Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 26, 2017 | |
Entity Information [Line Items] | ||
Entity Registrant Name | SCIENTIFIC GAMES CORP | |
Entity Central Index Key | 750,004 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 88,796,673 | |
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 ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenue: | |||
Services | $ 362.5 | $ 350.3 | |
Product sales | 222.7 | 197.6 | |
Instant games | 140.2 | 134.1 | |
Total revenue | 725.4 | 682 | |
Operating expenses: | |||
Cost of services | [1] | 103.3 | 94.9 |
Cost of product sales | [1] | 106.6 | 94.4 |
Cost of instant games | [1] | 70.1 | 67 |
Selling, general and administrative | 140.7 | 142.3 | |
Research and development | 42.4 | 49.8 | |
Depreciation, amortization and impairments | 165.1 | 180.6 | |
Restructuring and other | 9.2 | 2.7 | |
Operating (loss) income | 88 | 50.3 | |
Other (expense) income: | |||
Interest expense | (159.4) | (165.7) | |
Earnings from equity investments | 9.5 | 3.2 | |
Loss on extinguishment and modification of debt | (29.7) | 0 | |
Other income (expense), net | 7.5 | 0.7 | |
Total other expense, net | (172.1) | (161.8) | |
Net loss before income taxes | (84.1) | (111.5) | |
Income tax (expense) benefit | (16.7) | 19.2 | |
Net (loss) income | (100.8) | (92.3) | |
Other comprehensive income (loss): | |||
Foreign currency translation gain (loss) | 33.6 | (1.6) | |
Pension and post-retirement (loss) gain, net of tax | (0.3) | 0.2 | |
Derivative financial instruments unrealized gain (loss), net of tax | 2.8 | (1) | |
Other comprehensive income (loss) | 36.1 | (2.4) | |
Comprehensive (loss) income | $ (64.7) | $ (94.7) | |
Basic and diluted net loss per share: | |||
Basic (in USD per share) | $ (1.14) | $ (1.07) | |
Diluted (in USD per share) | $ (1.14) | $ (1.07) | |
Weighted average number of shares used in per share calculations: | |||
Basic (in shares) | 88.2 | 86.6 | |
Diluted (in shares) | 88.2 | 86.6 | |
[1] | Exclusive of D&A. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 131.9 | $ 115.1 |
Restricted cash | 27.1 | 24.7 |
Accounts receivable, net | 463.5 | 495 |
Notes receivable, net | 131 | 125.4 |
Inventories | 253.5 | 242.3 |
Prepaid expenses, deposits and other current assets | 113.2 | 114.1 |
Total current assets | 1,120.2 | 1,116.6 |
Non-current assets: | ||
Restricted cash | 16.8 | 17.1 |
Notes receivable, net | 48.7 | 48.1 |
Property and equipment, net | 584.7 | 612.2 |
Goodwill | 2,906.1 | 2,888.4 |
Intangible assets, net | 1,761.9 | 1,768.3 |
Software, net | 395.5 | 409.1 |
Equity investments | 187 | 179.9 |
Other assets | 52.3 | 47.7 |
Total assets | 7,073.2 | 7,087.4 |
Current liabilities: | ||
Current portion of long-term debt | 39.3 | 49.3 |
Accounts payable | 182.9 | 188.9 |
Accrued liabilities | 463.3 | 454.2 |
Total current liabilities | 685.5 | 692.4 |
Deferred income taxes | 75.6 | 70.2 |
Other long-term liabilities | 238.9 | 235.6 |
Long-term debt, excluding current portion | 8,068.4 | 8,024.9 |
Total liabilities | 9,068.4 | 9,023.1 |
Commitments and contingencies (see Note 14) | ||
Stockholders' deficit: | ||
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 105.9 and 105.2 shares issued and 88.7 and 88.0 shares outstanding, respectively | 1 | 1 |
Additional paid-in capital | 796 | 790.8 |
Accumulated loss | (2,319.5) | (2,218.7) |
Treasury stock, at cost, 17.2 shares | (175.2) | (175.2) |
Accumulated other comprehensive loss | (297.5) | (333.6) |
Total stockholders' deficit | (1,995.2) | (1,935.7) |
Total liabilities and stockholders' (deficit) equity | $ 7,073.2 | $ 7,087.4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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) | 105,900,000 | 105,200,000 |
Class A common stock, shares outstanding (in shares) | 88,700,000 | 88,000,000 |
Treasury stock, at cost, shares held (in shares) | 17,200,000 | 17,200,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net cash provided by operating activities | $ 111 | $ 101.1 |
Cash flows from investing activities: | ||
Capital expenditures | (61.3) | (51.2) |
Acquisition of business, net of cash acquired | (21.5) | 0 |
Distributions of capital from equity investments | 1.3 | 1.5 |
Changes in other assets and liabilities and other | 2 | 1.5 |
Net cash used in investing activities | (79.5) | (48.2) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 125 | 95 |
Repayments under revolving credit facility | (170) | (110) |
Proceeds from issuance of senior notes and term loans | 1,762.4 | 0 |
Repayments of senior notes and term loans | (1,693.4) | 0 |
Payments of debt issuance and deferred financing costs | (27.2) | 0 |
Payments on long-term debt | (1.5) | (12.5) |
Payments on license obligations | (9.8) | (9.6) |
Net redemptions of common stock under stock-based compensation plans | (0.6) | 0 |
Net cash provided by (used in) financing activities | (15.1) | (37.1) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2.5 | 1.8 |
Increase (decrease) in cash, cash equivalents and restricted cash | 18.9 | 17.6 |
Cash, cash equivalents and restricted cash, beginning of period | 156.9 | 166.8 |
Cash, cash equivalents and restricted cash, end of period | 175.8 | 184.4 |
Supplemental cash flow information: | ||
Cash paid for interest | 113.5 | 122.3 |
Income taxes paid | 5.7 | 2.7 |
Non-cash investing and financing transactions: | ||
Non-cash rollover of Term loans (see Note 10) | 2,747.6 | 0 |
Non-cash additions to intangible assets related to license agreements | $ 28.1 | $ 86.9 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
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, lottery systems, lottery content and services, interactive gaming and social casino solutions, as well as other products and services. We report our operations in three business segments—Gaming, Lottery and Interactive. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The accompanying condensed consolidated financial statements include the accounts of SGC 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 condensed 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 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2016 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 within the Notes of our 2016 10-K. Acquisitions During the third quarter of 2016, we entered into a definitive agreement to acquire all of the issued and outstanding common shares of DEQ Systems Corp. (DEQ) for $22.0 million in cash consideration transferred. The transaction closed on January 18, 2017. Substantially all of the purchase price was allocated to acquired intellectual property. Refer to Subsequent Events Note 15. Revenue The following table summarizes our revenues by type within each of our business segments: Three Months Ended March 31, 2017 2016 Gaming Gaming operations $ 172.4 $ 184.4 Gaming machine sales 156.2 134.5 Gaming systems 61.5 59.7 Table products 49.9 43.1 Total $ 440.0 $ 421.7 Lottery Instant products $ 141.7 $ 137.3 Lottery systems 47.4 50.4 Total $ 189.1 $ 187.7 Interactive Social Gaming - B2C $ 80.2 $ 60.2 Other 16.1 12.4 Total $ 96.3 $ 72.6 Deferred Revenue The following table summarizes the deferred revenue activity for the reporting period: Three Months Ended March 31, 2017 2016 Deferred revenue balance, beginning of period $ 67.4 $ 57.8 New deferrals 45.8 92.9 Amounts recognized in revenue (51.8 ) (85.5 ) Deferred revenue balance, end of period $ 61.4 $ 65.2 Computation of Basic and Diluted Net Loss Per Share 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 1.8 million of stock options from the diluted weighted-average common shares outstanding for the three-month periods ended March 31, 2017 and 2016, respectively, and 5.0 million and 4.6 million of RSUs from the calculation of diluted weighted-average common shares outstanding for the three-month periods ended March 31, 2017 and 2016, respectively. New Accounting Guidance - Recently Adopted 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, 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. We adopted the guidance at the beginning of first quarter 2017. The adoption of this guidance did not result in a net cumulative-effect adjustment to accumulated loss, as the previously unrecognized excess tax benefit of $10.1 million was fully offset by an increase in the valuation allowance as of December 31, 2016. The excess tax benefit recognized in our provision for income taxes for the three months ended March 31, 2017 was immaterial. In addition, we elected to continue to account for forfeitures by estimating the expected forfeitures over the course of a vesting period. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the guidance retrospectively at the beginning of first quarter 2017. The adoption of this guidance resulted in increases to the cash, cash equivalents and restricted cash beginning-of-period and end-of period line item totaling $38.1 million and $38.7 million , respectively, which now includes restricted cash, and a $0.6 million decrease in net cash used in investing activities for the three months ended March 31, 2016. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. We adopted this guidance prospectively at the beginning of first quarter 2017, which will simplify our future goodwill impairment testing. New Accounting Guidance - Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . ASU 2014-09 combined with all subsequent amendments (collectively ASC 606) provides guidance outlining a single comprehensive revenue model in accounting for revenue from contracts with customers. ASC 606 supersedes existing revenue recognition guidance, including industry-specific guidance, and replaces it with a five-step revenue model with a core principle 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." This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. We will adopt this guidance at the beginning of the first quarter of 2018, using a modified retrospective application approach. Refer to Note 1 of our 2016 10-K for our current assessment of the anticipated impact of adopting this guidance on revenue recognition for each of our business segments. 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 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 Sheet. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This guidance 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 June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) . The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The new guidance will be effective for us beginning January 1, 2020, with early adoption permitted beginning January 1, 2018. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact and timing of adopting this guidance. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The new guidance clarifies the definition of a business in order to allow for the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early 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 | 3 Months Ended |
Mar. 31, 2017 | |
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. A detailed discussion regarding the products and services from which each reportable business segment derives its revenue is included in Notes 2 and 3 in our 2016 10-K. 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 within the Notes in our 2016 10-K. The following tables present our segment information: Three Months Ended March 31, 2017 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 440.0 $ 189.1 $ 96.3 $ — $ 725.4 Depreciation, amortization and impairments 123.3 13.9 4.0 23.9 165.1 Restructuring and other 4.2 0.3 0.8 3.9 9.2 Operating income (loss) 77.5 56.1 17.2 (62.8 ) 88.0 Interest expense (159.4 ) Earnings from equity investments 9.5 Loss on extinguishment and modification of debt (29.7 ) Other income (expense), net 7.5 Net loss before income taxes $ (84.1 ) (1) Includes corporate amounts not allocated to the business segments. Three Months Ended March 31, 2016 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 421.7 $ 187.7 $ 72.6 $ — $ 682.0 Depreciation, amortization and impairments 141.6 17.8 3.7 17.5 180.6 Restructuring and other 1.6 1.1 — — 2.7 Operating income (loss) 43.4 48.0 11.5 (52.6 ) 50.3 Interest expense (165.7 ) Earnings from equity investments 3.2 Other income (expense), net 0.7 Net loss before income taxes $ (111.5 ) (1) Includes corporate amounts not allocated to the business segments. |
Restructuring and other
