Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 30, 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 | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 89,641,395 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Services | $ 386.7 | $ 356.4 | $ 1,135 | $ 1,070.2 |
Product sales | 240.6 | 225.9 | 694.4 | 638.3 |
Instant games | 141.6 | 137.7 | 431.2 | 422.7 |
Total revenue | 768.9 | 720 | 2,260.6 | 2,131.2 |
Operating expenses: | ||||
Cost of services | 105.5 | 98 | 307.7 | 294.3 |
Cost of product sales | 116.9 | 104.6 | 332.2 | 299.7 |
Cost of instant games | 68.4 | 71.7 | 209.8 | 212.8 |
Selling, general and administrative | 158.8 | 152.8 | 445.4 | 440 |
Research and development | 47.8 | 53.9 | 138.3 | 155.4 |
Depreciation, amortization and impairments | 173.1 | 191.7 | 513.2 | 565.4 |
Restructuring and other | 7.8 | 13.8 | 18.1 | 20.7 |
Operating (loss) income | 90.6 | 33.5 | 295.9 | 142.9 |
Other (expense) income: | ||||
Interest expense | (148.9) | (165.4) | (459.5) | (496.4) |
Earnings from equity investments | 7.5 | 7.3 | 20.1 | 18.5 |
(Loss) gain on debt financing transactions | (8.4) | 0 | (38.1) | 25.2 |
Other (expense) income, net | (4.3) | 6 | 1.3 | 8.4 |
Total other expense, net | (154.1) | (152.1) | (476.2) | (444.3) |
Net loss before income taxes | (63.5) | (118.6) | (180.3) | (301.4) |
Income tax benefit (expense) | 4.2 | 19.7 | (18.9) | 58.5 |
Net (loss) income | (59.3) | (98.9) | (199.2) | (242.9) |
Other comprehensive income (loss): | ||||
Foreign currency translation gain (loss) | 73.4 | 1.9 | 139.1 | (34.8) |
Pension and post-retirement (loss) gain, net of tax | (1.3) | 0.2 | (2) | 0.7 |
Derivative financial instruments unrealized gain, net of tax | 0.7 | 3.1 | 3.5 | 6.7 |
Other comprehensive income (loss) | 72.8 | 5.2 | 140.6 | (27.4) |
Comprehensive income (loss) | $ 13.5 | $ (93.7) | $ (58.6) | $ (270.3) |
Basic and diluted net loss per share: | ||||
Basic (in dollars per share) | $ (0.66) | $ (1.13) | $ (2.79) | |
Diluted (in dollars per share) | $ (0.66) | $ (1.13) | $ (2.24) | $ (2.79) |
Weighted average number of shares used in per share calculations: | ||||
Basic (in shares) | 89.6 | 87.5 | 88.9 | 87.1 |
Diluted (in shares) | 89.6 | 87.5 | 88.9 | 87.1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 196.4 | $ 115.1 |
Restricted cash | 27 | 24.7 |
Accounts receivable, net | 492.7 | 495 |
Notes receivable, net | 118.3 | 125.4 |
Inventories | 255.2 | 242.3 |
Prepaid expenses, deposits and other current assets | 135.8 | 114.1 |
Total current assets | 1,225.4 | 1,116.6 |
Non-current assets: | ||
Restricted cash | 16.3 | 17.1 |
Notes receivable, net | 44.4 | 48.1 |
Property and equipment, net | 567.2 | 612.2 |
Goodwill | 2,961.3 | 2,888.4 |
Intangible assets, net | 1,667.8 | 1,768.3 |
Software, net | 356.7 | 409.1 |
Equity investments | 168.4 | 179.9 |
Other assets | 54.9 | 47.7 |
Total assets | 7,062.4 | 7,087.4 |
Current liabilities: | ||
Current portion of long-term debt | 39.9 | 49.3 |
Accounts payable | 178.4 | 188.9 |
Accrued liabilities | 452.3 | 454.2 |
Total current liabilities | 670.6 | 692.4 |
Deferred income taxes | 80.9 | 70.2 |
Other long-term liabilities | 238.5 | 235.6 |
Long-term debt, excluding current portion | 8,048.9 | 8,024.9 |
Total liabilities | 9,038.9 | 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; 106.8 and 105.2 shares issued and 89.6 and 88.0 shares outstanding, respectively | 1.1 | 1 |
Additional paid-in capital | 808.5 | 790.8 |
Accumulated loss | (2,417.9) | (2,218.7) |
Treasury stock, at cost, 17.2 shares | (175.2) | (175.2) |
Accumulated other comprehensive loss | (193) | (333.6) |
Total stockholders' deficit | (1,976.5) | (1,935.7) |
Total liabilities and stockholders' (deficit) equity | $ 7,062.4 | $ 7,087.4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 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) | 106,800,000 | 105,200,000 |
Class A common stock, shares outstanding (in shares) | 89,600,000 | 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 | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (199.2) | $ (242.9) |
Adjustments to reconcile net loss to cash provided by operating activities | 589.4 | 592.2 |
Changes in working capital accounts | (6) | 96.3 |
Changes in deferred income taxes and other | 4.8 | (102.8) |
Net cash provided by operating activities | 389 | 342.8 |
Cash flows from investing activities: | ||
Capital expenditures | (214.1) | (214.4) |
Acquisitions of businesses, net of cash acquired | (57.7) | 0 |
Proceeds from asset sales | 7.5 | 3.1 |
Distributions of capital from equity investments | 23.9 | 24 |
Other | 2.5 | 3 |
Net cash used in investing activities | (237.9) | (184.3) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 125 | 270 |
Repayments under revolving credit facility | (170) | (315) |
Proceeds from issuance of senior notes and term loans | 1,762.4 | 0 |
Repayment of senior notes and term loans | (1,693.4) | (39.9) |
Payments of debt issuance and deferred financing costs | (52.3) | 0 |
Payments on long-term debt | (13.1) | (37.6) |
Payments on license obligations | (29) | (34.5) |
Net redemptions of common stock under stock-based compensation plans and other | (2.7) | (4.7) |
Net cash provided by (used in) financing activities | (73.1) | (161.7) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4.8 | (1.1) |
Increase (decrease) in cash, cash equivalents and restricted cash | 82.8 | (4.3) |
Cash, cash equivalents and restricted cash, beginning of period | 156.9 | 166.8 |
Cash, cash equivalents and restricted cash, end of period | 239.7 | 162.5 |
Supplemental cash flow information: | ||
Cash paid for interest | 423.1 | 433.5 |
Income taxes paid | 27.8 | 9.8 |
Supplemental non-cash transactions: | ||
Non-cash rollover and refinancing of Term loans (see Note 10) | 6,030.4 | 0 |
Non-cash interest expense | 17.4 | 30.3 |
Non-cash additions to intangible assets related to license agreements | $ 28.1 | $ 91.3 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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. 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 to be expected 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 On January 18, 2017, we closed the acquisition of all of the issued and outstanding common shares of DEQ Systems Corp. ("DEQ"), which was announced in the third quarter of 2016. DEQ was integrated into our gaming business segment and expands the depth and breadth of our table product portfolio. On April 7, 2017, we completed the acquisition of all of the issued and outstanding capital stock of privately held mobile and social game company Spicerack Media, Inc. ("Spicerack"), which expands our existing portfolio of social casino games and our customer base. Spicerack was integrated into our interactive business segment. On April 25, 2017, we completed the acquisition of all of the issued and outstanding membership interests of privately held lottery sales force and retail performance technology and consulting services company Lapis Software Associates, LLC (“Lapis”), which expands our suite of value-added retail lottery products. Lapis was integrated into our lottery business segment. On July 7, 2017, we completed the acquisition of all of the issued and outstanding capital shares of privately held U.K.-based mobile and interactive casino content developer Red7Mobile Ltd. ("Red7"), which expands our existing portfolio of mobile and interactive game titles. Red7 was integrated into our interactive business segment. We accounted for these acquisitions using the acquisition method of accounting whereby the total purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on respective estimated fair values. The following table summarizes an aggregate disclosure related to business acquisitions completed through September 30, 2017 and is based on the preliminary allocations of the purchase price expected to be finalized by the fourth quarter of 2017, pending completion of the valuation analyses for acquired intangible assets: Total Cash paid, net Contingent Consideration 1 Allocation of 2 Weighted Excess purchase Aggregate total $ 66.0 $ 57.7 $ 7.5 $ 56.4 8.3 $ 14.6 1 Contingent consideration as determined by fair value and included in the consideration transferred. 2 Intangible assets primarily consist of technology-based and customer relationship intangible assets. The fair value of these intangible assets was determined using a combination of a royalty savings method and the excess earnings method using Level 3 in the hierarchy as established by ASC 820. The discount rates and royalty rates used in the valuation analysis ranged between 9% and 20% and 1% and 16% , respectively. The contingent consideration value is primarily based on reaching certain earnings-based metrics, with a maximum payout of up to $38.5 million . The goodwill recognized relates to the Spicerack acquisition, and the factors contributing to the recognition of goodwill are based on expected synergies resulting from this acquisition, including the expansion of the customer base. None of the resultant goodwill is expected to be deductible for income tax purposes. The amount of revenue and earnings associated with the above acquisitions and since the acquisition date included in the consolidated financial statements were less than 1.0% for all of the periods presented, thus not significant to our consolidated financial statements. Pending Acquisition of NYX Gaming Group Limited As previously disclosed in Item 1.01 of our Current Report on Form 8-K filed with the SEC on September 21, 2017, during the third quarter of 2017, we entered into a definitive agreement (the “Arrangement Agreement”) to acquire all of the outstanding ordinary shares of NYX Gaming Group Limited, a Guernsey company ("NYX"), for CAD $2.40 per share, equivalent to an aggregate enterprise value of approximately CAD $775.0 million , or approximately $631.0 million , including the refinancing of the existing indebtedness of NYX (the "NYX Acquisition"). NYX, a leading digital gaming software supplier for interactive, social and mobile gaming worldwide, is headquartered in Las Vegas, Nevada and is listed on the Toronto Stock Exchange - Venture Exchange (“TSX-V”) under the ticker symbol “NYX.” The transaction, which was approved by each company’s board of directors, is expected to close in the first quarter of 2018, subject to the satisfaction of certain conditions, including NYX shareholder approval, approval by the Royal Court of Guernsey and receipt of gaming approvals in certain jurisdictions. The Arrangement Agreement contains customary deal protection provisions in favor of us, including a termination fee payable by NYX in certain circumstances. If the conditions to closing the NYX Acquisition have been satisfied and we are unable to close, we would be required to pay to NYX a termination fee of CAD $30 million . We expect to finance the NYX Acquisition with a combination of cash on hand, borrowings under our existing revolving credit facility and the October 2017 Financing Transaction (see Note 10). See “Uncertainties related to our proposed acquisition of NYX may negatively affect our financial condition and results of operations and could negatively impact our stock price” contained in “Risk Factors” in Item 1A of this Quarterly Report on Form 10-Q which discusses our ability to complete this transaction and other uncertainties related to this proposed acquisition. Upon consummation of the NYX Acquisition, we anticipate reporting our operations in four business segments, representing our different products and services -- Gaming, Lottery, Social, and Digital Gaming & Sports. Revenue The following table summarizes our revenues by type within each of our business segments: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Gaming Gaming operations $ 176.0 $ 182.4 $ 526.8 $ 552.8 Gaming machine sales 163.1 159.8 482.6 448.7 Gaming systems 62.0 57.6 190.6 176.8 Table products 53.5 48.4 151.8 133.5 Total $ 454.6 $ 448.2 $ 1,351.8 $ 1,311.8 Lottery Instant products $ 142.7 $ 140.3 $ 435.7 $ 431.3 Lottery systems 60.2 46.3 158.6 146.9 Total $ 202.9 $ 186.6 $ 594.3 $ 578.2 Interactive Social Gaming - B2C $ 95.1 $ 70.3 $ 266.4 $ 199.5 Other 16.3 14.9 48.1 41.7 Total $ 111.4 $ 85.2 $ 314.5 $ 241.2 Deferred Revenue The following table summarizes the deferred revenue activity for the reporting period: Nine Months Ended September 30, 2017 2016 Deferred revenue balance, beginning of period $ 67.4 $ 57.8 New deferrals 173.3 194.6 Amounts recognized in revenue (178.4 ) (192.8 ) Deferred revenue balance, end of period $ 62.3 $ 59.6 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 2.6 million and 3.2 million of stock options from the diluted weighted-average common shares outstanding for the three and nine months ended September 30, 2017 and 2016, respectively. We excluded 4.2 million and 5.6 million of RSUs from the calculation of diluted weighted-average common shares outstanding for the three and nine months ended September 30, 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 the first quarter of 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 and nine months ended September 30, 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 $41.6 million , respectively, which now includes restricted cash, and a $3.5 million decrease in net cash used in investing activities for the nine months ended September 30, 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 the first quarter of 2017, which will simplify our future goodwill impairment testing, if testing necessitates an impairment charge. 