Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SCIENTIFIC GAMES CORP | ||
Entity Central Index Key | 750,004 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 92,248,836 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,708,470,025 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenue: | ||||
Total revenue | $ 3,363.2 | $ 3,083.6 | $ 2,883.4 | |
Operating expenses: | ||||
Cost of revenues | 1,255.3 | 1,164.6 | 1,106.3 | |
Selling, general and administrative | 696.9 | 613.1 | 577 | |
Research and development | 202.3 | 184.1 | 204.8 | |
Depreciation, amortization and impairments | 689.7 | 682.8 | 738.7 | |
Goodwill impairment | 0 | 0 | 69 | |
Restructuring and other | 253.4 | 45.9 | 57 | |
Operating income (loss) | 265.6 | 393.1 | 130.6 | |
Other (expense) income: | ||||
Interest expense | (597.2) | (609.7) | (661.4) | |
Earnings from equity investments | 24.9 | 26.7 | 13 | |
(Loss) gain on debt financing transactions | (93.2) | (38.1) | 25.2 | |
Gain on remeasurement of debt | 43.4 | 0 | 0 | |
Other income, net | 17.2 | 0.2 | 13.9 | |
Total other expense, net | (604.9) | (620.9) | (609.3) | |
Net (loss) income before income taxes | (339.3) | (227.8) | (478.7) | |
Income tax (expense) benefit | (13.1) | (14.5) | 125 | |
Net (loss) income | (352.4) | (242.3) | (353.7) | |
Other comprehensive loss: | ||||
Foreign currency translation (loss) gain, net of tax | (98.4) | 126.4 | (104.7) | |
Pension and post-retirement (loss) gain, net of tax | (1.3) | 3.3 | (9.7) | |
Derivative financial instruments unrealized (loss) gain, net of tax | (0.1) | 4.2 | 3 | |
Other comprehensive (loss) income | (99.8) | 133.9 | (111.4) | |
Comprehensive (loss) income | $ (452.2) | $ (108.4) | $ (465.1) | |
Basic and diluted net loss per share: | ||||
Basic (in dollars per share) | $ (3.87) | $ (2.72) | $ (4.05) | |
Diluted (in dollars per share) | $ (3.87) | $ (2.72) | $ (4.05) | |
Weighted average number of shares used in per share calculations: | ||||
Basic shares (in shares) | 91.1 | 89.1 | 87.3 | |
Diluted shares (in shares) | 91.1 | 89.1 | 87.3 | |
Services | ||||
Revenue: | ||||
Total revenue | $ 1,777.1 | $ 1,522.7 | $ 1,424 | |
Operating expenses: | ||||
Cost of revenues | [1] | 505.6 | 417.2 | 396.5 |
Product sales | ||||
Revenue: | ||||
Total revenue | 993.8 | 978.6 | 896.2 | |
Operating expenses: | ||||
Cost of revenues | [1] | 465.6 | 465.3 | 424.6 |
Instant products | ||||
Revenue: | ||||
Total revenue | 592.3 | 582.3 | 563.2 | |
Operating expenses: | ||||
Cost of revenues | [1] | $ 284.1 | $ 282.1 | $ 285.2 |
[1] | Exclusive of D&A. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Current assets: | |||
Cash and cash equivalents | $ 168.2 | $ 788.8 | |
Restricted cash | 38.7 | 29 | |
Accounts receivable, net | 599.2 | 540.9 | |
Notes receivable, net | 113.9 | 143.5 | |
Inventories | 215.6 | 243.1 | |
Prepaid expenses, deposits and other current assets | 232.7 | 131.1 | |
Total current assets | 1,368.3 | 1,876.4 | |
Non-current assets: | |||
Restricted cash | 13.1 | 16.3 | |
Notes receivable, net | 40.2 | 52.8 | |
Property and equipment, net | 547 | 568.2 | |
Goodwill | 3,279.9 | 2,956.1 | |
Intangible assets, net | 1,809.1 | 1,604.6 | |
Software, net | 285.3 | 339.4 | |
Equity investments | 298.4 | 253.9 | |
Other assets | 76.5 | 57.6 | |
Total assets | 7,717.8 | 7,725.3 | |
Current liabilities: | |||
Current portion of long-term debt | 45 | 40.3 | |
Accounts payable | 225.1 | 190.4 | |
Accrued liabilities | 477.2 | 509.1 | |
Total current liabilities | 747.3 | 739.8 | |
Deferred income taxes | 107.6 | 73.1 | |
Other long-term liabilities | 334.2 | 203.1 | |
Long-term debt, excluding current portion | 8,991.9 | 8,736.3 | |
Total liabilities | 10,181 | 9,752.3 | |
Commitments and contingencies (see Note 15 and Note 22) | |||
Stockholders’ deficit: | |||
Class A common stock, par value $0.01 per share, 199.3 shares authorized, 107.1 and 105.2 shares issued and 89.9 and 88.0 shares outstanding as of December 31, 2017 and 2016, respectively | [1] | 1.1 | 1.1 |
Additional paid-in capital | 834.7 | 807.8 | |
Accumulated loss | (2,824.3) | (2,461) | |
Treasury stock, at cost - 17.2 shares | (175.2) | (175.2) | |
Accumulated other comprehensive loss | (299.5) | (199.7) | |
Total stockholders’ deficit | (2,463.2) | (2,027) | |
Total liabilities and stockholders’ deficit | $ 7,717.8 | $ 7,725.3 | |
[1] | Following the consummation of the reincorporation merger on January 10, 2018, each authorized, issued and outstanding share of Class A common stock of SGC, par value $0.01 per share, automatically converted into one share of common stock of the surviving corporation, par value $0.001 per share. The change in par value had no impact on total number of authorized, issued and outstanding shares. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Financial Position [Abstract] | |||
Common stock par value (in dollars per share) | [1] | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | [1] | 199,300,000 | 199,300,000 |
Common stock issued (in shares) | [1] | 109,100,000 | 107,100,000 |
Common stock outstanding (in shares) | [1] | 91,900,000 | 89,900,000 |
Treasury stock at cost (in shares) | 17,200,000 | 17,200,000 | |
[1] | Following the consummation of the reincorporation merger on January 10, 2018, each authorized, issued and outstanding share of Class A common stock of SGC, par value $0.01 per share, automatically converted into one share of common stock of the surviving corporation, par value $0.001 per share. The change in par value had no impact on total number of authorized, issued and outstanding shares. |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ in Millions | Total | Common stock: | Additional paid-in capital: | Accumulated loss: | Treasury stock: | Accumulated other comprehensive loss: |
Beginning balance at Dec. 31, 2015 | $ 1 | $ 765.9 | $ (1,865) | $ (222.2) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuances and purchases of common stock | 0 | |||||
Issuance of common stock in connection with employee stock purchase plan | 0 | |||||
Net redemption of common stock in connection with stock options and RSUs | (6.1) | |||||
Stock-based compensation | 33.7 | |||||
Tax effect from employee stock options and RSUs | (2.7) | |||||
Net loss | $ (353.7) | (353.7) | ||||
Other comprehensive (loss) income | (111.4) | (111.4) | ||||
Ending balance at Dec. 31, 2016 | (1,935.7) | 1 | 790.8 | (2,218.7) | $ (175.2) | (333.6) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuances and purchases of common stock | 0.1 | |||||
Issuance of common stock in connection with employee stock purchase plan | 0.8 | |||||
Net redemption of common stock in connection with stock options and RSUs | (7.1) | |||||
Stock-based compensation | 23.3 | |||||
Tax effect from employee stock options and RSUs | 0 | |||||
Net loss | (242.3) | (242.3) | ||||
Other comprehensive (loss) income | 133.9 | 133.9 | ||||
Ending balance at Dec. 31, 2017 | (2,027) | 1.1 | 807.8 | (2,461) | (175.2) | (199.7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuances and purchases of common stock | 0 | |||||
Issuance of common stock in connection with employee stock purchase plan | 0 | |||||
Net redemption of common stock in connection with stock options and RSUs | (15.5) | |||||
Stock-based compensation | 42.4 | |||||
Tax effect from employee stock options and RSUs | 0 | |||||
Net loss | (352.4) | (352.4) | ||||
Other comprehensive (loss) income | (99.8) | (99.8) | ||||
Ending balance at Dec. 31, 2018 | $ (2,463.2) | $ 1.1 | $ 834.7 | $ (2,824.3) | $ (175.2) | $ (299.5) |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Parenthetical) | Jan. 10, 2018$ / sharesshares |
Statement of Stockholders' Equity [Abstract] | |
Common stock par value (in dollars per share) | $ / shares | $ 0.001 |
Shares converted to new shares upon merger (in shares) | shares | 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (352.4) | $ (242.3) | $ (353.7) |
Adjustments to reconcile net loss to cash provided by operating activities: | |||
Depreciation, amortization and impairments | 689.7 | 682.8 | 738.7 |
Goodwill impairment | 0 | 0 | 69 |
Change in deferred income taxes | (33.3) | (5.7) | (164.6) |
Stock-based compensation | 43.9 | 27.2 | 35.3 |
Non-cash interest expense | 25.4 | 21.2 | 40.4 |
Earnings from equity investments, net | (24.9) | (26.7) | (13) |
Distributed earnings from equity investments | 32.8 | 33.2 | 26.4 |
(Gain) loss on sale of assets and other, net | (16.3) | 0.9 | (2.8) |
Loss (gain) on debt financing transactions | 93.2 | 38.1 | (25.2) |
Gain on remeasurement of debt | (43.4) | 0 | 0 |
Contingent acquisition consideration fair value adjustment | 28.7 | 0 | 0 |
Changes in current assets and liabilities, net of effects of acquisitions: | |||
Accounts and notes receivable, net | 31.8 | (48) | 30 |
Inventories | 23.7 | (2.2) | 2.5 |
Other current assets and liabilities | (27) | (35.9) | 21.3 |
Accounts payable and accrued liabilities | (125.8) | 64.5 | 14.7 |
Net cash provided by operating activities | 346.1 | 507.1 | 419 |
Cash flows from investing activities: | |||
Capital expenditures | (390.8) | (293.7) | (272.9) |
Acquisitions of businesses and assets, net of cash acquired | (296.6) | (57.7) | 0 |
Proceeds from asset sales | 40 | 7.5 | 16.7 |
Acquisitions and additions to equity method investments | (180.4) | (107.3) | (1.2) |
Distributions of capital from equity investments | 29.7 | 34.1 | 25.3 |
Changes in other assets and liabilities and other | 0 | 2.5 | 4.1 |
Net cash (used in) provided by investing activities | (798.1) | (414.6) | (228) |
Cash flows from financing activities: | |||
Borrowings under revolving credit facility | 560 | 475 | 360 |
Repayments under revolving credit facility | (585) | (170) | (410) |
Proceeds from issuance of long-term debt | 2,512.4 | 2,112.4 | 0 |
Repayment of assumed NYX and other acquisitions debt | (290.1) | 0 | 0 |
Payments on long-term debt | (38.9) | (23) | (49.8) |
Repayments of senior notes and term loans (including redemption premium) | (2,210.3) | (1,693.4) | (39.9) |
Payments of debt issuance and deferred financing costs | (38.5) | (58.7) | 0 |
Payments on license obligations | (44.9) | (52.6) | (50.2) |
Net redemptions of common stock under stock-based compensation plans and other | (20.9) | (9.5) | (6.1) |
Net cash (used in) provided by financing activities | (156.2) | 580.2 | (196) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5.9) | 4.5 | (4.9) |
(Decrease) increase in cash, cash equivalents and restricted cash | (614.1) | 677.2 | (9.9) |
Cash, cash equivalents and restricted cash, beginning of period | 834.1 | 156.9 | 166.8 |
Cash, cash equivalents and restricted cash, end of period | 220 | 834.1 | 156.9 |
Supplemental cash flow information: | |||
Cash paid for interest | 633 | 575 | 621.5 |
Income taxes paid | 32.9 | 37.8 | 21.9 |
Non-cash investing and financing transactions: | |||
Non-cash rollover and refinancing of Term loans (see Note 16) | 3,274.6 | 6,030.4 | 0 |
Non-cash additions to intangible assets related to license agreements | 137.5 | 26 | 78.3 |
NYX non-cash consideration transferred (including 2017 acquisition of ordinary shares) (see Note 9) | $ 93.2 | $ 0 | $ 0 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [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, social and digital gaming industries. Our portfolio of revenue-generating activities primarily includes supplying gaming machines and game content, casino-management systems and table game products and services to licensed gaming entities; providing instant and draw-based lottery products, lottery systems and lottery content and services to lottery operators; providing social casino solutions to retail consumers; and providing a comprehensive suite of digital RMG and sports wagering solutions, distribution platforms, content and services to regulated gaming entities as applicable. We report our operations in four business segments—Gaming, Lottery, Social and Digital. Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The accompanying consolidated financial statements include the accounts of SGC and its wholly owned subsidiaries, and those subsidiaries in which we have a controlling financial interest. Investments in other entities in which we do not have a controlling financial interest but we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant Accounting Policies Additional accounting policy disclosures are provided within the applicable Notes. Cash and cash equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. We place our temporary cash investments with high credit quality financial institutions. At times, such investments in U.S. accounts may be in excess of the Federal Deposit Insurance Corporation insurance limit. Restricted cash We are required by gaming regulations to maintain sufficient reserves in restricted cash accounts to be used for the purpose of funding payments to WAP jackpot winners. Restricted cash balances are based primarily on the jackpot meters displayed to slot players or for previously won jackpots and vary by jurisdiction. Compliance with maintaining adequate restricted cash balances and complying with appropriate investment guidelines for jackpot funding is periodically reported to gaming authorities. Minimum guarantees We enter into long-term license agreements with third parties in which we are obligated to pay a minimum guaranteed amount of royalties, typically annually over the life of the contract. These license agreements provide us with access to a portfolio of major brands to be used across our business segments in building our strong brand presence across multiple channels of distributions. We account for the minimum guaranteed obligations within accrued and other long-term liabilities at the onset of the license arrangement and record a corresponding licensed asset within intangible assets, net. The licensed intangible assets related to the minimum guaranteed obligations are amortized over the term of the license agreement with the amortization expense recorded in D&A. The long-term liability related to the minimum guaranteed obligations is reduced as royalty payments are made as required under the license agreement. We assess the recoverability of license agreements whenever events arise or circumstances change that indicate the carrying value of the licensed asset may not be recoverable. Recoverability of the licensed asset and the amount of impairment, if any, are determined using our policy for intangible assets with finite useful lives. Amortization expense related to these licenses and recorded in D&A for the years ended December 31, 2018 , 2017 and 2016 was $61.3 million , $68.5 million and $68.5 million , respectively. The following are our total minimum guaranteed obligations for the periods presented: As of December 31, 2018 2017 Accrued liabilities $ 50.1 $ 47.4 Other long-term liabilities 212.4 117.6 Total minimum guarantee obligations $ 262.5 $ 165.0 Weighted average remaining term (in years) 4.2 3.0 The following are our remaining expected future payments of minimum guarantee obligations: Year Ended December 31, 2019 2020 2021 2022 2023 After 2023 Expected future payments $50.1 $45.7 $41.2 $42.2 $27.5 $55.8 Other assets We capitalize debt issuance costs associated with long-term line-of-credit arrangements and amortize such amounts ratably over the term of the arrangement as an adjustment to interest expense. We assess the recoverability of our other long-term assets whenever events arise or circumstances change that indicate the carrying value of the asset may not be recoverable. Advertising costs The cost of advertising is expensed as incurred and totaled $102.0 million , $82.6 million and $71.3 million in 2018 , 2017 and 2016 , respectively. R&D R&D relates primarily to software product development costs and is expensed as incurred until technological feasibility has been established. Employee related costs associated with product development are included in R&D. Foreign currency translation We have significant operations where the local currency is the functional currency, including our operations in the U.K., Europe, Australia and Canada. Assets and liabilities of foreign operations are translated at period-end rates of exchange and results of operations are translated at the average rates of exchange for the period. Gains or losses resulting from translating the foreign currency financial statements are accumulated as a separate component of accumulated other comprehensive loss in stockholders’ deficit. Gains or losses resulting from foreign currency transactions are included in other (expense) income, net. See Note 20. Comprehensive loss We include and classify in comprehensive loss unrealized gains and losses from our foreign currency translation adjustments, certain gains or losses associated with pension or other post-retirement benefits, including prior service costs or credits and transition assets or obligations, the effective portion of derivative financial instruments designated as hedging instruments, and net investment non-derivative hedge of our investments in certain of our international subsidiaries. New Accounting Guidance - Recently 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 adopted this guidance effective January 1, 2018 using a modified retrospective application approach. See Note 3 for our revenue recognition policy and the adoption impact of ASC 606 on our consolidated financial statements. The FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business in 2017. 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. We adopted this guidance effective January 1, 2018, and this adoption did not have a material effect on our consolidated financial statements. The FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost in 2017. We adopted this guidance effective January 1, 2018. This guidance requires an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of operating income, if one is presented, which for us means that certain immaterial amounts are classified within interest expense as compared to the previous classification within SG&A. We are also required to describe which line items are used to present the other components of net benefit cost if such financial statement line items are separately presented; otherwise, we must disclose the line items in which such costs are presented. The FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities in 2017 . We early adopted this guidance during the first quarter of 2018, which simplifies the application of hedge accounting guidance, and creates greater transparency for results presented on the face of the financial statements and footnotes. Our adoption did not have a material effect on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance requires that such capitalized implementation costs for hosting arrangements are expensed over the term of the hosting arrangement and presented in the same line item in the statement of operations and comprehensive (loss) income as the fees associated with the hosting service. We early adopted this guidance prospectively effective the third quarter of 2018, and this adoption did not have a material effect on our consolidated financial statements. New Accounting Guidance - Not Yet Adopted T he FASB issued ASU No. 2016-02, Leases (Topic 842 ) in 2016. ASU 2016-02 combined with all subsequent amendments (collectively, ASC 842) requires balance sheet recognition for all leases with a lease term greater than one year to be recorded as a lease liability (on a discounted basis) with a corresponding right-of-use asset. This guidance also expands the required quantitative and qualitative disclosures for lease arrangements and gives rise to other changes impacting certain aspects of lessor accounting. We will adopt this guidance at the beginning of the first quarter of 2019 using the optional transition method provided by ASU 2018-11, and we anticipate applying both the lessee package of practical expedients and the available lessor practical expedients. We have substantially completed our assessment and the following is our adoption impact assessment completed to date: Lessee Accounting: We estimate the adoption will result in the addition of $115.0 million to $145.0 million of assets and liabilities to our consolidated balance sheet, primarily related to real estate leases, with no significant change to our consolidated statements of operations and comprehensive (loss) income or cash flows. We also expect our quantitative and qualitative disclosures for lease arrangements to increase under ASC 842. Lessor Accounting: Certain of our international gaming operations arrangements and domestic lottery systems arrangements may contain identified equipment that is conveyed to our customers as a part of a comprehensive service solution. The equipment substitution rights under these arrangements are concluded to be non-substantive, because historical substitutions have primarily been made for operational failures or maintenance reasons and such substitutions generally do not provide us an economic benefit due to high capital costs without incremental revenue. We do not anticipate this fact pattern will change in the future; accordingly, we expect to treat such arrangements as a service arrangement with an embedded lease. However, because the lease component of such lottery arrangements generally is not predominant, we anticipate recognizing the associated revenue under these arrangements under ASC 606. While most of these arrangements are expected to contain embedded operating leases, depending on the terms of these arrangements, either at inception or upon modification, certain of these arrangements could potentially be classified as sales-type financing leases. Because we are predominantly compensated on a variable basis based on a percentage of revenue in these arrangements, we might be required to recognize a loss at lease inception (or modification) for such arrangements classified as sales-type financing leases. This loss would result from the derecognition of the carrying amount of the underlying equipment that is greater than the net investment in the lease, even though the arrangement is expected to ultimately be profitable. This is not expected to change the timing or amount of revenue that we recognize under these arrangements. The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment methodology in current U.S. 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, 2019. Application is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of adopting this guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in ASC 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The new guidance will be effective for us beginning January 1, 2020, with early adoption permitted upon issuance of this updated guidance. We do not plan to early adopt this ASU, and 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 consolidated financial statements. |
Business Segments
Business Segments | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | Year Ended December 31, 2017 Gaming Lottery Social Digital Unallocated and Reconciling Items (1) Total Total revenue $ 1,844.3 $ 811.5 $ 362.0 $ 65.8 $ — $ 3,083.6 AEBITDA (2) 895.6 364.7 81.7 16.0 (133.1 ) $ 1,224.9 Reconciling items to consolidated net loss before income taxes: D&A (520.8 ) (50.1 ) (17.7 ) (8.6 ) (85.6 ) (682.8 ) Restructuring and other (7.7 ) (5.9 ) (2.0 ) (0.2 ) (30.1 ) (45.9 ) EBITDA from equity investments (2) (67.1 ) (67.1 ) Earnings from equity investments 26.7 26.7 Interest expense (609.7 ) (609.7 ) Loss on debt financing transactions (38.1 ) (38.1 ) Other expense, net (8.6 ) (8.6 ) Stock-based compensation (27.2 ) (27.2 ) Net loss before income taxes $ (227.8 ) Assets as of December 31, 2017 $ 5,401.6 $ 1,070.6 $ 219.1 $ 61.2 $ 972.8 $ 7,725.3 Capital expenditures for the year ended December 31, 2017 $ 194.1 $ 37.9 $ 4.5 $ 3.9 $ 53.3 $ 293.7 (1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes. (2) AEBITDA is described in footnote (2) to the first table in this Note 2. Year Ended December 31, 2016 Gaming Lottery Social Digital Unallocated and Reconciling Items (1) Total Total revenue $ 1,772.7 $ 777.9 $ 274.4 $ 58.4 $ — $ 2,883.4 AEBITDA (2) 821.6 333.1 55.5 11.4 (118.0 ) $ 1,103.6 Reconciling items to consolidated net loss before income taxes: D&A (585.2 ) (66.5 ) (9.1 ) (5.8 ) (72.1 ) (738.7 ) Goodwill impairment — (69.0 ) — — — (69.0 ) Restructuring and other (14.6 ) (8.7 ) (0.5 ) (1.1 ) (32.1 ) (57.0 ) EBITDA from equity investments(2) (70.2 ) (70.2 ) Earnings from equity investments 13.0 13.0 Interest expense (661.4 ) (661.4 ) Gain on debt financing transactions 25.2 25.2 Other income, net 11.1 11.1 Stock-based compensation (35.3 ) (35.3 ) Net loss before income taxes $ (478.7 ) Assets as of December 31, 2016 $ 5,506.6 $ 1,032.0 $ 169.8 $ 36.0 $ 343.0 $ 7,087.4 Capital expenditures for the year ended December 31, 2016 $ 184.4 $ 40.5 $ 4.9 $ 4.0 $ 39.1 $ 272.9 (1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes. (2) AEBITDA is described in footnote (2) to the first table in this Note 2. The following tables present revenue by customer location and property and equipment by geographic location: Year Ended December 31, 2018 2017 2016 Revenue: U.S. $ 2,190.5 $ 2,118.1 $ 1,959.0 Other 1,172.7 965.5 924.4 Total $ 3,363.2 $ 3,083.6 $ 2,883.4 As of December 31, 2018 2017 Property and equipment, net: U.S. $ 334.5 $ 390.1 Other 212.5 178.1 Total $ 547.0 $ 568.2 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition As described in Note 1, on January 1, 2018, we adopted ASC 606 using the modified retrospective method, which was applied to customer contracts that were not completed as of January 1, 2018. In accordance with the modified retrospective transition method, our results of operations beginning with the first quarter of 2018 are presented in accordance with ASC 606, while prior periods continue to be reported in accordance with the historical revenue recognition guidance under ASC 605. The following table disaggregates our revenues by type within each of our business segments: Revenue recognized for Year Ended December 31, Revenue category 2018 2017 2016 Gaming Gaming operations $ 631.9 $ 696.0 $ 725.3 Gaming machine sales 646.3 672.4 618.2 Gaming systems 320.6 274.0 240.8 Table products 232.6 201.9 188.4 Total $ 1,831.4 $ 1,844.3 $ 1,772.7 Lottery Instant products $ 592.5 $ 588.0 $ 573.7 Lottery systems 253.8 223.5 204.2 Total $ 846.3 $ 811.5 $ 777.9 Social Mobile $ 322.9 $ 259.6 $ 187.1 Web and other 93.0 102.4 87.3 Total $ 415.9 $ 362.0 $ 274.4 Digital Sports and platform $ 100.5 $ — $ — Gaming and other 169.1 65.8 58.4 Total $ 269.6 $ 65.8 $ 58.4 2018 Accounting Policy Under ASC 606 General We evaluate the recognition of revenue and rental income based on the criteria set forth in ASC 606 or ASC 840, as appropriate. Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. This condition normally is met when the product has been delivered or upon performance of services. Revenue is reported net of incentive rebates and discounts. We made an accounting policy election to exclude from the measurement of the transaction price sales taxes and all other items of a similar nature, and also elected to account for shipping and handling activities as a fulfillment of our promise to transfer the goods. Accordingly, shipping and handling costs are included in cost of sales. Our credit terms are predominately short term in nature. We also grant extended payment terms under certain Gaming contracts, primarily where the sale is secured by the related equipment sold. For these contracts with customers for which the financing component is determined to be significant to the contract, the contract transaction price is adjusted for the effect of a financing component (time value of money). We have not applied the significant financing component guidance to transactions with financing terms of 12 months or less. Any sales commissions associated with the sale or placement of our products and services are expensed as incurred as contracts associated with sales commissions are generally completed within a one-year period. The primary types of revenue impacted by the adoption of ASC 606 were Gaming operations and Lottery instant products. Each of these is described separately below. We had other balance sheet adoption impacts that, combined with the preceding, resulted in a net increase to opening accumulated loss of $10.9 million as of January 1, 2018. As part of the adoption of ASC 606, we increased contract liabilities by $9.7 million primarily associated with Lottery instant products licensing and player loyalty contracts for which we determined that the promises in the related contracts were part of a single performance obligation under ASC 606. In addition, we reduced previously recorded deferred costs net of newly established contract assets by $11.4 million related to licensing in certain customized lottery software contracts for which we concluded that we were unable to recognize revenue for delivered elements under ASC 985-605 due to the lack of vendor-specific objective evidence for undelivered elements and for which we were required to estimate the standalone selling price of delivered performance obligations under ASC 606. Other than the adoption impact for Gaming operations and Lottery instant products, described herein, the impact of adopting the new revenue recognition guidance on revenue and operating income in aggregate was less than $10.0 million . Contracts with Customers with Multiple Promised Goods and Services We enter into contracts with customers that include multiple promises (such as gaming machines, gaming systems hardware and software, installation, service and maintenance, product support or lottery systems and hardware, installation and maintenance bundled promises). For such contracts, the transaction price is allocated to each distinct performance obligation using an estimate of stand-alone selling price. The stand-alone selling price is generally based on observable prices or a cost plus margin approach. The establishment of stand-alone selling price requires judgment as to whether there is a sufficient quantity of items sold or substantively renewed on a stand-alone basis and those prices demonstrate an appropriate level of concentration to conclude that a stand-alone selling price exists. The guidance in ASC 606 requires that we apply judgments or estimates to determine both the performance obligations and the stand-alone selling prices of identified performance obligations. Contracts with multiple promised goods and services described above will often involve significant judgment in determining whether each promise is distinct or should be combined with other promises in such contracts in concluding on the distinct performance obligations for such contracts. Such judgment generally requires an assessment of the level of integration and interdependency between individual components particularly in our gaming systems and certain digital contracts with customers. Associated with these same contracts, we also apply significant judgment to determine the stand-alone selling prices of the identified performance obligations. In certain contracts with customers, we bundle the selling price for multiple promised goods or services or we may license systems for which the solutions we provide are highly customized and therefore the prices we charge are either uncertain, highly variable, or both. Gaming Operations Gaming operations revenues are generated by providing customers access to proprietary land-based gaming equipment, table game products and VLTs under a variety of recurring operating, service, or rental contracts, for which consideration is based upon a percentage of Coin-in, a percentage of Net win, or a fixed daily/monthly fee, with variability generally resolved in the reporting period. For these contracts with customers, we generally transfer control and recognize revenue or rental income over time based on the amount we expect to receive as described and classify such revenue or rental income as services revenue. Payments from customers under these contracts are typically due on a monthly basis. Jackpot expense for our WAP services is recorded as a reduction to revenue, which decreased revenue and cost of services by $22.3 million for the year ended December 31, 2018 . This change in classification has no impact on operating income or net loss. There was $23.2 million and $29.8 million of such amounts presented as cost of services for the year ended December 31, 2017 and 2016. The amount of rental income revenue that is outside the scope of ASC 606 and ASC 605 was $265.2 million , $275.0 million , and $294.3 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Gaming Machine Sales These contracts with customers include the sale of gaming machines, including game content, electronic table game products and parts (including game themes and conversion kits). We transfer control and recognize revenue from the sale of gaming machines at a point in time upon delivery of gaming machines to our customers or distributors pursuant to the terms of the contract. If the sale of gaming machines includes multiple promised goods and services, these contracts are accounted for as described in the “Contracts with Customers with Multiple Promised Goods and Services” section above. Our credit terms are predominately short term in nature. Gaming Systems Gaming systems contracts with customers can include a comprehensive suite of technology solutions provided to gaming operators, including perpetual licenses to core system solutions and non-core system solutions and other applications and tools. Gaming systems products also include the iVIEW touch screen display, which facilitates the player experience, bonus features, customer service, and employee functions and ongoing hardware and software maintenance services and upgrades. Determination of performance obligations and timing of the transfer of control varies by contract. Generally, these contracts contain multiple promised goods and services, including the following: (i) core system software license; (ii) non-core system software license(s); (iii) professional services; (iv) system-based hardware; (v) in-game hardware products; and (vi) software and hardware maintenance and product support. Control transfers and we recognize revenue from the sale of perpetual gaming systems licenses and various hardware products at a point in time when the gaming system is available for use by a customer which is no earlier than the commencement of the license term, and for the hardware products upon delivery. For contracts that include new core gaming system installations, control is not considered transferred until control of the core gaming system license is transferred as the additional promises are generally highly dependent on the core gaming system. Software and hardware maintenance and product support services are considered stand-ready obligations, therefore control transfers and revenue is recognized over time over the term of the maintenance and support period. If a gaming systems contract includes multiple promised goods and services, these contracts are accounted for as described in the “Contracts with Customers with Multiple Promised Goods and Services” section above. Table Products Table products revenue is generated from supplying and maintaining or selling table game products, primarily including automatic card shufflers, deck checkers, table roulette chip sorters and other land-based table gaming equipment. We transfer control and recognize revenue from the sale of table products at a point in time upon delivery to our customers or distributors pursuant to the terms of the contract. Supply and maintenance contracts, for which consideration is primarily based on a fixed monthly fee, are considered stand-ready obligations, therefore control transfers and revenue is recognized over time over the term of the supply and maintenance period. Such contracts are generally short-term in nature. We also license our proprietary table games content, for which revenue is recognized at a point in time under the licensing of intellectual property guidance as such licenses are functional licenses. Lottery Instant Products Our instant products revenue is primarily generated under long-term contracts to supply instant products and provide related services to our Lottery customers. For instant products that are sold on a PPU and POS basis, we generally have a single performance obligation of a promise to supply the instant products. Control transfers and we recognize revenue from the sale of such instant products when the lotteries have taken delivery of shipments of instant products pursuant to the terms of the contract. For instant products that are sold on a POS basis, we are compensated based on retail sales, therefore the timing difference between the recognition of revenue, the billing of our customers and the receipt of payments depends on retail sales. Contract assets resulting from these contracts remain until we have the contractual ability to invoice and collect from customers (which occurs upon retail sales). For our CSP contracts, revenue is recognized when a lottery retailer activates associated instant tickets, which timing corresponds with how we satisfy our performance obligation. The guidance in ASC 606 requires that we apply judgment to determine the timing of control transfer of performance obligations in our Lottery instant products contracts. For instant products that are sold under POS contracts, we generally have a single performance obligation of a promise to supply the instant products. The determination of when control transfers requires significant judgment because lotteries take delivery of shipments of instant products, but we retain the risk of such inventory until retail sales of such tickets takes place. We have determined control transfers upon delivery to a lottery-controlled warehouse, because we do not have the ability to direct the use of such instant products subsequent to delivery. Lottery revenue associated with instant products sold on a POS basis increased by less than $5.0 million for the year ended December 31, 2018 as a result of adopting the new revenue recognition guidance. The revenue value of tickets and the associated historical cost of inventory sold under POS arrangements remaining in the distribution channel at December 31, 2017 was reflected directly in shareholders’ deficit with an increase to contract assets (included in Prepaid expenses, deposits and other current assets) totaling $52.0 million , a reduction to inventory totaling $33.0 million and a decrease to accumulated net loss totaling $19.0 million . The impact of ASC 606 on our December 31, 2018 consolidated balance sheet was a $36.5 million decrease to inventories and a $64.3 million increase to contract assets included in Prepaid expenses, deposits and other current assets. Lottery Systems Our Lottery business segment offers our customers a number of related, value-added services as part of an integrated product offering. These services include lottery systems, including point-of-sale terminals and other equipment, software, data communication services and support and instant game validation systems, and software, hardware and related services for sports wagering and keno systems. For our integrated lottery systems service contracts (described above), our single performance obligation is a promise to perform a series of stand-ready services to operate a fully-functional draw lottery. Revenue is recognized over time in an amount generally based on a percentage of sales of the related games, which represents our measure of progress toward satisfying our performance obligation. For our perpetual licensing of customized lottery software contracts, we generally recognize revenue over time using costs incurred to date relative to total estimated completion costs to measure progress toward satisfying our performance obligations, which we believe best depicts the transfer of control to the customer. Maintenance on lottery software and lottery terminals is considered a stand-ready obligation, with control transferring and revenue being recognized over time ratably over the maintenance and support period. If a lottery systems contract includes multiple promised goods and services, these contracts are accounted for as described in the “Contracts with Customers with Multiple Promised Goods and Services” section above. Social Gaming Social gaming revenues are generated from the sale of virtual coins, chips or bingo cards (collectively referred to as “virtual currency”), which players can use to play casino-style slot and table games or bingo games (i.e., spin in the case of slot games, bet in the case of table games and use of bingo cards in the case of bingo games). We distribute our games through various global social web and mobile platforms such as Facebook, Apple, Google, Amazon , and other web and mobile platforms. Control transfers and we recognize revenues from player purchases of virtual currency as the virtual currency is consumed for game play, which is based on a historical data analysis. Because we have control over the content and functionality of games before they are accessed by the end user, we have determined we are the principal and, as a result, revenues are recorded on a gross basis. Payment processing fees paid to platform providers (such as Facebook, Apple, Amazon and Google ) are recorded within cost of services. All social gaming revenue is classified as services revenue. Digital Digital revenue is generated from professional services related to highly customized software design, development, licensing, maintenance and support services associated with a comprehensive suite of technology solutions, including sports books and betting markets across both fixed-odds and pari-mutuel betting styles. Additionally, through our integrated suite of various platform and technology solutions, we provide gaming operators optional portals for reporting and administrative functions, and access to a wide portfolio of content, including casino, lottery and bingo style games. Determination of performance obligations and timing of the transfer of control vary based on the nature of the contract. Generally, these contracts contain multiple promises, including the following: (i) implementation of customized software solution and the associated software license; (ii) support services and unspecified software updates; (iii) professional development services; and (iv) access to the game content. Control generally transfers and we recognize revenue from the implementation of a customized software solution and the associated software license over time using costs incurred to date relative to total estimated completion costs to measure progress toward satisfying our performance obligations, which we believe best depicts the transfer of control to the customer. Support services and unspecified software updates are considered stand-ready obligations, therefore control transfers and revenue is recognized over time ratably over the term of the support period. Professional development services generally relate to post-go live development, and control transfers and revenue is recognized over time as services are rendered. We also generate revenue from various content aggregation platforms, remote gaming servers, our SG Universe platform and various other platforms, which deliver a wide spectrum of internally developed and branded games and popular third-party provided games to gaming operators. We provide daily access to these platforms and are typically compensated based on variable consideration, such as a percentage of net gaming revenue with variability generally resolved in the reporting period. Substantially all Digital revenue is classified as services revenue. Contract Liabilities and Other Disclosures The following table summarizes the activity in our contract liabilities for the reporting period: Year Ended December 31, 2018 Contract liability balance, beginning of period (1) $ 88.2 Liabilities recognized during the period 53.7 Amounts recognized in revenue from beginning balance (44.8 ) Contract liability balance, end of period (1) $ 97.1 (1) Contract liabilities are included within accrued liabilities and other long-term liabilities in our consolidated balance sheet. The timing of revenue recognition, billings and cash collections results in billed receivables, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on our consolidated balance sheet. Other than contracts with customers with financing arrangements exceeding 12 months, revenue recognition is generally proximal to conversion to cash, except for Lottery instant products sold under percentage of sale contracts. As disclosed in “Lottery Instant Products” above, revenue is recognized for such contracts upon delivery to our customers, while conversion to cash is based on the retail sale of the underlying tickets to end consumers. As a result, revenue recognition under ASC 606 does not approximate conversion to cash in any periods post-adoption. Total revenue recognized under such contracts was $103.1 million for the year ended December 31, 2018 . The following table summarizes our opening and closing balances in these accounts (other than contract liabilities disclosed above): Receivables Contract Assets (1) Opening balance, January 1, 2018 $ 724.7 $ 66.4 Closing balance, December 31, 2018 753.3 113.7 (1) Contract assets are included primarily within Prepaid expenses, deposits and other current assets in our December 31, 2018 consolidated balance sheet. Other than acquired contract assets and receivables and assumed contract liabilities resulting from the NYX acquisition (described in Note 9), we did not have any material changes in these balances other than normal, recurring activity during the year ended December 31, 2018 . As of December 31, 2018 , other than as described above, we did not have material unsatisfied performance obligations for contracts expected to be long-term or contracts for which we recognize revenue at an amount other than for which we have the right to invoice for goods or services delivered or performed. 