Restructuring and other | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and other | Restructuring and other Restructuring and other includes charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; and (v) acquisition costs and other unusual items. The following table summarizes pre-tax restructuring and other costs for the periods presented: Three Months Ended March 31, 2017 2016 Employee severance (1) $ 2.7 $ 2.3 Acquisitions and related costs 3.4 — Restructuring, integration and other 3.1 0.4 Total $ 9.2 $ 2.7 (1) Inclusive of employee severance and termination costs associated with restructuring activities. On November 3, 2016, we announced that we began implementing a new business improvement initiative, which we expect will streamline our organization, increase our efficiencies, and significantly reduce our operating costs once the initiative is fully implemented. These cost savings are expected to be achieved across all our divisions and will encompass a combination of headcount reductions, facilities streamlining and reduction in other operating costs. The following table presents a summary of restructuring charges and the changes in the restructuring accrual during 2017: Restructuring Accrual Balance as of January 1, 2017 $ 16.4 Accrual additions 2.2 Cash payments (12.6 ) Balance as of March 31, 2017 $ 6.0 |
Accounts and Notes Receivable a
Accounts and Notes Receivable and Credit Quality of Notes Receivable | 3 Months Ended |
Mar. 31, 2017 | |
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: March 31, 2017 December 31, 2016 Current: Accounts receivable $ 474.8 $ 508.1 Notes receivable 146.9 140.0 Allowance for doubtful accounts and notes (27.2 ) (27.7 ) Current accounts and notes receivable, net $ 594.5 $ 620.4 Long-term: Notes receivable, net of allowance of $0.4 and $0.4 48.7 48.1 Total accounts and notes receivable, net $ 643.2 $ 668.5 Credit Quality of Notes Receivable The interest rates on our outstanding notes receivable ranged from 4.0% to 10.4% at March 31, 2017 and 3.3% to 10.4% at December 31, 2016. We have certain concentrations of outstanding notes receivable in international locations that impact our assessment of the credit quality of our notes receivable. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our notes receivable. We have not identified changes in the aforementioned factors during the three months ended March 31, 2017 that require a reassessment of our receivable balances. The international locations with significant concentrations (generally deemed to be exceeding 10%) of our notes receivable are as follows: • Mexico - Our notes receivable, net, from certain customers in Mexico at March 31, 2017 was $30.8 million. We collected $8.1 million of outstanding receivables from these customers during the three months ended March 31, 2017 . • Peru - Our notes receivable, net, from certain customers in Peru at March 31, 2017 was $25.1 million . We collected $4.4 million of outstanding receivables from these customers during the three months ended March 31, 2017 . • Argentina - Our notes receivable, net, from customers in Argentina at March 31, 2017 was $11.8 million denominated in USD. Our customers are required to, and have continued to, pay us in pesos at the spot exchange rate on the date of payment. We collected $6.4 million of outstanding receivables from customers in Argentina during the three months ended March 31, 2017 . In addition to the macroeconomic and political factors noted above, we also evaluated recent payments, receivables aging, any additional security or collateral we had (bills of exchange, pledge agreements, etc.) and other facts and circumstances relevant to our customers' ability to pay. The following summarizes the components of total notes receivable, net: March 31, 2017 Balances over 90 days past due December 31, 2016 Balances over 90 days past due Notes receivable: Domestic $ 66.1 $ 1.4 $ 45.1 $ 1.1 International 129.9 37.4 143.0 38.7 Total notes receivable 196.0 38.8 188.1 39.8 Notes receivable allowance Domestic (2.1 ) (2.0 ) (1.0 ) (0.9 ) International (14.2 ) (14.2 ) (14.0 ) (14.0 ) Total notes receivable allowance (16.3 ) (16.2 ) (15.0 ) (14.9 ) Notes receivable, net $ 179.7 $ 22.6 $ 173.1 $ 24.9 At March 31, 2017 , 12.6% of our total notes receivable, net, was past due by over 90 days, compared to 14.4% at December 31, 2016. We evaluate our exposure to credit loss on notes receivable on both a collective and individual basis. In addition, we evaluate such notes receivable on a geographic basis and take into account any other factors (such as general economic conditions, other macroeconomic considerations, etc.) that could impact our collectability of notes receivable individually or in the aggregate. Accordingly, notes receivable may be evaluated under multiple methodologies, and the resulting allowance is not determined based on one specific methodology taking all factors into consideration. The activity in our allowance for notes receivable for each of the three month periods ended March 31, 2017 and 2016 is as follows: For the Three Months Ended March 31, 2017 2016 Beginning allowance for notes receivable $ 15.0 $ 13.2 Provision 1.7 2.0 Charge-offs and recoveries (0.4 ) (0.6 ) Ending allowance for notes receivable $ 16.3 $ 14.6 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 March 31, 2017 and December 31, 2016, the fair value of notes receivable, net, approximated the carrying value due to contractual terms of notes receivable generally being under 24 months. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following as of the dates presented below: March 31, 2017 December 31, 2016 Parts and work-in-process $ 114.7 $ 110.5 Finished goods 138.8 131.8 Total inventories $ 253.5 $ 242.3 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. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consisted of the following: March 31, 2017 December 31, 2016 Land $ 36.8 $ 36.5 Buildings and leasehold improvements 185.4 182.2 Gaming and lottery machinery and equipment 983.0 993.3 Furniture and fixtures 30.3 28.6 Construction in progress 16.8 21.2 Other property and equipment 247.2 239.3 Less: accumulated depreciation (914.8 ) (888.9 ) Total property and equipment, net $ 584.7 $ 612.2 Depreciation expense is excluded from Cost of services, Cost of product sales, Cost of instant games and Other operating expenses and is separately presented within D&A. Three Months Ended March 31, 2017 2016 Depreciation expense $ 66.9 $ 80.6 |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and December 31, 2016 . March 31, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 878.6 $ (178.5 ) $ 700.1 $ 875.8 $ (163.9 ) $ 711.9 Intellectual property 750.7 (244.3 ) 506.4 726.0 (218.2 ) 507.8 Licenses 435.2 (164.8 ) 270.4 413.2 (153.5 ) 259.7 Brand names 125.1 (35.7 ) 89.4 123.7 (32.1 ) 91.6 Trade names 97.4 (9.7 ) 87.7 97.4 (8.1 ) 89.3 Patents and other 28.4 (14.7 ) 13.7 28.0 (14.2 ) 13.8 2,315.4 (647.7 ) 1,667.7 2,264.1 (590.0 ) 1,674.1 Non-amortizable intangible assets: Trade names 96.3 (2.1 ) 94.2 96.3 (2.1 ) 94.2 Total intangible assets $ 2,411.7 $ (649.8 ) $ 1,761.9 $ 2,360.4 $ (592.1 ) $ 1,768.3 The following reflects intangible amortization expense included within D&A: Three Months Ended March 31, 2017 2016 Amortization expense $ 61.9 $ 65.6 Goodwill The table below reconciles the change in the carrying value of goodwill by business segment for the period from December 31, 2016 to March 31, 2017 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2016 $ 2,428.6 $ 350.0 $ 109.8 $ 2,888.4 Foreign currency adjustments 15.9 1.8 — 17.7 Balance as of March 31, 2017 $ 2,444.5 $ 351.8 $ 109.8 $ 2,906.1 |
Software, net
Software, net | 3 Months Ended |
Mar. 31, 2017 | |
Capitalized Computer Software, Net [Abstract] | |
Software, net | Software, net Software, net consisted of the following: March 31, 2017 December 31, 2016 Software $ 951.2 $ 924.8 Accumulated amortization (555.7 ) (515.7 ) Software, net $ 395.5 $ 409.1 The following reflects amortization of software included within D&A: Three Months Ended March 31, 2017 2016 Amortization expense $ 36.3 $ 34.4 |
Equity Investments
Equity Investments | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Equity Investments Equity investments totaled $187.0 million and $179.9 million as of March 31, 2017 and December 31, 2016, respectively. We received distributions and dividends totaling $3.7 million and $1.5 million during the three months ended March 31, 2017 and 2016, respectively. |
Long-Term and Other Debt
Long-Term and Other Debt | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 December 31, 2016 Face value Unamortized debt (discount) premium Unamortized deferred financing costs Book value Book value Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ — $ — $ — $ — $ 45.0 Revolver, varying interest rate, due 2020 — — — — — Term Loan B-1 — — — — 2,183.5 Term Loan B-2 — — — — 1,905.8 Term Loan B-3 3,291.0 (16.3 ) (58.2 ) 3,216.5 — Senior Notes: Secured Notes 2,100.0 67.5 (31.8 ) 2,135.7 936.3 Unsecured Notes 2,200.0 — (34.5 ) 2,165.5 2,164.0 Subordinated Notes: 2018 Notes — — — — 248.7 2020 Notes 243.5 — (2.1 ) 241.4 241.2 2021 Notes 340.6 (1.4 ) (4.3 ) 334.9 334.5 Capital lease obligations, 3.9% interest as of March 31, 2017 payable monthly through 2019 13.7 — — 13.7 15.2 Total long-term debt outstanding $ 8,188.8 $ 49.8 $ (130.9 ) $ 8,107.7 $ 8,074.2 Less: current portion of long-term debt (39.3 ) (49.3 ) Long-term debt, excluding current portion $ 8,068.4 $ 8,024.9 Fair value of debt (1) $ 8,379.2 $ 8,221.8 (1) Fair value of our fixed rate and variable interest rate debt is classified within level 2 in the fair value hierarchy and has been calculated based on the quoted market prices of our securities. We were in compliance with the financial covenants under our debt agreements as of March 31, 2017. February 2017 Refinancing Transactions On February 14, 2017, we entered into an amendment to our credit agreement which provides for a $3,291.0 million senior secured term B-3 loan facility which matures in 2021 and reduces the commitments on the revolving credit facility to $556.2 million through October 2018, with a step-down in availability at that time to $381.7 million until the extended maturity in October 2020. We also successfully completed an additional offering of our Secured Notes in the aggregate principal amount of $1.15 billion (the "additional Secured Notes"). The net proceeds of the term B-3 loan facility and the additional Secured Notes were used to (a) prepay the balances on the term B-1 and term B-2 loans and the existing revolving credit facility, (b) redeem all $250.0 million aggregate principal amount of our outstanding 2018 Notes at a redemption price equal to 100% of the principal amount of the 2018 Notes, plus accrued and unpaid interest to but not including the redemption date (which redemption was completed on March 17, 2017) and (c) pay related fees and expenses (the "February 2017 Refinancing"). In connection with the February 2017 Refinancing, we recorded $27.9 million in financing costs presented primarily as a reduction to long-term debt. Term Loan B-3 The new term B-3 loans that were entered into as part of the February 2017 Refinancing mature in October 2021 and will amortize in equal quarterly installments in an amount equal to 1.00% per annum of the stated principal amount thereof, with the remaining balance due at final maturity. 7.000% Senior Secured Notes due 2022 In connection with the February 2017 Refinancing, SGI issued $1.15 billion in aggregate principal amount of additional Secured Notes under the existing indenture governing the Secured Notes. Therefore the additional Secured Notes have the same terms as the previously issued $950.0 million in aggregate principal amount of Secured Notes initially issued in November 2014 except for the issue date and offering price. The additional Secured Notes and the initial Secured Notes will be treated as a single series of debt securities for all other purposes under the indenture governing the Secured Notes. For additional information regarding terms of our credit agreement and Secured Notes, see Note 16 (Long-Term and Other Debt) in our 2016 10-K. Loss on Extinguishment and Modification of Debt The following are components of the loss on extinguishment and modification of debt for the three months ended March 31, 2017: Unamortized debt discount and deferred financing costs $ (25.8 ) Third party debt issuance fees (3.9 ) Total loss on extinguishment and modification of debt $ (29.7 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