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. We continue to assess the anticipated impact of adopting this guidance in revenue recognition for our business segments. The following table summarizes the anticipated impact to the financial statements based on our assessment completed to date: Business Segment Revenue Type Anticipated Impact Gaming Gaming operations Gaming machine sales Gaming systems Table products and other We anticipate the following impact on the net amount of revenue for WAP jackpot payments, which will no longer be treated as an expense but rather as a reduction to revenue: WAP jackpot expense of $5.5 million and $17.9 million for the three and nine months ended September 30, 2017, respectively, and $6.1 million and $22.9 million for the three and nine months ended September 30, 2016, respectively, would have been recognized as a reduction to revenue. We do not anticipate a material impact on timing or amount of revenue, other than the WAP impact disclosed above. We do not anticipate a material impact on timing or amount of revenue. We anticipate impact on timing of revenue recognition primarily related to certain hardware products and professional services, for which timing of revenue recognition might accelerate. While we do not anticipate this will result in a material impact on our consolidated financial statements, we are in the process of quantifying this change. We do not anticipate a material impact on timing or amount of revenue. Lottery Instant products under POS Lottery - other We anticipate there may be a material impact on the timing and amount of revenue for our instant products revenues generated under POS arrangements. Timing of recognition - currently, we recognize revenue under POS arrangements when such amounts become fixed or determinable, which is when retail sales occur. Under ASC 606, we have concluded that control transfers to the lottery authorities when the lotteries have taken delivery of shipments of instant products. This will accelerate revenue when compared to the current timing of recognition. Adoption impact- upon adoption of ASC 606, the amount that we expect to receive from our lottery customers for inventory that remains unsold through retail sales will be recognized as an adjustment (both the revenue and cost of such instant products) to retained earnings. As of December 31, 2016, approximately $55 million of revenue related to instant products was not recognized because those tickets had not been sold by lottery retailers; accordingly, under ASC 606 this amount would be recognized directly to retained earnings as opposed to being recognized as future revenue upon the occurrence of retail sales. Because the ultimate effect of this adoption is highly dependent on shipment of instant products under POS arrangements in the fourth quarter, we can not quantify the adoption impact at December 31, 2017. Future impact - because of the timing change described above, revenues and associated operating income may be materially impacted depending on timing of shipments of instant products. We also expect that future revenues under POS arrangements could be much more volatile than we have experienced under current accounting. However, because the timing of future shipments is not known, we can not estimate the impact on future revenues and associated operating income. We anticipate other immaterial impacts on timing and amount of revenue related to our other instant product and lottery systems arrangements which we anticipate would result in a shift in the timing of revenue recognition from 2017 to 2018 by less than $12 million in the aggregate. Interactive All We do not anticipate a material impact on timing or amount of revenue. Additionally, as disclosed in our 2016 10-K, ASC 606 will significantly increase revenue disclosure requirements; however many of these newly required disclosures, including disaggregation of revenue and discussion of deferred revenue are included in revenue presented in this Note 1. We currently do not anticipate significant changes to our business processes and systems to support the adoption of the new guidance and are currently assessing an impact on our internal controls. We will continue to monitor and assess the impact of any changes to the standard and interpretations as they become available. 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, including potentially early 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. We are currently evaluating the impact of adopting this guidance. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The new guidance makes improvements to simplify the application of hedge accounting guidance while also creating more transparency for results presented on the face of the financial statements and footnotes. The new guidance is effective for fiscal years beginning after December 15, 2018, 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2017 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 454.6 $ 202.9 $ 111.4 $ — $ 768.9 Depreciation, amortization and impairments 129.8 10.0 7.9 25.4 173.1 Restructuring and other 0.3 (0.1 ) 0.5 7.1 7.8 Operating income (loss) 85.2 62.4 12.9 (69.9 ) 90.6 Interest expense (148.9 ) Earnings from equity investments 7.5 Loss on debt financing transactions (8.4 ) Other income (expense), net (4.3 ) Net loss before income taxes (63.5 ) (1) Includes corporate amounts not allocated to the business segments. Three Months Ended September 30, 2016 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 448.2 $ 186.6 $ 85.2 $ — $ 720.0 Depreciation, amortization and impairments 154.0 15.2 3.7 18.8 191.7 Restructuring and other — 0.5 (0.4 ) 13.7 13.8 Operating income (loss) 51.5 43.2 9.6 (70.8 ) 33.5 Interest expense (165.4 ) Earnings from equity investments 7.3 Other income (expense), net 6.0 Net loss before income taxes (118.6 ) (1) Includes corporate amounts not allocated to the business segments. Nine Months Ended September 30, 2017 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 1,351.8 $ 594.3 $ 314.5 $ — $ 2,260.6 Depreciation, amortization and impairments 389.1 37.2 16.3 70.6 513.2 Restructuring and other 4.8 (0.9 ) 1.6 12.6 18.1 Operating income (loss) 248.6 188.8 48.9 (190.4 ) 295.9 Interest expense (459.5 ) Earnings from equity investments 20.1 Loss on debt financing transactions (38.1 ) Other income (expense), net 1.3 Net loss before income taxes (180.3 ) (1) Includes corporate amounts not allocated to the business segments. Nine Months Ended September 30, 2016 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 1,311.8 $ 578.2 $ 241.2 $ — $ 2,131.2 Depreciation, amortization and impairments 449.9 50.2 11.2 54.1 565.4 Restructuring and other 5.0 1.8 0.1 13.8 20.7 Operating income (loss) 141.6 149.1 34.8 (182.6 ) 142.9 Interest expense (496.4 ) Earnings from equity investments 18.5 Gain on debt financing transactions 25.2 Other income (expense), net 8.4 Net loss before income taxes (301.4 ) (1) Includes corporate amounts not allocated to the business segments. |
Restructuring and other
Restructuring and other | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Employee severance (1) $ 1.7 $ 4.1 $ 4.4 $ 8.9 Acquisitions and related costs 4.0 1.5 8.2 1.5 Restructuring, integration and other 2.1 8.2 5.5 10.3 Total $ 7.8 $ 13.8 $ 18.1 $ 20.7 (1) Inclusive of employee severance and termination costs associated with restructuring activities. In the fourth quarter of 2016, we announced a new business improvement initiative, which has streamlined our organization, increased our efficiencies and significantly reduced our operating costs across all our divisions through a combination of headcount reductions, facilities streamlining and reduction in other operating costs. We have completed these actions related to this initiative. The following table presents a summary of restructuring charges and the charges in the restructuring accrual during 2017: Restructuring Accrual Balance as of January 1, 2017 $ 16.4 Accrual additions 2.2 Cash payments and other (18.6 ) Balance as of September 30, 2017 $ — |
Accounts and Notes Receivable a
Accounts and Notes Receivable and Credit Quality of Receivables | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Accounts and Notes Receivable and Credit Quality of Receivables | Accounts and Notes Receivable and Credit Quality of Receivables Accounts and Notes Receivable The following summarizes the components of current and long-term accounts and notes receivable, net: September 30, 2017 December 31, 2016 Current: Accounts receivable $ 502.4 $ 508.1 Notes receivable 136.5 140.0 Allowance for doubtful accounts and notes (27.9 ) (27.7 ) Current accounts and notes receivable, net $ 611.0 $ 620.4 Long-term: Notes receivable, net of allowance of $0.4 and $0.4 44.4 48.1 Total accounts and notes receivable, net $ 655.4 $ 668.5 Credit Quality of Receivables The interest rates on our outstanding notes receivable ranged from 3.0% to 10.4% at September 30, 2017 and 3.3% to 10.4% at December 31, 2016. We have certain concentrations of outstanding accounts and notes receivable in international locations that impact our assessment of the credit quality of those receivables. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our receivables. We have not identified changes in the aforementioned factors during the nine months ended September 30, 2017 that require a reassessment of our receivable balances. The international locations with significant concentrations (generally deemed to be exceeding 10%) of our accounts and notes receivable are as follows: • Mexico - Our notes receivable, net, from certain customers in Mexico at September 30, 2017 was $27.4 million. We collected $28.7 million of outstanding receivables from these customers during the nine months ended September 30, 2017 . • Peru - Our notes receivable, net, from certain customers in Peru at September 30, 2017 was $21.4 million . We collected $12.1 million of outstanding receivables from these customers during the nine months ended September 30, 2017 . • Argentina - Our notes receivable, net, from customers in Argentina at September 30, 2017 was $21.6 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 $18.1 million of outstanding receivables from customers in Argentina during the nine months ended September 30, 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: September 30, 2017 Balances over 90 days past due December 31, 2016 Balances over 90 days past due Notes receivable: Domestic $ 74.9 $ 9.3 $ 45.1 $ 1.1 International 106.4 29.8 143.0 38.7 Total notes receivable 181.3 39.1 188.1 39.8 Notes receivable allowance Domestic (3.4 ) (3.4 ) (1.0 ) (0.9 ) International (15.2 ) (15.2 ) (14.0 ) (14.0 ) Total notes receivable allowance (18.6 ) (18.6 ) (15.0 ) (14.9 ) Notes receivable, net $ 162.7 $ 20.5 $ 173.1 $ 24.9 At September 30, 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 nine month periods ended September 30, 2017 and 2016 is as follows: Nine Months Ended September 30, 2017 2016 Beginning allowance for notes receivable $ 15.0 $ 13.2 Provision 4.8 3.8 Charge-offs and recoveries (1.2 ) (2.2 ) Ending allowance for notes receivable $ 18.6 $ 14.8 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 September 30, 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 | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following as of the dates presented below: September 30, 2017 December 31, 2016 Parts and work-in-process $ 123.8 $ 110.5 Finished goods 131.4 131.8 Total inventories $ 255.2 $ 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 | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consisted of the following: September 30, 2017 December 31, 2016 Land $ 35.8 $ 36.5 Buildings and leasehold improvements 177.3 182.2 Gaming and lottery machinery and equipment 986.8 993.3 Furniture and fixtures 32.9 28.6 Construction in progress 20.6 21.2 Other property and equipment 240.0 239.3 Less: accumulated depreciation (926.2 ) (888.9 ) Total property and equipment, net $ 567.2 $ 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 Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Depreciation expense $ 69.0 $ 80.9 $ 205.9 $ 248.3 |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 9 Months Ended |
Sep. 30, 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 September 30, 2017 and December 31, 2016 . September 30, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 882.8 $ (201.0 ) $ 681.8 $ 875.8 $ (163.9 ) $ 711.9 Intellectual property 789.1 (304.0 ) 485.1 726.0 (218.2 ) 507.8 Licenses 417.0 (189.0 ) 228.0 413.2 (153.5 ) 259.7 Brand names 126.4 (43.1 ) 83.3 123.7 (32.1 ) 91.6 Trade names 98.8 (13.0 ) 85.8 97.4 (8.1 ) 89.3 Patents and other 23.5 (13.9 ) 9.6 28.0 (14.2 ) 13.8 2,337.6 (764.0 ) 1,573.6 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 $ 2,433.9 $ (766.1 ) $ 1,667.8 $ 2,360.4 $ (592.1 ) $ 1,768.3 The following reflects intangible amortization expense included within D&A: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Amortization expense $ 62.3 $ 60.9 $ 193.1 $ 188.8 Goodwill The table below reconciles the change in the carrying value of goodwill by business segment for the period from December 31, 2016 to September 30, 2017 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2016 $ 2,428.6 $ 350.0 $ 109.8 $ 2,888.4 Acquired goodwill — — 14.6 14.6 Foreign currency adjustments 51.3 7.0 — 58.3 Balance as of September 30, 2017 $ 2,479.9 $ 357.0 $ 124.4 $ 2,961.3 |
Software, net
Software, net | 9 Months Ended |
Sep. 30, 2017 | |
Capitalized Computer Software, Net [Abstract] | |
Software, net | Software, net Software, net consisted of the following: September 30, 2017 December 31, 2016 Software $ 989.2 $ 924.8 Accumulated amortization (632.5 ) (515.7 ) Software, net $ 356.7 $ 409.1 The following reflects amortization of software included within D&A: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Amortization expense $ 41.8 $ 44.2 $ 114.2 $ 122.6 |
Equity Investments
Equity Investments | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Equity Investments Equity investments totaled $168.4 million and $179.9 million as of September 30, 2017 and December 31, 2016, respectively. We received distributions and dividends totaling $44.1 million and $40.7 million during the nine months ended September 30, 2017 and 2016, respectively, primarily related to our LNS equity investment. |
Long-Term and Other Debt
Long-Term and Other Debt | 9 Months Ended |