2017 and 2016 Accounting Policy Under ASC 605 Refer above for description of how revenue is generated for each revenue category within each of our business segments. General We evaluate the recognition of revenue and rental income based on the criteria set forth in ASC 605, ASC 985 or ASC 840, as appropriate. Revenue is recognized when the risks and rewards of ownership have substantively transferred to customers. This condition normally is met when the product has been delivered or upon performance of services. Revenue is reported net of incentive rebates, discounts, sales taxes and all other items of a similar nature. Shipping and handling costs are included in cost of sales. Collectability is evaluated based on a review of the customer’s creditworthiness and a review of historic collection experience under contracts with extended payment terms, as applicable. We separately assess whether pricing is fixed or determinable under arrangements with extended payment terms reflected in the issuance of a receivable. The majority of our sales agreements are for standard products and services with customer acceptance occurring upon delivery of the product or performance of the service. However, SGC also enters into agreements that involve multiple elements (such as gaming machines, systems hardware and software, installation and service and maintenance and product support), or non-standard terms and conditions. For non-software multiple-element arrangements, we recognize revenue for delivered elements when they have stand-alone value to the customer, they have been accepted by the customer, and for which there are only customary refund or return rights. The transaction price is allocated to the deliverables by use of the relative selling price method. The selling price used for each deliverable is based on VSOE if available, TPE if VSOE is not available, or ESP if neither VSOE nor TPE is available. ESP is determined in a manner consistent with that used to establish the price to sell the deliverable on a standalone basis. In addition to the preceding conditions, equipment revenue is not recorded until the installation has been completed if equipment acceptance is dependent upon installation or if installation is essential to the functionality of the equipment. Installation revenues are not recorded until installation has been completed. In accounting for multiple-element arrangements that include both hardware and software elements, we first separate the collective hardware and software elements using the relative selling price method as prescribed by ASC 605-25. For software elements not essential to functionality of related hardware, we follow the industry specific software guidance set forth in ASC 985, which only allows for the use of VSOE in establishing fair value if such elements remain undelivered. Generally, VSOE is the price charged when the deliverable is sold separately or the price established by management for a product that is not yet sold. For these types of arrangements (or portions of arrangements) falling within software revenue recognition standards and that do not involve significant production, modification, or customization, revenue for each software or software-related element is recognized when we have VSOE of the selling price of all of the undelivered elements and applicable revenue recognition criteria have been met for the delivered elements. The establishment of VSOE requires judgment as to whether there is a sufficient quantity of items sold on a stand-alone basis or substantive post-contract customer support (“PCS”) contract renewals and whether the prices or PCS renewal rates demonstrate an appropriate level of concentration to conclude that VSOE exists. Gaming, Social and Digital segments revenue categories are recognized under the general revenue recognition policy described above. If the sale of gaming machines or other arrangements includes multiple elements, these arrangements are accounted for under multiple element arrangement accounting described above. The following are specific revenue recognition policies for our Lottery segment: • Revenue from the sale of instant products that are sold on a PPU basis is recognized when the customer accepts the product pursuant to the terms of the contract and are recognized under general accounting policy described above. • Revenue from the sale of instant products that are sold on a Participation basis (POS and CSP) is recognized as retail sales are generated. We believe that products and services provided under these arrangements are delivered contemporaneously and are not separate units of account; therefore, as the services offered are a comprehensive solution in exchange for Participation-based or price-per-unit based compensation, this revenue is recognized under the general revenue recognition policy above. • Revenue from the provision of lottery system services provided on a Participation basis is recognized when the retail sales of draw lottery games are generated. Some lottery systems contracts also result in recognition of revenue when retail sales of instant tickets through the system are generated. • Revenue from the perpetual licensing of customized lottery software is recognized under the percentage of completion method of accounting, based on the ratio of costs incurred to estimated costs to complete. • Revenue derived from maintenance on lottery software and lottery terminals is recognized ratably over the maintenance period. Deferred revenue and deferred cost of revenue Deferred revenue arises primarily from the timing differences between the shipment or installation of Gaming and Lottery equipment and systems products and the satisfaction of all revenue recognition criteria consistent with our revenue recognition policy, and prepayment of contracts which are recognized ratably over a service period, such as maintenance or licensing revenue. Deferred cost of revenue primarily consists of the direct costs associated with the manufacture of Gaming and Lottery equipment and systems products for which revenue has been deferred. Deferred revenue and deferred cost of revenue expected to be realized within one year are classified as current liabilities and current assets, respectively. Sales commissions Any sales commissions associated with the sale or placement of our products are expensed as incurred. Contracts associated with sales commissions are generally completed within a one-year period. Warranties At the time a sale is recognized, we record estimated future warranty costs. The warranty liability is determined by applying historical claim rate experience to the current applicable population. Warranty costs may differ from those estimated if actual claim rates are higher or lower than our historical rates. |
Restructuring and other
Restructuring and other | 12 Months Ended |
Dec. 31, 2018 | |
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; (v) major litigation; and (vi) acquisition related and other unusual items. The following table summarizes pre-tax restructuring and other costs for the periods presented: Year Ended December 31, 2018 2017 2016 Employee severance (1) $ 37.2 $ 9.8 $ 36.2 Acquisition-related costs (2) 7.6 21.1 2.5 Contingent acquisition consideration (3) 28.7 — — Legal and related (4) 152.5 — — Restructuring, integration and other 27.4 15.0 18.3 Total $ 253.4 $ 45.9 $ 57.0 (1) Including employee severance and termination costs associated with restructuring activities. |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss Per Share | Basic and Diluted Net Loss Per Share Basic and diluted net loss per share were the same, as any additional common stock equivalents would be anti-dilutive. We excluded 2.1 million , 2.6 million and 2.9 million stock options from the calculation of diluted weighted-average net loss per share for the years ended December 31, 2018 , 2017 and 2016 , respectively, which would be anti-dilutive due to the net loss in those periods. In addition, we excluded 2.6 million , 3.8 million and 4.9 million RSUs from the calculation of diluted weighted-average net loss per share for the years ended December 31, 2018 , 2017 and 2016 , respectively, which would be anti-dilutive due to the net loss in those periods. |
Accounts Receivable and Notes R
Accounts Receivable and Notes Receivable and Credit Quality of Receivables | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable and Notes Receivable and Credit Quality of Receivables | Accounts and Notes Receivable and Credit Quality of Receivables Accounts and Notes Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts and notes receivable is our best estimate of the amount of probable credit losses in our existing receivables. Changes in circumstances relating to the collectability of accounts and notes receivable may result in the need to increase or decrease our allowance for doubtful accounts and notes receivable in the future. We determine the allowances based on historical experience, current market trends and, for larger customer accounts, our assessment of the ability of the customers to pay outstanding balances. Past due balances and other higher risk amounts are reviewed individually for collectability. Account balances are charged against the allowances after all collection efforts have been exhausted and the potential for recovery is considered remote. The timing of our invoices does not always coincide with revenue recognized under the contract. We have contract assets (unbilled receivable) which represent revenue recorded in excess of amounts invoiced under the contract and generally become billable at contractually specified dates or events. We had $100.2 million and $61.2 million of unbilled receivables as of December 31, 2018 and 2017 , respectively. The following summarizes the components of current and long-term accounts and notes receivable, net: As of December 31, 2018 2017 Current: Accounts receivable $ 615.1 $ 551.5 Notes receivable 138.4 164.1 Allowance for doubtful accounts (40.4 ) (31.2 ) Current accounts and notes receivable, net $ 713.1 $ 684.4 Long-term: Accounts and notes receivable, net of allowance of $0.1 and $0.2 40.2 52.8 Total accounts and notes receivable, net $ 753.3 $ 737.2 We have provided extended payment terms and development financing to certain customers with some of these arrangements being evidenced by a note. We carry notes receivable at face amounts less an allowance for doubtful accounts and imputed interest, if any. Our notes receivable portfolio consists of domestic and international receivables with installment payment terms ranging from 90 days to four years or single payment terms greater than 12 months. Interest income, if any, is recognized ratably over the life of the note receivable and any related fees or costs to establish the notes are charged to selling, general and administrative expense as incurred, as they are immaterial. Actual or imputed interest, if any, is determined based on current market rates at the time the note originated and is recorded in other income and expense, net, ratably over the payment period, which approximates the effective interest method. We generally impute interest income on all notes receivable with terms greater than one year that do not contain a stated interest rate. Credit Quality of Receivables The interest rates on our outstanding accounts and notes receivable ranged from 3.0% to 10.0% at December 31, 2018 and 3.0% to 10.4% at December 31, 2017 . Our general policy is to recognize interest on such receivables until the receivable is deemed non-performing, which we define as payments being overdue by 180 days beyond the agreed-upon terms. When a receivable is deemed to be non-performing, the item is placed on non-accrual status and interest income is recognized on a cash basis. The amount of such non-performing receivables was immaterial at December 31, 2018 and 2017 . In certain international jurisdictions, we offer extended payment terms ranging between 18 to 36 months. Sales with extended payment terms typically result in a higher selling price and, if extended over periods longer than one year, incur interest. In our Gaming machine sales business, we file UCC-1 financing statements domestically in order to retain a security interest in the gaming machines that underlie a significant portion of our domestic accounts and notes receivable until the receivable balance is fully paid. However, the value of the gaming machines, if repossessed, may be less than the balance of the outstanding receivable. For international customers, depending on the country and our historic collection experience with the customer, we may obtain pledge agreements, bills of exchange, guarantees, post-dated checks or other forms of security agreements designed to enhance our ability to collect the receivables, although a majority of our international accounts and notes receivables do not have these features. In our Gaming operations business, because we own the Participation gaming machines that are leased or otherwise provided to the customer, in a bankruptcy the customer has to generally either accept or reject the lease or other agreement and, if rejected, our gaming machines are returned to us. Our accounts and notes receivable related to revenue earned on Participation gaming machines and all other revenue sources are typically unsecured claims. Due to the significance of our gaming machines to the on-going operations of our casino customers, we may be designated as a key vendor in any bankruptcy filing by a casino customer, which can enhance our position above other creditors in the bankruptcy. Due to our successful collection experience and our continuing relationship with casino customers and their businesses, it is infrequent that we repossess gaming machines from a customer in partial settlement of outstanding accounts or notes receivable balances. In those unusual instances where repossession occurs to mitigate our exposure on the related receivable, the repossessed gaming machines are subsequently resold in the used gaming machine market; however, we may not fully recover the receivable from this re-sale. We evaluate our exposure to credit loss on receivables on both a collective and individual basis. In addition, we evaluate such receivables 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 such receivables individually or in the aggregate. Accordingly, receivables may be evaluated under multiple methodologies, and the resulting allowance is not determined based on one specific methodology taking all factors into consideration. Where possible, we seek payment deposits, collateral, pledge agreements, bills of exchange, foreign bank letters of credit, post-dated checks or personal guarantees with respect to receivables from our customers. We continuously assess our receivables using the information stated above for impairment, especially in cases where macroeconomic conditions could indicate that our ability to collect all amounts due under our contractual agreements is unlikely. Consistent with our policy with respect to past due receivables, for impaired notes receivable, we generally recognize interest on notes receivable until the note receivable is deemed impaired, which we define as a note where payments have not been received within 180 days of the agreed-upon terms. When a note receivable is deemed to be impaired, we write the note down to its net realizable value, which approximates fair value. Accordingly, on impaired notes we cease recognizing interest income and instead recognize any payments on a cash basis. We have certain concentrations of outstanding notes receivable in international locations that impact our assessment of the credit quality of our notes receivable. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our notes receivable. We have not identified changes in the aforementioned factors in the year ended December 31, 2018 that require a reassessment of our receivable balances. The international locations with significant concentrations (generally deemed to be exceeding 10% ) of our receivables with terms longer than one year are as follows: • Mexico - Our notes receivable, net, from certain customers in Mexico at December 31, 2018 was $25.2 million . We collected $33.8 million of outstanding receivables from these customers during the year ended December 31, 2018 . • Peru - Our notes receivable, net, from certain customers in Peru at December 31, 2018 was $15.5 million . We collected $11.8 million of outstanding receivables from these customers during the year ended December 31, 2018 . • Argentina - Our notes receivable, net, from customers in Argentina at December 31, 2018 was $18.5 million , which are 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 $34.2 million of outstanding receivables from customers in Argentina during the year ended December 31, 2018 . The following summarizes the components of total notes receivable, net: December 31, 2018 Balances over 90 days past due December 31, 2017 Balances over 90 days past due Notes receivable: Domestic $ 55.1 $ 6.2 $ 93.5 $ 9.2 International 123.5 24.8 123.6 33.2 Total notes receivable 178.6 31.0 217.1 42.4 Notes receivable allowance Domestic (6.5 ) (6.5 ) (4.0 ) (4.0 ) International (17.9 ) (17.9 ) (16.8 ) (16.8 ) Total notes receivable allowance (24.4 ) (24.4 ) (20.8 ) (20.8 ) Notes receivable, net $ 154.2 $ 6.6 $ 196.3 $ 21.6 At December 31, 2018 , 4.3% of our total notes receivable, net, was past due by over 90 days compared to 11.0% at December 31, 2017 . The activity in our allowance for notes receivable for each of the years ended December 31, 2018 and 2017 is as follows: December 31, 2018 December 31, 2017 Beginning allowance for notes receivable $ (20.8 ) $ (15.0 ) Provision (6.3 ) (7.3 ) Charge-offs and recoveries 2.7 1.5 Ending allowance for notes receivable $ (24.4 ) $ (20.8 ) The fair value of notes receivable is estimated by discounting future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. At December 31, 2018 and 2017 , the fair value of the notes receivable, net, approximated the carrying value due to contractual terms of notes receivable generally being under 24 months. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out or weighted moving average method. Our inventory primarily consists of gaming machines and table products for sale and related parts, instant products for our Participation and PPU arrangements and our licensed brand merchandise. We determine the lower of cost or net realizable value of our inventory based on estimates of potentially excess and obsolete inventories after considering historical and forecasted demand and average selling prices. Inventories consisted of the following: As of December 31, 2018 2017 Parts and work-in-process $ 130.5 $ 128.7 Finished goods 85.1 114.4 Total inventories $ 215.6 $ 243.1 Parts and work-in-process include parts for gaming machines, lottery terminals and instant lottery ticket materials, and labor and overhead costs for work-in-process associated with the manufacturing of gaming machines, instant lottery products and lottery terminals. Our finished goods inventory primarily consists of gaming machines for sale, instant products primarily for our Participation arrangements and our licensed branded merchandise. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, and when placed into service, are depreciated using the straight-line method over the estimated useful lives of the assets as follows: Item Estimated Life in Years Lottery and other machinery and equipment 3 - 15 Gaming equipment 1 - 5 Transportation equipment 3 - 8 Furniture and fixtures 5 - 10 Buildings and improvements 15 - 40 Costs incurred for equipment associated with specific Gaming, Lottery and Digital contracts not yet placed into service are classified as construction in progress and are not depreciated until placed into service. Leasehold improvements are amortized over the lesser of the term of the corresponding lease or their useful life. We periodically review the estimated useful lives of our fixed assets and assess the recoverability of long-lived assets (or asset groups) whenever events or changes in circumstances indicate that the carrying value of such an asset (or asset groups) may not be recoverable. Property and equipment, net consisted of the following: As of December 31, 2018 2017 Land $ 15.0 $ 35.7 Buildings and leasehold improvements 128.2 183.6 Gaming and lottery machinery and equipment 1,041.3 962.2 Furniture and fixtures 27.0 33.2 Construction in progress 17.0 27.7 Other property and equipment 239.7 236.9 Less: accumulated depreciation (921.2 ) (911.1 ) Total property and equipment, net $ 547.0 $ 568.2 Depreciation expense is excluded from cost of services, cost of product sales, cost of instant products and other operating expenses and is separately presented within D&A. Year Ended December 31, 2018 2017 2016 Depreciation expense $ 212.5 $ 269.5 $ 323.1 Capitalized installation costs Certain Participation contracts require us to perform installation activities. Direct installation activities, which include costs for installing gaming machines, terminals, facilities wiring, computers, internal labor and travel, are performed at the inception of the contract to enable us to perform under the terms of the contract. Such activities do not represent a separate earnings process and, therefore, the installation costs are capitalized and amortized over the estimated contract term in the case of lottery-related contracts and typically over the life of the equipment when no long-term contract exists, as is often the case within our Participation gaming business. We had $28.0 million and $22.7 million of capitalized installation costs, net of accumulated depreciation, included within lottery machinery and equipment included within property and equipment, net as of December 31, 2018 and 2017 , respectively. There were no capitalized installation costs recorded related to gaming activities as of December 31, 2018 and 2017 . |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions We account for business combinations in accordance with ASC 805, which requires us to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition related restructuring costs from acquisition accounting. 2018 Acquisitions NYX Gaming Group Limited Purchase Price Allocation On January 5, 2018 , we completed the acquisition of all outstanding ordinary shares of NYX, creating a leading digital provider of sports wagering, iGaming and iLottery technologies, platforms, content, products and services. We paid $665.8 million in cash to acquire ordinary shares and other securities and to redeem NYX’s outstanding debt (including $91.9 million paid during the fourth quarter of 2017 to acquire NYX ordinary shares and other securities). The fair value of our NYX non-controlling equity interest held immediately before the acquisition date was $90.4 million . We incurred $7.7 million and $15.1 million of NYX acquisition-related costs which were recorded in Restructuring and other for the years ended December 31, 2018 and 2017 , respectively. The following table summarizes the allocation of the purchase price, which reflects an $8.1 million adjustment from the preliminary allocation during the first quarter of 2018 and primarily related to the provisional amounts recognized for certain receivables and liabilities for which we have subsequently obtained and evaluated more detailed information than existed at the measurement date: January 5, 2018 Cash, cash equivalents and restricted cash $ 23.3 Accounts receivable and other current assets (1) 55.8 Property and equipment and other non-current assets (1) 22.1 Goodwill 368.3 Intangible assets 350.0 Total assets $ 819.5 Current liabilities (2) $ 74.5 Deferred income taxes 66.3 Assumed debt and other liabilities 299.7 Total liabilities $ 440.5 Total consideration transferred $ 379.0 (1) Including $40.5 million and $12.9 million of receivables and contract assets, respectively. (2) Including $15.7 million of contract liabilities. Cash, cash equivalents and restricted cash, accounts receivable and other current assets and most liabilities (other than as primarily related to deferred income taxes) were valued at the existing carrying values which approximated the estimated fair values. The fair value of deferred income taxes was determined by applying the applicable enacted statutory tax rate to the temporary differences that arose on the differences between the financial reporting value and tax basis of the acquired assets and assumed liabilities. The fair value of intangible assets was determined using a combination of the relief from royalty method and the excess earnings method using Level 3 inputs in the hierarchy as established by ASC 820. The discount rates used in the valuation analysis ranged between 10% and 14% , and the royalty rate used was 0.5% . The following table details the intangible assets that have been identified: Fair Value Weighted Average Useful Life (Years) Customer relationships $ 214.0 7 Intellectual property (1) 126.5 7 Trade names 9.5 7 (1) Primarily consists of core technology and content. The factors contributing to the recognition of acquisition goodwill are based on enhanced financial and operational scale, market diversification, expected cost and operational synergies, assembled workforce and other strategic benefits. None of the resultant goodwill is expected to be deductible for income tax purposes. NYX revenue and net loss since the acquisition date included in our consolidated results were as follows: Year Ended December 31, 2018 Revenue $ 198.0 Net loss 41.1 The acquired NYX business was combined with the business-to-business component of our previous Interactive business segment, forming the new Digital business segment. The following unaudited pro forma financial information for the years ended December 31, 2018 and 2017 give effect to the NYX acquisition as if it had been completed on January 1, 2017: Year Ended December 31, 2018 2017 Revenue $ 3,363.2 $ 3,265.2 Net loss 344.7 307.7 The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been if the NYX acquisition had taken place on January 1, 2017, nor is it indicative of future operating results. The pro forma amounts include the historical operating results of SGC and NYX prior to the acquisition, with adjustments factually supportable and directly attributable to the NYX acquisition, primarily related to the effect of fair value adjustments and related depreciation and amortization, acquisition-related fees and expenses, interest expense related to additional borrowings used to complete the acquisition and the effect of repayments of NYX historical debt as a result of the acquisition. Other Acquisitions On January 23, 2018, we acquired privately held Tech Art. The transaction was accounted for as an asset acquisition, with substantially all of the cash consideration transferred allocated to intellectual property. Tech Art has been integrated into our Gaming business segment. On November 1, 2018, we completed the acquisition of Don Best, a leading global supplier of real-time betting data and pricing for North American sporting events. Don Best was integrated into our Digital business segment. 2017 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, which expands our existing portfolio of social casino games and our customer base. Spicerack was integrated into our Social 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 Red7, which expands our existing portfolio of mobile and interactive game titles. Red7 was integrated into our Digital business segment. The following table summarizes an aggregate disclosure related to business acquisitions completed in 2018 and 2017, excluding the NYX acquisition: Total Cash paid, net Contingent Acquisition Consideration (1) Allocation of (2) Weighted Excess purchase Aggregate total 2018 $ 46.2 $ 34.1 $ 9.0 $ 41.6 9.4 Years $ 10.8 Aggregate total 2017 66.0 57.7 7.5 56.4 8.3 Years 12.8 (1) Contingent consideration is determined by fair value and included in the consideration transferred (see Note 17 for subsequent changes due to remeasurements, which are recorded in Restructuring and other). Contingent acquisition consideration value is primarily based on reaching certain earnings-based metrics, with a maximum payout of up to $49.2 million as of December 31, 2018. Goodwill recognized relates to the Spicerack and Don Best acquisitions, and the factors contributing to the recognition of goodwill are based on expected synergies resulting from these acquisitions, including the expansion of the customer bases and new markets. Goodwill of $12.8 million attributable to the Spicerack acquisition is deductible for income tax purposes, while goodwill attributable to the Don Best acquisition is not 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 5.0% for all of the periods presented, thus not significant to our consolidated financial statements. |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
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 December 31, 2018 and 2017 . Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual values, which materially approximates the expected pattern of use. December 31, 2018 December 31, 2017 Gross Carrying Accumulated Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 1,083.9 $ (298.7 ) $ 785.2 $ 881.4 $ (214.8 ) $ 666.6 Intellectual property 930.6 (452.6 ) 478.0 788.1 (332.7 ) 455.4 Licenses 546.2 (253.5 ) 292.7 419.5 (206.9 ) 212.6 Brand names 123.4 (58.9 ) 64.5 125.7 (46.5 ) 79.2 Trade names 107.3 (22.5 ) 84.8 98.7 (14.7 ) 84.0 Patents and other 23.3 (13.6 ) 9.7 27.1 (14.5 ) 12.6 2,814.7 (1,099.8 ) 1,714.9 2,340.5 (830.1 ) 1,510.4 Non-amortizable intangible assets: Trade names 96.3 (2.1 ) 94.2 96.3 (2.1 ) 94.2 Total intangible assets $ 2,911.0 $ (1,101.9 ) $ 1,809.1 $ 2,436.8 $ (832.2 ) $ 1,604.6 The following reflects intangible amortization expense included within D&A: Year Ended December 31, 2018 2017 2016 Amortization expense $ 297.1 $ 260.0 $ 251.9 Estimated intangible asset amortization expense for the year ending December 31, 2019 and each of the subsequent four years: Year Ending December 31, 2019 2020 2021 2022 2023 Amortization expense $ 284.5 $ 241.1 $ 223.6 $ 195.7 $ 189.3 Goodwill Following the NYX acquisition, in the first quarter of 2018, we revised our operating segments as described in Note 2. As a result of our resegmentation during the first quarter of 2018, we reviewed our operating segments in accordance with ASC 350 to determine if additional reporting units exist within our operating segments based on the availability of discrete financial information that is regularly reviewed by segment management. We determined that we have nine reporting units: Instant Products, U.S. Lottery Systems, International Lottery Systems, SG Gaming, legacy U.K. Gaming, Casino Management Systems, Table Products, Social Gaming, and SG Digital. The change in our reporting units resulted in the allocation of $116.9 million of the previous Interactive reporting unit goodwill balance to the new Social Gaming reporting unit with the remaining $7.5 million allocated to the new SG Digital reporting unit, which allocation was determined based on the relative fair value approach in accordance with ASC 350. The table below reconciles the change in the carrying value of goodwill, by business segment, for the period from December 31, 2016 to December 31, 2018 . Gaming (1) Lottery (2) Interactive Social Digital 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 46.9 6.2 — — — 53.1 Balance as of December 31, 2017 2,475.5 356.2 124.4 — — 2,956.1 Reporting unit reallocation adjustment — — (124.4 ) 116.9 7.5 — Acquired goodwill — — — — 379.1 379.1 Foreign currency adjustments (27.0 ) (3.8 ) — (1.8 ) (22.7 ) (55.3 ) Balance as of December 31, 2018 $ 2,448.5 $ 352.4 $ — $ 115.1 $ 363.9 $ 3,279.9 (1) Accumulated goodwill impairment charges for the Gaming segment as of December 31, 2018 were $935.0 million. |
Impairments and Assets Held For
Impairments and Assets Held For Sale | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Impairments and Assets Held for Sale | Impairments and Assets Held for Sale Goodwill and intangible assets with indefinite useful lives Goodwill represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed of acquired companies. We test goodwill for impairment annually as of October 1 of each fiscal year or more frequently if events arise or circumstances change that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. As disclosed in Note 1, at the beginning of the first quarter of 2017, we adopted ASU 2017-04, which eliminated Step 2 from the goodwill impairment test. We evaluate goodwill at the reporting unit level by comparing the carrying value of each reporting unit to its fair value using a quantitative impairment test or qualitative assessment, as deemed appropriate. Under the qualitative assessment option, we first assesses qualitative factors to determine whether the fair value of a reporting unit is not “more than likely” less than its carrying value, which is commonly referred to as “Step 0”. If the fair value of the reporting unit is greater or if it is more likely than not that the fair value of the reporting unit is greater than its carrying value, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying value, an impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value determined based on a quantitative test, not to exceed the total amount of goodwill allocated to that reporting unit. Prior to the adoption of ASU 2017-04 and for the year ended December 31, 2016, the impairment loss was measured by comparing the fair value of goodwill to its carrying value based on an approach under which we were required to estimate the fair value of the entire reporting unit being assessed and assigning the residual difference between the estimated fair value of the reporting unit and the estimated fair value of the identifiable assets and liabilities to goodwill. We reviewed our operating segments in accordance with ASC 350 to determine if additional reporting units exist within our operating segments based on the availability of discrete financial information that is regularly reviewed by segment management. As disclosed in Note 10, we determined that we have nine reporting units: Instant Products, U.S. Lottery Systems, International Lottery Systems, SG Gaming, legacy U.K. Gaming, Casino Management Systems, Table Products, Social Gaming, and SG Digital. For business segment information, see Note 2. Our annual goodwill impairment tests as of October 1, 2018 indicated estimated fair values were more likely than not in excess of their carrying values for each of our reporting units that have goodwill balances. We conduct impairment tests of our indefinite-lived assets annually in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of an indefinite-lived asset is less than its carrying value or when circumstances no longer continue to support an indefinite useful life. Our annual impairment tests as of October 1, 2018 indicated estimated fair values were more likely than not in excess of the carrying values for all of our remaining indefinite-lived intangible assets. 2016 International Lottery Systems Impairment Charge Based on the results of our annual goodwill impairment test for our International Lottery Systems reporting unit, we recorded a goodwill impairment charge of $69.0 million , which resulted in a tax benefit of $14.5 million , during the fourth quarter of 2016. The impairment charge resulted from an accumulation of various internal and external factors, including the loss of our China Sports Lottery validation contract, the inability to receive regulatory approval in 2016 on certain games resulting in lower than anticipated replacement revenues, and the underlying factors driving the assumptions used in our model for goodwill valuation purposes, which were based on normalized historical results as described below. For purposes of the step one test under ASC 350-20, we estimated the fair value of the International Lottery Systems reporting unit using both an income approach that analyzed projected discounted cash flows and a market approach that considered comparable public companies. In determining the fair value of our International Lottery Systems reporting unit, we have given equal weight to the income and the market approach. In calculating the fair value of our International Lottery Systems reporting unit using the income approach, we used projections of revenues, profit margin, operating costs, capital expenditures and cash flows that primarily considered historical results, but also considered estimated future results and general economic and market conditions. In developing these projections, as large system installations and related hardware and terminal sales are inherently unpredictable, we used normalized historical results, even though such installations have occurred in the past and may reoccur in the future. The following estimates and assumptions were used in the discounted cash flow analysis: • A terminal revenue growth rate of 2.0% ; • A terminal profit margin percentage reflecting our historical normalized profit margins; • Assumptions regarding future capital expenditures reflective of maintaining and renewing our current customer contracts under normalized operations; and • An overall discount rate of 8.0% based on our weighted average cost of capital for the International Lottery Systems reporting unit. As the step one test indicated a possible impairment in the carrying value of our International Lottery Systems reporting unit goodwill, we performed step two of the impairment test to determine the amount of goodwill impairment to be recorded. The amount of the impairment was calculated by using assumptions consistent with our step one assumptions described above and the resulting implied fair value of the goodwill after allocating the fair value determined in the step one test to the individual assets and liabilities of the reporting unit, including the fair value of identified intangible assets which are not included in the existing carrying value of the reporting unit. The International Lottery Systems reporting unit fair value from our step one test was primarily allocated to our existing recorded assets and liabilities and our unrecorded identified intangible assets, including our proprietary Lottery systems platform and our existing customer relationships, resulting in an unallocated excess amount of $22.9 million , which was the implied fair value of the goodwill and was used in determining the impairment charge. The International Lottery Systems reporting unit is included in our Lottery business segment. Other long-lived assets and intangible assets with finite useful lives Intangible assets with finite useful lives are amortized over two to fifteen years using the straight-line method, which materially approximates the pattern of the assets' use. Factors considered when assigning useful lives include legal, regulatory and contractual provisions, product obsolescence, demand, competition and other economic factors. We assess the recoverability of long-lived assets and intangible assets with finite useful lives whenever events arise or circumstances change that indicate the carrying value of an asset may not be recoverable. Recoverability of long-lived assets (or asset groups) to be held and used is measured by a comparison of the carrying value of the asset (or asset group) to the expected net future undiscounted cash flows to be generated by that asset (or asset group). The amount of impairment of other long-lived assets and intangible assets with finite lives is measured by the amount by which the carrying value of the asset exceeds the fair market value of the asset. Assets Held For Sale As of December 31, 2018 , we had $36.4 million of assets held for sale, and none as of December 31, 2017 . Assets held for sale primarily relate to our Gaming business segment and consist of certain properties in Chicago that are actively being marketed for sale as a result of recent facility rationalization and integration activities. These assets are included within Prepaid expenses, deposits and other current assets and are reported at the lower of the carrying value or fair market value, less expected costs to sell. We measured the fair value of assets held for sale under a market approach and have categorized such measurements as Level 3 in the fair value hierarchy. Based on our fair value measurement during the first quarter of 2018 , the book value related to our assets held for sale was reduced by approximately $19.0 million , which was recorded within D&A. During the fourth quarter of 2018, we sold certain of our properties held for sale with net cash proceeds of approximately $40.0 million , which resulted in a gain on sale of assets of $16.3 million , which was recorded within Other income, net for the year ended December 31, 2018 . |
Software, net
Software, net | 12 Months Ended |
Dec. 31, 2018 | |
Research and Development [Abstract] | |
Software, net | Software, net We capitalize direct costs used in the development of internal-use software. Amounts capitalized are amortized over a period of two to ten years on a straight-line basis. We purchase, license and incur costs to develop external use software to be used in the products we sell, lease or market to customers. Costs incurred in creating software are expensed when incurred as R&D until technological feasibility has been established, after which costs are capitalized up to the date the software is available for general release to customers. Generally, the software we develop reaches technological feasibility when a working model of the software is available. We capitalize the payments made for software that we purchase or license for use in our products that has previously met the technological feasibility criteria prior to our purchase or license. Amortization of capitalized software costs is recorded over the estimated economic life, which is typically eight to ten years. For our game themes, we have determined that such products reach technological feasibility when internal testing is complete and the product is ready to be submitted to gaming regulators for approval. We incur and capitalize regulatory approval costs for our game themes after technological feasibility is achieved. Amortization of regulatory approval costs is recorded over the estimated economic life, which is typically two to four years. Software, net consisted of the following: As of December 31, 2018 2017 Software $ 1,101.6 $ 1,003.2 Accumulated amortization (816.3 ) (663.8 ) Software, net $ 285.3 $ 339.4 In the years ended December 31, 2018 and 2017 , we capitalized $108.5 million and $75.3 million , respectively, of software. The following reflects amortization of software included within D&A: Year Ended December 31, 2018 2017 2016 Amortization expense $ 160.5 $ 153.3 $ 158.9 |
Equity Investments