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. Our assets and liabilities measured at fair value on a recurring basis are described below. Interest rate swap contracts We record derivative financial instruments on the balance sheet at their respective fair values. We currently use swap contracts as described below to mitigate gains or losses associated with the change in expected cash flows due to fluctuations in interest rates on our variable rate debt. We hedge a portion of our interest expense associated with our variable rate debt to effectively fix the interest rates that we pay. We have interest rate swap contracts designated as cash flow hedges under ASC 815. Under these hedges, we pay interest at a weighted-average fixed rate of 2.151% and receive interest at the greater of 1% or the prevailing three -month LIBOR rate. The total notional amount of interest rate swaps outstanding was $ 700.0 million as of both March 31, 2017 and December 31, 2016. These hedges are highly effective in offsetting changes in our future expected cash flows due to the 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. As a result of the effective matching of the critical terms on our variable rate interest expense being hedged to the hedging instruments being used, we have not measured any hedge ineffectiveness through the date of our debt refinancing transactions as described in Note 10. Subsequent to the debt refinancing, we have measured ineffectiveness totaling $0.6 million as a result of the terms of our swaps no longer matching critical terms with the hedged forecasted interest payments; however, those hedges remain highly effective as measured by our regression analysis. We expect our interest rate swaps to continue to remain highly effective. 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. 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. The following table shows the (gains) losses on our interest rate swap contracts: Three Months Ended March 31, 2017 2016 (Gains) losses recorded in accumulated other comprehensive loss, net of tax $ (2.8 ) $ 1.0 Reclassifications of losses out of accumulated other comprehensive loss 2.1 2.1 Ineffectiveness recorded in interest expense 0.6 — We expect to reclassify additional losses of $4.6 million from accumulated other comprehensive loss to interest expense in the next twelve months. The following table shows the fair value of our hedges: March 31, 2017 December 31, 2016 Accrued liabilities $ 4.6 $ 6.7 Other long-term liabilities — 0.2 Total fair value $ 4.6 $ 6.9 |
Stock-based Compensation and Em
Stock-based Compensation and Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Stock-based Compensation and Employee Benefit Plans | Stock-based Compensation and Employee Benefit Plans We provide stock-based compensation using stock options and RSUs. At the Annual Meeting, our stockholders approved the adoption of a new ESPP. The first offering period under the new ESPP commenced on January 1, 2017. The following reflects stock-based compensation expense recognized: Three Months Ended March 31, 2017 2016 Related to vesting of stock options $ 0.2 $ 0.7 Related to vesting of RSUs 5.7 5.8 Total $ 5.9 $ 6.5 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") as well as a 401(k) plan for U.S.-based employees, which are described in Note 19 in our 2016 10-K. We recognized no material costs in 2017 and 2016 under these plans. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes 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. Upon evaluation of all available evidence, and considering the projected U.S. pre-tax losses for 2017, a valuation allowance has been contemplated as a component of the estimated annual effective tax rate for 2017. The valuation allowance to be recorded during 2017 related to the U.S. federal tax jurisdiction is incremental to the valuation allowance recorded as of December 31, 2016. The Company maintained other valuation allowances for certain non-U.S. jurisdictions with cumulative losses. The effective income tax rates for the three months ended March 31, 2017 and 2016 were (19.9)% and 17.2% , respectively , and were determined using an estimated annual effective tax rate after considering any discrete items for such periods. The change in the effective tax rates relates primarily to an increase in the valuation allowance recorded against net deferred tax assets in the U.S. federal tax jurisdiction for the three months ended March 31, 2017. The effective income tax rate for the three months ended March 31, 2017 reflects an overall tax expense due to the application of a full valuation allowance against the U.S. pre-tax losses coupled with a tax expense on foreign pre-tax earnings. In the three months ended March 31, 2016, we have an overall tax benefit as the valuation allowance recorded during the period was only applicable to a portion of the U.S. pre-tax losses. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company is involved in various routine and other specific legal proceedings, including the following which are described in Note 22 within our 2016 10-K: Colombia litigation, SNAI litigation, Oregon State Lottery matter and Shuffle Tech matter . There have been no material changes to these matters since the 2016 10-K was filed with the SEC, except as described 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 $4.8 million and $7.7 million for all of our legal matters that were contingencies as of March 31, 2017 and December 31, 2016, 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 and in Note 22 in our 2016 10-K, 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 $13.0 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. Shuffle Tech update On March 24, 2017, SGC, Bally Technologies, Inc. and Bally Gaming, Inc. filed a motion for summary judgment in their favor on all claims asserted by the plaintiffs in the lawsuit. We intend to continue to vigorously defend against the claims asserted in the lawsuit. For additional information regarding our pending litigation matters, see Note 22 in our 2016 10-K. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent to March 31, 2017, we entered into a settlement and seven -year patent cross-license agreement with another party that resolved outstanding intellectual property matters between the two companies. As part of this agreement, we received a $20.0 million advance royalty payment. On April 7, 2017, we completed the acquisition of privately held mobile and social game company Spicerack Media, Inc., acquiring all of the issued and outstanding capital stock for approximately $25.0 million in cash with the potential for additional contingent consideration. We expect that a substantial portion of the purchase price will be allocated to acquired intellectual property and customer list. |
Financial Information for Guara
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017, SGI's obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes were fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI. We redeemed all of the outstanding 2018 Notes on March 17, 2017, but they were previously issued by SGC and fully and unconditionally and jointly and severally guaranteed by the Guarantor Subsidiaries. The guarantees of our 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 SGC and SGI; and (5) the proper designation of the guarantor as an unrestricted subsidiary pursuant to the indenture governing the respective Notes. The guarantees of our 2018 Notes were released in connection with the redemption of the 2018 Notes. During the third quarter of 2016, we designated certain of our wholly owned direct and indirect subsidiaries that hold substantially all of the assets of, and operate, our social gaming business, as “Unrestricted Subsidiaries” under our credit agreement and each of the indentures governing the 2018 Notes, 2020 Notes, 2021 Notes, Secured Notes and Unsecured Notes. As a result of these designations, our 100%-owned social gaming subsidiaries are no longer guarantors under our credit agreement and indentures. Therefore, the historical condensed consolidating financial information presented has been reclassified to show the nature of assets held, results of operations and cash flows assuming the "Unrestricted Subsidiary" designations were in effect at the beginning of all periods presented, consistent with their status as non-guarantors as of March 31, 2017. The affected subsidiaries are no longer allocated interest in this condensed consolidating financial information due to their present status as non-guarantors. Accordingly, for all periods presented, we no longer present an allocation of interest to any entities, including the Unrestricted Subsidiaries, other than the legal entity issuer of the associated debt. Presented below is condensed consolidating financial information for (1) SGC, (2) SGI, (3) the Guarantor Subsidiaries and (4) the Non-Guarantor Subsidiaries as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016. The condensed consolidating financial information has been presented to show the nature of assets held, results of operations and cash flows of SGC, SGI, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming the current guarantee structures of 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 SGC 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 March 31, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 37.8 $ 1.0 $ — $ 98.7 $ (5.6 ) $ 131.9 Restricted cash — — 27.0 0.1 — 27.1 Accounts receivable, net — 51.9 202.5 209.1 — 463.5 Notes receivable, net — — 103.6 27.4 — 131.0 Inventories — 39.9 88.3 141.4 (16.1 ) 253.5 Prepaid expenses, deposits and other current assets 5.3 20.7 48.4 38.8 — 113.2 Property and equipment, net 7.3 93.7 347.0 156.6 (19.9 ) 584.7 Investment in subsidiaries 3,045.4 941.0 1,022.4 — (5,008.8 ) — Goodwill — 188.3 1,932.4 785.4 — 2,906.1 Intangible assets, net 196.0 37.3 1,323.2 205.4 — 1,761.9 Intercompany balances — 5,594.2 — 213.3 (5,807.5 ) — Software, net 77.6 20.2 248.4 49.3 — 395.5 Other assets (3) 233.6 281.0 57.1 178.0 (444.9 ) 304.8 Total assets $ 3,603.0 $ 7,269.2 $ 5,400.3 $ 2,103.5 $ (11,302.8 ) $ 7,073.2 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 32.9 $ — $ 6.4 $ — $ 39.3 Other current liabilities 98.9 198.1 200.0 156.4 (7.2 ) 646.2 Long-term debt, excluding current portion — 8,061.0 — 7.4 — 8,068.4 Other long-term liabilities 189.1 9.0 487.7 71.9 (443.2 ) 314.5 Intercompany balances 5,310.2 — 497.3 — (5,807.5 ) — Stockholders' (deficit) equity (1,995.2 ) (1,031.8 ) 4,215.3 1,861.4 (5,044.9 ) (1,995.2 ) Total liabilities and stockholders' (deficit) equity $ 3,603.0 $ 7,269.2 $ 5,400.3 $ 2,103.5 $ (11,302.8 ) $ 7,073.2 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Includes $16.1 million and $0.7 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 32.7 $ 1.7 $ — $ 81.8 $ (1.1 ) $ 115.1 Restricted cash — — 24.6 0.1 — 24.7 Accounts receivable, net — 61.4 199.2 234.4 — 495.0 Notes receivable, net — — 94.4 31.0 — 125.4 Inventories — 40.3 83.1 138.1 (19.2 ) 242.3 Prepaid expenses, deposits and other current assets 11.6 15.7 45.6 41.2 — 114.1 Property and equipment, net 5.6 98.4 369.3 154.9 (16.0 ) 612.2 Investment in subsidiaries 3,000.7 926.7 944.0 — (4,871.4 ) — Goodwill — 188.3 1,931.6 768.5 — 2,888.4 Intangible assets, net 185.8 37.5 1,343.0 202.0 — 1,768.3 Intercompany balances — 5,415.1 — 116.6 (5,531.7 ) — Software, net 74.7 21.4 264.6 48.4 — 409.1 Other assets (3) 233.6 236.5 50.8 173.5 (401.6 ) 292.8 Total assets $ 3,544.7 $ 7,043.0 $ 5,350.2 $ 1,990.5 $ (10,841.0 ) $ 7,087.4 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 43.0 $ — $ 6.3 $ — $ 49.3 Other current liabilities 100.5 158.7 216.3 168.7 (1.1 ) 643.1 Long-term debt, excluding current portion 248.7 7,767.3 — 8.9 — 8,024.9 Other long-term liabilities 159.0 12.4 468.8 67.2 (401.6 ) 305.8 Intercompany balances 4,972.2 — 559.5 — (5,531.7 ) — Stockholders' (deficit) equity (1,935.7 ) (938.4 ) 4,105.6 1,739.4 (4,906.6 ) (1,935.7 ) Total liabilities and stockholders' (deficit) equity $ 3,544.7 $ 7,043.0 $ 5,350.2 $ 1,990.5 $ (10,841.0 ) $ 7,087.4 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Includes $16.4 million and $0.7 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended March 31, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 118.0 $ 399.8 $ 264.6 $ (57.0 ) $ 725.4 Cost of services, cost of product sales and cost of instant games (3) — 82.9 123.7 121.8 (48.4 ) 280.0 Selling, general and administrative 29.7 9.5 48.8 62.4 (9.7 ) 140.7 Research and development 0.5 1.4 34.2 6.3 — 42.4 Depreciation, amortization and impairments 20.3 7.5 111.9 27.8 (2.4 ) 165.1 Restructuring and other 3.8 0.2 4.2 1.0 — 9.2 Operating (loss) income (54.3 ) 16.5 77.0 45.3 3.5 88.0 Interest expense (4.5 ) (154.6 ) — (0.3 ) — (159.4 ) Loss on early extinguishment of debt (1.1 ) (28.6 ) — — — (29.7 ) Other (expense) income, net (20.8 ) 50.7 (25.5 ) 12.6 — 17.0 Net (loss) income before equity in income of subsidiaries and income taxes (80.7 ) (116.0 ) 51.5 57.6 3.5 (84.1 ) Equity in income of subsidiaries 4.7 17.3 15.4 — (37.4 ) — Income tax (expense) benefit (24.8 ) 43.4 (20.6 ) (14.7 ) — (16.7 ) Net (loss) income $ (100.8 ) $ (55.3 ) $ 46.3 $ 42.9 $ (33.9 ) $ (100.8 ) Other comprehensive income 36.1 4.0 21.5 29.5 (55.0 ) 36.1 Comprehensive (loss) income $ (64.7 ) $ (51.3 ) $ 67.8 $ 72.4 $ (88.9 ) $ (64.7 ) 