | 2,463 |
Lottery | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 417.9 |
Foreign currency adjustments | 1.8 |
Balance at the end of the period | 419.7 |
Interactive | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 109.8 |
Foreign currency adjustments | 0 |
Balance at the end of the period | $ 109.8 |
Software, net (Details)
Software, net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Capitalized Computer Software, Net [Abstract] | |||||
Software | $ 894.8 | $ 894.8 | $ 854.2 | ||
Accumulated amortization | (451.6) | (451.6) | (368.3) | ||
Software, net | 443.2 | 443.2 | $ 485.9 | ||
Amortization expense | $ 44 | $ 41.1 | $ 78.4 | $ 79.8 |
Equity Investments (Details)
Equity Investments (Details) € in Millions, $ in Millions | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2016EUR (€) | Jun. 30, 2015USD ($) | Jun. 30, 2015EUR (€) | |
Schedule of Equity Method Investments [Line Items] | ||||
Distributed earnings from equity investments | $ 16.3 | $ 19.9 | ||
ITL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Distribution of capital received | 3.1 | € 2.8 | 6.5 | € 5.8 |
RCN | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Distributed earnings from equity investments | 1.4 | 1.8 | ||
LNS | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Distribution of capital received | 19.4 | 17.6 | 16.8 | 15 |
Distributed earnings from equity investments | $ 14.9 | € 13.5 | $ 14.5 | € 12.9 |
Long-Term and Other Debt - Sche
Long-Term and Other Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument | ||
Principal | $ 8,296.3 | $ 8,404.7 |
Unamortized debt discount | (23.7) | (26.3) |
Unamortized deferred financing costs | (155.3) | (171.4) |
Total long-term debt outstanding | 8,117.3 | 8,207 |
Less: current portion of long-term debt | (49.7) | (50.3) |
Long-term debt, excluding current portion | 8,067.6 | 8,156.7 |
Term loan facility | Term Loan, varying interest rate, due 2020 | ||
Debt Instrument | ||
Principal | 2,242.5 | 2,254 |
Unamortized debt discount | (6.9) | (7.8) |
Unamortized deferred financing costs | (47) | (52.5) |
Total long-term debt outstanding | 2,188.6 | 2,193.7 |
Term loan facility | Term Loan, varying interest rate, due 2021 | ||
Debt Instrument | ||
Principal | 1,970 | 1,980 |
Unamortized debt discount | (15.2) | (16.7) |
Unamortized deferred financing costs | (44.8) | (49.2) |
Total long-term debt outstanding | 1,910 | 1,914.1 |
Senior subordinated notes | 2018 Notes | ||
Debt Instrument | ||
Principal | 250 | 250 |
Unamortized debt discount | 0 | 0 |
Unamortized deferred financing costs | (1.6) | (2) |
Total long-term debt outstanding | 248.4 | 248 |
Senior subordinated notes | 2020 Notes | ||
Debt Instrument | ||
Principal | 243.5 | 300 |
Unamortized debt discount | 0 | 0 |
Unamortized deferred financing costs | (2.6) | (3.6) |
Total long-term debt outstanding | 240.9 | 296.4 |
Senior subordinated notes | 2021 Notes | ||
Debt Instrument | ||
Principal | 340.6 | 350 |
Unamortized debt discount | (1.6) | (1.8) |
Unamortized deferred financing costs | (5.1) | (5.6) |
Total long-term debt outstanding | 333.9 | 342.6 |
Senior subordinated notes | Secured Notes | ||
Debt Instrument | ||
Principal | 950 | 950 |
Unamortized debt discount | 0 | 0 |
Unamortized deferred financing costs | (15.1) | (16.4) |
Total long-term debt outstanding | 934.9 | 933.6 |
Senior subordinated notes | Unsecured Notes | ||
Debt Instrument | ||
Principal | 2,200 | 2,200 |
Unamortized debt discount | 0 | 0 |
Unamortized deferred financing costs | (39.1) | (42.1) |
Total long-term debt outstanding | $ 2,160.9 | $ 2,157.9 |
Capital lease obligations | ||
Debt Instrument | ||
Capital lease interest rate | 3.90% | 3.90% |