Equity Investments | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Equity Investments We account for our equity investments where we own a non-controlling interest, but exercise significant influence, under the equity method of accounting. Under the equity method of accounting, our original cost of the investment is adjusted for our share of equity in the earnings of the equity investee and reduced by dividends and distributions of capital received. We evaluate our investments in unconsolidated affiliates, for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may have experienced an “other-than-temporary” decline in value. If such conditions exist, we compare the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determine whether the impairment is “other-than-temporary” based on an assessment of all relevant factors, including consideration of our intent and ability to retain our investment until the recovery of the unrealized loss. We estimate fair value using a discounted cash flow analysis based on estimated future results of, or cash distributions from, the investee. Impairment charges, if any, are recorded in earnings (loss) from equity investment. During the fourth quarter of 2016, we recorded an impairment charge of $11.3 million related to our investment in GLB. At December 31, 2018 , we had investments in a number of entities (principally in our Lottery business segment) which are accounted for under the equity method of accounting because we do not have a controlling financial interest but we have the ability to exercise significant influence. For these investments, equity method income (loss) is recorded in “Earnings (loss) from equity investments”, with our investment recorded in “Equity investments.” See the tables below for details of our equity investments: Equity Investment Purpose Concession and/or Supplier Agreement Term Ownership Interest Segment LNS (1) Exclusive operator of Italian instant game lottery Initial term of nine years beginning October 2010, which was subsequently extended for up to nine years (September 2028) 20% Lottery Northstar IL (2) Private manager of Illinois lottery under a PMA January 2011 through January 2018 20% Lottery Northstar NJ (3) Provision of marketing and sales services to New Jersey Lottery October 1, 2013 through 2029 17.69% Lottery Northstar SupplyCo New Jersey LLC (NJ SupplyCo) Separate agreement under which we provide instant games to Northstar NJ October 1, 2013 through 2029 30% Lottery (1) Other members of consortium are Lottomatica Holdings, S.r.l. and Arianna 2001. LNS succeeded Consorzio Lotterie Nazionali, a consortium comprised of essentially the same group that owns LNS, as holder of the concession as the exclusive operator of the Italian Gratta e Vinci instant game lottery. (2) Other member of Northstar Illinois is IGT Global Solutions Corporation, a subsidiary of IGT. (3) Other members are IGT Global Solutions Corporation and a subsidiary of the administrator of the Ontario Municipal Employees Retirement System, this agreement provides us substantive participating rights. Equity investment Balance as of December 31, Equity earnings (loss) recognized for the Year Ended December 31, Cash distributions and dividends received for the Year Ended December 31, Equity Investment 2018 2017 2018 2017 2016 2018 2017 2016 LNS $ 224.1 $ 75.1 $ 16.4 $ 14.3 $ 14.0 $ 37.3 $ 40.4 $ 34.3 Northstar IL — — (0.6 ) 2.8 (0.4 ) — — — Northstar NJ and NJ Supply Co 25.5 21.2 3.3 0.9 1.0 — 4.6 4.8 GLB and CSG 23.1 35.3 0.6 (0.1 ) (8.0 ) 10.8 5.0 1.7 International Terminal Leasing 3.8 8.1 0.1 0.8 — 4.3 5.6 5.9 Other 21.9 23.8 5.1 8.0 6.4 10.1 11.7 5.0 Total under equity method $ 298.4 $ 163.5 $ 24.9 $ 26.7 $ 13.0 $ 62.5 $ 67.3 $ 51.7 NYX (1) — 90.4 — — — — — — Total equity investment $ 298.4 $ 253.9 $ 24.9 $ 26.7 $ 13.0 $ 62.5 $ 67.3 $ 51.7 (1) We elected the fair value option to account for our 36% non-controlling equity investment in NYX during and as of and for the year ended December 31, 2017. Revenue recognized from sales to investee for the Year Ended December 31, Equity Investment 2018 2017 2016 LNS $ 40.0 $ 44.9 $ 45.3 Northstar IL (1) — 22.8 22.6 Northstar NJ and NJ Supply Co 23.3 20.6 20.9 Other 6.6 6.7 4.9 Total $ 69.9 $ 95.0 $ 93.7 (1) Effective January 1, 2018, Camelot Illinois, LLC assumed our and IGT’s supply agreements (see below). LNS On December 4, 2017, we announced that LNS had accepted a contract extension of up to nine years for the Italian Scratch and Win concession. As a part of the contract extension, LNS was required to pay an upfront fee of €800 million in three installments. The first installment of €50 million was paid as of December 31, 2017; payments of the second installment of €300 million and third installment of €450 million were made in April 2018 and October 2018, respectively. Our pro-rata concession funding payments to LNS were €10 million ( $11.9 million ), €60 million ( $74.3 million ) and €90 million ( $104.2 million ), respectively, and were treated as contributions to our equity method investment as contributions were made. As of December 31, 2018 we had accounts receivable of $11.3 million from LNS. Northstar Illinois In August 2015, Northstar Illinois, the State of Illinois, SGI and Gtech Corporation (now known as IGT Global Solutions Corporation (“IGT”)) entered into a termination agreement with respect to the PMA (the “Termination Agreement”). In September 2016, Northstar Illinois, the State of Illinois, SGI and IGT entered into a letter agreement that (a) extended the term of the PMA (which expired January 2018) and (b) extended our instant lottery product supply agreement (and IGT’s lottery systems supply agreement) with Northstar Illinois which now expires April 1, 2019 (though it may be terminated earlier upon at least thirty ( 30 ) days prior written notice). The new PMA between the state of Illinois and Camelot Illinois, LLC commenced in January 2018, and Camelot Illinois, LLC has accepted the assignment and assumption of the SGI and IGT supply agreements. Northstar New Jersey Northstar New Jersey is entitled to receive annual incentive compensation payments from the State of New Jersey to the extent the lottery's net income for the applicable year exceeds specified target levels, subject to a cap of 3% of the applicable year’s net income. Northstar New Jersey is responsible for payments to the State of New Jersey to the extent certain net income targets are not achieved by the New Jersey Lottery, subject to a cap of 2% of the applicable year’s net income and a $20.0 million shortfall payment credit that was fully used by the end of the fourth quarter of 2015. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: As of December 31, 2018 2017 Compensation and benefits $ 119.7 $ 148.2 Contract liability (1) 73.4 42.7 Accrued interest 64.2 116.5 Customer advances and licenses 42.5 55.0 Taxes, other than income 26.7 27.7 Contingent acquisition consideration liabilities 22.1 — Legal accruals 7.0 14.9 Other 121.6 104.1 Total $ 477.2 $ 509.1 (1) Represents deferred revenue prior to the adoption of ASC 606. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | Leases At December 31, 2018 , we were obligated under operating leases covering office equipment, office and warehouse space, transponders and transportation equipment expiring at various dates. Future minimum lease payments required under our operating leases at December 31, 2018 were approximately as follows: 2019 2020 2021 2022 2023 Thereafter Future minimum lease payments $ 33.4 $ 27.2 $ 22.8 $ 17.9 $ 14.4 $ 29.3 Total rental expense under operating leases was $39.2 million , $32.2 million and $32.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Some of our operating leases contain provisions for future rent increases, rent-free periods or periods in which rent payments are reduced. The total amount of rental payments due over the lease term is being charged to rent expense on a straight-line method over the term of the lease. The difference between rent expense recorded and the amount paid is credited or charged to deferred rent obligation, which is included in accrued liabilities and other long-term liabilities. |
Long-Term and Other Debt
Long-Term and Other Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term and Other Debt | Long-Term and Other Debt Outstanding debt and capital leases The following reflects outstanding debt as of the dates indicated below: As of December 31, 2018 2017 Final Maturity Rate(s) Face Value Unamortized debt discount/premium and deferred financing costs, net Book Value Book Value Senior Secured Credit Facilities: 2018 Revolver, varying interest rate 2018 variable $ — $ — $ — $ 100.5 2020 Revolver, varying interest rate 2020 variable 325.0 — 325.0 249.5 Term Loan B-4 2024 variable — — — 3,193.6 Term Loan B-5 2024 variable 4,143.3 (72.3 ) 4,071.0 — Senior Notes: 2022 Secured Notes 2022 7.000 % — — — 2,130.7 2025 Secured Notes (1) 2025 5.000 % 1,250.0 (17.5 ) 1,232.5 343.7 2026 Secured Euro Notes (2) 2026 3.375 % 371.9 (5.4 ) 366.5 — Unsecured Notes 2022 10.000 % 2,200.0 (23.8 ) 2,176.2 2,170.1 2026 Unsecured Euro Notes (2) 2026 5.500 % 286.1 (4.2 ) 281.9 — Subordinated Notes: 2020 Notes 2020 6.250 % 243.5 (1.0 ) 242.5 241.8 2021 Notes 2021 6.625 % 340.6 (3.3 ) 337.3 336.0 Capital lease obligations, 3.9% as of December 31, 2018 payable monthly through 2020 2020 3.900 % 4.0 — 4.0 10.7 Total long-term debt outstanding $ 9,164.4 $ (127.5 ) $ 9,036.9 $ 8,776.6 Less: current portion of long-term debt (45.0 ) (40.3 ) Long-term debt, excluding current portion $ 8,991.9 $ 8,736.3 Fair value of debt (3) $ 8,773.3 (1) In connection with the February 2018 Refinancing, we entered into certain cross-currency interest rate swap agreements to achieve more attractive interest rates by effectively converting $460.0 million of the fixed-rate, U.S. Dollar-denominated 2025 Secured Notes, including the semi-annual interest payments through October 2023, to a fixed-rate Euro-denominated debt, with a fixed annual weighted average interest rate of approximately 2.946% . These cross-currency swaps have been designated as a hedge of our net investment in certain subsidiaries. (2) We designated a portion of our 2026 Secured Euro Notes as a net investment non-derivative hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency in order to reduce the volatility in our operating results caused by the change in foreign currency exchange rates of the Euro relative to the U.S. Dollar (see Note 17 for additional information). The total change in the face value of the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes due to changes in foreign currency exchange rates since the issuance was a reduction of $54.4 million , of which a $ 43.4 million gain was recognized on remeasurement of debt in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2018. (3) 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. The following reflects the principal amount of debt and capital lease payments due over the next five years and beyond as of December 31, 2018 : Total 2019 2020 2021 2022 2023 After 2023 Senior Secured Credit Facilities $ 4,468.3 $ 41.7 $ 366.7 $ 41.7 $ 41.7 $ 41.7 $ 3,934.8 Senior Notes 4,108.0 — — — 2,200.0 — 1,908.0 Subordinated Notes 584.1 — 243.5 340.6 — — — Capital lease obligations 4.0 3.3 0.7 — — — — Total long-term debt outstanding $ 9,164.4 $ 45.0 $ 610.9 $ 382.3 $ 2,241.7 $ 41.7 $ 5,842.8 Unamortized deferred financing costs and discount/premium (127.5 ) Total debt book value $ 9,036.9 Senior secured credit facilities SGC and certain of its subsidiaries are party to a credit agreement, dated as of October 18, 2013, by and among SGI, as the borrower, SGC, as a guarantor, Bank of America, N.A., as administrative agent, and the lenders and other agents party thereto (the “credit agreement”). As of December 31, 2017, the credit agreement included (a) a revolving credit facility of $596.2 million , through October 2018, with a step-down in availability at that time to $421.7 million until the extended maturity in October 2020, and with up to $350.0 million of the revolving credit facility available for issuances of letters of credit and (b) a $3.3 billion term B-4 loan facility. On February 14, 2018, we entered into the following transactions (the “February 2018 Refinancing”): a private offering of an additional $900.0 million principal amount of our 2025 Secured Notes, €325.0 million of 3.375% new senior secured notes due 2026 and €250 million of 5.500% new senior unsecured notes due 2026, and an amendment to our credit agreement to refinance our existing term loan B-4 facility and increase the term loans outstanding by $900.0 million under a new term loan B-5 facility. We used the net proceeds of the February 2018 Refinancing to (a) redeem all of our outstanding 2022 Secured Notes, (b) prepay a portion of our revolver borrowings under our credit agreement and (c) pay accrued and unpaid interest thereon plus related premiums, fees and expenses. The applicable margin for the new term B-5 loans was 2.75% per annum for eurocurrency (LIBOR) loans and 1.75% per annum for base rate loans, compared to 3.25% per annum for eurocurrency (LIBOR) loans and 2.25% per annum for base rate loans under the previous term B-4 loan facility. We also increased the amount of the revolving credit agreement by $24.0 million to $620.2 million through October 18, 2018, with a step-down in availability at that time to $445.7 million until the extended maturity on October 18, 2020. On October 18, 2018 we entered into a lender joinder agreement to the credit agreement with an additional revolving commitment lender. Pursuant to that joinder agreement, the amount of the revolving credit facility availability under the credit agreement was increased by $50.0 million through October 18, 2020. On December 12, 2018, we entered into two lender joinder agreements to the credit agreement with two additional revolving commitment lenders. Pursuant to these joinder agreements, the amount of the revolving credit facility availability under the credit agreement was increased by $125.0 million effective December 13, 2018 through October 18, 2020. As a result of all three of these joinder agreements, the amount of the availability under the revolving credit facility as of December 31, 2018 was $620.7 million until it matures on October 18, 2020. All of the debt incurred under the credit agreement is subject to accelerated maturity depending on our liquidity at the time our 2020 Notes, 2021 Notes and Unsecured Notes become due. The term B-5 loans under the credit agreement 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. SGI is required to pay commitment fees to revolving lenders on the actual daily unused portion of the revolving commitments at a rate of 0.50% per annum through maturity, subject to a step-down to 0.375% based upon the achievement of certain net first lien leverage ratios. SGI may voluntarily prepay all or any portion of outstanding amounts under the credit facilities at any time, in whole or in part, without premium or penalty, subject to redeployment costs in the case of a prepayment of euro currency loans on a day that is not the last day of the relevant interest period. Borrowings under the credit agreement are guaranteed by us and each of our current and future direct and indirect wholly owned domestic subsidiaries (other than SGI, the unrestricted social gaming business entities and immaterial subsidiaries), subject to certain customary exceptions as set forth in the credit agreement. The obligations under the credit agreement are secured by a first priority lien on (1) substantially all the property and assets (real and personal, tangible and intangible) of SGI and the other guarantors, and (2) 100% of the capital stock (or other equity interests) of the direct domestic subsidiaries of SGC, SGI and the guarantors and 65% of the capital stock (or other equity interests) of the direct foreign subsidiaries of SGC, SGI and the guarantors, in each case, subject to certain customary exceptions. Senior notes Unsecured Notes The Unsecured Notes were issued pursuant to an indenture dated as of November 21, 2014 (the “Unsecured Notes Indenture”). SGI may redeem some or all of the Unsecured Notes at any time on or after December 1, 2018 at the prices specified in the Unsecured Notes indenture. The Unsecured Notes are senior unsecured obligations of SGI and rank equally to all of SGI’s existing and future senior debt and rank senior to all of SGI’s existing and future senior subordinated debt. The Unsecured Notes are guaranteed on a senior unsecured basis by SGC and all of its wholly owned U.S. subsidiaries (other than SGI, the unrestricted social gaming business entities and immaterial subsidiaries). The Unsecured Notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries. 2022 Secured Notes The 2022 Secured Notes were issued pursuant to an indenture dated as of November 21, 2014 (the “2022 Secured Notes Indenture”). We redeemed all of the outstanding 2022 Secured Notes in March 2018 in connection with the February 2018 Refinancing. 2025 Secured Notes On October 17, 2017, SGI issued $350.0 million in aggregate principal amount of the 2025 Secured Notes in a private offering (the “October 2017 Financing”). The 2025 Secured Notes were issued pursuant to an indenture dated as of October 17, 2017 (the “2025 Secured Notes Indenture”). We used the net proceeds of the October 2017 Financing, 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. The $900.0 million of additional 2025 Secured Notes that were issued as part of the February 2018 Refinancing were issued under the 2025 Secured Notes Indenture and therefore have the same terms as the initial 2025 Secured Notes except for the issue date. SGI may redeem some or all of the 2025 Secured Notes at any time prior to October 15, 2020 at a redemption price equal to 100% of the principal amount of the 2025 Secured Notes plus accrued and unpaid interest, if any, to the date of redemption plus a “make whole” premium. SGI may redeem some or all of the 2025 Secured Notes at any time on or after October 15, 2020 at the prices specified in the 2025 Secured Notes indenture. The 2025 Secured Notes are senior secured obligations of SGI and are equally and ratably secured with SGI’s obligations under the credit agreement and the 2026 Secured Euro Notes. The 2025 Secured Notes are equal in rank to all of SGI’s existing and future senior debt and rank senior to all of SGI’s existing and future senior subordinated debt. The 2025 Secured Notes are guaranteed on a senior secured basis by SGC and all of its wholly-owned U.S. subsidiaries (other than SGI, the unrestricted social gaming business entities and immaterial subsidiaries). The 2025 Secured Notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries. 2026 Secured and Unsecured Euro Notes In connection with the February 2018 Refinancing, SGI issued €325.0 million aggregate principal amount of its new 2026 Secured Euro Notes and €250.0 million aggregate principal amount of its new 2026 Unsecured Euro Notes. The 2026 Secured Euro Notes were issued pursuant to an indenture dated as of February 14, 2018 (the “2026 Secured Notes Indenture”). SGI may redeem some or all of the 2026 Secured Euro Notes at any time prior to February 15, 2021 at a redemption price equal to 100% of the principal amount of the 2026 Secured Euro Notes plus accrued and unpaid interest, if any, to the date of redemption plus a “make whole” premium. SGI may redeem some or all of the 2026 Secured Euro Notes at any time on or after February 15, 2021 at the prices specified in the 2026 Secured Notes Indenture. The 2026 Secured Euro Notes are senior secured obligations of SGI and are equally and ratably secured with SGI’s obligations under the credit agreement and the 2025 Secured Notes. The 2026 Secured Euro Notes are equal in rank to all of SGI’s existing and future senior debt and rank senior to all of SGI’s existing and future senior subordinated debt. The 2026 Secured Euro Notes are guaranteed on a senior secured basis by SGC and all of its wholly owned U.S. subsidiaries (other than SGI, the unrestricted social gaming business entities and immaterial subsidiaries). The 2026 Secured Euro Notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries. The 2026 Unsecured Euro Notes were issued pursuant to an indenture dated as of February 14, 2018 (the “2026 Unsecured Notes Indenture”). SGI may redeem some or all of the 2026 Unsecured Euro Notes at any time prior to February 15, 2021 at a redemption price equal to 100% of the principal amount of the 2026 Unsecured Euro Notes plus accrued and unpaid interest, if any, to the date of redemption plus a “make whole” premium. SGI may redeem some or all of the 2026 Unsecured Euro Notes at any time on or after February 15, 2021 at the prices specified in the 2026 Unsecured Notes indenture. The 2026 Unsecured Euro Notes are senior unsecured obligations of SGI and rank equally to all of SGI’s existing and future senior debt and rank senior to all of SGI’s existing and future senior subordinated debt. The 2026 Unsecured Euro Notes are guaranteed on a senior unsecured basis by SGC and all of its wholly owned U.S. subsidiaries (other than SGI, the unrestricted social gaming business entities and immaterial subsidiaries). The 2026 Unsecured Euro Notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries. Effective April 30, 2018, the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes were listed on the Official List of The International Stock Exchange. Subordinated notes 2018 Notes The 2018 Notes were issued pursuant to an indenture dated as of September 22, 2010 (the “2018 Notes Indenture”). We redeemed all of the outstanding 2018 Notes on March 17, 2017. 2020 Notes The 2020 Notes were issued pursuant to an indenture dated as of August 20, 2012 (the “2020 Notes Indenture”). SGI may redeem some or all of the 2020 Notes at any time at the prices specified in the 2020 Notes Indenture. The 2020 Notes are unsecured senior subordinated obligations of SGI and are subordinated to all of SGI’s existing and future senior debt, rank equally with all of SGI’s existing and future senior subordinated debt and rank senior to all of SGI’s future debt that is expressly subordinated to the 2020 Notes. The 2020 Notes are guaranteed on an unsecured senior subordinated basis by SGC and all of its wholly owned U.S. subsidiaries (other than SGI, the unrestricted social gaming business entities and immaterial subsidiaries). The 2020 Notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries. 2021 Notes The 2021 Notes were issued pursuant to an indenture dated as of June 4, 2014 (the “2021 Notes Indenture”). SGI may redeem some or all of the 2021 Notes at any time at the prices specified in the 2021 Notes Indenture. The 2021 Notes are unsecured senior subordinated obligations of SGI and are subordinated to all of SGI’s existing and future senior debt, rank equally with all of SGI’s existing and future senior subordinated debt and rank senior to all of SGI’s future debt that is expressly subordinated to the 2021 Notes. The 2021 Notes are guaranteed on an unsecured senior subordinated basis by SGC and all of its wholly owned U.S. subsidiaries (other than SGI, the unrestricted social gaming business entities and immaterial subsidiaries). The 2021 Notes are structurally subordinated to all of the liabilities of our non-guarantor subsidiaries. 2020 and 2021 notes repurchase During the second quarter of 2016, we repurchased and cancelled $56.5 million and $9.4 million of principal amount of the 2020 Notes and 2021 Notes, respectively, for $34.2 million and $5.7 million in cash, respectively, through separate open market purchases. In connection with these transactions, we recorded a $25.2 million gain on early extinguishment of debt, net of a $0.8 million charge related to the write-off of unamortized debt discount and deferred financing costs associated with the extinguished debt. Social gaming unrestricted subsidiary designation In order to provide flexibility for potential future growth opportunities with respect to our social gaming business, during the third quarter of 2016 we designated certain of our wholly owned direct and indirect subsidiaries, which hold substantially all of the assets of, and operate, our social gaming business, as “Unrestricted Subsidiaries” under our credit agreement and the 2018 Notes Indenture, 2020 Notes Indenture, 2021 Notes Indenture, 2022 Secured Notes Indenture, and Unsecured Notes Indenture. In connection with the October 2017 Financing, we designated these social gaming subsidiaries as “Unrestricted Subsidiaries” under the 2025 Secured Notes Indenture. In connection with the February 2018 Refinancing, we designated these social gaming subsidiaries as “Unrestricted Subsidiaries” under the 2026 Secured Notes Indenture and the 2026 Unsecured Notes Indenture. As a result of such designations, these social gaming subsidiaries are not guarantors under our credit agreement and indentures and are not obligated to comply with many of the covenants set forth in those agreements and that remain applicable to us and our restricted subsidiaries. In addition, except to the extent of cash distributions from these social gaming subsidiaries to us or our restricted subsidiaries, the assets, liabilities and financial results of these social gaming subsidiaries will be excluded from the calculation of the applicable financial metrics required by these agreements, including our credit agreement’s maintenance covenant, which is based on our consolidated net first lien leverage. Following these designations, the social gaming subsidiaries remain our wholly owned direct and indirect subsidiaries. Debt issuance costs We capitalize debt issuance costs associated with long-term financing arrangements and amortize the deferred debt issuance costs over the term of the arrangement using the effective interest method. The capitalized debt issuance costs associated with long-term debt financing, other than line-of-credit arrangements, are presented as a direct reduction from the carrying value of long-term debt, consistent with the treatment of unamortized debt discount. In connection with 2017 refinancing activities, we incurred $42.2 million in financing costs of which approximately $34.3 million are presented as a reduction to long-term debt and $7.9 million were expensed. In connection with the refinancing activities in 2018, we incurred $25.8 million in financing costs presented primarily as a reduction to long-term debt. 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: Years Ended December 31, 2018 2017 2016 Repurchase and cancellation of principal balance at premium (discount) $ 110.3 $ — $ (26.0 ) Unamortized debt (premium) discount and deferred financing costs. net (29.8 ) 26.4 0.8 Third party debt issuance fees 12.7 11.7 — Total loss (gain) on debt financing transactions $ 93.2 $ 38.1 $ (25.2 ) Terms of Outstanding Debt Restrictive covenants Our only financial maintenance covenant is contained in our credit agreement. This covenant is tested at the end of each fiscal quarter and requires us to not exceed a maximum consolidated net first lien leverage ratio of 5.5 x Consolidated EBITDA (as defined in the credit agreement) for the quarter ended December 31, 2018. This ratio will step down to 5.0 x for the quarter ended June 30, 2019. The credit agreement, 2020 Notes Indenture, 2021 Notes Indenture, Unsecured Notes Indenture, 2025 Secured Notes Indenture, 2026 Secured Notes Indenture and 2026 Unsecured Notes Indenture also contain certain covenants that, among other things and subject to certain exceptions, limit SGC’s and its restricted subsidiaries’ (including SGI) ability to incur additional indebtedness or guarantees, pay dividends or make distributions or certain other restricted payments, purchase or redeem capital stock, prepay junior indebtedness or modify certain debt instruments, make investments or extend credit, engage in certain transactions with affiliates, engage in sale-leaseback transactions, consummate certain assets sales, effect a consolidation or merger, sell, transfer, lease or otherwise dispose of assets, create certain liens and other encumbrances on assets, enter into arrangements that restrict the ability to pay dividends or change fiscal years. These agreements also contain events of default customary for agreements of their type (with customary grace periods, as applicable). Failure to comply with any of the covenants in these agreements could result in a default under these agreements and under other agreements containing cross-default provisions. Such a default would permit lenders to accelerate the maturity of the debt under these agreements and other agreements containing cross-default provisions and to foreclose upon any collateral securing the debt. We were in compliance with the financial covenants under our debt agreements as of December 31, 2018 . On January 10, 2018, in connection with the reincorporation merger, the Surviving Corporation assumed all of the obligations of SGC under the credit agreement, the Unsecured Notes, the 2022 Secured Notes, the 2025 Secured Notes, the 2020 Notes and the 2021 Notes, and became a guarantor of all of that indebtedness. |
Fair Value of Measurements
Fair Value of Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset and liability in an orderly transaction between market participants at the measurement date. We estimate the fair value of our assets and liabilities when required using an established three-level hierarchy in accordance with ASC 820. 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. Derivative Financial Instruments We record derivative financial instruments on the balance sheet at their respective fair values. As described in Note 1, during the first quarter of 2018, we adopted ASU 2017-12. As of December 31, 2018 , we held the following derivative instruments that were accounted for pursuant to ASC 815: Interest Rate Swap Contracts We currently use interest rate swap contracts as described below to manage exposure to interest rate fluctuations by reducing the uncertainty of future cash flows on our variable rate debt. Our interest rate swaps that we held as of December 31, 2017 expired in January 2018. In February 2018, we entered into interest rate swap contracts to hedge a portion of our interest expense associated with our variable rate debt to effectively fix the interest rate that we pay. These interest rate swap contracts are designated as cash flow hedges under ASC 815. We pay interest at a weighted-average fixed rate of 2.4418% and receive interest at a variable rate equal to one-month LIBOR. The total notional amount of interest rate swaps outstanding was $800.0 million as of December 31, 2018 . These hedges mature in February 2022. These hedges are highly effective in offsetting changes in our future expected cash flows due to the fluctuation in the one-month LIBOR rate associated with our variable rate debt. We qualitatively monitor the effectiveness of these hedges on a quarterly 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 expect these hedges 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 as established by ASC 820. The following table shows the gains (losses) and interest expense on our interest rate swap contracts: Year Ended December 31, 2018 2017 2016 Gains (losses) recorded in accumulated other comprehensive loss, net of tax $ 0.1 $ (4.2 ) $ (3.0 ) Interest expense recorded related to interest rate swap contracts 2.6 7.0 8.2 We do not expect to reclassify material amounts from Accumulated other comprehensive loss to interest expense in the next twelve months. The following table shows the effect of interest rate swap contracts designated as cash flow hedges on the consolidated statements of operations and comprehensive loss: Year Ended December 31, 2018 Interest expense Total amounts of expense line item presented in the statements of operations and comprehensive loss in which the effects of cash flow hedges are recorded $ (597.2 ) Hedged item (16.6 ) Derivative designated as hedging instrument 14.0 Cross-Currency Interest Rate Swaps In connection with the February 2018 Refinancing (see Note 16), we entered into certain cross-currency interest rate swap agreements to achieve more attractive interest rates by effectively converting $460.0 million of our fixed-rate U.S. Dollar-denominated 2025 Secured Notes, including the semi-annual interest payments through October 2023, to fixed-rate Euro-denominated debt, with a fixed annual weighted average interest rate of approximately 2.946% . We have designated these cross-currency interest rate swap agreements as a net investment hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency in order to reduce the volatility in our operating results caused by the changes in foreign currency exchange rates of the Euro relative to the U.S. Dollar. We use the spot method to measure the effectiveness of our net investment hedge. Under this method, for each reporting period, the change in the fair value of the $460.0 million cross-currency interest rate swaps is reported in foreign currency translation gain (loss) in Accumulated other comprehensive loss. The cross-currency basis spread (along with other components of the cross-currency swaps’ fair value excluded from the spot method effectiveness assessment) are amortized and recorded to interest expense. We evaluate the effectiveness of our net investment hedge at the beginning of each quarter. The following table shows the fair value of our hedges: Balance Sheet Line Item December 31, 2018 December 31, 2017 Interest rate swaps (1)(3) Other assets/(accrued liabilities) $ 0.2 $ (0.2 ) Cross-currency interest rate swaps (2)(3) Other assets 18.0 — (1) The gains (loss) of $0.2 million, ($0.2 million) and ($6.9 million) for the years ended December 31, 2018, 2017 and 2016, respectively, are reflected in Derivative financial instrument unrealized gain (loss), net of tax in Other comprehensive income. Net Investment Non-derivative Hedge - 2026 Secured Euro Notes For the fourth quarter of 2018, we designated $155.0 million of our 2026 Secured Euro Notes as a net investment non-derivative hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency in order to reduce the volatility in our results caused by the changes in foreign currency exchange rates of the Euro relative to the U.S. Dollar. We use the spot method to measure the effectiveness of our net investment non-derivative hedge. Under this method, for each reporting period, the change in the hedged portion of the carrying value of the 2026 Secured Euro Notes due to remeasurement is reported in foreign currency translation gain (loss) in Other comprehensive income, and the remaining remeasurement change is recognized in Loss on remeasurement of debt in our consolidated statements of operations and comprehensive loss. We evaluate the effectiveness of our net investment non-derivative hedge at the beginning of each quarter and the inputs used to measure the fair value of this non-derivative hedge are categorized as Level 2 in the fair value hierarchy. Contingent Acquisition Consideration Liabilities In connection with our 2017 and 2018 acquisitions, we have recorded certain contingent acquisition consideration liabilities, of which the values are primarily based on reaching certain earnings-based metrics, with a maximum payout of up to $49.2 million as of December 31, 2018 . The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and are remeasured each reporting period. The inputs used to measure the fair value of our liabilities are categorized as Level 3 in the fair value hierarchy. We remeasured contingent acquisition consideration at each reporting period. These remeasurements included increases to the projected earnings-based measures and also the probability of achievement (categorized as Level 3 in the fair value hierarchy as established by ASC 820), which resulted in increases to the calculated fair value of contingent acquisition consideration by $18.0 million , $8.4 million , and $2.3 million , for the first, third, and fourth quarters of 2018, respectively. These changes were recorded in Restructuring and other. Contingent acquisition consideration liabilities as of December 31, 2018 and 2017 were $44.6 million and $7.5 million , respectively, of which $22.1 million as of December 31, 2018 is included in accrued liabilities with the remaining balance included in other long-term liabilities and the entire balance as of December 31, 2017 included in other long-term liabilities. We did not have assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2018 other than those described in Note 9. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Shares outstanding The following table sets forth the change in the number of shares of common stock outstanding during the fiscal years ended December 31, 2018 and 2017 : December 31, 2018 2017 Shares outstanding as of beginning of period 89.9 88.0 Shares issued as part of equity-based compensation plans and the ESPP, net of shares surrendered 2.0 1.9 Shares outstanding as of end of period 91.9 89.9 Series A 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 (the “Rights Agreement”). Concurrently, the Board of Directors of SGC adopted a resolution reserving for issuance a series of 20,000 shares of preferred stock. On January 10, 2018, the Rights Agreement was amended and restated to account for the Reincorporation Merger (the “Amended and Restated Rights Agreement”). In connection with the Amended and Restated Rights Agreement, the preferred stock was designated as Series A Junior Participating Preferred Stock (“Junior Preferred Stock”), par value $.001 per share, upon the exercise of rights under the Amended and Restated Rights Agreement. The Amended and Restated Rights Agreement provides for a dividend of one preferred share purchase right (“Right”) for each share of common stock of SGC. Each Right entitles the holder to purchase one ten-thousandth of a share of Series A Junior Preferred Stock for a purchase price of $109.00 , subject to adjustment as provided in the Amended and Restated Rights Agreement. As of December 31, 2018 , none of these shares were outstanding and no Rights were exercised. Stock-based and other incentive compensation Pursuant to our incentive stock plans we offer stock-based compensation in the form of stock options and RSUs to employees and our non-employee directors. The terms of such stock option and RSU awards, including the vesting schedule of such awards, are determined at our discretion subject to the terms of the applicable equity-based compensation plan. Commencing on January 1, 2017, we also offer an ESPP. Our ESPP allows for a total of up to 2.0 million shares of common stock to be purchased by eligible employees under offerings made each January 1 and July 1. Employees participate through payroll deductions up to a maximum of 15% of eligible compensation. The term of each offering period is six months and shares are purchased on the last day of the offering period at a 15% discount to the stock’s market value. For offering periods in 2018 and 2017, we issued a total of 83 thousand and 54 thousand shares of common stock at an average price of $22.79 per share and $30.63 per share, respectively. Options granted over the last several years have generally become exercisable in four equal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met, in all cases, with a maximum term of ten years. RSUs typically vest in four equal installments beginning on the first anniversary of the date of grant or when certain performance targets are determined to have been met. We recognize expense for stock-based compensation plans based on the estimated fair value of the related awards in accordance with ASC 718. Stock options are granted with exercise prices that are not less than the fair market value of our common stock on the date of grant. We periodically grant certain stock-based awards that are contingent upon SGC or certain of our subsidiaries achieving certain pre-determined financial performance targets. Upon determining that the performance target is probable, the fair value of the award is recognized over the service period. Determining the probability of achieving a performance target requires estimates and judgment. As of December 31, 2018 , we had approximately 19.4 million shares of common stock authorized for awards under the 2003 Incentive Compensation Plan, as amended and restated (the “2003 Plan”) (plus available shares from a pre-existing equity-based compensation plan). As of December 31, 2018 , we had approximately 3.1 million shares reserved under the 2003 Plan for future grants of equity awards and less than 0.1 million shares available under a pre-existing plan. As of December 31, 2018 , we also had outstanding stock options and RSUs granted as part of inducement awards that were not approved by our stockholders, as permitted by applicable stock exchange rules. Stock options For the years ended December 31, 2018 , 2017 and 2016 , we recognized stock-based compensation expense of $12.2 million , $3.7 million and $6.4 million , respectively, related to the vesting of stock options. During 2018, we issued 0.4 million stock options with a weighted average exercise price of $42.74 and a total grant date fair value of $9.1 million . At December 31, 2018 , we had $6.7 million of unrecognized stock-based compensation expense relating to approximately 2.1 million unvested stock options that will be amortized over a weighted-average period of approximately two years and have an average remaining contract term of 5.8 years with a weighted average exercise price of $18.23 . During the year ended December 31, 2018 , we received $7.9 million in cash from the exercise of stock options. Restricted stock units A summary of the changes in RSUs outstanding under our equity-based compensation plans during 2018 is presented below: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested RSUs as of December 31, 2017 3.9 $ 13.73 Granted 1.1 $ 47.17 Vested (2.1 ) $ 15.45 Cancelled (0.3 ) $ 22.02 Unvested RSUs as of December 31, 2018 2.6 $ 25.37 The weighted-average grant date fair value of RSUs granted during 2018 and 2017 was $47.17 and $22.55 , respectively. The fair value of each RSU grant is based on the market value of our common stock at the time of grant. During the years ended December 31, 2018 , 2017 and 2016 , we recognized stock-based compensation expense of $31.5 million , $23.0 million and $28.8 million , respectively, related to the vesting of RSUs. At December 31, 2018 , we had $47.8 million of unrecognized stock-based compensation expense relating to unvested RSUs that will be amortized over a weighted-average period of approximately two years. The fair value at vesting date of RSUs vested during the years ended December 31, 2018 , 2017 and 2016 was $88.0 million , $47.1 million and $24.2 million , respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We have defined benefit pension plans for our U.K.