Sep. 30, 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 September 30, 2017 December 31, 2016 Face value Unamortized debt discount/premium and deferred financing costs, net 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 — — — — Term Loan B-4 3,282.8 (83.8 ) 3,199.0 Term Loan B-4 — Senior Notes: Secured Notes 2,100.0 32.4 2,132.4 936.3 Unsecured Notes 2,200.0 (31.4 ) 2,168.6 2,164.0 Subordinated Notes: 2018 Notes — — — 248.7 2020 Notes 243.5 (1.8 ) 241.7 241.2 2021 Notes 340.6 (5.0 ) 335.6 334.5 Capital lease obligations, 3.9% interest as of September 30, 2017 payable monthly through 2019 11.5 — 11.5 15.2 Total long-term debt outstanding $ 8,178.4 $ (89.6 ) $ 8,088.8 $ 8,074.2 Less: current portion of long-term debt (39.9 ) (49.3 ) Long-term debt, excluding current portion $ 8,048.9 $ 8,024.9 Fair value of debt (1) $ 8,589.5 $ 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 September 30, 2017 . October 2017 Financing Transaction On October 17, 2017, we successfully completed the offering of our 5.000% Senior Secured Notes due 2025 (the "2025 Secured Notes") in the aggregate principal amount of $350.0 million (the "October 2017 Financing"). We intend to use the net proceeds of this offering, together with cash on hand and borrowings under the revolving credit facility under our credit agreement, to finance the NYX Acquisition, including the refinancing of certain indebtedness of NYX, and to pay related fees and expenses. If the NYX Acquisition is not consummated for any reason or other corporate needs arise, we may use the net proceeds from this offering for general corporate purposes, which may include the prepayment of term loan borrowings under our credit agreement. Subsequent to the October 2017 Financing, the aggregate principal amount of Secured Notes and 2025 Secured Notes outstanding was $2,450.0 million . August 2017 Refinancing Transaction On August 14, 2017, we entered into an amendment to our credit agreement which provided for a $3,282.8 million senior secured term B-4 loan facility and extended the maturity from October 2021 to August 2024 as compared to the previous term B-3 loan facility. The net proceeds of the term B-4 loan facility were used to (a) prepay the balance on the term B-3 loans and (b) pay related fees and expenses (the “August 2017 Refinancing”). In connection with the August 2017 Refinancing, we incurred $7.9 million in financing costs. The new term B-4 loans that were entered into as part of the August 2017 Refinancing mature on August 14, 2024 and 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. The applicable margin for the new term B-4 loans is 3.25% per annum for eurocurrency (LIBOR) loans and 2.25% per annum for base rate loans, compared to 4.00% per annum for eurocurrency (LIBOR) loans and 3.00% per annum for base rate loans under the previous term B-3 loan facility. February 2017 Refinancing Transactions On February 14, 2017, we entered into an amendment to our credit agreement which provided for a $3,291.0 million senior secured term B-3 loan facility and reduced 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 were prepaid in full in connection with the August 2017 Refinancing. 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 are 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) Gain on Debt Financing Transactions The following are components of the (loss) gain on debt financing transactions resulting from debt extinguishment and modification accounting for the three and nine months ended September 30, 2017 and 2016: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Repurchase and cancellation of principal balance at discount $ — $ — $ — $ 26.0 Unamortized debt discount and deferred financing costs (0.6 ) — (26.4 ) (0.8 ) Third party debt issuance fees (7.8 ) — (11.7 ) — Total (loss) gain on debt financing transactions $ (8.4 ) $ — $ (38.1 ) $ 25.2 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 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, restricted cash, 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 September 30, 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 February 2017 Refinancing as described in Note 10. Subsequent to the February 2017 Refinancing, we have measured ineffectiveness totaling $0.5 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 are 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 on our interest rate swap contracts: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Gains recorded in accumulated other comprehensive loss, net of tax $ 0.8 $ 2.7 $ 3.6 $ 6.3 Reclassifications of losses out of accumulated other comprehensive loss 1.7 2.0 5.8 6.1 Ineffectiveness recorded in interest expense (0.2 ) — 0.5 — We expect to reclassify additional losses of $1.7 million from accumulated other comprehensive loss to interest expense in the next twelve months. The following table shows the fair value of our hedges: September 30, 2017 December 31, 2016 Accrued liabilities $ 1.7 $ 6.7 Other long-term liabilities — 0.2 Total fair value $ 1.7 $ 6.9 |
Stockholders' Deficit and Emplo
Stockholders' Deficit and Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Stockholders' Deficit and Employee Benefit Plans | Stockholders' Deficit and Employee Benefit Plans Stock Based Compensation We have stock-based compensation programs under which we use stock options and RSUs. In 2016, 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 total stock-based compensation expense recognized under all programs: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Related to vesting of stock options $ 1.1 $ 2.9 $ 2.6 $ 4.2 Related to vesting of RSUs 6.4 8.1 17.9 19.3 Total $ 7.5 $ 11.0 $ 20.5 $ 23.5 Employee Benefit Plans We have defined benefit pension plans for our U.K.-based union employees (the "U.K. Plan") and certain Canadian-based employees (the "Canadian Plan") 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. Series C Junior Participating Preferred Stock and Rights Agreement On June 19, 2017, the Board of Directors of SGC approved, and SGC entered into, a Rights Agreement between SGC and American Stock Transfer & Trust Company, LLC. Concurrently, the Board of Directors of SGC adopted a resolution reserving for issuance a series of 20,000 shares of preferred stock. Designated as SGC's Series C Junior Participating Preferred Stock ("Junior Preferred Stock"), par value $1.00 per share, upon the exercise of rights under the Rights Agreement. The Rights Agreement provides for a dividend of one preferred share purchase right (“Right”) for each share of Class A Common Stock, par value $0.01 per share, of SGC outstanding as of June 29, 2017. Each Right entitles the holder to purchase from SGC one ten-thousandth of a share of Junior Preferred Stock for a purchase price of $109.00 , subject to adjustment as provided in the Rights Agreement. As of September 30, 2017, none of these shares were outstanding and no Rights were exercised. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 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. Based upon the evaluation of all available evidence, and considering the projected U.S. pre-tax losses for 2017, a valuation allowance has been recorded for the U.S. operations in 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. We maintained other valuation allowances for certain non-U.S. jurisdictions with cumulative losses. The effective income tax rates for the three and nine months ended September 30, 2017 were 6.6% and (10.5)% , respectively , and 16.6% and 19.4% for the three and nine months ended September 30, 2016 , respectively, and were determined using an estimated annual effective tax rate after considering any discrete items for such periods. Due to a valuation allowance against our U.S. deferred tax assets, the effective tax rate for the three and nine months ended September 30, 2017 does not include the benefit of the current year U.S. tax loss. In the three and nine months ended September 30, 2016, we recorded 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. 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 and the overall mix of income in our foreign jurisdictions. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation We are 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 $5.1 million and $7.7 million for all of our legal matters that were contingencies as of September 30, 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 us or our subsidiaries, even when the amount of damages claimed against us or our 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 $14.3 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 we are 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. Oregon State Lottery update On June 14, 2017, the Oregon Court of Appeals affirmed the trial court’s dismissal of the plaintiff's claims with prejudice. As noted in the 2016 10-K, the trial court indicated that all claims against WMS Gaming Inc. were moot as a result of its dismissal. In August 2017, the plaintiff filed to petition the Oregon Supreme Court to review the decision of the Oregon Court of Appeals, and that petition is pending. 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. The district court denied the motion for summary judgment on September 1, 2017. Trial is currently scheduled for May 2018. 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. |
Financial Information for Guara
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries | 9 Months Ended |
Sep. 30, 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 September 30, 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, which 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. Presented below is condensed consolidating financial information for (1) SGC, (2) SGI, (3) the Guarantor Subsidiaries and (4) the Non-Guarantor Subsidiaries as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 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 September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 137.3 $ 3.9 $ — $ 60.6 $ (5.4 ) $ 196.4 Restricted cash — — 26.9 0.1 — 27.0 Accounts receivable, net 0.1 57.8 202.8 232.0 — 492.7 Notes receivable, net — — 96.1 22.2 — 118.3 Inventories — 40.2 93.1 145.5 (23.6 ) 255.2 Prepaid expenses, deposits and other current assets 9.7 25.3 44.5 56.3 — 135.8 Property and equipment, net 25.1 84.9 311.0 170.0 (23.8 ) 567.2 Investment in subsidiaries 3,200.0 981.4 954.7 — (5,136.1 ) — Goodwill — 188.3 1,932.4 840.6 — 2,961.3 Intangible assets, net 172.4 35.1 1,240.1 220.2 — 1,667.8 Intercompany balances — 5,405.8 — 340.0 (5,745.8 ) — Software, net 70.7 21.7 216.3 48.0 — 356.7 Other assets (3) 234.3 336.1 55.1 159.8 (501.3 ) 284.0 Total assets $ 3,849.6 $ 7,180.5 $ 5,173.0 $ 2,295.3 $ (11,436.0 ) $ 7,062.4 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 32.8 $ — $ 7.1 $ — $ 39.9 Other current liabilities 101.6 178.3 198.6 160.2 (8.0 ) 630.7 Long-term debt, excluding current portion — 8,044.5 — 4.4 — 8,048.9 Other long-term liabilities 167.8 9.9 549.4 90.9 (498.6 ) 319.4 Intercompany balances 5,556.7 — 189.1 — (5,745.8 ) — Stockholders' (deficit) equity (1,976.5 ) (1,085.0 ) 4,235.9 2,032.7 (5,183.6 ) (1,976.5 ) Total liabilities and stockholders' (deficit) equity $ 3,849.6 $ 7,180.5 $ 5,173.0 $ 2,295.3 $ (11,436.0 ) $ 7,062.4 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 $15.6 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 INCOME (LOSS) Three Months Ended September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 129.3 $ 400.0 $ 311.6 $ (72.0 ) $ 768.9 Cost of services, cost of product sales and cost of instant games (3) — 88.1 120.7 152.7 (70.7 ) 290.8 Selling, general and administrative 30.8 11.1 60.9 70.1 (14.1 ) 158.8 Research and development 0.5 2.6 26.0 18.7 — 47.8 Depreciation, amortization and impairments 22.3 8.8 111.6 33.5 (3.1 ) 173.1 Restructuring and other 7.0 (0.1 ) 0.1 0.8 — 7.8 Operating (loss) income (60.6 ) 18.8 80.7 35.8 15.9 90.6 Interest expense (0.1 ) (148.5 ) — (0.3 ) — (148.9 ) Loss on debt financing transactions — (8.4 ) — — — (8.4 ) Other (expense) income, net (21.2 ) 59.4 (14.5 ) (20.5 ) — 3.2 Net (loss) income before equity in income of subsidiaries and income taxes (81.9 ) (78.7 ) 66.2 15.0 15.9 (63.5 ) Equity in income of subsidiaries 26.1 22.5 15.5 — (64.1 ) — Income tax benefit (expense) (3.5 ) 29.4 (31.0 ) 9.3 — 4.2 Net (loss) income $ (59.3 ) $ (26.8 ) $ 50.7 $ 24.3 $ (48.2 ) $ (59.3 ) Other comprehensive income 72.8 4.6 53.2 67.0 (124.8 ) 72.8 Comprehensive income (loss) $ 13.5 $ (22.2 ) $ 103.9 $ 91.3 $ (173.0 ) $ 13.5 1 - Issuer of obligations under the 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 INCOME (LOSS) Three Months Ended September 30, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 114.2 $ 330.8 $ 358.4 $ (83.4 ) $ 720.0 Cost of services, cost of product sales and cost of instant games (3) — 81.8 86.1 189.8 (83.4 ) 274.3 Selling, general and administrative 30.9 14.8 43.1 64.0 — 152.8 Research and development 2.1 1.6 38.3 11.9 — 53.9 Depreciation, amortization and impairments 13.8 8.7 140.6 28.6 — 191.7 Restructuring and other 14.3 0.2 (0.7 ) — — 13.8 Operating (loss) income (61.1 ) 7.1 23.4 64.1 — 33.5 Interest expense (5.3 ) (159.5 ) — (0.6 ) — (165.4 ) Other (expense) income, net (13.9 ) 54.7 (26.7 ) (0.8 ) — 13.3 Net (loss) income before equity in income of subsidiaries and income taxes (80.3 ) (97.7 ) (3.3 ) 62.7 — (118.6 ) Equity in income of subsidiaries 18.1 7.5 37.9 — (63.5 ) — Income tax (expense) benefit (36.7 ) 99.2 (16.9 ) (25.9 ) — 19.7 Net (loss) income $ (98.9 ) $ 9.0 $ 17.7 $ 36.8 $ (63.5 ) $ (98.9 ) Other comprehensive (loss) income 5.2 2.1 (48.0 ) 19.0 26.9 5.2 Comprehensive (loss) income $ (93.7 ) $ 11.1 $ (30.3 ) $ 55.8 $ (36.6 ) $ (93.7 ) 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 INCOME (LOSS) Nine Months Ended September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 375.6 $ 1,220.3 $ 861.0 $ (196.3 ) $ 2,260.6 Cost of services, cost of product sales and cost of instant games (3) — 257.8 373.4 410.1 (191.6 ) 849.7 Selling, general and administrative 89.7 29.1 178.6 184.6 (36.6 ) 445.4 Research and development 1.7 6.4 77.1 53.1 — 138.3 Depreciation, amortization and impairments 59.5 24.3 346.3 90.9 (7.8 ) 513.2 Restructuring and other 12.3 0.4 3.2 2.2 — 18.1 Operating (loss) income (163.2 ) 57.6 241.7 120.1 39.7 295.9 Interest expense (4.4 ) (454.2 ) — (0.9 ) — (459.5 ) Loss on debt financing transactions (1.1 ) (37.0 ) — — — (38.1 ) Other (expense) income, net (60.1 ) 161.8 (71.0 ) (9.3 ) — 21.4 Net (loss) income before equity in income of subsidiaries and income taxes (228.8 ) (271.8 ) 170.7 109.9 39.7 (180.3 ) Equity in income of subsidiaries 49.6 54.4 37.0 — (141.0 ) — Income tax (expense) benefit (20.0 ) 101.7 (79.0 ) (21.6 ) — (18.9 ) Net (loss) income $ (199.2 ) $ (115.7 ) $ 128.7 $ 88.3 $ (101.3 ) $ (199.2 ) Other comprehensive income 140.6 8.9 119.4 126.7 (255.0 ) 140.6 Comprehensive (loss) income $ (58.6 ) $ (106.8 ) $ 248.1 $ 215.0 $ (356.3 ) $ (58.6 ) 1 - Issuer of obligations under the 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 INCOME (LOSS) Nine Months Ended September 30, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 355.8 $ 1,047.0 $ 942.2 $ (213.8 ) $ 2,131.2 Cost of instant games, cost of services and cost of product sales (3) — 250.8 275.2 494.6 (213.8 ) 806.8 Selling, general and administrative 91.9 37.6 132.8 177.7 — 440.0 Research and development 4.8 6.3 109.1 35.2 — 155.4 Depreciation, amortization and impairments 39.5 29.9 407.3 88.7 — 565.4 Restructuring and other 14.3 0.4 3.3 2.7 — 20.7 Operating (loss) income (150.5 ) 30.8 119.3 143.3 — 142.9 Interest expense (15.8 ) (480.0 ) — (0.6 ) — (496.4 ) Gain on debt financing transactions — 25.2 — — — 25.2 Other (expense) income, net (64.2 ) 157.5 (73.9 ) 7.5 — 26.9 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (230.5 ) (266.5 ) 45.4 150.2 — (301.4 ) Equity in (loss) income of subsidiaries (22.7 ) 37.8 85.3 — (100.4 ) — Income tax benefit (expense) 10.3 99.2 (16.8 ) (34.2 ) — 58.5 Net (loss) income $ (242.9 ) $ (129.5 ) $ 113.9 $ 116.0 $ (100.4 ) $ (242.9 ) Other comprehensive (loss) income (27.4 ) 5.0 (54.2 ) (11.8 ) 61.0 (27.4 ) Comprehensive (loss) income $ (270.3 ) $ (124.5 ) $ 59.7 $ 104.2 $ (39.4 ) $ (270.3 ) 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 Nine Months Ended September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (162.6 ) $ (169.9 ) $ 471.5 $ 254.3 $ (4.3 ) $ 389.0 Cash flows from investing activities: Capital expenditures (42.0 ) (13.6 ) (96.4 ) (62.1 ) — (214.1 ) Acquisitions of businesses, net of cash acquired — — (26.3 ) (31.4 ) — (57.7 ) Distributions of capital from equity investments — — — 23.9 — 23.9 Changes in other assets and liabilities and other — — 7.5 2.5 — 10.0 Other, principally change in intercompany investing activities — (27.7 ) — (208.4 ) 236.1 — Net cash used in investing activities (42.0 ) (41.3 ) (115.2 ) (275.5 ) 236.1 (237.9 ) Cash flows from financing activities: Net payments of long-term debt including proceeds and repurchases of senior notes and term loans (250.0 ) 265.7 — (4.8 ) — 10.9 Payments of debt issuance and deferred financing costs — (52.3 ) — — — (52.3 ) Payments on license obligations (24.3 ) — (4.7 ) — — (29.0 ) Net redemptions of common stock under stock-based compensation plans and other (2.7 ) — — — — (2.7 ) Other, principally change in intercompany financing activities 586.2 — (350.1 ) — (236.1 ) — Net cash provided by (used in) financing activities 309.2 213.4 (354.8 ) (4.8 ) (236.1 ) (73.1 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — 4.8 — 4.8 Increase (decrease) in cash, cash equivalents and restricted cash 104.6 2.2 1.5 (21.2 ) (4.3 ) 82.8 Cash, cash equivalents and restricted cash, beginning of period 32.7 1.7 41.0 82.6 (1.1 ) 156.9 Cash, cash equivalents and restricted cash end of period $ 137.3 $ 3.9 $ 42.5 $ 61.4 $ (5.4 ) $ 239.7 1 - Issuer of obligations under the 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 Nine Months Ended September 30, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (213.3 ) $ (157.0 ) $ 494.3 $ 225.9 $ (7.1 ) $ 342.8 Cash flows from investing activities: Capital expenditures (36.6 ) (22.1 ) (110.4 ) (45.3 ) — (214.4 ) Distributions of capital from equity investments — — — 24.0 — 24.0 Changes in other assets and liabilities and other — — 6.1 — — 6.1 Other, principally change in intercompany investing activities — 296.8 — (198.8 ) (98.0 ) — Net cash (used in) provided by investing activities (36.6 ) 274.7 (104.3 ) (220.1 ) (98.0 ) (184.3 ) Cash flows from financing activities: Net payments on long-term debt — (117.2 ) — (5.3 ) — (122.5 ) Payments on license obligations (24.2 ) — (10.3 ) — — (34.5 ) Net redemptions of common stock under stock-based compensation plans and other (4.7 ) — — — — (4.7 ) Other, principally change in intercompany financing activities 278.3 — (376.3 ) — 98.0 — Net cash provided by (used in) financing activities 249.4 (117.2 ) (386.6 ) (5.3 ) 98.0 (161.7 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — (0.4 ) (0.7 ) — (1.1 ) (Decrease) increase in cash, cash equivalents and restricted cash (0.5 ) 0.5 3.0 (0.2 ) (7.1 ) (4.3 ) 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 $ 42.7 $ 0.5 $ 40.7 $ 85.7 $ (7.1 ) $ 162.5 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 a21