Capital lease obligations | Capital lease obligations, payable monthly | ||
Debt Instrument | ||
Principal | $ 19.7 | $ 25.7 |
Unamortized debt discount | 0 | 0 |
Unamortized deferred financing costs | 0 | 0 |
Total long-term debt outstanding | 19.7 | 25.7 |
Revolving credit facility | Revolver, varying interest rate, due 2018 | ||
Debt Instrument | ||
Principal | 80 | 95 |
Unamortized debt discount | 0 | 0 |
Unamortized deferred financing costs | 0 | 0 |
Total long-term debt outstanding | $ 80 | $ 95 |
Long-Term and Other Debt - Addi
Long-Term and Other Debt - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Feb. 12, 2015 | Feb. 11, 2015 | Oct. 01, 2014 | Oct. 18, 2013 | |
Debt Instrument | |||||||||
Cash paid to retire debt | $ 39,900,000 | $ 0 | |||||||
Gain on early extinguishment of debt | $ 25,200,000 | $ 0 | 25,200,000 | $ 0 | |||||
Fair value of debt | 7,532,300,000 | 7,532,300,000 | $ 6,931,600,000 | ||||||
Senior secured credit facilities | |||||||||
Debt Instrument | |||||||||
Line of credit facility, maximum borrowing capacity | $ 2,600,000,000 | ||||||||
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 | $ 267,600,000 | ||||||||
Revolver, varying interest rate, due 2018 | Letter of credit | |||||||||
Debt Instrument | |||||||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | ||||||||
Term Loan, varying interest rate, due 2020 | Term loan facility | |||||||||
Debt Instrument | |||||||||
Line of credit facility, maximum borrowing capacity | 2,300,000,000 | ||||||||
B-2 Loan Facility | Revolving credit facility | |||||||||
Debt Instrument | |||||||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000,000 | ||||||||
2020 Notes | |||||||||
Debt Instrument | |||||||||
Principal amount of repurchased debt | 56,500,000 | 56,500,000 | |||||||
Cash paid to retire debt | 34,200,000 | ||||||||
2021 Notes | |||||||||
Debt Instrument | |||||||||
Principal amount of repurchased debt | 9,400,000 | $ 9,400,000 | |||||||
Cash paid to retire debt | 5,700,000 | ||||||||
Gain on early extinguishment of debt | 25,200,000 | ||||||||
Unamortized debt write off | $ 800,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Oct. 31, 2013 | Aug. 31, 2013 | |
Derivatives Fair Value | |||||||
Loss to be reclassified during next 12 months | $ 8,200,000 | $ 8,200,000 | |||||
Assets held for sale | 14,500,000 | 14,500,000 | $ 16,700,000 | ||||
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 | 4,600,000 | $ 5,600,000 | 3,600,000 | $ 800,000 | |||
Reclassification of loss recognized in other comprehensive income (loss), effective portion | 2,000,000 | 4,100,000 | |||||
Derivative liability fair value | 11,800,000 | 11,800,000 | 11,900,000 | ||||
Accrued Liabilities | Interest rate swap | |||||||
Derivatives Fair Value | |||||||
Derivative liability fair value | 8,200,000 | 8,200,000 | 7,900,000 | ||||
Other long-term liabilities | Interest rate swap | |||||||
Derivatives Fair Value | |||||||
Derivative liability fair value | $ 3,600,000 | $ 3,600,000 | $ 4,000,000 |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted during the period (in shares) | 1.2 | 1.2 | |||
Weighted average grant date fair value of options granted during the period (in dollars per share) | $ 4.81 | $ 4.81 | |||
Options outstanding (in shares) | 3 | 3 | |||
Options exercisable (in shares) | 0.9 | 0.9 | |||
Employee stock option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award expiration period | 10 years | ||||
Share-based compensation expense | $ 0.6 | $ 0.5 | $ 1.3 | $ 0.9 | |
Compensation cost not yet recognized | 10.2 | $ 10.2 | |||
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 expense | 5.4 | $ 6.3 | $ 11.2 | $ 11 | |