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended March 31, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 115.3 $ 361.5 $ 264.4 $ (59.2 ) $ 682.0 Cost of services, cost of product sales and cost of instant games (3) — 82.9 96.7 135.9 (59.2 ) 256.3 Selling, general and administrative 24.0 11.3 53.5 53.5 — 142.3 Research and development 0.9 2.3 35.9 10.7 — 49.8 Depreciation, amortization and impairments 12.8 10.7 126.2 30.9 — 180.6 Restructuring and other — — 0.8 1.9 — 2.7 Operating (loss) income (37.7 ) 8.1 48.4 31.5 — 50.3 Interest (expense) income (5.3 ) (160.5 ) — 0.1 — (165.7 ) Other (expense) income, net (25.6 ) 50.3 (23.1 ) 2.3 — 3.9 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (68.6 ) (102.1 ) 25.3 33.9 — (111.5 ) Equity in (loss) income of subsidiaries (45.9 ) 18.9 20.9 — 6.1 — Income tax benefit (expense) 22.2 — — (3.0 ) — 19.2 Net (loss) income $ (92.3 ) $ (83.2 ) $ 46.2 $ 30.9 $ 6.1 $ (92.3 ) Other comprehensive (loss) income (2.4 ) (0.3 ) 1.9 2.8 (4.4 ) (2.4 ) Comprehensive (loss) income $ (94.7 ) $ (83.5 ) $ 48.1 $ 33.7 $ 1.7 $ (94.7 ) 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Three Months Ended March 31, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (62.2 ) $ (20.9 ) $ 104.3 $ 94.3 $ (4.5 ) $ 111.0 Cash flows from investing activities: Capital expenditures (9.3 ) (4.7 ) (26.2 ) (21.1 ) — (61.3 ) Acquisition of business, net of cash acquired — — (21.5 ) — — (21.5 ) Distributions of capital from equity investments — — — 1.3 — 1.3 Changes in other assets and liabilities and other — — — 2.0 — 2.0 Other, principally change in intercompany investing activities — (221.9 ) — (60.6 ) 282.5 — Net cash used in investing activities (9.3 ) (226.6 ) (47.7 ) (78.4 ) 282.5 (79.5 ) Cash flows from financing activities: Net payments of long-term debt including proceeds and repurchases of senior notes and term loans (250.0 ) 274.0 — (1.5 ) — 22.5 Payments of debt issuance and deferred financing costs — (27.2 ) — — — (27.2 ) Payments on license obligations (9.2 ) — (0.6 ) — — (9.8 ) Net redemptions of common stock under stock-based compensation plans (0.6 ) — — — — (0.6 ) Other, principally change in intercompany financing activities 336.4 — (53.9 ) — (282.5 ) — Net cash provided by (used in) financing activities 76.6 246.8 (54.5 ) (1.5 ) (282.5 ) (15.1 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — 2.5 — 2.5 Increase (decrease) in cash, cash equivalents and restricted cash 5.1 (0.7 ) 2.1 16.9 (4.5 ) 18.9 Cash, cash equivalents and restricted cash, beginning of period 32.7 1.7 41.0 82.6 (1.1 ) 156.9 Cash, cash equivalents and restricted cash end of period $ 37.8 $ 1.0 $ 43.1 $ 99.5 $ (5.6 ) $ 175.8 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Three Months Ended March 31, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (75.2 ) $ (36.9 ) $ 176.0 $ 38.0 $ (0.8 ) $ 101.1 Cash flows from investing activities: Capital expenditures (5.8 ) (2.7 ) (35.5 ) (7.2 ) — (51.2 ) Distributions of capital from equity investments — — — 1.5 — 1.5 Changes in other assets and liabilities and other — — 1.6 (0.1 ) — 1.5 Other, principally change in intercompany investing activities — 65.4 — — (65.4 ) — Net cash (used in) provided by investing activities (5.8 ) 62.7 (33.9 ) (5.8 ) (65.4 ) (48.2 ) Cash flows from financing activities: Net payments on long-term debt — (25.8 ) — (1.7 ) — (27.5 ) Payments on license obligations (8.4 ) — (1.2 ) — — (9.6 ) Other, principally change in intercompany financing activities 108.0 — (140.8 ) (32.6 ) 65.4 — Net cash provided by (used in) financing activities 99.6 (25.8 ) (142.0 ) (34.3 ) 65.4 (37.1 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — 0.1 — 1.7 — 1.8 Increase (decrease) in cash, cash equivalents and restricted cash 18.6 0.1 0.1 (0.4 ) (0.8 ) 17.6 Cash, cash equivalents and restricted cash, beginning of period 43.2 — 37.7 85.9 — 166.8 Cash, cash equivalents and restricted cash, end of period $ 61.8 $ 0.1 $ 37.8 $ 85.5 $ (0.8 ) $ 184.4 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. |
Description of the Business a22
Description of the Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of SGC 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 condensed 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 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2016 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 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, 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. We adopted the guidance at the beginning of first quarter 2017. The adoption of this guidance did not result in a net cumulative-effect adjustment to accumulated loss, as the previously unrecognized excess tax benefit of $10.1 million was fully offset by an increase in the valuation allowance as of December 31, 2016. The excess tax benefit recognized in our provision for income taxes for the three months ended March 31, 2017 was immaterial. In addition, we elected to continue to account for forfeitures by estimating the expected forfeitures over the course of a vesting period. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the guidance retrospectively at the beginning of first quarter 2017. The adoption of this guidance resulted in increases to the cash, cash equivalents and restricted cash beginning-of-period and end-of period line item totaling $38.1 million and $38.7 million , respectively, which now includes restricted cash, and a $0.6 million decrease in net cash used in investing activities for the three months ended March 31, 2016. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. We adopted this guidance prospectively at the beginning of first quarter 2017, which will simplify our future goodwill impairment testing. New Accounting Guidance - Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . ASU 2014-09 combined with all subsequent amendments (collectively ASC 606) provides guidance outlining a single comprehensive revenue model in accounting for revenue from contracts with customers. ASC 606 supersedes existing revenue recognition guidance, including industry-specific guidance, and replaces it with a five-step revenue model with a core principle 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." This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. We will adopt this guidance at the beginning of the first quarter of 2018, using a modified retrospective application approach. Refer to Note 1 of our 2016 10-K for our current assessment of the anticipated impact of adopting this guidance on revenue recognition for each of our business segments. 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 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 Sheet. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This guidance 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 June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) . The new guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The new guidance will be effective for us beginning January 1, 2020, with early adoption permitted beginning January 1, 2018. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact and timing of adopting this guidance. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The new guidance clarifies the definition of a business in order to allow for the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting this guidance. |
Description of the Business a23
Description of the Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Revenue by Type Within Each Business Segment | The following table summarizes our revenues by type within each of our business segments: Three Months Ended March 31, 2017 2016 Gaming Gaming operations $ 172.4 $ 184.4 Gaming machine sales 156.2 134.5 Gaming systems 61.5 59.7 Table products 49.9 43.1 Total $ 440.0 $ 421.7 Lottery Instant products $ 141.7 $ 137.3 Lottery systems 47.4 50.4 Total $ 189.1 $ 187.7 Interactive Social Gaming - B2C $ 80.2 $ 60.2 Other 16.1 12.4 Total $ 96.3 $ 72.6 |
Summary of Deferred Revenue Activity | The following table summarizes the deferred revenue activity for the reporting period: Three Months Ended March 31, 2017 2016 Deferred revenue balance, beginning of period $ 67.4 $ 57.8 New deferrals 45.8 92.9 Amounts recognized in revenue (51.8 ) (85.5 ) Deferred revenue balance, end of period $ 61.4 $ 65.2 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Operating Information by Segment | The following tables present our segment information: Three Months Ended March 31, 2017 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 440.0 $ 189.1 $ 96.3 $ — $ 725.4 Depreciation, amortization and impairments 123.3 13.9 4.0 23.9 165.1 Restructuring and other 4.2 0.3 0.8 3.9 9.2 Operating income (loss) 77.5 56.1 17.2 (62.8 ) 88.0 Interest expense (159.4 ) Earnings from equity investments 9.5 Loss on extinguishment and modification of debt (29.7 ) Other income (expense), net 7.5 Net loss before income taxes $ (84.1 ) (1) Includes corporate amounts not allocated to the business segments. Three Months Ended March 31, 2016 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 421.7 $ 187.7 $ 72.6 $ — $ 682.0 Depreciation, amortization and impairments 141.6 17.8 3.7 17.5 180.6 Restructuring and other 1.6 1.1 — — 2.7 Operating income (loss) 43.4 48.0 11.5 (52.6 ) 50.3 Interest expense (165.7 ) Earnings from equity investments 3.2 Other income (expense), net 0.7 Net loss before income taxes $ (111.5 ) (1) Includes corporate amounts not allocated to the business segments. |
Restructuring and other (Tables
Restructuring and other (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Costs | The following table summarizes pre-tax restructuring and other costs for the periods presented: Three Months Ended March 31, 2017 2016 Employee severance (1) $ 2.7 $ 2.3 Acquisitions and related costs 3.4 — Restructuring, integration and other 3.1 0.4 Total $ 9.2 $ 2.7 (1) Inclusive of employee severance and termination costs associated with restructuring activities. |
Summary of Restructuring Charges and Changes in Accrual | The following table presents a summary of restructuring charges and the changes in the restructuring accrual during 2017: Restructuring Accrual Balance as of January 1, 2017 $ 16.4 Accrual additions 2.2 Cash payments (12.6 ) Balance as of March 31, 2017 $ 6.0 |
Accounts and Notes Receivable26
Accounts and Notes Receivable and Credit Quality of Notes Receivable (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Summary of Components of Accounts and Notes Receivable, Net | The following summarizes the components of current and long-term accounts and notes receivable, net: March 31, 2017 December 31, 2016 Current: Accounts receivable $ 474.8 $ 508.1 Notes receivable 146.9 140.0 Allowance for doubtful accounts and notes (27.2 ) (27.7 ) Current accounts and notes receivable, net $ 594.5 $ 620.4 Long-term: Notes receivable, net of allowance of $0.4 and $0.4 48.7 48.1 Total accounts and notes receivable, net $ 643.2 $ 668.5 |
Summary of Components of Notes Receivable, Net | The following summarizes the components of total notes receivable, net: March 31, 2017 Balances over 90 days past due December 31, 2016 Balances over 90 days past due Notes receivable: Domestic $ 66.1 $ 1.4 $ 45.1 $ 1.1 International 129.9 37.4 143.0 38.7 Total notes receivable 196.0 38.8 188.1 39.8 Notes receivable allowance Domestic (2.1 ) (2.0 ) (1.0 ) (0.9 ) International (14.2 ) (14.2 ) (14.0 ) (14.0 ) Total notes receivable allowance (16.3 ) (16.2 ) (15.0 ) (14.9 ) Notes receivable, net $ 179.7 $ 22.6 $ 173.1 $ 24.9 |
Schedule of Allowance for Notes Receivable Activity | The activity in our allowance for notes receivable for each of the three month periods ended March 31, 2017 and 2016 is as follows: For the Three Months Ended March 31, 2017 2016 Beginning allowance for notes receivable $ 15.0 $ 13.2 Provision 1.7 2.0 Charge-offs and recoveries (0.4 ) (0.6 ) Ending allowance for notes receivable $ 16.3 $ 14.6 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following as of the dates presented below: March 31, 2017 December 31, 2016 Parts and work-in-process $ 114.7 $ 110.5 Finished goods 138.8 131.8 Total inventories $ 253.5 $ 242.3 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property and Equipment | Property and equipment, net consisted of the following: March 31, 2017 December 31, 2016 Land $ 36.8 $ 36.5 Buildings and leasehold improvements 185.4 182.2 Gaming and lottery machinery and equipment 983.0 993.3 Furniture and fixtures 30.3 28.6 Construction in progress 16.8 21.2 Other property and equipment 247.2 239.3 Less: accumulated depreciation (914.8 ) (888.9 ) Total property and equipment, net $ 584.7 $ 612.2 Depreciation expense is excluded from Cost of services, Cost of product sales, Cost of instant games and Other operating expenses and is separately presented within D&A. Three Months Ended March 31, 2017 2016 Depreciation expense $ 66.9 $ 80.6 |