-based union employees (the “U.K. Plan”) and certain Canadian-based employees (the “Canadian Plan”). Collectively these two plans are referred to as the “Pension Plans”. Retirement benefits under the U.K. Plan are generally based on an employee’s average compensation over the two years preceding retirement. Retirement benefits under the Canadian Plan are generally based on the number of years of credited service. Our policy is to fund the minimum contributions permissible by the applicable authorities. We estimate that $3.6 million will be contributed to the Pension Plans in fiscal year 2019. Our pension benefit costs are calculated using various actuarial assumptions and methodologies. These assumptions include discount rates, inflation, compensation increase rates, expected returns on plan assets, mortality rates and other factors. The assumptions used in recording the obligations under our plans represent our best estimates, and we believe that they are reasonable, based on information as to historical experience and performance and other factors that might cause future expectations to differ from past trends. Differences in actual experience or changes in assumptions may affect our pension obligations and future expense. The primary factors contributing to actuarial gains and losses each year are (1) changes in the discount rate used to value pension benefit obligations as of the measurement date and (2) differences between the expected and the actual return on plan assets. The following table sets forth the combined funded status of the Pension Plans and their reconciliation to the related amounts recognized in our Consolidated Financial Statements at our December 31, 2018 and 2017 measurement dates: December 31, 2018 2017 Change in benefit obligation: Benefit obligation at beginning of year $ 133.8 $ 121.0 Service cost 2.5 2.4 Interest cost 3.8 4.2 Participant contributions 0.9 1.0 Actuarial (gain) loss (6.6 ) 1.2 Benefits paid (3.8 ) (6.0 ) Other, principally foreign exchange (5.5 ) 10.0 Benefit obligation at end of year $ 125.1 $ 133.8 Change in plan assets: Fair value of plan assets at beginning of year $ 115.5 $ 99.3 Actual (loss) gain on plan assets (4.1 ) 10.4 Employer contributions 3.2 3.1 Participant contributions 0.9 1.0 Benefits paid (3.8 ) (6.0 ) Other, principally foreign exchange (4.8 ) 7.7 Fair value of assets at end of year $ 106.9 $ 115.5 Amounts recognized in the consolidated balance sheets: Funded status (current) $ — $ — Funded status (non-current) (18.2 ) (18.3 ) Accumulated other comprehensive loss: Unrecognized actuarial loss 24.7 20.6 Unrecognized prior service cost 0.5 0.5 Deferred taxes (4.7 ) (4.7 ) Net amount recognized $ 2.3 $ (1.9 ) The following table presents the components of our net periodic pension benefit cost: Year Ended December 31, 2018 2017 2016 Components of net periodic pension benefit cost: Service cost $ 2.5 $ 2.4 $ 2.2 Interest cost 3.8 4.2 4.1 Expected return on plan assets (5.4 ) (5.9 ) (5.8 ) Amortization of actuarial losses 1.0 1.4 0.3 Net periodic cost $ 1.9 $ 2.1 $ 0.8 The accumulated benefit obligation for the Pension Plans was $125.1 million and $134.0 million as of December 31, 2018 and 2017 , respectively. The underfunded status of the Pension Plans recorded as a long-term liability in our Consolidated Balance Sheets as of December 31, 2018 and 2017 was 18.2 million and $18.3 million , respectively. The amounts included in accumulated other comprehensive loss as of December 31, 2018 expected to be recognized as components of net periodic pension benefit cost during the fiscal year ending December 31, 2019 are presented below: Unrecognized loss $ 1.8 Unrecognized prior service cost (0.5 ) Net amount expected to be recognized $ 1.3 The U.K. Plan is closed to new participants and pensionable earnings used to calculate retirement benefits are limited to a 2% annual increase while the plan is less than 100% funded. The investment policy is to maximize long-term financial return commensurate with security and minimizing risk. This is achieved by holding a portfolio of marketable investments that avoids over-concentration of investment and spreads assets both over industries and geographies. In setting investment strategy, we considered the lowest risk strategy that it could adopt in relation to the plan's liabilities and designed the asset allocation to achieve a higher return while maintaining a cautious approach to meeting the plan's liabilities. We considered a full range of asset classes, the risks and rewards of a range of alternative asset allocation strategies, the suitability of each asset class and the need for appropriate diversification. The current strategy in the U.K. Plan is to hold approximately 23% in a global return fund, approximately 4.9% in U.K. equities, approximately 6.9% in real estate, approximately 30% in non-U.K. equities, approximately 19% in Liability Driven Investments (LDI) and approximately 16% in corporate bonds. The current strategy in the Canadian Plan is to hold approximately 22% in Canadian equities, approximately 43% in non-Canadian equities and approximately 35% in bonds. The fair value of the plan assets for the Pension Plans at December 31, 2018 by asset category is presented below: Asset Category Market Value at 12/31/2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities (a) $ 51.5 $ 29.9 $ 21.6 $ — Global return fund (a) 13.8 — 13.8 — Corporate bonds (a) 14.5 — 14.5 — Government bonds 10.6 — 10.6 — Real estate 4.2 — — 4.2 LDI (Liability Driven Investment) 11.3 — 11.3 — Cash and cash equivalents (b) 1.0 1.0 — — Total pension assets $ 106.9 $ 30.9 $ 71.8 $ 4.2 (a) The assets are invested through managed funds that are valued using inputs derived principally from quoted prices in active markets for the underlying assets in the fund. (b) The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. The fair value of the plan assets for both of the Pension Plans at December 31, 2017 by asset category is presented below: Asset Category Market Quoted Significant Significant Equity securities (a) $ 56.1 $ 31.4 $ 24.7 $ — Global return fund (a) 14.6 — 14.6 — Corporate bonds (a) 13.9 — 13.9 — Government bonds 10.6 — 10.6 — Real estate 4.2 — — 4.2 LDI (Liability Driven Investment) 13.3 — 13.3 — Cash and cash equivalents (b) 2.8 2.8 — — Total pension assets $ 115.5 $ 34.2 $ 77.1 $ 4.2 (a) The assets are invested through managed funds that are valued using inputs derived principally from quoted prices in active markets for the underlying assets in the fund. (b) The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. The change in fair value of the Pension Plan assets valued using significant unobservable inputs (Level 3) is presented below: 2018 2017 Significant unobservable inputs (Level 3), beginning of period $ 4.2 $ 10.9 Unrealized gain (loss) on asset still held — (6.7 ) Significant unobservable inputs (Level 3), end of period $ 4.2 $ 4.2 The table below presents the weighted-average actuarial assumptions used to determine the benefit obligation and net periodic benefit cost for the Pension Plans. U.K. Plan Canadian Plan 2018 2017 2016 2018 2017 2016 Discount rates: Benefit obligation 2.90 % 2.60 % 2.80 % 3.90 % 4.00 % 4.00 % Net periodic pension cost 2.60 % 2.80 % 4.00 % 3.60 % 3.60 % 4.15 % Rate of compensation increase 1.00 % 1.00 % 1.00 % 1.00 % 3.00 % 3.00 % Expected return on assets 5.00 % 4.80 % 5.70 % 5.70 % 6.00 % 6.25 % The overall expected long-term rate of return on assets assumption for the U.K. Plan has been determined as a weighted-average of the expected returns on the above asset classes for the U.K. Plan. The expected return on bonds is taken as the current redemption yield on the appropriate index. The expected return on equities and property is determined by assuming a measure of out performance over the gilt-yield. The expected return on cash is related to the Bank of England base rate. Returns so determined are reduced to allow for investment manager expenses. The overall expected long-term rate of return on assets assumption for the Canadian Plan has been determined by consideration of the current level of expected returns on risk-free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class based on our active management of certain portfolio classes. We expect benefit payments between $3.0 million and $4.6 million annually, which reflect expected future service, for each of the next five years. Additionally, we expect benefit payments of $28.1 million for benefit payments during the five years from 2024 to 2028. U.S. plan We have a 401(k) plan for U.S.-based employees. Those employees who participate in our 401(k) plan are eligible to receive matching contributions from us for the first 6% of participant contributions. We match contributions of 35.0% of any participant’s contributions, up to the first 6% of their compensation (as defined in the plan document). Contribution expense for the years ended December 31, 2018 , 2017 and 2016 amounted to $11.5 million , $10.8 million and $10.7 million , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The accumulated balances for each classification of comprehensive (loss) income are presented below: Foreign Currency Items Derivative Financial Instruments (1) Unrecognized pension benefit costs, net of taxes (2) Accumulated Other Comprehensive Loss Balance at January 1, 2016 $ (205.6 ) $ (6.6 ) $ (10.0 ) $ (222.2 ) Change during period (104.7 ) (5.2 ) (10.0 ) (119.9 ) Reclassified into operations — 8.2 0.3 8.5 Balance at December 31, 2016 $ (310.3 ) $ (3.6 ) $ (19.7 ) $ (333.6 ) Change during period 126.4 (3.1 ) 1.9 125.2 Reclassified into operations — 7.3 1.4 8.7 Balance at December 31, 2017 $ (183.9 ) $ 0.6 $ (16.4 ) $ (199.7 ) Change during period (98.4 ) (0.1 ) (2.3 ) (100.8 ) Reclassified into operations — — 1.0 1.0 Balance at December 31, 2018 $ (282.3 ) $ 0.5 $ (17.7 ) $ (299.5 ) (1) The change during the period is net of income taxes of $0.1 million, $(2.6) million and $(2.0) million in 2018, 2017 and 2016, respectively. (2) The change during the period is net of income taxes of $0.5 million, $(0.7) million and $(3.2) million in 2018, 2017 and 2016, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income taxes are determined using the liability method of accounting for income taxes, under which deferred tax assets ("DTAs") and deferred tax liabilities ("DTLs") are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities. If, based upon all available evidence, both positive and negative, it is more likely than not that such DTAs will not be realized, a valuation allowance is recorded. Management assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing DTAs in each taxpaying jurisdiction. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2018 . Such strong objective evidence puts less emphasis on other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of December 31, 2018 , a valuation allowance of $245.2 million has been recorded to recognize only the portion of the DTAs that are more likely than not to be realized; however, the amount of the DTAs considered realizable could be adjusted if estimates of future taxable income during the carryforward period change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth. We apply a recognition threshold and measurement attribute related to uncertain tax positions taken or expected to be taken on our tax returns. We recognize a tax benefit for financial reporting of an uncertain income tax position when it has a greater than 50% likelihood of being sustained upon examination by the taxing authorities. We measure the tax benefit of an uncertain tax position based on the largest benefit that has a greater than 50% likelihood of being ultimately realized including evaluation of settlements. The components of net loss from continuing operations before income taxes are as follows: Year Ended December 31, 2018 2017 2016 United States $ (356.0 ) $ (336.6 ) $ (563.7 ) Foreign 16.7 108.8 85.0 Net loss before income tax (benefit) expense $ (339.3 ) $ (227.8 ) $ (478.7 ) The components of income tax expense (benefit) are as follows: Year Ended December 31, 2018 2017 2016 Current U.S. Federal $ 19.0 $ 5.0 $ 10.2 U.S. State 3.7 (4.0 ) (0.3 ) Foreign 22.6 24.8 32.0 Total 45.3 25.8 41.9 Deferred U.S. Federal (9.8 ) (5.8 ) (129.5 ) U.S. State (7.1 ) 2.5 (8.5 ) Foreign (15.3 ) (8.0 ) (28.9 ) Total (32.2 ) (11.3 ) (166.9 ) Total income tax expense (benefit) $ 13.1 $ 14.5 $ (125.0 ) The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is presented below: Year Ended December 31, 2018 2017 2016 Statutory U.S. federal income tax rate 21.0 % 35.0 % 35.0 % Foreign earnings at rates different than U.S. federal rate (1.5 )% (5.7 )% (1.5 )% Valuation allowance adjustments (16.8 )% (40.8 )% (6.5 )% Impact of U.S. Tax Reform (3.1 )% 4.3 % — % Other (3.5 )% 0.8 % (0.9 )% Effective income tax rate (3.9 )% (6.4 )% 26.1 % Our 2018 effective tax rate was impacted by the change in valuation allowances totaling $92.9 million against domestic (federal and state) net DTAs. Our 2017 effective tax rate was impacted by the recording of valuation allowances totaling $49.7 million against domestic (federal and state) net DTAs. Deferred income taxes reflect the net tax effects of temporary differences between the carrying values of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred income tax balances are established using the enacted statutory tax rates and are adjusted for changes in such rates in the period of change. December 31, 2018 2017 Deferred tax assets: Reserves and other accrued expenses $ 37.1 $ 29.4 Net operating loss carry forwards 436.2 395.5 Tax credit carry forwards 29.1 26.7 Interest limitation carryforwards 105.8 — Differences in financial reporting and tax basis for: Other 63.6 70.7 Valuation allowance (245.2 ) (158.8 ) Realizable deferred tax assets 426.6 363.5 Deferred tax liabilities: Reserves and other accrued expenses (4.5 ) (16.0 ) Deferred costs and prepaid expenses (45.2 ) (8.2 ) Differences in financial reporting and tax basis for: Identifiable intangible assets (382.6 ) (352.0 ) Property and equipment (62.3 ) (25.5 ) Other (9.6 ) (2.0 ) Total deferred tax liabilities (504.2 ) (403.7 ) Net deferred tax liability on balance sheet $ (77.6 ) $ (40.2 ) At December 31, 2018 , we had the following NOL, interest limitation, R&D credit, and state tax credit carry forwards: December 31, 2018 Federal State Foreign NOL carry forwards $ 1,540.3 $ 1,437.2 $ 164.7 Interest limitation carry forwards 413.9 252.6 7.4 R&D and state credit carry forwards 29.1 2.4 — The federal and state tax loss carryforwards will expire through 2038. The foreign NOL carryforwards can be carried forward for periods that vary from five years to indefinitely. R&D tax credit carryforwards will expire through 2038, and state tax credits expire through 2023. The interest limitation carryforwards can be carried forward indefinitely in all jurisdictions in which we have them available. At December 31, 2018 and 2017 , we had the following valuation allowances: December 31, 2018 2017 Federal $ 161.6 $ 69.4 State 49.5 48.9 Foreign 34.0 40.5 Undistributed earnings of subsidiaries are accounted for as a temporary difference, except that DTLs are not recorded for undistributed earnings of foreign subsidiaries that are deemed to be indefinitely reinvested in foreign jurisdictions. The Tax Act required us to compute a tax on previously undistributed earnings and profits of our foreign subsidiaries upon transition from a worldwide tax system to a territorial tax system during the year ended December 31, 2017. The repatriation of such amounts in the future should generally be exempt from income taxes in the U.S. (as a result of the Tax Act) and in those jurisdictions that have a similar territorial system of taxation. Substantially all of our current year foreign cash flows are not intended to be indefinitely reinvested offshore, and therefore the tax effects of repatriation (including applicable withholding taxes) of such cash flows are provided for in our financial reporting. Unrecognized Tax Benefits The total amount of unrecognized tax benefits as of December 31, 2018 was $33.8 million . Of this amount, $33.8 million , if recognized, would be included in our Consolidated Statements of Operations and Comprehensive Loss and have an impact on our effective tax rate. We have determined it is reasonably possible that the unrecognized tax benefits may decrease by $4.3 million due to settlements with the tax authorities and/or expiration of applicable statutes before December 31, 2019. We recognize interest and penalties for unrecognized tax benefits in income tax expense. The amounts recognized for interest and penalties during the years ended December 31, 2018 , 2017 and 2016 were not material. We accrued $1.7 million and $1.3 million for the payment of interest and penalties at December 31, 2018 and 2017 , respectively. We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. We are currently under examination by the Internal Revenue Service for years 2013 and 2014. There are no material state, local or non-U.S. examinations by tax authorities for years prior to 2013. We had the following activity for unrecognized tax benefits: Year Ended December 31, 2018 2017 2016 Balance at beginning of period $ 21.8 $ 27.4 $ 10.8 Tax positions related to current year additions 10.8 2.3 8.4 Additions for tax positions of prior years 2.6 — 9.7 Tax positions related to prior years reductions (0.2 ) (7.3 ) (0.3 ) Reductions due to lapse of statute of limitations on tax positions (1.2 ) — (0.4 ) Settlements — (0.6 ) (0.8 ) Balance at end of period $ 33.8 $ 21.8 $ 27.4 Tax Reform On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code that impacted the 2017 tax year, including (1) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries (“Transition Tax”) and (2) allowing bonus depreciation for the full expensing of qualified property. The Tax Act also established new tax laws that affected the 2018 tax year and will affect future tax years, including, but not limited to: (1) reduction of the U.S. federal corporate tax rate from 35% to 21% ; (2) a new limitation on deductible interest expense; (3) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (4) elimination of the corporate alternative minimum tax (AMT); (5) a new provision designed to tax global intangible low-taxed income (GILTI); (6) the creation of the base erosion anti-abuse tax (BEAT), a new minimum tax; (7) limitations on the deductibility of certain executive compensation; and (8) changing rules related to uses of and limitations of net operating losses (NOLs) generated after December 31, 2017 . ASC 740, Income Taxes , requires companies to recognize the impact of tax law changes in the period of enactment; however, Staff Accounting Bulletin (SAB) No. 118 provided that companies could record provisional amounts related to the Tax Act during a measurement period not to exceed one year from the Tax Act enactment date. Our accounting for the Tax Act was completed in the fourth quarter of 2018. Consistent with SAB 118, we included reasonable estimates of certain aspects of the Tax Act as of December 31, 2017, as follows: Impact on DTAs and DTLs from reduction of U.S. federal corporate tax rate We computed the impact of the reduced tax rate (from 35% to 21% ) on our U.S. federal DTAs and DTLs, which were remeasured as of December 31, 2017 . We also computed the provisional impact on our valuation allowance as it relates to our U.S. federal DTAs and DTLs and appropriately adjusted our valuation allowance as of December 31, 2017. The provisional net impact on our 2017 tax provision related to the remeasuring of DTAs, DTLs, and the associated valuation allowance as a result of the reduced U.S. federal corporate tax rate was a $9.9 million tax benefit. During the fourth quarter of 2018, we completed our accounting for the remeasured federal DTAs and DTLs and corresponding valuation allowance. Included in this net amount was tax expense of $51.3 million related to remeasured deferred taxes, offset by the tax benefit of the remeasured corresponding valuation allowance of $51.3 million , which represented a change from the provisional amount recorded in the year ended December 31, 2017 of $20.3 million . All such amounts offset and had no net impact on the effective tax rate. Deemed Repatriation Transition Tax As of December 31, 2017, we recorded a provision estimate of the taxable income subject to the Transition Tax of $102.6 million , which we expected to be fully offset by NOLs and not result in a cash tax obligation. During the fourth quarter of December 31, 2018, we completed our accounting for the Transition Tax. Based upon the guidance available at the time of filing of our 2017 federal income tax return, we were able to utilize foreign tax credits (“FTC”) to offset all of the Transition Tax. Our ability to utilize FTCs to absorb the Transition Tax resulted in the preservation of federal NOLs for this aspect of the Tax Act. Valuation Allowances As of December 31, 2017, the amount of valuation allowance needed was based on provisional amounts recorded in connection with the Tax Act; therefore, a portion of the valuation allowance was provisional. During the fourth quarter of December 31, 2018, we completed our accounting for all provisional items and recorded an additional valuation allowance of $20.3 million , as disclosed above. Global Intangible Low Taxed Income As of December 31, 2017, we did not make a provisional adjustment for the impact of GILTI. During the fourth quarter of December 31, 2018, we completed our accounting for GILTI. As part of completing that process, we have made the election to account for GILTI as a current-period expense when incurred; accordingly, we included $33.6 million of a taxable income inclusion related to GILTI in our U.S. income tax provision for the year ended December 31, 2018. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation We are involved in various legal proceedings, including those discussed below. We record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss can be reasonably estimated (although, as discussed below, there may be an exposure to loss in excess of the accrued liability). We evaluate our accruals for legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect (1) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments, (2) the advice and analyses of counsel and (3) the assumptions and judgment of management. Legal costs associated with our legal proceedings are expensed as incurred. We had accrued liabilities of $3.7 million and $4.7 million for all of our legal matters that were contingencies as of December 31, 2018 and 2017, 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 those related to the previously disclosed settlement agreement entered into in February 2015 with SNAI S.p.a. (“SNAI”), as to which a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a range of possible loss, the current estimated range is up to approximately $13.7 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. Colombia litigation Our subsidiary, SGI, owned a minority interest in Wintech de Colombia S.A., or Wintech (now liquidated), which formerly operated the Colombian national lottery under a contract with Empresa Colombiana de Recursos para la Salud, S.A. (together with its successors, "Ecosalud"), an agency of the Colombian government. The contract provided for a penalty against Wintech, SGI and the other shareholders of Wintech of up to $5.0 million if certain levels of lottery sales were not achieved. In addition, SGI delivered to Ecosalud a $4.0 million surety bond as a further guarantee of performance under the contract. Wintech started the instant lottery in Colombia but, due to difficulties beyond its control, including, among other factors, social and political unrest in Colombia, frequently interrupted telephone service and power outages, and competition from another lottery being operated in a province of Colombia that we believe was in violation of Wintech’s exclusive license from Ecosalud, the projected sales level was not met for the year ended June 30, 1993. In 1993, Ecosalud issued a resolution declaring that the contract was in default. In 1994, Ecosalud issued a liquidation resolution asserting claims for compensation and damages against Wintech, SGI and other shareholders of Wintech for, among other things, realization of the full amount of the penalty, plus interest, and the amount of the bond. SGI filed separate actions opposing each resolution with the Tribunal Contencioso of Cundinamarca in Colombia (the “Tribunal”), which upheld both resolutions. SGI appealed each decision to the Council of State. In May 2012, the Council of State upheld the contract default resolution, which decision was notified to us in August 2012. In October 2013, the Council of State upheld the liquidation resolution, which decision was notified to us in December 2013. In July 1996, Ecosalud filed a lawsuit against SGI in the U.S. District Court for the Northern District of Georgia asserting many of the same claims asserted in the Colombia proceedings, including breach of contract, and seeking damages. In March 1997, the District Court dismissed Ecosalud’s claims. Ecosalud appealed the decision to the U.S. Court of Appeals for the Eleventh Circuit. The Court of Appeals affirmed the District Court’s decision in 1998. In June 1999, Ecosalud filed a collection proceeding against SGI to enforce the liquidation resolution and recover the claimed damages. In May 2013, the Tribunal denied SGI’s merit defenses to the collection proceeding and issued an order of payment of approximately 90 billion Colombian pesos, or approximately $30.2 million, plus default interest (potentially accrued since 1994 at a 12% statutory interest rate). SGI has filed an appeal to the Council of State, which appeal has stayed the payment order. SGI believes it has various defenses, including on the merits, against Ecosalud’s claims. Although we believe these claims will not result in a material adverse effect on our consolidated results of operations, cash flows or financial position, it is not feasible to predict the final outcome, and we cannot assure that these claims will not ultimately be resolved adversely to us or result in material liability. SNAI litigation On April 16, 2012, certain VLTs operated by SNAI in Italy and supplied by Barcrest Group Limited ("Barcrest") erroneously printed what appeared to be winning jackpot and other tickets with a face amount in excess of €400.0 million. SNAI has stated, and system data confirms, that no jackpots were actually won on that day. The terminals were deactivated by the Italian regulatory authority. Following the incident, we understand that the Italian regulatory authority revoked the certification of the version of the gaming system that Barcrest provided to SNAI and fined SNAI €1.5 million, but determined to not revoke SNAI’s concession to operate VLTs in Italy. In October 2012, SNAI filed a lawsuit in the Court of First Instance of Rome in Italy against Barcrest and The Global Draw Limited (“Global Draw”), our subsidiary which acquired Barcrest from IGT‑UK Group Limited, a subsidiary of IGT, claiming liability based on breach of contract and tort. The lawsuit sought to terminate SNAI’s agreement with Barcrest and damages arising from the deactivation of the terminals, including among other things, lost profits, expenses and costs, potential awards to players who have sought to enforce what appeared to be winning jackpot and other tickets, compensation for lost profits sought by managers of the gaming locations where SNAI VLTs supplied by Barcrest were installed, damages to commercial reputation and any future damages arising from SNAI’s potential loss of its concession or inability to obtain a new concession. In September 2013, Global Draw brought an action against IGT‑UK Group Limited and IGT in the High Court of Justice (Commercial Court) in London, England seeking indemnification for liability arising out of the April 2012 incident under the agreement pursuant to which Barcrest was acquired from IGT‑UK Group and addressing other ancillary matters. The action against IGT was resolved in May 2015, pursuant to a settlement agreement in which neither party admitted liability. The settlement did not have a material impact on our results of operations. In February 2015, we entered into a settlement agreement with SNAI that provides, among other things, for us to make a €25.0 million upfront payment to SNAI, which payment was made in February 2015, and to indemnify SNAI against certain potential future losses. In connection with the settlement, the parties’ pending claims in the Court of First Instance of Rome were dismissed on February 19, 2015. In May 2015, certain underwriters at Lloyd’s of London filed a complaint against the Company, Barcrest and Global Draw in the Supreme Court of the State of New York seeking a declaratory judgment that such underwriters do not owe insurance coverage for the matters that are the subject of the settlement agreement with SNAI. In May 2015, the Company filed its counterclaims and also filed a third-party complaint against three excess insurers. In June 2015, the plaintiffs filed a motion to dismiss the counterclaims. The excess insurers filed a similar motion to dismiss in July 2015. In June 2016, we entered into a settlement agreement with the underwriters and excess insurers, pursuant to which the Supreme Court of the State of New York dismissed the lawsuit with prejudice in July 2016. Shuffle Tech matter In April 2015, Shuffle Tech International, LLC, Aces Up Gaming, Inc. and Poydras-Talrick Holdings LLC brought a civil action in the United States District Court for the Northern District of Illinois against the Company, Bally and Bally Gaming, Inc., alleging monopolization of the market for card shufflers in violation of federal antitrust laws, fraudulent procurement of patents on card shufflers, unfair competition and deceptive trade practices. Specifically, the plaintiffs claimed that the defendants used certain shuffler patents in a predatory manner to create and maintain a monopoly in the relevant shuffler market. The plaintiffs sought no less than $100.0 million in compensatory damages; treble damages; and injunctive and declaratory relief. In June 2015, the defendants filed a motion to dismiss. On August 7, 2018, the jury returned a verdict for the plaintiffs. The jury awarded plaintiffs $105.0 million in compensatory damages, which was subject to trebling, as well as attorneys’ fees and costs. We believe the jury reached the wrong result, and on September 4, 2018, the defendants sought review in the trial court of both the finding of liability and the damages award. On December 13, 2018, the defendants announced that they reached a settlement in the Shuffle Tech matter, and that as part of the settlement, we paid the plaintiffs $151.5 million , which represents 45% of the $105.0 million in compensatory damages awarded by the jury on August 7, 2018 which was subject to trebling, as well as attorney’s fees and costs. As part of the settlement, on December 24, 2018, the trial court entered an order vacating and striking the judgment entered on the jury’s verdict, denying all pending motions and petitions as moot, and dismissing the Shuffle Tech matter with prejudice. While this settlement resolves the disputed claims asserted in the Shuffle Tech matter, the defendants have not admitted, and continue to deny, any liability. Washington State Matter On April 17, 2018, a plaintiff filed a putative class action complaint, Fife v. Scientific Games Corp ., against SGC in the United States District Court for the Western District of Washington. The plaintiff seeks to represent a putative class of all persons in the State of Washington who purchased and allegedly lost virtual coins playing SGC's online social casino games, including but not limited to Jackpot Party Casino and Gold Fish Casino . The complaint asserts claims for alleged violations of Washington’s Recovery of Money Lost at Gambling Act, Washington’s consumer protection statute, and for unjust enrichment, and seeks unspecified money damages (including treble damages as appropriate), the award of reasonable attorneys’ fees and costs, pre- and post-judgment interest, and injunctive and/or declaratory relief. On July 2, 2018, SGC filed a motion to dismiss the plaintiff’s complaint with prejudice, which the trial court denied on December 18, 2018. SGC filed its answer to the putative class action complaint on January 18, 2019. Due to the early nature of this litigation, we are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible loss. Raqqa Matter On May 4, 2018, plaintiffs Raqqa, Inc. Pittsburg Liquors, Inc., Omdev, Inc., Om Riya, Inc., E and B Liquors, Inc., Michael Cairo, and Jason Van Lente (collectively, “plaintiffs”) filed a putative class action complaint against Northstar Lottery Group LLC, IGT Global Solutions Corporation, and Scientific Games International, Inc. (collectively, “defendants”), in the United States District Court for the Southern District of Illinois. In their complaint, plaintiffs seek to represent two putative classes of persons: (1) all persons who were or are parties to a contract to sell at retail Illinois Lottery instant game tickets at any time between July 1, 2011 and the present; and (2) all natural persons who purchased one or more Illinois Lottery instant game tickets at any time between July 1, 2011 and the present. The complaint alleges that Northstar Lottery Group LLC discontinued certain Illinois Lottery instant game tickets before all grand prizes were awarded, and further alleges that those discontinuations caused economic harm to lottery players, and to lottery retailers who receive commissions on winning tickets. The complaint asserts claims for alleged tortious interference with contract, alleged tortious interference with prospective economic advantage, alleged common law fraud, alleged violation of Illinois’ Consumer Fraud and Deceptive Business Practices Act, alleged unjust enrichment and alleged civil conspiracy. The complaint seeks unspecified money damages and the award of plaintiffs’ attorneys’ fees and costs. On June 18, 2018, the defendants filed a motion to dismiss the plaintiffs’ complaint with prejudice, which is fully-briefed and pending before the trial court. Due to the early nature of this litigation, we are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible loss. |
Financial Information for Guara
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries | 12 Months Ended |
Dec. 31, 2018 | |
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 December 31, 2018, SGI’s obligations under the 2020 Notes, the 2021 Notes, the 2025 Secured Notes, the 2026 Secured Euro Notes, the Unsecured Notes and the 2026 Unsecured Euro 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 2022 Secured Notes during the first quarter of 2018, which were previously issued by SGI and fully and unconditionally and jointly and severally guaranteed by SGC and the Guarantor Subsidiaries other than SGI. The guarantees of our 2022 Secured Notes were released in connection with the redemption of the 2022 Secured Notes. 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, 2025 Secured Notes, 2026 Secured Euro Notes, Unsecured Notes, and 2026 Unsecured Euro 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. Presented below is condensed consolidating financial information for (1) SGC, (2) SGI, (3) the Guarantor Subsidiaries and (4) the Non-Guarantor Subsidiaries as of December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018 , 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 2020 Notes, the 2021 Notes, the Unsecured Notes, the 2025 Secured Notes, the 2026 Secured Euro Notes, and the 2026 Unsecured Euro 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 December 31, 2018 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Assets Cash and cash equivalents $ 73.5 $ 0.9 $ — $ 95.1 $ (1.3 ) $ 168.2 Restricted cash — 0.8 31.6 6.3 — 38.7 Accounts receivable, net — 79.2 204.8 315.2 — 599.2 Notes receivable, net — — 100.6 13.3 — 113.9 Inventories — 40.4 81.7 110.8 (17.3 ) 215.6 Prepaid expenses, deposits and other current assets 6.2 63.3 92.5 70.5 0.2 232.7 Property and equipment, net 31.0 112.1 218.6 218.2 (32.9 ) 547.0 Investment in subsidiaries 2,835.9 974.5 1,093.4 — (4,903.8 ) — Goodwill — 240.2 1,896.8 1,142.9 — 3,279.9 Intangible assets, net 42.6 34.1 1,291.4 441.0 — 1,809.1 Intercompany balances — 6,053.9 — — (6,053.9 ) — Software, net 58.6 38.2 128.3 60.2 — 285.3 Other assets (2) 110.0 404.4 45.9 307.8 (439.9 ) 428.2 Total assets $ 3,157.8 $ 8,042.0 $ 5,185.6 $ 2,781.3 $ (11,448.9 ) $ 7,717.8 Liabilities and stockholders’ (deficit) equity Current portion of long-term debt $ — $ 41.7 $ — $ 3.3 $ — $ 45.0 Other current liabilities 63.8 162.4 247.9 254.1 (25.9 ) 702.3 Long-term debt, excluding current portion — 8,991.1 — 0.8 — 8,991.9 Other long-term liabilities 105.8 7.6 637.3 171.9 (480.8 ) 441.8 Intercompany balances 5,451.4 — 48.1 554.4 (6,053.9 ) — Stockholders’ (deficit) equity (2,463.2 ) (1,160.8 ) 4,252.3 1,796.8 (4,888.3 ) (2,463.2 ) Total liabilities and stockholders’ (deficit) equity $ 3,157.8 $ 8,042.0 $ 5,185.6 $ 2,781.3 $ (11,448.9 ) $ 7,717.8 1 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018. 2 - Includes $12.2 million and $0.9 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, 2017 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Assets Cash and cash equivalents $ 732.6 $ — $ — $ 59.4 $ (3.2 ) $ 788.8 Restricted cash — 0.6 28.3 0.1 — 29.0 Accounts receivable, net 0.4 68.1 192.6 279.8 — 540.9 Notes receivable, net — — 121.1 22.4 — 143.5 Inventories — 40.7 91.8 131.8 (21.2 ) 243.1 Prepaid expenses, deposits and other current assets 6.5 30.3 41.6 52.7 — 131.1 Property and equipment, net 28.8 91.5 295.6 179.9 (27.6 ) 568.2 Investment in subsidiaries 3,098.7 867.9 987.7 — (4,954.3 ) — Goodwill — 240.3 1,880.4 835.4 — 2,956.1 Intangible assets, net 15.7 34.9 1,335.3 218.7 — 1,604.6 Intercompany balances — 5,889.8 — 222.5 (6,112.3 ) — Software, net 67.2 24.7 199.0 48.5 — 339.4 Other assets (2) 234.4 388.8 62.0 270.3 (574.9 ) 380.6 Total assets $ 4,184.3 $ 7,677.6 $ 5,235.4 $ 2,321.5 $ (11,693.5 ) $ 7,725.3 Liabilities and stockholders’ (deficit) equity Current portion of long-term debt $ — $ 32.8 $ — $ 7.5 $ — $ 40.3 Other current liabilities 67.6 199.0 254.2 206.4 (27.7 ) 699.5 Long-term debt, excluding current portion — 8,733.0 — 3.3 — 8,736.3 Other long-term liabilities 68.8 11.3 650.3 110.9 (565.1 ) 276.2 Intercompany balances 6,074.9 — 37.4 — (6,112.3 ) — Stockholders’ (deficit) equity (2,027.0 ) (1,298.5 ) 4,293.5 1,993.4 (4,988.4 ) (2,027.0 ) Total liabilities and stockholders’ (deficit) equity $ 4,184.3 $ 7,677.6 $ 5,235.4 $ 2,321.5 $ (11,693.5 ) $ 7,725.3 1 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, the 2025 Secured Notes and the Unsecured Notes. 2 - Includes $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 STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME Year Ended December 31, 2018 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Revenue $ — $ 547.1 $ 1,654.0 $ 1,540.3 $ (378.2 ) $ 3,363.2 Cost of services, cost of product sales and cost of instant products (2) — 360.9 490.3 721.2 (317.1 ) 1,255.3 Selling, general and administrative 154.4 42.4 227.0 325.5 (52.4 ) 696.9 Research and development — 2.7 87.2 112.4 — 202.3 Depreciation, amortization and impairments 44.2 32.6 439.4 188.3 (14.8 ) 689.7 Restructuring and other 194.7 (1.1 ) 9.2 50.6 — 253.4 Operating (loss) income (393.3 ) 109.6 400.9 142.3 6.1 265.6 Interest expense — (596.7 ) — (0.5 ) — (597.2 ) Loss on debt financing transactions — (93.2 ) — — — (93.2 ) Gain on remeasurement of debt — 43.4 — — — 43.4 Other income (expense), net 335.7 534.9 (744.8 ) (83.7 ) — 42.1 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (57.6 ) (2.0 ) (343.9 ) 58.1 6.1 (339.3 ) Equity in (loss) income of subsidiaries (218.5 ) 43.6 (28.2 ) — 203.1 — Income tax (expense) benefit (76.3 ) 0.5 82.3 (19.6 ) — (13.1 ) Net (loss) income $ (352.4 ) $ 42.1 $ (289.8 ) $ 38.5 $ 209.2 $ (352.4 ) Other comprehensive (loss) income (99.8 ) 30.0 (66.3 ) (113.8 ) 150.1 (99.8 ) Comprehensive (loss) income $ (452.2 ) $ 72.1 $ (356.1 ) $ (75.3 ) $ 359.3 $ (452.2 ) 1 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018. 2 - Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Year Ended December 31, 2017 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Revenue $ — $ 498.1 $ 1,683.9 $ 1,223.3 $ (321.7 ) $ 3,083.6 Cost of services, cost of product sales and cost of instant products (2) — 341.9 511.0 629.1 (317.4 ) 1,164.6 Selling, general and administrative 127.1 41.3 244.4 250.2 (49.9 ) 613.1 Research and development 2.1 6.5 101.3 74.2 — 184.1 Depreciation, amortization and impairments 71.6 31.3 462.7 128.0 (10.8 ) 682.8 Restructuring and other 29.7 5.1 7.3 3.8 — 45.9 Operating (loss) income (230.5 ) 72.0 357.2 138.0 56.4 393.1 Interest expense (4.6 ) (603.9 ) — (1.2 ) — (609.7 ) Loss on debt financing transactions (1.1 ) (37.0 ) — — — (38.1 ) Other income (expense), net 87.7 150.4 (184.7 ) (26.5 ) — 26.9 Net (loss) income before equity in income of subsidiaries and income taxes (148.5 ) (418.5 ) 172.5 110.3 56.4 (227.8 ) Equity in (loss) income of subsidiaries (45.4 ) 67.6 21.9 — (44.1 ) — Income tax (expense) benefit (48.4 ) 157.9 (85.6 ) (38.4 ) — (14.5 ) Net (loss) income $ (242.3 ) $ (193.0 ) $ 108.8 $ 71.9 $ 12.3 $ (242.3 ) Other comprehensive income 133.9 10.3 65.8 128.7 (204.8 ) 133.9 Comprehensive (loss) income $ (108.4 ) $ (182.7 ) $ 174.6 $ 200.6 $ (192.5 ) $ (108.4 ) (1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes and the 2025 Secured Notes, which were issued in October 2017. (2) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Year Ended December 31, 2016 SGC (Parent 1 ) SGI (Issuer 2 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Revenue $ — $ 469.5 $ 1,583.5 $ 1,148.6 $ (318.2 ) $ 2,883.4 Cost of services, cost of product sales and cost of instant products (3) — 328.6 480.9 553.8 (257.0 ) 1,106.3 Selling, general and administrative 121.0 46.9 213.8 235.9 (40.6 ) 577.0 Research and development 6.1 10.7 145.2 42.8 — 204.8 Depreciation, amortization and impairments 53.5 40.9 534.6 116.0 (6.3 ) 738.7 Goodwill impairment — — — 69.0 — 69.0 Restructuring and other 32.6 4.6 11.7 8.1 — 57.0 Operating (loss) income (213.2 ) 37.8 197.3 123.0 (14.3 ) 130.6 Interest expense (21.0 ) (640.2 ) — (0.2 ) — (661.4 ) Gain on debt financing transactions — 25.2 — — — 25.2 Other income (expense), net 64.0 194.4 (227.3 ) (4.2 ) — 26.9 Net (loss) income before equity in income of subsidiaries and income taxes (170.2 ) (382.8 ) (30.0 ) 118.6 (14.3 ) (478.7 ) Equity in (loss) income of subsidiaries (180.1 ) 48.5 61.1 — 70.5 — Income tax (expense) benefit (3.4 ) 138.2 15.9 (25.7 ) — 125.0 Net (loss) income $ (353.7 ) $ (196.1 ) $ 47.0 $ 92.9 $ 56.2 $ (353.7 ) Other comprehensive (loss) income (111.4 ) (1.7 ) (43.1 ) (135.1 ) 179.9 (111.4 ) Comprehensive (loss) income $ (465.1 ) $ (197.8 ) $ 3.9 $ (42.2 ) $ 236.1 $ (465.1 ) (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 2022 Secured Notes, which were redeemed in March 2018, and the Unsecured Notes. (3) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2018 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminating Entries Consolidated Net cash (used in) provided by operating activities $ (221.1 ) $ 18.3 $ 205.8 $ 341.2 $ 1.9 $ 346.1 Cash flows from investing activities: Capital expenditures (35.0 ) (63.2 ) (145.9 ) (146.7 ) — (390.8 ) Acquisitions of businesses and assets, net of cash acquired — — (32.1 ) (264.5 ) — (296.6 ) Proceeds from asset sales — — 40.0 — — 40.0 Acquisitions and additions to equity method investments — (1.9 ) — (178.5 ) — (180.4 ) Distributions of capital from equity investments — — — 29.7 — 29.7 Other, principally change in intercompany investing activities — (159.3 ) — — 159.3 — Net cash used in by investing activities (35.0 ) (224.4 ) (138.0 ) (560.0 ) 159.3 (798.1 ) Cash flows from financing activities: Payments on long-term debt, net of proceeds — 245.7 — (7.5 ) — 238.2 Payments of assumed NYX debt and other acquisitions debt — — (1.9 ) (288.2 ) — (290.1 ) Payments of debt issuance and deferred financing costs — (38.5 ) — — — (38.5 ) Payments on license obligations (42.9 ) — (2.0 ) — — (44.9 ) Net redemptions of common stock under stock-based compensation plans and other (18.4 ) — (2.5 ) — — (20.9 ) Other, principally change in intercompany financing activities (341.7 ) — (61.5 ) 562.5 (159.3 ) — Net cash (used in) provided by financing activities (403.0 ) 207.2 (67.9 ) 266.8 (159.3 ) (156.2 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — (5.9 ) — (5.9 ) (Decrease) increase in cash, cash equivalents and restricted cash (659.1 ) 1.1 (0.1 ) 42.1 1.9 (614.1 ) Cash, cash equivalents, and restricted cash, beginning of period 732.6 0.6 43.9 60.2 (3.2 ) 834.1 Cash, cash equivalents and restricted cash, end of period $ 73.5 $ 1.7 $ 43.8 $ 102.3 $ (1.3 ) $ 220.0 (1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2017 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminating Entries Consolidated Net cash (used in) provided by operating activities $ (40.7 ) $ (300.0 ) $ 567.3 $ 282.6 $ (2.1 ) $ 507.1 Cash flows from investing activities: Capital expenditures (53.3 ) (31.0 ) (128.8 ) (80.6 ) — (293.7 ) Acquisitions of businesses, net of cash acquired — — (26.3 ) (31.4 ) — (57.7 ) Acquisitions and additions to equity method investments — — — (107.3 ) — (107.3 ) Distributions of capital on equity investments — — — 34.1 — 34.1 Changes in other assets and liabilities and other — — 7.5 2.5 — 10.0 Other, principally change in intercompany investing activities — (569.1 ) — (120.1 ) 689.2 — Net cash (used in) provided by investing activities (53.3 ) (600.1 ) (147.6 ) (302.8 ) 689.2 (414.6 ) Cash flows from financing activities: Net (payments) proceeds of long-term debt including senior notes and term loans (250.0 ) 957.7 — (6.7 ) — 701.0 Payments of debt issuance and deferred financing costs — (58.7 ) — — — (58.7 ) Payments on license obligations (47.5 ) — (5.1 ) — — (52.6 ) Net redemptions of common stock under stock-based compensation plans and other (8.5 ) — (1.0 ) — — (9.5 ) Other, principally change in intercompany financing activities 1,099.9 — (410.7 ) — (689.2 ) — Net cash provided by (used in) financing activities 793.9 899.0 (416.8 ) (6.7 ) (689.2 ) 580.2 Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — 4.5 — 4.5 Increase (decrease) in cash, cash equivalents and restricted cash 699.9 (1.1 ) 2.9 (22.4 ) (2.1 ) 677.2 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 $ 732.6 $ 0.6 $ 43.9 $ 60.2 $ (3.2 ) $ 834.1 (1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes and the 2025 Secured Notes, which were issued in October 2017. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2016 SGC (Parent 1 ) SGI (Issuer 2 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Net cash (used in) provided by operating activities $ (90.4 ) $ (259.8 ) $ 535.0 $ 235.3 $ (1.1 ) $ 419.0 Cash flows from investing activities: Capital expenditures (39.1 ) (22.8 ) (149.5 ) (61.5 ) — (272.9 ) Distribution of capital on equity investments — — — 25.3 — 25.3 Changes in other assets and liabilities and other — (1.2 ) 16.8 4.0 — 19.6 Other, principally change in intercompany investing activities — 418.4 — (194.5 ) (223.9 ) — Net cash (used in) provided by investing activities (39.1 ) 394.4 (132.7 ) (226.7 ) (223.9 ) (228.0 ) Cash flows from financing activities: Net payments on long-term debt — (132.9 ) — (6.8 ) — (139.7 ) Payments on license obligations (38.0 ) — (12.2 ) — — (50.2 ) Net (redemptions) issuances of common stock under stock-based compensation plans and other (6.1 ) — — — — (6.1 ) Other, principally change in intercompany financing activities 163.1 — (387.0 ) — 223.9 — Net cash provided by (used in) financing activities 119.0 (132.9 ) (399.2 ) (6.8 ) 223.9 (196.0 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — (4.9 ) — (4.9 ) Increase (decrease) in cash, cash equivalents and restricted cash (10.5 ) 1.7 3.1 (3.1 ) (1.1 ) (9.9 ) Cash, cash equivalents, and restricted cash, beginning of period 43.2 — 37.9 85.7 — 166.8 Cash, cash equivalents and restricted cash, end of period $ 32.7 $ 1.7 $ 41.0 $ 82.6 $ (1.1 ) $ 156.9 (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 2022 Secured Notes, which were redeemed in March 2018, and the Unsecured Notes. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data, Unaudited | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data, Unaudited | Selected Quarterly Financial Data, Unaudited Quarter Ended 2018 March 31 (a) June 30 (b) September 30 (c) December 31 (d) Total operating revenues $ 811.8 $ 844.7 $ 821.0 $ 885.7 Total cost of revenues (1) 296.7 315.9 301.3 341.4 Selling, general and administrative 171.6 173.9 169.7 181.7 Research and development 53.8 49.2 49.5 49.8 Restructuring and other 52.2 33.5 338.7 (171.0 ) Depreciation, amortization and impairments 188.1 172.7 166.3 162.6 Operating income (loss) 49.4 99.5 (204.5 ) 321.2 Net (loss) income $ (201.8 ) $ (5.8 ) $ (351.6 ) $ 206.8 Basic and diluted net (loss) income per share: Basic net (loss) income per share $ (2.24 ) $ (0.06 ) $ (3.85 ) $ 2.25 Diluted net (loss) income per share $ (2.24 ) $ (0.06 ) $ (3.85 ) $ 2.21 Weighted average number of shares used in per share calculations: Basic shares 90.1 91.0 91.4 91.8 Diluted shares 90.1 91.0 91.4 93.4 (1) Exclusive of D&A (a) Includes a loss on debt financing transactions of $93.2 million in connection with the February 2018 Refinancing and $1.1 million loss on remeasurement of debt. (b) Includes a gain on remeasurement of debt of $34.5 million . (c) Includes a loss on remeasurement of debt of $4.0 million and a $309.6 million reserve related to the Shuffle Tech Matter. (d) Includes a gain on remeasurement of debt of $14.0 million and a $183.1 million reversal of the Shuffle Tech Matter legal reserve as a result of a settlement agreement reached (see Note 22). Quarter Ended 2017 March 31 (a) June 30 September 30 (b) December 31 Total operating revenues $ 725.4 $ 766.3 $ 768.9 $ 823.0 Total cost of revenues (1) 280.0 278.9 290.8 314.9 Selling, general and administrative 140.7 145.9 158.8 167.7 Research and development 42.4 48.1 47.8 45.8 Restructuring and other 9.2 1.1 7.8 27.8 Depreciation, amortization and impairments 165.1 175.0 173.1 169.6 Operating income 88.0 117.3 90.6 97.2 Net loss $ (100.8 ) $ (39.1 ) $ (59.3 ) $ (43.1 ) Basic and diluted net loss per share $ (1.14 ) $ (0.44 ) $ (0.66 ) $ (0.48 ) Weighted average number of shares used in per share calculations: Basic shares 88.2 89.1 89.6 89.7 Diluted shares 88.2 89.1 89.6 89.7 (1) Exclusive of D&A. (a) Includes a loss recorded of $29.7 million in connection with the refinancing that we completed in February 2017. (b) Includes a loss recorded of $8.4 million in connection with the refinancing that we completed in August 2017. |