Compensation cost not yet recognized | $ 58 | $ 58 | |||
Compensation cost not yet recognized, period for recognition | 2 years | ||||
Weighted average grant date fair value (in USD per share) | $ 9.60 | $ 8.21 | $ 9.42 | ||
Restricted stock units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Changes in RSUs Outstanding (Details) - Restricted stock units - $ / shares shares in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | |
Number of Restricted Stock Units | |||
Unvested units at beginning of period (in shares) | 4.6 | 5.6 | 5.6 |
Granted units (in shares) | 1.4 | 0.2 | |
Vested units (in shares) | (0.6) | (0.8) | |
Canceled units (in shares) | (0.1) | (0.4) | |
Unvested units at end of period (in shares) | 5.3 | 4.6 | 5.3 |
Weighted Average Grant Date Fair Value | |||
Unvested units at beginning of period (in USD per share) | $ 13 | $ 13.05 | $ 13.05 |
Granted units (in USD per share) | 9.60 | 8.21 | 9.42 |
Vested units (in USD per share) | 12.51 | 12.46 | |
Canceled units (in USD per share) | 13.35 | 12.56 | |
Unvested units at end of period (in USD per share) | $ 12.16 | $ 13 | $ 12.16 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution | 35.00% | |||
Maximum annual contributions per employee (as percent) | 6.00% | |||
Contribution expense | $ 2.9 | $ 2.7 | $ 5.8 | $ 5.8 |
Net periodic cost | $ 0.4 | $ 0.4 | $ 0.7 | $ 0.9 |
United Kingdom Defined Benefit Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Period preceding retirement for measuring benefits | 2 years |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax [Line Items] | ||||
Effective tax rates | 27.50% | 39.00% | 21.20% | 40.40% |
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 | 39.00% |
Litigation - Additional Informa
Litigation - Additional Information (Details) COP in Billions | 1 Months Ended | 6 Months Ended | ||
May 31, 2013USD ($) | May 31, 2013COP | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | ||||
Loss contingency accrual | $ 9,000,000 | $ 16,400,000 | ||
Loss contingency liability, estimated range | 13,200,000 | |||
Ecosalud | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement, amount | $ 30,800,000 | COP 90 | ||
Statutory interest rate | 12.00% | 12.00% | ||
Oregon State Lottery Matter | ||||
Loss Contingencies [Line Items] | ||||
Minimum monetary damages sought by plaintiffs | 134,000,000 | |||
Bally Technologies Inc. | ||||
Loss Contingencies [Line Items] | ||||
Minimum comprehensive damages sought by plaintiffs | 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 Ca68
Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 313.6 | $ 294.6 |
Income taxes paid (received) | 6.6 | (4.1) |
Noncash contribution expense | $ 86.9 | $ 12.5 |
Financial Information for Gua69
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Balance Sheet (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||||
Cash and cash equivalents | $ 101.4 | $ 128.7 | $ 129.1 | $ 171.8 |
Restricted cash | 24.5 | 20.2 | ||
Accounts receivable, net | 501.3 | 487.1 | ||
Notes receivable, net | 140 | 167.7 | ||
Inventories | 249 | 248.5 | ||
Prepaid expenses, deposits and other current assets | 120.9 | 123.3 | ||
Property and equipment, net | 695.5 | 794 | ||
Investment in subsidiaries | 0 | 0 | ||
Goodwill | 2,992.5 | 3,013.7 | ||
Intangible assets, net | 1,891.9 | 1,920 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 443.2 | 485.9 | ||
Other assets | 304.9 | 343.1 | ||
Total assets | 7,465.1 | 7,732.2 | ||
Liabilities and stockholders' (deficit) equity | ||||
Current portion of long-term debt | 49.7 | 50.3 | ||
Other current liabilities | 595.7 | 603.6 | ||
Long-term debt, excluding current portion | 8,067.6 | 8,156.7 | ||
Other long-term liabilities | 419 | 417.1 | ||