Intangible Assets, net and Go29
Intangible Assets, net and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite and Indefinite-lived Intangible Assets | The following tables present certain information regarding our intangible assets as of March 31, 2017 and December 31, 2016 . March 31, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 878.6 $ (178.5 ) $ 700.1 $ 875.8 $ (163.9 ) $ 711.9 Intellectual property 750.7 (244.3 ) 506.4 726.0 (218.2 ) 507.8 Licenses 435.2 (164.8 ) 270.4 413.2 (153.5 ) 259.7 Brand names 125.1 (35.7 ) 89.4 123.7 (32.1 ) 91.6 Trade names 97.4 (9.7 ) 87.7 97.4 (8.1 ) 89.3 Patents and other 28.4 (14.7 ) 13.7 28.0 (14.2 ) 13.8 2,315.4 (647.7 ) 1,667.7 2,264.1 (590.0 ) 1,674.1 Non-amortizable intangible assets: Trade names 96.3 (2.1 ) 94.2 96.3 (2.1 ) 94.2 Total intangible assets $ 2,411.7 $ (649.8 ) $ 1,761.9 $ 2,360.4 $ (592.1 ) $ 1,768.3 |
Schedule of Amortization Expense | The following reflects intangible amortization expense included within D&A: Three Months Ended March 31, 2017 2016 Amortization expense $ 61.9 $ 65.6 The following reflects amortization of software included within D&A: Three Months Ended March 31, 2017 2016 Amortization expense $ 36.3 $ 34.4 |
Reconciliation of the Carrying Amount of Goodwill, by Business Segment | The table below reconciles the change in the carrying value of goodwill by business segment for the period from December 31, 2016 to March 31, 2017 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2016 $ 2,428.6 $ 350.0 $ 109.8 $ 2,888.4 Foreign currency adjustments 15.9 1.8 — 17.7 Balance as of March 31, 2017 $ 2,444.5 $ 351.8 $ 109.8 $ 2,906.1 |
Software, net (Tables)
Software, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of Software, net | Software, net consisted of the following: March 31, 2017 December 31, 2016 Software $ 951.2 $ 924.8 Accumulated amortization (555.7 ) (515.7 ) Software, net $ 395.5 $ 409.1 |
Schedule of Amortization Expense | The following reflects intangible amortization expense included within D&A: Three Months Ended March 31, 2017 2016 Amortization expense $ 61.9 $ 65.6 The following reflects amortization of software included within D&A: Three Months Ended March 31, 2017 2016 Amortization expense $ 36.3 $ 34.4 |
Long-Term and Other Debt (Table
Long-Term and Other Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following reflects our outstanding debt: As of March 31, 2017 December 31, 2016 Face value Unamortized debt (discount) premium Unamortized deferred financing costs Book value Book value Senior Secured Credit Facilities: Revolver, varying interest rate, due 2018 $ — $ — $ — $ — $ 45.0 Revolver, varying interest rate, due 2020 — — — — — Term Loan B-1 — — — — 2,183.5 Term Loan B-2 — — — — 1,905.8 Term Loan B-3 3,291.0 (16.3 ) (58.2 ) 3,216.5 — Senior Notes: Secured Notes 2,100.0 67.5 (31.8 ) 2,135.7 936.3 Unsecured Notes 2,200.0 — (34.5 ) 2,165.5 2,164.0 Subordinated Notes: 2018 Notes — — — — 248.7 2020 Notes 243.5 — (2.1 ) 241.4 241.2 2021 Notes 340.6 (1.4 ) (4.3 ) 334.9 334.5 Capital lease obligations, 3.9% interest as of March 31, 2017 payable monthly through 2019 13.7 — — 13.7 15.2 Total long-term debt outstanding $ 8,188.8 $ 49.8 $ (130.9 ) $ 8,107.7 $ 8,074.2 Less: current portion of long-term debt (39.3 ) (49.3 ) Long-term debt, excluding current portion $ 8,068.4 $ 8,024.9 Fair value of debt (1) $ 8,379.2 $ 8,221.8 (1) Fair value of our fixed rate and variable interest rate debt is classified within level 2 in the fair value hierarchy and has been calculated based on the quoted market prices of our securities. |
Schedule of Components of Extinguishment and Modification of Debt | The following are components of the loss on extinguishment and modification of debt for the three months ended March 31, 2017: Unamortized debt discount and deferred financing costs $ (25.8 ) Third party debt issuance fees (3.9 ) Total loss on extinguishment and modification of debt $ (29.7 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments, recognized gains (losses) | The following table shows the (gains) losses on our interest rate swap contracts: Three Months Ended March 31, 2017 2016 (Gains) losses recorded in accumulated other comprehensive loss, net of tax $ (2.8 ) $ 1.0 Reclassifications of losses out of accumulated other comprehensive loss 2.1 2.1 Ineffectiveness recorded in interest expense 0.6 — |
Fair value of liabilities measured on recurring basis | The following table shows the fair value of our hedges: March 31, 2017 December 31, 2016 Accrued liabilities $ 4.6 $ 6.7 Other long-term liabilities — 0.2 Total fair value $ 4.6 $ 6.9 |
Stock-based Compensation and 33
Stock-based Compensation and Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Stock-based Compensation Expense Recognized | The following reflects stock-based compensation expense recognized: Three Months Ended March 31, 2017 2016 Related to vesting of stock options $ 0.2 $ 0.7 Related to vesting of RSUs 5.7 5.8 Total $ 5.9 $ 6.5 |
Financial Information for Gua34
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 37.8 $ 1.0 $ — $ 98.7 $ (5.6 ) $ 131.9 Restricted cash — — 27.0 0.1 — 27.1 Accounts receivable, net — 51.9 202.5 209.1 — 463.5 Notes receivable, net — — 103.6 27.4 — 131.0 Inventories — 39.9 88.3 141.4 (16.1 ) 253.5 Prepaid expenses, deposits and other current assets 5.3 20.7 48.4 38.8 — 113.2 Property and equipment, net 7.3 93.7 347.0 156.6 (19.9 ) 584.7 Investment in subsidiaries 3,045.4 941.0 1,022.4 — (5,008.8 ) — Goodwill — 188.3 1,932.4 785.4 — 2,906.1 Intangible assets, net 196.0 37.3 1,323.2 205.4 — 1,761.9 Intercompany balances — 5,594.2 — 213.3 (5,807.5 ) — Software, net 77.6 20.2 248.4 49.3 — 395.5 Other assets (3) 233.6 281.0 57.1 178.0 (444.9 ) 304.8 Total assets $ 3,603.0 $ 7,269.2 $ 5,400.3 $ 2,103.5 $ (11,302.8 ) $ 7,073.2 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 32.9 $ — $ 6.4 $ — $ 39.3 Other current liabilities 98.9 198.1 200.0 156.4 (7.2 ) 646.2 Long-term debt, excluding current portion — 8,061.0 — 7.4 — 8,068.4 Other long-term liabilities 189.1 9.0 487.7 71.9 (443.2 ) 314.5 Intercompany balances 5,310.2 — 497.3 — (5,807.5 ) — Stockholders' (deficit) equity (1,995.2 ) (1,031.8 ) 4,215.3 1,861.4 (5,044.9 ) (1,995.2 ) Total liabilities and stockholders' (deficit) equity $ 3,603.0 $ 7,269.2 $ 5,400.3 $ 2,103.5 $ (11,302.8 ) $ 7,073.2 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Includes $16.1 million and $0.7 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 32.7 $ 1.7 $ — $ 81.8 $ (1.1 ) $ 115.1 Restricted cash — — 24.6 0.1 — 24.7 Accounts receivable, net — 61.4 199.2 234.4 — 495.0 Notes receivable, net — — 94.4 31.0 — 125.4 Inventories — 40.3 83.1 138.1 (19.2 ) 242.3 Prepaid expenses, deposits and other current assets 11.6 15.7 45.6 41.2 — 114.1 Property and equipment, net 5.6 98.4 369.3 154.9 (16.0 ) 612.2 Investment in subsidiaries 3,000.7 926.7 944.0 — (4,871.4 ) — Goodwill — 188.3 1,931.6 768.5 — 2,888.4 Intangible assets, net 185.8 37.5 1,343.0 202.0 — 1,768.3 Intercompany balances — 5,415.1 — 116.6 (5,531.7 ) — Software, net 74.7 21.4 264.6 48.4 — 409.1 Other assets (3) 233.6 236.5 50.8 173.5 (401.6 ) 292.8 Total assets $ 3,544.7 $ 7,043.0 $ 5,350.2 $ 1,990.5 $ (10,841.0 ) $ 7,087.4 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 43.0 $ — $ 6.3 $ — $ 49.3 Other current liabilities 100.5 158.7 216.3 168.7 (1.1 ) 643.1 Long-term debt, excluding current portion 248.7 7,767.3 — 8.9 — 8,024.9 Other long-term liabilities 159.0 12.4 468.8 67.2 (401.6 ) 305.8 Intercompany balances 4,972.2 — 559.5 — (5,531.7 ) — Stockholders' (deficit) equity (1,935.7 ) (938.4 ) 4,105.6 1,739.4 (4,906.6 ) (1,935.7 ) Total liabilities and stockholders' (deficit) equity $ 3,544.7 $ 7,043.0 $ 5,350.2 $ 1,990.5 $ (10,841.0 ) $ 7,087.4 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Includes $16.4 million and $0.7 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively. |
Supplemental Condensed Consolidating Statement of Income | SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended March 31, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 118.0 $ 399.8 $ 264.6 $ (57.0 ) $ 725.4 Cost of services, cost of product sales and cost of instant games (3) — 82.9 123.7 121.8 (48.4 ) 280.0 Selling, general and administrative 29.7 9.5 48.8 62.4 (9.7 ) 140.7 Research and development 0.5 1.4 34.2 6.3 — 42.4 Depreciation, amortization and impairments 20.3 7.5 111.9 27.8 (2.4 ) 165.1 Restructuring and other 3.8 0.2 4.2 1.0 — 9.2 Operating (loss) income (54.3 ) 16.5 77.0 45.3 3.5 88.0 Interest expense (4.5 ) (154.6 ) — (0.3 ) — (159.4 ) Loss on early extinguishment of debt (1.1 ) (28.6 ) — — — (29.7 ) Other (expense) income, net (20.8 ) 50.7 (25.5 ) 12.6 — 17.0 Net (loss) income before equity in income of subsidiaries and income taxes (80.7 ) (116.0 ) 51.5 57.6 3.5 (84.1 ) Equity in income of subsidiaries 4.7 17.3 15.4 — (37.4 ) — Income tax (expense) benefit (24.8 ) 43.4 (20.6 ) (14.7 ) — (16.7 ) Net (loss) income $ (100.8 ) $ (55.3 ) $ 46.3 $ 42.9 $ (33.9 ) $ (100.8 ) Other comprehensive income 36.1 4.0 21.5 29.5 (55.0 ) 36.1 Comprehensive (loss) income $ (64.7 ) $ (51.3 ) $ 67.8 $ 72.4 $ (88.9 ) $ (64.7 ) 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Three Months Ended March 31, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 115.3 $ 361.5 $ 264.4 $ (59.2 ) $ 682.0 Cost of services, cost of product sales and cost of instant games (3) — 82.9 96.7 135.9 (59.2 ) 256.3 Selling, general and administrative 24.0 11.3 53.5 53.5 — 142.3 Research and development 0.9 2.3 35.9 10.7 — 49.8 Depreciation, amortization and impairments 12.8 10.7 126.2 30.9 — 180.6 Restructuring and other — — 0.8 1.9 — 2.7 Operating (loss) income (37.7 ) 8.1 48.4 31.5 — 50.3 Interest (expense) income (5.3 ) (160.5 ) — 0.1 — (165.7 ) Other (expense) income, net (25.6 ) 50.3 (23.1 ) 2.3 — 3.9 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (68.6 ) (102.1 ) 25.3 33.9 — (111.5 ) Equity in (loss) income of subsidiaries (45.9 ) 18.9 20.9 — 6.1 — Income tax benefit (expense) 22.2 — — (3.0 ) — 19.2 Net (loss) income $ (92.3 ) $ (83.2 ) $ 46.2 $ 30.9 $ 6.1 $ (92.3 ) Other comprehensive (loss) income (2.4 ) (0.3 ) 1.9 2.8 (4.4 ) (2.4 ) Comprehensive (loss) income $ (94.7 ) $ (83.5 ) $ 48.1 $ 33.7 $ 1.7 $ (94.7 ) 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. 3 - Exclusive of D&A. |
Supplemental Condensed Consolidating Statement of Cash Flows | SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Three Months Ended March 31, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (62.2 ) $ (20.9 ) $ 104.3 $ 94.3 $ (4.5 ) $ 111.0 Cash flows from investing activities: Capital expenditures (9.3 ) (4.7 ) (26.2 ) (21.1 ) — (61.3 ) Acquisition of business, net of cash acquired — — (21.5 ) — — (21.5 ) Distributions of capital from equity investments — — — 1.3 — 1.3 Changes in other assets and liabilities and other — — — 2.0 — 2.0 Other, principally change in intercompany investing activities — (221.9 ) — (60.6 ) 282.5 — Net cash used in investing activities (9.3 ) (226.6 ) (47.7 ) (78.4 ) 282.5 (79.5 ) Cash flows from financing activities: Net payments of long-term debt including proceeds and repurchases of senior notes and term loans (250.0 ) 274.0 — (1.5 ) — 22.5 Payments of debt issuance and deferred financing costs — (27.2 ) — — — (27.2 ) Payments on license obligations (9.2 ) — (0.6 ) — — (9.8 ) Net redemptions of common stock under stock-based compensation plans (0.6 ) — — — — (0.6 ) Other, principally change in intercompany financing activities 336.4 — (53.9 ) — (282.5 ) — Net cash provided by (used in) financing activities 76.6 246.8 (54.5 ) (1.5 ) (282.5 ) (15.1 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — 2.5 — 2.5 Increase (decrease) in cash, cash equivalents and restricted cash 5.1 (0.7 ) 2.1 16.9 (4.5 ) 18.9 Cash, cash equivalents and restricted cash, beginning of period 32.7 1.7 41.0 82.6 (1.1 ) 156.9 Cash, cash equivalents and restricted cash end of period $ 37.8 $ 1.0 $ 43.1 $ 99.5 $ (5.6 ) $ 175.8 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Three Months Ended March 31, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (75.2 ) $ (36.9 ) $ 176.0 $ 38.0 $ (0.8 ) $ 101.1 Cash flows from investing activities: Capital expenditures (5.8 ) (2.7 ) (35.5 ) (7.2 ) — (51.2 ) Distributions of capital from equity investments — — — 1.5 — 1.5 Changes in other assets and liabilities and other — — 1.6 (0.1 ) — 1.5 Other, principally change in intercompany investing activities — 65.4 — — (65.4 ) — Net cash (used in) provided by investing activities (5.8 ) 62.7 (33.9 ) (5.8 ) (65.4 ) (48.2 ) Cash flows from financing activities: Net payments on long-term debt — (25.8 ) — (1.7 ) — (27.5 ) Payments on license obligations (8.4 ) — (1.2 ) — — (9.6 ) Other, principally change in intercompany financing activities 108.0 — (140.8 ) (32.6 ) 65.4 — Net cash provided by (used in) financing activities 99.6 (25.8 ) (142.0 ) (34.3 ) 65.4 (37.1 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — 0.1 — 1.7 — 1.8 Increase (decrease) in cash, cash equivalents and restricted cash 18.6 0.1 0.1 (0.4 ) (0.8 ) 17.6 Cash, cash equivalents and restricted cash, beginning of period 43.2 — 37.7 85.9 — 166.8 Cash, cash equivalents and restricted cash, end of period $ 61.8 $ 0.1 $ 37.8 $ 85.5 $ (0.8 ) $ 184.4 1 - Issuer of obligations under the 2018 Notes, which were redeemed on March 17, 2017. 2 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the Secured Notes and the Unsecured Notes. |