Description of the Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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. 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 to be expected 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 the first quarter of 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 and nine months ended September 30, 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 $41.6 million , respectively, which now includes restricted cash, and a $3.5 million decrease in net cash used in investing activities for the nine months ended September 30, 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 the first quarter of 2017, which will simplify our future goodwill impairment testing, if testing necessitates an impairment charge. 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. We continue to assess the anticipated impact of adopting this guidance in revenue recognition for our business segments. The following table summarizes the anticipated impact to the financial statements based on our assessment completed to date: Business Segment Revenue Type Anticipated Impact Gaming Gaming operations Gaming machine sales Gaming systems Table products and other We anticipate the following impact on the net amount of revenue for WAP jackpot payments, which will no longer be treated as an expense but rather as a reduction to revenue: WAP jackpot expense of $5.5 million and $17.9 million for the three and nine months ended September 30, 2017, respectively, and $6.1 million and $22.9 million for the three and nine months ended September 30, 2016, respectively, would have been recognized as a reduction to revenue. We do not anticipate a material impact on timing or amount of revenue, other than the WAP impact disclosed above. We do not anticipate a material impact on timing or amount of revenue. We anticipate impact on timing of revenue recognition primarily related to certain hardware products and professional services, for which timing of revenue recognition might accelerate. While we do not anticipate this will result in a material impact on our consolidated financial statements, we are in the process of quantifying this change. We do not anticipate a material impact on timing or amount of revenue. Lottery Instant products under POS Lottery - other We anticipate there may be a material impact on the timing and amount of revenue for our instant products revenues generated under POS arrangements. Timing of recognition - currently, we recognize revenue under POS arrangements when such amounts become fixed or determinable, which is when retail sales occur. Under ASC 606, we have concluded that control transfers to the lottery authorities when the lotteries have taken delivery of shipments of instant products. This will accelerate revenue when compared to the current timing of recognition. Adoption impact- upon adoption of ASC 606, the amount that we expect to receive from our lottery customers for inventory that remains unsold through retail sales will be recognized as an adjustment (both the revenue and cost of such instant products) to retained earnings. As of December 31, 2016, approximately $55 million of revenue related to instant products was not recognized because those tickets had not been sold by lottery retailers; accordingly, under ASC 606 this amount would be recognized directly to retained earnings as opposed to being recognized as future revenue upon the occurrence of retail sales. Because the ultimate effect of this adoption is highly dependent on shipment of instant products under POS arrangements in the fourth quarter, we can not quantify the adoption impact at December 31, 2017. Future impact - because of the timing change described above, revenues and associated operating income may be materially impacted depending on timing of shipments of instant products. We also expect that future revenues under POS arrangements could be much more volatile than we have experienced under current accounting. However, because the timing of future shipments is not known, we can not estimate the impact on future revenues and associated operating income. We anticipate other immaterial impacts on timing and amount of revenue related to our other instant product and lottery systems arrangements which we anticipate would result in a shift in the timing of revenue recognition from 2017 to 2018 by less than $12 million in the aggregate. Interactive All We do not anticipate a material impact on timing or amount of revenue. Additionally, as disclosed in our 2016 10-K, ASC 606 will significantly increase revenue disclosure requirements; however many of these newly required disclosures, including disaggregation of revenue and discussion of deferred revenue are included in revenue presented in this Note 1. We currently do not anticipate significant changes to our business processes and systems to support the adoption of the new guidance and are currently assessing an impact on our internal controls. We will continue to monitor and assess the impact of any changes to the standard and interpretations as they become available. 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, including potentially early 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. We are currently evaluating the impact of adopting this guidance. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The new guidance makes improvements to simplify the application of hedge accounting guidance while also creating more transparency for results presented on the face of the financial statements and footnotes. The new guidance is effective for fiscal years beginning after December 15, 2018, 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 a22
Description of the Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Aggregate Business Acquisitions Completed | The following table summarizes an aggregate disclosure related to business acquisitions completed through September 30, 2017 and is based on the preliminary allocations of the purchase price expected to be finalized by the fourth quarter of 2017, pending completion of the valuation analyses for acquired intangible assets: Total Cash paid, net Contingent Consideration 1 Allocation of 2 Weighted Excess purchase Aggregate total $ 66.0 $ 57.7 $ 7.5 $ 56.4 8.3 $ 14.6 1 Contingent consideration as determined by fair value and included in the consideration transferred. 2 Intangible assets primarily consist of technology-based and customer relationship intangible assets. The fair value of these intangible assets was determined using a combination of a royalty savings method and the excess earnings method using Level 3 in the hierarchy as established by ASC 820. The discount rates and royalty rates used in the valuation analysis ranged between 9% and 20% and 1% and 16% , respectively. |
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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Gaming Gaming operations $ 176.0 $ 182.4 $ 526.8 $ 552.8 Gaming machine sales 163.1 159.8 482.6 448.7 Gaming systems 62.0 57.6 190.6 176.8 Table products 53.5 48.4 151.8 133.5 Total $ 454.6 $ 448.2 $ 1,351.8 $ 1,311.8 Lottery Instant products $ 142.7 $ 140.3 $ 435.7 $ 431.3 Lottery systems 60.2 46.3 158.6 146.9 Total $ 202.9 $ 186.6 $ 594.3 $ 578.2 Interactive Social Gaming - B2C $ 95.1 $ 70.3 $ 266.4 $ 199.5 Other 16.3 14.9 48.1 41.7 Total $ 111.4 $ 85.2 $ 314.5 $ 241.2 |
Summary of Deferred Revenue Activity | The following table summarizes the deferred revenue activity for the reporting period: Nine Months Ended September 30, 2017 2016 Deferred revenue balance, beginning of period $ 67.4 $ 57.8 New deferrals 173.3 194.6 Amounts recognized in revenue (178.4 ) (192.8 ) Deferred revenue balance, end of period $ 62.3 $ 59.6 |
Schedule of Impact of Adopting Revenue Recognition Guidance | The following table summarizes the anticipated impact to the financial statements based on our assessment completed to date: Business Segment Revenue Type Anticipated Impact Gaming Gaming operations Gaming machine sales Gaming systems Table products and other We anticipate the following impact on the net amount of revenue for WAP jackpot payments, which will no longer be treated as an expense but rather as a reduction to revenue: WAP jackpot expense of $5.5 million and $17.9 million for the three and nine months ended September 30, 2017, respectively, and $6.1 million and $22.9 million for the three and nine months ended September 30, 2016, respectively, would have been recognized as a reduction to revenue. We do not anticipate a material impact on timing or amount of revenue, other than the WAP impact disclosed above. We do not anticipate a material impact on timing or amount of revenue. We anticipate impact on timing of revenue recognition primarily related to certain hardware products and professional services, for which timing of revenue recognition might accelerate. While we do not anticipate this will result in a material impact on our consolidated financial statements, we are in the process of quantifying this change. We do not anticipate a material impact on timing or amount of revenue. Lottery Instant products under POS Lottery - other We anticipate there may be a material impact on the timing and amount of revenue for our instant products revenues generated under POS arrangements. Timing of recognition - currently, we recognize revenue under POS arrangements when such amounts become fixed or determinable, which is when retail sales occur. Under ASC 606, we have concluded that control transfers to the lottery authorities when the lotteries have taken delivery of shipments of instant products. This will accelerate revenue when compared to the current timing of recognition. Adoption impact- upon adoption of ASC 606, the amount that we expect to receive from our lottery customers for inventory that remains unsold through retail sales will be recognized as an adjustment (both the revenue and cost of such instant products) to retained earnings. As of December 31, 2016, approximately $55 million of revenue related to instant products was not recognized because those tickets had not been sold by lottery retailers; accordingly, under ASC 606 this amount would be recognized directly to retained earnings as opposed to being recognized as future revenue upon the occurrence of retail sales. Because the ultimate effect of this adoption is highly dependent on shipment of instant products under POS arrangements in the fourth quarter, we can not quantify the adoption impact at December 31, 2017. Future impact - because of the timing change described above, revenues and associated operating income may be materially impacted depending on timing of shipments of instant products. We also expect that future revenues under POS arrangements could be much more volatile than we have experienced under current accounting. However, because the timing of future shipments is not known, we can not estimate the impact on future revenues and associated operating income. We anticipate other immaterial impacts on timing and amount of revenue related to our other instant product and lottery systems arrangements which we anticipate would result in a shift in the timing of revenue recognition from 2017 to 2018 by less than $12 million in the aggregate. Interactive All We do not anticipate a material impact on timing or amount of revenue. |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Operating Information by Segment | The following tables present our segment information: Three Months Ended September 30, 2017 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 454.6 $ 202.9 $ 111.4 $ — $ 768.9 Depreciation, amortization and impairments 129.8 10.0 7.9 25.4 173.1 Restructuring and other 0.3 (0.1 ) 0.5 7.1 7.8 Operating income (loss) 85.2 62.4 12.9 (69.9 ) 90.6 Interest expense (148.9 ) Earnings from equity investments 7.5 Loss on debt financing transactions (8.4 ) Other income (expense), net (4.3 ) Net loss before income taxes (63.5 ) (1) Includes corporate amounts not allocated to the business segments. Three Months Ended September 30, 2016 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 448.2 $ 186.6 $ 85.2 $ — $ 720.0 Depreciation, amortization and impairments 154.0 15.2 3.7 18.8 191.7 Restructuring and other — 0.5 (0.4 ) 13.7 13.8 Operating income (loss) 51.5 43.2 9.6 (70.8 ) 33.5 Interest expense (165.4 ) Earnings from equity investments 7.3 Other income (expense), net 6.0 Net loss before income taxes (118.6 ) (1) Includes corporate amounts not allocated to the business segments. Nine Months Ended September 30, 2017 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 1,351.8 $ 594.3 $ 314.5 $ — $ 2,260.6 Depreciation, amortization and impairments 389.1 37.2 16.3 70.6 513.2 Restructuring and other 4.8 (0.9 ) 1.6 12.6 18.1 Operating income (loss) 248.6 188.8 48.9 (190.4 ) 295.9 Interest expense (459.5 ) Earnings from equity investments 20.1 Loss on debt financing transactions (38.1 ) Other income (expense), net 1.3 Net loss before income taxes (180.3 ) (1) Includes corporate amounts not allocated to the business segments. Nine Months Ended September 30, 2016 Gaming Lottery Interactive Corporate (1) Total Total revenue $ 1,311.8 $ 578.2 $ 241.2 $ — $ 2,131.2 Depreciation, amortization and impairments 449.9 50.2 11.2 54.1 565.4 Restructuring and other 5.0 1.8 0.1 13.8 20.7 Operating income (loss) 141.6 149.1 34.8 (182.6 ) 142.9 Interest expense (496.4 ) Earnings from equity investments 18.5 Gain on debt financing transactions 25.2 Other income (expense), net 8.4 Net loss before income taxes (301.4 ) (1) Includes corporate amounts not allocated to the business segments. |