Intercompany balances | 0 | 0 | ||
Stockholders' (deficit) equity | (1,666.9) | (1,495.5) | ||
Total liabilities and stockholders' (deficit) equity | 7,465.1 | 7,732.2 | ||
Reportable Legal Entities | Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 32.4 | 43.2 | 41.9 | 37.9 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Notes receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Prepaid expenses, deposits and other current assets | 31.6 | 26.8 | ||
Property and equipment, net | 11.9 | 8.2 | ||
Investment in subsidiaries | 3,202.2 | 3,280.9 | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 207.1 | 138.3 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 52.4 | 35.6 | ||
Other assets | 291 | 232.5 | ||
Total assets | 3,828.6 | 3,765.5 | ||
Liabilities and stockholders' (deficit) equity | ||||
Current portion of long-term debt | 0 | 0 | ||
Other current liabilities | 74.3 | 63.7 | ||
Long-term debt, excluding current portion | 248.4 | 248 | ||
Other long-term liabilities | 179.2 | 119.1 | ||
Intercompany balances | 4,993.6 | 4,830.2 | ||
Stockholders' (deficit) equity | (1,666.9) | (1,495.5) | ||
Total liabilities and stockholders' (deficit) equity | 3,828.6 | 3,765.5 | ||
Reportable Legal Entities | SGI | ||||
Assets | ||||
Cash and cash equivalents | 0.5 | 0 | 1.4 | 0.1 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 98 | 94.6 | ||
Notes receivable, net | 0 | 0 | ||
Inventories | 35.8 | 36.9 | ||
Prepaid expenses, deposits and other current assets | 14.1 | 7 | ||
Property and equipment, net | 101.4 | 106.4 | ||
Investment in subsidiaries | 851.8 | 838.1 | ||
Goodwill | 188.3 | 186 | ||
Intangible assets, net | 38.7 | 39.8 | ||
Intercompany balances | 6,531.8 | 6,511.1 | ||
Software, net | 25.4 | 32.7 | ||
Other assets | 119.3 | 123.4 | ||
Total assets | 8,005.1 | 7,976 | ||
Liabilities and stockholders' (deficit) equity | ||||
Current portion of long-term debt | 43 | 43 | ||
Other current liabilities | 153.2 | 150.5 | ||
Long-term debt, excluding current portion | 7,806.2 | 7,890.3 | ||
Other long-term liabilities | 14.2 | 14.5 | ||
Intercompany balances | 0 | 0 | ||
Stockholders' (deficit) equity | (11.5) | (122.3) | ||
Total liabilities and stockholders' (deficit) equity | 8,005.1 | 7,976 | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 0 | 4.7 | 15.8 | 28.8 |
Restricted cash | 24.4 | 20 | ||
Accounts receivable, net | 226.5 | 233.6 | ||
Notes receivable, net | 91.2 | 114.2 | ||
Inventories | 89.4 | 104.2 | ||
Prepaid expenses, deposits and other current assets | 35.1 | 52.1 | ||
Property and equipment, net | 430.4 | 502.2 | ||
Investment in subsidiaries | 796.8 | 648.3 | ||
Goodwill | 1,988.2 | 1,990.5 | ||
Intangible assets, net | 1,423.6 | 1,505.8 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 316.3 | 359.8 | ||
Other assets | 44.7 | 51.7 | ||
Total assets | 5,466.6 | 5,587.1 | ||
Liabilities and stockholders' (deficit) equity | ||||
Current portion of long-term debt | 0 | 0 | ||
Other current liabilities | 208.4 | 245.4 | ||
Long-term debt, excluding current portion | 0 | 0 | ||
Other long-term liabilities | 498.8 | 502.1 | ||
Intercompany balances | 1,503.7 | 1,558.2 | ||
Stockholders' (deficit) equity | 3,255.7 | 3,281.4 | ||
Total liabilities and stockholders' (deficit) equity | 5,466.6 | 5,587.1 | ||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 68.5 | 80.8 | 70 | 105 |
Restricted cash | 0.1 | 0.2 | ||
Accounts receivable, net | 176.8 | 158.9 | ||
Notes receivable, net | 48.8 | 53.5 | ||
Inventories | 136.2 | 119.6 | ||
Prepaid expenses, deposits and other current assets | 40.1 | 37.4 | ||
Property and equipment, net | 166.3 | 188.7 | ||
Investment in subsidiaries | 0 | 0 | ||