Description of the Business a35
Description of the Business and Summary of Significant Accounting Policies - Additional Information (Details) shares in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2017USD ($)Segmentshares | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($)shares | Dec. 31, 2016USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of business segments | Segment | 3 | |||
Business Acquisition [Line Items] | ||||
Unrecognized tax benefit | $ 10.1 | |||
Offset of valuation allowance | $ 10.1 | |||
Decrease in net cash used in investing activities | $ 79.5 | $ 48.2 | ||
Accounting Standards Update 2016-18 | ||||
Business Acquisition [Line Items] | ||||
Adjustment to cash, cash equivalents and restricted cash beginning balance | 38.1 | |||
Adjustment to cash, cash equivalents and restricted cash ending balance | 38.7 | |||
Decrease in net cash used in investing activities | $ 0.6 | |||
Stock Options | ||||
Business Acquisition [Line Items] | ||||
Anti-dilutive securities (in shares) | shares | 3 | 1.8 | ||
Restricted Stock Units | ||||
Business Acquisition [Line Items] | ||||
Anti-dilutive securities (in shares) | shares | 5 | 4.6 | ||
DEQ Systems Corp. | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 22 |
Description of the Business a36
Description of the Business and Summary of Significant Accounting Policies - Summary of Revenue by Type (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 725.4 | $ 682 |
Gaming | ||
Segment Reporting Information [Line Items] | ||
Revenue | 440 | 421.7 |
Gaming | Gaming operations | ||
Segment Reporting Information [Line Items] | ||
Revenue | 172.4 | 184.4 |
Gaming | Gaming machine sales | ||
Segment Reporting Information [Line Items] | ||
Revenue | 156.2 | 134.5 |
Gaming | Gaming systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 61.5 | 59.7 |
Gaming | Table products | ||
Segment Reporting Information [Line Items] | ||
Revenue | 49.9 | 43.1 |
Lottery | ||
Segment Reporting Information [Line Items] | ||
Revenue | 189.1 | 187.7 |
Lottery | Instant products | ||
Segment Reporting Information [Line Items] | ||
Revenue | 141.7 | 137.3 |
Lottery | Lottery systems | ||
Segment Reporting Information [Line Items] | ||
Revenue | 47.4 | 50.4 |
Interactive | ||
Segment Reporting Information [Line Items] | ||
Revenue | 96.3 | 72.6 |
Interactive | Social Gaming - B2C | ||
Segment Reporting Information [Line Items] | ||
Revenue | 80.2 | 60.2 |
Interactive | Other | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 16.1 | $ 12.4 |
Description of the Business a37
Description of the Business and Summary of Significant Accounting Policies - Summary of Deferred Revenue Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue balance, beginning of period | $ 67.4 | $ 57.8 |
New deferrals | 45.8 | 92.9 |
Amounts recognized in revenue | (51.8) | (85.5) |
Deferred revenue balance, end of period | $ 61.4 | $ 65.2 |
Business Segments - Additional
Business Segments - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2017Segment | |
Segment Reporting [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 | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 725.4 | $ 682 |
Depreciation, amortization and impairments | 165.1 | 180.6 |
Restructuring and other | 9.2 | 2.7 |
Operating income (loss) | 88 | 50.3 |
Interest expense | (159.4) | (165.7) |
Earnings from equity investments | 9.5 | 3.2 |
Loss on extinguishment and modification of debt | (29.7) | 0 |
Other income (expense), net | 7.5 | 0.7 |
Net (loss) income before equity in income of subsidiaries and income taxes | (84.1) | (111.5) |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Depreciation, amortization and impairments | 23.9 | 17.5 |
Restructuring and other | 3.9 | 0 |
Operating income (loss) | (62.8) | (52.6) |
Gaming | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 440 | 421.7 |
Depreciation, amortization and impairments | 123.3 | 141.6 |
Restructuring and other | 4.2 | 1.6 |
Operating income (loss) | 77.5 | 43.4 |
Lottery | ||
Segment Reporting Information [Line Items] | ||
Revenue | 189.1 | 187.7 |
Lottery | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 189.1 | 187.7 |
Depreciation, amortization and impairments | 13.9 | 17.8 |
Restructuring and other | 0.3 | 1.1 |
Operating income (loss) | 56.1 | 48 |
Interactive | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 96.3 | 72.6 |
Depreciation, amortization and impairments | 4 | 3.7 |
Restructuring and other | 0.8 | 0 |
Operating income (loss) | $ 17.2 | $ 11.5 |
Restructuring and other - Restr
Restructuring and other - Restructuring and Other Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other | $ 9.2 | $ 2.7 |
Employee severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other | 2.7 | 2.3 |
Acquisitions and related costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other | 3.4 | 0 |
Restructuring, integration and other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other | $ 3.1 | $ 0.4 |
Restructuring and other - Res41
Restructuring and other - Restructuring Accrual Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Accrual additions | $ 9.2 | $ 2.7 |
November 2016 Plan | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring accrual, beginning balance | 16.4 | |
Accrual additions | 2.2 | |
Cash payments | (12.6) | |
Restructuring accrual, ending balance | $ 6 |
Accounts and Notes Receivable42
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Components Accounts and Notes Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current: | ||
Accounts receivable | $ 474.8 | $ 508.1 |
Notes receivable | 146.9 | 140 |
Allowance for doubtful accounts and notes | (27.2) | (27.7) |
Current accounts and notes receivable, net | 594.5 | 620.4 |
Long-term: | ||
Notes receivable, net of allowance of $0.4 and $0.4 | 48.7 | 48.1 |
Total accounts and notes receivable, net | 643.2 | 668.5 |
Allowance for notes receivable | $ 0.4 | $ 0.4 |
Accounts and Notes Receivable43
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 643.2 | $ 668.5 |
Contractual term of notes receivable | 24 months | |
Notes receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 179.7 | $ 173.1 |
Percentage of total notes receivable over 90 days past due | 12.60% | 14.40% |
Mexico | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 30.8 | |
Proceeds from collection of accounts and notes receivable, net | 8.1 | |
Peru | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 25.1 | |
Proceeds from collection of accounts and notes receivable, net | 4.4 | |
Argentina | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 11.8 | |
Proceeds from collection of accounts and notes receivable, net | $ 6.4 | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield (interest rate) | 4.00% | 3.30% |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield (interest rate) | 10.40% | 10.40% |
Accounts and Notes Receivable44
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Components of Notes Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total accounts and notes receivable, net | $ 643.2 | $ 668.5 | ||
Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 196 | 188.1 | ||
Notes receivable allowance | (16.3) | (15) | $ (14.6) | $ (13.2) |
Total accounts and notes receivable, net | 179.7 | 173.1 | ||
Domestic | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 66.1 | 45.1 | ||
Notes receivable allowance | (2.1) | (1) | ||
International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 129.9 | 143 | ||
Notes receivable allowance | (14.2) | (14) | ||
Balances over 90 days past due | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 38.8 | 39.8 | ||
Notes receivable allowance for balances over 90 days past due | (16.2) | (14.9) | ||
Notes receivable, net, balances over 90 days past due | 22.6 | 24.9 | ||
Balances over 90 days past due | Domestic | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 1.4 | 1.1 | ||
Notes receivable allowance for balances over 90 days past due | (2) | (0.9) | ||
Balances over 90 days past due | International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 37.4 | 38.7 | ||
Notes receivable allowance for balances over 90 days past due | $ (14.2) | $ (14) |
Accounts and Notes Receivable45
Accounts and Notes Receivable and Credit Quality of Notes Receivable - Allowance for Notes Receivable Activity (Details) - Notes receivable - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Allowance for notes receivable | ||
Beginning allowance for notes receivable | $ 15 | $ 13.2 |
Provision | 1.7 | 2 |
Charge-offs and recoveries | (0.4) | (0.6) |
Ending allowance for notes receivable | $ 16.3 | $ 14.6 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Parts and work-in-process | $ 114.7 | $ 110.5 |
Finished goods | 138.8 | 131.8 |
Total inventories | $ 253.5 | $ 242.3 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation | $ (914.8) | $ (888.9) | |
Property and equipment, net | 584.7 | 612.2 | |
Depreciation expense | 66.9 | $ 80.6 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 36.8 | 36.5 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 185.4 | 182.2 | |
Gaming and lottery machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 983 | 993.3 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 30.3 | 28.6 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 16.8 | 21.2 | |
Other property and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 247.2 | $ 239.3 |
Intangible Assets, net and Go48
Intangible Assets, net and Goodwill - Schedule of Finite and Indefinite-lived Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | $ 2,315.4 | $ 2,264.1 |
Amortizable intangible assets, accumulated amortization | (647.7) | (590) |
Amortizable intangible assets, net balance | 1,667.7 | 1,674.1 |
Non-amortizable intangible assets: | ||
Total intangible assets, gross carrying value | 2,411.7 | 2,360.4 |
Total intangible assets, accumulated amortization (excluding goodwill) | (649.8) | (592.1) |
Total intangible assets, net | 1,761.9 | 1,768.3 |
Trade names | ||
Non-amortizable intangible assets: | ||
Non-amortizable intangible assets, Gross Carrying Value | 96.3 | 96.3 |
Non-amortizable intangible assets, Accumulated Amortization | (2.1) | (2.1) |
Non-amortizable intangible assets, Net Balance | 94.2 | 94.2 |
Customer relationships | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 878.6 | 875.8 |
Amortizable intangible assets, accumulated amortization | (178.5) | (163.9) |
Amortizable intangible assets, net balance | 700.1 | 711.9 |
Intellectual property | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 750.7 | 726 |
Amortizable intangible assets, accumulated amortization | (244.3) | (218.2) |
Amortizable intangible assets, net balance | 506.4 | 507.8 |
Licenses | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 435.2 | 413.2 |
Amortizable intangible assets, accumulated amortization | (164.8) | (153.5) |
Amortizable intangible assets, net balance | 270.4 | 259.7 |
Brand names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 125.1 | 123.7 |
Amortizable intangible assets, accumulated amortization | (35.7) | (32.1) |
Amortizable intangible assets, net balance | 89.4 | 91.6 |
Trade names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 97.4 | 97.4 |
Amortizable intangible assets, accumulated amortization | (9.7) | (8.1) |
Amortizable intangible assets, net balance | 87.7 | 89.3 |
Patents and other | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 28.4 | 28 |
Amortizable intangible assets, accumulated amortization | (14.7) | (14.2) |
Amortizable intangible assets, net balance | $ 13.7 | $ 13.8 |
Intangible Assets, net and Go49
Intangible Assets, net and Goodwill - Intangible Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 61.9 | $ 65.6 |
Intangible Assets, net and Go50
Intangible Assets, net and Goodwill - Reconciliation of the Carrying Amount of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | $ 2,888.4 |
Foreign currency adjustments | 17.7 |
Balance at the end of the period | 2,906.1 |
Gaming | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 2,428.6 |