Restructuring and other (Tables
Restructuring and other (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Employee severance (1) $ 1.7 $ 4.1 $ 4.4 $ 8.9 Acquisitions and related costs 4.0 1.5 8.2 1.5 Restructuring, integration and other 2.1 8.2 5.5 10.3 Total $ 7.8 $ 13.8 $ 18.1 $ 20.7 (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 charges in the restructuring accrual during 2017: Restructuring Accrual Balance as of January 1, 2017 $ 16.4 Accrual additions 2.2 Cash payments and other (18.6 ) Balance as of September 30, 2017 $ — |
Accounts and Notes Receivable25
Accounts and Notes Receivable and Credit Quality of Receivables (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2017 December 31, 2016 Current: Accounts receivable $ 502.4 $ 508.1 Notes receivable 136.5 140.0 Allowance for doubtful accounts and notes (27.9 ) (27.7 ) Current accounts and notes receivable, net $ 611.0 $ 620.4 Long-term: Notes receivable, net of allowance of $0.4 and $0.4 44.4 48.1 Total accounts and notes receivable, net $ 655.4 $ 668.5 |
Summary of Components of Notes Receivable, Net | The following summarizes the components of total notes receivable, net: September 30, 2017 Balances over 90 days past due December 31, 2016 Balances over 90 days past due Notes receivable: Domestic $ 74.9 $ 9.3 $ 45.1 $ 1.1 International 106.4 29.8 143.0 38.7 Total notes receivable 181.3 39.1 188.1 39.8 Notes receivable allowance Domestic (3.4 ) (3.4 ) (1.0 ) (0.9 ) International (15.2 ) (15.2 ) (14.0 ) (14.0 ) Total notes receivable allowance (18.6 ) (18.6 ) (15.0 ) (14.9 ) Notes receivable, net $ 162.7 $ 20.5 $ 173.1 $ 24.9 |
Schedule of Allowance for Notes Receivable Activity | The activity in our allowance for notes receivable for each of the nine month periods ended September 30, 2017 and 2016 is as follows: Nine Months Ended September 30, 2017 2016 Beginning allowance for notes receivable $ 15.0 $ 13.2 Provision 4.8 3.8 Charge-offs and recoveries (1.2 ) (2.2 ) Ending allowance for notes receivable $ 18.6 $ 14.8 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following as of the dates presented below: September 30, 2017 December 31, 2016 Parts and work-in-process $ 123.8 $ 110.5 Finished goods 131.4 131.8 Total inventories $ 255.2 $ 242.3 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property and Equipment | Property and equipment, net consisted of the following: September 30, 2017 December 31, 2016 Land $ 35.8 $ 36.5 Buildings and leasehold improvements 177.3 182.2 Gaming and lottery machinery and equipment 986.8 993.3 Furniture and fixtures 32.9 28.6 Construction in progress 20.6 21.2 Other property and equipment 240.0 239.3 Less: accumulated depreciation (926.2 ) (888.9 ) Total property and equipment, net $ 567.2 $ 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 Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Depreciation expense $ 69.0 $ 80.9 $ 205.9 $ 248.3 |
Intangible Assets, net and Go28
Intangible Assets, net and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2017 and December 31, 2016 . September 30, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 882.8 $ (201.0 ) $ 681.8 $ 875.8 $ (163.9 ) $ 711.9 Intellectual property 789.1 (304.0 ) 485.1 726.0 (218.2 ) 507.8 Licenses 417.0 (189.0 ) 228.0 413.2 (153.5 ) 259.7 Brand names 126.4 (43.1 ) 83.3 123.7 (32.1 ) 91.6 Trade names 98.8 (13.0 ) 85.8 97.4 (8.1 ) 89.3 Patents and other 23.5 (13.9 ) 9.6 28.0 (14.2 ) 13.8 2,337.6 (764.0 ) 1,573.6 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 $ 2,433.9 $ (766.1 ) $ 1,667.8 $ 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 Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Amortization expense $ 62.3 $ 60.9 $ 193.1 $ 188.8 The following reflects amortization of software included within D&A: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Amortization expense $ 41.8 $ 44.2 $ 114.2 $ 122.6 |
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 September 30, 2017 . Goodwill Gaming Lottery Interactive Totals Balance as of December 31, 2016 $ 2,428.6 $ 350.0 $ 109.8 $ 2,888.4 Acquired goodwill — — 14.6 14.6 Foreign currency adjustments 51.3 7.0 — 58.3 Balance as of September 30, 2017 $ 2,479.9 $ 357.0 $ 124.4 $ 2,961.3 |
Software, net (Tables)
Software, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Capitalized Computer Software, Net [Abstract] | |
Schedule of Software, net | Software, net consisted of the following: September 30, 2017 December 31, 2016 Software $ 989.2 $ 924.8 Accumulated amortization (632.5 ) (515.7 ) Software, net $ 356.7 $ 409.1 |
Schedule of Amortization Expense | The following reflects intangible amortization expense included within D&A: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Amortization expense $ 62.3 $ 60.9 $ 193.1 $ 188.8 The following reflects amortization of software included within D&A: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Amortization expense $ 41.8 $ 44.2 $ 114.2 $ 122.6 |
Long-Term and Other Debt (Table
Long-Term and Other Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following reflects our outstanding debt: As of September 30, 2017 December 31, 2016 Face value Unamortized debt discount/premium and deferred financing costs, net 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 — — — — Term Loan B-4 3,282.8 (83.8 ) 3,199.0 Term Loan B-4 — Senior Notes: Secured Notes 2,100.0 32.4 2,132.4 936.3 Unsecured Notes 2,200.0 (31.4 ) 2,168.6 2,164.0 Subordinated Notes: 2018 Notes — — — 248.7 2020 Notes 243.5 (1.8 ) 241.7 241.2 2021 Notes 340.6 (5.0 ) 335.6 334.5 Capital lease obligations, 3.9% interest as of September 30, 2017 payable monthly through 2019 11.5 — 11.5 15.2 Total long-term debt outstanding $ 8,178.4 $ (89.6 ) $ 8,088.8 $ 8,074.2 Less: current portion of long-term debt (39.9 ) (49.3 ) Long-term debt, excluding current portion $ 8,048.9 $ 8,024.9 Fair value of debt (1) $ 8,589.5 $ 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) gain on debt financing transactions resulting from debt extinguishment and modification accounting for the three and nine months ended September 30, 2017 and 2016: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Repurchase and cancellation of principal balance at discount $ — $ — $ — $ 26.0 Unamortized debt discount and deferred financing costs (0.6 ) — (26.4 ) (0.8 ) Third party debt issuance fees (7.8 ) — (11.7 ) — Total (loss) gain on debt financing transactions $ (8.4 ) $ — $ (38.1 ) $ 25.2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of gains on interest rate swap contracts | The following table shows the gains on our interest rate swap contracts: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Gains recorded in accumulated other comprehensive loss, net of tax $ 0.8 $ 2.7 $ 3.6 $ 6.3 Reclassifications of losses out of accumulated other comprehensive loss 1.7 2.0 5.8 6.1 Ineffectiveness recorded in interest expense (0.2 ) — 0.5 — |
Fair value of liabilities measured on recurring basis | The following table shows the fair value of our hedges: September 30, 2017 December 31, 2016 Accrued liabilities $ 1.7 $ 6.7 Other long-term liabilities — 0.2 Total fair value $ 1.7 $ 6.9 |
Stockholders' Deficit and Emp32
Stockholders' Deficit and Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Stock-based Compensation Expense Recognized | The following reflects total stock-based compensation expense recognized under all programs: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Related to vesting of stock options $ 1.1 $ 2.9 $ 2.6 $ 4.2 Related to vesting of RSUs 6.4 8.1 17.9 19.3 Total $ 7.5 $ 11.0 $ 20.5 $ 23.5 |
Financial Information for Gua33
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Assets Cash and cash equivalents $ 137.3 $ 3.9 $ — $ 60.6 $ (5.4 ) $ 196.4 Restricted cash — — 26.9 0.1 — 27.0 Accounts receivable, net 0.1 57.8 202.8 232.0 — 492.7 Notes receivable, net — — 96.1 22.2 — 118.3 Inventories — 40.2 93.1 145.5 (23.6 ) 255.2 Prepaid expenses, deposits and other current assets 9.7 25.3 44.5 56.3 — 135.8 Property and equipment, net 25.1 84.9 311.0 170.0 (23.8 ) 567.2 Investment in subsidiaries 3,200.0 981.4 954.7 — (5,136.1 ) — Goodwill — 188.3 1,932.4 840.6 — 2,961.3 Intangible assets, net 172.4 35.1 1,240.1 220.2 — 1,667.8 Intercompany balances — 5,405.8 — 340.0 (5,745.8 ) — Software, net 70.7 21.7 216.3 48.0 — 356.7 Other assets (3) 234.3 336.1 55.1 159.8 (501.3 ) 284.0 Total assets $ 3,849.6 $ 7,180.5 $ 5,173.0 $ 2,295.3 $ (11,436.0 ) $ 7,062.4 Liabilities and stockholders' (deficit) equity Current portion of long-term debt $ — $ 32.8 $ — $ 7.1 $ — $ 39.9 Other current liabilities 101.6 178.3 198.6 160.2 (8.0 ) 630.7 Long-term debt, excluding current portion — 8,044.5 — 4.4 — 8,048.9 Other long-term liabilities 167.8 9.9 549.4 90.9 (498.6 ) 319.4 Intercompany balances 5,556.7 — 189.1 — (5,745.8 ) — Stockholders' (deficit) equity (1,976.5 ) (1,085.0 ) 4,235.9 2,032.7 (5,183.6 ) (1,976.5 ) Total liabilities and stockholders' (deficit) equity $ 3,849.6 $ 7,180.5 $ 5,173.0 $ 2,295.3 $ (11,436.0 ) $ 7,062.4 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 $15.6 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 INCOME (LOSS) Three Months Ended September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 129.3 $ 400.0 $ 311.6 $ (72.0 ) $ 768.9 Cost of services, cost of product sales and cost of instant games (3) — 88.1 120.7 152.7 (70.7 ) 290.8 Selling, general and administrative 30.8 11.1 60.9 70.1 (14.1 ) 158.8 Research and development 0.5 2.6 26.0 18.7 — 47.8 Depreciation, amortization and impairments 22.3 8.8 111.6 33.5 (3.1 ) 173.1 Restructuring and other 7.0 (0.1 ) 0.1 0.8 — 7.8 Operating (loss) income (60.6 ) 18.8 80.7 35.8 15.9 90.6 Interest expense (0.1 ) (148.5 ) — (0.3 ) — (148.9 ) Loss on debt financing transactions — (8.4 ) — — — (8.4 ) Other (expense) income, net (21.2 ) 59.4 (14.5 ) (20.5 ) — 3.2 Net (loss) income before equity in income of subsidiaries and income taxes (81.9 ) (78.7 ) 66.2 15.0 15.9 (63.5 ) Equity in income of subsidiaries 26.1 22.5 15.5 — (64.1 ) — Income tax benefit (expense) (3.5 ) 29.4 (31.0 ) 9.3 — 4.2 Net (loss) income $ (59.3 ) $ (26.8 ) $ 50.7 $ 24.3 $ (48.2 ) $ (59.3 ) Other comprehensive income 72.8 4.6 53.2 67.0 (124.8 ) 72.8 Comprehensive income (loss) $ 13.5 $ (22.2 ) $ 103.9 $ 91.3 $ (173.0 ) $ 13.5 1 - Issuer of obligations under the 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 INCOME (LOSS) Three Months Ended September 30, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 114.2 $ 330.8 $ 358.4 $ (83.4 ) $ 720.0 Cost of services, cost of product sales and cost of instant games (3) — 81.8 86.1 189.8 (83.4 ) 274.3 Selling, general and administrative 30.9 14.8 43.1 64.0 — 152.8 Research and development 2.1 1.6 38.3 11.9 — 53.9 Depreciation, amortization and impairments 13.8 8.7 140.6 28.6 — 191.7 Restructuring and other 14.3 0.2 (0.7 ) — — 13.8 Operating (loss) income (61.1 ) 7.1 23.4 64.1 — 33.5 Interest expense (5.3 ) (159.5 ) — (0.6 ) — (165.4 ) Other (expense) income, net (13.9 ) 54.7 (26.7 ) (0.8 ) — 13.3 Net (loss) income before equity in income of subsidiaries and income taxes (80.3 ) (97.7 ) (3.3 ) 62.7 — (118.6 ) Equity in income of subsidiaries 18.1 7.5 37.9 — (63.5 ) — Income tax (expense) benefit (36.7 ) 99.2 (16.9 ) (25.9 ) — 19.7 Net (loss) income $ (98.9 ) $ 9.0 $ 17.7 $ 36.8 $ (63.5 ) $ (98.9 ) Other comprehensive (loss) income 5.2 2.1 (48.0 ) 19.0 26.9 5.2 Comprehensive (loss) income $ (93.7 ) $ 11.1 $ (30.3 ) $ 55.8 $ (36.6 ) $ (93.7 ) 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 INCOME (LOSS) Nine Months Ended September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 375.6 $ 1,220.3 $ 861.0 $ (196.3 ) $ 2,260.6 Cost of services, cost of product sales and cost of instant games (3) — 257.8 373.4 410.1 (191.6 ) 849.7 Selling, general and administrative 89.7 29.1 178.6 184.6 (36.6 ) 445.4 Research and development 1.7 6.4 77.1 53.1 — 138.3 Depreciation, amortization and impairments 59.5 24.3 346.3 90.9 (7.8 ) 513.2 Restructuring and other 12.3 0.4 3.2 2.2 — 18.1 Operating (loss) income (163.2 ) 57.6 241.7 120.1 39.7 295.9 Interest expense (4.4 ) (454.2 ) — (0.9 ) — (459.5 ) Loss on debt financing transactions (1.1 ) (37.0 ) — — — (38.1 ) Other (expense) income, net (60.1 ) 161.8 (71.0 ) (9.3 ) — 21.4 Net (loss) income before equity in income of subsidiaries and income taxes (228.8 ) (271.8 ) 170.7 109.9 39.7 (180.3 ) Equity in income of subsidiaries 49.6 54.4 37.0 — (141.0 ) — Income tax (expense) benefit (20.0 ) 101.7 (79.0 ) (21.6 ) — (18.9 ) Net (loss) income $ (199.2 ) $ (115.7 ) $ 128.7 $ 88.3 $ (101.3 ) $ (199.2 ) Other comprehensive income 140.6 8.9 119.4 126.7 (255.0 ) 140.6 Comprehensive (loss) income $ (58.6 ) $ (106.8 ) $ 248.1 $ 215.0 $ (356.3 ) $ (58.6 ) 1 - Issuer of obligations under the 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 INCOME (LOSS) Nine Months Ended September 30, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Revenue $ — $ 355.8 $ 1,047.0 $ 942.2 $ (213.8 ) $ 2,131.2 Cost of instant games, cost of services and cost of product sales (3) — 250.8 275.2 494.6 (213.8 ) 806.8 Selling, general and administrative 91.9 37.6 132.8 177.7 — 440.0 Research and development 4.8 6.3 109.1 35.2 — 155.4 Depreciation, amortization and impairments 39.5 29.9 407.3 88.7 — 565.4 Restructuring and other 14.3 0.4 3.3 2.7 — 20.7 Operating (loss) income (150.5 ) 30.8 119.3 143.3 — 142.9 Interest expense (15.8 ) (480.0 ) — (0.6 ) — (496.4 ) Gain on debt financing transactions — 25.2 — — — 25.2 Other (expense) income, net (64.2 ) 157.5 (73.9 ) 7.5 — 26.9 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (230.5 ) (266.5 ) 45.4 150.2 — (301.4 ) Equity in (loss) income of subsidiaries (22.7 ) 37.8 85.3 — (100.4 ) — Income tax benefit (expense) 10.3 99.2 (16.8 ) (34.2 ) — 58.5 Net (loss) income $ (242.9 ) $ (129.5 ) $ 113.9 $ 116.0 $ (100.4 ) $ (242.9 ) Other comprehensive (loss) income (27.4 ) 5.0 (54.2 ) (11.8 ) 61.0 (27.4 ) Comprehensive (loss) income $ (270.3 ) $ (124.5 ) $ 59.7 $ 104.2 $ (39.4 ) $ (270.3 ) 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 Nine Months Ended September 30, 2017 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (162.6 ) $ (169.9 ) $ 471.5 $ 254.3 $ (4.3 ) $ 389.0 Cash flows from investing activities: Capital expenditures (42.0 ) (13.6 ) (96.4 ) (62.1 ) — (214.1 ) Acquisitions of businesses, net of cash acquired — — (26.3 ) (31.4 ) — (57.7 ) Distributions of capital from equity investments — — — 