Goodwill | 816 | 837.2 | ||
Intangible assets, net | 222.5 | 236.1 | ||
Intercompany balances | 0 | 0 | ||
Software, net | 49.1 | 57.8 | ||
Other assets | 214.6 | 241.7 | ||
Total assets | 1,939 | 2,011.9 | ||
Liabilities and stockholders' (deficit) equity | ||||
Current portion of long-term debt | 6.7 | 7.3 | ||
Other current liabilities | 159.8 | 144 | ||
Long-term debt, excluding current portion | 13 | 18.4 | ||
Other long-term liabilities | 91.5 | 87.7 | ||
Intercompany balances | 34.5 | 122.6 | ||
Stockholders' (deficit) equity | 1,633.5 | 1,631.9 | ||
Total liabilities and stockholders' (deficit) equity | 1,939 | 2,011.9 | ||
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 | (12.4) | (12.2) | ||
Prepaid expenses, deposits and other current assets | 0 | 0 | ||
Property and equipment, net | (14.5) | (11.5) | ||
Investment in subsidiaries | (4,850.8) | (4,767.3) | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Intercompany balances | (6,531.8) | (6,511.1) | ||
Software, net | 0 | 0 | ||
Other assets | (364.7) | (306.2) | ||
Total assets | (11,774.2) | (11,608.3) | ||
Liabilities and stockholders' (deficit) equity | ||||
Current portion of long-term debt | 0 | 0 | ||
Other current liabilities | 0 | 0 | ||
Long-term debt, excluding current portion | 0 | 0 | ||
Other long-term liabilities | (364.7) | (306.3) | ||
Intercompany balances | (6,531.8) | (6,511) | ||
Stockholders' (deficit) equity | (4,877.7) | (4,791) | ||
Total liabilities and stockholders' (deficit) equity | $ (11,774.2) | $ (11,608.3) |
Financial Information for Gua70
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Statement of Operations and Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Condensed Financial Statements | ||||
Revenue | $ 729.2 | $ 691.5 | $ 1,411.2 | $ 1,350.2 |
Cost of services, cost of product sales and cost of instant games | 276.2 | 275.3 | 532.5 | 530.7 |
Selling, general and administrative | 144.9 | 140.9 | 287.2 | 286.8 |
Research and development | 51.7 | 48 | 101.5 | 94.9 |
Employee termination and restructuring | 4.2 | 5.2 | 6.9 | 13.4 |
Depreciation and amortization | 193.1 | 222.2 | 373.7 | 406.4 |
Operating (loss) income | 59.1 | (0.1) | 109.4 | 18 |
Interest expense | (165.3) | (166.4) | (331) | (330.7) |
Gain on early extinguishment of debt | 25.2 | 0 | 25.2 | 0 |
Other (expense) income, net | 9.7 | (1) | 13.6 | (3.5) |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | (71.3) | (167.5) | (182.8) | (316.2) |
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | 0 |
Income tax benefit (expense) | 19.6 | 65.3 | 38.8 | 127.6 |
Net (loss) income | (51.7) | (102.2) | (144) | (188.6) |
Other comprehensive (loss) income | (30.2) | 23.1 | (32.6) | (87.1) |
Comprehensive (loss) income | (81.9) | (79.1) | (176.6) | (275.7) |
Reportable Legal Entities | Parent Company | ||||
Condensed Financial Statements | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of services, cost of product sales and cost of instant games | 0 | 0 | 0 | 0 |
Selling, general and administrative | 36.9 | 16.7 | 61 | 31.6 |
Research and development | 1.9 | 0 | 2.8 | 0 |
Employee termination and restructuring | 0.1 | 1.4 | 0.1 | 3.2 |
Depreciation and amortization | 13 | 8.1 | 25.8 | 16 |
Operating (loss) income | (51.9) | (26.2) | (89.7) | (50.8) |
Interest expense | 0 | (5.3) | (0.1) | (3.9) |
Gain on early extinguishment of debt | 0 | |||
Other (expense) income, net | (24.7) | 6.2 | (50.3) | 18 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | (76.6) | (25.3) | (140.1) | (36.7) |
Equity in (loss) income of subsidiaries | 0 | (143) | (51) | (281.3) |
Income tax benefit (expense) | 24.9 | 66.1 | 47.1 | 129.4 |
Net (loss) income | (51.7) | (102.2) | (144) | (188.6) |