SCHEDULE II Valuation and Quali
SCHEDULE II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II Valuation and Qualifying Accounts | SCHEDULE II SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts Year Ended December 31, 2018 , 2017 and 2016 (in millions) Allowance for doubtful accounts Balance at Additions Deductions (1) Balance at end Year ended December 31, 2018 $ 31.4 9.3 (0.2 ) $ 40.5 Year ended December 31, 2017 $ 28.1 11.4 (8.1 ) $ 31.4 Year ended December 31, 2016 $ 23.8 8.6 (4.3 ) $ 28.1 Tax-related valuation allowance Balance at Added (charged) to Balance at end Year ended December 31, 2018 $ 158.8 86.4 $ 245.2 Year ended December 31, 2017 $ 119.0 39.8 $ 158.8 Year ended December 31, 2016 $ 95.6 23.4 $ 119.0 (1) Amounts written off, net of recovery, and related impact of foreign currency exchange. |
Description of the Business a_2
Description of the Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The accompanying consolidated financial statements include the accounts of SGC and its wholly owned subsidiaries, and those subsidiaries in which we have a controlling financial interest. Investments in other entities in which we do not have a controlling financial interest but we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents and Restricted Cash | Cash and cash equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. We place our temporary cash investments with high credit quality financial institutions. At times, such investments in U.S. accounts may be in excess of the Federal Deposit Insurance Corporation insurance limit. Restricted cash We are required by gaming regulations to maintain sufficient reserves in restricted cash accounts to be used for the purpose of funding payments to WAP jackpot winners. Restricted cash balances are based primarily on the jackpot meters displayed to slot players or for previously won jackpots and vary by jurisdiction. Compliance with maintaining adequate restricted cash balances and complying with appropriate investment guidelines for jackpot funding is periodically reported to gaming authorities. |
Minimum Guarantees | Minimum guarantees We enter into long-term license agreements with third parties in which we are obligated to pay a minimum guaranteed amount of royalties, typically annually over the life of the contract. These license agreements provide us with access to a portfolio of major brands to be used across our business segments in building our strong brand presence across multiple channels of distributions. We account for the minimum guaranteed obligations within accrued and other long-term liabilities at the onset of the license arrangement and record a corresponding licensed asset within intangible assets, net. The licensed intangible assets related to the minimum guaranteed obligations are amortized over the term of the license agreement with the amortization expense recorded in D&A. The long-term liability related to the minimum guaranteed obligations is reduced as royalty payments are made as required under the license agreement. We assess the recoverability of license agreements whenever events arise or circumstances change that indicate the carrying value of the licensed asset may not be recoverable. Recoverability of the licensed asset and the amount of impairment, if any, are determined using our policy for intangible assets with finite useful lives. |
Other Assets | Other assets We capitalize debt issuance costs associated with long-term line-of-credit arrangements and amortize such amounts ratably over the term of the arrangement as an adjustment to interest expense. We assess the recoverability of our other long-term assets whenever events arise or circumstances change that indicate the carrying value of the asset may not be recoverable. |
Advertising Costs | Advertising costs The cost of advertising is expensed as incurred and totaled $102.0 million , $82.6 million and $71.3 million in 2018 , 2017 and 2016 , respectively. |
R&D | R&D R&D relates primarily to software product development costs and is expensed as incurred until technological feasibility has been established. Employee related costs associated with product development are included in R&D. |
Foreign Currency Translation | Foreign currency translation We have significant operations where the local currency is the functional currency, including our operations in the U.K., Europe, Australia and Canada. Assets and liabilities of foreign operations are translated at period-end rates of exchange and results of operations are translated at the average rates of exchange for the period. Gains or losses resulting from translating the foreign currency financial statements are accumulated as a separate component of accumulated other comprehensive loss in stockholders’ deficit. Gains or losses resulting from foreign currency transactions are included in other (expense) income, net. See Note 20. |
Comprehensive Loss | Comprehensive loss We include and classify in comprehensive loss unrealized gains and losses from our foreign currency translation adjustments, certain gains or losses associated with pension or other post-retirement benefits, including prior service costs or credits and transition assets or obligations, the effective portion of derivative financial instruments designated as hedging instruments, and net investment non-derivative hedge of our investments in certain of our international subsidiaries. |
New Accounting Guidance | New Accounting Guidance - Recently 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 adopted this guidance effective January 1, 2018 using a modified retrospective application approach. See Note 3 for our revenue recognition policy and the adoption impact of ASC 606 on our consolidated financial statements. The FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business in 2017. 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. We adopted this guidance effective January 1, 2018, and this adoption did not have a material effect on our consolidated financial statements. The FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost in 2017. We adopted this guidance effective January 1, 2018. This guidance requires an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of operating income, if one is presented, which for us means that certain immaterial amounts are classified within interest expense as compared to the previous classification within SG&A. We are also required to describe which line items are used to present the other components of net benefit cost if such financial statement line items are separately presented; otherwise, we must disclose the line items in which such costs are presented. The FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities in 2017 . We early adopted this guidance during the first quarter of 2018, which simplifies the application of hedge accounting guidance, and creates greater transparency for results presented on the face of the financial statements and footnotes. Our adoption did not have a material effect on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance requires that such capitalized implementation costs for hosting arrangements are expensed over the term of the hosting arrangement and presented in the same line item in the statement of operations and comprehensive (loss) income as the fees associated with the hosting service. We early adopted this guidance prospectively effective the third quarter of 2018, and this adoption did not have a material effect on our consolidated financial statements. New Accounting Guidance - Not Yet Adopted T he FASB issued ASU No. 2016-02, Leases (Topic 842 ) in 2016. ASU 2016-02 combined with all subsequent amendments (collectively, ASC 842) requires balance sheet recognition for all leases with a lease term greater than one year to be recorded as a lease liability (on a discounted basis) with a corresponding right-of-use asset. This guidance also expands the required quantitative and qualitative disclosures for lease arrangements and gives rise to other changes impacting certain aspects of lessor accounting. We will adopt this guidance at the beginning of the first quarter of 2019 using the optional transition method provided by ASU 2018-11, and we anticipate applying both the lessee package of practical expedients and the available lessor practical expedients. We have substantially completed our assessment and the following is our adoption impact assessment completed to date: Lessee Accounting: We estimate the adoption will result in the addition of $115.0 million to $145.0 million of assets and liabilities to our consolidated balance sheet, primarily related to real estate leases, with no significant change to our consolidated statements of operations and comprehensive (loss) income or cash flows. We also expect our quantitative and qualitative disclosures for lease arrangements to increase under ASC 842. Lessor Accounting: Certain of our international gaming operations arrangements and domestic lottery systems arrangements may contain identified equipment that is conveyed to our customers as a part of a comprehensive service solution. The equipment substitution rights under these arrangements are concluded to be non-substantive, because historical substitutions have primarily been made for operational failures or maintenance reasons and such substitutions generally do not provide us an economic benefit due to high capital costs without incremental revenue. We do not anticipate this fact pattern will change in the future; accordingly, we expect to treat such arrangements as a service arrangement with an embedded lease. However, because the lease component of such lottery arrangements generally is not predominant, we anticipate recognizing the associated revenue under these arrangements under ASC 606. While most of these arrangements are expected to contain embedded operating leases, depending on the terms of these arrangements, either at inception or upon modification, certain of these arrangements could potentially be classified as sales-type financing leases. Because we are predominantly compensated on a variable basis based on a percentage of revenue in these arrangements, we might be required to recognize a loss at lease inception (or modification) for such arrangements classified as sales-type financing leases. This loss would result from the derecognition of the carrying amount of the underlying equipment that is greater than the net investment in the lease, even though the arrangement is expected to ultimately be profitable. This is not expected to change the timing or amount of revenue that we recognize under these arrangements. The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment methodology in current U.S. 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, 2019. Application is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of adopting this guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in ASC 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The new guidance will be effective for us beginning January 1, 2020, with early adoption permitted upon issuance of this updated guidance. We do not plan to early adopt this ASU, and 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 consolidated financial statements. |
Revenue and Revenue Recognition | We evaluate the recognition of revenue and rental income based on the criteria set forth in ASC 606 or ASC 840, as appropriate. Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. This condition normally is met when the product has been delivered or upon performance of services. Revenue is reported net of incentive rebates and discounts. We made an accounting policy election to exclude from the measurement of the transaction price sales taxes and all other items of a similar nature, and also elected to account for shipping and handling activities as a fulfillment of our promise to transfer the goods. Accordingly, shipping and handling costs are included in cost of sales. Our credit terms are predominately short term in nature. We also grant extended payment terms under certain Gaming contracts, primarily where the sale is secured by the related equipment sold. For these contracts with customers for which the financing component is determined to be significant to the contract, the contract transaction price is adjusted for the effect of a financing component (time value of money). We have not applied the significant financing component guidance to transactions with financing terms of 12 months or less. Any sales commissions associated with the sale or placement of our products and services are expensed as incurred as contracts associated with sales commissions are generally completed within a one-year period. The primary types of revenue impacted by the adoption of ASC 606 were Gaming operations and Lottery instant products. Each of these is described separately below. We had other balance sheet adoption impacts that, combined with the preceding, resulted in a net increase to opening accumulated loss of $10.9 million as of January 1, 2018. As part of the adoption of ASC 606, we increased contract liabilities by $9.7 million primarily associated with Lottery instant products licensing and player loyalty contracts for which we determined that the promises in the related contracts were part of a single performance obligation under ASC 606. In addition, we reduced previously recorded deferred costs net of newly established contract assets by $11.4 million related to licensing in certain customized lottery software contracts for which we concluded that we were unable to recognize revenue for delivered elements under ASC 985-605 due to the lack of vendor-specific objective evidence for undelivered elements and for which we were required to estimate the standalone selling price of delivered performance obligations under ASC 606. Other than the adoption impact for Gaming operations and Lottery instant products, described herein, the impact of adopting the new revenue recognition guidance on revenue and operating income in aggregate was less than $10.0 million . Contracts with Customers with Multiple Promised Goods and Services We enter into contracts with customers that include multiple promises (such as gaming machines, gaming systems hardware and software, installation, service and maintenance, product support or lottery systems and hardware, installation and maintenance bundled promises). For such contracts, the transaction price is allocated to each distinct performance obligation using an estimate of stand-alone selling price. The stand-alone selling price is generally based on observable prices or a cost plus margin approach. The establishment of stand-alone selling price requires judgment as to whether there is a sufficient quantity of items sold or substantively renewed on a stand-alone basis and those prices demonstrate an appropriate level of concentration to conclude that a stand-alone selling price exists. The guidance in ASC 606 requires that we apply judgments or estimates to determine both the performance obligations and the stand-alone selling prices of identified performance obligations. Contracts with multiple promised goods and services described above will often involve significant judgment in determining whether each promise is distinct or should be combined with other promises in such contracts in concluding on the distinct performance obligations for such contracts. Such judgment generally requires an assessment of the level of integration and interdependency between individual components particularly in our gaming systems and certain digital contracts with customers. Associated with these same contracts, we also apply significant judgment to determine the stand-alone selling prices of the identified performance obligations. In certain contracts with customers, we bundle the selling price for multiple promised goods or services or we may license systems for which the solutions we provide are highly customized and therefore the prices we charge are either uncertain, highly variable, or both. Gaming Operations Gaming operations revenues are generated by providing customers access to proprietary land-based gaming equipment, table game products and VLTs under a variety of recurring operating, service, or rental contracts, for which consideration is based upon a percentage of Coin-in, a percentage of Net win, or a fixed daily/monthly fee, with variability generally resolved in the reporting period. For these contracts with customers, we generally transfer control and recognize revenue or rental income over time based on the amount we expect to receive as described and classify such revenue or rental income as services revenue. Payments from customers under these contracts are typically due on a monthly basis. Jackpot expense for our WAP services is recorded as a reduction to revenue, which decreased revenue and cost of services by $22.3 million for the year ended December 31, 2018 . This change in classification has no impact on operating income or net loss. There was $23.2 million and $29.8 million of such amounts presented as cost of services for the year ended December 31, 2017 and 2016. The amount of rental income revenue that is outside the scope of ASC 606 and ASC 605 was $265.2 million , $275.0 million , and $294.3 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Gaming Machine Sales These contracts with customers include the sale of gaming machines, including game content, electronic table game products and parts (including game themes and conversion kits). We transfer control and recognize revenue from the sale of gaming machines at a point in time upon delivery of gaming machines to our customers or distributors pursuant to the terms of the contract. If the sale of gaming machines includes multiple promised goods and services, these contracts are accounted for as described in the “Contracts with Customers with Multiple Promised Goods and Services” section above. Our credit terms are predominately short term in nature. Gaming Systems Gaming systems contracts with customers can include a comprehensive suite of technology solutions provided to gaming operators, including perpetual licenses to core system solutions and non-core system solutions and other applications and tools. Gaming systems products also include the iVIEW touch screen display, which facilitates the player experience, bonus features, customer service, and employee functions and ongoing hardware and software maintenance services and upgrades. Determination of performance obligations and timing of the transfer of control varies by contract. Generally, these contracts contain multiple promised goods and services, including the following: (i) core system software license; (ii) non-core system software license(s); (iii) professional services; (iv) system-based hardware; (v) in-game hardware products; and (vi) software and hardware maintenance and product support. Control transfers and we recognize revenue from the sale of perpetual gaming systems licenses and various hardware products at a point in time when the gaming system is available for use by a customer which is no earlier than the commencement of the license term, and for the hardware products upon delivery. For contracts that include new core gaming system installations, control is not considered transferred until control of the core gaming system license is transferred as the additional promises are generally highly dependent on the core gaming system. Software and hardware maintenance and product support services are considered stand-ready obligations, therefore control transfers and revenue is recognized over time over the term of the maintenance and support period. If a gaming systems contract includes multiple promised goods and services, these contracts are accounted for as described in the “Contracts with Customers with Multiple Promised Goods and Services” section above. Table Products Table products revenue is generated from supplying and maintaining or selling table game products, primarily including automatic card shufflers, deck checkers, table roulette chip sorters and other land-based table gaming equipment. We transfer control and recognize revenue from the sale of table products at a point in time upon delivery to our customers or distributors pursuant to the terms of the contract. Supply and maintenance contracts, for which consideration is primarily based on a fixed monthly fee, are considered stand-ready obligations, therefore control transfers and revenue is recognized over time over the term of the supply and maintenance period. Such contracts are generally short-term in nature. We also license our proprietary table games content, for which revenue is recognized at a point in time under the licensing of intellectual property guidance as such licenses are functional licenses. Lottery Instant Products Our instant products revenue is primarily generated under long-term contracts to supply instant products and provide related services to our Lottery customers. For instant products that are sold on a PPU and POS basis, we generally have a single performance obligation of a promise to supply the instant products. Control transfers and we recognize revenue from the sale of such instant products when the lotteries have taken delivery of shipments of instant products pursuant to the terms of the contract. For instant products that are sold on a POS basis, we are compensated based on retail sales, therefore the timing difference between the recognition of revenue, the billing of our customers and the receipt of payments depends on retail sales. Contract assets resulting from these contracts remain until we have the contractual ability to invoice and collect from customers (which occurs upon retail sales). For our CSP contracts, revenue is recognized when a lottery retailer activates associated instant tickets, which timing corresponds with how we satisfy our performance obligation. The guidance in ASC 606 requires that we apply judgment to determine the timing of control transfer of performance obligations in our Lottery instant products contracts. For instant products that are sold under POS contracts, we generally have a single performance obligation of a promise to supply the instant products. The determination of when control transfers requires significant judgment because lotteries take delivery of shipments of instant products, but we retain the risk of such inventory until retail sales of such tickets takes place. We have determined control transfers upon delivery to a lottery-controlled warehouse, because we do not have the ability to direct the use of such instant products subsequent to delivery. Lottery revenue associated with instant products sold on a POS basis increased by less than $5.0 million for the year ended December 31, 2018 as a result of adopting the new revenue recognition guidance. The revenue value of tickets and the associated historical cost of inventory sold under POS arrangements remaining in the distribution channel at December 31, 2017 was reflected directly in shareholders’ deficit with an increase to contract assets (included in Prepaid expenses, deposits and other current assets) totaling $52.0 million , a reduction to inventory totaling $33.0 million and a decrease to accumulated net loss totaling $19.0 million . The impact of ASC 606 on our December 31, 2018 consolidated balance sheet was a $36.5 million decrease to inventories and a $64.3 million increase to contract assets included in Prepaid expenses, deposits and other current assets. Lottery Systems Our Lottery business segment offers our customers a number of related, value-added services as part of an integrated product offering. These services include lottery systems, including point-of-sale terminals and other equipment, software, data communication services and support and instant game validation systems, and software, hardware and related services for sports wagering and keno systems. For our integrated lottery systems service contracts (described above), our single performance obligation is a promise to perform a series of stand-ready services to operate a fully-functional draw lottery. Revenue is recognized over time in an amount generally based on a percentage of sales of the related games, which represents our measure of progress toward satisfying our performance obligation. For our perpetual licensing of customized lottery software contracts, we generally recognize revenue over time using costs incurred to date relative to total estimated completion costs to measure progress toward satisfying our performance obligations, which we believe best depicts the transfer of control to the customer. Maintenance on lottery software and lottery terminals is considered a stand-ready obligation, with control transferring and revenue being recognized over time ratably over the maintenance and support period. If a lottery systems contract includes multiple promised goods and services, these contracts are accounted for as described in the “Contracts with Customers with Multiple Promised Goods and Services” section above. Social Gaming Social gaming revenues are generated from the sale of virtual coins, chips or bingo cards (collectively referred to as “virtual currency”), which players can use to play casino-style slot and table games or bingo games (i.e., spin in the case of slot games, bet in the case of table games and use of bingo cards in the case of bingo games). We distribute our games through various global social web and mobile platforms such as Facebook, Apple, Google, Amazon , and other web and mobile platforms. Control transfers and we recognize revenues from player purchases of virtual currency as the virtual currency is consumed for game play, which is based on a historical data analysis. Because we have control over the content and functionality of games before they are accessed by the end user, we have determined we are the principal and, as a result, revenues are recorded on a gross basis. Payment processing fees paid to platform providers (such as Facebook, Apple, Amazon and Google ) are recorded within cost of services. All social gaming revenue is classified as services revenue. Digital Digital revenue is generated from professional services related to highly customized software design, development, licensing, maintenance and support services associated with a comprehensive suite of technology solutions, including sports books and betting markets across both fixed-odds and pari-mutuel betting styles. Additionally, through our integrated suite of various platform and technology solutions, we provide gaming operators optional portals for reporting and administrative functions, and access to a wide portfolio of content, including casino, lottery and bingo style games. Determination of performance obligations and timing of the transfer of control vary based on the nature of the contract. Generally, these contracts contain multiple promises, including the following: (i) implementation of customized software solution and the associated software license; (ii) support services and unspecified software updates; (iii) professional development services; and (iv) access to the game content. Control generally transfers and we recognize revenue from the implementation of a customized software solution and the associated software license over time using costs incurred to date relative to total estimated completion costs to measure progress toward satisfying our performance obligations, which we believe best depicts the transfer of control to the customer. Support services and unspecified software updates are considered stand-ready obligations, therefore control transfers and revenue is recognized over time ratably over the term of the support period. Professional development services generally relate to post-go live development, and control transfers and revenue is recognized over time as services are rendered. We also generate revenue from various content aggregation platforms, remote gaming servers, our SG Universe platform and various other platforms, which deliver a wide spectrum of internally developed and branded games and popular third-party provided games to gaming operators. We provide daily access to these platforms and are typically compensated based on variable consideration, such as a percentage of net gaming revenue with variability generally resolved in the reporting period. Substantially all Digital revenue is classified as services revenue. |
Description of the Business a_3
Description of the Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Total Minimum Guaranteed Obligations | The following are our total minimum guaranteed obligations for the periods presented: As of December 31, 2018 2017 Accrued liabilities $ 50.1 $ 47.4 Other long-term liabilities 212.4 117.6 Total minimum guarantee obligations $ 262.5 $ 165.0 Weighted average remaining term (in years) 4.2 3.0 |
Schedule of Remaining Future Payments of Guarantee Obligations | The following are our remaining expected future payments of minimum guarantee obligations: Year Ended December 31, 2019 2020 2021 2022 2023 After 2023 Expected future payments $50.1 $45.7 $41.2 $42.2 $27.5 $55.8 |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Operating Information by Segment | The following tables present our recast segment information: Year Ended December 31, 2018 Gaming Lottery Social Digital Unallocated and Reconciling Items (1) Total Total revenue $ 1,831.4 $ 846.3 $ 415.9 $ 269.6 $ — $ 3,363.2 AEBITDA (2) 919.5 390.8 106.7 54.1 (141.4 ) $ 1,329.7 Reconciling items to consolidated net loss before income taxes: D&A (493.0 ) (58.6 ) (17.4 ) (66.5 ) (54.2 ) (689.7 ) Restructuring and other (7.4 ) (1.5 ) (29.1 ) (20.2 ) (195.2 ) (253.4 ) EBITDA from equity investments (2) (67.3 ) (67.3 ) Earnings from equity investments 24.9 24.9 Interest expense (597.2 ) (597.2 ) Loss on debt financing transactions (93.2 ) (93.2 ) Gain on remeasurement of debt 43.4 43.4 Other income, net 7.4 7.4 Stock-based compensation (43.9 ) (43.9 ) Net loss before income taxes $ (339.3 ) Assets as of December 31, 2018 $ 5,094.4 $ 1,299.9 $ 182.6 $ 883.1 $ 257.8 $ 7,717.8 Capital expenditures for the year ended December 31, 2018 $ 248.4 $ 75.7 $ 3.3 $ 28.3 $ 35.1 $ 390.8 (1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes. (2) AEBITDA is net income (loss) before the following adjustments: (1) restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) management changes; (iii) restructuring and integration; (iv) M&A and other, which includes: (a) M&A transaction costs, (b) purchase accounting, (c) unusual items (including certain litigation), and (d) other non-cash items; and (v) cost savings initiatives; (2) depreciation and amortization expense and impairment charges (including goodwill impairment charges); (3) change in fair value of investments and remeasurement of debt; (4) interest expense; (5) income taxes expense (benefit); (6) stock-based compensation; and (7) loss (gain) on debt financing transactions. In addition to the preceding adjustments, we exclude earnings from equity method investments and add (without duplication) our pro rata share of EBITDA of our equity investments, which represents our share of earnings (whether or not distributed to us) before income tax expense, depreciation and amortization expense, and interest (income) expense, net. Year Ended December 31, 2017 Gaming Lottery Social Digital Unallocated and Reconciling Items (1) Total Total revenue $ 1,844.3 $ 811.5 $ 362.0 $ 65.8 $ — $ 3,083.6 AEBITDA (2) 895.6 364.7 81.7 16.0 (133.1 ) $ 1,224.9 Reconciling items to consolidated net loss before income taxes: D&A (520.8 ) (50.1 ) (17.7 ) (8.6 ) (85.6 ) (682.8 ) Restructuring and other (7.7 ) (5.9 ) (2.0 ) (0.2 ) (30.1 ) (45.9 ) EBITDA from equity investments (2) (67.1 ) (67.1 ) Earnings from equity investments 26.7 26.7 Interest expense (609.7 ) (609.7 ) Loss on debt financing transactions (38.1 ) (38.1 ) Other expense, net (8.6 ) (8.6 ) Stock-based compensation (27.2 ) (27.2 ) Net loss before income taxes $ (227.8 ) Assets as of December 31, 2017 $ 5,401.6 $ 1,070.6 $ 219.1 $ 61.2 $ 972.8 $ 7,725.3 Capital expenditures for the year ended December 31, 2017 $ 194.1 $ 37.9 $ 4.5 $ 3.9 $ 53.3 $ 293.7 (1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes. (2) AEBITDA is described in footnote (2) to the first table in this Note 2. Year Ended December 31, 2016 Gaming Lottery Social Digital Unallocated and Reconciling Items (1) Total Total revenue $ 1,772.7 $ 777.9 $ 274.4 $ 58.4 $ — $ 2,883.4 AEBITDA (2) 821.6 333.1 55.5 11.4 (118.0 ) $ 1,103.6 Reconciling items to consolidated net loss before income taxes: D&A (585.2 ) (66.5 ) (9.1 ) (5.8 ) (72.1 ) (738.7 ) Goodwill impairment — (69.0 ) — — — (69.0 ) Restructuring and other (14.6 ) (8.7 ) (0.5 ) (1.1 ) (32.1 ) (57.0 ) EBITDA from equity investments(2) (70.2 ) (70.2 ) Earnings from equity investments 13.0 13.0 Interest expense (661.4 ) (661.4 ) Gain on debt financing transactions 25.2 25.2 Other income, net 11.1 11.1 Stock-based compensation (35.3 ) (35.3 ) Net loss before income taxes $ (478.7 ) Assets as of December 31, 2016 $ 5,506.6 $ 1,032.0 $ 169.8 $ 36.0 $ 343.0 $ 7,087.4 Capital expenditures for the year ended December 31, 2016 $ 184.4 $ 40.5 $ 4.9 $ 4.0 $ 39.1 $ 272.9 (1) Includes amounts not allocated to the business segments (including corporate costs) and reconciling items to reconcile the total business segments AEBITDA to our consolidated net loss before income taxes. (2) AEBITDA is described in footnote (2) to the first table in this Note 2. |
Schedule of the Service and Sales Revenue by Customer Location and Long-Lived Assets by Geographic Segment | The following tables present revenue by customer location and property and equipment by geographic location: Year Ended December 31, 2018 2017 2016 Revenue: U.S. $ 2,190.5 $ 2,118.1 $ 1,959.0 Other 1,172.7 965.5 924.4 Total $ 3,363.2 $ 3,083.6 $ 2,883.4 As of December 31, 2018 2017 Property and equipment, net: U.S. $ 334.5 $ 390.1 Other 212.5 178.1 Total $ 547.0 $ 568.2 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue by Type Within Each Business Segment | The following table disaggregates our revenues by type within each of our business segments: Revenue recognized for Year Ended December 31, Revenue category 2018 2017 2016 Gaming Gaming operations $ 631.9 $ 696.0 $ 725.3 Gaming machine sales 646.3 672.4 618.2 Gaming systems 320.6 274.0 240.8 Table products 232.6 201.9 188.4 Total $ 1,831.4 $ 1,844.3 $ 1,772.7 Lottery Instant products $ 592.5 $ 588.0 $ 573.7 Lottery systems 253.8 223.5 204.2 Total $ 846.3 $ 811.5 $ 777.9 Social Mobile $ 322.9 $ 259.6 $ 187.1 Web and other 93.0 102.4 87.3 Total $ 415.9 $ 362.0 $ 274.4 Digital Sports and platform $ 100.5 $ — $ — Gaming and other 169.1 65.8 58.4 Total $ 269.6 $ 65.8 $ 58.4 |
Summary of Contract Liabilities | The following table summarizes our opening and closing balances in these accounts (other than contract liabilities disclosed above): Receivables Contract Assets (1) Opening balance, January 1, 2018 $ 724.7 $ 66.4 Closing balance, December 31, 2018 753.3 113.7 (1) Contract assets are included primarily within Prepaid expenses, deposits and other current assets in our December 31, 2018 consolidated balance sheet. The following table summarizes the activity in our contract liabilities for the reporting period: Year Ended December 31, 2018 Contract liability balance, beginning of period (1) $ 88.2 Liabilities recognized during the period 53.7 Amounts recognized in revenue from beginning balance (44.8 ) Contract liability balance, end of period (1) $ 97.1 (1) Contract liabilities are included within accrued liabilities and other long-term liabilities in our consolidated balance sheet. |
Restructuring and other (Tables
Restructuring and other (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring and Other Costs | The following table summarizes pre-tax restructuring and other costs for the periods presented: Year Ended December 31, 2018 2017 2016 Employee severance (1) $ 37.2 $ 9.8 $ 36.2 Acquisition-related costs (2) 7.6 21.1 2.5 Contingent acquisition consideration (3) 28.7 — — Legal and related (4) 152.5 — — Restructuring, integration and other 27.4 15.0 18.3 Total $ 253.4 $ 45.9 $ 57.0 (1) Including employee severance and termination costs associated with restructuring activities. |
Accounts Receivable and Notes_2
Accounts Receivable and Notes Receivable and Credit Quality of Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Summary of components of current and long-term accounts and notes receivable, net | The following summarizes the components of current and long-term accounts and notes receivable, net: As of December 31, 2018 2017 Current: Accounts receivable $ 615.1 $ 551.5 Notes receivable 138.4 164.1 Allowance for doubtful accounts (40.4 ) (31.2 ) Current accounts and notes receivable, net $ 713.1 $ 684.4 Long-term: Accounts and notes receivable, net of allowance of $0.1 and $0.2 40.2 52.8 Total accounts and notes receivable, net $ 753.3 $ 737.2 |
Summary of the components of total notes receivable, net | The following summarizes the components of total notes receivable, net: December 31, 2018 Balances over 90 days past due December 31, 2017 Balances over 90 days past due Notes receivable: Domestic $ 55.1 $ 6.2 $ 93.5 $ 9.2 International 123.5 24.8 123.6 33.2 Total notes receivable 178.6 31.0 217.1 42.4 Notes receivable allowance Domestic (6.5 ) (6.5 ) (4.0 ) (4.0 ) International (17.9 ) (17.9 ) (16.8 ) (16.8 ) Total notes receivable allowance (24.4 ) (24.4 ) (20.8 ) (20.8 ) Notes receivable, net $ 154.2 $ 6.6 $ 196.3 $ 21.6 |
Schedule of activity in allowance for notes receivable | The activity in our allowance for notes receivable for each of the years ended December 31, 2018 and 2017 is as follows: December 31, 2018 December 31, 2017 Beginning allowance for notes receivable $ (20.8 ) $ (15.0 ) Provision (6.3 ) (7.3 ) Charge-offs and recoveries 2.7 1.5 Ending allowance for notes receivable $ (24.4 ) $ (20.8 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following: As of December 31, 2018 2017 Parts and work-in-process $ 130.5 $ 128.7 Finished goods 85.1 114.4 Total inventories $ 215.6 $ 243.1 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property plant and equipment | Property and equipment are stated at cost, and when placed into service, are depreciated using the straight-line method over the estimated useful lives of the assets as follows: Item Estimated Life in Years Lottery and other machinery and equipment 3 - 15 Gaming equipment 1 - 5 Transportation equipment 3 - 8 Furniture and fixtures 5 - 10 Buildings and improvements 15 - 40 Property and equipment, net consisted of the following: As of December 31, 2018 2017 Land $ 15.0 $ 35.7 Buildings and leasehold improvements 128.2 183.6 Gaming and lottery machinery and equipment 1,041.3 962.2 Furniture and fixtures 27.0 33.2 Construction in progress 17.0 27.7 Other property and equipment 239.7 236.9 Less: accumulated depreciation (921.2 ) (911.1 ) Total property and equipment, net $ 547.0 $ 568.2 Depreciation expense is excluded from cost of services, cost of product sales, cost of instant products and other operating expenses and is separately presented within D&A. Year Ended December 31, 2018 2017 2016 Depreciation expense $ 212.5 $ 269.5 $ 323.1 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of allocation of purchase price | The following table summarizes the allocation of the purchase price, which reflects an $8.1 million adjustment from the preliminary allocation during the first quarter of 2018 and primarily related to the provisional amounts recognized for certain receivables and liabilities for which we have subsequently obtained and evaluated more detailed information than existed at the measurement date: January 5, 2018 Cash, cash equivalents and restricted cash $ 23.3 Accounts receivable and other current assets (1) 55.8 Property and equipment and other non-current assets (1) 22.1 Goodwill 368.3 Intangible assets 350.0 Total assets $ 819.5 Current liabilities (2) $ 74.5 Deferred income taxes 66.3 Assumed debt and other liabilities 299.7 Total liabilities $ 440.5 Total consideration transferred $ 379.0 (1) Including $40.5 million and $12.9 million of receivables and contract assets, respectively. (2) Including $15.7 million of contract liabilities. |
Details of intangible assets that have been identified | The following table details the intangible assets that have been identified: Fair Value Weighted Average Useful Life (Years) Customer relationships $ 214.0 7 Intellectual property (1) 126.5 7 Trade names 9.5 7 (1) Primarily consists of core technology and content. |
Unaudited pro forma financial information | NYX revenue and net loss since the acquisition date included in our consolidated results were as follows: Year Ended December 31, 2018 Revenue $ 198.0 Net loss 41.1 The following unaudited pro forma financial information for the years ended December 31, 2018 and 2017 give effect to the NYX acquisition as if it had been completed on January 1, 2017: Year Ended December 31, 2018 2017 Revenue $ 3,363.2 $ 3,265.2 Net loss 344.7 307.7 |
Summary of aggregate disclosure related to business acquisitions | The following table summarizes an aggregate disclosure related to business acquisitions completed in 2018 and 2017, excluding the NYX acquisition: Total Cash paid, net Contingent Acquisition Consideration (1) Allocation of (2) Weighted Excess purchase Aggregate total 2018 $ 46.2 $ 34.1 $ 9.0 $ 41.6 9.4 Years $ 10.8 Aggregate total 2017 66.0 57.7 7.5 56.4 8.3 Years 12.8 (1) Contingent consideration is determined by fair value and included in the consideration transferred (see Note 17 for subsequent changes due to remeasurements, which are recorded in Restructuring and other). |
Intangible Assets, net and Go_2
Intangible Assets, net and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following tables present certain information regarding our intangible assets as of December 31, 2018 and 2017 . Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives with no estimated residual values, which materially approximates the expected pattern of use. December 31, 2018 December 31, 2017 Gross Carrying Accumulated Net Balance Gross Carrying Value Accumulated Amortization Net Balance Amortizable intangible assets: Customer relationships $ 1,083.9 $ (298.7 ) $ 785.2 $ 881.4 $ (214.8 ) $ 666.6 Intellectual property 930.6 (452.6 ) 478.0 788.1 (332.7 ) 455.4 Licenses 546.2 (253.5 ) 292.7 419.5 (206.9 ) 212.6 Brand names 123.4 (58.9 ) 64.5 125.7 (46.5 ) 79.2 Trade names 107.3 (22.5 ) 84.8 98.7 (14.7 ) 84.0 Patents and other 23.3 (13.6 ) 9.7 27.1 (14.5 ) 12.6 2,814.7 (1,099.8 ) 1,714.9 2,340.5 (830.1 ) 1,510.4 Non-amortizable intangible assets: Trade names 96.3 (2.1 ) 94.2 96.3 (2.1 ) 94.2 Total intangible assets $ 2,911.0 $ (1,101.9 ) $ 1,809.1 $ 2,436.8 $ (832.2 ) $ 1,604.6 |
Schedule of Intangible Asset Amortization Expense | The following reflects intangible amortization expense included within D&A: Year Ended December 31, 2018 2017 2016 Amortization expense $ 297.1 $ 260.0 $ 251.9 The following reflects amortization of software included within D&A: Year Ended December 31, 2018 2017 2016 Amortization expense $ 160.5 $ 153.3 $ 158.9 |
Schedule of Estimated Intangible Asset Amortization Expense | Estimated intangible asset amortization expense for the year ending December 31, 2019 and each of the subsequent four years: Year Ending December 31, 2019 2020 2021 2022 2023 Amortization expense $ 284.5 $ 241.1 $ 223.6 $ 195.7 $ 189.3 |
Schedule of Goodwill Reconciliation | The table below reconciles the change in the carrying value of goodwill, by business segment, for the period from December 31, 2016 to December 31, 2018 . Gaming (1) Lottery (2) Interactive Social Digital 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 46.9 6.2 — — — 53.1 Balance as of December 31, 2017 2,475.5 356.2 124.4 — — 2,956.1 Reporting unit reallocation adjustment — — (124.4 ) 116.9 7.5 — Acquired goodwill — — — — 379.1 379.1 Foreign currency adjustments (27.0 ) (3.8 ) — (1.8 ) (22.7 ) (55.3 ) Balance as of December 31, 2018 $ 2,448.5 $ 352.4 $ — $ 115.1 $ 363.9 $ 3,279.9 (1) Accumulated goodwill impairment charges for the Gaming segment as of December 31, 2018 were $935.0 million. |