23.9 — 23.9 Changes in other assets and liabilities and other — — 7.5 2.5 — 10.0 Other, principally change in intercompany investing activities — (27.7 ) — (208.4 ) 236.1 — Net cash used in investing activities (42.0 ) (41.3 ) (115.2 ) (275.5 ) 236.1 (237.9 ) Cash flows from financing activities: Net payments of long-term debt including proceeds and repurchases of senior notes and term loans (250.0 ) 265.7 — (4.8 ) — 10.9 Payments of debt issuance and deferred financing costs — (52.3 ) — — — (52.3 ) Payments on license obligations (24.3 ) — (4.7 ) — — (29.0 ) Net redemptions of common stock under stock-based compensation plans and other (2.7 ) — — — — (2.7 ) Other, principally change in intercompany financing activities 586.2 — (350.1 ) — (236.1 ) — Net cash provided by (used in) financing activities 309.2 213.4 (354.8 ) (4.8 ) (236.1 ) (73.1 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — 4.8 — 4.8 Increase (decrease) in cash, cash equivalents and restricted cash 104.6 2.2 1.5 (21.2 ) (4.3 ) 82.8 Cash, cash equivalents and restricted cash, beginning of period 32.7 1.7 41.0 82.6 (1.1 ) 156.9 Cash, cash equivalents and restricted cash end of period $ 137.3 $ 3.9 $ 42.5 $ 61.4 $ (5.4 ) $ 239.7 1 - Issuer of obligations under the 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 Nine Months Ended September 30, 2016 SGC (Parent and Issuer 1 ) SGI (Issuer 2 ) Guarantor Non-Guarantor Eliminating Consolidated Net cash (used in) provided by operating activities $ (213.3 ) $ (157.0 ) $ 494.3 $ 225.9 $ (7.1 ) $ 342.8 Cash flows from investing activities: Capital expenditures (36.6 ) (22.1 ) (110.4 ) (45.3 ) — (214.4 ) Distributions of capital from equity investments — — — 24.0 — 24.0 Changes in other assets and liabilities and other — — 6.1 — — 6.1 Other, principally change in intercompany investing activities — 296.8 — (198.8 ) (98.0 ) — Net cash (used in) provided by investing activities (36.6 ) 274.7 (104.3 ) (220.1 ) (98.0 ) (184.3 ) Cash flows from financing activities: Net payments on long-term debt — (117.2 ) — (5.3 ) — (122.5 ) Payments on license obligations (24.2 ) — (10.3 ) — — (34.5 ) Net redemptions of common stock under stock-based compensation plans and other (4.7 ) — — — — (4.7 ) Other, principally change in intercompany financing activities 278.3 — (376.3 ) — 98.0 — Net cash provided by (used in) financing activities 249.4 (117.2 ) (386.6 ) (5.3 ) 98.0 (161.7 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — (0.4 ) (0.7 ) — (1.1 ) (Decrease) increase in cash, cash equivalents and restricted cash (0.5 ) 0.5 3.0 (0.2 ) (7.1 ) (4.3 ) 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 $ 42.7 $ 0.5 $ 40.7 $ 85.7 $ (7.1 ) $ 162.5 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 a34
Description of the Business and Summary of Significant Accounting Policies - Additional Information (Details) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)shares | Sep. 30, 2016shares | Sep. 30, 2017USD ($)Segmentshares | Sep. 30, 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 | $ 237.9 | $ 184.3 | |||
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 | $ 41.6 | $ 41.6 | |||
Decrease in net cash used in investing activities | $ 3.5 | ||||
Stock Options | |||||
Business Acquisition [Line Items] | |||||
Anti-dilutive securities (in shares) | shares | 2.6 | 3.2 | 2.6 | 3.2 | |
Restricted Stock Units | |||||
Business Acquisition [Line Items] | |||||
Anti-dilutive securities (in shares) | shares | 4.2 | 5.6 | 4.2 | 5.6 |
Description of the Business a35
Description of the Business and Summary of Significant Accounting Policies - Aggregate Business Acquisitions Completed (Details) CAD / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017CADCAD / shares | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Business Acquisition [Line Items] | ||||||
Cash paid, net of cash acquired | $ 57.7 | $ 0 | ||||
Excess purchase price allocated to Goodwill | $ 2,961.3 | $ 2,888.4 | ||||
Earnings Based Metrics | ||||||
Business Acquisition [Line Items] | ||||||
Maximum contingent consideration | 38.5 | |||||
Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired, discount rate | 9.00% | |||||
Intangible assets acquired, royalty rate | 1.00% | |||||
Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired, discount rate | 20.00% | |||||
Intangible assets acquired, royalty rate | 16.00% | |||||
Aggregate total | ||||||
Business Acquisition [Line Items] | ||||||
Total Consideration | $ 66 | |||||
Cash paid, net of cash acquired | $ 57.7 | |||||
Contingent consideration | 7.5 | |||||
Allocation of purchase price to Intangible assets, net | 56.4 | |||||
Weighted average useful life of acquired intangible assets | 8 years 3 months | |||||
Excess purchase price allocated to Goodwill | $ 14.6 | |||||
NYX | ||||||
Business Acquisition [Line Items] | ||||||
Total Consideration | CAD 775,000,000 | $ 631 | ||||
Aggregate purchase price (in CAD per share) | CAD / shares | CAD 2.40 | |||||
Contingent termination fee | CAD | CAD 30,000,000 |
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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 768.9 | $ 720 | $ 2,260.6 | $ 2,131.2 |
Gaming | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 454.6 | 448.2 | 1,351.8 | 1,311.8 |
Gaming | Gaming operations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 176 | 182.4 | 526.8 | 552.8 |
Gaming | Gaming machine sales | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 163.1 | 159.8 | 482.6 | 448.7 |
Gaming | Gaming systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 62 | 57.6 | 190.6 | 176.8 |
Gaming | Table products | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 53.5 | 48.4 | 151.8 | 133.5 |
Lottery | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 202.9 | 186.6 | 594.3 | 578.2 |
Lottery | Instant products | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 142.7 | 140.3 | 435.7 | 431.3 |
Lottery | Lottery systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 60.2 | 46.3 | 158.6 | 146.9 |
Interactive | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 111.4 | 85.2 | 314.5 | 241.2 |
Interactive | Social Gaming - B2C | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 95.1 | 70.3 | 266.4 | 199.5 |
Interactive | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 16.3 | $ 14.9 | $ 48.1 | $ 41.7 |
Description of the Business a37
Description of the Business and Summary of Significant Accounting Policies - Summary of Deferred Revenue Activity (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue balance, beginning of period | $ 67.4 | $ 57.8 |
New deferrals | 173.3 | 194.6 |
Amounts recognized in revenue | (178.4) | (192.8) |
Deferred revenue balance, end of period | $ 62.3 | $ 59.6 |
Description of the Business a38
Description of the Business and Summary of Significant Accounting Policies - New Accounting Guidance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Product Information [Line Items] | |||||
Cost of services | $ 105.5 | $ 98 | $ 307.7 | $ 294.3 | |
Retained earnings | (2,417.9) | (2,417.9) | $ (2,218.7) | ||
WAP Jackpot Payments | Gaming | |||||
Product Information [Line Items] | |||||
Cost of services | $ 5.5 | $ 6.1 | $ 17.9 | $ 22.9 | |
Instant Products Under POS Arrangements | Accounting Standards Update 2015-14 | Lottery | |||||
Product Information [Line Items] | |||||
Inventory sales | 55 | ||||
Retained earnings | 55 | ||||
Other Instant Product and Lottery Systems Arrangements | Accounting Standards Update 2015-14 | Lottery | |||||
Product Information [Line Items] | |||||
Inventory sales | $ 12 |
Business Segments - Additional
Business Segments - Additional Information (Details) | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 768.9 | $ 720 | $ 2,260.6 | $ 2,131.2 |
Depreciation, amortization and impairments | 173.1 | 191.7 | 513.2 | 565.4 |
Restructuring and other | 7.8 | 13.8 | 18.1 | 20.7 |
Operating income (loss) | 90.6 | 33.5 | 295.9 | 142.9 |
Interest expense | (148.9) | (165.4) | (459.5) | (496.4) |
Earnings from equity investments | 7.5 | 7.3 | 20.1 | 18.5 |
(Loss) gain on debt financing transactions | (8.4) | 0 | (38.1) | 25.2 |
Other income (expense), net | (4.3) | 6 | 1.3 | 8.4 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | (63.5) | (118.6) | (180.3) | (301.4) |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Depreciation, amortization and impairments | 25.4 | 18.8 | 70.6 | 54.1 |
Restructuring and other | 7.1 | 13.7 | 12.6 | 13.8 |
Operating income (loss) | (69.9) | (70.8) | (190.4) | (182.6) |
Gaming | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 454.6 | 448.2 | 1,351.8 | 1,311.8 |
Gaming | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 454.6 | 448.2 | 1,351.8 | 1,311.8 |
Depreciation, amortization and impairments | 129.8 | 154 | 389.1 | 449.9 |
Restructuring and other | 0.3 | 0 | 4.8 | 5 |
Operating income (loss) | 85.2 | 51.5 | 248.6 | 141.6 |
Lottery | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 202.9 | 186.6 | 594.3 | 578.2 |
Lottery | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 202.9 | 186.6 | 594.3 | 578.2 |
Depreciation, amortization and impairments | 10 | 15.2 | 37.2 | 50.2 |
Restructuring and other | (0.1) | 0.5 | (0.9) | 1.8 |
Operating income (loss) | 62.4 | 43.2 | 188.8 | 149.1 |
Interactive | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 111.4 | 85.2 | 314.5 | 241.2 |
Interactive | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 111.4 | 85.2 | 314.5 | 241.2 |
Depreciation, amortization and impairments | 7.9 | 3.7 | 16.3 | 11.2 |
Restructuring and other | 0.5 | (0.4) | 1.6 | 0.1 |
Operating income (loss) | $ 12.9 | $ 9.6 | $ 48.9 | $ 34.8 |
Restructuring and other - Restr
Restructuring and other - Restructuring and Other Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other | $ 7.8 | $ 13.8 | $ 18.1 | $ 20.7 |
Employee severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other | 1.7 | 4.1 | 4.4 | 8.9 |
Acquisitions and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other | 4 | 1.5 | 8.2 | 1.5 |
Restructuring, integration and other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other | $ 2.1 | $ 8.2 | $ 5.5 | $ 10.3 |
Restructuring and other - Res42
Restructuring and other - Restructuring Accrual Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Reserve [Roll Forward] | ||||
Accrual additions | $ 7.8 | $ 13.8 | $ 18.1 | $ 20.7 |
Q4 2016 Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accrual, beginning balance | 16.4 | |||
Accrual additions | 2.2 | |||
Cash payments and other | (18.6) | |||
Restructuring accrual, ending balance | $ 0 | $ 0 |
Accounts and Notes Receivable43
Accounts and Notes Receivable and Credit Quality of Receivables - Components of Accounts and Notes Receivable, Net (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current: | ||
Accounts receivable | $ 502.4 | $ 508.1 |
Notes receivable | 136.5 | 140 |
Allowance for doubtful accounts and notes | (27.9) | (27.7) |
Current accounts and notes receivable, net | 611 | 620.4 |
Long-term: | ||
Notes receivable, net of allowance of $0.4 and $0.4 | 44.4 | 48.1 |
Total accounts and notes receivable, net | 655.4 | 668.5 |
Allowance for notes receivable | $ 0.4 | $ 0.4 |
Accounts and Notes Receivable44
Accounts and Notes Receivable and Credit Quality of Receivables - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 655.4 | $ 668.5 |
Contractual term of notes receivable | 24 months | |
Notes receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | $ 162.7 | $ 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 | $ 27.4 | |
Proceeds from collection of accounts and notes receivable, net | 28.7 | |
Peru | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 21.4 | |
Proceeds from collection of accounts and notes receivable, net | 12.1 | |
Argentina | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts and notes receivable, net | 21.6 | |
Proceeds from collection of accounts and notes receivable, net | $ 18.1 | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield | 3.00% | 3.30% |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivable with imputed interest, effective yield | 10.40% | 10.40% |
Accounts and Notes Receivable45
Accounts and Notes Receivable and Credit Quality of Receivables - Components of Notes Receivable, Net (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total accounts and notes receivable, net | $ 655.4 | $ 668.5 | ||
Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 181.3 | 188.1 | ||
Notes receivable allowance | (18.6) | (15) | $ (14.8) | $ (13.2) |
Total accounts and notes receivable, net | 162.7 | 173.1 | ||
Domestic | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 74.9 | 45.1 | ||
Notes receivable allowance | (3.4) | (1) | ||
International | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable | 106.4 | 143 | ||
Notes receivable allowance | (15.2) | (14) | ||
Balances over 90 days past due | Notes receivable | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable over 90 days past due | 39.1 | 39.8 | ||
Notes receivable allowance for balances over 90 days past due | (18.6) | (14.9) | ||
Notes receivable, net, balances over 90 days past due | 20.5 | 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 | 9.3 | 1.1 | ||
Notes receivable allowance for balances over 90 days past due | (3.4) | (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 | 29.8 | 38.7 | ||
Notes receivable allowance for balances over 90 days past due | $ (15.2) | $ (14) |
Accounts and Notes Receivable46
Accounts and Notes Receivable and Credit Quality of Receivables - Allowance for Notes Receivable Activity (Details) - Notes receivable - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Allowance for notes receivable | ||
Beginning allowance for notes receivable | $ 15 | $ 13.2 |
Provision | 4.8 | 3.8 |
Charge-offs and recoveries | (1.2) | (2.2) |
Ending allowance for notes receivable | $ 18.6 | $ 14.8 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Parts and work-in-process | $ 123.8 | $ 110.5 |
Finished goods | 131.4 | 131.8 |
Total inventories | $ 255.2 | $ 242.3 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Less: accumulated depreciation | $ (926.2) | $ (926.2) | $ (888.9) | ||
Property and equipment, net | 567.2 | 567.2 | 612.2 | ||
Depreciation expense | 69 | $ 80.9 | 205.9 | $ 248.3 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 35.8 | 35.8 | 36.5 | ||
Buildings and leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 177.3 | 177.3 | 182.2 | ||
Gaming and lottery machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 986.8 | 986.8 | 993.3 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 32.9 | 32.9 | 28.6 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 20.6 | 20.6 | 21.2 | ||
Other property and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 240 | $ 240 | $ 239.3 |
Intangible Assets, net and Go49
Intangible Assets, net and Goodwill - Schedule of Finite and Indefinite-lived Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | $ 2,337.6 | $ 2,264.1 |
Amortizable intangible assets, accumulated amortization | (764) | (590) |
Amortizable intangible assets, net balance | 1,573.6 | 1,674.1 |