Other comprehensive (loss) income | (30.2) | 23.1 | (32.6) | (87.1) |
Comprehensive (loss) income | (81.9) | (79.1) | (176.6) | (275.7) |
Reportable Legal Entities | SGI | ||||
Condensed Financial Statements | ||||
Revenue | 126.4 | 106.4 | 241.7 | 217.6 |
Cost of services, cost of product sales and cost of instant games | 86.1 | 79 | 169 | 160.3 |
Selling, general and administrative | 11.7 | 18.4 | 22.9 | 34.6 |
Research and development | 2.3 | 1.4 | 4.6 | 2.8 |
Employee termination and restructuring | (0.1) | 0.7 | 0 | 0.9 |
Depreciation and amortization | 10.3 | 9.8 | 21.1 | 19.6 |
Operating (loss) income | 16.1 | (2.9) | 24.1 | (0.6) |
Interest expense | (35.1) | (83.1) | (69.9) | (119.3) |
Gain on early extinguishment of debt | 25.2 | 25.2 | ||
Other (expense) income, net | 52.5 | 18.3 | 102.8 | 35.9 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | 58.7 | (67.7) | 82.2 | (84) |
Equity in (loss) income of subsidiaries | 11.3 | 22.7 | 30.2 | 29.3 |
Income tax benefit (expense) | 0 | (0.1) | 0 | (0.1) |
Net (loss) income | 70 | (45.1) | 112.4 | (54.8) |
Other comprehensive (loss) income | 3.2 | 3.3 | 3 | (9.8) |
Comprehensive (loss) income | 73.2 | (41.8) | 115.4 | (64.6) |
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Condensed Financial Statements | ||||
Revenue | 408.6 | 430.6 | 816.5 | 862.9 |
Cost of services, cost of product sales and cost of instant games | 108.8 | 139.5 | 219.8 | 284.8 |
Selling, general and administrative | 51.7 | 70.8 | 119.4 | 145.1 |
Research and development | 39.1 | 39.3 | 78.4 | 77.1 |
Employee termination and restructuring | 3.3 | 2.4 | 4.1 | 6.9 |
Depreciation and amortization | 141.1 | 170.8 | 267.9 | 299.6 |
Operating (loss) income | 64.6 | 7.8 | 126.9 | 49.4 |
Interest expense | (130.1) | (77.9) | (260.9) | (207.3) |
Gain on early extinguishment of debt | 0 | 0 | ||
Other (expense) income, net | (24.2) | (29) | (47.3) | (68.8) |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | (89.7) | (99.1) | (181.3) | (226.7) |
Equity in (loss) income of subsidiaries | 9.3 | 9.5 | 16.2 | 3.3 |
Income tax benefit (expense) | 0 | 2.9 | 0 | 2.9 |
Net (loss) income | (80.4) | (86.7) | (165.1) | (220.5) |
Other comprehensive (loss) income | (8.1) | (25.4) | (6.2) | (8.5) |
Comprehensive (loss) income | (88.5) | (112.1) | (171.3) | (229) |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
Condensed Financial Statements | ||||
Revenue | 265.5 | 261.5 | 483.4 | 470.3 |
Cost of services, cost of product sales and cost of instant games | 152.6 | 163.8 | 274.1 | 286.2 |
Selling, general and administrative | 44.6 | 35 | 83.9 | 75.5 |
Research and development | 8.4 | 7.3 | 15.7 | 15 |
Employee termination and restructuring | 0.9 | 0.7 | 2.7 | 2.4 |
Depreciation and amortization | 28.7 | 33.5 | 58.9 | 71.2 |
Operating (loss) income | 30.3 | 21.2 | 48.1 | 20 |
Interest expense | (0.1) | (0.1) | (0.1) | (0.2) |
Gain on early extinguishment of debt | 0 | |||
Other (expense) income, net | 6.1 | 3.5 | 8.4 | 11.4 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | 36.3 | 24.6 | 56.4 | 31.2 |
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | 0 |
Income tax benefit (expense) | (5.3) | (3.6) | (8.3) | (4.6) |
Net (loss) income | 31 | 21 | 48.1 | 26.6 |
Other comprehensive (loss) income | (33.4) | 42.4 | (30.7) | (77.2) |
Comprehensive (loss) income | (2.4) | 63.4 | 17.4 | (50.6) |
Eliminating Entries | ||||
Condensed Financial Statements | ||||
Revenue | (71.3) | (107) | (130.4) | (200.6) |
Cost of services, cost of product sales and cost of instant games | (71.3) | (107) | (130.4) | (200.6) |
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 |