Foreign currency adjustments | 15.9 |
Balance at the end of the period | 2,444.5 |
Lottery | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 350 |
Foreign currency adjustments | 1.8 |
Balance at the end of the period | 351.8 |
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 | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Capitalized Computer Software, Net [Abstract] | |||
Software | $ 951.2 | $ 924.8 | |
Accumulated amortization | (555.7) | (515.7) | |
Software, net | 395.5 | $ 409.1 | |
Amortization expense | $ 36.3 | $ 34.4 |
Equity Investments (Details)
Equity Investments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Equity investments | $ 187 | $ 179.9 | |
Distributed earnings from equity investments | $ 3.7 | $ 1.5 |
Long-Term and Other Debt - Sche
Long-Term and Other Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Feb. 14, 2017 | Dec. 31, 2016 |
Debt Instrument | |||
Face value | $ 8,188.8 | ||
Unamortized debt (discount) premium | 49.8 | ||
Unamortized deferred financing costs | (130.9) | ||
Total long-term debt outstanding | 8,107.7 | $ 8,074.2 | |
Less: current portion of long-term debt | (39.3) | (49.3) | |
Long-term debt, excluding current portion | 8,068.4 | 8,024.9 | |
Fair value of debt | 8,379.2 | 8,221.8 | |
Term Loan B-3 | |||
Debt Instrument | |||
Unamortized deferred financing costs | $ (27.9) | ||
Senior Notes | Secured Notes | |||
Debt Instrument | |||
Face value | 2,100 | ||
Unamortized debt (discount) premium | 67.5 | ||
Unamortized deferred financing costs | (31.8) | ||
Total long-term debt outstanding | 2,135.7 | 936.3 | |
Senior Notes | Unsecured Notes | |||
Debt Instrument | |||
Face value | 2,200 | ||
Unamortized debt (discount) premium | 0 | ||
Unamortized deferred financing costs | (34.5) | ||
Total long-term debt outstanding | 2,165.5 | 2,164 | |
Subordinated Notes | 2018 Notes | |||
Debt Instrument | |||
Face value | 0 | ||
Unamortized debt (discount) premium | 0 | ||
Unamortized deferred financing costs | 0 | ||
Total long-term debt outstanding | 0 | 248.7 | |
Subordinated Notes | 2020 Notes | |||
Debt Instrument | |||
Face value | 243.5 | ||
Unamortized debt (discount) premium | 0 | ||
Unamortized deferred financing costs | (2.1) | ||
Total long-term debt outstanding | 241.4 | 241.2 | |
Subordinated Notes | 2021 Notes | |||
Debt Instrument | |||
Face value | 340.6 | ||
Unamortized debt (discount) premium | (1.4) | ||
Unamortized deferred financing costs | (4.3) | ||
Total long-term debt outstanding | $ 334.9 | 334.5 | |
Capital Lease Obligations | |||
Debt Instrument | |||
Capital lease interest rate | 3.90% | ||
Capital Lease Obligations | Capital lease obligations, 3.9% interest as of March 31, 2017 payable monthly through 2019 | |||
Debt Instrument | |||
Face value | $ 13.7 | ||
Unamortized debt (discount) premium | 0 | ||
Unamortized deferred financing costs | 0 | ||
Total long-term debt outstanding | 13.7 | 15.2 | |
Revolving Credit Facility | Senior Secured Credit Facilities | Revolver, varying interest rate, due 2018 | |||
Debt Instrument | |||
Face value | 0 | ||
Unamortized debt (discount) premium | 0 | ||
Unamortized deferred financing costs | 0 | ||
Total long-term debt outstanding | 0 | 45 | |
Revolving Credit Facility | Senior Secured Credit Facilities | Revolver, varying interest rate, due 2020 | |||
Debt Instrument | |||
Face value | 0 | ||
Unamortized debt (discount) premium | 0 | ||
Unamortized deferred financing costs | 0 | ||
Total long-term debt outstanding | 0 | 0 | |
Term Loan Facility | Senior Secured Credit Facilities | Term Loan B-1 | |||
Debt Instrument | |||
Face value | 0 | ||
Unamortized debt (discount) premium | 0 | ||
Unamortized deferred financing costs | 0 | ||
Total long-term debt outstanding | 0 | 2,183.5 | |
Term Loan Facility | Senior Secured Credit Facilities | Term Loan B-2 | |||
Debt Instrument | |||
Face value | 3,291 | ||
Unamortized debt (discount) premium | (16.3) | ||
Unamortized deferred financing costs | (58.2) | ||
Total long-term debt outstanding | $ 3,216.5 | 1,905.8 | |
Term Loan Facility | Senior Secured Credit Facilities | Term Loan B-3 | |||
Debt Instrument | |||
Total long-term debt outstanding | $ 0 |
Long-Term and Other Debt - Addi
Long-Term and Other Debt - Additional Information (Details) - USD ($) | Feb. 14, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Nov. 30, 2014 |
Debt Instrument | ||||
Financing costs | $ 130,900,000 | |||
Senior Secured Credit Facility, Term Loan B-3, Maturing 2021 | ||||
Debt Instrument | ||||
Principal debt amount | $ 3,291,000,000 | |||
Financing costs | 27,900,000 | |||
Senior Secured Credit Facility, Term Loan B-3, Maturing 2021 | Senior Notes | ||||
Debt Instrument | ||||
Principal debt amount | 1,150,000,000 | |||
Amortization percentage | 1.00% | |||
Senior Secured Credit Facility, Term Loan B-3, Maturing 2021 | Revolving Credit Facility | ||||
Debt Instrument | ||||
Credit facility available | 556,200,000 | |||
Step-down in availability | 381,700,000 | |||
2018 Notes | Subordinated Notes | ||||
Debt Instrument | ||||
Debt redemption amount | $ 250,000,000 | |||
Debt redemption price | 100.00% | |||
Financing costs | 0 | |||
Senior Secured Notes, Maturing 2022 | Senior Notes | ||||
Debt Instrument | ||||
Principal debt amount | $ 950,000,000 | |||
Financing costs | $ 31,800,000 |
Long-Term and Other Debt - Loss
Long-Term and Other Debt - Loss on Extinguishment and Modification of Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Unamortized debt discount and deferred financing costs | $ (25.8) | |
Third party debt issuance fees | (3.9) | |
Total loss on extinguishment and modification of debt | $ (29.7) | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Derivatives Fair Value | |||
Loss to be reclassified during next 12 months | $ 4,600,000 | ||
Interest rate swap | |||
Derivatives Fair Value | |||
(Gains) losses recorded in accumulated other comprehensive loss, net of tax | (2,800,000) | $ 1,000,000 | |
Derivative liability fair value | 4,600,000 | $ 6,900,000 | |
Interest rate swap | Accrued Liabilities | |||
Derivatives Fair Value | |||
Derivative liability fair value | 4,600,000 | 6,700,000 | |
Interest rate swap | Other long-term liabilities | |||
Derivatives Fair Value | |||
Derivative liability fair value | 0 | 200,000 | |
Interest rate swap | Interest Expense | |||
Derivatives Fair Value | |||
Ineffectiveness recorded in interest expense | 600,000 | 0 | |
Reclassifications of losses out of accumulated other comprehensive loss | 2,100,000 | 2,100,000 | |
Ineffectiveness recorded in interest expense | $ 600,000 | $ 0 | |
Interest rate swap | LIBOR | |||
Derivatives Fair Value | |||
Interest received on derivative | 1.00% | ||
Interest rate swap | Cash Flow Hedging | Designated as Hedging Instrument | |||
Derivatives Fair Value | |||
Derivative average fixed interest rate | 2.151% | ||
Total notional amount of swaps | $ 700,000,000 | $ 700,000,000 |
Stock-based Compensation and 57
Stock-based Compensation and Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 5.9 | $ 6.5 |
Employee stock option | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | 0.2 | 0.7 |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based compensation expense | $ 5.7 | $ 5.8 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax [Line Items] | ||
Effective tax rates | (19.90%) | 17.20% |
Litigation (Details)
Litigation (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingency accrual | $ 4.8 | $ 7.7 |
Contractual penalty | $ 13 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | Apr. 07, 2017 | Apr. 28, 2017 |
Spicerack Media | ||
Subsequent Event [Line Items] | ||
Consideration transferred | $ 25 | |
Intellectual property | ||
Subsequent Event [Line Items] | ||
Term of agreement | 7 years | |
Minimum expected under agreement | $ 20 | |
Advanced royalty payment | $ 15 |
Financial Information for Gua61
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 131.9 | $ 115.1 |
Restricted cash | 27.1 | 24.7 |
Accounts receivable, net | 463.5 | 495 |
Notes receivable, net | 131 | 125.4 |
Inventories | 253.5 | 242.3 |
Prepaid expenses, deposits and other current assets | 113.2 | 114.1 |
Property and equipment, net | 584.7 | 612.2 |
Investment in subsidiaries | 0 | 0 |
Goodwill | 2,906.1 | 2,888.4 |
Intangible assets, net | 1,761.9 | 1,768.3 |
Intercompany balances | 0 | 0 |
Software, net | 395.5 | 409.1 |
Other assets | 304.8 | 292.8 |
Total assets | 7,073.2 | 7,087.4 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 39.3 | 49.3 |
Other current liabilities | 646.2 | 643.1 |
Long-term debt, excluding current portion | 8,068.4 | 8,024.9 |
Other long-term liabilities | 314.5 | 305.8 |
Intercompany balances | 0 | 0 |
Stockholders' (deficit) equity | (1,995.2) | (1,935.7) |
Total liabilities and stockholders' (deficit) equity | 7,073.2 | 7,087.4 |
Non-current restricted cash | 16.8 | 17.1 |
Eliminating Entries | ||
Assets | ||
Cash and cash equivalents | (5.6) | (1.1) |
Restricted cash | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Notes receivable, net | 0 | 0 |
Inventories | (16.1) | (19.2) |
Prepaid expenses, deposits and other current assets | 0 | 0 |
Property and equipment, net | (19.9) | (16) |
Investment in subsidiaries | (5,008.8) | (4,871.4) |
Goodwill | 0 | 0 |
Intangible assets, net | 0 | 0 |
Intercompany balances | (5,807.5) | (5,531.7) |
Software, net | 0 | 0 |
Other assets | (444.9) | (401.6) |
Total assets | (11,302.8) | (10,841) |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 0 | 0 |
Other current liabilities | (7.2) | (1.1) |
Long-term debt, excluding current portion | 0 | 0 |
Other long-term liabilities | (443.2) | (401.6) |
Intercompany balances | (5,807.5) | (5,531.7) |
Stockholders' (deficit) equity | (5,044.9) | (4,906.6) |
Total liabilities and stockholders' (deficit) equity | (11,302.8) | (10,841) |
SGC (Parent and Issuer) | Reportable Legal Entities | ||
Assets | ||
Cash and cash equivalents | 37.8 | 32.7 |
Restricted cash | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Notes receivable, net | 0 | 0 |
Inventories | 0 | 0 |
Prepaid expenses, deposits and other current assets | 5.3 | 11.6 |
Property and equipment, net | 7.3 | 5.6 |
Investment in subsidiaries | 3,045.4 | 3,000.7 |
Goodwill | 0 | 0 |
Intangible assets, net | 196 | 185.8 |
Intercompany balances | 0 | 0 |
Software, net | 77.6 | 74.7 |
Other assets | 233.6 | 233.6 |
Total assets | 3,603 | 3,544.7 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 0 | 0 |
Other current liabilities | 98.9 | 100.5 |
Long-term debt, excluding current portion | 0 | 248.7 |
Other long-term liabilities | 189.1 | 159 |
Intercompany balances | 5,310.2 | 4,972.2 |
Stockholders' (deficit) equity | (1,995.2) | (1,935.7) |
Total liabilities and stockholders' (deficit) equity | 3,603 | 3,544.7 |
SGI (Issuer) | Reportable Legal Entities | ||
Assets | ||
Cash and cash equivalents | 1 | 1.7 |
Restricted cash | 0 | 0 |
Accounts receivable, net | 51.9 | 61.4 |
Notes receivable, net | 0 | 0 |
Inventories | 39.9 | 40.3 |
Prepaid expenses, deposits and other current assets | 20.7 | 15.7 |
Property and equipment, net | 93.7 | 98.4 |
Investment in subsidiaries | 941 | 926.7 |
Goodwill | 188.3 | 188.3 |
Intangible assets, net | 37.3 | 37.5 |
Intercompany balances | 5,594.2 | 5,415.1 |
Software, net | 20.2 | 21.4 |
Other assets | 281 | 236.5 |
Total assets | 7,269.2 | 7,043 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 32.9 | 43 |
Other current liabilities | 198.1 | 158.7 |
Long-term debt, excluding current portion | 8,061 | 7,767.3 |
Other long-term liabilities | 9 | 12.4 |
Intercompany balances | 0 | 0 |
Stockholders' (deficit) equity | (1,031.8) | (938.4) |
Total liabilities and stockholders' (deficit) equity | 7,269.2 | 7,043 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 27 | 24.6 |
Accounts receivable, net | 202.5 | 199.2 |
Notes receivable, net | 103.6 | 94.4 |
Inventories | 88.3 | 83.1 |
Prepaid expenses, deposits and other current assets | 48.4 | 45.6 |
Property and equipment, net | 347 | 369.3 |
Investment in subsidiaries | 1,022.4 | 944 |
Goodwill | 1,932.4 | 1,931.6 |
Intangible assets, net | 1,323.2 | 1,343 |
Intercompany balances | 0 | 0 |
Software, net | 248.4 | 264.6 |
Other assets | 57.1 | 50.8 |
Total assets | 5,400.3 | 5,350.2 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 0 | 0 |
Other current liabilities | 200 | 216.3 |
Long-term debt, excluding current portion | 0 | 0 |
Other long-term liabilities | 487.7 | 468.8 |
Intercompany balances | 497.3 | 559.5 |
Stockholders' (deficit) equity | 4,215.3 | 4,105.6 |
Total liabilities and stockholders' (deficit) equity | 5,400.3 | 5,350.2 |
Non-current restricted cash | 16.1 | 16.4 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Assets | ||
Cash and cash equivalents | 98.7 | 81.8 |
Restricted cash | 0.1 | 0.1 |