Non-amortizable intangible assets: | ||
Total intangible assets, gross carrying value | 2,433.9 | 2,360.4 |
Total intangible assets, accumulated amortization (excluding goodwill) | (766.1) | (592.1) |
Total intangible assets, net | 1,667.8 | 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 | 882.8 | 875.8 |
Amortizable intangible assets, accumulated amortization | (201) | (163.9) |
Amortizable intangible assets, net balance | 681.8 | 711.9 |
Intellectual property | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 789.1 | 726 |
Amortizable intangible assets, accumulated amortization | (304) | (218.2) |
Amortizable intangible assets, net balance | 485.1 | 507.8 |
Licenses | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 417 | 413.2 |
Amortizable intangible assets, accumulated amortization | (189) | (153.5) |
Amortizable intangible assets, net balance | 228 | 259.7 |
Brand names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 126.4 | 123.7 |
Amortizable intangible assets, accumulated amortization | (43.1) | (32.1) |
Amortizable intangible assets, net balance | 83.3 | 91.6 |
Trade names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 98.8 | 97.4 |
Amortizable intangible assets, accumulated amortization | (13) | (8.1) |
Amortizable intangible assets, net balance | 85.8 | 89.3 |
Patents and other | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying value | 23.5 | 28 |
Amortizable intangible assets, accumulated amortization | (13.9) | (14.2) |
Amortizable intangible assets, net balance | $ 9.6 | $ 13.8 |
Intangible Assets, net and Go50
Intangible Assets, net and Goodwill - Intangible Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 62.3 | $ 60.9 | $ 193.1 | $ 188.8 |
Intangible Assets, net and Go51
Intangible Assets, net and Goodwill - Reconciliation of the Carrying Amount of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | $ 2,888.4 |
Acquired goodwill | 14.6 |
Foreign currency adjustments | 58.3 |
Balance at the end of the period | 2,961.3 |
Gaming | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 2,428.6 |
Acquired goodwill | 0 |
Foreign currency adjustments | 51.3 |
Balance at the end of the period | 2,479.9 |
Lottery | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 350 |
Acquired goodwill | 0 |
Foreign currency adjustments | 7 |
Balance at the end of the period | 357 |
Interactive | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 109.8 |
Acquired goodwill | 14.6 |
Foreign currency adjustments | 0 |
Balance at the end of the period | $ 124.4 |
Software, net (Details)
Software, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Capitalized Computer Software, Net [Abstract] | |||||
Software | $ 989.2 | $ 989.2 | $ 924.8 | ||
Accumulated amortization | (632.5) | (632.5) | (515.7) | ||
Software, net | 356.7 | 356.7 | $ 409.1 | ||
Amortization expense | $ 41.8 | $ 44.2 | $ 114.2 | $ 122.6 |
Equity Investments (Details)
Equity Investments (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Equity investments | $ 168.4 | $ 179.9 | |
Distributed earnings from equity investments | $ 44.1 | $ 40.7 |
Long-Term and Other Debt - Sche
Long-Term and Other Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument | ||
Face value | $ 8,178.4 | |
Unamortized debt discount/premium and deferred financing costs, net | (89.6) | |
Total long-term debt outstanding | 8,088.8 | $ 8,074.2 |
Less: current portion of long-term debt | (39.9) | (49.3) |
Long-term debt, excluding current portion | 8,048.9 | 8,024.9 |
Fair value of debt | 8,589.5 | 8,221.8 |
Senior Notes | Secured Notes | ||
Debt Instrument | ||
Face value | 2,100 | |
Unamortized debt discount/premium and deferred financing costs, net | 32.4 | |
Total long-term debt outstanding | 2,132.4 | 936.3 |
Senior Notes | Unsecured Notes | ||
Debt Instrument | ||
Face value | 2,200 | |
Unamortized debt discount/premium and deferred financing costs, net | (31.4) | |
Total long-term debt outstanding | 2,168.6 | 2,164 |
Subordinated Notes | 2018 Notes | ||
Debt Instrument | ||
Face value | 0 | |
Unamortized debt discount/premium and deferred financing costs, net | 0 | |
Total long-term debt outstanding | 0 | 248.7 |
Subordinated Notes | 2020 Notes | ||
Debt Instrument | ||
Face value | 243.5 | |
Unamortized debt discount/premium and deferred financing costs, net | (1.8) | |
Total long-term debt outstanding | 241.7 | 241.2 |
Subordinated Notes | 2021 Notes | ||
Debt Instrument | ||
Face value | 340.6 | |
Unamortized debt discount/premium and deferred financing costs, net | (5) | |
Total long-term debt outstanding | $ 335.6 | 334.5 |
Capital Lease Obligations | ||
Debt Instrument | ||
Capital lease interest rate | 3.90% | |
Capital Lease Obligations | Capital lease obligations, 3.9% interest as of September 30, 2017 payable monthly through 2019 | ||
Debt Instrument | ||
Face value | $ 11.5 | |
Unamortized debt discount/premium and deferred financing costs, net | 0 | |
Total long-term debt outstanding | 11.5 | 15.2 |
Revolving Credit Facility | Senior Secured Credit Facilities | Revolver, varying interest rate, due 2018 | ||
Debt Instrument | ||
Face value | 0 | |
Unamortized debt discount/premium and deferred financing costs, net | 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 and deferred financing costs, net | 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 and deferred financing costs, net | 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 | 0 | |
Unamortized debt discount/premium and deferred financing costs, net | 0 | |
Total long-term debt outstanding | 0 | 1,905.8 |
Term Loan Facility | Senior Secured Credit Facilities | Term Loan B-3 | ||
Debt Instrument | ||
Face value | 0 | |
Unamortized debt discount/premium and deferred financing costs, net | 0 | |
Total long-term debt outstanding | 0 | 0 |
Term Loan Facility | Senior Secured Credit Facilities | Term Loan B-4 | ||
Debt Instrument | ||
Face value | 3,282.8 | |
Unamortized debt discount/premium and deferred financing costs, net | (83.8) | |
Total long-term debt outstanding | $ 3,199 | $ 0 |
Long-Term and Other Debt - Addi
Long-Term and Other Debt - Additional Information (Details) - USD ($) | Aug. 14, 2017 | Feb. 14, 2017 | Nov. 02, 2017 | Oct. 17, 2017 | Nov. 30, 2014 |
Senior Secured Credit Facility, Term Loan B-4, Maturing 2024 | |||||
Debt Instrument | |||||
Principal debt amount | $ 3,282,800,000 | ||||
Financing costs | $ 7,900,000 | ||||
Amortization percentage | 1.00% | ||||
Senior Secured Credit Facility, Term Loan B-4, Maturing 2024 | LIBOR Loans | |||||
Debt Instrument | |||||
Applicable margin for term loan | 3.25% | ||||
Senior Secured Credit Facility, Term Loan B-4, Maturing 2024 | Base Rate Loans | |||||
Debt Instrument | |||||
Applicable margin for term loan | 2.25% | ||||
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 | LIBOR Loans | |||||
Debt Instrument | |||||
Applicable margin for term loan | 4.00% | ||||
Senior Secured Credit Facility, Term Loan B-3, Maturing 2021 | Base Rate Loans | |||||
Debt Instrument | |||||
Applicable margin for term loan | 3.00% | ||||
Senior Secured Credit Facility, Term Loan B-3, Maturing 2021 | Senior Notes | |||||
Debt Instrument | |||||
Principal debt amount | 1,150,000,000 | ||||
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% | ||||
Senior Secured Notes, Maturing 2022 | Senior Notes | |||||
Debt Instrument | |||||
Principal debt amount | $ 950,000,000 | ||||
Subsequent Event | Senior Notes | |||||
Debt Instrument | |||||
Principle amount outstanding | $ 2,450,000,000 | ||||
Subsequent Event | Senior Secured Notes, Maturing 2025 | Senior Notes | |||||
Debt Instrument | |||||
Debt interest rate | 5.00% | ||||
Principal debt amount | $ 350,000,000 |
Long-Term and Other Debt - (Los
Long-Term and Other Debt - (Loss) Gain on Debt Financing Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||||
Repurchase and cancellation of principal balance at discount | $ 0 | $ 0 | $ 0 | $ 26 |
Unamortized debt discount and deferred financing costs | (0.6) | 0 | (26.4) | (0.8) |
Third party debt issuance fees | (7.8) | 0 | (11.7) | 0 |
Total (loss) gain on debt financing transactions | $ (8.4) | $ 0 | $ (38.1) | $ 25.2 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Derivatives Fair Value | |||||
Loss to be reclassified during next 12 months | $ 1.7 | $ 1.7 | |||
Interest rate swap | |||||
Derivatives Fair Value | |||||
Gains recorded in accumulated other comprehensive loss, net of tax | 0.8 | $ 2.7 | 3.6 | $ 6.3 | |
Derivative liability fair value | 1.7 | 1.7 | $ 6.9 | ||
Interest rate swap | Accrued liabilities | |||||
Derivatives Fair Value | |||||
Derivative liability fair value | 1.7 | 1.7 | 6.7 | ||
Interest rate swap | Other long-term liabilities | |||||
Derivatives Fair Value | |||||
Derivative liability fair value | 0 | 0 | 0.2 | ||
Interest rate swap | Interest Expense | |||||
Derivatives Fair Value | |||||
Ineffectiveness recorded in interest expense | (0.2) | 0 | 0.5 | 0 | |
Reclassifications of losses out of accumulated other comprehensive loss | 1.7 | 2 | 5.8 | 6.1 | |
Ineffectiveness recorded in interest expense | $ (0.2) | $ 0 | $ 0.5 | $ 0 | |
Interest rate swap | LIBOR | |||||
Derivatives Fair Value | |||||
Interest received on derivative | 1.00% | 1.00% | |||
Interest rate swap | Cash Flow Hedging | Designated as Hedging Instrument | |||||
Derivatives Fair Value | |||||
Derivative average fixed interest rate | 2.151% | 2.151% | |||
Total notional amount of swaps | $ 700 | $ 700 | $ 700 |
Stockholders' Deficit and Emp58
Stockholders' Deficit and Employee Benefit Plans (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 19, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Share-based compensation expense | $ 7.5 | $ 11 | $ 20.5 | $ 23.5 | |
Series C Junior Participating Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Junior preferred stock reserved for issuance (in shares) | 20,000 | ||||
Preferred stock par value (in dollars per share) | $ 1 | ||||
Number of shares called by each right (in shares) | 0.0001 | ||||
Right purchase price (in dollars per share) | $ 109 | ||||
Preferred shares outstanding (in shares) | 0 | 0 | |||
Series A Preferred Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Preferred stock par value (in dollars per share) | $ 0.01 | ||||
Series A Preferred Stock | Preferred Share Purchase Right | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Preferred share purchase right dividend | 1 | ||||
Preferred shares issued (in shares) | 0 | 0 | |||
Related to vesting of stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Share-based compensation expense | $ 1.1 | 2.9 | $ 2.6 | 4.2 | |
Related to vesting of RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Share-based compensation expense | $ 6.4 | $ 8.1 | $ 17.9 | $ 19.3 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rates | 6.60% | 16.60% | (10.50%) | 19.40% |
Litigation (Details)
Litigation (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingency accrual | $ 5.1 | $ 7.7 |
Contractual penalty | $ 14.3 |
Financial Information for Gua61
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 196.4 | $ 115.1 |
Restricted cash | 27 | 24.7 |
Accounts receivable, net | 492.7 | 495 |
Notes receivable, net | 118.3 | 125.4 |
Inventories | 255.2 | 242.3 |
Prepaid expenses, deposits and other current assets | 135.8 | 114.1 |
Property and equipment, net | 567.2 | 612.2 |
Investment in subsidiaries | 0 | 0 |
Goodwill | 2,961.3 | 2,888.4 |
Intangible assets, net | 1,667.8 | 1,768.3 |
Intercompany balances | 0 | 0 |
Software, net | 356.7 | 409.1 |
Other assets | 284 | 292.8 |
Total assets | 7,062.4 | 7,087.4 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 39.9 | 49.3 |
Other current liabilities | 630.7 | 643.1 |
Long-term debt, excluding current portion | 8,048.9 | 8,024.9 |
Other long-term liabilities | 319.4 | 305.8 |
Intercompany balances | 0 | 0 |
Stockholders' (deficit) equity | (1,976.5) | (1,935.7) |
Total liabilities and stockholders' (deficit) equity | 7,062.4 | 7,087.4 |
Non-current restricted cash | 16.3 | 17.1 |
Reportable Legal Entities | SGI (Issuer) | ||
Assets | ||
Cash and cash equivalents | 3.9 | 1.7 |
Restricted cash | 0 | 0 |
Accounts receivable, net | 57.8 | 61.4 |
Notes receivable, net | 0 | 0 |
Inventories | 40.2 | 40.3 |
Prepaid expenses, deposits and other current assets | 25.3 | 15.7 |
Property and equipment, net | 84.9 | 98.4 |
Investment in subsidiaries | 981.4 | 926.7 |
Goodwill | 188.3 | 188.3 |
Intangible assets, net | 35.1 | 37.5 |
Intercompany balances | 5,405.8 | 5,415.1 |
Software, net | 21.7 | 21.4 |
Other assets | 336.1 | 236.5 |
Total assets | 7,180.5 | 7,043 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 32.8 | 43 |
Other current liabilities | 178.3 | 158.7 |
Long-term debt, excluding current portion | 8,044.5 | 7,767.3 |
Other long-term liabilities | 9.9 | 12.4 |
Intercompany balances | 0 | 0 |
Stockholders' (deficit) equity | (1,085) | (938.4) |
Total liabilities and stockholders' (deficit) equity | 7,180.5 | 7,043 |
Reportable Legal Entities | SGC (Parent and Issuer) | ||
Assets | ||
Cash and cash equivalents | 137.3 | 32.7 |
Restricted cash | 0 | 0 |
Accounts receivable, net | 0.1 | 0 |
Notes receivable, net | 0 | 0 |
Inventories | 0 | 0 |
Prepaid expenses, deposits and other current assets | 9.7 | 11.6 |
Property and equipment, net | 25.1 | 5.6 |
Investment in subsidiaries | 3,200 | 3,000.7 |
Goodwill | 0 | 0 |
Intangible assets, net | 172.4 | 185.8 |
Intercompany balances | 0 | 0 |
Software, net | 70.7 | 74.7 |
Other assets | 234.3 | 233.6 |
Total assets | 3,849.6 | 3,544.7 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 0 | 0 |
Other current liabilities | 101.6 | 100.5 |
Long-term debt, excluding current portion | 0 | 248.7 |
Other long-term liabilities | 167.8 | 159 |
Intercompany balances | 5,556.7 | 4,972.2 |
Stockholders' (deficit) equity | (1,976.5) | (1,935.7) |
Total liabilities and stockholders' (deficit) equity | 3,849.6 | 3,544.7 |
Reportable Legal Entities | Guarantor Subsidiaries | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 26.9 | 24.6 |
Accounts receivable, net | 202.8 | 199.2 |
Notes receivable, net | 96.1 | 94.4 |
Inventories | 93.1 | 83.1 |
Prepaid expenses, deposits and other current assets | 44.5 | 45.6 |
Property and equipment, net | 311 | 369.3 |
Investment in subsidiaries | 954.7 | 944 |
Goodwill | 1,932.4 | 1,931.6 |
Intangible assets, net | 1,240.1 | 1,343 |
Intercompany balances | 0 | 0 |
Software, net | 216.3 | 264.6 |
Other assets | 55.1 | 50.8 |
Total assets | 5,173 | 5,350.2 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 0 | 0 |
Other current liabilities | 198.6 | 216.3 |
Long-term debt, excluding current portion | 0 | 0 |
Other long-term liabilities | 549.4 | 468.8 |
Intercompany balances | 189.1 | 559.5 |
Stockholders' (deficit) equity | 4,235.9 | 4,105.6 |
Total liabilities and stockholders' (deficit) equity | 5,173 | 5,350.2 |
Non-current restricted cash | 15.6 | 16.4 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||
Assets | ||
Cash and cash equivalents | 60.6 | 81.8 |
Restricted cash | 0.1 | 0.1 |