Software, net (Tables)
Software, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Research and Development [Abstract] | |
Schedule of Capitalized Computer Software | Software, net consisted of the following: As of December 31, 2018 2017 Software $ 1,101.6 $ 1,003.2 Accumulated amortization (816.3 ) (663.8 ) Software, net $ 285.3 $ 339.4 |
Schedule of Software Amortization Expense | The following reflects intangible amortization expense included within D&A: Year Ended December 31, 2018 2017 2016 Amortization expense $ 297.1 $ 260.0 $ 251.9 The following reflects amortization of software included within D&A: Year Ended December 31, 2018 2017 2016 Amortization expense $ 160.5 $ 153.3 $ 158.9 |
Equity Investments (Tables)
Equity Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedules of equity method investments | See the tables below for details of our equity investments: Equity Investment Purpose Concession and/or Supplier Agreement Term Ownership Interest Segment LNS (1) Exclusive operator of Italian instant game lottery Initial term of nine years beginning October 2010, which was subsequently extended for up to nine years (September 2028) 20% Lottery Northstar IL (2) Private manager of Illinois lottery under a PMA January 2011 through January 2018 20% Lottery Northstar NJ (3) Provision of marketing and sales services to New Jersey Lottery October 1, 2013 through 2029 17.69% Lottery Northstar SupplyCo New Jersey LLC (NJ SupplyCo) Separate agreement under which we provide instant games to Northstar NJ October 1, 2013 through 2029 30% Lottery (1) Other members of consortium are Lottomatica Holdings, S.r.l. and Arianna 2001. LNS succeeded Consorzio Lotterie Nazionali, a consortium comprised of essentially the same group that owns LNS, as holder of the concession as the exclusive operator of the Italian Gratta e Vinci instant game lottery. (2) Other member of Northstar Illinois is IGT Global Solutions Corporation, a subsidiary of IGT. (3) Other members are IGT Global Solutions Corporation and a subsidiary of the administrator of the Ontario Municipal Employees Retirement System, this agreement provides us substantive participating rights. Equity investment Balance as of December 31, Equity earnings (loss) recognized for the Year Ended December 31, Cash distributions and dividends received for the Year Ended December 31, Equity Investment 2018 2017 2018 2017 2016 2018 2017 2016 LNS $ 224.1 $ 75.1 $ 16.4 $ 14.3 $ 14.0 $ 37.3 $ 40.4 $ 34.3 Northstar IL — — (0.6 ) 2.8 (0.4 ) — — — Northstar NJ and NJ Supply Co 25.5 21.2 3.3 0.9 1.0 — 4.6 4.8 GLB and CSG 23.1 35.3 0.6 (0.1 ) (8.0 ) 10.8 5.0 1.7 International Terminal Leasing 3.8 8.1 0.1 0.8 — 4.3 5.6 5.9 Other 21.9 23.8 5.1 8.0 6.4 10.1 11.7 5.0 Total under equity method $ 298.4 $ 163.5 $ 24.9 $ 26.7 $ 13.0 $ 62.5 $ 67.3 $ 51.7 NYX (1) — 90.4 — — — — — — Total equity investment $ 298.4 $ 253.9 $ 24.9 $ 26.7 $ 13.0 $ 62.5 $ 67.3 $ 51.7 (1) We elected the fair value option to account for our 36% non-controlling equity investment in NYX during and as of and for the year ended December 31, 2017. Revenue recognized from sales to investee for the Year Ended December 31, Equity Investment 2018 2017 2016 LNS $ 40.0 $ 44.9 $ 45.3 Northstar IL (1) — 22.8 22.6 Northstar NJ and NJ Supply Co 23.3 20.6 20.9 Other 6.6 6.7 4.9 Total $ 69.9 $ 95.0 $ 93.7 (1) Effective January 1, 2018, Camelot Illinois, LLC assumed our and IGT’s supply agreements (see below). |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: As of December 31, 2018 2017 Compensation and benefits $ 119.7 $ 148.2 Contract liability (1) 73.4 42.7 Accrued interest 64.2 116.5 Customer advances and licenses 42.5 55.0 Taxes, other than income 26.7 27.7 Contingent acquisition consideration liabilities 22.1 — Legal accruals 7.0 14.9 Other 121.6 104.1 Total $ 477.2 $ 509.1 (1) Represents deferred revenue prior to the adoption of ASC 606. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Future minimum lease payments required under our leasing arrangements | Future minimum lease payments required under our operating leases at December 31, 2018 were approximately as follows: 2019 2020 2021 2022 2023 Thereafter Future minimum lease payments $ 33.4 $ 27.2 $ 22.8 $ 17.9 $ 14.4 $ 29.3 |
Long-Term and Other Debt (Table
Long-Term and Other Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt outstanding | The following reflects outstanding debt as of the dates indicated below: As of December 31, 2018 2017 Final Maturity Rate(s) Face Value Unamortized debt discount/premium and deferred financing costs, net Book Value Book Value Senior Secured Credit Facilities: 2018 Revolver, varying interest rate 2018 variable $ — $ — $ — $ 100.5 2020 Revolver, varying interest rate 2020 variable 325.0 — 325.0 249.5 Term Loan B-4 2024 variable — — — 3,193.6 Term Loan B-5 2024 variable 4,143.3 (72.3 ) 4,071.0 — Senior Notes: 2022 Secured Notes 2022 7.000 % — — — 2,130.7 2025 Secured Notes (1) 2025 5.000 % 1,250.0 (17.5 ) 1,232.5 343.7 2026 Secured Euro Notes (2) 2026 3.375 % 371.9 (5.4 ) 366.5 — Unsecured Notes 2022 10.000 % 2,200.0 (23.8 ) 2,176.2 2,170.1 2026 Unsecured Euro Notes (2) 2026 5.500 % 286.1 (4.2 ) 281.9 — Subordinated Notes: 2020 Notes 2020 6.250 % 243.5 (1.0 ) 242.5 241.8 2021 Notes 2021 6.625 % 340.6 (3.3 ) 337.3 336.0 Capital lease obligations, 3.9% as of December 31, 2018 payable monthly through 2020 2020 3.900 % 4.0 — 4.0 10.7 Total long-term debt outstanding $ 9,164.4 $ (127.5 ) $ 9,036.9 $ 8,776.6 Less: current portion of long-term debt (45.0 ) (40.3 ) Long-term debt, excluding current portion $ 8,991.9 $ 8,736.3 Fair value of debt (3) $ 8,773.3 (1) In connection with the February 2018 Refinancing, we entered into certain cross-currency interest rate swap agreements to achieve more attractive interest rates by effectively converting $460.0 million of the fixed-rate, U.S. Dollar-denominated 2025 Secured Notes, including the semi-annual interest payments through October 2023, to a fixed-rate Euro-denominated debt, with a fixed annual weighted average interest rate of approximately 2.946% . These cross-currency swaps have been designated as a hedge of our net investment in certain subsidiaries. (2) We designated a portion of our 2026 Secured Euro Notes as a net investment non-derivative hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency in order to reduce the volatility in our operating results caused by the change in foreign currency exchange rates of the Euro relative to the U.S. Dollar (see Note 17 for additional information). The total change in the face value of the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes due to changes in foreign currency exchange rates since the issuance was a reduction of $54.4 million , of which a $ 43.4 million gain was recognized on remeasurement of debt in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2018. (3) 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 debt and capital lease payments due over the next five years and beyond | The following reflects the principal amount of debt and capital lease payments due over the next five years and beyond as of December 31, 2018 : Total 2019 2020 2021 2022 2023 After 2023 Senior Secured Credit Facilities $ 4,468.3 $ 41.7 $ 366.7 $ 41.7 $ 41.7 $ 41.7 $ 3,934.8 Senior Notes 4,108.0 — — — 2,200.0 — 1,908.0 Subordinated Notes 584.1 — 243.5 340.6 — — — Capital lease obligations 4.0 3.3 0.7 — — — — Total long-term debt outstanding $ 9,164.4 $ 45.0 $ 610.9 $ 382.3 $ 2,241.7 $ 41.7 $ 5,842.8 Unamortized deferred financing costs and discount/premium (127.5 ) Total debt book value $ 9,036.9 |
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: Years Ended December 31, 2018 2017 2016 Repurchase and cancellation of principal balance at premium (discount) $ 110.3 $ — $ (26.0 ) Unamortized debt (premium) discount and deferred financing costs. net (29.8 ) 26.4 0.8 Third party debt issuance fees 12.7 11.7 — Total loss (gain) on debt financing transactions $ 93.2 $ 38.1 $ (25.2 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of losses (gains) on interest rate swaps | The following table shows the gains (losses) and interest expense on our interest rate swap contracts: Year Ended December 31, 2018 2017 2016 Gains (losses) recorded in accumulated other comprehensive loss, net of tax $ 0.1 $ (4.2 ) $ (3.0 ) Interest expense recorded related to interest rate swap contracts 2.6 7.0 8.2 |
Schedule of Effect of Interest Rate Swap Contracts Designated as Cash Flow Hedges | The following table shows the effect of interest rate swap contracts designated as cash flow hedges on the consolidated statements of operations and comprehensive loss: Year Ended December 31, 2018 Interest expense Total amounts of expense line item presented in the statements of operations and comprehensive loss in which the effects of cash flow hedges are recorded $ (597.2 ) Hedged item (16.6 ) Derivative designated as hedging instrument 14.0 |
Schedule of fair value hedges | The following table shows the fair value of our hedges: Balance Sheet Line Item December 31, 2018 December 31, 2017 Interest rate swaps (1)(3) Other assets/(accrued liabilities) $ 0.2 $ (0.2 ) Cross-currency interest rate swaps (2)(3) Other assets 18.0 — (1) The gains (loss) of $0.2 million, ($0.2 million) and ($6.9 million) for the years ended December 31, 2018, 2017 and 2016, respectively, are reflected in Derivative financial instrument unrealized gain (loss), net of tax in Other comprehensive income. |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of change in the number of shares of Class A common stock | The following table sets forth the change in the number of shares of common stock outstanding during the fiscal years ended December 31, 2018 and 2017 : December 31, 2018 2017 Shares outstanding as of beginning of period 89.9 88.0 Shares issued as part of equity-based compensation plans and the ESPP, net of shares surrendered 2.0 1.9 Shares outstanding as of end of period 91.9 89.9 |
RSUs outstanding under equity-based compensation plans | A summary of the changes in RSUs outstanding under our equity-based compensation plans during 2018 is presented below: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested RSUs as of December 31, 2017 3.9 $ 13.73 Granted 1.1 $ 47.17 Vested (2.1 ) $ 15.45 Cancelled (0.3 ) $ 22.02 Unvested RSUs as of December 31, 2018 2.6 $ 25.37 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of combined funded status of the pension plans and their reconciliation with the related amounts recognized in balance sheet | The following table sets forth the combined funded status of the Pension Plans and their reconciliation to the related amounts recognized in our Consolidated Financial Statements at our December 31, 2018 and 2017 measurement dates: December 31, 2018 2017 Change in benefit obligation: Benefit obligation at beginning of year $ 133.8 $ 121.0 Service cost 2.5 2.4 Interest cost 3.8 4.2 Participant contributions 0.9 1.0 Actuarial (gain) loss (6.6 ) 1.2 Benefits paid (3.8 ) (6.0 ) Other, principally foreign exchange (5.5 ) 10.0 Benefit obligation at end of year $ 125.1 $ 133.8 Change in plan assets: Fair value of plan assets at beginning of year $ 115.5 $ 99.3 Actual (loss) gain on plan assets (4.1 ) 10.4 Employer contributions 3.2 3.1 Participant contributions 0.9 1.0 Benefits paid (3.8 ) (6.0 ) Other, principally foreign exchange (4.8 ) 7.7 Fair value of assets at end of year $ 106.9 $ 115.5 Amounts recognized in the consolidated balance sheets: Funded status (current) $ — $ — Funded status (non-current) (18.2 ) (18.3 ) Accumulated other comprehensive loss: Unrecognized actuarial loss 24.7 20.6 Unrecognized prior service cost 0.5 0.5 Deferred taxes (4.7 ) (4.7 ) Net amount recognized $ 2.3 $ (1.9 ) |
Schedule of components of net periodic pension cost | The following table presents the components of our net periodic pension benefit cost: Year Ended December 31, 2018 2017 2016 Components of net periodic pension benefit cost: Service cost $ 2.5 $ 2.4 $ 2.2 Interest cost 3.8 4.2 4.1 Expected return on plan assets (5.4 ) (5.9 ) (5.8 ) Amortization of actuarial losses 1.0 1.4 0.3 Net periodic cost $ 1.9 $ 2.1 $ 0.8 |
Schedule of amounts included in accumulated other comprehensive loss expected to be recognized as components of net periodic pension cost during the next fiscal year | The amounts included in accumulated other comprehensive loss as of December 31, 2018 expected to be recognized as components of net periodic pension benefit cost during the fiscal year ending December 31, 2019 are presented below: Unrecognized loss $ 1.8 Unrecognized prior service cost (0.5 ) Net amount expected to be recognized $ 1.3 |
Schedule of fair value of defined benefit pension plan assets by asset category | The fair value of the plan assets for both of the Pension Plans at December 31, 2017 by asset category is presented below: Asset Category Market Quoted Significant Significant Equity securities (a) $ 56.1 $ 31.4 $ 24.7 $ — Global return fund (a) 14.6 — 14.6 — Corporate bonds (a) 13.9 — 13.9 — Government bonds 10.6 — 10.6 — Real estate 4.2 — — 4.2 LDI (Liability Driven Investment) 13.3 — 13.3 — Cash and cash equivalents (b) 2.8 2.8 — — Total pension assets $ 115.5 $ 34.2 $ 77.1 $ 4.2 (a) The assets are invested through managed funds that are valued using inputs derived principally from quoted prices in active markets for the underlying assets in the fund. (b) The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. The fair value of the plan assets for the Pension Plans at December 31, 2018 by asset category is presented below: Asset Category Market Value at 12/31/2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities (a) $ 51.5 $ 29.9 $ 21.6 $ — Global return fund (a) 13.8 — 13.8 — Corporate bonds (a) 14.5 — 14.5 — Government bonds 10.6 — 10.6 — Real estate 4.2 — — 4.2 LDI (Liability Driven Investment) 11.3 — 11.3 — Cash and cash equivalents (b) 1.0 1.0 — — Total pension assets $ 106.9 $ 30.9 $ 71.8 $ 4.2 (a) The assets are invested through managed funds that are valued using inputs derived principally from quoted prices in active markets for the underlying assets in the fund. (b) The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. |
Schedule of changes in fair value of pension assets valued using significant unobservable inputs (Level 3) | The change in fair value of the Pension Plan assets valued using significant unobservable inputs (Level 3) is presented below: 2018 2017 Significant unobservable inputs (Level 3), beginning of period $ 4.2 $ 10.9 Unrealized gain (loss) on asset still held — (6.7 ) Significant unobservable inputs (Level 3), end of period $ 4.2 $ 4.2 |
Schedule of weighted-average actuarial assumptions used to determine the benefit obligation and net periodic benefit cost | The table below presents the weighted-average actuarial assumptions used to determine the benefit obligation and net periodic benefit cost for the Pension Plans. U.K. Plan Canadian Plan 2018 2017 2016 2018 2017 2016 Discount rates: Benefit obligation 2.90 % 2.60 % 2.80 % 3.90 % 4.00 % 4.00 % Net periodic pension cost 2.60 % 2.80 % 4.00 % 3.60 % 3.60 % 4.15 % Rate of compensation increase 1.00 % 1.00 % 1.00 % 1.00 % 3.00 % 3.00 % Expected return on assets 5.00 % 4.80 % 5.70 % 5.70 % 6.00 % 6.25 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of accumulated balances for each classification of comprehensive (loss) income | The accumulated balances for each classification of comprehensive (loss) income are presented below: Foreign Currency Items Derivative Financial Instruments (1) Unrecognized pension benefit costs, net of taxes (2) Accumulated Other Comprehensive Loss Balance at January 1, 2016 $ (205.6 ) $ (6.6 ) $ (10.0 ) $ (222.2 ) Change during period (104.7 ) (5.2 ) (10.0 ) (119.9 ) Reclassified into operations — 8.2 0.3 8.5 Balance at December 31, 2016 $ (310.3 ) $ (3.6 ) $ (19.7 ) $ (333.6 ) Change during period 126.4 (3.1 ) 1.9 125.2 Reclassified into operations — 7.3 1.4 8.7 Balance at December 31, 2017 $ (183.9 ) $ 0.6 $ (16.4 ) $ (199.7 ) Change during period (98.4 ) (0.1 ) (2.3 ) (100.8 ) Reclassified into operations — — 1.0 1.0 Balance at December 31, 2018 $ (282.3 ) $ 0.5 $ (17.7 ) $ (299.5 ) (1) The change during the period is net of income taxes of $0.1 million, $(2.6) million and $(2.0) million in 2018, 2017 and 2016, respectively. (2) The change during the period is net of income taxes of $0.5 million, $(0.7) million and $(3.2) million in 2018, 2017 and 2016, respectively. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of net loss from continuing operations before income taxes | The components of net loss from continuing operations before income taxes are as follows: Year Ended December 31, 2018 2017 2016 United States $ (356.0 ) $ (336.6 ) $ (563.7 ) Foreign 16.7 108.8 85.0 Net loss before income tax (benefit) expense $ (339.3 ) $ (227.8 ) $ (478.7 ) |
Schedule of components of the expense (benefit) for income taxes | The components of income tax expense (benefit) are as follows: Year Ended December 31, 2018 2017 2016 Current U.S. Federal $ 19.0 $ 5.0 $ 10.2 U.S. State 3.7 (4.0 ) (0.3 ) Foreign 22.6 24.8 32.0 Total 45.3 25.8 41.9 Deferred U.S. Federal (9.8 ) (5.8 ) (129.5 ) U.S. State (7.1 ) 2.5 (8.5 ) Foreign (15.3 ) (8.0 ) (28.9 ) Total (32.2 ) (11.3 ) (166.9 ) Total income tax expense (benefit) $ 13.1 $ 14.5 $ (125.0 ) |
Schedule of reconciliation of the U.S. federal statutory tax rate to the actual tax rate | The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is presented below: Year Ended December 31, 2018 2017 2016 Statutory U.S. federal income tax rate 21.0 % 35.0 % 35.0 % Foreign earnings at rates different than U.S. federal rate (1.5 )% (5.7 )% (1.5 )% Valuation allowance adjustments (16.8 )% (40.8 )% (6.5 )% Impact of U.S. Tax Reform (3.1 )% 4.3 % — % Other (3.5 )% 0.8 % (0.9 )% Effective income tax rate (3.9 )% (6.4 )% 26.1 % |
Schedule of deferred income taxes | December 31, 2018 2017 Deferred tax assets: Reserves and other accrued expenses $ 37.1 $ 29.4 Net operating loss carry forwards 436.2 395.5 Tax credit carry forwards 29.1 26.7 Interest limitation carryforwards 105.8 — Differences in financial reporting and tax basis for: Other 63.6 70.7 Valuation allowance (245.2 ) (158.8 ) Realizable deferred tax assets 426.6 363.5 Deferred tax liabilities: Reserves and other accrued expenses (4.5 ) (16.0 ) Deferred costs and prepaid expenses (45.2 ) (8.2 ) Differences in financial reporting and tax basis for: Identifiable intangible assets (382.6 ) (352.0 ) Property and equipment (62.3 ) (25.5 ) Other (9.6 ) (2.0 ) Total deferred tax liabilities (504.2 ) (403.7 ) Net deferred tax liability on balance sheet $ (77.6 ) $ (40.2 ) |
Summary of net operating loss carryforward | At December 31, 2018 , we had the following NOL, interest limitation, R&D credit, and state tax credit carry forwards: December 31, 2018 Federal State Foreign NOL carry forwards $ 1,540.3 $ 1,437.2 $ 164.7 Interest limitation carry forwards 413.9 252.6 7.4 R&D and state credit carry forwards 29.1 2.4 — |
Summary of valuation allowance | At December 31, 2018 and 2017 , we had the following valuation allowances: December 31, 2018 2017 Federal $ 161.6 $ 69.4 State 49.5 48.9 Foreign 34.0 40.5 |
Schedule of unrecognized tax benefits | We had the following activity for unrecognized tax benefits: Year Ended December 31, 2018 2017 2016 Balance at beginning of period $ 21.8 $ 27.4 $ 10.8 Tax positions related to current year additions 10.8 2.3 8.4 Additions for tax positions of prior years 2.6 — 9.7 Tax positions related to prior years reductions (0.2 ) (7.3 ) (0.3 ) Reductions due to lapse of statute of limitations on tax positions (1.2 ) — (0.4 ) Settlements — (0.6 ) (0.8 ) Balance at end of period $ 33.8 $ 21.8 $ 27.4 |
Financial Information for Gua_2
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries [Abstract] | |
Supplemental Condensed Consolidating Balance Sheet | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2018 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Assets Cash and cash equivalents $ 73.5 $ 0.9 $ — $ 95.1 $ (1.3 ) $ 168.2 Restricted cash — 0.8 31.6 6.3 — 38.7 Accounts receivable, net — 79.2 204.8 315.2 — 599.2 Notes receivable, net — — 100.6 13.3 — 113.9 Inventories — 40.4 81.7 110.8 (17.3 ) 215.6 Prepaid expenses, deposits and other current assets 6.2 63.3 92.5 70.5 0.2 232.7 Property and equipment, net 31.0 112.1 218.6 218.2 (32.9 ) 547.0 Investment in subsidiaries 2,835.9 974.5 1,093.4 — (4,903.8 ) — Goodwill — 240.2 1,896.8 1,142.9 — 3,279.9 Intangible assets, net 42.6 34.1 1,291.4 441.0 — 1,809.1 Intercompany balances — 6,053.9 — — (6,053.9 ) — Software, net 58.6 38.2 128.3 60.2 — 285.3 Other assets (2) 110.0 404.4 45.9 307.8 (439.9 ) 428.2 Total assets $ 3,157.8 $ 8,042.0 $ 5,185.6 $ 2,781.3 $ (11,448.9 ) $ 7,717.8 Liabilities and stockholders’ (deficit) equity Current portion of long-term debt $ — $ 41.7 $ — $ 3.3 $ — $ 45.0 Other current liabilities 63.8 162.4 247.9 254.1 (25.9 ) 702.3 Long-term debt, excluding current portion — 8,991.1 — 0.8 — 8,991.9 Other long-term liabilities 105.8 7.6 637.3 171.9 (480.8 ) 441.8 Intercompany balances 5,451.4 — 48.1 554.4 (6,053.9 ) — Stockholders’ (deficit) equity (2,463.2 ) (1,160.8 ) 4,252.3 1,796.8 (4,888.3 ) (2,463.2 ) Total liabilities and stockholders’ (deficit) equity $ 3,157.8 $ 8,042.0 $ 5,185.6 $ 2,781.3 $ (11,448.9 ) $ 7,717.8 1 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018. 2 - Includes $12.2 million and $0.9 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, 2017 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Assets Cash and cash equivalents $ 732.6 $ — $ — $ 59.4 $ (3.2 ) $ 788.8 Restricted cash — 0.6 28.3 0.1 — 29.0 Accounts receivable, net 0.4 68.1 192.6 279.8 — 540.9 Notes receivable, net — — 121.1 22.4 — 143.5 Inventories — 40.7 91.8 131.8 (21.2 ) 243.1 Prepaid expenses, deposits and other current assets 6.5 30.3 41.6 52.7 — 131.1 Property and equipment, net 28.8 91.5 295.6 179.9 (27.6 ) 568.2 Investment in subsidiaries 3,098.7 867.9 987.7 — (4,954.3 ) — Goodwill — 240.3 1,880.4 835.4 — 2,956.1 Intangible assets, net 15.7 34.9 1,335.3 218.7 — 1,604.6 Intercompany balances — 5,889.8 — 222.5 (6,112.3 ) — Software, net 67.2 24.7 199.0 48.5 — 339.4 Other assets (2) 234.4 388.8 62.0 270.3 (574.9 ) 380.6 Total assets $ 4,184.3 $ 7,677.6 $ 5,235.4 $ 2,321.5 $ (11,693.5 ) $ 7,725.3 Liabilities and stockholders’ (deficit) equity Current portion of long-term debt $ — $ 32.8 $ — $ 7.5 $ — $ 40.3 Other current liabilities 67.6 199.0 254.2 206.4 (27.7 ) 699.5 Long-term debt, excluding current portion — 8,733.0 — 3.3 — 8,736.3 Other long-term liabilities 68.8 11.3 650.3 110.9 (565.1 ) 276.2 Intercompany balances 6,074.9 — 37.4 — (6,112.3 ) — Stockholders’ (deficit) equity (2,027.0 ) (1,298.5 ) 4,293.5 1,993.4 (4,988.4 ) (2,027.0 ) Total liabilities and stockholders’ (deficit) equity $ 4,184.3 $ 7,677.6 $ 5,235.4 $ 2,321.5 $ (11,693.5 ) $ 7,725.3 1 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, the 2025 Secured Notes and the Unsecured Notes. 2 - Includes $15.6 million and $0.7 million in non-current restricted cash for Guarantor Subsidiaries and Non-Guarantor Subsidiaries, respectively. |
Supplemental Condensed Consolidating Statement of Operations and Comprehensive Loss | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME Year Ended December 31, 2018 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Revenue $ — $ 547.1 $ 1,654.0 $ 1,540.3 $ (378.2 ) $ 3,363.2 Cost of services, cost of product sales and cost of instant products (2) — 360.9 490.3 721.2 (317.1 ) 1,255.3 Selling, general and administrative 154.4 42.4 227.0 325.5 (52.4 ) 696.9 Research and development — 2.7 87.2 112.4 — 202.3 Depreciation, amortization and impairments 44.2 32.6 439.4 188.3 (14.8 ) 689.7 Restructuring and other 194.7 (1.1 ) 9.2 50.6 — 253.4 Operating (loss) income (393.3 ) 109.6 400.9 142.3 6.1 265.6 Interest expense — (596.7 ) — (0.5 ) — (597.2 ) Loss on debt financing transactions — (93.2 ) — — — (93.2 ) Gain on remeasurement of debt — 43.4 — — — 43.4 Other income (expense), net 335.7 534.9 (744.8 ) (83.7 ) — 42.1 Net (loss) income before equity in (loss) income of subsidiaries and income taxes (57.6 ) (2.0 ) (343.9 ) 58.1 6.1 (339.3 ) Equity in (loss) income of subsidiaries (218.5 ) 43.6 (28.2 ) — 203.1 — Income tax (expense) benefit (76.3 ) 0.5 82.3 (19.6 ) — (13.1 ) Net (loss) income $ (352.4 ) $ 42.1 $ (289.8 ) $ 38.5 $ 209.2 $ (352.4 ) Other comprehensive (loss) income (99.8 ) 30.0 (66.3 ) (113.8 ) 150.1 (99.8 ) Comprehensive (loss) income $ (452.2 ) $ 72.1 $ (356.1 ) $ (75.3 ) $ 359.3 $ (452.2 ) 1 - Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018. 2 - Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Year Ended December 31, 2017 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Revenue $ — $ 498.1 $ 1,683.9 $ 1,223.3 $ (321.7 ) $ 3,083.6 Cost of services, cost of product sales and cost of instant products (2) — 341.9 511.0 629.1 (317.4 ) 1,164.6 Selling, general and administrative 127.1 41.3 244.4 250.2 (49.9 ) 613.1 Research and development 2.1 6.5 101.3 74.2 — 184.1 Depreciation, amortization and impairments 71.6 31.3 462.7 128.0 (10.8 ) 682.8 Restructuring and other 29.7 5.1 7.3 3.8 — 45.9 Operating (loss) income (230.5 ) 72.0 357.2 138.0 56.4 393.1 Interest expense (4.6 ) (603.9 ) — (1.2 ) — (609.7 ) Loss on debt financing transactions (1.1 ) (37.0 ) — — — (38.1 ) Other income (expense), net 87.7 150.4 (184.7 ) (26.5 ) — 26.9 Net (loss) income before equity in income of subsidiaries and income taxes (148.5 ) (418.5 ) 172.5 110.3 56.4 (227.8 ) Equity in (loss) income of subsidiaries (45.4 ) 67.6 21.9 — (44.1 ) — Income tax (expense) benefit (48.4 ) 157.9 (85.6 ) (38.4 ) — (14.5 ) Net (loss) income $ (242.3 ) $ (193.0 ) $ 108.8 $ 71.9 $ 12.3 $ (242.3 ) Other comprehensive income 133.9 10.3 65.8 128.7 (204.8 ) 133.9 Comprehensive (loss) income $ (108.4 ) $ (182.7 ) $ 174.6 $ 200.6 $ (192.5 ) $ (108.4 ) (1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes and the 2025 Secured Notes, which were issued in October 2017. (2) Exclusive of D&A. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS Year Ended December 31, 2016 SGC (Parent 1 ) SGI (Issuer 2 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Revenue $ — $ 469.5 $ 1,583.5 $ 1,148.6 $ (318.2 ) $ 2,883.4 Cost of services, cost of product sales and cost of instant products (3) — 328.6 480.9 553.8 (257.0 ) 1,106.3 Selling, general and administrative 121.0 46.9 213.8 235.9 (40.6 ) 577.0 Research and development 6.1 10.7 145.2 42.8 — 204.8 Depreciation, amortization and impairments 53.5 40.9 534.6 116.0 (6.3 ) 738.7 Goodwill impairment — — — 69.0 — 69.0 Restructuring and other 32.6 4.6 11.7 8.1 — 57.0 Operating (loss) income (213.2 ) 37.8 197.3 123.0 (14.3 ) 130.6 Interest expense (21.0 ) (640.2 ) — (0.2 ) — (661.4 ) Gain on debt financing transactions — 25.2 — — — 25.2 Other income (expense), net 64.0 194.4 (227.3 ) (4.2 ) — 26.9 Net (loss) income before equity in income of subsidiaries and income taxes (170.2 ) (382.8 ) (30.0 ) 118.6 (14.3 ) (478.7 ) Equity in (loss) income of subsidiaries (180.1 ) 48.5 61.1 — 70.5 — Income tax (expense) benefit (3.4 ) 138.2 15.9 (25.7 ) — 125.0 Net (loss) income $ (353.7 ) $ (196.1 ) $ 47.0 $ 92.9 $ 56.2 $ (353.7 ) Other comprehensive (loss) income (111.4 ) (1.7 ) (43.1 ) (135.1 ) 179.9 (111.4 ) Comprehensive (loss) income $ (465.1 ) $ (197.8 ) $ 3.9 $ (42.2 ) $ 236.1 $ (465.1 ) (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 2022 Secured Notes, which were redeemed in March 2018, and the Unsecured Notes. (3) Exclusive of D&A. |
Supplemental Condensed Consolidating Statement of Cash Flows | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2018 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminating Entries Consolidated Net cash (used in) provided by operating activities $ (221.1 ) $ 18.3 $ 205.8 $ 341.2 $ 1.9 $ 346.1 Cash flows from investing activities: Capital expenditures (35.0 ) (63.2 ) (145.9 ) (146.7 ) — (390.8 ) Acquisitions of businesses and assets, net of cash acquired — — (32.1 ) (264.5 ) — (296.6 ) Proceeds from asset sales — — 40.0 — — 40.0 Acquisitions and additions to equity method investments — (1.9 ) — (178.5 ) — (180.4 ) Distributions of capital from equity investments — — — 29.7 — 29.7 Other, principally change in intercompany investing activities — (159.3 ) — — 159.3 — Net cash used in by investing activities (35.0 ) (224.4 ) (138.0 ) (560.0 ) 159.3 (798.1 ) Cash flows from financing activities: Payments on long-term debt, net of proceeds — 245.7 — (7.5 ) — 238.2 Payments of assumed NYX debt and other acquisitions debt — — (1.9 ) (288.2 ) — (290.1 ) Payments of debt issuance and deferred financing costs — (38.5 ) — — — (38.5 ) Payments on license obligations (42.9 ) — (2.0 ) — — (44.9 ) Net redemptions of common stock under stock-based compensation plans and other (18.4 ) — (2.5 ) — — (20.9 ) Other, principally change in intercompany financing activities (341.7 ) — (61.5 ) 562.5 (159.3 ) — Net cash (used in) provided by financing activities (403.0 ) 207.2 (67.9 ) 266.8 (159.3 ) (156.2 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — (5.9 ) — (5.9 ) (Decrease) increase in cash, cash equivalents and restricted cash (659.1 ) 1.1 (0.1 ) 42.1 1.9 (614.1 ) Cash, cash equivalents, and restricted cash, beginning of period 732.6 0.6 43.9 60.2 (3.2 ) 834.1 Cash, cash equivalents and restricted cash, end of period $ 73.5 $ 1.7 $ 43.8 $ 102.3 $ (1.3 ) $ 220.0 (1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes, the 2025 Secured Notes, which were issued in October 2017, and the 2026 Secured Euro Notes and 2026 Unsecured Euro Notes, which were issued in February 2018. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2017 SGC (Parent) SGI (Issuer 1 ) Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminating Entries Consolidated Net cash (used in) provided by operating activities $ (40.7 ) $ (300.0 ) $ 567.3 $ 282.6 $ (2.1 ) $ 507.1 Cash flows from investing activities: Capital expenditures (53.3 ) (31.0 ) (128.8 ) (80.6 ) — (293.7 ) Acquisitions of businesses, net of cash acquired — — (26.3 ) (31.4 ) — (57.7 ) Acquisitions and additions to equity method investments — — — (107.3 ) — (107.3 ) Distributions of capital on equity investments — — — 34.1 — 34.1 Changes in other assets and liabilities and other — — 7.5 2.5 — 10.0 Other, principally change in intercompany investing activities — (569.1 ) — (120.1 ) 689.2 — Net cash (used in) provided by investing activities (53.3 ) (600.1 ) (147.6 ) (302.8 ) 689.2 (414.6 ) Cash flows from financing activities: Net (payments) proceeds of long-term debt including senior notes and term loans (250.0 ) 957.7 — (6.7 ) — 701.0 Payments of debt issuance and deferred financing costs — (58.7 ) — — — (58.7 ) Payments on license obligations (47.5 ) — (5.1 ) — — (52.6 ) Net redemptions of common stock under stock-based compensation plans and other (8.5 ) — (1.0 ) — — (9.5 ) Other, principally change in intercompany financing activities 1,099.9 — (410.7 ) — (689.2 ) — Net cash provided by (used in) financing activities 793.9 899.0 (416.8 ) (6.7 ) (689.2 ) 580.2 Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — 4.5 — 4.5 Increase (decrease) in cash, cash equivalents and restricted cash 699.9 (1.1 ) 2.9 (22.4 ) (2.1 ) 677.2 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 $ 732.6 $ 0.6 $ 43.9 $ 60.2 $ (3.2 ) $ 834.1 (1) Issuer of obligations under the 2020 Notes, the 2021 Notes, the 2022 Secured Notes, which were redeemed in March 2018, the Unsecured Notes and the 2025 Secured Notes, which were issued in October 2017. SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2016 SGC (Parent 1 ) SGI (Issuer 2 ) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Net cash (used in) provided by operating activities $ (90.4 ) $ (259.8 ) $ 535.0 $ 235.3 $ (1.1 ) $ 419.0 Cash flows from investing activities: Capital expenditures (39.1 ) (22.8 ) (149.5 ) (61.5 ) — (272.9 ) Distribution of capital on equity investments — — — 25.3 — 25.3 Changes in other assets and liabilities and other — (1.2 ) 16.8 4.0 — 19.6 Other, principally change in intercompany investing activities — 418.4 — (194.5 ) (223.9 ) — Net cash (used in) provided by investing activities (39.1 ) 394.4 (132.7 ) (226.7 ) (223.9 ) (228.0 ) Cash flows from financing activities: Net payments on long-term debt — (132.9 ) — (6.8 ) — (139.7 ) Payments on license obligations (38.0 ) — (12.2 ) — — (50.2 ) Net (redemptions) issuances of common stock under stock-based compensation plans and other (6.1 ) — — — — (6.1 ) Other, principally change in intercompany financing activities 163.1 — (387.0 ) — 223.9 — Net cash provided by (used in) financing activities 119.0 (132.9 ) (399.2 ) (6.8 ) 223.9 (196.0 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — — (4.9 ) — (4.9 ) Increase (decrease) in cash, cash equivalents and restricted cash (10.5 ) 1.7 3.1 (3.1 ) (1.1 ) (9.9 ) Cash, cash equivalents, and restricted cash, beginning of period 43.2 — 37.9 85.7 — 166.8 Cash, cash equivalents and restricted cash, end of period $ 32.7 $ 1.7 $ 41.0 $ 82.6 $ (1.1 ) $ 156.9 (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 2022 Secured Notes, which were redeemed in March 2018, and the Unsecured Notes. |
Selected Quarterly Financial _2
Selected Quarterly Financial Data, Unaudited (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Financial Information of Selected Quarterly Financial Data | Quarter Ended 2018 March 31 (a) June 30 (b) September 30 (c) December 31 (d) Total operating revenues $ 811.8 $ 844.7 $ 821.0 $ 885.7 Total cost of revenues (1) 296.7 315.9 301.3 341.4 Selling, general and administrative 171.6 173.9 169.7 181.7 Research and development 53.8 49.2 49.5 49.8 Restructuring and other 52.2 33.5 338.7 (171.0 ) Depreciation, amortization and impairments 188.1 172.7 166.3 162.6 Operating income (loss) 49.4 99.5 (204.5 ) 321.2 Net (loss) income $ (201.8 ) $ (5.8 ) $ (351.6 ) $ 206.8 Basic and diluted net (loss) income per share: Basic net (loss) income per share $ (2.24 ) $ (0.06 ) $ (3.85 ) $ 2.25 Diluted net (loss) income per share $ (2.24 ) $ (0.06 ) $ (3.85 ) $ 2.21 Weighted average number of shares used in per share calculations: Basic shares 90.1 91.0 91.4 91.8 Diluted shares 90.1 91.0 91.4 93.4 (1) Exclusive of D&A (a) Includes a loss on debt financing transactions of $93.2 million in connection with the February 2018 Refinancing and $1.1 million loss on remeasurement of debt. (b) Includes a gain on remeasurement of debt of $34.5 million . (c) Includes a loss on remeasurement of debt of $4.0 million and a $309.6 million reserve related to the Shuffle Tech Matter. (d) Includes a gain on remeasurement of debt of $14.0 million and a $183.1 million reversal of the Shuffle Tech Matter legal reserve as a result of a settlement agreement reached (see Note 22). Quarter Ended 2017 March 31 (a) June 30 September 30 (b) December 31 Total operating revenues $ 725.4 $ 766.3 $ 768.9 $ 823.0 Total cost of revenues (1) 280.0 278.9 290.8 314.9 Selling, general and administrative 140.7 145.9 158.8 167.7 Research and development 42.4 48.1 47.8 45.8 Restructuring and other 9.2 1.1 7.8 27.8 Depreciation, amortization and impairments 165.1 175.0 173.1 169.6 Operating income 88.0 117.3 90.6 97.2 Net loss $ (100.8 ) $ (39.1 ) $ (59.3 ) $ (43.1 ) Basic and diluted net loss per share $ (1.14 ) $ (0.44 ) $ (0.66 ) $ (0.48 ) Weighted average number of shares used in per share calculations: Basic shares 88.2 89.1 89.6 89.7 Diluted shares 88.2 89.1 89.6 89.7 (1) Exclusive of D&A. (a) Includes a loss recorded of $29.7 million in connection with the refinancing that we completed in February 2017. (b) Includes a loss recorded of $8.4 million in connection with the |
Description of the Business a_4
Description of the Business and Summary of Significant Accounting Policies - Description of the Business (Details) - Segment | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Number of reportable segments | 4 | 4 | 3 |
Description of the Business a_5
Description of the Business and Summary of Significant Accounting Policies - Minimum Guarantees (Details) - Payment guarantee - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Guarantor Obligations [Line Items] | |||
Amortization related to licenses | $ 61.3 | $ 68.5 | $ 68.5 |
Accrued liabilities | 50.1 | 47.4 | |
Other long-term liabilities | 212.4 | 117.6 | |
Total minimum guarantee obligations | $ 262.5 | $ 165 | |
Weighted average remaining term (in years) | 4 years 2 months 18 days | 3 years | |
Expected future payments, 2019 | $ 50.1 | $ 47.4 | |
Expected future payments, 2020 | 45.7 | ||
Expected future payments, 2021 | 41.2 | ||
Expected future payments, 2022 | 42.2 | ||
Expected future payments, 2023 | 27.5 | ||
Expected future payments, After 2023 | $ 55.8 |
Description of the Business a_6
Description of the Business and Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Advertising costs | $ 102 | $ 82.6 | $ 71.3 |
Description of the Business a_7
Description of the Business and Summary of Significant Accounting Policies - New Accounting Guidance (Details) - Scenario, Forecast $ in Millions | Jan. 01, 2019USD ($) |
Minimum | Lease assets | |
Segment Reporting Information [Line Items] | |
Estimate of additional assets and liabilities with adoption of ASC 842 | $ 115 |
Minimum | Lease liabilities | |
Segment Reporting Information [Line Items] | |
Estimate of additional assets and liabilities with adoption of ASC 842 | 115 |
Maximum | Lease assets | |
Segment Reporting Information [Line Items] | |
Estimate of additional assets and liabilities with adoption of ASC 842 | 145 |
Maximum | Lease liabilities | |
Segment Reporting Information [Line Items] | |
Estimate of additional assets and liabilities with adoption of ASC 842 | $ 145 |
Business Segments - Additional
Business Segments - Additional Information (Details) - Segment | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | |||
Number of reportable segments | 4 | 4 | 3 |
Business Segments - Reportable
Business Segments - Reportable Segment (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Feb. 28, 2018 | Aug. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | $ 885.7 | $ 821 | $ 844.7 | $ 811.8 | $ 823 | $ 768.9 | $ 766.3 | $ 725.4 | $ 3,363.2 | $ 3,083.6 | $ 2,883.4 | |||
AEBITDA | 1,329.7 | 1,224.9 | 1,103.6 | |||||||||||
D&A | (162.6) | (166.3) | (172.7) | (188.1) | (169.6) | (173.1) | (175) | (165.1) | (689.7) | (682.8) | (738.7) | |||
Goodwill impairment | 0 | 0 | (69) | |||||||||||
Restructuring and other | 171 | (338.7) | (33.5) | (52.2) | (27.8) | $ (7.8) | $ (1.1) | $ (9.2) | (253.4) | (45.9) | (57) | |||
EBITDA from equity investments | (67.3) | (67.1) | (70.2) | |||||||||||
Earnings from equity investments | 24.9 | 26.7 | 13 | |||||||||||
Interest expense | (597.2) | (609.7) | (661.4) | |||||||||||
(Loss) gain on debt financing transactions | $ (93.2) | $ (8.4) | $ (29.7) | (93.2) | (38.1) | 25.2 | ||||||||
Gain on remeasurement of debt | 14 | $ (4) | $ 34.5 | $ (1.1) | 43.4 | 0 | 0 | |||||||
Other income (expense), net | 7.4 | (8.6) | 11.1 | |||||||||||
Stock-based compensation | (43.9) | (27.2) | (35.3) | |||||||||||
Net (loss) income before income taxes | (339.3) | (227.8) | (478.7) | |||||||||||
Assets | 7,717.8 | 7,725.3 | 7,717.8 | 7,725.3 | 7,087.4 | |||||||||
Capital expenditures for year ended | 390.8 | 293.7 | 272.9 | |||||||||||
Gaming | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 1,831.4 | 1,844.3 | 1,772.7 | |||||||||||
Lottery | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 846.3 | 811.5 | 777.9 | |||||||||||
Social | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 415.9 | 362 | 274.4 | |||||||||||
Digital | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 269.6 | 65.8 | 58.4 | |||||||||||
Operating Segments | Gaming | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 1,831.4 | 1,844.3 | 1,772.7 | |||||||||||
AEBITDA | 919.5 | 895.6 | 821.6 | |||||||||||
D&A | (493) | (520.8) | (585.2) | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | (7.4) | (7.7) | (14.6) | |||||||||||
Assets | 5,094.4 | 5,401.6 | 5,094.4 | 5,401.6 | 5,506.6 | |||||||||
Capital expenditures for year ended | 248.4 | 194.1 | 184.4 | |||||||||||
Operating Segments | Lottery | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 846.3 | 811.5 | 777.9 | |||||||||||
AEBITDA | 390.8 | 364.7 | 333.1 | |||||||||||
D&A | (58.6) | (50.1) | (66.5) | |||||||||||
Goodwill impairment | (69) | |||||||||||||
Restructuring and other | (1.5) | (5.9) | (8.7) | |||||||||||
Assets | 1,299.9 | 1,070.6 | 1,299.9 | 1,070.6 | 1,032 | |||||||||
Capital expenditures for year ended | 75.7 | 37.9 | 40.5 | |||||||||||
Operating Segments | Social | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 415.9 | 362 | 274.4 | |||||||||||
AEBITDA | 106.7 | 81.7 | 55.5 | |||||||||||
D&A | (17.4) | (17.7) | (9.1) | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | (29.1) | (2) | (0.5) | |||||||||||
Assets | 182.6 | 219.1 | 182.6 | 219.1 | 169.8 | |||||||||
Capital expenditures for year ended | 3.3 | 4.5 | 4.9 | |||||||||||
Operating Segments | Digital | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 269.6 | 65.8 | 58.4 | |||||||||||
AEBITDA | 54.1 | 16 | 11.4 | |||||||||||
D&A | (66.5) | (8.6) | (5.8) | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | (20.2) | (0.2) | (1.1) | |||||||||||
Assets | 883.1 | 61.2 | 883.1 | 61.2 | 36 | |||||||||
Capital expenditures for year ended | 28.3 | 3.9 | 4 | |||||||||||
Unallocated and Reconciling Items | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 0 | 0 | 0 | |||||||||||
AEBITDA | (141.4) | (133.1) | (118) | |||||||||||
D&A | (54.2) | (85.6) | (72.1) | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | (195.2) | (30.1) | (32.1) | |||||||||||
Assets | $ 257.8 | $ 972.8 | 257.8 | 972.8 | 343 | |||||||||
Capital expenditures for year ended | $ 35.1 | $ 53.3 | $ 39.1 |
Business Segments - Revenue and
Business Segments - Revenue and Long-Lived Assets by Geographic Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Geographic Segments | |||||||||||
Total revenue | $ 885.7 | $ 821 | $ 844.7 | $ 811.8 | $ 823 | $ 768.9 | $ 766.3 | $ 725.4 | $ 3,363.2 | $ 3,083.6 | $ 2,883.4 |
Property and equipment, net | 547 | 568.2 | 547 | 568.2 | |||||||
U.S. | |||||||||||
Geographic Segments | |||||||||||
Total revenue | 2,190.5 | 2,118.1 | 1,959 | ||||||||
Property and equipment, net | 334.5 | 390.1 | 334.5 | 390.1 | |||||||
Other | |||||||||||
Geographic Segments | |||||||||||
Total revenue | 1,172.7 | 965.5 | $ 924.4 | ||||||||
Property and equipment, net | $ 212.5 | $ 178.1 | $ 212.5 | $ 178.1 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenue by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 885.7 | $ 821 | $ 844.7 | $ 811.8 | $ 823 | $ 768.9 | $ 766.3 | $ 725.4 | $ 3,363.2 | $ 3,083.6 | $ 2,883.4 |
Gaming | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 1,831.4 | 1,844.3 | 1,772.7 | ||||||||
Lottery | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 846.3 | 811.5 | 777.9 | ||||||||
Social | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 415.9 | 362 | 274.4 | ||||||||
Digital | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 269.6 | 65.8 | 58.4 | ||||||||
Gaming operations | Gaming | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 631.9 | 696 | 725.3 | ||||||||
Gaming machine sales | Gaming | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 646.3 | 672.4 | 618.2 | ||||||||
Gaming systems | Gaming | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 320.6 | 274 | 240.8 | ||||||||
Table products | Gaming | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 232.6 | 201.9 | 188.4 | ||||||||
Instant products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 592.3 | 582.3 | 563.2 | ||||||||
Instant products | Lottery | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 592.5 | 588 | 573.7 | ||||||||
Lottery systems | Lottery | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 253.8 | 223.5 | 204.2 | ||||||||
Mobile | Social | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 322.9 | 259.6 | 187.1 | ||||||||
Web and other | Social | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 93 | 102.4 | 87.3 | ||||||||
Sports and platform | Digital | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 100.5 | 0 | 0 | ||||||||
Gaming and other | Digital | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 169.1 | $ 65.8 | $ 58.4 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | $ 885.7 | $ 821 | $ 844.7 | $ 811.8 | $ 823 | $ 768.9 | $ 766.3 | $ 725.4 | $ 3,363.2 | $ 3,083.6 | $ 2,883.4 | ||
Cost of revenues | 341.4 | $ 301.3 | $ 315.9 | $ 296.7 | 314.9 | $ 290.8 | $ 278.9 | $ 280 | 1,255.3 | 1,164.6 | 1,106.3 | ||
Rental income revenue | 265.2 | 275 | 294.3 | ||||||||||
Reduction to inventory | (215.6) | (243.1) | (215.6) | (243.1) | |||||||||
Total revenue recognized | 44.8 | ||||||||||||
Accounting Standards Update 2014-09 | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Increase in contract liabilities | $ 9.7 | ||||||||||||
Decrease in previously recorded deferred costs | 11.4 | ||||||||||||
Accounting Standards Update 2014-09 | Accumulated other comprehensive loss: | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Increase (decrease) to accumulated net loss | $ 10.9 | ||||||||||||
All other adoption impacts on revenue and operating income (less than) | 10 | ||||||||||||
Gaming | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | 1,831.4 | 1,844.3 | 1,772.7 | ||||||||||