Operating (loss) income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Gain on early extinguishment of debt | 0 | |||
Other (expense) income, net | 0 | 0 | 0 | 0 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | 0 | 0 | 0 | 0 |
Equity in (loss) income of subsidiaries | (20.6) | 110.8 | 4.6 | 248.7 |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Net (loss) income | (20.6) | 110.8 | 4.6 | 248.7 |
Other comprehensive (loss) income | 38.3 | (20.3) | 33.9 | 95.5 |
Comprehensive (loss) income | $ 17.7 | $ 90.5 | $ 38.5 | $ 344.2 |
Financial Information for Gua71
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Statement of Cash Flows (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | $ 191.9 | $ 114.4 |
Cash flows from investing activities: | ||
Capital expenditures | (132.6) | (142.8) |
Distributions of capital on equity investments | 22.5 | 35.2 |
Restricted cash | (3.8) | 1 |
Changes in other assets and liabilities and other | 6.1 | 9.5 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (107.8) | (98.1) |
Cash flows from financing activities: | ||
Net payments of long-term debt including repurchases of notes | (80.1) | (36.2) |
Payments on license obligations | (25) | (18.7) |
Contingent earnout payments | 0 | (0.5) |
Issuance (redemptions) of common stock under stock-based compensation plans | (4.4) | 0.9 |
Other, principally change in intercompany financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | (109.5) | (54.5) |
Effect of exchange rate changes on cash and cash equivalents | (1.9) | (4.5) |
Increase (decrease) in cash and cash equivalents | (27.3) | (42.7) |
Cash and cash equivalents, beginning of period | 128.7 | 171.8 |
Cash and cash equivalents, end of period | 101.4 | 129.1 |
Parent Company | ||
Cash flows from financing activities: | ||
Issuance (redemptions) of common stock under stock-based compensation plans | (4.4) | |
SGI | ||
Cash flows from financing activities: | ||
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
Guarantor Subsidiaries | ||
Cash flows from financing activities: | ||
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
Non-Guarantor Subsidiaries | ||
Cash flows from financing activities: | ||
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
Reportable Legal Entities | Parent Company | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | (109.5) | (33.1) |
Cash flows from investing activities: | ||
Capital expenditures | (26.7) | (8.6) |
Distributions of capital on equity investments | 0 | 0 |
Restricted cash | 0 | |
Changes in other assets and liabilities and other | 0.3 | 0 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (26.4) | (8.6) |
Cash flows from financing activities: | ||
Net payments of long-term debt including repurchases of notes | 0 | 0 |
Payments on license obligations | (15.1) | (13.5) |
Contingent earnout payments | 0 | |
Issuance (redemptions) of common stock under stock-based compensation plans | 0.9 | |
Other, principally change in intercompany financing activities | 144.6 | 58.2 |
Net cash provided by (used in) financing activities | 125.1 | 45.6 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0.1 |
Increase (decrease) in cash and cash equivalents | (10.8) | 4 |
Cash and cash equivalents, beginning of period | 43.2 | 37.9 |
Cash and cash equivalents, end of period | 32.4 | 41.9 |
Reportable Legal Entities | SGI | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 122.1 | (69.4) |
Cash flows from investing activities: | ||
Capital expenditures | (5.2) | (12.4) |
Distributions of capital on equity investments | 0 | 0.8 |
Restricted cash | 0 | |
Changes in other assets and liabilities and other | 0 | 0 |
Other, principally intercompany balances | (39.9) | 114.2 |