Accounts receivable, net | 232 | 234.4 |
Notes receivable, net | 22.2 | 31 |
Inventories | 145.5 | 138.1 |
Prepaid expenses, deposits and other current assets | 56.3 | 41.2 |
Property and equipment, net | 170 | 154.9 |
Investment in subsidiaries | 0 | 0 |
Goodwill | 840.6 | 768.5 |
Intangible assets, net | 220.2 | 202 |
Intercompany balances | 340 | 116.6 |
Software, net | 48 | 48.4 |
Other assets | 159.8 | 173.5 |
Total assets | 2,295.3 | 1,990.5 |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 7.1 | 6.3 |
Other current liabilities | 160.2 | 168.7 |
Long-term debt, excluding current portion | 4.4 | 8.9 |
Other long-term liabilities | 90.9 | 67.2 |
Intercompany balances | 0 | 0 |
Stockholders' (deficit) equity | 2,032.7 | 1,739.4 |
Total liabilities and stockholders' (deficit) equity | 2,295.3 | 1,990.5 |
Non-current restricted cash | 0.7 | 0.7 |
Eliminating Entries | ||
Assets | ||
Cash and cash equivalents | (5.4) | (1.1) |
Restricted cash | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Notes receivable, net | 0 | 0 |
Inventories | (23.6) | (19.2) |
Prepaid expenses, deposits and other current assets | 0 | 0 |
Property and equipment, net | (23.8) | (16) |
Investment in subsidiaries | (5,136.1) | (4,871.4) |
Goodwill | 0 | 0 |
Intangible assets, net | 0 | 0 |
Intercompany balances | (5,745.8) | (5,531.7) |
Software, net | 0 | 0 |
Other assets | (501.3) | (401.6) |
Total assets | (11,436) | (10,841) |
Liabilities and stockholders' (deficit) equity | ||
Current portion of long-term debt | 0 | 0 |
Other current liabilities | (8) | (1.1) |
Long-term debt, excluding current portion | 0 | 0 |
Other long-term liabilities | (498.6) | (401.6) |
Intercompany balances | (5,745.8) | (5,531.7) |
Stockholders' (deficit) equity | (5,183.6) | (4,906.6) |
Total liabilities and stockholders' (deficit) equity | $ (11,436) | $ (10,841) |
Financial Information for Gua62
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Financial Statements | ||||
Revenue | $ 768.9 | $ 720 | $ 2,260.6 | $ 2,131.2 |
Cost of services, cost of product sales and cost of instant games | 290.8 | 274.3 | 849.7 | 806.8 |
Selling, general and administrative | 158.8 | 152.8 | 445.4 | 440 |
Research and development | 47.8 | 53.9 | 138.3 | 155.4 |
Depreciation, amortization and impairments | 173.1 | 191.7 | 513.2 | 565.4 |
Restructuring and other | 7.8 | 13.8 | 18.1 | 20.7 |
Operating (loss) income | 90.6 | 33.5 | 295.9 | 142.9 |
Interest expense | (148.9) | (165.4) | (459.5) | (496.4) |
(Loss) gain on debt financing transactions | (8.4) | 0 | (38.1) | 25.2 |
Other (expense) income, net | 3.2 | 13.3 | 21.4 | 26.9 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | (63.5) | (118.6) | (180.3) | (301.4) |
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | 0 |
Income tax benefit (expense) | 4.2 | 19.7 | (18.9) | 58.5 |
Net (loss) income | (59.3) | (98.9) | (199.2) | (242.9) |
Other comprehensive income | 72.8 | 5.2 | 140.6 | (27.4) |
Comprehensive income (loss) | 13.5 | (93.7) | (58.6) | (270.3) |
Reportable Legal Entities | SGI (Issuer) | ||||
Condensed Financial Statements | ||||
Revenue | 129.3 | 114.2 | 375.6 | 355.8 |
Cost of services, cost of product sales and cost of instant games | 88.1 | 81.8 | 257.8 | 250.8 |
Selling, general and administrative | 11.1 | 14.8 | 29.1 | 37.6 |
Research and development | 2.6 | 1.6 | 6.4 | 6.3 |
Depreciation, amortization and impairments | 8.8 | 8.7 | 24.3 | 29.9 |
Restructuring and other | (0.1) | 0.2 | 0.4 | 0.4 |
Operating (loss) income | 18.8 | 7.1 | 57.6 | 30.8 |
Interest expense | (148.5) | (159.5) | (454.2) | (480) |
(Loss) gain on debt financing transactions | (8.4) | (37) | 25.2 | |
Other (expense) income, net | 59.4 | 54.7 | 161.8 | 157.5 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | (78.7) | (97.7) | (271.8) | (266.5) |
Equity in (loss) income of subsidiaries | 22.5 | 7.5 | 54.4 | 37.8 |
Income tax benefit (expense) | 29.4 | 99.2 | 101.7 | 99.2 |
Net (loss) income | (26.8) | 9 | (115.7) | (129.5) |
Other comprehensive income | 4.6 | 2.1 | 8.9 | 5 |
Comprehensive income (loss) | (22.2) | 11.1 | (106.8) | (124.5) |
Reportable Legal Entities | SGC (Parent and Issuer) | ||||
Condensed Financial Statements | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of services, cost of product sales and cost of instant games | 0 | 0 | 0 | 0 |
Selling, general and administrative | 30.8 | 30.9 | 89.7 | 91.9 |
Research and development | 0.5 | 2.1 | 1.7 | 4.8 |
Depreciation, amortization and impairments | 22.3 | 13.8 | 59.5 | 39.5 |
Restructuring and other | 7 | 14.3 | 12.3 | 14.3 |
Operating (loss) income | (60.6) | (61.1) | (163.2) | (150.5) |
Interest expense | (0.1) | (5.3) | (4.4) | (15.8) |
(Loss) gain on debt financing transactions | 0 | (1.1) | 0 | |
Other (expense) income, net | (21.2) | (13.9) | (60.1) | (64.2) |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | (81.9) | (80.3) | (228.8) | (230.5) |
Equity in (loss) income of subsidiaries | 26.1 | 18.1 | 49.6 | (22.7) |
Income tax benefit (expense) | (3.5) | (36.7) | (20) | 10.3 |
Net (loss) income | (59.3) | (98.9) | (199.2) | (242.9) |
Other comprehensive income | 72.8 | 5.2 | 140.6 | (27.4) |
Comprehensive income (loss) | 13.5 | (93.7) | (58.6) | (270.3) |
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Condensed Financial Statements | ||||
Revenue | 400 | 330.8 | 1,220.3 | 1,047 |
Cost of services, cost of product sales and cost of instant games | 120.7 | 86.1 | 373.4 | 275.2 |
Selling, general and administrative | 60.9 | 43.1 | 178.6 | 132.8 |
Research and development | 26 | 38.3 | 77.1 | 109.1 |
Depreciation, amortization and impairments | 111.6 | 140.6 | 346.3 | 407.3 |
Restructuring and other | 0.1 | (0.7) | 3.2 | 3.3 |
Operating (loss) income | 80.7 | 23.4 | 241.7 | 119.3 |
Interest expense | 0 | 0 | 0 | 0 |
(Loss) gain on debt financing transactions | 0 | 0 | 0 | |
Other (expense) income, net | (14.5) | (26.7) | (71) | (73.9) |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | 66.2 | (3.3) | 170.7 | 45.4 |
Equity in (loss) income of subsidiaries | 15.5 | 37.9 | 37 | 85.3 |
Income tax benefit (expense) | (31) | (16.9) | (79) | (16.8) |
Net (loss) income | 50.7 | 17.7 | 128.7 | 113.9 |
Other comprehensive income | 53.2 | (48) | 119.4 | (54.2) |
Comprehensive income (loss) | 103.9 | (30.3) | 248.1 | 59.7 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
Condensed Financial Statements | ||||
Revenue | 311.6 | 358.4 | 861 | 942.2 |
Cost of services, cost of product sales and cost of instant games | 152.7 | 189.8 | 410.1 | 494.6 |
Selling, general and administrative | 70.1 | 64 | 184.6 | 177.7 |
Research and development | 18.7 | 11.9 | 53.1 | 35.2 |
Depreciation, amortization and impairments | 33.5 | 28.6 | 90.9 | 88.7 |
Restructuring and other | 0.8 | 0 | 2.2 | 2.7 |
Operating (loss) income | 35.8 | 64.1 | 120.1 | 143.3 |
Interest expense | (0.3) | (0.6) | (0.9) | (0.6) |
(Loss) gain on debt financing transactions | 0 | 0 | 0 | |
Other (expense) income, net | (20.5) | (0.8) | (9.3) | 7.5 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | 15 | 62.7 | 109.9 | 150.2 |
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | 0 |
Income tax benefit (expense) | 9.3 | (25.9) | (21.6) | (34.2) |
Net (loss) income | 24.3 | 36.8 | 88.3 | 116 |
Other comprehensive income | 67 | 19 | 126.7 | (11.8) |
Comprehensive income (loss) | 91.3 | 55.8 | 215 | 104.2 |
Eliminating Entries | ||||
Condensed Financial Statements | ||||
Revenue | (72) | (83.4) | (196.3) | (213.8) |
Cost of services, cost of product sales and cost of instant games | (70.7) | (83.4) | (191.6) | (213.8) |
Selling, general and administrative | (14.1) | 0 | (36.6) | 0 |
Research and development | 0 | 0 | 0 | 0 |
Depreciation, amortization and impairments | (3.1) | 0 | (7.8) | 0 |
Restructuring and other | 0 | 0 | 0 | 0 |
Operating (loss) income | 15.9 | 0 | 39.7 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
(Loss) gain on debt financing transactions | 0 | 0 | 0 | |
Other (expense) income, net | 0 | 0 | 0 | 0 |
Net (loss) income before equity in (loss) income of subsidiaries and income taxes | 15.9 | 0 | 39.7 | 0 |
Equity in (loss) income of subsidiaries | (64.1) | (63.5) | (141) | (100.4) |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Net (loss) income | (48.2) | (63.5) | (101.3) | (100.4) |
Other comprehensive income | (124.8) | 26.9 | (255) | 61 |
Comprehensive income (loss) | $ (173) | $ (36.6) | $ (356.3) | $ (39.4) |
Financial Information for Gua63
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | $ 389 | $ 342.8 |
Cash flows from investing activities: | ||
Capital expenditures | (214.1) | (214.4) |
Acquisitions of businesses, net of cash acquired | (57.7) | 0 |
Distributions of capital from equity investments | 23.9 | 24 |
Changes in other assets and liabilities and other | 10 | 6.1 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (237.9) | (184.3) |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | 10.9 | (122.5) |
Payments of debt issuance and deferred financing costs | (52.3) | 0 |
Payments on license obligations | (29) | (34.5) |
Net redemptions of common stock under stock-based compensation plans and other | (2.7) | (4.7) |
Other, principally change in intercompany financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | (73.1) | (161.7) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4.8 | (1.1) |
Increase (decrease) in cash, cash equivalents and restricted cash | 82.8 | (4.3) |
Cash, cash equivalents and restricted cash, beginning of period | 156.9 | 166.8 |
Cash, cash equivalents and restricted cash, end of period | 239.7 | 162.5 |
SGI (Issuer) | ||
Cash flows from financing activities: | ||
Net redemptions of common stock under stock-based compensation plans and other | 0 | |
Guarantor Subsidiaries | ||
Cash flows from financing activities: | ||
Net redemptions of common stock under stock-based compensation plans and other | 0 | |
Reportable Legal Entities | SGI (Issuer) | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | (169.9) | (157) |
Cash flows from investing activities: | ||
Capital expenditures | (13.6) | (22.1) |
Acquisitions of businesses, 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 | (27.7) | 296.8 |
Net cash used in investing activities | (41.3) | 274.7 |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | 265.7 | (117.2) |
Payments of debt issuance and deferred financing costs | (52.3) | |
Payments on license obligations | 0 | 0 |
Net redemptions of common stock under stock-based compensation plans and other | 0 | |
Other, principally change in intercompany financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | 213.4 | (117.2) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 |
Increase (decrease) in cash, cash equivalents and restricted cash | 2.2 | 0.5 |
Cash, cash equivalents and restricted cash, beginning of period | 1.7 | 0 |
Cash, cash equivalents and restricted cash, end of period | 3.9 | 0.5 |
Reportable Legal Entities | SGC (Parent and Issuer) | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | (162.6) | (213.3) |
Cash flows from investing activities: | ||
Capital expenditures | (42) | (36.6) |
Acquisitions of businesses, 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 | (42) | (36.6) |
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 | (24.3) | (24.2) |
Net redemptions of common stock under stock-based compensation plans and other | (2.7) | (4.7) |
Other, principally change in intercompany financing activities | 586.2 | 278.3 |
Net cash provided by (used in) financing activities | 309.2 | 249.4 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 |
Increase (decrease) in cash, cash equivalents and restricted cash | 104.6 | (0.5) |
Cash, cash equivalents and restricted cash, beginning of period | 32.7 | 43.2 |
Cash, cash equivalents and restricted cash, end of period | 137.3 | 42.7 |
Reportable Legal Entities | Guarantor Subsidiaries | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 471.5 | 494.3 |
Cash flows from investing activities: | ||
Capital expenditures | (96.4) | (110.4) |
Acquisitions of businesses, net of cash acquired | (26.3) | |
Distributions of capital from equity investments | 0 | 0 |
Changes in other assets and liabilities and other | 7.5 | 6.1 |
Other, principally intercompany balances | 0 | 0 |
Net cash used in investing activities | (115.2) | (104.3) |
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 | (4.7) | (10.3) |
Net redemptions of common stock under stock-based compensation plans and other | 0 | |
Other, principally change in intercompany financing activities | (350.1) | (376.3) |
Net cash provided by (used in) financing activities | (354.8) | (386.6) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | (0.4) |
Increase (decrease) in cash, cash equivalents and restricted cash | 1.5 | 3 |
Cash, cash equivalents and restricted cash, beginning of period | 41 | 37.7 |
Cash, cash equivalents and restricted cash, end of period | 42.5 | 40.7 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | 254.3 | 225.9 |
Cash flows from investing activities: | ||
Capital expenditures | (62.1) | (45.3) |
Acquisitions of businesses, net of cash acquired | (31.4) | |
Distributions of capital from equity investments | 23.9 | 24 |
Changes in other assets and liabilities and other | 2.5 | 0 |
Other, principally intercompany balances | (208.4) | (198.8) |
Net cash used in investing activities | (275.5) | (220.1) |
Cash flows from financing activities: | ||
Net payments of long-term debt including proceeds and repurchases of senior notes and term loans | (4.8) | (5.3) |
Payments of debt issuance and deferred financing costs | 0 | |
Payments on license obligations | 0 | 0 |
Net redemptions of common stock under stock-based compensation plans and other | 0 | 0 |
Other, principally change in intercompany financing activities | 0 | 0 |
Net cash provided by (used in) financing activities | (4.8) | (5.3) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4.8 | (0.7) |
Increase (decrease) in cash, cash equivalents and restricted cash | (21.2) | (0.2) |
Cash, cash equivalents and restricted cash, beginning of period | 82.6 | 85.9 |
Cash, cash equivalents and restricted cash, end of period | 61.4 | 85.7 |
Eliminating Entries | ||
Condensed Financial Statements | ||
Net cash (used in) provided by operating activities | (4.3) | (7.1) |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Acquisitions of businesses, 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 | 236.1 | (98) |
Net cash used in investing activities | 236.1 | (98) |
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 |
Net redemptions of common stock under stock-based compensation plans and other | 0 | 0 |
Other, principally change in intercompany financing activities | (236.1) | 98 |
Net cash provided by (used in) financing activities | (236.1) | 98 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 |
Increase (decrease) in cash, cash equivalents and restricted cash | (4.3) | (7.1) |
Cash, cash equivalents and restricted cash, beginning of period | (1.1) | 0 |
Cash, cash equivalents and restricted cash, end of period | $ (5.4) | $ (7.1) |