Lottery | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | 846.3 | 811.5 | 777.9 | ||||||||||
Gaming operations | Gaming | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | 631.9 | 696 | 725.3 | ||||||||||
Gaming operations | Gaming | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | (22.3) | ||||||||||||
Cost of revenues | (23.2) | (29.8) | |||||||||||
Instant products | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | 592.3 | 582.3 | 563.2 | ||||||||||
Cost of revenues | [1] | 284.1 | 282.1 | 285.2 | |||||||||
Instant products | Lottery | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | 592.5 | 588 | $ 573.7 | ||||||||||
Instant products | Lottery | Accounting Standards Update 2014-09 | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Total revenue recognized | 103.1 | ||||||||||||
Instant products | Lottery | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
(Reduction) increase in revenue | 5 | ||||||||||||
Increase in contract assets | 64.3 | 52 | 64.3 | 52 | |||||||||
Reduction to inventory | $ 36.5 | 33 | $ 36.5 | 33 | |||||||||
Instant products | Lottery | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | Accumulated other comprehensive loss: | |||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||
Increase (decrease) to accumulated net loss | $ (19) | $ (19) | |||||||||||
[1] | Exclusive of D&A. |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Liabilities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Change In Contract Liabilities [Roll Forward] | |
Contract liability balance, beginning of period | $ 88.2 |
Liabilities recognized during the period | 53.7 |
Amounts recognized in revenue from beginning balance | (44.8) |
Contract liability balance,end of period | $ 97.1 |
Revenue Recognition - Opening a
Revenue Recognition - Opening and Closing Balances (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | |||
Receivables | $ 753.3 | $ 724.7 | |
Contract Assets | 100.2 | $ 66.4 | $ 61.2 |
Contract with Customer, Asset, Net | $ 113.7 |
Restructuring and other (Detail
Restructuring and other (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring and other | $ (171) | $ 338.7 | $ 33.5 | $ 52.2 | $ 27.8 | $ 7.8 | $ 1.1 | $ 9.2 | $ 253.4 | $ 45.9 | $ 57 |
Employee severance | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring and other | 37.2 | 9.8 | 36.2 | ||||||||
Acquisition-related costs | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring and other | 7.6 | 21.1 | 2.5 | ||||||||
Acquisition-related costs | NYX | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring and other | 7.7 | 15.1 | |||||||||
Contingent acquisition consideration | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring and other | 28.7 | 0 | 0 | ||||||||
Legal and related | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring and other | 152.5 | 0 | 0 | ||||||||
Restructuring, integration and other | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring and other | $ 27.4 | $ 15 | $ 18.3 |
Basic and Diluted Net Loss Pe_2
Basic and Diluted Net Loss Per Share (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2.1 | 2.6 | 2.9 |
Restricted Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2.6 | 3.8 | 4.9 |
Accounts Receivable and Notes_3
Accounts Receivable and Notes Receivable and Credit Quality of Receivables - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unbilled accounts receivable | $ 100.2 | $ 61.2 | $ 66.4 |
Accounts and notes receivable, net | 753.3 | 737.2 | |
Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts and notes receivable, net | $ 154.2 | $ 196.3 | |
Financing receivable, percentage greater than 90 days past due | 4.30% | 11.00% | |
Mexico | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts and notes receivable, net | $ 25.2 | ||
Proceeds from collection of accounts and notes receivable, net | 33.8 | ||
PERU | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts and notes receivable, net | 15.5 | ||
Proceeds from collection of accounts and notes receivable, net | 11.8 | ||
Argentina | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts and notes receivable, net | 18.5 | ||
Proceeds from collection of accounts and notes receivable, net | $ 34.2 | ||
Minimum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable, imputed interest rate | 3.00% | 3.00% | |
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable, imputed interest rate | 10.00% | 10.40% |
Accounts Receivable and Notes_4
Accounts Receivable and Notes Receivable and Credit Quality of Receivables - Components of Accounts and Notes Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current: | ||
Accounts receivable | $ 615.1 | $ 551.5 |
Notes receivable | 138.4 | 164.1 |
Allowance for doubtful accounts | (40.4) | (31.2) |
Current accounts and notes receivable, net | 713.1 | 684.4 |
Long-term: | ||
Accounts and notes receivable, net of allowance of $0.1 and $0.2 | 40.2 | 52.8 |
Total accounts and notes receivable, net | 753.3 | 737.2 |
Accounts and notes receivable allowance | $ 0.1 | $ 0.2 |
Accounts Receivable and Notes_5
Accounts Receivable and Notes Receivable and Credit Quality of Receivables - Components of Total Notes Receivable, Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2017 |
Notes receivable, net | ||||
Total accounts and notes receivable, net | $ 753.3 | $ 737.2 | ||
Notes Receivable | ||||
Notes receivable, net | ||||
Notes receivable | 178.6 | 217.1 | ||
Notes receivable allowance for doubtful accounts | (24.4) | $ (20.8) | (20.8) | $ (15) |
Total accounts and notes receivable, net | 154.2 | 196.3 | ||
Domestic | Notes Receivable | ||||
Notes receivable, net | ||||
Notes receivable | 55.1 | 93.5 | ||
Notes receivable allowance for doubtful accounts | (6.5) | (4) | ||
International | Notes Receivable | ||||
Notes receivable, net | ||||
Notes receivable | 123.5 | 123.6 | ||
Notes receivable allowance for doubtful accounts | (17.9) | (16.8) | ||
Balances over 90 days past due | Notes Receivable | ||||
Balances over 90 days past due | ||||
Notes receivable, balances over 90 days past due | 31 | 42.4 | ||
Notes receivable allowance for doubtful accounts, balances over 90 days past due | (24.4) | (20.8) | ||
Notes receivable, net, balances over 90 days past due | 6.6 | 21.6 | ||
Balances over 90 days past due | Domestic | Notes Receivable | ||||
Balances over 90 days past due | ||||
Notes receivable, balances over 90 days past due | 6.2 | 9.2 | ||
Notes receivable allowance for doubtful accounts, balances over 90 days past due | (6.5) | (4) | ||
Balances over 90 days past due | International | Notes Receivable | ||||
Balances over 90 days past due | ||||
Notes receivable, balances over 90 days past due | 24.8 | 33.2 | ||
Notes receivable allowance for doubtful accounts, balances over 90 days past due | $ (17.9) | $ (16.8) |
Accounts Receivable and Notes_6
Accounts Receivable and Notes Receivable and Credit Quality of Receivables - Allowance for Notes Receivable (Details) - Notes Receivable - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning allowance for notes receivable | $ (20.8) | |
Provision | (6.3) | $ (7.3) |
Charge-offs and recoveries | 2.7 | 1.5 |
Ending allowance for notes receivable | $ (24.4) | $ (20.8) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Parts and work-in-process | $ 130.5 | $ 128.7 |
Finished goods | 85.1 | 114.4 |
Total inventories | $ 215.6 | $ 243.1 |
Property and Equipment, net - P
Property and Equipment, net - Property and Equipment Estimated Lives (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Lottery and other machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Lottery and other machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 15 years |
Gaming equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 1 year |
Gaming equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Transportation equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Transportation equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 8 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 10 years |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 15 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 40 years |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation | $ (921.2) | $ (911.1) | |
Property and equipment, net | 547 | 568.2 | |
Depreciation expense | 212.5 | 269.5 | $ 323.1 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 15 | 35.7 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 128.2 | 183.6 | |
Gaming and lottery machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,041.3 | 962.2 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 27 | 33.2 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 17 | 27.7 | |
Other property and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 239.7 | $ 236.9 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Lottery machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized installation costs, net | $ 28,000,000 | $ 22,700,000 |
Gaming equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized installation costs, net | $ 0 | $ 0 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Millions | Jan. 05, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
NYX | ||||
Business Acquisition [Line Items] | ||||
Cash paid in acquisition | $ 665.8 | |||
Fair value of shares acquired | 91.9 | |||
Non-controlling equity interest held before acquisition | $ 90.4 | |||
Acquisition-related costs recorded | $ 7.7 | $ 15.1 | ||
Allocated purchase price adjustment | $ 8.1 | |||
Royalty rate | 0.50% | |||
Spicerack | ||||
Business Acquisition [Line Items] | ||||
Goodwill deductible for income tax purposes | $ 12.8 | |||
Minimum | ||||
Business Acquisition [Line Items] | ||||
Discount rate | 9.00% | |||
Royalty rate | 1.00% | |||
Minimum | NYX | ||||
Business Acquisition [Line Items] | ||||
Discount rate | 10.00% | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Discount rate | 20.00% | |||
Royalty rate | 16.00% | |||
Contingent acquisition consideration liabilities | $ 49.2 | |||
Maximum | NYX | ||||
Business Acquisition [Line Items] | ||||
Discount rate | 14.00% | |||
Business Combination | Revenue | ||||
Business Acquisition [Line Items] | ||||
Revenue and earnings associated with acquisitions (less than) | 5.00% | |||
Business Combination | Earnings | ||||
Business Acquisition [Line Items] | ||||
Revenue and earnings associated with acquisitions (less than) | 5.00% |
Acquisitions - Allocation of Pu
Acquisitions - Allocation of Purchase Price (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 05, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 3,279.9 | $ 2,956.1 | $ 2,888.4 | |
NYX | ||||
Business Acquisition [Line Items] | ||||
Cash, cash equivalents and restricted cash | $ 23.3 | |||
Accounts receivable and other current assets | 55.8 | |||
Property and equipment and other non-current assets | 22.1 | |||
Goodwill | 368.3 | |||
Intangible assets | 350 | |||
Total assets | 819.5 | |||
Current liabilities | 74.5 | |||
Deferred income taxes | 66.3 | |||
Assumed debt and other liabilities | 299.7 | |||
Total liabilities | 440.5 | |||
Total consideration transferred | 379 | |||
Receivables | 40.5 | |||
Contract assets | 12.9 | |||
Contract liabilities | $ 15.7 |
Acquisitions - Details of Intan
Acquisitions - Details of Intangible Assets that have been Identified (Details) - Level 3 - NYX $ in Millions | Jan. 05, 2018USD ($) |
Customer relationships | |
Business Acquisition [Line Items] | |
Fair Value | $ 214 |
Weighted Average Useful Life | 7 years |
Intellectual property | |
Business Acquisition [Line Items] | |
Fair Value | $ 126.5 |
Weighted Average Useful Life | 7 years |
Trade names | |
Business Acquisition [Line Items] | |
Fair Value | $ 9.5 |
Weighted Average Useful Life | 7 years |
Acquisitions - Unaudited Pro fo
Acquisitions - Unaudited Pro forma Financial Information (Details) - NYX - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Revenue since acquisition | $ 198 | |
Net loss since acquisition | 41.1 | |
Revenue | 3,363.2 | $ 3,265.2 |
Net loss | $ 344.7 | $ 307.7 |
Acquisitions - Aggregate Disclo
Acquisitions - Aggregate Disclosure Related to Business Acquisitions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||
Cash paid, net of cash acquired | $ 296.6 | $ 57.7 | $ 0 |
Contingent acquisition consideration | 44.6 | 7.5 | |
Excess purchase price allocated to goodwill | 3,279.9 | $ 2,956.1 | $ 2,888.4 |
Aggregate total 2018 | |||
Business Acquisition [Line Items] | |||
Total consideration | 46.2 | ||
Cash paid, net of cash acquired | 34.1 | ||
Contingent acquisition consideration | 9 | ||
Allocation of purchase price to intangible assets, net | $ 41.6 | ||
Weighted average useful life of acquired intangible assets | 9 years 4 months 18 days | ||
Excess purchase price allocated to goodwill | $ 10.8 | ||
Aggregate total 2017 | |||
Business Acquisition [Line Items] | |||
Total consideration | 66 | ||
Cash paid, net of cash acquired | 57.7 | ||
Contingent acquisition 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 18 days | ||
Excess purchase price allocated to goodwill | $ 12.8 | ||
Minimum | |||
Business Acquisition [Line Items] | |||
Discount rate | 9.00% | ||
Royalty rate | 1.00% | ||
Maximum | |||
Business Acquisition [Line Items] | |||
Discount rate | 20.00% | ||
Royalty rate | 16.00% |
Intangible Assets, net and Go_3
Intangible Assets, net and Goodwill - Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | $ 2,814.7 | $ 2,340.5 |
Amortizable intangible assets, accumulated amortization | (1,099.8) | (830.1) |
Amortizable intangible assets, net balance | 1,714.9 | 1,510.4 |
Non-amortizable intangible assets | ||
Total intangible assets, gross carrying amount | 2,911 | 2,436.8 |
Total intangible assets, accumulated amortization | (1,101.9) | (832.2) |
Total intangible assets, net balance | 1,809.1 | 1,604.6 |
Trade names | ||
Non-amortizable intangible assets | ||
Non-amortizable intangible assets, gross carrying amount | 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 amount | 1,083.9 | 881.4 |
Amortizable intangible assets, accumulated amortization | (298.7) | (214.8) |
Amortizable intangible assets, net balance | 785.2 | 666.6 |
Intellectual property | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 930.6 | 788.1 |
Amortizable intangible assets, accumulated amortization | (452.6) | (332.7) |
Amortizable intangible assets, net balance | 478 | 455.4 |
Licenses | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 546.2 | 419.5 |
Amortizable intangible assets, accumulated amortization | (253.5) | (206.9) |
Amortizable intangible assets, net balance | 292.7 | 212.6 |
Brand names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 123.4 | 125.7 |
Amortizable intangible assets, accumulated amortization | (58.9) | (46.5) |
Amortizable intangible assets, net balance | 64.5 | 79.2 |
Trade names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 107.3 | 98.7 |
Amortizable intangible assets, accumulated amortization | (22.5) | (14.7) |
Amortizable intangible assets, net balance | 84.8 | 84 |
Patents and other | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 23.3 | 27.1 |
Amortizable intangible assets, accumulated amortization | (13.6) | (14.5) |
Amortizable intangible assets, net balance | $ 9.7 | $ 12.6 |
Intangible Assets, net and Go_4
Intangible Assets, net and Goodwill - Intangible Asset Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 297.1 | $ 260 | $ 251.9 |
Amortization expense, 2018 | 284.5 | ||
Amortization expense, 2019 | 241.1 | ||
Amortization expense, 2020 | 223.6 | ||
Amortization expense, 2021 | 195.7 | ||
Amortization expense, 2022 | $ 189.3 |
Intangible Assets, net and Go_5
Intangible Assets, net and Goodwill - Goodwill (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)unit | Dec. 31, 2018USD ($)unit | Dec. 31, 2017USD ($) | |
Goodwill [Line Items] | |||
Number of reporting units | unit | 9 | 9 | |
Goodwill | |||
Balance at the beginning of the period | $ 2,956.1 | $ 2,956.1 | $ 2,888.4 |
Reporting unit reallocation adjustment | 0 | ||
Acquired goodwill | 379.1 | 14.6 | |
Foreign currency adjustments | (55.3) | 53.1 | |
Balance at the end of the period | 3,279.9 | 2,956.1 | |
Gaming | |||
Goodwill | |||
Balance at the beginning of the period | 2,475.5 | 2,475.5 | 2,428.6 |
Reporting unit reallocation adjustment | 0 | ||
Acquired goodwill | 0 | 0 | |
Foreign currency adjustments | (27) | 46.9 | |
Balance at the end of the period | 2,448.5 | 2,475.5 | |
Accumulated goodwill impairment charges | 935 | ||
Lottery | |||
Goodwill | |||
Balance at the beginning of the period | 356.2 | 356.2 | 350 |
Reporting unit reallocation adjustment | 0 | ||
Acquired goodwill | 0 | 0 | |
Foreign currency adjustments | (3.8) | 6.2 | |
Balance at the end of the period | 352.4 | 356.2 | |
Accumulated goodwill impairment charges | 136.6 | ||
Interactive | |||
Goodwill | |||
Balance at the beginning of the period | 124.4 | 124.4 | 109.8 |
Reporting unit reallocation adjustment | (124.4) | ||
Acquired goodwill | 0 | 14.6 | |
Foreign currency adjustments | 0 | 0 | |
Balance at the end of the period | 0 | 124.4 | |
Social | |||
Goodwill | |||
Balance at the beginning of the period | 0 | 0 | 0 |
Reporting unit reallocation adjustment | 116.9 | 116.9 | |
Acquired goodwill | 0 | 0 | |
Foreign currency adjustments | (1.8) | 0 | |
Balance at the end of the period | 115.1 | 0 | |
Digital | |||
Goodwill | |||
Balance at the beginning of the period | 0 | 0 | 0 |
Reporting unit reallocation adjustment | $ 7.5 | 7.5 | |
Acquired goodwill | 379.1 | 0 | |
Foreign currency adjustments | (22.7) | 0 | |
Balance at the end of the period | $ 363.9 | $ 0 |
Impairments and Assets Held F_2
Impairments and Assets Held For Sale (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($)unit | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)unit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Property, Plant and Equipment [Abstract] | |||||||||||
Number of reporting units | unit | 9 | 9 | |||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill impairment | $ 0 | $ 0 | $ 69,000,000 | ||||||||
Income tax benefit | (13,100,000) | (14,500,000) | 125,000,000 | ||||||||
Assets held for sale | $ 36,400,000 | $ 0 | 36,400,000 | 0 | |||||||
Depreciation and amortization | $ 162,600,000 | $ 166,300,000 | $ 172,700,000 | $ 188,100,000 | 169,600,000 | $ 173,100,000 | $ 175,000,000 | $ 165,100,000 | 689,700,000 | 682,800,000 | 738,700,000 |
Net cash proceeds from asset sales | 40,000,000 | 7,500,000 | 16,700,000 | ||||||||
Gain on sale of assets | $ 16,300,000 | (900,000) | $ 2,800,000 | ||||||||
Lottery systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill impairment | 69,000,000 | ||||||||||
Income tax benefit | 14,500,000 | ||||||||||
Goodwill, fair value | $ 22,900,000 | $ 22,900,000 | |||||||||
Revenue Growth Rate | Lottery systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Measurement inputs for valuation | 0.020 | 0.020 | |||||||||
Discount Rate | Lottery systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Measurement inputs for valuation | 0.080 | 0.080 | |||||||||
Held-for-sale | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | $ 19,000,000 |
Software, net - Additional Info
Software, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Internal use software | ||
Business Acquisition [Line Items] | ||
Capitalized computer software, additions | $ 108.5 | $ 75.3 |
Internal use software | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated economic life | 2 years | |
Internal use software | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated economic life | 10 years | |
External use software | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated economic life | 8 years | |
External use software | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated economic life | 10 years | |
Regulatory approval costs | Minimum | ||
Business Acquisition [Line Items] | ||
Estimated economic life | 2 years | |
Regulatory approval costs | Maximum | ||
Business Acquisition [Line Items] | ||
Estimated economic life | 4 years |
Software, net - Summary of Soft
Software, net - Summary of Software and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Research and Development [Abstract] | |||
Software | $ 1,101.6 | $ 1,003.2 | |
Accumulated amortization | (816.3) | (663.8) | |
Software, net | 285.3 | 339.4 | |
Capitalized computer software, amortization | $ 160.5 | $ 153.3 | $ 158.9 |
Equity Investments - GLB (Detai
Equity Investments - GLB (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
GLB | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment impairment | $ 11.3 |
Equity Investments - Schedules
Equity Investments - Schedules of Equity Method Investments (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2010 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | $ 298.4 | $ 253.9 | ||
Earnings from equity investments | 24.9 | 26.7 | $ 13 | |
Distributed earnings from equity investments | 62.5 | 67.3 | 51.7 | |
Revenue from the sale of instant tickets to equity method investment | 69.9 | 95 | 93.7 | |
Equity Method Investments, Excluding Fair Value Accounting Method | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 298.4 | 163.5 | ||
Earnings from equity investments | 24.9 | 26.7 | 13 | |
Distributed earnings from equity investments | 62.5 | 67.3 | 51.7 | |
LNS | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue from the sale of instant tickets to equity method investment | 40 | 44.9 | 45.3 | |
LNS | Equity Method Investments, Excluding Fair Value Accounting Method | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 224.1 | 75.1 | ||
Earnings from equity investments | 16.4 | 14.3 | 14 | |
Distributed earnings from equity investments | 37.3 | 40.4 | 34.3 | |
Northstar IL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue from the sale of instant tickets to equity method investment | 0 | 22.8 | 22.6 | |
Northstar IL | Equity Method Investments, Excluding Fair Value Accounting Method | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 0 | 0 | ||
Earnings from equity investments | (0.6) | 2.8 | (0.4) | |
Distributed earnings from equity investments | 0 | 0 | 0 | |
Northstar NJ and NJ Supply Co | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue from the sale of instant tickets to equity method investment | 23.3 | 20.6 | 20.9 | |
Northstar NJ and NJ Supply Co | Equity Method Investments, Excluding Fair Value Accounting Method | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 25.5 | 21.2 | ||
Earnings from equity investments | 3.3 | 0.9 | 1 | |
Distributed earnings from equity investments | 0 | 4.6 | 4.8 | |
GLB and CSG | Equity Method Investments, Excluding Fair Value Accounting Method | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 23.1 | 35.3 | ||
Earnings from equity investments | 0.6 | (0.1) | (8) | |
Distributed earnings from equity investments | 10.8 | 5 | 1.7 | |
International Terminal Leasing | Equity Method Investments, Excluding Fair Value Accounting Method | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 3.8 | 8.1 | ||
Earnings from equity investments | 0.1 | 0.8 | 0 | |
Distributed earnings from equity investments | 4.3 | 5.6 | 5.9 | |
Other | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue from the sale of instant tickets to equity method investment | 6.6 | 6.7 | 4.9 | |
Other | Equity Method Investments, Excluding Fair Value Accounting Method | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 21.9 | 23.8 | ||
Earnings from equity investments | 5.1 | 8 | 6.4 | |
Distributed earnings from equity investments | 10.1 | 11.7 | 5 | |
NYX | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investments | 0 | 90.4 | ||
Earnings from equity investments | 0 | 0 | 0 | |
Distributed earnings from equity investments | $ 0 | $ 0 | $ 0 | |
Lottery | LNS | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Agreement term | 9 years | |||
Equity interest (as a percent) | 20.00% | |||
Lottery | Northstar IL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest (as a percent) | 20.00% | |||
Lottery | Northstar NJ | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest (as a percent) | 17.69% | |||
Lottery | Northstar SupplyCo New Jersey, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest (as a percent) | 30.00% |
Equity Investments - LNS (Detai
Equity Investments - LNS (Details) - LNS € in Millions, $ in Millions | Dec. 04, 2017EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) |
Schedule of Equity Method Investments [Line Items] | |||
Contract extension period | 9 years | ||
Upfront fees associated with the new concession | € 800 | ||
Concession upfront fees, installment one | € 50 | ||
Concession upfront fees, installment two | 300 | ||
Concession upfront fees, installment three | 450 | ||
Prorated | |||
Schedule of Equity Method Investments [Line Items] | |||
Concession upfront fees, installment one | $ 11.9 | 10 | |
Concession upfront fees, installment two | 74.3 | 60 | |
Concession upfront fees, installment three | 104.2 | € 90 | |
Accounts receivable from equity method investment | $ | $ 11.3 |
Equity Investments - Northstar
Equity Investments - Northstar Illinois (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Northstar IL | |
Schedule of Equity Method Investments [Line Items] | |
Prior written notice period | 30 days |
Equity Investments - Northsta_2
Equity Investments - Northstar New Jersey (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||
Shortfall payment | $ 20 | |
Northstar NJ | ||
Schedule of Equity Method Investments [Line Items] | ||
Incentive compensation cap, percentage of net income | 3.00% | |
Investee payment to third party cap, percentage of net income | 2.00% |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities, Current [Abstract] | ||
Compensation and benefits | $ 119.7 | $ 148.2 |
Contract liability | 73.4 | 42.7 |
Accrued interest | 64.2 | 116.5 |
Customer advances and licenses | 42.5 | 55 |
Taxes, other than income | 26.7 | 27.7 |
Contingent acquisition consideration liabilities | 22.1 | 0 |
Legal accruals | 7 | 14.9 |
Other | 121.6 | 104.1 |
Total Accrued Liabilities | $ 477.2 | $ 509.1 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum lease payments required under leasing arrangements | |||
Future minimum lease payments, 2019 | $ 33.4 | ||
Future minimum lease payments, 2020 | 27.2 | ||
Future minimum lease payments, 2021 | 22.8 | ||
Future minimum lease payments, 2022 | 17.9 | ||
Future minimum lease payments, 2023 | 14.4 | ||
Future minimum lease payments, Thereafter | 29.3 | ||
Rental expense under operating leases | $ 39.2 | $ 32.2 | $ 32.7 |
Long-Term and Other Debt - Outs
Long-Term and Other Debt - Outstanding Debt (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 28, 2018USD ($) | Feb. 14, 2018USD ($) | Feb. 14, 2018EUR (€) | Oct. 17, 2017USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Face Value | $ 9,164,400,000 | $ 9,164,400,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (127,500,000) | (127,500,000) | |||||||||
Total long-term debt outstanding | 9,036,900,000 | 9,036,900,000 | $ 8,776,600,000 | ||||||||
Less: current portion of long-term debt | (45,000,000) | (45,000,000) | (40,300,000) | ||||||||
Long-term debt, excluding current portion | 8,991,900,000 | 8,991,900,000 | 8,736,300,000 | ||||||||
Debt instrument, fair value | 8,773,300,000 | 8,773,300,000 | |||||||||
Gain on remeasurement of debt | 14,000,000 | $ (4,000,000) | $ 34,500,000 | $ (1,100,000) | 43,400,000 | 0 | $ 0 | ||||
Senior Secured Term Loan B-5, maturing 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt amount | $ 900,000,000 | ||||||||||
Senior Secured Notes, maturing 2025 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 2.946% | ||||||||||
Senior Secured Euro Notes, maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 3.375% | 3.375% | |||||||||
Debt amount | € | € 325,000,000 | ||||||||||
Senior Unsecured Euro Notes, Maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 5.50% | 5.50% | |||||||||
Debt amount | € | € 250,000,000 | ||||||||||
Senior Secured and Unsecured Notes, maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Reduction in foreign currency exchange rates | 54,400,000 | ||||||||||
Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face Value | $ 4,108,000,000 | $ 4,108,000,000 | |||||||||
Senior Notes | Senior Secured Notes, maturing 2022 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 7.00% | 7.00% | |||||||||
Face Value | $ 0 | $ 0 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | 0 | 0 | |||||||||
Total long-term debt outstanding | $ 0 | $ 0 | 2,130,700,000 | ||||||||
Senior Notes | Senior Secured Notes, maturing 2025 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 5.00% | 5.00% | 2.946% | ||||||||
Face Value | $ 1,250,000,000 | $ 1,250,000,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (17,500,000) | (17,500,000) | |||||||||
Total long-term debt outstanding | $ 1,232,500,000 | $ 1,232,500,000 | 343,700,000 | ||||||||
Debt amount | $ 460,000,000 | $ 900,000,000 | $ 350,000,000 | ||||||||
Senior Notes | Senior Secured Euro Notes, maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 3.375% | 3.375% | |||||||||
Face Value | $ 371,900,000 | $ 371,900,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (5,400,000) | (5,400,000) | |||||||||
Total long-term debt outstanding | $ 366,500,000 | $ 366,500,000 | 0 | ||||||||
Debt amount | € | 325,000,000 | ||||||||||
Senior Notes | Senior Unsecured Notes, maturing 2022 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 10.00% | 10.00% | |||||||||
Face Value | $ 2,200,000,000 | $ 2,200,000,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (23,800,000) | (23,800,000) | |||||||||
Total long-term debt outstanding | $ 2,176,200,000 | $ 2,176,200,000 | 2,170,100,000 | ||||||||
Senior Notes | Senior Unsecured Euro Notes, Maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 5.50% | 5.50% | |||||||||
Face Value | $ 286,100,000 | $ 286,100,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (4,200,000) | (4,200,000) | |||||||||
Total long-term debt outstanding | 281,900,000 | 281,900,000 | 0 | ||||||||
Debt amount | € | € 250,000,000 | ||||||||||
Senior Subordinated Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face Value | $ 584,100,000 | $ 584,100,000 | |||||||||
Senior Subordinated Notes | Senior Subordinated Notes, maturing 2020 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 6.25% | 6.25% | |||||||||
Face Value | $ 243,500,000 | $ 243,500,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (1,000,000) | (1,000,000) | |||||||||
Total long-term debt outstanding | $ 242,500,000 | $ 242,500,000 | 241,800,000 | ||||||||
Senior Subordinated Notes | Senior Subordinated Notes, maturing 2021 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 6.625% | 6.625% | |||||||||
Face Value | $ 340,600,000 | $ 340,600,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (3,300,000) | (3,300,000) | |||||||||
Total long-term debt outstanding | 337,300,000 | 337,300,000 | 336,000,000 | ||||||||
Capital Lease Obligations | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face Value | $ 4,000,000 | $ 4,000,000 | |||||||||
Capital Lease Obligations | Capital lease obligations, 3.9% as of December 31, 2018 payable monthly through 2020 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, interest rate, stated percentage | 3.90% | 3.90% | |||||||||
Face Value | $ 4,000,000 | $ 4,000,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | 0 | 0 | |||||||||
Total long-term debt outstanding | 4,000,000 | 4,000,000 | 10,700,000 | ||||||||
Revolver | Secured Debt | Senior Secured Revolver, maturing 2018 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face Value | 0 | 0 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | 0 | 0 | |||||||||
Total long-term debt outstanding | 0 | 0 | 100,500,000 | ||||||||
Revolver | Secured Debt | Senior Secured Revolver, maturing 2020 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face Value | 325,000,000 | 325,000,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | 0 | 0 | |||||||||
Total long-term debt outstanding | 325,000,000 | 325,000,000 | 249,500,000 | ||||||||
Term Loan | Secured Debt | Senior Secured Term Loan B-4, maturing 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face Value | 0 | 0 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | 0 | 0 | |||||||||
Total long-term debt outstanding | 0 | 0 | 3,193,600,000 | ||||||||
Term Loan | Secured Debt | Senior Secured Term Loan B-5, maturing 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face Value | 4,143,300,000 | 4,143,300,000 | |||||||||
Unamortized debt discount/premium and deferred financing costs, net | (72,300,000) | (72,300,000) | |||||||||
Total long-term debt outstanding | $ 4,071,000,000 | $ 4,071,000,000 | $ 0 |
Long-Term and Other Debt - Matu
Long-Term and Other Debt - Maturities of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total long-term debt outstanding | $ 9,164.4 | |
2,019 | 45 | |
2,020 | 610.9 | |
2,021 | 382.3 | |
2,022 | 2,241.7 | |
2,023 | 41.7 | |
After 2,023 | 5,842.8 | |
Unamortized deferred financing costs and discount/premium | (127.5) | |
Total long-term debt outstanding | 9,036.9 | $ 8,776.6 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Total long-term debt outstanding | 4,108 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 0 | |
2,022 | 2,200 | |
2,023 | 0 | |
After 2,023 | 1,908 | |
Senior Subordinated Notes | ||
Debt Instrument [Line Items] | ||
Total long-term debt outstanding | 584.1 | |
2,019 | 0 | |
2,020 | 243.5 | |
2,021 | 340.6 | |
2,022 | 0 | |
2,023 | 0 | |
After 2,023 | 0 | |
Capital Lease Obligations | ||
Debt Instrument [Line Items] | ||
Total long-term debt outstanding | 4 | |
2,019 | 3.3 | |
2,020 | 0.7 | |
2,021 | 0 | |
2,022 | 0 | |
2,023 | 0 | |
After 2,023 | 0 | |
Revolver and Term Loans | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total long-term debt outstanding | 4,468.3 | |
2,019 | 41.7 | |
2,020 | 366.7 | |
2,021 | 41.7 | |
2,022 | 41.7 | |
2,023 | 41.7 | |
After 2,023 | $ 3,934.8 |
Long-Term and Other Debt - Cred
Long-Term and Other Debt - Credit Facilities (Details) | Feb. 14, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 12, 2018USD ($) | Oct. 18, 2018USD ($) | Feb. 28, 2018USD ($) | Feb. 14, 2018EUR (€) | Dec. 31, 2017USD ($) | Oct. 17, 2017USD ($) | Aug. 14, 2017 |
The Credit Agreement | Revolver | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum revolving commitments | $ 596,200,000 | ||||||||
Total revolving facility after reduction | 421,700,000 | ||||||||
The Credit Agreement | Revolver | Letter of credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum revolving commitments | 350,000,000 | ||||||||
The Credit Agreement | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum revolving commitments | $ 3,300,000,000 | ||||||||
Senior Secured Notes, maturing 2025 | |||||||||
Debt Instrument [Line Items] | |||||||||
Additional principal borrowings | $ 900,000,000 | ||||||||
Debt Instrument, interest rate, stated percentage | 2.946% | ||||||||
Senior Secured Notes, maturing 2025 | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt amount | $ 900,000,000 | $ 460,000,000 | $ 350,000,000 | ||||||
Debt Instrument, interest rate, stated percentage | 5.00% | 2.946% | |||||||
Senior Secured Euro Notes, maturing 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt amount | € | € 325,000,000 | ||||||||
Debt Instrument, interest rate, stated percentage | 3.375% | 3.375% | |||||||
Senior Secured Euro Notes, maturing 2026 | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt amount | € | € 325,000,000 | ||||||||
Debt Instrument, interest rate, stated percentage | 3.375% | ||||||||
Senior Unsecured Euro Notes, maturing 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt amount | € | € 250,000,000 | ||||||||
Debt Instrument, interest rate, stated percentage | 5.50% | 5.50% | |||||||
Senior Unsecured Euro Notes, maturing 2026 | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt amount | € | € 250,000,000 | ||||||||
Debt Instrument, interest rate, stated percentage | 5.50% | ||||||||
Senior Secured Term Loan B-5, maturing 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt amount | $ 900,000,000 | ||||||||
Senior Secured Term Loan B-5, maturing 2024 | Eurodollar | |||||||||
Debt Instrument [Line Items] | |||||||||
Margin spread on debt | 2.75% | ||||||||
Senior Secured Term Loan B-5, maturing 2024 | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Margin spread on debt | 1.75% | ||||||||
Senior Secured Term Loan B-4, maturing 2024 | Eurodollar | |||||||||
Debt Instrument [Line Items] | |||||||||
Margin spread on debt | 3.25% | ||||||||
Senior Secured Term Loan B-4, maturing 2024 | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Margin spread on debt | 2.25% | ||||||||
Senior Secured Term Loan B-4, maturing 2024 | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization percentage | 1.00% | ||||||||
Senior Secured Credit Facility, Lender Joinder Agreement, maturing 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum revolving commitments | $ 620,200,000 | ||||||||
Additional borrowing capacity | 24,000,000 | ||||||||
Step-down borrowing capacity | $ 445,700,000 | ||||||||
Senior Secured Credit Facility, Lender Joinder Agreement, maturing 2020 | Revolver | |||||||||
Debt Instrument [Line Items] | |||||||||
Additional borrowing capacity | $ 50,000,000 | ||||||||
Senior Secured Credit Facility, Two Lender Joinder Agreements, maturing 2020 | Revolver | |||||||||
Debt Instrument [Line Items] | |||||||||
Additional borrowing capacity | $ 125,000,000 | ||||||||
Senior Secured Revolver, maturing 2018 | Revolver | |||||||||
Debt Instrument [Line Items] | |||||||||
Unused capacity, commitment fee percentage | 0.50% | ||||||||
Unused capacity, commitment fee, step-down percentage | 0.375% | ||||||||
Senior Secured Credit Facilities | Direct and Indirect Wholly Owned Domestic Subsidiaries | |||||||||
Debt Instrument [Line Items] | |||||||||
Collateral as a percentage of capital | 100.00% | ||||||||
Senior Secured Credit Facilities | Foreign Subsidiaries | |||||||||
Debt Instrument [Line Items] | |||||||||
Collateral as a percentage of capital | 65.00% | ||||||||
Senior Secured Credit Facilities | Revolver | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum revolving commitments | $ 620,700,000 |
Long-Term and Other Debt - Note
Long-Term and Other Debt - Notes (Details) | Feb. 14, 2018USD ($) | Oct. 17, 2017USD ($) | Feb. 28, 2018USD ($) | Aug. 31, 2017USD ($) | Feb. 28, 2017USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 14, 2018EUR (€) | Jun. 30, 2016USD ($) |
Debt Instrument [Line Items] | |||||||||||
Repurchase of notes | $ 2,210,300,000 | $ 1,693,400,000 | $ 39,900,000 | ||||||||
Gain on early extinguishment of debt | $ (93,200,000) | $ (8,400,000) | $ (29,700,000) | $ (93,200,000) | $ (38,100,000) | $ 25,200,000 | |||||
Senior Secured Euro Notes, maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt amount | € | € 325,000,000 | ||||||||||
Senior Unsecured Euro Notes, maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt amount | € | 250,000,000 | ||||||||||
Senior Subordinated Notes, maturing 2020 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt repurchased and cancelled | $ 56,500,000 | ||||||||||
Repurchase of notes | $ 34,200,000 | ||||||||||
Senior Subordinated Notes, maturing 2021 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt repurchased and cancelled | $ 9,400,000 | ||||||||||
Repurchase of notes | 5,700,000 | ||||||||||
Gain on early extinguishment of debt | 25,200,000 | ||||||||||
Write-off of unamortized debt costs | $ 800,000 | ||||||||||
Senior Notes | Senior Secured Notes, maturing 2025 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt amount | $ 900,000,000 | $ 350,000,000 | $ 460,000,000 | ||||||||
Redemption price percentage | 100.00% | ||||||||||
Senior Notes | Senior Secured Euro Notes, maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt amount | € | 325,000,000 | ||||||||||
Redemption price percentage | 100.00% | ||||||||||
Senior Notes | Senior Unsecured Euro Notes, maturing 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt amount | € | € 250,000,000 | ||||||||||
Redemption price percentage | 100.00% |
Long-Term and Other Debt - Debt
Long-Term and Other Debt - Debt Issuance Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Gross financing costs | $ 42.2 | |
Financing costs | 34.3 | $ 25.8 |
Debt issuance costs expensed | $ 7.9 |
Long-Term and Other Debt - Gain
Long-Term and Other Debt - Gain (Loss) on Debt Financing Transactions (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2018 | Aug. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||||||
Repurchase and cancellation of principal balance at premium (discount) | $ 110.3 | $ 0 | $ (26) | |||
Unamortized debt (premium) discount and deferred financing costs. net | (29.8) | 26.4 | 0.8 | |||
Third party debt issuance fees | 12.7 | 11.7 | 0 | |||
Loss (gain) on debt financing transactions | $ 93.2 | $ 8.4 | $ 29.7 | $ 93.2 | $ 38.1 | $ (25.2) |
Long-Term and Other Debt - Term
Long-Term and Other Debt - Terms of Outstanding Debt (Details) | 1 Months Ended | 3 Months Ended |
Feb. 28, 2017 | Dec. 31, 2018 | |
Debt Instrument, Redemption, Period One | ||
Debt Instrument [Line Items] | ||
First lien leverage ratio, period one maximum | 5.5 | |
Debt Instrument, Redemption, Period Two | ||
Debt Instrument [Line Items] | ||
First lien leverage ratio, period one maximum | 5 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Feb. 14, 2018 | Dec. 31, 2017 | |
Derivatives Fair Value | ||||||
Contingent acquisition consideration liabilities | $ 44,600,000 | $ 7,500,000 | ||||
Cash Flow Hedging | Designated as Hedging Instrument | Interest rate swap | ||||||
Derivatives Fair Value | ||||||
Derivative, average fixed interest rate | 2.4418% | |||||
Notional amounts of the forward contracts | $ 800,000,000 | |||||
Senior Secured Notes, maturing 2025 | ||||||
Derivatives Fair Value | ||||||
Debt Instrument, interest rate, stated percentage | 2.946% | |||||
Senior Secured Notes, maturing 2025 | Senior Notes | ||||||
Derivatives Fair Value | ||||||
Debt Instrument, interest rate, stated percentage | 5.00% | 2.946% | ||||
Senior Secured Notes, maturing 2025 | Senior Notes | Cross-currency interest rate swaps | ||||||
Derivatives Fair Value | ||||||
Debt converted in interest rate swap | $ 460,000,000 | |||||
Senior Secured Euro Notes, maturing 2026 | ||||||
Derivatives Fair Value | ||||||
Debt Instrument, interest rate, stated percentage | 3.375% | |||||
Senior Secured Euro Notes, maturing 2026 | Net Investment Hedging | Designated as Hedging Instrument | ||||||
Derivatives Fair Value | ||||||
Net investment non-derivative hedge | $ 155,000,000 | |||||
Senior Secured Euro Notes, maturing 2026 | Senior Notes | ||||||
Derivatives Fair Value | ||||||
Debt Instrument, interest rate, stated percentage | 3.375% | |||||
Earnings Based Metrics | ||||||
Derivatives Fair Value | ||||||
Maximum contingent consideration payout | $ 49,200,000 | |||||
Level 3 | Earnings Based Metrics | ||||||
Derivatives Fair Value | ||||||
Increases to calculated fair value of contingent acquisition consideration | 2,300,000 | $ 8,400,000 | $ 18,000,000 | |||
Accrued Liabilities | ||||||
Derivatives Fair Value | ||||||
Contingent acquisition consideration liabilities | $ 22,100,000 |
Fair Value Measurements - Gains
Fair Value Measurements - Gains (Losses) on Interest Rate Swaps (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative financial instruments unrealized (loss) gain, net of tax | $ (0.1) | $ 4.2 | $ 3 |
Interest rate swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative financial instruments unrealized (loss) gain, net of tax | 0.1 | (4.2) | (3) |
Interest expense recorded related to interest rate swap contracts | $ 2.6 | $ 7 | $ 8.2 |
Fair Value Measurements - Effec
Fair Value Measurements - Effect of Interest Rate Swap Contracts Designated as Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |||
Total amounts of expense line item presented in the statements of operations and comprehensive loss in which the effects of cash flow hedges are recorded | $ (597.2) | $ (609.7) | $ (661.4) |
Hedged item | (16.6) | ||
Derivative designated as hedging instrument | $ 14 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Gains (losses) recorded in accumulated other comprehensive loss, net of tax | $ 14 | ||
Other assets/(accrued liabilities) | Interest rate swap | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative fair value | 0.2 | $ (0.2) | |
Gains (losses) recorded in accumulated other comprehensive loss, net of tax | 0.2 | (0.2) | $ (6.9) |
Other assets | Cross-currency interest rate swaps | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative fair value | 18 | $ 0 | |
Gains (losses) recorded in accumulated other comprehensive loss, net of tax | $ 18 |
Stockholders' Deficit - Changes
Stockholders' Deficit - Changes in Common Stock (Details) - shares shares in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares outstanding as of beginning of period (in shares) | 89.9 | [1] | 88 | |
Shares issued as part of equity-based compensation plans and the ESPP, net of shares surrendered (in shares) | 2 | 1.9 | ||
Shares outstanding as of end of period (in shares) | [1] | 91.9 | 89.9 | |