Net cash used in investing activities | (45.1) | 102.6 |
Cash flows from financing activities: | ||
Net payments of long-term debt including repurchases of notes | (76.5) | (31.5) |
Payments on license obligations | 0 | 0 |
Contingent earnout payments | 0 | |
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
Other, principally change in intercompany financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | (76.5) | (31.5) |
Effect of exchange rate changes on cash and cash equivalents | 0 | (0.4) |
Increase (decrease) in cash and cash equivalents | 0.5 | 1.3 |
Cash and cash equivalents, beginning of period | 0 | 0.1 |
Cash and cash equivalents, end of period | 0.5 | 1.4 |
Reportable Legal Entities | Guarantor Subsidiaries | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 104.8 | 127.7 |
Cash flows from investing activities: | ||
Capital expenditures | (77.3) | (95.6) |
Distributions of capital on equity investments | 0 | 0 |
Restricted cash | (3.8) | |
Changes in other assets and liabilities and other | 8 | 4 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (73.1) | (91.6) |
Cash flows from financing activities: | ||
Net payments of long-term debt including repurchases of notes | 0 | 0 |
Payments on license obligations | (9.9) | (5.2) |
Contingent earnout payments | (0.5) | |
Issuance (redemptions) of common stock under stock-based compensation plans | (29.6) | |
Other, principally change in intercompany financing activities | (25.9) | (12) |
Net cash provided by (used in) financing activities | (35.8) | (47.3) |
Effect of exchange rate changes on cash and cash equivalents | (0.6) | (1.8) |
Increase (decrease) in cash and cash equivalents | (4.7) | (13) |
Cash and cash equivalents, beginning of period | 4.7 | 28.8 |
Cash and cash equivalents, end of period | 0 | 15.8 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 74.5 | 89.2 |
Cash flows from investing activities: | ||
Capital expenditures | (23.4) | (26.2) |
Distributions of capital on equity investments | 22.5 | 34.4 |
Restricted cash | 0 | |
Changes in other assets and liabilities and other | (2.2) | 5.5 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (3.1) | 13.7 |
Cash flows from financing activities: | ||
Net payments of long-term debt including repurchases of notes | (3.6) | (4.7) |
Payments on license obligations | 0 | 0 |
Contingent earnout payments | 0 | |
Issuance (redemptions) of common stock under stock-based compensation plans | (116) | |
Other, principally change in intercompany financing activities | (78.8) | (14.8) |
Net cash provided by (used in) financing activities | (82.4) | (135.5) |
Effect of exchange rate changes on cash and cash equivalents | (1.3) | (2.4) |
Increase (decrease) in cash and cash equivalents | (12.3) | (35) |
Cash and cash equivalents, beginning of period | 80.8 | 105 |
Cash and cash equivalents, end of period | 68.5 | 70 |
Eliminating Entries | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Distributions of capital on equity investments | 0 | 0 |
Restricted cash | 0 | |
Changes in other assets and liabilities and other | 0 | 0 |
Other, principally intercompany balances | 39.9 | (114.2) |
Net cash used in investing activities | 39.9 | (114.2) |
Cash flows from financing activities: | ||
Net payments of long-term debt including repurchases of notes | 0 | 0 |
Payments on license obligations | 0 | 0 |
Contingent earnout payments | 0 | |
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | 145.6 |
Other, principally change in intercompany financing activities | (39.9) | (31.4) |
Net cash provided by (used in) financing activities | (39.9) | 114.2 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | $ 0 | $ 0 |