Accounts receivable, net | 209.1 | 234.4 |
Notes receivable, net | 27.4 | 31 |
Inventories | 141.4 | 138.1 |
Prepaid expenses, deposits and other current assets | 38.8 | 41.2 |
Property and equipment, net | 156.6 | 154.9 |
Investment in subsidiaries | 0 | 0 |
Goodwill | 785.4 | 768.5 |
Intangible assets, net | 205.4 | 202 |
Intercompany balances | 213.3 | 116.6 |
Software, net | 49.3 | 48.4 |
Other assets | 178 | 173.5 |
Total assets | 2,103.5 | 1,990.5 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 6.4 | 6.3 |
Other current liabilities | 156.4 | 168.7 |
Long-term debt, excluding current portion | 7.4 | 8.9 |
Other long-term liabilities | 71.9 | 67.2 |
Intercompany balances | 0 | 0 |
Stockholders' (deficit) equity | 1,861.4 | 1,739.4 |
Total liabilities and stockholders' (deficit) equity | 2,103.5 | 1,990.5 |
Non-current restricted cash | $ 0.7 | $ 0.7 |
Financial Information for Gua62
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Operations and Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Condensed Financial Statements | ||
Revenue | $ 725.4 | $ 682 |
Cost of services, cost of product sales and cost of instant games | 280 | 256.3 |
Selling, general and administrative | 140.7 | 142.3 |
Research and development | 42.4 | 49.8 |
Depreciation, amortization and impairments | 165.1 | 180.6 |
Restructuring and other | 9.2 | 2.7 |
Operating (loss) income | 88 | 50.3 |
Interest (expense) income | (159.4) | (165.7) |
Loss on extinguishment and modification of debt | (29.7) | 0 |
Other (expense) income, net | 17 | 3.9 |
Net (loss) income before equity in income of subsidiaries and income taxes | (84.1) | (111.5) |
Equity in income of subsidiaries | 0 | 0 |
Income tax (expense) benefit | (16.7) | 19.2 |
Net (loss) income | (100.8) | (92.3) |
Other comprehensive income | 36.1 | (2.4) |
Comprehensive (loss) income | (64.7) | (94.7) |
Eliminating Entries | ||
Condensed Financial Statements | ||
Revenue | (57) | (59.2) |
Cost of services, cost of product sales and cost of instant games | (48.4) | (59.2) |
Selling, general and administrative | (9.7) | 0 |
Research and development | 0 | 0 |
Depreciation, amortization and impairments | (2.4) | 0 |
Restructuring and other | 0 | 0 |
Operating (loss) income | 3.5 | 0 |
Interest (expense) income | 0 | 0 |
Loss on extinguishment and modification of debt | 0 | |
Other (expense) income, net | 0 | 0 |
Net (loss) income before equity in income of subsidiaries and income taxes | 3.5 | 0 |
Equity in income of subsidiaries | (37.4) | 6.1 |
Income tax (expense) benefit | 0 | 0 |
Net (loss) income | (33.9) | 6.1 |
Other comprehensive income | (55) | (4.4) |
Comprehensive (loss) income | (88.9) | 1.7 |
SGC (Parent and Issuer) | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Revenue | 0 | 0 |
Cost of services, cost of product sales and cost of instant games | 0 | 0 |
Selling, general and administrative | 29.7 | 24 |
Research and development | 0.5 | 0.9 |
Depreciation, amortization and impairments | 20.3 | 12.8 |
Restructuring and other | 3.8 | 0 |
Operating (loss) income | (54.3) | (37.7) |
Interest (expense) income | (4.5) | (5.3) |
Loss on extinguishment and modification of debt | (1.1) | |
Other (expense) income, net | (20.8) | (25.6) |
Net (loss) income before equity in income of subsidiaries and income taxes | (80.7) | (68.6) |
Equity in income of subsidiaries | 4.7 | (45.9) |
Income tax (expense) benefit | (24.8) | 22.2 |
Net (loss) income | (100.8) | (92.3) |
Other comprehensive income | 36.1 | (2.4) |
Comprehensive (loss) income | (64.7) | (94.7) |
SGI (Issuer) | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Revenue | 118 | 115.3 |
Cost of services, cost of product sales and cost of instant games | 82.9 | 82.9 |
Selling, general and administrative | 9.5 | 11.3 |
Research and development | 1.4 | 2.3 |
Depreciation, amortization and impairments | 7.5 | 10.7 |
Restructuring and other | 0.2 | 0 |
Operating (loss) income | 16.5 | 8.1 |
Interest (expense) income | (154.6) | (160.5) |
Loss on extinguishment and modification of debt | (28.6) | |
Other (expense) income, net | 50.7 | 50.3 |
Net (loss) income before equity in income of subsidiaries and income taxes | (116) | (102.1) |
Equity in income of subsidiaries | 17.3 | 18.9 |
Income tax (expense) benefit | 43.4 | 0 |
Net (loss) income | (55.3) | (83.2) |
Other comprehensive income | 4 | (0.3) |
Comprehensive (loss) income | (51.3) | (83.5) |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Revenue | 399.8 | 361.5 |
Cost of services, cost of product sales and cost of instant games | 123.7 | 96.7 |
Selling, general and administrative | 48.8 | 53.5 |
Research and development | 34.2 | 35.9 |
Depreciation, amortization and impairments | 111.9 | 126.2 |
Restructuring and other | 4.2 | 0.8 |
Operating (loss) income | 77 | 48.4 |
Interest (expense) income | 0 | 0 |
Loss on extinguishment and modification of debt | 0 | |
Other (expense) income, net | (25.5) | (23.1) |
Net (loss) income before equity in income of subsidiaries and income taxes | 51.5 | 25.3 |
Equity in income of subsidiaries | 15.4 | 20.9 |
Income tax (expense) benefit | (20.6) | 0 |
Net (loss) income | 46.3 | 46.2 |
Other comprehensive income | 21.5 | 1.9 |
Comprehensive (loss) income | 67.8 | 48.1 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Revenue | 264.6 | 264.4 |
Cost of services, cost of product sales and cost of instant games | 121.8 | 135.9 |
Selling, general and administrative | 62.4 | 53.5 |
Research and development | 6.3 | 10.7 |
Depreciation, amortization and impairments | 27.8 | 30.9 |
Restructuring and other | 1 | 1.9 |
Operating (loss) income | 45.3 | 31.5 |
Interest (expense) income | (0.3) | 0.1 |
Loss on extinguishment and modification of debt | 0 | |
Other (expense) income, net | 12.6 | 2.3 |
Net (loss) income before equity in income of subsidiaries and income taxes | 57.6 | 33.9 |
Equity in income of subsidiaries | 0 | 0 |
Income tax (expense) benefit | (14.7) | (3) |
Net (loss) income | 42.9 | 30.9 |
Other comprehensive income | 29.5 | 2.8 |
Comprehensive (loss) income | $ 72.4 | $ 33.7 |
Financial Information for Gua63
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | $ 111 | $ 101.1 |
Cash flows from investing activities: | ||
Capital expenditures | (61.3) | (51.2) |
Acquisition of business, net of cash acquired | (21.5) | 0 |
Distributions of capital from equity investments | 1.3 | 1.5 |
Changes in other assets and liabilities and other | 2 | 1.5 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (79.5) | (48.2) |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | 22.5 | (27.5) |
Payments of debt issuance and deferred financing costs | (27.2) | 0 |
Payments on license obligations | (9.8) | (9.6) |
Issuance (redemptions) of common stock under stock-based compensation plans | (0.6) | 0 |
Other, principally change in intercompany financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | (15.1) | (37.1) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2.5 | 1.8 |
Increase (decrease) in cash, cash equivalents and restricted cash | 18.9 | 17.6 |
Cash, cash equivalents and restricted cash, beginning of period | 156.9 | 166.8 |
Cash, cash equivalents and restricted cash, end of period | 175.8 | 184.4 |
Eliminating Entries | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | (4.5) | (0.8) |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Acquisition of business, net of cash acquired | 0 | |
Distributions of capital from equity investments | 0 | 0 |
Changes in other assets and liabilities and other | 0 | 0 |
Other, principally intercompany balances | 282.5 | (65.4) |
Net cash used in investing activities | 282.5 | (65.4) |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | 0 | 0 |
Payments of debt issuance and deferred financing costs | 0 | |
Payments on license obligations | 0 | 0 |
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
Other, principally change in intercompany financing activities | (282.5) | 65.4 |
Net cash provided by (used in) financing activities | (282.5) | 65.4 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 |
Increase (decrease) in cash, cash equivalents and restricted cash | (4.5) | (0.8) |
Cash, cash equivalents and restricted cash, beginning of period | (1.1) | 0 |
Cash, cash equivalents and restricted cash, end of period | (5.6) | (0.8) |
SGC (Parent and Issuer) | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | (62.2) | (75.2) |
Cash flows from investing activities: | ||
Capital expenditures | (9.3) | (5.8) |
Acquisition of business, net of cash acquired | 0 | |
Distributions of capital from equity investments | 0 | 0 |
Changes in other assets and liabilities and other | 0 | 0 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (9.3) | (5.8) |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | (250) | 0 |
Payments of debt issuance and deferred financing costs | 0 | |
Payments on license obligations | (9.2) | (8.4) |
Issuance (redemptions) of common stock under stock-based compensation plans | (0.6) | |
Other, principally change in intercompany financing activities | 336.4 | 108 |
Net cash provided by (used in) financing activities | 76.6 | 99.6 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 |
Increase (decrease) in cash, cash equivalents and restricted cash | 5.1 | 18.6 |
Cash, cash equivalents and restricted cash, beginning of period | 32.7 | 43.2 |
Cash, cash equivalents and restricted cash, end of period | 37.8 | 61.8 |
SGI (Issuer) | ||
Cash flows from financing activities: | ||
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
SGI (Issuer) | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | (20.9) | (36.9) |
Cash flows from investing activities: | ||
Capital expenditures | (4.7) | (2.7) |
Acquisition of business, net of cash acquired | 0 | |
Distributions of capital from equity investments | 0 | 0 |
Changes in other assets and liabilities and other | 0 | 0 |
Other, principally intercompany balances | (221.9) | 65.4 |
Net cash used in investing activities | (226.6) | 62.7 |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | 274 | (25.8) |
Payments of debt issuance and deferred financing costs | (27.2) | |
Payments on license obligations | 0 | 0 |
Other, principally change in intercompany financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | 246.8 | (25.8) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0.1 |
Increase (decrease) in cash, cash equivalents and restricted cash | (0.7) | 0.1 |
Cash, cash equivalents and restricted cash, beginning of period | 1.7 | 0 |
Cash, cash equivalents and restricted cash, end of period | 1 | 0.1 |
Guarantor Subsidiaries | ||
Cash flows from financing activities: | ||
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 104.3 | 176 |
Cash flows from investing activities: | ||
Capital expenditures | (26.2) | (35.5) |
Acquisition of business, net of cash acquired | (21.5) | |
Distributions of capital from equity investments | 0 | 0 |
Changes in other assets and liabilities and other | 0 | 1.6 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (47.7) | (33.9) |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | 0 | 0 |
Payments of debt issuance and deferred financing costs | 0 | |
Payments on license obligations | (0.6) | (1.2) |
Other, principally change in intercompany financing activities | (53.9) | (140.8) |
Net cash provided by (used in) financing activities | (54.5) | (142) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 |
Increase (decrease) in cash, cash equivalents and restricted cash | 2.1 | 0.1 |
Cash, cash equivalents and restricted cash, beginning of period | 41 | 37.7 |
Cash, cash equivalents and restricted cash, end of period | 43.1 | 37.8 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 94.3 | 38 |
Cash flows from investing activities: | ||
Capital expenditures | (21.1) | (7.2) |
Acquisition of business, net of cash acquired | 0 | |
Distributions of capital from equity investments | 1.3 | 1.5 |
Changes in other assets and liabilities and other | 2 | (0.1) |
Other, principally intercompany balances | (60.6) | 0 |
Net cash used in investing activities | (78.4) | (5.8) |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | (1.5) | (1.7) |
Payments of debt issuance and deferred financing costs | 0 | |
Payments on license obligations | 0 | 0 |
Issuance (redemptions) of common stock under stock-based compensation plans | 0 | |
Other, principally change in intercompany financing activities | 0 | (32.6) |
Net cash provided by (used in) financing activities | (1.5) | (34.3) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2.5 | 1.7 |
Increase (decrease) in cash, cash equivalents and restricted cash | 16.9 | (0.4) |
Cash, cash equivalents and restricted cash, beginning of period | 82.6 | 85.9 |
Cash, cash equivalents and restricted cash, end of period | $ 99.5 | $ 85.5 |