[1] | Following the consummation of the reincorporation merger on January 10, 2018, each authorized, issued and outstanding share of Class A common stock of SGC, par value $0.01 per share, automatically converted into one share of common stock of the surviving corporation, par value $0.001 per share. The change in par value had no impact on total number of authorized, issued and outstanding shares. |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 19, 2017 | Jan. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for awards under incentive compensation plan (in shares) | 2,000,000 | ||||
Maximum employee subscription rate | 15.00% | ||||
Discount from market price | 15.00% | ||||
Shares issued | 83,000 | 54,000 | |||
Average price of shares issues (in usd per share) | $ 22.79 | $ 30.63 | |||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period from first anniversary of grant | 4 years | ||||
Award expiration period | 10 years | ||||
Stock-based compensation expense recognized | $ 12.2 | $ 3.7 | $ 6.4 | ||
Stock options granted (in shares) | 400,000 | ||||
Grants, weighted average grant date fair value (in usd per share) | $ 42.74 | ||||
Fair value of options granted | $ 9.1 | ||||
Unrecognized stock-based compensation expense relating to unvested awards that will be amortized | $ 6.7 | ||||
Unvested stock options (in shares) | 2,100,000 | ||||
Weighted-average period of amortization | 2 years | ||||
Average remaining contract term | 5 years 9 months | ||||
Options exercisable at end of period (in usd per share) | $ 18.23 | ||||
Cash received from exercise of stock options | $ 7.9 | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period from first anniversary of grant | 4 years | ||||
Stock-based compensation expense recognized | 31.5 | $ 23 | $ 28.8 | ||
Unrecognized stock-based compensation expense relating to unvested awards that will be amortized | $ 47.8 | ||||
Weighted-average period of amortization | 2 years | ||||
Rights Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for issuance (in shares) | 20,000 | ||||
2003 Incentive Compensation Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for awards under incentive compensation plan (in shares) | 19,400,000 | ||||
Shares available for grant (in shares) | 3,100,000 | ||||
Preexisting Incentive Compensation Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for issuance (less than) | 100,000 | ||||
Series A Junior Participating Preferred Stock | Amended and Restated Rights Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Preferred par value (in usd per share) | $ 0.001 | ||||
Shares holders are entitled to (in shares) | 0.0001 | ||||
Exercise price of rights (in usd per share) | $ 109 | ||||
Preferred shares outstanding (in shares) | 0 | ||||
Preferred Share Purchase Right | Series A Junior Participating Preferred Stock | Amended and Restated Rights Agreement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Preferred dividend (in shares) | 1 | ||||
Preferred shares issued on exercise (in shares) | 0 |
Stockholders' Deficit - Restric
Stockholders' Deficit - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Restricted Stock Units (in shares) [Roll Forward] | |||
Unvested units outstanding at the beginning of the period (in shares) | 3.9 | ||
Number of RSUs granted (in shares) | 1.1 | ||
Number of RSUs vested (in shares) | (2.1) | ||
Number of RSUs cancelled (in shares) | (0.3) | ||
Unvested units outstanding at the end of the period (in shares) | 2.6 | 3.9 | |
Weighted Average Grant Date Fair Value (in dollars per share) [Roll Forward] | |||
Weighted average grant date fair value of unvested units outstanding at the beginning of the period (in usd per share) | $ 13.73 | ||
Fair value of RSUs granted (in usd per share) | 47.17 | $ 22.55 | |
Fair value of RSUs vested (in usd per share) | 15.45 | ||
Fair value of RSUs cancelled (in usd per share) | 22.02 | ||
Weighted average grant date fair value of unvested units outstanding at the end of the period (in usd per share) | $ 25.37 | $ 13.73 | |
Stock-based compensation expense recognized | $ 31.5 | $ 23 | $ 28.8 |
Unrecognized stock-based compensation expense relating to unvested awards that will be amortized | $ 47.8 | ||
Weighted-average period of amortization | 2 years | ||
Fair value at vesting date | $ 88 | $ 47.1 | $ 24.2 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)plan | Dec. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||
Number of pension plans | plan | 2 | |
Estimated contributions in the next fiscal year | $ 3.6 | |
Defined Benefit Plan, Accumulated Benefit Obligation | 125.1 | $ 134 |
Underfunded status of Pension Plans | $ 18.2 | $ 18.3 |
U.K. Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Maximum increase in pensionable earnings | 2.00% | |
Funded percentage (less than) | 100.00% | |
U.K. Plan | Global return fund | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 23.00% | |
U.K. Plan | Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 6.90% | |
U.K. Plan | Liability Driven Investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 19.00% | |
U.K. Plan | Corporate bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 16.00% | |
U.K. Plan | U.K | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 4.90% | |
U.K. Plan | Other Than United Kingdom | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 30.00% | |
Canadian Plan | Corporate bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 35.00% | |
Canadian Plan | Canada | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 22.00% | |
Canadian Plan | Other Than Canada | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation in debt securities | 43.00% |
Employee Benefit Plans - Funded
Employee Benefit Plans - Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 133.8 | $ 121 | |
Service cost | 2.5 | 2.4 | $ 2.2 |
Interest cost | 3.8 | 4.2 | 4.1 |
Participant contributions | 0.9 | 1 | |
Actuarial (gain) loss | (6.6) | 1.2 | |
Benefits paid | (3.8) | (6) | |
Other, principally foreign exchange | (5.5) | 10 | |
Benefit obligation at end of year | 133.8 | 121 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 115.5 | 99.3 | |
Actual (loss) gain on plan assets | (4.1) | 10.4 | |
Employer contributions | 3.2 | 3.1 | |
Participant contributions | 0.9 | 1 | |
Benefits paid | (3.8) | (6) | |
Other, principally foreign exchange | (4.8) | 7.7 | |
Fair value of assets at end of year | 106.9 | 115.5 | $ 99.3 |
Amounts recognized in the consolidated balance sheets: | |||
Funded status (current) | 0 | 0 | |
Funded status (non-current) | (18.2) | (18.3) | |
Accumulated other comprehensive loss: | |||
Unrecognized actuarial loss | 24.7 | 20.6 | |
Unrecognized prior service cost | 0.5 | 0.5 | |
Deferred taxes | (4.7) | (4.7) | |
Net amount recognized | 2.3 | (1.9) | |
Defined Benefit Plan, Accumulated Benefit Obligation | $ 125.1 | $ 134 |
Employee Benefit Plans - Net Pe
Employee Benefit Plans - Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Service cost | $ 2.5 | $ 2.4 | $ 2.2 |
Interest cost | 3.8 | 4.2 | 4.1 |
Expected return on plan assets | (5.4) | (5.9) | (5.8) |
Amortization of actuarial losses | 1 | 1.4 | 0.3 |
Net periodic cost | $ 1.9 | $ 2.1 | $ 0.8 |
Employee Benefit Plans - Amount
Employee Benefit Plans - Amounts in Accumulated Other Comprehensive (Loss) Income (Details) $ in Millions | Dec. 31, 2018USD ($) |
Retirement Benefits [Abstract] | |
Unrecognized loss | $ 1.8 |
Unrecognized prior service cost | (0.5) |
Net amount expected to be recognized | $ 1.3 |
Employee Benefit Plans - Fair V
Employee Benefit Plans - Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | $ 106.9 | $ 115.5 | $ 99.3 |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 30.9 | 34.2 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 71.8 | 77.1 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 4.2 | 4.2 | $ 10.9 |
Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 51.5 | 56.1 | |
Equity securities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 29.9 | 31.4 | |
Equity securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 21.6 | 24.7 | |
Global return fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 13.8 | 14.6 | |
Global return fund | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 13.8 | 14.6 | |
Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 14.5 | 13.9 | |
Corporate bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 14.5 | 13.9 | |
Government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 10.6 | 10.6 | |
Government bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 10.6 | 10.6 | |
Real estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 4.2 | 4.2 | |
Real estate | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 0 | ||
Real estate | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 4.2 | 4.2 | |
LDI (Liability Driven Investment) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 11.3 | 13.3 | |
LDI (Liability Driven Investment) | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 11.3 | 13.3 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | 1 | 2.8 | |
Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension assets | $ 1 | $ 2.8 |
Employee Benefit Plans - Change
Employee Benefit Plans - Change in Level 3 Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Change in fair value of the pension assets valued using significant unobservable inputs (Level 3) | ||
Fair value of plan assets at beginning of year | $ 115.5 | $ 99.3 |
Fair value of assets at end of year | 106.9 | 115.5 |
Level 3 | ||
Change in fair value of the pension assets valued using significant unobservable inputs (Level 3) | ||
Fair value of plan assets at beginning of year | 4.2 | 10.9 |
Unrealized gain (loss) on asset still held | 0 | (6.7) |
Fair value of assets at end of year | $ 4.2 | $ 4.2 |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted-Average Assumptions used to Determine Benefit Obligation (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
U.K. Plan | |||
Weighted average actuarial assumptions used to determine the benefit obligation and net periodic benefit cost | |||
Discount rate used to calculate benefit obligation (as a percent) | 2.90% | 2.60% | 2.80% |
Discount rate used to calculate net periodic pension cost (as a percent) | 2.60% | 2.80% | 4.00% |
Rate of compensation increase (as a percent) | 1.00% | 1.00% | 1.00% |
Expected return on assets (as a percent) | 5.00% | 4.80% | 5.70% |
Canadian Plan | |||
Weighted average actuarial assumptions used to determine the benefit obligation and net periodic benefit cost | |||
Discount rate used to calculate benefit obligation (as a percent) | 3.90% | 4.00% | 4.00% |
Discount rate used to calculate net periodic pension cost (as a percent) | 3.60% | 3.60% | 4.15% |
Rate of compensation increase (as a percent) | 1.00% | 3.00% | 3.00% |
Expected return on assets (as a percent) | 5.70% | 6.00% | 6.25% |
Employee Benefit Plans - Expect
Employee Benefit Plans - Expected Benefit Payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Expected benefit payments | |
Expected benefit payments, years 2024-2028 | $ 28.1 |
Minimum | |
Expected benefit payments | |
Expected benefit payments, year one | 3 |
Expected benefit payments, year two | 3 |
Expected benefit payments, year three | 3 |
Expected benefit payments, year four | 3 |
Expected benefit payments, year five | 3 |
Maximum | |
Expected benefit payments | |
Expected benefit payments, year one | 4.6 |
Expected benefit payments, year two | 4.6 |
Expected benefit payments, year three | 4.6 |
Expected benefit payments, year four | 4.6 |
Expected benefit payments, year five | $ 4.6 |
Employee Benefit Plans - 401(k)
Employee Benefit Plans - 401(k) Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Employer matching contribution, percentage of match | 6.00% | ||
Employer's matching contribution | 35.00% | ||
Contribution expense | $ 11.5 | $ 10.8 | $ 10.7 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | $ (199.7) | $ (333.6) | $ (222.2) |
Change during period | (100.8) | 125.2 | (119.9) |
Reclassified into operations | 1 | 8.7 | 8.5 |
Balance at the end of the period | (299.5) | (199.7) | (333.6) |
Foreign Currency Items | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | (183.9) | (310.3) | (205.6) |
Change during period | (98.4) | 126.4 | (104.7) |
Reclassified into operations | 0 | 0 | 0 |
Balance at the end of the period | (282.3) | (183.9) | (310.3) |
Derivative Financial Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | 0.6 | (3.6) | (6.6) |
Change during period | (0.1) | (3.1) | (5.2) |
Reclassified into operations | 0 | 7.3 | 8.2 |
Balance at the end of the period | 0.5 | 0.6 | (3.6) |
Other comprehensive income (loss), tax benefit (expense) | 0.1 | (2.6) | (2) |
Unrecognized pension benefit costs, net of taxes | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | (16.4) | (19.7) | (10) |
Change during period | (2.3) | 1.9 | (10) |
Reclassified into operations | 1 | 1.4 | 0.3 |
Balance at the end of the period | (17.7) | (16.4) | (19.7) |
Other comprehensive income (loss), tax benefit (expense) | $ 0.5 | $ (0.7) | $ (3.2) |
Income Taxes - Components of In
Income Taxes - Components of Income Before Tax and Benefit for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ 245.2 | $ 158.8 | |
Components of income (loss) before income taxes | |||
United States | (356) | (336.6) | $ (563.7) |
Foreign | 16.7 | 108.8 | 85 |
Net (loss) income before income taxes | (339.3) | (227.8) | (478.7) |
Current | |||
U.S. Federal | 19 | 5 | 10.2 |
U.S. State | 3.7 | (4) | (0.3) |
Foreign | 22.6 | 24.8 | 32 |
Total | 45.3 | 25.8 | 41.9 |
Deferred | |||
U.S. Federal | (9.8) | (5.8) | (129.5) |
U.S. State | (7.1) | 2.5 | (8.5) |
Foreign | (15.3) | (8) | (28.9) |
Total | (32.2) | (11.3) | (166.9) |
Total income tax expense (benefit) | $ 13.1 | $ 14.5 | $ (125) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the U.S. federal statutory tax rate to the actual tax rate is as follows: | |||
Statutory U.S. federal income tax rate | 21.00% | 35.00% | 35.00% |
Foreign earnings at rates different than U.S. federal rate | (1.50%) | (5.70%) | (1.50%) |
Valuation allowance adjustments | (16.80%) | (40.80%) | (6.50%) |
Impact of U.S. Tax Reform | (3.10%) | 4.30% | 0.00% |
Other | (3.50%) | 0.80% | (0.90%) |
Effective income tax rate | (3.90%) | (6.40%) | 26.10% |
Tax Cuts and Jobs Act of 2017, Change in tax rate, deferred tax asset, income tax expense (benefit) | $ 92.9 | $ 49.7 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Reserves and other accrued expenses | $ 37.1 | $ 29.4 |
Net operating loss carry forwards | 436.2 | 395.5 |
Tax credit carry forwards | 29.1 | 26.7 |
Interest limitation carryforwards | 105.8 | 0 |
Differences in financial reporting and tax basis for: | ||
Other | 63.6 | 70.7 |
Valuation allowance | (245.2) | (158.8) |
Realizable deferred tax assets | 426.6 | 363.5 |
Deferred tax liabilities: | ||
Reserves and other accrued expenses | (4.5) | (16) |
Deferred costs and prepaid expenses | (45.2) | (8.2) |
Differences in financial reporting and tax basis for: | ||
Identifiable intangible assets | (382.6) | (352) |
Property and equipment | (62.3) | (25.5) |
Other | (9.6) | (2) |
Total deferred tax liabilities | (504.2) | (403.7) |
Net deferred tax liability on balance sheet | $ (77.6) | $ (40.2) |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Operating Loss Carryforwards [Line Items] | ||
Interest limitation carry forwards | $ 105.8 | $ 0 |
R&D and state credit carry forwards | 29.1 | $ 26.7 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carry forwards | 1,540.3 | |
Interest limitation carry forwards | 413.9 | |
R&D and state credit carry forwards | 29.1 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carry forwards | 1,437.2 | |
Interest limitation carry forwards | 252.6 | |
R&D and state credit carry forwards | 2.4 | |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carry forwards | 164.7 | |
Interest limitation carry forwards | 7.4 | |
R&D and state credit carry forwards | $ 0 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Valuation allowance | ||
Valuation allowance | $ 245.2 | $ 158.8 |
Federal | ||
Valuation allowance | ||
Valuation allowance | 161.6 | 69.4 |
State | ||
Valuation allowance | ||
Valuation allowance | 49.5 | 48.9 |
Foreign | ||
Valuation allowance | ||
Valuation allowance | $ 34 | $ 40.5 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unrecognized Tax Benefits | |||||
Unrecognized tax benefits | $ 21.8 | $ 27.4 | $ 10.8 | $ 33.8 | $ 21.8 |
Unrecognized tax benefit, if recognized, would have an impact on effective tax rate | 33.8 | ||||
Decrease in unrecognized tax benefits is reasonably possible | 4.3 | ||||
Payment of interest and penalties accrued | $ 1.7 | $ 1.3 | |||
Activity for unrecognized tax benefits [Roll Forward] | |||||
Balance at beginning of period | 21.8 | 27.4 | 10.8 | ||
Tax positions related to current year additions | 10.8 | 2.3 | 8.4 | ||
Additions for tax positions of prior years | 2.6 | 0 | 9.7 | ||
Tax positions related to prior years reductions | (0.2) | (7.3) | (0.3) | ||
Reductions due to lapse of statute of limitations on tax positions | (1.2) | 0 | (0.4) | ||
Settlements | 0 | (0.6) | (0.8) | ||
Balance at end of period | $ 33.8 | $ 21.8 | $ 27.4 |
Income Taxes - Tax Reform (Deta
Income Taxes - Tax Reform (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit | $ 9.9 | ||
Provisional impact related to remeasuring deferred taxes | 51.3 | ||
Offsetting tax benefit of remeasured valuation allowance | 51.3 | ||
Transition tax reserve recorded | $ 20.3 | $ 20.3 | |
Provisional reduction to NOLs | $ 102.6 | ||
Additional valuation allowance recorded | $ 20.3 | ||
GILTI taxable income included in income tax provision | $ 33.6 |
Litigation (Details)
Litigation (Details) € in Millions, $ in Millions, $ in Billions | Dec. 13, 2018USD ($) | Aug. 07, 2018USD ($) | Apr. 16, 2012EUR (€) | Apr. 30, 2015USD ($) | Feb. 28, 2015EUR (€) | May 31, 2013USD ($) | May 31, 2013COP ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 1993USD ($) |
Litigation | |||||||||||
Loss contingency accrual | $ 3.7 | $ 4.7 | |||||||||
Legal contingencies, liability range | $ 13.7 | ||||||||||
Barcrest | |||||||||||
Litigation | |||||||||||
Litigation settlement amount | € | € 25 | ||||||||||
Third party erroneous winning jackpot face amount in excess of threshold | € | € 400 | ||||||||||
Third party loss | € | € 1.5 | ||||||||||
Ecosalud | |||||||||||
Litigation | |||||||||||
Litigation settlement amount | $ 30.2 | $ 90 | |||||||||
Shuffle Tech Matter | |||||||||||
Litigation | |||||||||||
Loss contingency accrual | $ 309.6 | ||||||||||
Damages sought | $ 100 | ||||||||||
Damages awarded | $ 105 | ||||||||||
Damages paid | $ 151.5 | ||||||||||
Percent of total damages awarded paid | 45.00% | ||||||||||
Guarantee of business revenue | |||||||||||
Litigation | |||||||||||
Legal contingencies, liability range | $ 5 | ||||||||||
Performance guarantee | |||||||||||
Litigation | |||||||||||
Surety bond | $ 4 |
Financial Information for Gua_3
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||
Cash and cash equivalents | $ 168.2 | $ 788.8 | |
Restricted cash | 38.7 | 29 | |
Accounts receivable, net | 599.2 | 540.9 | |
Notes receivable, net | 113.9 | 143.5 | |
Inventories | 215.6 | 243.1 | |
Prepaid expenses, deposits and other current assets | 232.7 | 131.1 | |
Property and equipment, net | 547 | 568.2 | |
Investment in subsidiaries | 0 | 0 | |
Goodwill | 3,279.9 | 2,956.1 | $ 2,888.4 |
Intangible assets, net | 1,809.1 | 1,604.6 | |
Intercompany balances | 0 | 0 | |
Software, net | 285.3 | 339.4 | |
Other assets | 428.2 | 380.6 | |
Total assets | 7,717.8 | 7,725.3 | 7,087.4 |
Liabilities and stockholders’ (deficit) equity | |||
Current portion of long-term debt | 45 | 40.3 | |
Other current liabilities | 702.3 | 699.5 | |
Long-term debt, excluding current portion | 8,991.9 | 8,736.3 | |
Other long-term liabilities | 441.8 | 276.2 | |
Intercompany balances | 0 | 0 | |
Stockholders’ (deficit) equity | (2,463.2) | (2,027) | $ (1,935.7) |
Total liabilities and stockholders’ deficit | 7,717.8 | 7,725.3 | |
Non-current restricted cash | 13.1 | 16.3 | |
Reportable Legal Entities | Parent Company | |||
Assets | |||
Cash and cash equivalents | 73.5 | 732.6 | |
Restricted cash | 0 | 0 | |
Accounts receivable, net | 0 | 0.4 | |
Notes receivable, net | 0 | 0 | |
Inventories | 0 | 0 | |
Prepaid expenses, deposits and other current assets | 6.2 | 6.5 | |
Property and equipment, net | 31 | 28.8 | |
Investment in subsidiaries | 2,835.9 | 3,098.7 | |
Goodwill | 0 | 0 | |
Intangible assets, net | 42.6 | 15.7 | |
Intercompany balances | 0 | 0 | |
Software, net | 58.6 | 67.2 | |
Other assets | 110 | 234.4 | |
Total assets | 3,157.8 | 4,184.3 | |
Liabilities and stockholders’ (deficit) equity | |||
Current portion of long-term debt | 0 | 0 | |
Other current liabilities | 63.8 | 67.6 | |
Long-term debt, excluding current portion | 0 | 0 | |
Other long-term liabilities | 105.8 | 68.8 | |
Intercompany balances | 5,451.4 | 6,074.9 | |
Stockholders’ (deficit) equity | (2,463.2) | (2,027) | |
Total liabilities and stockholders’ deficit | 3,157.8 | 4,184.3 | |
Reportable Legal Entities | Guarantor Subsidiaries | |||
Assets | |||
Cash and cash equivalents | 0 | 0 | |
Restricted cash | 31.6 | 28.3 | |
Accounts receivable, net | 204.8 | 192.6 | |
Notes receivable, net | 100.6 | 121.1 | |
Inventories | 81.7 | 91.8 | |
Prepaid expenses, deposits and other current assets | 92.5 | 41.6 | |
Property and equipment, net | 218.6 | 295.6 | |
Investment in subsidiaries | 1,093.4 | 987.7 | |
Goodwill | 1,896.8 | 1,880.4 | |
Intangible assets, net | 1,291.4 | 1,335.3 | |
Intercompany balances | 0 | 0 | |
Software, net | 128.3 | 199 | |
Other assets | 45.9 | 62 | |
Total assets | 5,185.6 | 5,235.4 | |
Liabilities and stockholders’ (deficit) equity | |||
Current portion of long-term debt | 0 | 0 | |
Other current liabilities | 247.9 | 254.2 | |
Long-term debt, excluding current portion | 0 | 0 | |
Other long-term liabilities | 637.3 | 650.3 | |
Intercompany balances | 48.1 | 37.4 | |
Stockholders’ (deficit) equity | 4,252.3 | 4,293.5 | |
Total liabilities and stockholders’ deficit | 5,185.6 | 5,235.4 | |
Non-current restricted cash | 12.2 | 15.6 | |
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||
Assets | |||
Cash and cash equivalents | 95.1 | 59.4 | |
Restricted cash | 6.3 | 0.1 | |
Accounts receivable, net | 315.2 | 279.8 | |
Notes receivable, net | 13.3 | 22.4 | |
Inventories | 110.8 | 131.8 | |
Prepaid expenses, deposits and other current assets | 70.5 | 52.7 | |
Property and equipment, net | 218.2 | 179.9 | |
Investment in subsidiaries | 0 | 0 | |
Goodwill | 1,142.9 | 835.4 | |
Intangible assets, net | 441 | 218.7 | |
Intercompany balances | 0 | 222.5 | |
Software, net | 60.2 | 48.5 | |
Other assets | 307.8 | 270.3 | |
Total assets | 2,781.3 | 2,321.5 | |
Liabilities and stockholders’ (deficit) equity | |||
Current portion of long-term debt | 3.3 | 7.5 | |
Other current liabilities | 254.1 | 206.4 | |
Long-term debt, excluding current portion | 0.8 | 3.3 | |
Other long-term liabilities | 171.9 | 110.9 | |
Intercompany balances | 554.4 | 0 | |
Stockholders’ (deficit) equity | 1,796.8 | 1,993.4 | |
Total liabilities and stockholders’ deficit | 2,781.3 | 2,321.5 | |
Non-current restricted cash | 0.9 | 0.7 | |
Reportable Legal Entities | SGI | |||
Assets | |||
Cash and cash equivalents | 0.9 | 0 | |
Restricted cash | 0.8 | 0.6 | |
Accounts receivable, net | 79.2 | 68.1 | |
Notes receivable, net | 0 | 0 | |
Inventories | 40.4 | 40.7 | |
Prepaid expenses, deposits and other current assets | 63.3 | 30.3 | |
Property and equipment, net | 112.1 | 91.5 | |
Investment in subsidiaries | 974.5 | 867.9 | |
Goodwill | 240.2 | 240.3 | |
Intangible assets, net | 34.1 | 34.9 | |
Intercompany balances | 6,053.9 | 5,889.8 | |
Software, net | 38.2 | 24.7 | |
Other assets | 404.4 | 388.8 | |
Total assets | 8,042 | 7,677.6 | |
Liabilities and stockholders’ (deficit) equity | |||
Current portion of long-term debt | 41.7 | 32.8 | |
Other current liabilities | 162.4 | 199 | |
Long-term debt, excluding current portion | 8,991.1 | 8,733 | |
Other long-term liabilities | 7.6 | 11.3 | |
Intercompany balances | 0 | 0 | |
Stockholders’ (deficit) equity | (1,160.8) | (1,298.5) | |
Total liabilities and stockholders’ deficit | 8,042 | 7,677.6 | |
Eliminating Entries | |||
Assets | |||
Cash and cash equivalents | (1.3) | (3.2) | |
Restricted cash | 0 | 0 | |
Accounts receivable, net | 0 | 0 | |
Notes receivable, net | 0 | 0 | |
Inventories | (17.3) | (21.2) | |
Prepaid expenses, deposits and other current assets | 0.2 | 0 | |
Property and equipment, net | (32.9) | (27.6) | |
Investment in subsidiaries | (4,903.8) | (4,954.3) | |
Goodwill | 0 | 0 | |
Intangible assets, net | 0 | 0 | |
Intercompany balances | (6,053.9) | (6,112.3) | |
Software, net | 0 | 0 | |
Other assets | (439.9) | (574.9) | |
Total assets | (11,448.9) | (11,693.5) | |
Liabilities and stockholders’ (deficit) equity | |||
Current portion of long-term debt | 0 | 0 | |
Other current liabilities | (25.9) | (27.7) | |
Long-term debt, excluding current portion | 0 | 0 | |
Other long-term liabilities | (480.8) | (565.1) | |
Intercompany balances | (6,053.9) | (6,112.3) | |
Stockholders’ (deficit) equity | (4,888.3) | (4,988.4) | |
Total liabilities and stockholders’ deficit | $ (11,448.9) | $ (11,693.5) |
Financial Information for Gua_4
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Feb. 28, 2018 | Aug. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Total revenue | $ 885.7 | $ 821 | $ 844.7 | $ 811.8 | $ 823 | $ 768.9 | $ 766.3 | $ 725.4 | $ 3,363.2 | $ 3,083.6 | $ 2,883.4 | |||
Cost of revenues | 341.4 | 301.3 | 315.9 | 296.7 | 314.9 | 290.8 | 278.9 | 280 | 1,255.3 | 1,164.6 | 1,106.3 | |||
Selling, general and administrative | 181.7 | 169.7 | 173.9 | 171.6 | 167.7 | 158.8 | 145.9 | 140.7 | 696.9 | 613.1 | 577 | |||
Research and development | 49.8 | 49.5 | 49.2 | 53.8 | 45.8 | 47.8 | 48.1 | 42.4 | 202.3 | 184.1 | 204.8 | |||
Depreciation, amortization and impairments | 162.6 | 166.3 | 172.7 | 188.1 | 169.6 | 173.1 | 175 | 165.1 | 689.7 | 682.8 | 738.7 | |||
Goodwill impairment | 0 | 0 | 69 | |||||||||||
Restructuring and other | (171) | 338.7 | 33.5 | 52.2 | 27.8 | 7.8 | 1.1 | 9.2 | 253.4 | 45.9 | 57 | |||
Operating income (loss) | 321.2 | (204.5) | 99.5 | 49.4 | 97.2 | 90.6 | 117.3 | 88 | 265.6 | 393.1 | 130.6 | |||
Interest expense | (597.2) | (609.7) | (661.4) | |||||||||||
(Loss) gain on debt financing transactions | $ (93.2) | $ (8.4) | $ (29.7) | (93.2) | (38.1) | 25.2 | ||||||||
Gain on remeasurement of debt | 14 | (4) | 34.5 | (1.1) | 43.4 | 0 | 0 | |||||||
Other income (expense), net | 42.1 | 26.9 | 26.9 | |||||||||||
Net (loss) income before income taxes | (339.3) | (227.8) | (478.7) | |||||||||||
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | |||||||||||
Income tax (expense) benefit | (13.1) | (14.5) | 125 | |||||||||||
Net (loss) income | $ 206.8 | $ (351.6) | $ (5.8) | $ (201.8) | $ (43.1) | $ (59.3) | $ (39.1) | $ (100.8) | (352.4) | (242.3) | (353.7) | |||
Other comprehensive (loss) income | (99.8) | 133.9 | (111.4) | |||||||||||
Comprehensive (loss) income | (452.2) | (108.4) | (465.1) | |||||||||||
Reportable Legal Entities | Parent Company | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Total revenue | 0 | 0 | 0 | |||||||||||
Cost of revenues | 0 | 0 | 0 | |||||||||||
Selling, general and administrative | 154.4 | 127.1 | 121 | |||||||||||
Research and development | 0 | 2.1 | 6.1 | |||||||||||
Depreciation, amortization and impairments | 44.2 | 71.6 | 53.5 | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | 194.7 | 29.7 | 32.6 | |||||||||||
Operating income (loss) | (393.3) | (230.5) | (213.2) | |||||||||||
Interest expense | 0 | (4.6) | (21) | |||||||||||
(Loss) gain on debt financing transactions | 0 | (1.1) | 0 | |||||||||||
Gain on remeasurement of debt | 0 | |||||||||||||
Other income (expense), net | 335.7 | 87.7 | 64 | |||||||||||
Net (loss) income before income taxes | (57.6) | (148.5) | (170.2) | |||||||||||
Equity in (loss) income of subsidiaries | (218.5) | (45.4) | (180.1) | |||||||||||
Income tax (expense) benefit | (76.3) | (48.4) | (3.4) | |||||||||||
Net (loss) income | (352.4) | (242.3) | (353.7) | |||||||||||
Other comprehensive (loss) income | (99.8) | 133.9 | (111.4) | |||||||||||
Comprehensive (loss) income | (452.2) | (108.4) | (465.1) | |||||||||||
Reportable Legal Entities | Guarantor Subsidiaries | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Total revenue | 1,654 | 1,683.9 | 1,583.5 | |||||||||||
Cost of revenues | 490.3 | 511 | 480.9 | |||||||||||
Selling, general and administrative | 227 | 244.4 | 213.8 | |||||||||||
Research and development | 87.2 | 101.3 | 145.2 | |||||||||||
Depreciation, amortization and impairments | 439.4 | 462.7 | 534.6 | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | 9.2 | 7.3 | 11.7 | |||||||||||
Operating income (loss) | 400.9 | 357.2 | 197.3 | |||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
(Loss) gain on debt financing transactions | 0 | 0 | 0 | |||||||||||
Gain on remeasurement of debt | 0 | |||||||||||||
Other income (expense), net | (744.8) | (184.7) | (227.3) | |||||||||||
Net (loss) income before income taxes | (343.9) | 172.5 | (30) | |||||||||||
Equity in (loss) income of subsidiaries | (28.2) | 21.9 | 61.1 | |||||||||||
Income tax (expense) benefit | 82.3 | (85.6) | 15.9 | |||||||||||
Net (loss) income | (289.8) | 108.8 | 47 | |||||||||||
Other comprehensive (loss) income | (66.3) | 65.8 | (43.1) | |||||||||||
Comprehensive (loss) income | (356.1) | 174.6 | 3.9 | |||||||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Total revenue | 1,540.3 | 1,223.3 | 1,148.6 | |||||||||||
Cost of revenues | 721.2 | 629.1 | 553.8 | |||||||||||
Selling, general and administrative | 325.5 | 250.2 | 235.9 | |||||||||||
Research and development | 112.4 | 74.2 | 42.8 | |||||||||||
Depreciation, amortization and impairments | 188.3 | 128 | 116 | |||||||||||
Goodwill impairment | 69 | |||||||||||||
Restructuring and other | 50.6 | 3.8 | 8.1 | |||||||||||
Operating income (loss) | 142.3 | 138 | 123 | |||||||||||
Interest expense | (0.5) | (1.2) | (0.2) | |||||||||||
(Loss) gain on debt financing transactions | 0 | 0 | 0 | |||||||||||
Gain on remeasurement of debt | 0 | |||||||||||||
Other income (expense), net | (83.7) | (26.5) | (4.2) | |||||||||||
Net (loss) income before income taxes | 58.1 | 110.3 | 118.6 | |||||||||||
Equity in (loss) income of subsidiaries | 0 | 0 | 0 | |||||||||||
Income tax (expense) benefit | (19.6) | (38.4) | (25.7) | |||||||||||
Net (loss) income | 38.5 | 71.9 | 92.9 | |||||||||||
Other comprehensive (loss) income | (113.8) | 128.7 | (135.1) | |||||||||||
Comprehensive (loss) income | (75.3) | 200.6 | (42.2) | |||||||||||
Reportable Legal Entities | SGI | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Total revenue | 547.1 | 498.1 | 469.5 | |||||||||||
Cost of revenues | 360.9 | 341.9 | 328.6 | |||||||||||
Selling, general and administrative | 42.4 | 41.3 | 46.9 | |||||||||||
Research and development | 2.7 | 6.5 | 10.7 | |||||||||||
Depreciation, amortization and impairments | 32.6 | 31.3 | 40.9 | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | (1.1) | 5.1 | 4.6 | |||||||||||
Operating income (loss) | 109.6 | 72 | 37.8 | |||||||||||
Interest expense | (596.7) | (603.9) | (640.2) | |||||||||||
(Loss) gain on debt financing transactions | (93.2) | (37) | 25.2 | |||||||||||
Gain on remeasurement of debt | 43.4 | |||||||||||||
Other income (expense), net | 534.9 | 150.4 | 194.4 | |||||||||||
Net (loss) income before income taxes | (2) | (418.5) | (382.8) | |||||||||||
Equity in (loss) income of subsidiaries | 43.6 | 67.6 | 48.5 | |||||||||||
Income tax (expense) benefit | 0.5 | 157.9 | 138.2 | |||||||||||
Net (loss) income | 42.1 | (193) | (196.1) | |||||||||||
Other comprehensive (loss) income | 30 | 10.3 | (1.7) | |||||||||||
Comprehensive (loss) income | 72.1 | (182.7) | (197.8) | |||||||||||
Eliminating Entries | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Total revenue | (378.2) | (321.7) | (318.2) | |||||||||||
Cost of revenues | (317.1) | (317.4) | (257) | |||||||||||
Selling, general and administrative | (52.4) | (49.9) | (40.6) | |||||||||||
Research and development | 0 | 0 | 0 | |||||||||||
Depreciation, amortization and impairments | (14.8) | (10.8) | (6.3) | |||||||||||
Goodwill impairment | 0 | |||||||||||||
Restructuring and other | 0 | 0 | 0 | |||||||||||
Operating income (loss) | 6.1 | 56.4 | (14.3) | |||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
(Loss) gain on debt financing transactions | 0 | 0 | 0 | |||||||||||
Gain on remeasurement of debt | 0 | |||||||||||||
Other income (expense), net | 0 | 0 | 0 | |||||||||||
Net (loss) income before income taxes | 6.1 | 56.4 | (14.3) | |||||||||||
Equity in (loss) income of subsidiaries | 203.1 | (44.1) | 70.5 | |||||||||||
Income tax (expense) benefit | 0 | 0 | 0 | |||||||||||
Net (loss) income | 209.2 | 12.3 | 56.2 | |||||||||||
Other comprehensive (loss) income | 150.1 | (204.8) | 179.9 | |||||||||||
Comprehensive (loss) income | $ 359.3 | $ (192.5) | $ 236.1 |
Financial Information for Gua_5
Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries - Supplemental Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net cash (used in) provided by operating activities | $ 346.1 | $ 507.1 | $ 419 |
Cash flows from investing activities: | |||
Capital expenditures | (390.8) | (293.7) | (272.9) |
Acquisitions of businesses and assets, net of cash acquired | (296.6) | (57.7) | 0 |
Proceeds from asset sales | 40 | 7.5 | 16.7 |
Acquisitions and additions to equity method investments | (180.4) | (107.3) | (1.2) |
Distributions of capital from equity investments | 29.7 | 34.1 | 25.3 |
Changes in other assets and liabilities and other | 10 | 19.6 | |
Other, principally change in intercompany investing activities | 0 | 0 | 0 |
Net cash (used in) provided by investing activities | (798.1) | (414.6) | (228) |
Cash flows from financing activities: | |||
Payments on long-term debt, net of proceeds | 238.2 | 701 | (139.7) |
Payments of assumed NYX debt and other acquisitions debt | (290.1) | 0 | 0 |
Payments of debt issuance and deferred financing costs | (38.5) | (58.7) | 0 |
Payments on license obligations | (44.9) | (52.6) | (50.2) |
Net redemptions of common stock under stock-based compensation plans and other | (20.9) | (9.5) | (6.1) |
Other, principally change in intercompany financing activities | 0 | 0 | 0 |
Net cash (used in) provided by financing activities | (156.2) | 580.2 | (196) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5.9) | 4.5 | (4.9) |
(Decrease) increase in cash, cash equivalents and restricted cash | (614.1) | 677.2 | (9.9) |
Cash, cash equivalents and restricted cash, beginning of period | 834.1 | 156.9 | 166.8 |
Cash, cash equivalents and restricted cash, end of period | 220 | 834.1 | 156.9 |
Reportable Legal Entities | Parent Company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash (used in) provided by operating activities | (221.1) | (40.7) | (90.4) |
Cash flows from investing activities: | |||
Capital expenditures | (35) | (53.3) | (39.1) |
Acquisitions of businesses and assets, net of cash acquired | 0 | 0 | |
Proceeds from asset sales | 0 | ||
Acquisitions and additions to equity method investments | 0 | 0 | |
Distributions of capital from equity investments | 0 | 0 | 0 |
Changes in other assets and liabilities and other | 0 | 0 | |
Other, principally change in intercompany investing activities | 0 | 0 | 0 |
Net cash (used in) provided by investing activities | (35) | (53.3) | (39.1) |
Cash flows from financing activities: | |||
Payments on long-term debt, net of proceeds | 0 | (250) | 0 |
Payments of assumed NYX debt and other acquisitions debt | 0 | ||
Payments of debt issuance and deferred financing costs | 0 | 0 | |
Payments on license obligations | (42.9) | (47.5) | (38) |
Net redemptions of common stock under stock-based compensation plans and other | (18.4) | (8.5) | (6.1) |
Other, principally change in intercompany financing activities | (341.7) | 1,099.9 | 163.1 |
Net cash (used in) provided by financing activities | (403) | 793.9 | 119 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
(Decrease) increase in cash, cash equivalents and restricted cash | (659.1) | 699.9 | (10.5) |
Cash, cash equivalents and restricted cash, beginning of period | 732.6 | 32.7 | 43.2 |
Cash, cash equivalents and restricted cash, end of period | 73.5 | 732.6 | 32.7 |
Reportable Legal Entities | Guarantor Subsidiaries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash (used in) provided by operating activities | 205.8 | 567.3 | 535 |
Cash flows from investing activities: | |||
Capital expenditures | (145.9) | (128.8) | (149.5) |
Acquisitions of businesses and assets, net of cash acquired | (32.1) | (26.3) | |
Proceeds from asset sales | 40 | ||
Acquisitions and additions to equity method investments | 0 | 0 | |
Distributions of capital from equity investments | 0 | 0 | 0 |
Changes in other assets and liabilities and other | 7.5 | 16.8 | |
Other, principally change in intercompany investing activities | 0 | 0 | 0 |
Net cash (used in) provided by investing activities | (138) | (147.6) | (132.7) |
Cash flows from financing activities: | |||
Payments on long-term debt, net of proceeds | 0 | 0 | 0 |
Payments of assumed NYX debt and other acquisitions debt | (1.9) | ||
Payments of debt issuance and deferred financing costs | 0 | 0 | |
Payments on license obligations | (2) | (5.1) | (12.2) |
Net redemptions of common stock under stock-based compensation plans and other | (2.5) | (1) | 0 |
Other, principally change in intercompany financing activities | (61.5) | (410.7) | (387) |
Net cash (used in) provided by financing activities | (67.9) | (416.8) | (399.2) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
(Decrease) increase in cash, cash equivalents and restricted cash | (0.1) | 2.9 | 3.1 |
Cash, cash equivalents and restricted cash, beginning of period | 43.9 | 41 | 37.9 |
Cash, cash equivalents and restricted cash, end of period | 43.8 | 43.9 | 41 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash (used in) provided by operating activities | 341.2 | 282.6 | 235.3 |
Cash flows from investing activities: | |||
Capital expenditures | (146.7) | (80.6) | (61.5) |
Acquisitions of businesses and assets, net of cash acquired | (264.5) | (31.4) | |
Proceeds from asset sales | 0 | ||
Acquisitions and additions to equity method investments | (178.5) | (107.3) | |
Distributions of capital from equity investments | 29.7 | 34.1 | 25.3 |
Changes in other assets and liabilities and other | 2.5 | 4 | |
Other, principally change in intercompany investing activities | 0 | (120.1) | (194.5) |
Net cash (used in) provided by investing activities | (560) | (302.8) | (226.7) |
Cash flows from financing activities: | |||
Payments on long-term debt, net of proceeds | (7.5) | (6.7) | (6.8) |
Payments of assumed NYX debt and other acquisitions debt | (288.2) | ||
Payments of debt issuance and deferred financing costs | 0 | 0 | |
Payments on license obligations | 0 | 0 | 0 |
Net redemptions of common stock under stock-based compensation plans and other | 0 | 0 | 0 |
Other, principally change in intercompany financing activities | 562.5 | 0 | 0 |
Net cash (used in) provided by financing activities | 266.8 | (6.7) | (6.8) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5.9) | 4.5 | (4.9) |
(Decrease) increase in cash, cash equivalents and restricted cash | 42.1 | (22.4) | (3.1) |
Cash, cash equivalents and restricted cash, beginning of period | 60.2 | 82.6 | 85.7 |
Cash, cash equivalents and restricted cash, end of period | 102.3 | 60.2 | 82.6 |
Reportable Legal Entities | SGI | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash (used in) provided by operating activities | 18.3 | (300) | (259.8) |
Cash flows from investing activities: | |||
Capital expenditures | (63.2) | (31) | (22.8) |
Acquisitions of businesses and assets, net of cash acquired | 0 | 0 | |
Proceeds from asset sales | 0 | ||
Acquisitions and additions to equity method investments | (1.9) | 0 | |
Distributions of capital from equity investments | 0 | 0 | 0 |
Changes in other assets and liabilities and other | 0 | (1.2) | |
Other, principally change in intercompany investing activities | (159.3) | (569.1) | 418.4 |
Net cash (used in) provided by investing activities | (224.4) | (600.1) | 394.4 |
Cash flows from financing activities: | |||
Payments on long-term debt, net of proceeds | 245.7 | 957.7 | (132.9) |
Payments of assumed NYX debt and other acquisitions debt | 0 | ||
Payments of debt issuance and deferred financing costs | (38.5) | (58.7) | |
Payments on license obligations | 0 | 0 | 0 |
Net redemptions of common stock under stock-based compensation plans and other | 0 | 0 | 0 |
Other, principally change in intercompany financing activities | 0 | 0 | 0 |
Net cash (used in) provided by financing activities | 207.2 | 899 | (132.9) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
(Decrease) increase in cash, cash equivalents and restricted cash | 1.1 | (1.1) | 1.7 |
Cash, cash equivalents and restricted cash, beginning of period | 0.6 | 1.7 | 0 |
Cash, cash equivalents and restricted cash, end of period | 1.7 | 0.6 | 1.7 |
Eliminating Entries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash (used in) provided by operating activities | 1.9 | (2.1) | (1.1) |
Cash flows from investing activities: | |||
Capital expenditures | 0 | 0 | 0 |
Acquisitions of businesses and assets, net of cash acquired | 0 | 0 | |
Proceeds from asset sales | 0 | ||
Acquisitions and additions to equity method investments | 0 | 0 | |
Distributions of capital from equity investments | 0 | 0 | 0 |
Changes in other assets and liabilities and other | 0 | 0 | |
Other, principally change in intercompany investing activities | 159.3 | 689.2 | (223.9) |
Net cash (used in) provided by investing activities | 159.3 | 689.2 | (223.9) |
Cash flows from financing activities: | |||
Payments on long-term debt, net of proceeds | 0 | 0 | 0 |
Payments of assumed NYX debt and other acquisitions debt | 0 | ||
Payments of debt issuance and deferred financing costs | 0 | 0 | |
Payments on license obligations | 0 | 0 | 0 |
Net redemptions of common stock under stock-based compensation plans and other | 0 | 0 | 0 |
Other, principally change in intercompany financing activities | (159.3) | (689.2) | 223.9 |
Net cash (used in) provided by financing activities | (159.3) | (689.2) | 223.9 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
(Decrease) increase in cash, cash equivalents and restricted cash | 1.9 | (2.1) | (1.1) |
Cash, cash equivalents and restricted cash, beginning of period | (3.2) | (1.1) | 0 |
Cash, cash equivalents and restricted cash, end of period | $ (1.3) | $ (3.2) | $ (1.1) |
Selected Quarterly Financial _3
Selected Quarterly Financial Data, Unaudited (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Feb. 28, 2018 | Aug. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||||||||||||
Total revenue | $ 885.7 | $ 821 | $ 844.7 | $ 811.8 | $ 823 | $ 768.9 | $ 766.3 | $ 725.4 | $ 3,363.2 | $ 3,083.6 | $ 2,883.4 | |||
Cost of revenues | 341.4 | 301.3 | 315.9 | 296.7 | 314.9 | 290.8 | 278.9 | 280 | 1,255.3 | 1,164.6 | 1,106.3 | |||
Selling, general and administrative | 181.7 | 169.7 | 173.9 | 171.6 | 167.7 | 158.8 | 145.9 | 140.7 | 696.9 | 613.1 | 577 | |||
Research and development | 49.8 | 49.5 | 49.2 | 53.8 | 45.8 | 47.8 | 48.1 | 42.4 | 202.3 | 184.1 | 204.8 | |||
Restructuring and other | (171) | 338.7 | 33.5 | 52.2 | 27.8 | 7.8 | 1.1 | 9.2 | 253.4 | 45.9 | 57 | |||
Depreciation, amortization and impairments | 162.6 | 166.3 | 172.7 | 188.1 | 169.6 | 173.1 | 175 | 165.1 | 689.7 | 682.8 | 738.7 | |||
Operating income (loss) | 321.2 | (204.5) | 99.5 | 49.4 | 97.2 | 90.6 | 117.3 | 88 | 265.6 | 393.1 | 130.6 | |||
Net (loss) income | $ 206.8 | $ (351.6) | $ (5.8) | $ (201.8) | $ (43.1) | $ (59.3) | $ (39.1) | $ (100.8) | $ (352.4) | $ (242.3) | $ (353.7) | |||
Basic net (loss) income per share (in dollars per share) | $ 2.25 | $ (3.85) | $ (0.06) | $ (2.24) | $ (3.87) | $ (2.72) | $ (4.05) | |||||||
Diluted net (loss) income per share (in dollars per share) | $ 2.21 | $ (3.85) | $ (0.06) | $ (2.24) | $ (3.87) | $ (2.72) | $ (4.05) | |||||||
Basic and diluted net loss per share (in dollars per share) | $ (0.48) | $ (0.66) | $ (0.44) | $ (1.14) | ||||||||||
Weighted average number of shares used in per share calculations: | ||||||||||||||
Basic shares (in shares) | 91.8 | 91.4 | 91 | 90.1 | 89.7 | 89.6 | 89.1 | 88.2 | 91.1 | 89.1 | 87.3 | |||
Diluted shares (in shares) | 93.4 | 91.4 | 91 | 90.1 | 89.7 | 89.6 | 89.1 | 88.2 | 91.1 | 89.1 | 87.3 | |||
Loss on debt financing transactions | $ 93.2 | $ 8.4 | $ 29.7 | $ 93.2 | $ 38.1 | $ (25.2) | ||||||||
Gain (loss) on remeasurement of debt | $ 14 | $ (4) | $ 34.5 | $ (1.1) | 43.4 | 0 | $ 0 | |||||||
Loss contingency accrual | 3.7 | $ 4.7 | $ 3.7 | $ 4.7 | ||||||||||
Shuffle Tech Matter | ||||||||||||||
Weighted average number of shares used in per share calculations: | ||||||||||||||
Loss contingency accrual | $ 309.6 | |||||||||||||
Reversal of legal reserve due to settlement | $ 183.1 |
SCHEDULE II Valuation and Qua_2
SCHEDULE II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts | |||
Allowance for valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 31.4 | $ 28.1 | $ 23.8 |
Additions | 9.3 | 11.4 | 8.6 |
Deductions | (0.2) | (8.1) | (4.3) |
Balance at End of Period | 40.5 | 31.4 | 28.1 |
Tax-Related valuation allowance | |||
Allowance for valuation and qualifying accounts | |||
Balance at Beginning of Period | 158.8 | 119 | 95.6 |
Additions | 86.4 | 39.8 | 23.4 |
Balance at End of Period | $ 245.2 | $ 158.8 | $ 119 |
Uncategorized Items - sgms-2018
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (10,900,000) |